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Thursday 31 January 2013
Hedge Fund Analyst Sentenced in Manhattan Federal Court for Insider Trading SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JASON PFLAUM, a former research analyst with the hedge fund Barai Capital Management (“BCM”), was sentenced today to time served followed by two years of supervised release for his participation in an insider trading scheme in which PFLAUM obtained material, nonpublic information (“Inside Information”) about various publicly-traded companies, and provided it to the head of BCM, Samir Barai. PFLAUM pled guilty in December 2010 to one count of conspiracy to commit securities fraud and one count of securities fraud pursuant to a cooperation agreement with the Government. He was sentenced today in Manhattan federal court by U.S. District Judge Jed S. Rakoff.
According to the Information to which PFLAUM pled guilty, statements made during his guilty plea proceeding, PFLAUM’s testimony during the criminal trial of Winifred Jiau, and the Government’s sentencing submission in his case:
From mid-2008 through October 2010, while working as an analyst for Barai, PFLAUM obtained Inside Information about publicly traded technology companies and provided it to Barai, who then traded on it. In one example, PFLAUM obtained Inside Information from company insiders who worked as “experts” or “consultants” for the expert network firm Primary Global Research (“PGR”), and provided it to Barai. BCM paid PGR a fee, and PGR in turn paid the experts to talk to PFLAUM. PFLAUM also facilitated the passing of Inside Information to Barai from Barai’s own network of company insiders and consultants, including Winifred Jiau, who provided details of the quarterly earnings announcement of NVIDIA Corporation and Marvell Technology Group, Ltd.
PFLAUM, 39, of New York, New York, was ordered to pay a $200 special assessment fee and forfeiture in the amount of $500,000 for which he and his coconspirators are jointly and severally liable.
Jiau was convicted following a June 2011 jury trial of one count of conspiracy to commit securities fraud and wire fraud, and one count of securities fraud. She was sentenced in September 2011 to four years in prison.
Barai pled guilty in May 2011 to one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, one count of wire fraud, and one count of obstruction of justice. He awaits sentencing.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force 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 is working to improve efforts across the federal executive branch, and with state and local partners, to 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 case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Antonia M. Apps and David Miller are in charge of the prosecution.
Health Care Practitioner Sentenced to Six Months in Prison, Six Months Home Detention, for Accepting Cash Kickbacks for Patient ReferralsRead the Press Release
NEWARK, N.J. – Daisy Deguzman, a New Jersey doctor who practiced in Newark, today was sentenced to six months in prison and six months of home detention for her role in a cash-for-patients scheme with a diagnostic facility in Orange, N.J., U.S. Attorney Paul J. Fishman announced.
Deguzman, 70, of Livingston, N.J., pleaded guilty June 4, 2012, before U.S. District Judge Claire C. Cecchi in Newark federal court to an Information charging her with one count of violating the federal healthcare program anti-kickback statute.
“Patients have every right to expect their doctors will recommend medical service providers because they do the best job, not because they provide the best bribes,” said U.S. Attorney Fishman. “The sentence handed down today shows the federal healthcare system cannot be abused by those practitioners who see a person in need of care as an opportunity to illegally make an extra buck.”“Buying patient referrals has absolutely no place in a modern health care system,” said Tom O’Donnell, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General’s region including New Jersey. “The country's taxpayers are fed up with footing the bill for health care fraud, so these criminals can expect to pay the price.”
According to documents filed in this case and statements made in court:On Dec. 13, 2011, Deguzman was arrested and charged with accepting cash kickback payments from Orange Community MRI (“Orange MRI”), a diagnostic facility, in exchange for her referral of Medicare and Medicaid patients. Twelve other New Jersey doctors and one nurse practitioner were arrested that day and charged in separate Complaints with accepting similar cash kickback payments from Orange MRI. Each defendant was recorded taking envelopes of cash in exchange for their patient referrals. On Dec. 8, 2011, an Orange MRI executive was arrested and charged in a separate Complaint in connection with his participation in the scheme. Deguzman is the first of the defendants to be sentenced.
Starting in at least 2010, Orange MRI began making monthly cash kickback payments to Deguzman in exchange for her referral of patients for diagnostic tests. At the end of each calendar month, individuals at Orange MRI printed Orange MRI patient reports that detailed how many magnetic resonance imagings (“MRIs”) and computed axial tomographies (“CAT Scans”) were referred by Deguzman. These patient reports were used to calculate the kickback payment owed to Deguzman. Pursuant to Deguzman’s agreement with Orange MRI, she was paid kickbacks for each Medicare or Medicaid beneficiary MRI or CAT Scan referred.
Deguzman received three separate payments from a cooperating government witness during the course of the investigation. On Oct. 11, 2011, Deguzman accepted $1,700 in cash for her September 2011 referrals to Orange MRI; she accepted another $1,130 on Nov. 17, 2011 for her October 2011 referrals to Orange MRI, and another $1,000 on Dec. 6, 2011 for her November 2011 referrals to Orange MRI.
In addition to the prison term, Judge Cecchi sentenced Deguzman to two years of supervised release, fined her $20,000 and ordered her to forfeit $23,595.
With respect to the other defendants charged in the investigation:
• Jose Castaneda, a nurse practitioner formerly practicing in Newark, pleaded guilty before Judge Cecchi on April 3, 2012, and is scheduled to be sentenced on June 18, 2013.• Yash Khanna, M.D., a doctor practicing in East Orange, was indicted on May 4, 2012, by a federal grand jury on one count of accepting kickbacks; Judge Cecchi has not yet set a trial date.
• Dov Rand, M.D., a doctor practicing in West Orange, pleaded guilty before Judge Cecchi on May 18, 2012, and is scheduled to be sentenced on Feb. 13, 2013.
• William Lagrada, M.D., another Newark doctor, pleaded guilty before Judge Cecchi on July 11, 2012, and is scheduled to be sentenced on June 4, 2013.
• Maryam Jafari, M.D., another Newark doctor, was indicted on July 13, 2012, by a federal grand jury on one count of accepting kickbacks. On Sept. 14, 2012, the same grand jury handed up a superseding indictment against Dr. Jafari, charging her with one count of conspiracy and two counts of accepting kickbacks. The trial of Dr. Jafari ended with a hung jury and mistrial on Dec. 6, 2012. Judge Cecchi has set the retrial date for March 1, 2013.
• Chikezie Onyenso, M.D., an Irvington doctor, was indicted on Sept. 7, 2012, by a federal grand jury on one count of accepting kickbacks; Judge Cecchi has not yet set a trial date. • Dinesh Patel, M.D., another Newark doctor, pleaded guilty before Judge Cecchi on Sept. 19, 2012, and is scheduled to be sentenced on Feb. 26, 2013.
• Ashokkumar Babaria, M.D., a Moorestown radiologist and Orange MRI’s former medical director and owner-in-fact, pleaded guilty before Judge Cecchi on Sept. 27, 2012, and is scheduled to be sentenced on March 21, 2013.
• Lucio Cardoso, M.D., a North Arlington physician, pleaded guilty before Judge Cecchi on Oct. 10, 2012, and is scheduled to be sentenced on March 27, 2013.
• Rameshcha Kania, M.D., an East Orange doctor, pleaded guilty before Judge Cecchi on Oct. 12, 2012, and is scheduled to be sentenced Feb. 14, 2013.
• Chirag Patel, Orange MRI’s former executive director, pleaded guilty before Judge Cecchi on Oct. 16, 2012, and is scheduled to be sentenced on July 15, 2013.
U.S. Attorney Fishman credited special agents with the Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge O’Donnell, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Joseph Mack and Scott B. McBride of the Office’s Healthcare and Government Fraud Unit.
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Defense counsel: Daniel A. Giaquinto Esq., Bridgewater, N.J.
Harrisburg Man Sentenced to 36 Months’ in PrisonRead the Press Release
For Bank Fraud
The United States Attorney’s Office for the Middle District of Pennsylvania announced that Humphrey Holmes was sentenced today by United States District Court Judge Sylvia H. Rambo to a 36-month term of imprisonment and four years of supervised release for bank fraud.
According to United States Attorney Peter J. Smith, from 2010 through September 2011, Holmes, age 28, used fraudulent social security numbers, employment records, and other materials in an effort to obtain loans and cash checks from several Central Pennsylvania banks and credit unions, including, the Pennsylvania State Employees Credit Union, Belco Credit Union, American General Financial Services, Susquehanna Valley Credit Union, Hershey Federal Credit Union, New Cumberland Federal Credit Union and the Patriot Federal Credit Union. Holmes also engaged in a check kiting scheme while attempting to cash a $20,000 check that he fraudulently obtained.
Holmes was indicted in October 2011 and pleaded guilty in August 2012.
The investigation was conducted by the United States Secret Service. The case was prosecuted by Assistant U.S. Attorney Michael A. Consiglio.
Gambling Business Owner Pleads Guilty in Federal CourtRead the Press Release
James Lynn Jones Operated Lot-O-Games in Jones County, Texas
LUBBOCK, Texas — James Lynn Jones, 69 , of Abilene, Texas, pleaded guilty this morning in federal court, before U.S. District Judge Sam R. Cummings, to an Information charging one count of operating an illegal gambling business, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Jones operated the illegal gambling business, Lot-O-Games, on Highway 277 in Jones, County, Texas.
The maximum statutory penalty for the offense is five years in federal prison and a $250,000 fine. However, according to the plea agreement filed in the case, the government will make a non-binding recommendation to the Court that the appropriate sentence is eight months imprisonment, to be satisfied by two months imprisonment and a term of supervised release with a condition that substitutes six months of home detention for the remaining term of imprisonment. Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report.
In addition, according to the plea agreement, Jones agrees to forfeit property that was seized by law enforcement officers last summer, pursuant to federal search and seizure warrants. That property includes $414,163 in cash; $12,337 in cashier’s checks; gold coins; two vehicles; jewelry; firearms; ammunition; numerous gaming machines; surveillance equipment and computer equipment.
According to the factual resume filed in the case, after U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) received information that Jones was operating the business, HSI agents, acting in an undercover capacity, entered the business and observed 25-30 customers playing on various gaming terminals. The agents approached a Lot-O-Games employee and told her they wanted to play on terminals 21 and 22, a slot-machine-type game and a video poker game. One agent handed the Lot-O-Games employee $50 in cash and the employee credited terminal 21 with 5000 credits. The other agent applied $65 worth of credits (6500 credits) from a prior undercover operation to terminal 22.
Soon thereafter, the agents observed James Lynn Jones, carrying a brown paper bag, enter the business and walk to a bar area across from the cashier’s counter where he pulled out two stacks of cash. Immediately after Jones arrived, several patrons exchanged certificates for small pieces of paper at the Lot-O-Games cashier’s counter. The patrons then took that piece of paper to Jones who, in turn, exchanged the small piece of paper for cash. About 20-25 minutes after the agents arrived, they observed the Lot-O-Games employee approach a patron who had won a 120,000 point jackpot. The employee told the patron that she would remove the 120,000 point credit from the machine and allow the patron to cash out the $1,200 in cash with Jones. The agents then saw the patron go to Jones to receive the cash.
One agent concluded playing the video poker game with 4900 credits, approached the Lot-O-Games employee and handed her a $1 bill. The employee, in return, gave the agent five, $10 “Playback Certificates.” The employee told the agent that he/she could get cash because the owner was present and that Sundays were the only days that the business paid out in cash. The Lot-O-Games employee took back the Playback Certificates and gave the agent a small piece of paper with the number “5” and her initials on it. The agent handed the piece of paper to Jones, who, in turn, gave the agent $50 in cash. The other agent followed a similar procedure to obtain $50 in cash from Jones.
The investigation revealed that this was standard practice at Lot-O-Games. During the week, customers would receive Playback Certificates for the points that were remaining after playing at various gambling-type video game consoles. On Sunday, Jones would come to Lot-O-Games and customers could exchange these Playback Certificates for cash. This practice began sometime around late 2010. The investigation further revealed that during a 12-hour shift, the business took in approximately $3,500 - $5,000.
The investigation is being conducted by ICE HSI, the Abilene Police Department, the Jones County District Attorney’s Office, the Office of the Texas Attorney General and the Texas Department of Public Safety. Assistant U.S. Attorney Jeffrey Haag, of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution, and Assistant U.S. Attorney Diane Kozub, is handling the forfeiture.
Four Charged in $15 Million Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – Four individuals from New Jersey were taken into custody today for their alleged roles in a $15 million mortgage fraud scheme on an Indictment returned by a federal grand jury on Jan. 30, 2013, U.S. Attorney Paul J. Fishman announced.
The four defendants are: Fredric M. Diantonio, 40, of Wildwood, N.J.; Louis V. Catarro, 60, of Runnemede, N.J.; Kathryn W. Lockwood, 43, of Wildwood Crest, N.J.; and Thomas E. Morello, 55, of Mt. Laurel, N.J. All defendants were charged with conspiracy to commit wire fraud. Diantonio, Catarro, and Lockwood were also charged with conspiracy to commit money laundering. In addition, Diantonio and Catarro were charged with making false statements to the U.S. Department of Housing and Urban Development. The defendants are expected to appear today before U.S. Magistrate Judge Karen M. Williams in Camden federal court.
According to the Indictment:
Real estate agents Diantonio, Catarro, and Lockwood located properties in Wildwood and North Wildwood, N.J., for sale by real estate developers such as Morello. Diantonio, Catarro, and Lockwood caused real estate sales contracts to be created, which listed deposit monies from buyers that often were not collected. The conspirators also agreed that sellers such as Morello would pay kickbacks to the buyers of the properties without disclosing the kickbacks to the lending institutions funding mortgages used by the buyers to purchase the properties. The conspirators caused fraudulent documents to be signed at real estate closings, including U.S. Department of Housing and Urban Development Settlement Statements, which failed to disclose the kickbacks paid to the buyers or which falsely stated that a deposit toward the purchase of the property had been collected. Diantonio, Catarro, and Lockwood received real estate sales commissions for putting the transactions together.
The wire fraud conspiracy charge is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. The false statements charge carries a maximum potential penalty of two years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident
Agency, under the direction of Acting Special Agent in Charge David Velasquez in Newark; special agents from the FBI’s Newtown Square Resident Agency, under the direction of Acting Special Agent in Charge John J. Brosnan in Philadelphia; special agents from IRS – Criminal Investigation in Philadelphia, under the direction of Special Agent in Charge Akeia Conner; and special agents from the Department of Housing and Urban Development Office of Inspector General, under the direction of Special Agent in Charge Joseph Clarke in Philadelphia for the investigation leading to the Indictment and arrests.The government is represented by R. Stephen Stigall, Attorney in Charge of the U.S. Attorney’s Office in Camden.
The charges and allegations contained in the Indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Diantonio, Fredric, et al. Indictment
Foun Men Sentenced to Prison for Roles in Chop-Shop RingRead the Press Release
Four men were sentenced to prison for their roles in a conspiracy that trafficked in stolen vehicles, backhoes, steel, scrap metal and other objects through a chop shop and a scrap-metal yard in Cleveland, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
Lindsey Blackmon, 48, of Cleveland, was sentenced to nearly five years (57 months) in prison by U.S. District Judge John Adams.
Nayyir Mahdi, aka “Willie Jones,” 42, of Shaker Heights, was sentenced to four years in prison and ordered to pay $22,184 in restitution.
Curtis Wilder, 43, of Bedford Heights, was sentenced to three years in prison and ordered to pay $346,845 in restitution.
Gilbert Evans, 48, of Cleveland, was sentenced to 16 months in prison.
Mark Brown, 46, of Cleveland, was sentenced to one day in jail followed by eight months of home confinement.
Davies Pierce, of Cleveland, is scheduled to be sentenced next month.
“These defendants ended up with semi-trucks or pickups that were stolen from parking lots and other places,” Dettelbach said. “This conspiracy included thefts in Warrensville Heights, Willoughby, Mentor, Euclid, Elyria and a slew of other locations.”
“Stealing and selling stolen vehicles and cargo comes with a price of incarceration,” Anthony said. “The FBI and our Organized Crime Task Force partners will continue our efforts to detect and dismantle these illegal enterprises which negatively impact our economy and our citizens.”
Mahdi operated Express Metals on East 152nd Street and, before that, at 14915 Woodworth Ave., both in Cleveland, and was in the business of selling scrapped metal. Blackmon obtained a location at 19210 Miles Road, Warrensville Heights, Ohio, to be used as a chop shop. Pierce owned and operated Duffy’s Towing at 7810 Colfax Road and salvaged autos for scrap metal, according to court documents.
Wilder, John Jones and others broke into and stole motor vehicles throughout Northeast Ohio. Between June 2011 and March 2012, they brought the stolen vehicles to Brown, Pierce and Mahdi. The Vehicle Identification Numbers (VIN) were then removed from the vehicles, parts were stripped from the vehicle and sold, and the rest of the vehicles were crushed and sold for scrap, according to court documents.
Some of the co-conspirators brought stolen vehicles to Brown, who stripped the autos of parts, including rims and catalytic converters, before towing the vehicles to Pierce’s shop on Colfax Road, where they were destroyed and scrapped, according to court documents.Blackmon and others would spot and steal loads of cargo after truck drivers parked their rigs. The tractor, trailer and loads of cargo were then brought to Express Metals, operated by Mahdi, and to Pierce’s scrap yard, where the stolen cargo was broken down, according to court documents.
On March 4, 2012, Blackmon, Evans, Brown and others possessed a shipment of steel coils worth about $120,000 that were stolen from a Ramada Inn in Elyria. The steel was being shipped to Michigan from Twinsburg, Ohio, according to court documents.
One month earlier, Blackmon, Pierce, Brown and others, possessed steel beams worth $18,700, a 2007 Kenworth semi-truck and a 2005 Eagle flatbed which had been stolen in the vicinity of Streetsboro, Ohio, while being used in interstate commerce between Twinsburg, Ohio and Virginia, according to court documents.
Nine others were indicted on related charges in state court.
This case is being handled by Assistant United States Attorney Robert E. Bulford following an investigation by the FBI’s Organized Crime Task Force, which includes the FBI, Ohio State Highway Patrol, U.S. Customs and Border Protection and the Cleveland Division of Police.
Former Twin Lakes, Wisconsin Man Sentenced to Prison for Role in Mortgage Fraud SchemeRead the Press Release
The Office of the United States Attorney announced that on January 29, 2013 Federal District Judge Lynn Adelman sentenced Paul Zaleski, (age: 64), formerly of Twin Lakes, Wisconsin, now living in Ojai, California, to fourteen months in federal prison for his part in a mortgage fraud scheme that spanned 2004 to 2006. Zaleski, who pled guilty to one count of wire fraud and one count of money laundering, faced a total of 30 years in prison for these offenses.
According to the indictment, Zaleski, acting as a mortgage broker, orchestrated a scheme which involved straw buyers, fraudulent loan applications, and inflated appraisals. At the result, he was able to arrange in excess of $14 million in loans for the purchase of approximately 51 properties located in southeastern Wisconsin and northern Illinois. More than $2 million of the loan proceeds wired by the various lenders were funneled to shell companies that Zalesk established.
In connection with the scheme, Zaleski represented himself as a person involved in the purchase and improvement of real estate for profit and the coordinator of a group of investors engaged in that activity. All but a few of the properties ultimately went into foreclosure resulting in a loss of more than $5 million.
The money laundering counts alleged that ill-gotten loan proceeds were used, in part, for the purchase of additional properties, and for personal expenses, including Zaleski’s purchase of a new Chevrolet Corvette.
Adelman previously sentenced Zaleski’s co-conspirators for their roles in the fraud scheme. Appraiser John Hochrek, 51, of Ingleside, Illinois, was sentenced to one year in prison for wire fraud. Remodeling contractor Michael Pembroke, 48, of Twin Lakes, Wisconsin, was sentenced to one year in prison for wire fraud and money laundering. Investor Patricia Kay, 60, of Kenosha, Wisconsin, was sentenced to three years probation for misprision of a felony. Loan processor, Robert Farrell, 33, of Mundelein, Illinois, was sentenced to three years probation for conspiracy. Restitution has yet to be determined.
According to First Assistant United States Attorney Gregory Haanstad “This prosecution reflects the Department of Justice’s commitment to protecting homeowners, lenders, and the economy from the serious damage that flows from mortgage fraud. As was the case in this prosecution, our office will continue to work collaboratively with the FBI, the IRS, and our other law enforcement partners to hold accountable those who engage in these frauds and who, by doing so, undermine the integrity of our housing and credit markets.”
"Mortgage fraud has had a devastating impact on our society" said Teresa L. Carlson, Special Agent in Charge of the FBI Milwaukee Division. "However, through the great collaboration of our law enforcement partnerships we will continue to dedicate resources to combat the threat of mortgage fraud here in Wisconsin and across the nation."
“Mr. Zaleski held a position of trust not only in First Security Financial, but also in the eyes of the public and the Kenosha community as a whole, and unfortunately chose to violate that trust and abuse his position” said Kelly Jackson, Special Agent in Charge of the IRS Criminal Investigation office who investigated Zaleski. Jackson added that federal authorities will continue their efforts to diligently investigate and prosecute crimes which financially victimize others.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation.
Former Police Officer Pleads Guilty to Gun ChargesRead the Press Release
BROWNSVILLE, Texas – Armando Duenez has entered a plea of guilty to conspiracy to export firearms and failure to appear, United States Attorney Kenneth Magidson announced today. Duenez, 31, who entered the plea late yesterday afternoon, was employed as a police officer with the Rio Hondo Police Department during the offense.
The former officer entered into an agreement with others to export weapons from the United States to Mexico. Duenez admitted to working with Raymond Martinez, formerly a member of the Palm Valley Police Department, to buy firearms and sell them for a profit to individuals who intended to smuggle them to Mexico. Duenez admitted to purchasing more than 15 semi-automatic rifles that were later sold in Mexico. The rifles were all capable of accepting high capacity magazines. The investigation began when weapons recovered in Mexico were traced back to him. Martinez was also convicted of dealing in firearms without a license and later sentenced to federal prison.
Duenez was arrested for the firearms offense in July 2008. After being release on bond, Duenez failed to appear for his arraignment having fled to Mexico. Duenez remained in Mexico until he surrendered to United States Marshals Service in December 2012.
U.S. District Judge Hilda G. Tagle, who accepted the guilty plea today, has set sentencing for May 1, 2013. At that time he faces up to five years in federal prison on each of the charges as well as a possible $250,000 fine. He will remain in custody pending that hearing.
This case was investigated by Bureau of Alcohol, Tobacco, Firearms and Explosives Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney Bill Hagen.Former Owner of Metro Pool Company Pleads Guilty to Tax FraudRead the Press Release
Oklahoma City, Oklahoma – Today, THEODORE MICHAEL ZACHRITZ, of Nichols Hills, Oklahoma, pled guilty to willfully failing to pay over to the Internal Revenue Service federal taxes that he withheld from his employees’ wages, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
For many years, Zachritz and his wife owned and operated Lifestyle Pools, LLC in Oklahoma City. As owner of the company, Zachritz deducted and withheld federal income taxes, Social Security taxes, and Medicare taxes (commonly called “payroll taxes”) from wages of Lifestyle Pools employees. Under federal law, an employer must deduct and withhold payroll taxes from employees’ wages, and then pay over those withheld taxes to the IRS at the end of each quarter.
On January 22, 2013, the United States charged Zachritz with willfully failing to collect and pay over to the IRS the federal income taxes, Social Security taxes, and Medicare taxes withheld from wages of Lifestyle Pools employees for the third quarter of 2006 through the end of 2009. At today’s plea hearing, Zachritz admitted that he deducted and withheld more than $290,000 in payroll taxes from his employees’ wages during that period. He also admitted that he knew he was required by law to turn over to the IRS the withheld federal payroll taxes each quarter, but he did not do so. Zachritz admitted that he still has not paid over to the IRS any of the payroll taxes that he withheld from 2006 to 2009.
At sentencing, Zachritz faces a potential penalty of up to five years in prison, a fine up to $250,000, and restitution to the IRS. In a plea agreement, Zachritz agreed to pay restitution to the IRS in the amount of his criminal conduct. The court will determine the specific amount of restitution due to the IRS at sentencing, which will take place in approximately ninety days.
This case is the result of an investigation conducted by the IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Chris M. Stephens.
Former Orthofix Regional Director Sentenced for PerjuryRead the Press Release
BOSTON – A former Orthofix regional sales director was sentenced today for making a false declaration to a grand jury.
Mitchell Salzman, 47, was sentenced by U.S. District Court Judge Rya W. Zobel to one year of probation including three months of home detention and a $2,000 fine. In December 2011, Salzman pleaded guilty to making a false declaration to a grand jury.Salzman admitted that he had lied to a grand jury about his role in doing business with a former Orthofix representative who had been terminated for falsifying medical records. Salzman was a regional sales director in the spine division at Orthofix, Inc. Orthofix manufactures bone growth stimulators that are used to help regenerate bone cells in connection with spinal fusions. In the summer of 2009, Orthofix fired a territory manager in Salzman’s region after discovering that the territory manager was falsifying medical records to induce Medicare to pay for stimulators that were outside of Medicare’s guidelines. Salzman and others were concerned that this termination would result in lost business. Therefore, Salzman and others executed a scheme whereby the territory manager continued to obtain stimulator orders in the territory, and Orthofix continued to pay commissions to the territory manager, through a front company established by the territory manager. Salzman was involved with these negotiations, including facilitating the agreement between Orthofix and the front company.
In 2011, Salzman testified before the grand jury related to Orthofix business practices pursuant to a grant of judicial immunity. Salzman was asked a number of questions about the arrangement between Orthofix and the territory manager and Salzman repeatedly lied to the grand jury concerning this arrangement. Salzman denied knowing that the territory manager had any role with the front company, stating that he only learned of the connection within a month before his grand jury appearance. Salzman also testified that he had recently contacted an employee of the front company and asked if the territory manager was involved with the company, and only then did he realize that the territory manager was still involved. None of this was true because Salzman knew from the beginning that the territory manager had established the front company. Indeed, the only reason that Salzman and others hired the front company was to continue to pay the territory manager.
In addition to the Salzman sentence, the Orthofix investigation has to date resulted in a number of felony charges against employees and contractors of Orthofix, including the following:
- In December 2012, Orthofix was convicted of obstruction of a federal audit, and ordered to pay $42 million in criminal fines and civil payments, and was sentenced to probation for five years;
- On January 22, 2013, Tom Guerrieri, the former vice president of sales for Orthofix, was sentenced to eight months in prison and ordered to pay $50,000 in fines and forfeiture for paying kickbacks;
- In July 2012, Michael Cobb, a physician’s assistant, was sentenced to six months in prison and six months home detention, and ordered to forfeit $10,000 and pay a $3,000 fine for accepting kickbacks from Orthofix;
- On January 9, 2013, Derrick Field, a former Orthofix territory manager, was sentenced to five months of home detention as part of a two year probation sentence, forfeiture of $40,000 and a $4,000 fine;
- On January 23, 2013, Michael McKay, a former Orthofix territory manager, was sentenced to three months of home detention as part of a one year probation sentence, forfeiture of $10,000 and a $3,000 fine;
- In September 2012, Brian Racey pleaded guilty to health care while he was a territory manager for Orthofix and is scheduled to be sentenced on Feb. 20, 2013 in the U.S. District Court for the Eastern District of Pennsylvania.
- On January 24, 2013, the United States filed a plea agreement and criminal Information related to Ilene Terrell, MD, charging her with making a false declaration to a grand jury. A plea hearing is scheduled for Feb. 21, 2013.
The case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations and the Department of Defense, Defense Criminal Investigative Service Boston Field Division. It was prosecuted by Assistant U.S. Attorneys David Schumacher and Jeremy Sternberg of Ortiz's Health Care Fraud Unit.
Former NFL Player Sentenced to Seven Months in Prison for Failure to File Tax ReturnRead the Press Release
CAMDEN, N.J. – A former National Football League player who formerly resided in Passaic County was sentenced today to seven months in prison for failing to file a federal income tax return, U.S. Attorney Paul J. Fishman announced.
William James, 33, of Brownsville, Pa., formerly known as William J. Peterson, pleaded guilty on May 23, 2012, before U.S. District Court Judge Jerome B Simandle to Count One of a five-count Information. Count One charged James, who formerly resided in Woodland Park, N.J., with having willfully failed to file a tax return for the tax year 2005.
According to documents filed in this case:
James was a professional football player from 2001 to 2010, having played for teams that included the New York Giants and the Philadelphia Eagles. While playing professionally, James earned a substantial income from the NFL teams for which he played. In 2005 his salary was $5.5 million. James was required to file an individual income tax return because his gross income exceeded the sum of the personal and standard deductions available to him that year.
Although he had repeatedly been advised by the IRS and by his personal accountant that he was obligated to file a tax return, James ignored their notices and failed to file a return.
In addition to the prison term, Judge Simandle sentenced James to one year of supervised release. As part of the plea agreement, James has agreed to file back returns and to pay back taxes and penalties, which total $470,254. He has already served four months in custody.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation under the direction of Acting Special Agent in Charge Shantelle P. Kitchen for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Bohdan Vitvitsky of the U.S. Attorney’s Economic Crimes Unit in Newark.
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Defense Counsel: Lori Koch Esq., Assistant Federal Public Defender, CamdenFormer Law School Student Sentenced to Four Years in Prison for Conspiring to Distribute Methamphetamine-Two Others Awaiting Sentencing in Case-Read the Press Release
WASHINGTON – Marc A. Gersen, 31, a former law school student, was sentenced today to a four-year prison term for conspiring to distribute methamphetamine in the Washington, D.C. area, announced U.S. Attorney Ronald C. Machen Jr. and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Gersen, of Washington, D.C., pled guilty in November 2012 in the U.S. District Court for the District of Columbia to one count of conspiracy to distribute and possess with intent to distribute methamphetamine. He was sentenced by the Honorable Reggie B. Walton. Upon completion of his prison term, Gersen will be placed on three years of supervised release. He also must comply with a forfeiture order calling for the payment of a $120,000 money judgment, pay a fine of $2,500, and perform 400 hours of community service.
According to the facts presented at the plea hearing, between the summer of 2011 and December of 2011, Gersen and others, including Michael Talon and Lee Hylton, conspired and agreed to obtain and distribute wholesale quantities of methamphetamine in the Washington, D.C., area. During the period of the conspiracy, Gersen, then a student at Georgetown Law School, traveled to California to buy the methamphetamine, which he then would ship to Washington D.C. and sell on a regular basis, in quantities ranging from an ounce to half a pound. The wholesale price of a pound of methamphetamine is approximately $26,000.
As part of an investigation, officers with the Metropolitan Police Department executed a search warrant on Nov. 28, 2011 at an apartment shared by Gersen and Talon in the 1600 block of 18th Street NW. They recovered about three grams of methamphetamine, chemicals used for drug manufacturing, and $3,000 in cash. No one was present during the search; at the time, Gersen was visiting his family in Florida, and Talon was away.
Gersen was arrested by the MPD on Dec. 1, 2011. The arrest took place outside of a hotel in the District of Columbia where others involved in the conspiracy were packaging and storing a large a quantity of crystal methamphetamine. Talon and Hylton were arrested at the hotel.
Talon, 30, of Washington, D.C., pled guilty to conspiracy to distribute and possess with intent to distribute methamphetamine and is to be sentenced March 15, 2013. Hylton, 51, of Arlington, Va., pled guilty to the same charge and is to be sentenced March 1, 2013.
In announcing the sentence, U.S. Attorney Machen and Chief Lanier commended the work of the MPD officers and the agents and personnel from the U.S. Drug Enforcement Administration and Naval Criminal Investigative Service, who worked on the investigation. They also thanked those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Crystal Seldon; Criminal Investigator Duncan Templeton, and Assistant U.S. Attorneys Patricia Stewart, Magdalena Acevedo, and Zia Faruqui, who investigated and prosecuted the case.
13-035Former Investment Advisor to Serve 12 ½ Years in Prison for $16 Million Mail Fraud, Money Laundering SchemeRead the Press Release
Peoria, Ill. – A former Urbana, Ill., investment advisor, Timothy J. Roth, 57, currently of Stonington, Ill., was sentenced this afternoon in federal court in Peoria, to serve 151 months (12 years, 7 months) in prison and ordered to pay restitution in the amount of $16,151,964 to victims of his fraud scheme. Senior U.S. District Judge Michael M. Mihm ordered that Roth report on Apr. 2, 2013, to the federal Bureau of Prisons to begin serving his prison term. Following completion of his prison sentence, Roth was ordered to remain on supervised release for a period of three years.
On Oct. 25, 2011, Roth waived indictment and entered guilty pleas to one count each of mail fraud and money laundering. Roth admitted that from May 2004 through March 2011, he defrauded eleven victims, including companies and individual victims, of approximately $16 million.
According to court documents and statements, Roth admitted that he fraudulently transferred, liquidated and removed mutual fund shares from clients’ accounts for his own personal and business use. Since June 2002, Roth had worked as a federally registered investment advisor for a capital management company in Champaign, Ill., and had also formed and operated several personal consulting companies. These companies provided software and tracking and management programs to various outside third party administrators for mutual fund option plans.
The investigation was conducted by the Internal Revenue Service, Criminal Investigations Division; the Federal Bureau of Investigation; the U.S. Postal Inspection Service; the Securities Department of the Illinois Secretary of State; and the Champaign Police Department. The case was prosecuted by Assistant U.S. Attorneys David H. Hoff and Eric I. Long.
Former Houston Businessman Sent to Prison for Bankruptcy FraudRead the Press Release
HOUSTON - Jimmy Wayne Sissom, 46, has been ordered to federal prison following his conviction on one count of bankruptcy fraud, United States Attorney Kenneth Magidson announced today. Sissom, of Bastrop, was the owner of Dealers Management Group Inc., a used car company located in Houston and a partner in F&S Storage Company in Katy. He pleaded guilty to the charge, Sept. 27, 2012.
Today, U.S. District Judge Sim Lake, who accepted the guilty plea, handed Sissom a 15-month sentence to be followed by three years of supervised release.
Sissom filed a Chapter 7 bankruptcy petition in May 2006. During the course of the bankruptcy proceeding, Sissom stated to the trustee that he had listed all of his assets in his estate. However, he failed to disclose that approximately two weeks prior to the bankruptcy filing, his wife had purchased a home valued in excess of $300,000 which was located in Bastrop.
Sissom admitted at the time of his plea that he made a false statement to the trustee about his assets.
Previously released on bond, Sissom was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
FBI investigated and Assistant United States Attorney Quincy L. Ollison prosecuted the case with the assistance of the United States Trustee’s Office.
Former Gray Bear Construction Company Owner Sentenced for Lying to Obtain Service Disabled Veteran Owned Small Business Program (SDVOSB) ContractsRead the Press Release
PORTLAND, Ore. - U.S. District Judge Michael W. Mosman today sentenced John Witty, 67, of Portland, to pay a $206,844 fine and serve five years probation, for lying to the Department of Veteran Affairs (VA) about being a service-disabled veteran. Witty will also be required to perform 100 hours of community service at a veterans' organization.
"The defendant's crime victimized the service-disabled veteran small business owners who deserved to be awarded these government contracts," said U.S. Attorney S. Amanda Marshall. "We will continue to investigate and aggressively prosecute federal procurement fraud."
Witty is the former owner and operator of Gray Bear Construction Company ("Gray Bear"). In November 2012, Witty pleaded guilty to one count of false statements. He admitted he falsely represented to the VA that Gray Bear was a Service Disabled Veteran Owned Small Business (SDVOSB), even though Witty had never been certified as a service-disabled veteran. Witty admitted that as a result of his false representations, the VA awarded Gray Bear approximately $5,849,372 in SDVOSB set-aside contracts from August 2009 through May 2011, and that Gray Bear was not eligible to receive those contracts.
Inspector General George Opfer, Department of Veterans Affairs, stated that, "Mr. Witty is the 15th individual prosecuted during the past year for defrauding a VA program intended to provide preference to service-disabled entrepreneurs whose sacrifices on behalf of our Nation have earned them the right to compete for Federal set-aside contracts. We are diligently investigating others elsewhere who have similarly defrauded this program and expect additional prosecutions. We are committed to ensuring the integrity of all VA programs and will continue to diligently pursue those individuals who, by fraud and deceit, abuse these programs."
This case stemmed from an investigation by the Department of Veteran Affairs, Office of Inspector General. The case was prosecuted by Assistant U.S. Attorney Stacie Beckerman.
Former Employee of Bon-Ton Stores FoundationRead the Press Release
Charged With $1.2 Million Mail Fraud And Money LaunderingThe United States Attorney’s Office for the Middle District of Pennsylvania, announced the indictment of a former employee of the Bon-Ton Stores Foundation for mail fraud and money laundering that robbed the Foundation of more than $1.2 million. Christine S. DeJuliis, age 51, of Felton, PA, was charged in a six-count indictment handed up by the Grand Jury sitting in Harrisburg Wednesday.
According to United States Attorney Peter J. Smith, DeJuliis is charged with five counts of mail fraud and one count of money laundering covering a period from as early as January 2003 until July 2009. The charges stem from an investigation conducted by the U.S. Secret Service and Internal Revenue Service–Criminal Investigation based on information received from the Bon-Ton Stores, Inc.
The investigation revealed that DeJuliis, hired by the Bon-Ton Stores, Inc., in 1999, worked in an administrative capacity for the head of the Bon-Ton Stores Foundation, a charitable organization established by the Bon-Ton Stores, Inc.
DeJuliis’s duties involved much of the day-to-day operation of the Foundation. DeJuliis allegedly created fictitious businesses with bank accounts and then devised a scheme to have the Foundation appear to award grants to the businesses. The grant money was put into the fictitious accounts controlled by DeJuliis and she allegedly caused the money to be taken out of those accounts and placed into her personal accounts. Over the period charged in the Indictment, DeJuliis allegedly defrauded the Foundation of more than $1.2 million.
The Indictment also contains a forfeiture allegation stating the Government’s intent to forfeit at least $1,282,885 traceable to the crime.
Officials at the Bon-Ton Stores, Inc., and the Bon-Ton Stores Foundation were cooperative with the investigation. DeJuliis was fired from the Foundation as soon as her conduct was discovered by the company in July 2009.
The case is being prosecuted by Assistant United States Attorney James T. Clancy.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this particular case, the maximum penalty under the federal statute is 20 years’ imprisonment on each mail fraud charge, a term of supervised release following imprisonment, and a fine. The money laundering charge also subjects DeJuliis to a term of imprisonment of up to 20 years and a fine of the greater of $500,000 or twice the value of the property involved in the money laundering transactions. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Former Detroit Public Library Contractor Indictedfor Bribery of A Public OfficialRead the Press Release
James Henley, a former contractor with the Detroit Public Library (“DPL”), was charged in an Indictment for Bribery of a Public Official, United States Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement were Robert D. Foley, III, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation and Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation
According to the six count Indictment, James Henley bribed a public official of the DPL from about January 2007 until about July 28, 2008. Henley owned a company called Core Consulting & Professional Services. The DPL official approved a proposal submitted by Core Consulting to provide information technology work, and approved various extensions and change orders to the contract. Ultimately, DPL paid Core Consulting $1.5 million under the contract, and Henley secretly paid kickbacks to the DPL official totaling at least $600,000.
Henley is also charged with failing to file individual and corporate tax returns for years 2007 and 2008.
If convicted, Henley faces a maximum of ten years in prison and a fine of up to $250,000. The Indictment also seeks forfeiture of proceeds and payments associated with the bribery scheme.United States Attorney McQuade said, “The citizens lose when public contracts are awarded on the basis of bribery instead of on the merits of the bids. We will do all we can to root out corruption in public contracting in hopes of deterring officials from using public funds for self-enrichment.”
FBI Special Agent in Charge Robert D. Foley III said, "Those individuals who engage in bribery and kickbacks rob citizens of the honest government they deserve. The FBI Led Detroit Area Public Corruption Task Force is committed to stopping these illegal acts."
"Kickbacks will not be tolerated as a way to do business in Detroit," said Special Agent in Charge Erick Martinez, IRS Criminal Investigation.
The case was investigated by agents of the FBI. This case is being prosecuted by Assistant United States Attorneys Elizabeth A. Stafford and Julie Beck.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Former Consultant, Roomy Khan, Sentenced in Manhattan Federal Court to One Year in Prison for Insider Trading and Obstruction of JusticeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ROOMY KHAN was sentenced today to one year in prison for her participation in insider trading schemes in which KHAN provided material, nonpublic information (“Inside Information”) about various publicly-traded companies to a number of individuals, including Raj Rajaratnam, the founder and former head of the Galleon Group, and Doug Whitman, the president and founder of Whitman Capital. KHAN pled guilty in October 2009 to securities fraud, conspiracy to commit securities fraud, and obstruction of justice pursuant to a cooperation agreement with the Government. She was sentenced in Manhattan federal court by U.S. District Judge Jed S. Rakoff.
According to the Information, statements made during KHAN’s guilty plea proceeding, KHAN’s testimony during the criminal trial of Doug Whitman, and the Government’s sentencing submission in KHAN’s case:
From approximately 2004 through 2007, KHAN provided Rajaratnam, Whitman, and others with Inside Information relating to several companies, including Polycom and Google, with the understanding that these individuals would use the information to trade securities. KHAN also used some of the Inside Information to make personal trades. In exchange for the information she provided to her co-conspirators, KHAN received Inside Information about numerous other companies. In addition, KHAN obstructed the Government’s investigation of her co-conspirators by, among other things, deleting an incriminating email she received from a co-conspirator and alerting others to a pending investigation by the U.S. Securities and Exchange Commission.
In addition to the prison term, Judge Rakoff sentenced KHAN, 54, to three years of supervised release. KHAN was also ordered to pay $1,525,000 in forfeiture and a $300 special assessment fee.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force 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 is working to improve efforts across the federal executive branch, and with state and local partners, to 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 case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Christopher L. LaVigne and Jillian Berman are in charge of the prosecution.
Former Camden Police Officer Sentenced to 46 Months in Prison for Conspiracy to Deprive Others of Civil RightsRead the Press Release
CAMDEN, N.J. – A former Camden police officer was sentenced today to 46 months in prison for conspiring with fellow officers to deprive others of their civil rights, U.S. Attorney Paul J. Fishman announced.
Jason Stetser, 34, of Waterford Township, N.J., previously pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court. He admitted he conspired with Antonio Figueroa, 36, of Camden; Dan Morris, 49, of Mount Laurel, N.J.; and Kevin Parry, 32, of Brooklawn, N.J., to deprive others of their due process rights and their right to be free from unreasonable searches and seizures.“The punishment handed down today is a just response to Jason Stetser’s betrayal of his oath of office,” U.S. Attorney Fishman said. “He also betrayed the trust of those whose rights he violated, the public he was sworn to protect, and all of the honest police officers who risk everything to keep us safe.”
According to documents filed in this case and statements made in court:
From May 2007 to October 2009, while on duty as a uniformed police officer with the Camden Police Department, Stetser engaged in a conspiracy with other Camden Police officers to deprive individuals of their due process rights by charging them with planted evidence; threatening certain individuals with arrest using planted evidence if they did not cooperate with law enforcement; conducting illegal searches without a search warrant or consent; stealing money during illegal searches and arrests; paying for cooperation and information with illegal drugs; failing to report found drugs and stashing them to use as planted evidence; and preparing false police reports or testifying falsely in court to conceal his actions.
In addition to the prison term, Judge Kugler sentenced Stetser to two years of supervised release.Morris previously pleaded guilty to conspiracy to deprive others of civil rights and was sentenced Dec. 11, 2012, to eight months in prison. Parry was sentenced Oct. 10, 2012, to 20 months in prison. Figueroa was convicted following a three-and-a-half week trial before Judge Kugler and was sentenced on Sept. 7, 2012, to 120 months in prison.
U.S. Attorney Fishman credited special agents of the FBI’s Resident Agency in Cherry Hill, N.J., under the direction of Acting Special Agent in Charge John J. Brosnan; investigators and prosecutors of the Camden County Prosecutor’s Office, under the direction of Prosecutor Warren W. Faulk; deputy attorney generals from the N.J. Attorney General’s Office, Division of Criminal Justice, under the direction of Attorney General Jeffrey Chiesa; and the Camden Police Department, under the direction of Chief John S. Thomson, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys William E. Fitzpatrick and Matthew J. Skahill of the U.S. Attorney’s Office in Camden.
13-051Defense counsel: Frederick W. Klepp Esq., Cherry Hill, N.J.
Former Bank Tellers Charged with Falsifying Bank RecordsRead the Press Release
McALLEN, Texas – Eduardo Alaniz, 24, and Sebastian Mendez, 30, have been charged with conspiring to falsify records at Bank of America in Mission, where they were formerly employed as tellers, U.S. Attorney Kenneth Magidson announced today.
Both Alaniz and Mendez turned themselves in to federal authorities today.
The criminal complaint alleges that more than $94,000 was discovered missing from the bank. The ensuing investigation revealed Alaniz and Mendez allegedly conspired together to repeatedly falsify bank records over the course of several days in April of last year, effectively concealing the missing money from auditors. On one occasion, records showed $36,953.26 in the teller drawer, when the actual amount was $2,526.60.
At a hearing today, U.S. Magistrate Judge Peter Ormsby formally advised both defendants of the charges and released them on bond pending trial with the one of the conditions they not work at a financial institution during the pendency of the case.
If convicted, each defendant could face a term of imprisonment of up to five years in federal prison and a possible $250,000 fine.
This case was investigated by the Secret Service with the assistance of Bank of America. Assistant U.S. Attorney Christopher Sully is prosecuting the case.
Florida Man Sentenced on Money Laundering and Tax ChargesRead the Press Release
Rochester, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Gary Shapoff, 62, of Boynton Beach, Florida, who was convicted of money laundering and making a false tax return, was sentenced to 60 months in prison and ordered to pay restitution in the amount of $2,228,605.84 by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Bradley E. Tyler, who handled the case, stated that between January 2004 and July 2008, the defendant participated in a scheme to defraud investors who had invested approximately $2.5 million in international currency trading investments through the company Atwood & James S.A. During the course of the scheme, Shapoff used the mail and wire communications to facilitate the execution of the fraud. He also used illegally obtained investor proceeds to promote the scheme, in violation of the federal money laundering provisions, and did not report the gains that he made from the fraud on his individual tax returns. Shapoff offered the opportunity for “huge profits” in foreign currency, trades that were never made in investors names.
This law enforcement action is part of President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force 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 is working to improve efforts across the federal executive branch, and with state and local partners, to 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 sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Christopher M. Piehota, the United States Postal Inspection Service, under the direction of Inspector in Charge Kevin M. Niland, and the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent in Charge Toni Weirauch.
Federal Jury Finds Consultants to Former New Mexico Secretary of State Guilty to Theft, Obstruction of Justice, and Money Laundering ChargesRead the Press Release
Armando C. Gutierrez and Joseph C. Kupfer Found Guilty of Stealing $2,500,993 in Federal "Help America Vote Act" Funds
ALBUQUERQUE – This evening, a federal jury sitting in Albuquerque, N.M., found Armando C. Gutierrez, 65, of Corpus Christi, Texas, and Joseph C. Kupfer, 49, of Rio Rancho, N.M., guilty of conspiracy and theft of government property charges after an eight-day trial. The jury also convicted Gutierrez on obstruction of justice and money laundering charges. The jury’s guilty verdict was announced by U.S. Attorney Kenneth J. Gonzales, Acting Special Agent in Charge Gabriel L. Grchan of the Phoenix Division of the IRS Criminal Investigation, and Special Agent in Charge Carol K.O. Lee of the Albuquerque Division of the FBI.
Kupfer and his wife, Elizabeth D. Kupfer, 50, were charged with federal tax evasion offenses on Dec. 15, 2010. The three-count indictment charged the couple with willfully failing to report at least $768,333 in taxable income during tax years 2004 through 2006, and evading $286,175 in federal taxes.
On July 27, 2011, the indictment was superseded by an eleven-count superseding indictment which added Gutierrez as a co-defendant. Counts 1 through 5 of the superseding indictment included a conspiracy charge and theft of government property charges against Gutierrez and Kupfer relating to federal “Help America Vote Act” (HAVA) funds administered by former New Mexico Secretary of State (NMSOS) Rebecca Vigil-Giron. Counts 6 and 7 added obstruction of justice charges against Gutierrez relating to a federal audit and investigation into the misuse of federal HAVA funds, and Count 8 charged Gutierrez with laundering $630,000 in unlawfully obtained proceeds. Counts 9 through 11 included the three original tax
evasion charges against the Kupfers. The superseding indictment also included provisions seeking forfeiture of any property constituting proceeds traceable to the offenses charged, and a money judgment in the amount of $2,500,993, the amount involved in the offenses charged.At the time of the events described in the superseding indictment, Gutierrez and Kupfer were providing consulting services to the NMSOS under HAVA contracts, and Mrs. Kupfer was an employee of the New Mexico Attorney General’s Office (NMAGO) who had been detailed to work for the NMSOS.
In April 2012, the federal judge presiding over the case severed the three tax evasion counts from the other eight counts in the superseding indictment for purposes of trial. The Judge then scheduled separate trials for the Kupfers on the three tax evasion charges (the tax trial), and for Gutierrez and Kupfer on the conspiracy, theft, obstruction of justice and money laundering charges (the HAVA trial).
The tax trial against the Kupfers commenced on Aug. 13, 2012, and concluded on Aug. 17, 2012, when the jury returned a guilty verdict against the Kupfers on all three tax evasion charges. The evidence at the tax trial established that, during the years 2004 through 2006, Kupfer received income from Kupfer Consulting (KC), a business owned and operated by Kupfer, including federal HAVA funds, and the Kupfers reported income from KC in their joint personal tax returns. During those three years, the Kupfers received $1,304,421 in revenue from KC but reported only $502,541 in their tax returns. The Kupfers concealed approximately $768,333 in income by providing incomplete information to their tax preparer, thus avoided paying taxes on that money, and signed false and fraudulent tax returns and submitting those returns to the IRS.
The HAVA trial commenced on Jan. 22, 2012, and the evidence established that, following the passage of HAVA in 2002, States received federal funding to educate voters about the electoral process, increase voter registration, and meet new standards for election administration and voting systems. Between April 2003 and Dec. 2006, the NMSOS administered almost $20 million of federal HAVA funds through a number of contracts, including a multi-million dollar contract for voting-related advertising that was awarded to A. Gutierrez and Associates, Inc. (AGA), a company solely-owned and operated by Gutierrez, and three small contracts for increasing voting accessibility for the disabled that were awarded to KC, Kupfer’s business.
In summary, the evidence established Gutierrez and Kupfer conspired together to defraud the United States by stealing federal HAVA funds and converting the funds for their own use. Specifically, the two men unlawfully obtained federal HAVA funds for work they did not perform and services they did not provide by: (1) submitting false invoices for services that AGA and KC never provided; (2) attempting to obstruct an audit by the Election Assistance Commission (EAC); and (3) attempting to conceal the federal HAVA funds that they stole.
In April 2004, the NMSOS awarded a voting-related advertising contract to AGA. By its terms, the AGA contract was to terminate on Dec. 30, 2006, could not exceed $4 million, and required the written approval of the NMSOS before AGA could retain subcontractors. The AGA contract was amended in May 2006 to include an additional $1,762,000 in federal HAVA funds, and again in Oct. 2006 to add another $186,750 in federal HAVA funds. Between Sept. 2004 and Oct. 2006, AGA received a total of $6,271,810 in federal HAVA funds from the State of New Mexico but Gutierrez submitted documentation supporting only $3,385,151 in services and costs, resulting in an overpayment of $2,500,993 to which AGA was not entitled.
In addition to the three small contracts ($20,000 in 2003; $20,000 in 2004; and $30,000 in 2005) awarded to KC by the NM SOS, AGA made a series of nine payments totaling $746,375 in federal HAVA funds to Kupfer between Oct. 2004 and Nov. 2006. The payments far exceeded the value of any work that Kupfer ever actually performed for AGA under the HAVA contract, and Gutierrez and AGA never submitted any documentation to the NMSOS’s reflecting that AGA had retained Kupfer and/or KC as a subcontractor.
In early 2007, the EAC, an independent bipartisan commission established by HAVA to assist states with HAVA compliance and distribution of federal HAVA funds, began an audit into the use of federal HAVA funds by the NMSOS. The AGA HAVA contract immediately became the primary focus of the EAC’s audit because AGA could not provide documentation to the EAC auditors to support the federal HAVA funds AGA received for services allegedly provided to the State of New Mexico. In an effort to provide documentation for the federal HAVA funds AGA received, AGA provided 187 fraudulent invoices totaling $1,137,000 that purported to represent payment to media vendors when in fact AGA never paid any vendors based on these invoices. AGA also submitted documents that purported to modify the AGA contract by (1) changing it from a fixed hourly rate contract to a cost-plus-percentage-of cost contract, and (2) permitting AGA to hire subcontractors without written approval of the NMSOS. These documents, signed only by Gutierrez and AGA, were not in the files of the NMSOS, the New Mexico Department of Finance and Administration (NM DFA) or the NMAGO, and were not approved by the NM DFA as required by New Mexico law.
Subsequent to the EAC audit and in response to federal grand jury subpoenas, AGA and KC submitted fraudulent invoices that purported to support the nine payments totaling $746,375 that KC received from AGA between Oct. 2004 and Nov. 2006. Three of these invoices sought payments in the aggregate amount of $236,605 for production of a poll worker training video that was actually produced by another subcontractor at the cost of $75,000. These invoices had not been submitted to the EAC during its audit and were not in the files of the NMSOS, the NM DFA or the NMAGO.
The jury deliberated approximately three hours before returning a guilty verdict on Counts 1 through 8 of the superseding indictment.
At sentencing, the defendants face a maximum penalty of five years in prison on each of Counts 1 and 6, and a maximum penalty of ten years in prison on each of the remaining counts in the superseding indictment. The defendants also may be fined up to $250,000 on each count of conviction with the exception of Count 8, the money laundering charge against Gutierrez, which provides for a fine up to twice the value of the funds at issue, or $1,260,000. All three defendants remain on conditions of release pending their sentencing hearings. Mrs. Kupfer is scheduled to be sentenced on March 25, 2013. Sentencing hearings have yet to be set for Gutierrez and Kupfer.
In announcing the jury’s guilty verdict, U.S. Attorney Gonzales said, “The message behind the jury’s guilty verdict is that those who do business with government agencies will be held to the same high standards as government officials. By entering into contracts to provide services paid for with taxpayers’ monies, private citizens become duty bound to provide honest services for the monies they received. Mr. Gutierrez and Mr. Kupfer violated that duty by stealing more than $2,500,000 in taxpayers’ monies and failing to provide any services for that money. When anyone, including public official and government contractors, abuses the public’s trust in this way, they corrupt the system and erode the public’s confidence in their government. I want to thank the New Mexico Attorney General's Office for initiating the investigation that led to today’s guilty verdict, and commend the IRS and FBI for undertaking
the painstaking, comprehensive and complex investigation that permits us to hold these men responsible for stealing from the public they contracted to serve.”“The Federal government provided voter education funds to the State of New Mexico to ensure all citizens have the opportunity to have their voices heard. Gutierrez and Kupfer instead used a significant portion of these funds to support their lavish lifestyles. IRS Criminal Investigation, along with our law enforcement partners, will continue to aggressively pursue the blatant waste of taxpayer dollars,” stated IRS Criminal Investigation Acting Special Agent in Charge Gabriel Grchan.
“The FBI has zero tolerance for those who would steal from U.S. taxpayers, especially when it involves taking advantage of a program created to increase access to one of our nation’s most cherished rights,” said FBI Special Agent in Charge Carol Lee. “Thanks to the efforts of FBI Special Agents working with the IRS Criminal Investigation and the New Mexico Attorney General’s Office, we have held accountable individuals who lined their pockets with money that should have been used to help Americans vote.”
The case was investigated by the IRS Criminal Investigation and the Albuquerque office of the FBI, with assistance from the New Mexico Attorney General’s Office. The case was prosecuted by Assistant U.S. Attorneys Tara C. Neda, Jeremy Peña and Cynthia L. Weisman.
Fayetteville Pain Center Settles HIV Discrimination CaseRead the Press Release
Raleigh – United States Attorney Thomas G. Walker, along with the United States Justice Department, announced today that as part of its Barrier-Free Health Care Initiative, it has reached a settlement with the Fayetteville Pain Center under the Americans with Disabilities Act (ADA). The settlement resolves allegations that the Fayetteville Pain Center violated the ADA by refusing to treat a woman because she has HIV.
The complainant, a woman with HIV who was suffering from back pain as a result of a car accident, visited the Fayetteville Pain Center in Fayetteville, North Carolina, seeking treatment. According to the complaint, the woman was unable to obtain medical treatment because the doctor at the Fayetteville Pain Center refused to treat a person with HIV. The ADA requires public accommodations such as doctors’ offices, medical clinics, hospitals, and other health care providers, to provide people with disabilities, including those with HIV, equal access to goods, services, and facilities.
Under the settlement, the Fayetteville Pain Center must pay $10,000 to the complainant and $5,000 to the United States in civil penalties, train its staff on the ADA, and develop and implement an anti-discrimination policy.
“All people deserve equal access to medical treatment. People with HIV and other disabilities must not be denied health care because of their disabilities. Medical professionals, perhaps more than anyone, should understand that the universal precautions they use when treating all patients mean no one should be excluded from treatment based on HIV,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This type of discrimination will not be tolerated.”
Mr. Walker emphasized that “this settlement should also send a message to all health care providers in Eastern North Carolina that a disability cannot be a factor in determining accessibility to care and treatment.“
This settlement is part of the Department of Justice’s Barrier-Free Health Care Initiative, a partnership of the Civil Rights Division and U.S. Attorneys’ offices across the nation, to target enforcement efforts on a critical area for individuals with disabilities. The initiative was announced on the anniversary of the ADA in July 2012 and 40 U.S. Attorneys’ offices are participating. The division expects the initiative to address access to health care for people with HIV and hearing disabilities, as well as physical access to medical facilities. In 2012, the division and U.S. Attorneys reached two settlement agreements regarding access to medical care for people with HIV and four settlements regarding access to medical care for people with hearing disabilities.
For more information on the ADA and HIV visit www.ada.gov/aids. Those interested in finding out more information about these settlements or the obligations of public accommodations under the ADA, including how it protects people with HIV in accessing medical care, may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed by email to [email protected].
Donald Carl Salois Found Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that on January 30, 2013, in Great Falls, after a federal district court trial before U.S. District Judge Sam E. Haddon, DONALD CARL SALOIS, a 49-year-old resident of Browning, was found guilty of aggravated sexual abuse. Sentencing is set for May 20, 2013. He is currently detained.
At trial, the following evidence and testimony was presented to the jury. SALOIS picked up his victim in a 2000 Ford Ranger along Highway 2, south of Browning. SALOIS said that he would take the victim home, but that never occurred. Instead, SALOIS passed the victim's residence, stopped at a sufficiently secluded place, exited his vehicle, and brutally raped the victim.
When questioned by law enforcement, SALOIS admitted that he had sex with the victim, but claimed the encounter was consensual and occurred in his residence, not on the side of the road. SALOIS also claimed that he never left his residence the night of the rape. The FBI investigated and discovered that neighbors, on the night of the rape, did not see the 2000 Ford Ranger owned by SALOIS at the residence.
After the government presented testimony of 12 witnesses over the course of a day and a half, which included medical professionals, law enforcement, lay witnesses, and a DNA expert, the jury convicted SALOIS.
Assistant U.S. Attorneys Ryan G. Weldon and Laura B. Weiss prosecuted the case for the United States.
SALOIS faces possible penalties of life imprisonment, a $250,000 fine, and lifetime supervised release.
The investigation was conducted by the Federal Bureau of Investigation.
Doctor and Owner of Medical Supply Company Plead Guilty in Million-Dollar Power Wheelchair ScamRead the Press Release
United States Attorney Laura E. Duffy announced that a California medical doctor and the owner of the Oceanside Medical Supply in Long Beach, CA have both pled guilty to participating in a conspiracy to defraud the Medicare trust fund by submitting more than $1 million in fraudulent power wheelchair claims. Dr. Irving Schwartz and Jose Melendez entered their guilty pleas before Magistrate Judge Nita L. Stormes in federal court in San Diego, and pursuant to their plea agreements, the defendants are obligated to pay restitution to the Medicare trust fund for the losses caused by their scheme.
According to court papers and admissions by the defendants, the fraudulent conspiracy focused on the sale of bogus prescriptions, with the ultimate goal being to obtain reimbursements from Medicare for expensive power wheelchairs that patients did not need and, in some cases, did not want. Dr. Irving Schwartz admitted today during his guilty plea that in 2007-2008, he would travel to El Centro, California, in search of elderly Medicare patients. Dr. Schwartz would write prescriptions for power wheelchairs, even though the patients did not need the equipment and could walk without assistance. In exchange, Schwartz collected a $300 cash kickback for each fraudulent power wheelchair prescription. One of Schwartz’s co-conspirators would then sell the power wheelchair prescriptions to Melendez, a medical supply company owner, charging him $1,000 per fraudulent prescription.
According to court papers and admissions at today’s hearing, Melendez sold some of the power wheelchair prescriptions to other co-conspirators, charging them an additional mark-up on each fraudulent prescription. As the last step in the scheme, Melendez and other co-conspirators would submit the fraudulent prescriptions to Medicare for reimbursement, billing the government thousands more per wheelchair than it had cost them to purchase and deliver the equipment. Often the unneeded equipment would sit unused in patients’ homes for years.
Dr. Schwartz admitted today in open court that he wrote at least 186 fraudulent power wheelchair prescriptions for Medicare beneficiaries in exchange for more than $55,000 in bribes and kickbacks. Melendez, the owner and operator of Oceanside Medical Services, admitted that he purchased these 186 fraudulent prescriptions and used them to submit over $830,000 in false claims to Medicare.
In a related case, co-conspirators Aristeo and Laura Tavares have pled guilty and admitted to submitting more than $250,000 in false claims based on Dr. Schwartz’s fraudulent prescriptions. In total, the scheme resulted in more than $1 million in false claims to the Medicare trust fund.
United States Attorney Duffy said, “Combating health care fraud is a top priority of the Department of Justice. When Medicare dollars are wasted on expensive and unnecessary equipment, senior citizens run the risk of not being able to obtain the legitimate medical treatment they need. In this time of fiscal austerity, we must aggressively prosecute those who pilfer Medicare dollars to line their own pockets.”
“Health care fraud schemes involving false claims of durable medical equipment, cost U.S. taxpayers billions of dollars each year,” said Daphne Hearn, Special Agent in Charge of the San Diego FBI Office. “This prosecution should serve notice, that the FBI will aggressively pursue those individuals and criminal enterprises who would line their own pockets at the expense of U.S. taxpayers.”
“There can be no doubt that the federal government will crack down on physicians and other individuals defrauding the Medicare program," said Glenn R. Ferry, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s Los Angeles region. “When business owners conspire with doctors to pay kickbacks and write phony prescriptions, they both should expect to be brought to justice."
The pleas are subject to final acceptance by United States District Judge Marilyn L. Huff. The defendants are scheduled to be sentenced by Judge Huff on May 6, 2013 at 9:00 a.m.
DEFENDANTS CRIMINAL CASE NO. 12cr2599-H Irving J. Schwartz
Jose Melendez SUMMARY OF CHARGESCount 1: Conspiracy to Pay and Receive Health Care Kickbacks and Defraud -Title 18, United States Code, Section 371; Maximum Penalties: Five years in custody; $250,000 fine; 3 year of supervised release; and mandatory restitution
INVESTIGATING AGENCYFederal Bureau of Investigation
Department of Health and Human Services, Office of Inspector GeneralDistrict Court Enters Permanent Injunction Against Ohio-Based Drug Manufacturer and Company’s Senior ExecutivesRead the Press Release
U.S. District Court Judge Lesley Wells entered a consent decree of permanent injunction against Ben Venue Laboratories Inc., a Bedford, Ohio-based drug manufacturer, the Justice Department announced today. The permanent injunction was also entered against George P. Doyle, president and chief executive officer, Kimberly A. Kellermann, vice president of operations, and Douglas A. Rich, vice president of quality operations, for Ben Venue. The department, at the request of the Food and Drug Administration (FDA), asked the court to enter the consent decree.
Ben Venue manufactures numerous generic sterile injectable drug products, including cancer medications. As set forth in the complaint filed by the United States on January 22, FDA conducted an inspection of defendants’ facility from Nov. 7 to Dec. 2, 2011, and documented 10 deviations from current good manufacturing practices. According to the complaint, the FDA found, among other things, that the company failed to create and follow appropriate procedures to prevent contamination of drugs which were purported to be sterile. The FDA also found that the company failed to properly clean and maintain its equipment to ensure the safety and quality of the drugs it manufactured. In addition, the FDA determined that the company failed to conduct adequate investigations of drugs that did not meet their specifications.
Compliance with current good manufacturing practices requirements assures that drugs meet the safety requirements of the law and have the identity and strength and meet the quality and purity characteristics that they purport to or are represented to possess. FDA regulations, which establish minimum current good manufacturing practices applicable to human drugs, require manufacturers to control all aspects of the processes and procedures by which drugs are manufactured in order to prevent the production of unsafe and ineffective products.
According to the complaint, t he deviations observed by FDA during the November - December 2011 inspection were similar to deviations observed by FDA during its many previous inspections of Ben Venue’s facility. During FDA’s May 2011 inspection, FDA documented 48 deviations from current good manufacturing practices including an inadequate quality control unit, inadequate and untimely investigations, inadequately designed aseptic processing areas, poor employee aseptic practices, failure to prevent microbial contamination of drug products purporting to be sterile and failure to determine the root cause for microbial contaminants.
As described in the complaint, FDA’s long inspection and regulatory history of Ben Venue, including 35 inspections since 1997, and approximately 40 recalls since February 2002 associated with drugs manufactured at the Ben Venue facility (including 10 recalls in 2011 and 10 recalls in 2012), reflects a continuing pattern of significant deviations from current good manufacturing practices with its drugs. Some recalls involved drugs contaminated with glass and other particulates. Additional recalls were based on the company’s inability to assure the drug’s sterility. Of the roughly 40 recalls, nine were classified by FDA as “Class I,” meaning that FDA determined that there was “a reasonable probability that the use of . . . a violative product will cause serious adverse health consequences or death.”
The consent decree entered resolves the complaint by requiring Ben Venue to take a wide range of actions to correct its violations and ensure that they do not happen again. The injunction establishes a series of steps which must occur before Ben Venue can fully resume operations, including the retention of an expert to inspect the company’s facility, the development and then implementation of a remediation plan, and an inspection by FDA to confirm that the company’s manufacturing processes are fully compliant with the law.
“This consent decree restricts Ben Venue from manufacturing and distributing certain drugs until the company fully complies with the law,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “As this case demonstrates, the Department of Justice and FDA will work together to protect the health and safety of Americans by making sure that those who produce and distribute prescription drugs follow the law.”
“This resolution comes following nearly three dozen inspections which revealed inadequate quality control, including contaminated drugs, and led to approximately 40 recalls on products from this facility alone,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “The Justice Department and the Food and Drug Administration will continue to place its highest priority on protecting consumers.”
Under the decree, Ben Venue may continue to manufacture and distribute a subset of their drugs (listed on Attachment A to the decree), which FDA has determined are currently in shortage (domestically or abroad) or are vulnerable to shortage. However, prior to distribution of each batch of these drugs, the company’s expert must conduct a batch-by-batch review and certify that no deviations occurred during the manufacture of the drug that would adversely affect the safety or quality of the batch.
Principal Deputy Assistant Attorney General Delery thanked the FDA for referring this matter to the Department of Justice. Jeffrey Steger, Assistant Director of the Consumer Protection Branch of the Justice Department and Michele Svonkin, Counsel at FDA’s Office of the Chief Counsel, brought this case on behalf of the United States.
Deported Alien Sentenced to Time-Served for Illegally Re-entering U.S.Read the Press Release
PITTSBURGH, Pa. - An individual found by the New Castle Police has been sentenced in federal court to time-served on his conviction of re-entry into the United States after deportation, United States Attorney David J. Hickton announced today.
United States District Judge R. Mark Hornak imposed the sentence on Alex Omar Colindres-Ortiz, 33, formerly from Choluteca, Honduras.
According to indictment, Colindres-Ortiz, an alien, was removed from the United States on Sept. 3, 2010. Colindres-Ortiz was found in New Castle, Lawrence County, on Dec. 5, 2012, without having been given permission to re-enter the United States.
Assistant United States Attorney Shardul S. Desai prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the U.S. Immigration and Custom Enforcement and the Pennsylvania State Police for the investigation leading to the successful prosecution of Alex Omar Colindres-Ortiz.
Defense Contractor Pleads Guilty to Theft of Employee Payroll TaxesRead the Press Release
United States Attorney Laura E. Duffy announced that Ildiko Pinero, an owner and the Chief Financial Officer of Alpha Machining Products & Development Inc. (“Alpha”), pled guilty today before United States Magistrate Judge Nita L. Stormes to failing to pay over to the United States payroll taxes that she withheld from the paychecks of Alpha employees. At the time of the offense, Alpha was a San Diego defense contractor engaged in the machining of weapons parts and other products for the U.S. Department of Defense.
As an employer, Alpha was required to withhold employment taxes from the wages it paid to its workers, including federal income taxes and the employees’ share of Federal Insurance Contributions Act taxes (Social Security and Medicare taxes). These withheld employment taxes are commonly referred to as “trust fund taxes,” because an employer holds these funds in trust for its employees. After collecting these trust fund taxed, Alpha was required to pay them over to the Internal Revenue Service (“IRS”). In addition, Alpha was required to account for and pay over its own “employer’s share” of the Social Security and Medicare taxes resulting from employing these workers.
As Pinero admitted during her guilty plea this morning, from January 2006 through September 2008, she withheld payroll taxes from the paychecks of Alpha’s employees. These taxes included over $110,000 in withholdings for federal income tax, plus the employees’ share of Medicare and Social Security taxes. Despite withholding these sums from the employees’ paychecks, Pinero refused to pay the taxes to the Internal Revenue Service. Similarly, Pinero also failed to pay over Alpha’s share of Social Security and Medicare taxes, in the amount of approximately $57,000.
United States Attorney Duffy emphasized that, “When an employer withholds federal taxes from the paychecks of its hard-working employees, that money isn’t the employer’s to spend. Failing to pass along those withheld funds to the IRS amounts to stealing. This applies to defense contractors like Alpha, just like any other employer.” U.S. Attorney Duffy praised the efforts of agents from the IRS Criminal Investigation, the Defense Criminal Investigative Service, Immigration and Customs Enforcement, and Army Criminal Investigation Division for their collaborative work in this multi-agency investigation.
“Corporate executives have a continuing responsibility to collect and turn over all IRS payroll taxes,” said N. Dawn Mertz, IRS Criminal Investigation (CI) Acting Special Agent in Charge for the Los Angeles Field Office. “The failure to pay over withheld payroll taxes is a very serious offense. IRS CI intends to vigorously pursue those who fraudulently collect payroll taxes and fail to timely remit those taxes.”
The guilty plea is subject to final acceptance by United States District Judge Dana M. Sabraw. Sentencing in this case is currently scheduled for April 19, 2013, at 9:00 a.m., before Judge Sabraw.
DEFENDANT Case Number: 12cr3125DMS Ildiko Pinero SUMMARY OF CHARGESCount 2: Willful failure to pay over tax, in violation of Title 26, United States Code, Section 7202 - Maximum penalties: 5 years in prison, $250,000 fine, term of supervised release of three years, restitution, and $100 special assessment.
INVESTIGATING AGENCYInternal Revenue Service - Criminal Investigation
Defense Criminal Investigative Service
Immigration and Customs Enforcement’s Homeland Security Investigations
Army Criminal Investigation DivisionCharleston Man Sentenced to 6 Years in Federal Prison as Part of Yearlong Drug Crackdown on Charleston’s West SideRead the Press Release
Saunders is the second defendant to be sentenced recently as part of Charleston’s West Side DMI initiative
CHARLESTON, W.Va. – U.S. Attorney Booth Goodwin today announced that a Charleston man was sentenced to six years in federal prison for distributing crack cocaine. Matthew Saunders, 20, of Charleston, previously pleaded guilty in October 2012.
Saunders admitted that on June 30, 2011, he sold a quantity of crack cocaine to a confidential informant working with the Metropolitan Drug Enforcement Network Team (MDENT) in exchange for $1,200. Saunders further admitted that on July 7 and July 14, 2011, he sold a quantity of crack cocaine to an informant. All of the illegal transactions occurred near Grant and Russell Streets in Charleston.
On July 18, 2011, law enforcement officers seized crack cocaine from a residence in Charleston. Saunders admitted that he had arranged to sell two ounces of the crack cocaine that was seized by law enforcement. Saunders was apprehended prior to arriving at the residence to obtain the crack cocaine.The suspected crack cocaine base from the three controlled buys and the quantity of crack cocaine seized from the search of the residence was submitted to the West Virginia State Police Laboratory for analysis and proved to be crack cocaine weighing 23.2 grams, 22.9 grams, and 27.2 grams, respectively. Saunders admitted that he was responsible for selling a total of 142.23 grams of crack cocaine.
Last Friday, Fred Taylor, 23, of Charleston, was sentenced to five years in prison for distributing crack cocaine. Taylor was prosecuted as part of the Charleston area’s Drug Market Intervention (DMI) initiative.
The Saunders case was also prosecuted as part of the Charleston area’s Drug Market Intervention (DMI) initiative. The DMI initiative was launched in February 2012 by Charleston Police Chief Brent Webster and U.S. Attorney Booth Goodwin, in collaboration with Kanawha County Prosecuting Attorney Mark Plants, other federal, state, local law enforcement agencies and leaders representing several West Side community development organizations. The DMI initiative was initiated in Charleston as a strategic problem-solving effort aimed at closing down open-air drug markets that breed crimes of violence and disorder.
The Metropolitan Drug Enforcement Network Team (MDENT) conducted the investigations. Assistant United States Attorney John Frail handled the prosecution.
Canadian Man Sentenced for Bank FraudRead the Press Release
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Mohammed Yassin, 42, of Hamilton, Ontario, who was convicted of bank fraud, was sentenced to 26 months in prison and ordered to pay $36,100 in restitution by U.S. District Court Judge Richard J. Arcara.
Assistant U.S. Attorney Russell T. Ippolito, Jr., who handled the case, stated that Yassin, a citizen and resident of Canada, opened a business bank account at a Key Bank branch located in Niagara Falls, N.Y. in the name of Montsaida, Inc. Between April 2, 2009 and May 8, 2009, the defendant deposited fraudulent pre-authorized debits (“PADS”) into Montsaida’s account. The false PADS deposited to the account purportedly represented money owed to Montsaida by the payers listed on the PADS. Key Bank relied upon the deposited PADS to calculate the daily cash balance of funds in the Montsaida business checking account.
On May 8, 2009, the defendant withdrew money from the Montsaida account by electronically transmitting funds from the account by means of wire communication to bank accounts in Canada. Yassin caused three separate wire transactions to transmit funds from the Montsaida account in the amounts of $8,500, $10,300 and $11,000, totaling $29,800. This money represented funds from the deposit of the false and fraudulent PADS.
Between February 26, 2009, and March 28, 2009, the defendant committed similar fraudulent acts against Bank of America. The total loss to Key Bank and Bank of America was $36,100.
The plea is the culmination of an investigation by the United States Secret Service, under the direction of Special Agent in Charge Tracy Gast.
Camp Pendleton Contractors Indicted for Pilfering over $3 Million in Medical EquipmentRead the Press Release
United States Attorney Laura E. Duffy announced that three civilian contractors who worked at Camp Pendleton were arraigned today on an indictment charging them with stealing millions of dollars’ worth of medical equipment that was to have been shipped to combat commands throughout the world. Defendants Henry Bonilla, Richard Navarro and Michael Tuisee made their first court appearance today before Magistrate Judge William McCurine, Jr. The three were arraigned on a six-count indictment charging the Department of Defense contractors with Conspiracy, Theft of Government Property and Criminal Forfeiture.
According to the indictment, the three defendants worked in warehouses run by 1st Medical Logistics Company (“1st MEDLOG”) aboard Camp Pendleton (the United States Marine Corps’ largest West Coast expeditionary force training facility). 1st MEDLOG is the unit responsible for maintaining medical equipment and shipping necessary medical items to combat forces. By virtue of their employment as defense contractors, the defendants had access to sophisticated, expensive medical equipment stored at 1st MEDLOG warehouses. Throughout 2012, the defendants repeatedly stole expensive medical equipment from 1st MEDLOG, transported it using their personal vehicles to other locations in Southern California, and sold the stolen items to medical equipment resellers. According to the indictment, exchanges with resellers often took place at night, in parking lots near commercial businesses. All told, the defendants are alleged to have stolen over $3 million worth of medical equipment needed by United States Marines.
At today’s hearing, Magistrate Judge McCurine set bond for the defendants, and ordered them to appear before District Judge Cathy A. Bencivengo on March 8, 2013. Each defendant faces a maximum penalty of 10 years in prison – as well as mandatory restitution to the U.S. military – if convicted of stealing government property.
United States Attorney Duffy advised that these charges are the result of an ongoing investigation into theft of valuable property aboard Camp Pendleton, and asked the public to contact the Naval Criminal Investigative Service (NCIS) at 1-800-264-6485 or www.ncis.navy.mil if they have any information relevant to that investigation.
The public is reminded that an indictment itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
DEFENDANT Case Number: 13cr0338-CAB Henry Bonilla
Richard Navarro
Michael Tuisee SUMMARY OF CHARGESCount 1: Conspiracy to Engage in Theft of Government Property, Title 18, United States Code, Section 371 (all defendants)
Maximum penalties: 5 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.
Count 2: Theft of Government Property, Title 18, United States Code, Section 641 (Navarro)
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.Count 3: Theft of Government Property, Title 18, United States Code, Section 641 (Tuisee)
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.Count 4: Theft of Government Property, Title 18, United States Code, Section 641 (Bonilla)
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.Count 5: Theft of Government Property, Title 18, United States Code, Section 641 (Bonilla)
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.Count 6: Theft of Government Property, Title 18, United States Code, Section 641 (Bonilla)
INVESTIGATING AGENCY
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.Naval Criminal Investigative Service
Business Owner Admits Orchestrating $3 Million Bank FraudRead the Press Release
NEWARK, N.J. – The owner of a Phillipsburg, N.J., luggage manufacturing company admitted today that he defrauded the Lakeland Bank of Oak Ridge, N.J., of $3 million, U. S. Attorney Paul J. Fishman announced.
Richard Rekuc, 59, of Asbury, N. J., pleaded guilty before U. S. District Judge William J. Martini in Newark federal court to an Information charging him with one count of bank fraud.According to the documents filed in this case and statements made in court:
Rekuc operated a luggage manufacturing company called Royalox International Inc, based in Phillipsburg. Rekuc arranged with Lakeland Bank to obtain a line of credit for Royalox that was based on Royalox’s accounts receivable: the higher Royalox’s sales, the more money it could borrow from the line of credit.
An investigation led by the Federal Deposit Insurance Corporation revealed that between 2004 and December 2009, Rekuc was submitting false invoices and copies of payments to Lakeland so that he could draw on his line of credit. Rekuc first opened fake bank accounts in names very similar to some of the clients with whom Royalox did business. Rekuc moved money from bank accounts he controlled to the fake accounts. He then created fictitious invoices, billed the fictitious “companies,” and made payments from the fake company accounts to Royalox. Rekuc submitted the false invoices and the copies of the payments from the fake company accounts to the Royalox accounts.
These false documents gave Lakeland the impression that Royalox was doing a substantial amount of business and was entitled to draw off the accounts receivable line of credit to cover payments for materials and other expenses. In fact, Rekuc was pocketing the money. Rekuc’s actions caused Lakeland Bank to lose $3 million.
The bank fraud charge to which Rekuc pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is set for May 6, 2013.
U.S. Attorney Fishman credited special agents of the Federal Deposit Insurance Corporation under the direction of FDIC-Office of Inspector General, Inspector General Jon. T. Rymer, with the investigation which led to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s interagency Financial Fraud Enforcement Task Force, which was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement.
13-056Defense counsel: Donald McCauley Esq., Newark, N.J.
Rekuc, Richard Information
Armed Drug Dealer Sentenced to 12 Years in Federal PrisonRead the Press Release
A Hancock County, Iowa man was sentenced January 30, 2013 to 144 months in federal prison.
Jeffrey Dale Brown, age 22, from Kanawha, Iowa, received the prison term after a September 28, 2011, guilty plea to conspiring to distribute methamphetamine and possessing a firearm in furtherance of the drug trafficking crime.
Information provided by the United States at the sentencing and change of plea hearing revealed Brown’s role is a string of burglaries across north-central Iowa. From about December 2010 until about June 7, 2011, Brown and others reached an agreement to distribute methamphetamine. During this same time, Brown possessed a number of stolen firearms including a sawed-off shotgun. Brown also possessed another firearm – a handgun -- that he carried during drug deals to protect himself, his drugs, and his drug proceeds and to intimidate drug customers and rivals.
Brown was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Brown was sentenced to 120 months’ imprisonment for the drug charge and 24 months’ imprisonment for possessing the firearm in furtherance of the drug offense. The terms of imprisonment will run consecutively, for a total sentence of 144 months. A special assessment of $200 was imposed. He must also serve a 5-year term of supervised release after the prison term. There is no parole in the federal system.
Brown is being held in the United States Marshal’s custody until he can be transported to a federal prison.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 11-3041.
The case was prosecuted as part of Project Safe Neighborhoods, a cooperative local, state, and federal program aimed at the enhanced prosecution of gun crimes. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Hancock County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Forde Fairchild.
Amasa Pinckney Niles, IV, Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on January 30, 2013, before Chief U.S. District Judge Richard F. Cebull, AMASA PINCKNEY NILES, IV, a 41-year-old resident of Billings, appeared for sentencing. NILES was sentenced to a term of:
Prison: 151 months
Special Assessment: $300
Supervised Release: 5 years
NILES was sentenced in connection with his guilty plea to conspiracy to possess with intent to distribute methamphetamine, possession with the intent to distribute methamphetamine, and distribution of methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Marcia K. Hurd, the government stated it would have proved at trial the following:
NILES came to the attention of law enforcement officers as part of a larger drug case. NILES was identified as a person who purchased large amounts of methamphetamine from Las Vegas on behalf of supplier Howard Bonifant in Billings to distribute to his distributor network here. NILES became involved through Sheila Coffman, as the two were dating and distributing together. Others also identified NILES as a distribution source from Bonifant. NILES and Coffman were getting the methamphetamine from several of Bonifant's runners beginning in June 2009. NILES received significantly more than several pounds from each of the suppliers during the time he was involved. His involvement ended in June of 2010 when he went to prison for shooting a person in Billings. NILES resold the methamphetamine to others who have identified him as their supplier.
Bonifant and Coffman both pled guilty to federal charges and have been sentenced.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that NILES will likely serve all of the time imposed by the court. In the federal system, NILES does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Billings Big Sky Safe Streets Task Force and the Federal Bureau of Investigation.
Abilene Man Sentenced to 18 Years in Federal Prison on Conspiracy, Cocaine, Methamphetamine, Marijuana and Firearm ConvictionsRead the Press Release
Drugs and Firearms Were Seized During the Execution of a Search Warrant in August 2011
ABILENE, Texas — Joshua Cisneros, 29, of Abilene, Texas, was sentenced yesterday afternoon by U.S. District Judge Jorge A. Solis, in federal court in Abilene, to a total of 18 years in federal prison. Cisneros was convicted at trial in September in 2012 on all five counts of an indictment charging conspiracy to distribute and possess with intent to distribute 50 grams or more of methamphetamine; possession with intent to distribute 50 grams or more of methamphetamine; possession with intent to distribute cocaine; possession with intent to distribute less than 50 kilograms of marijuana; and possession of a firearm in furtherance of a drug trafficking crime. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Cisneros’ co-defendant in the case, Nicholas Albarado, 27, also of Abilene, was sentenced by Judge Solis in November 2012 to 18 years in federal prison. He pleaded guilty to one count of possession with intent to distribute 50 grams or more of methamphetamine and possession of a firearm in furtherance of a drug trafficking crime.
According to documents filed in the case and evidence presented at trial, the Abilene Police Department received information that a residence on Locust Street in Abilene was being used as a marijuana stash house for a drug trafficking organization. On August 30, 2011, agents with the Abilene Police Department went to the residence to conduct a knock-and-talk in reference to a drug trafficking investigation. When Albarado answered the door, there was an overwhelming smell of fresh marijuana. When agents entered the residence based upon exigent circumstances, Albarado escorted them to a bedroom where they met the owner of the residence, as well as Cisneros.
Shortly thereafter, law enforcement obtained and executed a search warrant at the residence. During the execution of that warrant, agents located and seized methamphetamine, cocaine and marijuana, located throughout the house, as well as one stolen rifle and two handguns.
The investigation was spearheaded by the Abilene Police Department, with assistance from U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Taylor County Sheriff’s Office.
Assistant U.S. Attorneys Justin Cunningham and Jeffrey Haag, of the U.S. Attorney’s Office in Lubbock, Texas, were in charge of the prosecution.
Wednesday 30 January 2013
Wheeling Resident Sentenced on Firearms ChargeRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistWHEELING, WEST VIRGINIA — A 25 year old Wheeling, West Virginia, resident was sentenced on January 29, 2013, in United States District Court in Wheeling by Judge Frederick P. Stamp, Jr.
United States Attorney William J. Ihlenfeld, II, announced that: SHAWN L. BINKOWSKI was sentenced to 15 months imprisonment to be followed by three years of supervised release. BINKOWSKI entered a plea of guilty on January 3, 2013, to “Felon in Possession of a Firearm.” BINKOWSKI, having previously been convicted in the Circuit Court of Ohio County, West Virginia, of the felony offense of Grand Larceny, knowingly possessed a Bryco Arms pistol on September 16, 2012, in Wheeling. BINKOWSKI was remanded to the custody of the United States Marshal pending designation to a Federal institution.
The case was prosecuted by Assistant United States Attorney Stephen L. Vogrin and investigated by the United States Probation office and the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Wheeling Police Department.
Waterloo Crack Dealer Sentenced to Almost 20 Years in Federal PrisonRead the Press Release
A man who twice sold crack cocaine to a police informant was sentenced on January 29, 2013, to just under twenty years in federal prison.
Antonyo Reese, 35, from Waterloo, received the prison term after a October 25, 2012 guilty plea to distributing crack cocaine after a prior felony drug conviction.
In a plea agreement, Reese admitted he sold crack cocaine to an informant on two separate occasions in October and November 2011. Reese acknowledged that, at the time of the crack cocaine sales, he had a prior felony conviction for possession of crack cocaine with intent to deliver. Reese also had a prior conviction for assault on a police officer causing injury.
Reese was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Reese was sentenced to 235 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a six-year term of supervised release after the prison term. There is no parole in the federal system.
Reese is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Justin Lightfoot and investigated by the Iowa Division of Narcotics Enforcement.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 12-CR-2026.
Virginia Man Pleads Guilty to Distribution of Child PornographyRead the Press Release
WASHINGTON - James Wendell Brown, 51, of Warrenton, Va., pled guilty today to a federal charge of distribution of child pornography, announced U.S. Attorney Ronald C. Machen Jr., Debra Evans Smith, Acting Assistant Director in Charge of the FBI's Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Brown entered the guilty plea in the U.S. District Court for the District of Columbia. The Honorable Richard J. Leon is to sentence him on April 23, 2013. Brown faces a maximum sentence of 20 years of imprisonment as well as a fine of $250,000. Under federal sentencing guidelines, he faces a likely sentencing range of between 151 and 188 months in prison.
According to the government's evidence, on March 5, 2012, Brown contacted a man he believed to be the father of a 12-year-old girl on a social network site. That man turned out to be an undercover officer with the FBI's Child Exploitation Task Force. Over the next few days, Brown engaged in online e-mail and instant message conversations with the undercover officer. During this period of time, Brown sent the undercover officer three images of child pornography which depicted adult men engaged in sexual acts with children. During the course of his conversations with the undercover officer, Brown acknowledged having sexually abused young children in the past.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
In announcing the guilty plea, U.S. Attorney Machen, Acting Assistant Director in Charge Smith and Chief Lanier praised the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended Assistant U.S. Attorneys David Last and Ari Redbord, who are prosecuting the case.
13-033Union County, N.J., Woman Admits Serving as the Getaway Driver During A Middlesex, N.J. Bank RobberyRead the Press Release
NEWARK, N.J. – A Union County, N.J., woman today admitted serving as the getaway driver during the July 12, 2012, bank robbery of Unity Bank located at 1230 Bound Brook Road (Route 28) in Middlesex, N.J., U.S. Attorney Paul J. Fishman announced.
Teresa Webb, 41, of Plainfield, N.J., pleaded guilty before U.S. District Court Kevin McNulty in Newark federal court to an Information charging her with one count of bank robbery.
According to documents filed in this case and statements made in court:
On July 31, 2012, Claude Williams, 60, of Elizabeth, N.J., was charged by Complaint with six counts of bank robbery and two counts of using a firearm in furtherance of a crime of violence. In the course of those robberies, Williams would generally send an accomplice into the bank to case it shortly before he entered to commit the robbery.
Before the July 12, 2012, robbery, Webb entered the Unity Bank twice without doing any banking. A short while later, an unarmed, off-duty police officer observed Williams leave the bank, get into the rear of the getaway car, and crouch down. After noting the license plate number, the officer followed the car. Webb, who was driving the getaway car, attempted to elude the officer.
After Webb’s unsuccessful attempt to elude the officer, Williams got out of the car and pointed his gun at the officer, forcing her to leave the scene without apprehending Williams and Webb.
The bank robbery count to which Webb pleaded guilty is punishable by a maximum potential penalty of 25 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for May 8, 2013.U.S. Attorney Fishman credited special agents with the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark with the investigation leading to the arrest. He also thanked the Somerset County Prosecutors Office and the Middlesex Borough, Piscataway, Clifton, Metuchen, North Plainfield, and Plainfield Police Departments for their work in this case.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto of the U.S. Attorney’s Office General Crimes Unit in Newark.
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Defense counsel: Bruce S. Rosen Esq., Toms River, N.J.Webb Information
U.S. Patent & Trademark Office Employee Pleads Guilty to Enticing A Minor to Engage in Criminal Sexual ActivityRead the Press Release
ALEXANDRIA, Va. – James Raymond Schimmel, 53, of Alexandria, Va., pleaded guilty today to enticing a minor to engage in criminal sexual activity.
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 (ICE) Homeland Security Investigations (HSI) in Washington, D.C., made the announcement after the plea hearing before United States District Judge Liam O’Grady.
At sentencing on May 10, 2013, he faces a mandatory minimum of 10 years — and up to a lifetime — of incarceration. At the time of his arrest on Oct. 24, 2012, Schimmel was an employee of the U.S. Patent & Trademark Office.
According to court records, Schimmel met the 17-year-old victim through the Internet and convinced the victim to meet in person for the purpose of engaging in criminal sexual activity. In addition, Schimmel video recorded the sexual encounter without the victim’s knowledge.The case was investigated by HSI Washington, D.C., the Northern Virginia Internet Crimes Against Children Task Force, and the Virginia State Police. Assistant United States Attorneys Alexander T.H. Nguyen and Ryan K. Dickey 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.Two Men Indicted for Having 55 Fake Credit Cards That They Used to Purchase More Than $5,000 in MerchandiseRead the Press Release
A grand jury returned a four-count indictment charging two men with crimes related to their possession of approximately 55 fraudulently obtained credit cards that they used to purchase more than $5,000 worth of merchandise from various merchants at Beachwood Place and Golden Gate, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
“These men are accused of going on a shopping spree with fake credit cards,” Dettelbach said. “We all pay the price when people engage in theft like this, and this office will work with our partners to stamp out credit-card fraud.”
James Gibson of Orlando, Florida, and Lansford Beuns of Newport News, Virginia, were indicted on counts of (1) conspiracy to commit access device fraud; (2) use of unauthorized access devices; (3) possession of 15 or more counterfeit access devices and (4) possession of device-making equipment.
The indictment charges that in December 2012, Gibson and Beuns possessed approximately 55 counterfeit access devices (credit cards) upon which fraudulently acquired account information had been re-encoded and embossed using an encoder and an embosser in their possession.
The indictment further charges that Gibson and Beuns used the counterfeit access devices and unauthorized access devices to purchase thousands of dollars of merchandise from various merchants in Beachwood and Mayfield Heights, Ohio.
Among the purchases identified in the indictment, which all took place on Dec. 1 or Dec. 2, 2012, are:
* Abercrombie and Fitch, 26300 Cedar Road, $258.
* The Buckle, 26300 Cedar Road, $336.
* Saks Fifth Avenue, 26300 Cedar Road, $1,729.
* True Religion Jeans, 26300 Cedar Road, $623.
* Best Buy, 1417 Golden Gate Boulevard, $3,027.
If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including the defendants’ prior criminal records, if any, the defendants’ roles in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant United States Attorney Margaret A. Sweeney, following an investigation by the United States Secret Service.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Two District Men Sentenced to 12-Year Prison Terms on Carjacking and Robbery Charges-Defendants Attacked Two Victims in Six-Hour Period in June 2012-Read the Press Release
WASHINGTON—Robert Jeter, 19, and Davon Watkins, 18, both from Washington, D.C., were each sentenced today to 12 years in prison for carjacking one victim and committing an armed robbery against another victim within a matter of hours, U.S. Attorney Ronald C. Machen Jr. announced.
Jeter and Watkins pled guilty in October 2012 in the Superior Court of the District of Columbia. The Honorable Gerald I. Fisher sentenced them to seven years in prison on the carjacking charge and an additional five years for the armed robbery.
According to the government’s evidence, the defendants approached the carjacking victim at about 10:30 p.m. on June 21, 2012 as he was walking from his car in a parking lot behind 1400 block of Irving Street NW. Watkins put a gun to the victim’s head while Jeter took the victim’s wallet and cell phone. Watkins then demanded the victim’s car keys. Watkins and Jeter then got into the victim’s car and fled the scene.
About six hours later, at about 4:15 a.m. on June 22, 2012, Jeter and Watkins approached the armed robbery victim as he was walking on Mount Pleasant Street NW. They knocked the victim to the ground, put guns to his head, and took his wallet and cell phone.
About 15 minutes after the armed robbery, police spotted the car taken in the earlier carjacking. The defendants ultimately abandoned the car and fled on foot. They were apprehended in the 1100 block of Clifton Street NW. The armed robbery victim’s cell phone was found in the center console of the stolen car. Fingerprint and DNA evidence analyzed by the D.C. Forensics Laboratory tied Jeter and Watkins to the stolen car.
In announcing the sentences, U.S. Attorney Machen commended the efforts of the detectives, officers, crime scene technicians, and forensic analysts who investigated the case for the Metropolitan Police Department. He also acknowledged those who worked on the case from the U.S. Attorney’s Office, including Victim Witness Advocate Jennifer Clark, and Assistant U.S. Attorneys Allison Barlotta, Vivien Cockburn, Bridget Fitzpatrick, and Jonathan Kravis, who investigated and obtained the indictment in the case.
13-034Town of Binghamton Woman Sentenced for Filing A False Tax ReturnRead the Press Release
Richard S. Hartunian, United States Attorney, Northern District of New York, announced today that Jacqueline MacBlane of the Town of Binghamton, Broome County, New York was sentenced in Federal Court in Binghamton by Senior U.S. District Judge Thomas J. McAvoy in connection with her August 1, 2012, guilty plea to an Information charging her with Subscribing to a False Individual U.S. Income Tax Return. Judge McAvoy sentenced MacBlane to a term of two years of probation supervision and ordered her to perform100 hours community service, pay a $30,000 fine, and make restitution of $78,729. The defendant admitted at the time of her plea that she willfully subscribed to a U.S. Individual Form 1040 Tax Return, for tax year 2007, which substantially and materially understated her adjusted gross income and taxable income. During the 2007 tax year, the defendant managed and operated the Brackney Inn in Susquehanna County, Pa., and her husband managed and operated Charley’s Tavern in Broome County, New York.
During the tax years 2006 and 2007, the defendant filed Individual U.S. Income Tax Returns using the filing status of “married filing jointly.” As part of the plea agreement, the defendant acknowledged that she also underreported taxable income for the tax year 2006, and agreed to pay the full amount of tax owed to the federal government for both tax years. At least $118,248.00 in taxable income for the tax year 2006 was not reported and at least $150,875.00 in taxable income for the tax year 2007 was not reported. The failure to report that taxable income led to an additional federal tax owing of $31,301.00 and $47,428.00, respectively, totaling $78,729.00. This figure does not include penalties and interest that may be assessed by the IRS, or taxes due and owing to New York State and the State of Pennsylvania.
The indictment resulted from an investigation conducted by the Internal Revenue Service. The case was prosecuted by Assistant United States Attorney Kevin P. Dooley of the Binghamton office. Inquiries can be directed to AUSA Dooley at (607) 773-2887.
Three Independence Residents Sentenced for Armed RobberiesRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that three Independence, Mo., residents were sentenced in federal court today for their roles in a series of armed robberies in Independence, during which one of the defendants was shot by a police officer.
Justin M. Epps, 23, Devontae A. Spears, 20, and Tairre Y. Matthews, 22, all of Independence, were sentenced in separate appearances before U.S. District Judge Greg Kays. Epps was sentenced to 10 years in federal prison without parole. Spears and Matthews were each sentenced to two years and six months in federal prison without parole.
Epps, Spears and Matthews each pleaded guilty to aiding and abetting each other in three armed robberies in Independence in late 2011 – at two 7-Eleven stores and a Papa John’s Pizza – in which they used what appeared to be handguns but were actually air pistols.
The co-defendants were arrested following the robbery of the 7-Eleven convenience store at 11001 E. 23rd St., Independence, on Nov. 3, 2011. On that day an Independence detective was conducting surveillance on the store and saw Epps and Spears, dressed in black, enter the store. Epps was carrying what appeared to be a handgun and had a back pack.
Epps, wearing a white plastic mask with eye holes, pointed the gun at the clerk, who went to the counter and took money from a cash drawer. The clerk also gave Epps money from a second cash drawer. Epps also took some unknown brand liquor, cigars, and possibly cigarettes from behind the counter. Epps asked for the clerk’s wallet and the clerk gave Epps $15 from his wallet. Epps asked for access to the 7-Eleven safe, which was present behind the counter, but the clerk advised Epps that he could not access the safe.
As they left the store, Epps and Spears were arrested by law enforcement officers who were positioned around the building. Epps was shot by law enforcement officers during his arrest after pointing what appeared to be a gun at them in a threatening manner, and was taken to the hospital. Spears was arrested without incident. Matthews, who was waiting in a vehicle parked nearby, was also arrested without incident.
Epps, Spears and Matthews admitted to participating in at least two other robberies, along with a couple of attempted robberies. Matthews admitted that she drove Epps and Spears to the 7-Eleven and participated with them in other robberies.
This case was prosecuted by Assistant U.S. Attorney Justin G. Davids. It was investigated by the Independence, Mo., Police Department, the Kansas City, Mo., Police Department and the FBI.
Three California Men Plead Guilty to Perpetuating Fraudulent Cellphone SchemeRead the Press Release
ALBUQUERQUE – This afternoon three California men entered guilty pleas to participating in a scheme to fraudulently obtain high-value cellular phones from retail stores in California, Arizona and New Mexico and to resell the cellular phones for profit. The guilty pleas were announced by U.S. Attorney Kenneth J. Gonzales and Resident Agent in Charge Richard Ferretti of Albuquerque Resident Office of the U.S. Secret Service.
Joshua Ferdman, 31, Jeffrey Contella, 28, and Joseph Cohen, 26, of Los Angeles, Cal., and Amir Meir Levi, 36, of Sherman Oaks, Cal., were indicted on Feb. 28, 2012, and charged with (1) conspiracy to transport stolen property and commit access device fraud, and (2) access device fraud. This afternoon, Contella, Cohen and Levi each entered a guilty plea to the indictment without the benefit of any plea agreement.
According to the indictment, in May 2011, the four defendants engaged in a scheme to fraudulently obtain high-value cellphones, including smartphones, from Sprint stores, and to resell the cellphones in a Van Nuys, Cal., store owned by Cohen and through an on-line store hosted by EBay. The defendants traveled to Sprint stores throughout California, Arizona and New Mexico and fraudulently obtained significant quantities of cellphones by impersonating Sprint customers and the unauthorized use of the customers’ account numbers. The defendants allegedly obtained the phones free of cost by instructing store clerks to bill the cost of the phones to the accounts of the unwitting Sprint customers.
From May 10, 2011 through May 16, 2011, Ferdman and Levi traveled to various Sprint stores in California, including stores in Fullerton, Los Angeles, Hollywood, San Francisco, Sacramento and Folsom, to perpetuate their fraudulent scheme. From May 21, 2011 to May 24, 2011, Ferdman and Contella traveled to various Sprint stores in Arizona and New Mexico for that same purpose. During this period, Levi wired cash to Ferdman and Contella; Ferdman sent cellphones to Levi via Federal Express; Levi delivered the cellphones to Cohen; and Cohen sold the cellphones.
On May 25, 2011, Ferdman, Contella and Levi fraudulently obtained 13 smartphones from a Sprint store in Albuquerque through the unauthorized use of a Sprint customer’s account number. That same day, Ferdman, Contella and Levi attempted to purchase an additional six smartphones from a Sprint store in Albuquerque.
Contella, Cohen and Levi remain on conditions of release pending their sentencing hearings, which have yet to be scheduled. At sentencing, each man faces a maximum penalty of five years in prison and a $250,000 fine on the conspiracy charge, and ten years in prison and a $250,000 fine on the access device fraud charge.
The United States is seeking forfeiture of all property used by the defendants to commit the offenses charged in the indictment as well as all proceeds obtained by the defendants as a result of their illegal conduct, including funds in a bank account in the name of Cohen’s business and a PayPal, Inc., account. Approximately $250,000 was seized from those accounts pursuant to court-authorized seizure warrants.
Co-defendant Ferdman has entered a not guilty plea and is pending trial. The charges in the indictment against Ferdman are only accusations, and he is presumed innocent unless found proven guilty beyond a reasonable doubt.
The case was investigated by the U.S. Secret Service and the Albuquerque Police Department’s Organized Crime Unit, and is being prosecuted by Assistant U.S. Attorney John C. Anderson.
Thornton Man Sentenced to 90 Months in Federal Prison for Possession of Child PornographyRead the Press Release
DENVER – Daniel Ivan Ashby, age 40, of Thornton, Colorado, was sentenced late last week by Senior U.S. District Court Judge Wiley Y. Daniel to serve 90 months in federal prison for possession of child pornography, United States Attorney John Walsh and FBI Special Agent in Charge James Yacone announced. Following the 90 month (over 7 year) sentence, Ashby was ordered to serve 5 years on supervised release. Ashby appeared at the sentencing hearing on bond, and was remanded at its conclusion.
In 2011, Ashby was affiliated with Calvary Community Baptist Church and Community Christian School in Northglenn as a school administrator.
Ashby was indicted by a federal grand jury in Denver on July 9, 2012. He pled guilty to the possession of child pornography charge on October 4, 2012. He was sentenced on January 25, 2013.
According to the stipulated facts contained in a plea agreement, an investigation initiated by the FBI determined that a particular computer was sharing depictions that could be child pornography files from a computer that was used both in Peru and in Colorado. Further investigation determined that at least 125 such files of interest had been shared from the target computer between January 5 and October 30, 2011. FBI agents then determined through investigative means that the computer had accessed the internet from an Internet Protocol (IP) address assigned to a residence in Thornton, Colorado, where Daniel Ivan Ashby resided. FBI agents also found that the potential child pornography images had also been shared from another Colorado IP address, this one assigned to Calvary Community Baptist Church in Northglenn. Calvary Community Baptist Church operates a school named Community Christian School. The school’s website identified Ashby as the school administrator.
During undercover computer sessions, FBI agents were able to determine that the computer in Thornton was sharing multiple files of interest. After downloading the files of interest the FBI determined the images were in fact child pornography. On December 2, 2011, the FBI obtained a search warrant for the Thornton residential address. During the execution of that warrant, law enforcement officers seized several electronic items, including two laptops. Interviews with the occupants of the residence revealed that Daniel Ivan Ashby did download child pornography.
Following the execution of the search warrant in Thornton, law enforcement officers and Ashby drove separately to Calvary Community Baptist Church/Community Christian School in Northglenn. Agents obtained consent to search the computers at this location. Church and school computers did not contain child pornography.
“The defendant in this case ran a Christian school while possessing child pornography,” said U.S. Attorney John Walsh. “His 90 month sentence demonstrates that those who possess child pornography, especially those in a position of trust, face lengthy prison sentences.”
“Individuals who are investigated, prosecuted and appropriately sentenced for their heinous acts against defenseless children can never be disregarded as merely someone who is looking at pictures,” said FBI Denver Special Agent in Charge James Yacone. “This case demonstrates what investigative agencies and our United States Attorney’s Office can accomplish by working together.”
This case was investigated by the Federal Bureau of Investigation (FBI), Innocent Images Task Force.
Ashby was prosecuted by Assistant U.S. Attorney Ryan Bergsieker.
This case was brought as part of Project Safe Childhood (PSC), 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, PSC 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 PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab "resources."
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Thirteen Former West Texas Prison Employees Indicted for Accepting Bribes in Exchange for Smuggling Contraband into Federal Detention FacilityRead the Press Release
Federal authorities arrested 12 former Ector County Correctional Center (ECCC) guards and one former ECCC employee this morning for allegedly accepting bribes in exchange for smuggling contraband to inmates inside the federal detention facility announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Mark Morgan, El Paso Division.
The defendants are individually named in 13 federal grand jury indictments returned on January 23, 2013, and unsealed today. The indictments allege that during 2011 and 2012, the correctional officers, as well as Barbara Garrett, a food service worker, smuggled in contraband to inmates, including cell phones and chargers as well as tobacco and marijuana, in exchange for cash in knowing violation of their official duties. Those indicted and arrested include:
Jovanna Marie Olivarez, age 21, of Odessa;
Matthew Ryan Williams, age 20, of Odessa;
Dennis Earl Newsome, age 63, of Austin, TX;
Charlette Smith, age 46, of Odessa;
Nancy Torres Morales, age 36, of Odessa;
Valerie Ann Arenivas, age 22, of Odessa;
Gabriel Angel Navarette, age 23, of Odessa;
Jennifer Armida Lopez, age 25, of Odessa;
Jessica Lucia Smith, age 33, of Monahans, TX;
Jazmine Desiree Cruz, age 19, of Odessa;
Jonathon Wayne Meza, age 29, of Odessa;
Barbara Jean Garrett, age 52, of Andrews, TX; and,
Ashley Dawn Clark, age 29, of Crane, TX.Each defendant is charged with one count of accepting a bribe. Upon conviction, each defendant faces up to 15 years in federal prison and a maximum $250,000 fine.
This case was investigated by agents with Federal Bureau of Investigation together with investigators from the Odessa Police Department and the Ector County Sheriff’s Office along with cooperation from the United States Marshals Service and ECCC. Assistant United States Attorney John Klassen is prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Steven Hinz Sentenced to Nine Years in Prison, Ordered to Pay More Than $500,000Read the Press Release
Steven R. Hinz was sentenced to nine years in prison and ordered to pay more than $500,000 in restitution for his role in leading separate tax and mortgage fraud conspiracies, said Assistant Attorney General of the Justice Department’s Tax Division Kathryn Keneally, United States Attorney for the Northern District of Ohio Steven M. Dettelbach, and Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Cincinnati Field Office, Darryl K. Williams.
U.S. District Judge Patricia Gaughan ordered Hinz to pay $458,302 in restitution to Wells Fargo Bank, $50,069 to the IRS and $36,211 to the Department of Housing and Urban Development.
Hinz pleaded guilty last year to one count of conspiracy to defraud the United States, one count of making a false 2008 income tax return, fifteen counts of aiding and assisting the preparation of false income tax returns, and one count of conspiracy to commit bank fraud involving a mortgage fraud scheme.
The other three defendants charged in case – Heather L. English, Patricia A. Polk, and William E. Phillips, III – have also pleaded guilty.
All four defendants were indicted in December 2011 on the tax conspiracy and various false return charges. Hinz was arrested in Miami, Florida, in January 2012 and Polk was arrested in Sarasota, Florida in February 2012. Phillips was arrested in Los Angeles in June 2012, after being deported from the Philippines upon request of the U.S. government.
According to court documents, Hinz promoted a scheme to defraud the United States by filing false federal income tax returns claiming large tax refunds using the so-called “OID process.” The OID process involved the preparation of fictitious IRS Forms 1099-OID, Original Issue Discount, falsely reporting that financial institutions, creditors, and other entities had withheld large amounts of federal income tax on behalf of the defendants and other taxpayers, with respect to non-existent income. Hinz and English recruited potential clients by promoting the OID scheme to investors in and employees of Hinz’s real estate business in Youngstown, Ohio, as well as to individuals they knew from organizations known at different times as NeoThink, NeoTech, and the Society of Secrets. English prepared or directed the preparation of the 1099-OID forms and prepared and electronically filed the tax returns. Based on these fictitious withholdings, at least 17 false tax returns for the year 2008 were filed with the IRS, claiming false refunds totaling over $3,000,000. Under the scheme, taxpayers recruited by Hinz were to pay 20 percent of their refunds to Hinz and English, split equally between them, sometimes referred to as commissions and sometimes labeled as “donations.”
According to court documents, from approximately December 2006 through May 2009, Hinz conducted his real estate business in part through a scheme to defraud two federally-insured banks, Wells Fargo Bank and Huntington National Bank, that provided mortgage loans to the investors. The scheme was carried out through the filing of false mechanic’s liens for work not actually done and the providing of undisclosed down payment assistance to the investors. The scheme was designed to induce the banks to make mortgage loans based on false representations concerning the true price and value of the properties, the sources of down payments, and the disposition of loan proceeds. Polk began conspiring with Hinz to conduct the scheme April 2008.
The case is being handled by Assistant U.S. Attorneys John M. Siegel and Henry F. DeBaggis and Tax Division Trial Attorney Robert C. Kennedy, following investigation by the Internal Revenue Service, Criminal Investigation, the Office of Investigations of the Department of Housing and Urban Development Office of Inspector General, and the Federal Bureau of Investigation.
St. Louis Man Sentenced for 2008 Bombing in A Clayton Parking GarageRead the Press Release
St. Louis, MO - Milton Ohlsen III was sentenced to 20 years in prison involving the 2008 bombing in the Carondelet Plaza garage that injured Clayton attorney John L. Gillis.
With his plea last September, Ohlsen admitted that on October 15, 2008, he transported a bomb to the parking garage at 190 Carondelet with the intent that the bomb would cause death or serious bodily injury to the intended victim. He concealed the explosive device in a gift basket and placed the basket next to an Acura TL that he incorrectly believed belonged to the intended victim. On October 16, 2008, the bomb exploded and caused permanent bodily injury to John Gillis, who had moved the basket because it was blocking access to the driver's door of his Acura TL.
MILTON OHLSEN III pled guilty to one felony count each of transportation of explosive with intent to injure; malicious use of an explosive devise; being a previously convicted felon in possession of an explosive and possession of an unregistered destructive device. He appeared today for sentencing before United States District Judge E. Richard Webber.The case was investigated by ATF, the St. Louis County and Clayton Police Departments and the Federal Bureau of Investigation's Evidence Response Team. Prosecutors from both the St. Louis County Prosecutor’s Office and the United States Attorney’s Office also assisted in the almost three- year-long investigation. First Assistant United States Attorney Carrie Costantin handled the case for the U.S. Attorney's Office.
Smith County Man Sentenced for Drug Trafficking in East TexasRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 41-year-old Tyler, Texas man was sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Bonifacio Nunez-Romero was found guilty by a jury on Aug. 15, 2012, of conspiracy to possess with intent to distribute and distribution of methamphetamine and was sentenced to 240 months in federal prison today by U.S. District Judge Michael H. Schneider.
According to information presented in court, up until September 2011, Nunez-Romero conspired with another person to acquire and distribute methamphetamine in the Tyler, Texas area. Evidence presented at trial showed Nunez-Romero was distributing methamphetamine manufactured in Mexico and also selling heroin. He was also found in possession of firearms, a military flak jacket and body armor. Nunez-Romero was indicted by a federal grand jury on Aug. 1, 2012 and charged with drug trafficking violations.
This case is the result of an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) joint investigation. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
This case was investigated by the Drug Enforcement Administration and the Smith County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Bill Baldwin.
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