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19 March 2013
Fort Pierre Man Pleads Guilty to Possession of A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that Brent Flood, age 23, of Fort Pierre, South Dakota appeared before U.S. Magistrate Judge Mark A. Moreno on March 13, 2013 and pled guilty to the Superseding Information that charged him with Possession of a Controlled Substance. The maximum penalty upon conviction is 1 year of imprisonment, a $1,000 but not more than $100,000 fine, or both; 1 year of supervised release; an additional year of supervised release upon revocation and $25 special assessment to the Victim Assistance Fund. Restitution may also be imposed.
The charge stems from an incident on April 5, 2012 wherein Flood knowingly and intentionally possessed marijuana, a Schedule I controlled substance.
The investigation was conducted by the Northern Plains Safe Trails Drug Task Force and Assistant U.S. Attorney Kathryn N. Rich is prosecuting the case.
Flood was remanded to the custody of the U.S. Marshal pending sentencing which has been set for May 13, 2013.
Former Fugitive Sentenced on Conspiracy to Defraud the IRSRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), Miami Field Office, announce today’s sentencing of defendant Domingos Trofino, 64, on charges of conspiracy to defraud the IRS. Trofino was sentenced to 14 months in prison, which he has already served. Trofino was charged in a superseding indictment filed on October 13, 2000. He was extradited from Italy on August 10, 2012, and was detained pending trial since that time.
According to documents filed in court, during 1989, Trofino formed Compubras Export and Import Corporation (Compubras) in Miami, Florida. Compubras manufactured and sold electronics and computer hardware to customers in South Florida, Paraguay and Uruguay. As part of its business operations, Compubras maintained a dual set of records. One set of records accurately reflected its business activities. The second set of records was created to understate its actual income in an attempt to support a multi-year scheme to evade the payment of federal income taxes. The false set of records included false invoices that understated the true amount of Compubras’ sales and allowed the defendant and Compubras’ other shareholders to skim cash sales proceeds from Compubras without reporting the funds as income.
According to documents filed with the court, the IRS conducted an audit of Compubras, during which it received only with the false set of corporate records. After the IRS determined that it had been provided with fraudulent business records, a search warrant was obtained for the downtown Miami offices of Compubras and the personal residences of the defendant and other Compubras shareholders. Evidence seized during the execution of these search warrants confirmed the fraudulent nature of the previously produced business records.
Mr. Ferrer commended the investigative efforts of IRS-CID. This case is being prosecuted by Assistant U.S. Attorney Sean Cronin.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former East Bay Resident Sentenced for His Role in Tax Refund ScamRead the Press Release
SAN FRANCISCO – Clexton Ward was sentenced last week to 24 months in prison for conspiring to file false claims, United States Attorney Melinda Haag and Internal Revenue Service Criminal Investigation Special Agent in Jose M. Martinez, announced.
Ward pleaded guilty on August 22, 2012 to one count of Conspiracy to File False Claims. In pleading guilty, Ward acknowledged participating in a conspiracy to file false income tax returns electronically with the IRS. Ward admitted that, as part of the conspiracy, he gathered and supplied the names, personal identifying information and bank accounts that were used to file the false tax returns. Ward acknowledged that the false tax returns requested that the fraudulent refunds be deposited into various bank accounts controlled by either him or by his co-conspirators, and that he and his co-conspirators split the proceeds from the fraudulent refunds.
On April 17, 2012, Ward was charged with one count of Conspiracy to File False Claims. He is scheduled to begin his sentence on May 5, 2013.
Thomas Newman is the Assistant U.S. Attorney, who is prosecuting this case. The prosecution is the result of an investigation by the IRS, Criminal Investigation.
Former Credit Union Employee in Dickinson County Sentenced for Embezzling $85,000Read the Press Release
TOPEKA, KAN. – A former employee of a credit union in Dickinson County has been sentenced to two years probation for embezzling $85,000, U.S. Attorney Barry Grissom said today. She also was ordered to pay $85,000 in restitution.
Deborah A. Bomia, 46, Enterprise, Kan., pleaded guilty to one count of embezzlement. In her plea, she admitted the crime occurred from April 30, 2005, to Aug. 8, 2011, while she worked for Enterprise Credit Union in Enterprise, Kan.
Bomia kited checks between accounts in her name at Enterprise Credit Union, creating false and fictitious balances. The embezzlement involved making a large deposit toward the end of the month, which would be included in the general ledger, but the actual deposit would not be sent to the corporate checking account until around the middle of the next month. At the same time, another larger check would be drafted out of Bomia’s credit union checking account. The final deposit to the general ledger was recorded July 29, 2011, in the amount of $85,000. The money was never deposited to the credit union’s corporate account.
Grissom commended the FBI and Assistant U.S. Attorney Rich Hathaway and Assistant U.S. Attorney Christine Kenney for their work on the case.Florida Man Sentenced for Role in $30 Million Telemarketing Scam That Victimized over 22,000 PeopleRead the Press Release
Daniel L. Gregg, 40, of Boynton Beach, FL, was sentenced to 27 months in prison, 3 years supervised release, and ordered to pay a $375 file and a $100 special assessment fee, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today. Gregg pled guilty to one count of conspiracy to commit mail fraud and wire fraud. The indictment alleged that Gregg and others were involved in a telemarketing scam under the names Universal Marketing Solutions and Creative Vacation Solutions. The fraudulent companies, which operated in Florida and bilked over 22,000 victims of $30 million dollars, victimized consumers in all fifty states, the District of Columbia and Puerto Rico, all ten Canadian provinces and the Northwest Territory of Canada. There were at least 54 victims in twenty eight (28) of the thirty eight (38) counties comprising the Southern District of Illinois.
The criminal indictment alleged that Gregg was employed by a Universal Marketing Solutions and Creative Vacation Solutions franchise office. Beginning in October 2007, and continuing through at least January 2010, telemarketers for Universal Marketing Solutions and Creative Vacation Solutions placed cold calls to timeshare owners and then falsely represented that their company had actual buyers for the owners’ timeshare property. Gregg solicited advanced fees of up to several thousand dollars from each victim in purported closing costs – fees they promised would be refunded to the owner once the closing on the property occurred. Many timeshare owners were told that their closings were scheduled within the next 60 to 90 days. Despite collecting fees from 22,000 victims, not a single timeshare unit was ever sold. Gregg and his co-conspirators simply pocketed the closing costs.
Approximately twenty-four others have been charged in connection with the Creative Vacation Solutions telemarketing scam. The company’s former chief executive, Jennifer Kirk, pled guilty to a criminal Information on June 30, 2011. She was sentenced on January 9, 2012 to over 16 years in prison and five years’ supervised release. More than a dozen others have also been sentenced, receiving prison terms that range from 1 to 14 years.
The prosecution follows an investigation by the St. Louis Field Office of the Chicago Division of the United States Postal Inspection Service, the Florida Attorney General’s Office, the Florida Department of Agriculture and Consumer Services, and the Boynton Beach Florida Police Department. The prosecution of the case was handled by Special Assistant U.S. Attorney Katherine Lewis and Assistant U.S. Attorney Bruce Reppert.
Federal Jury Finds Native Mob Gang Members Guilty of Attempted Murder, Racketeering, and Other ChargesTwenty-one of Twenty-five Indicted Gang Members Earlier Pleaded Guilty to RICO-related Charges, While Another Pleaded Guilty to MurderRead the Press Release
MINNEAPOLIS— Earlier today in federal court, a jury found three members of the Native Mob street gang guilty on a number of charges related to the gang’s criminal activity. Following a nearly two-month trial, the jury found Wakinyon Wakan McArthur, age 34, guilty on six counts, including racketeering; William Earl Morris, age 25, guilty on four counts; and Anthony Francis Cree, age 26, guilty on six counts, including racketeering and attempted murder (see attached chart for specific charges). On July 19, 2012, the defendants were charged in a superseding indictment.
Following today’s conviction, U.S. Attorney Todd Jones said, “The Native Mob has wreaked havoc on tribal and non-tribal communities across Minnesota and our region. Its members traffick in drugs and guns, using violence, intimidation, and in some instances, murder, against those who stand in their way. This case, brought against more than two dozen Native Mob members, including its leaders, exemplifies the broad reach and effectiveness of a federal RICO prosecution, which carries penalties of up to life in prison, in attacking violent criminal organizations. This investigation took several years and the cooperation of numerous local, state, federal, and tribal law enforcement agencies. Their hard work has made our communities safer."
The Native Mob is a regional criminal gang that originated in Minneapolis in the early 1990s. Members routinely engage in drug trafficking, assault, robbery, and murder. Membership is estimated at 200, with new members, including juveniles, regularly recruited from communities with large, male, Native American populations. Association with the gang is often signified by wearing red and black clothing or sporting gang-related tattoos. According to the 2011 National Gang Threat Assessment, the Native Mob is one of the largest and most violent American Indian gangs in the U.S. and is most active in Minnesota and Wisconsin.
The evidence presented at trial proved that since at least the mid-1990s, the named defendants and others have conspired to conduct criminal activity through an “enterprise,” namely, the Native Mob, in violation of the federal Racketeering Influenced and Corrupt Organizations Act (“RICO”). The primary objective of this “enterprise” is to preserve, protect, promote, and enhance the Native Mob’s power, territory, and financial gains.
To that end, gang members distribute illegal drugs, from crack cocaine to ecstasy. They also provide monetary support to other members, including those incarcerated; share with one another police reports, victim statements, and other case discovery; hinder or obstruct officials from identifying or apprehending those wanted by the law; and intimidate witnesses to Native Mob crimes. Moreover, they maintain and circulate firearms for gang use and commit acts of violence, including murder, against individuals associated with rival gangs.
On December 21, 2012, Shaun Michael Martinez, age 35, pleaded guilty to shooting and killing fellow gang member Jeremee Kraskey. Martinez, also known as Tinez, pleaded guilty to one count of murder resulting from the use and carrying of a firearm during and in relation to a crime of violence.
In his plea agreement, Martinez admitted that on February 26, 2011, he killed Kraskey to prevent him from offering law enforcement information about the Native Mob’s criminal activities, which were the subject of a joint federal-state investigation. Martinez specifically admitted that on February 26, 2011, he drove Kraskey to a residence in the 3500 block of 14th Avenue South in Minneapolis, where he shot Kraskey three times. Martinez further admitted his use of a firearm occurred during and in relation to a conspiracy to violate federal racketeering laws.
According to the evidence presented at trial, the defendants committed numerous overt acts as evidence of their “criminal enterprise”: Immediately after the death of Kraskey, McArthur and others held an “emergency” Native Mob council meeting to discuss, among other things, Kraskey’s murder.
On March 4, 2010, McArthur, Cree, and others attempted to kill a man by shooting him three times with a .40-caliber handgun, the attack being in retaliation for the man’s supposed cooperation with law enforcement. At the time of the shooting, the man was holding his five-year-old daughter in his arms.
On July 10, 2010, McArthur and others attended a meeting to discuss killing enemies of the Native Mob, the transportation of firearms from northern Minnesota to Minneapolis, the storage and location of gang firearms, drug trafficking, collecting money for incarcerated Native Mob members, and the identity of persons believed to be cooperating with law enforcement against the Native Mob.
On March 7, 2010, in south Minneapolis, Native Mob members attempted to kill a Native Vice Lord gang member by shooting him in the neck.
On August 24, 2010, McArthur ordered members of the Native Mob a drive-by shooting of a rival gang member’s apartment in Bemidji.
On March 28, 2011, McArthur ordered members of the Native Mob to conduct a home invasion in Cass Lake.
For their crimes, the defendants who were tried and convicted in this case face a potential maximum sentence of between 20 years and life in federal prison. Since the federal justice system does not have parole, prison terms will be served virtually in their entirety behind bars. United States District Court Judge John R. Tunheim will determine their sentences at a future hearing, yet to be scheduled. See the attached chart for a list of other defendants and charges.
In addition to the defendants in this case, a number of Native Mob members have been prosecuted in related cases: Kenny Roberts and Corey Benjamin were convicted in 2010 of being armed career criminals in possession of firearms; Gordon Reese was convicted in 2007 of assault, methamphetamine trafficking, and possession of firearms, and he is serving a 30-year sentence; Rueben Crowfeather was convicted in 2008 of drug trafficking and has served his sentence; and Alden Fairbanks has pleaded guilty to racketeering conspiracy charges and is awaiting sentencing.This case was the result of a long-term, cross-jurisdictional investigation conducted by numerous local, state, federal, and tribal law enforcement officers dedicated to making Minnesota’s streets and communities safer. These agencies include representatives from the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; the U.S. Drug Enforcement Administration; the U.S. Bureau of Indian Affairs; the FBI-funded Headwaters Safe Trails Task Force; the Paul Bunyan Drug Task Force; the Minnesota Department of Corrections; the Minnesota Bureau of Criminal Apprehension; the Carlton County Sheriff’s Office; the Mille Lacs Tribal Police Department; the Bemidji Police Department; and the Minneapolis Police Department. These investigators were assisted by those from—in alphabetical order—the Becker County Sheriff’s Office, the Beltrami County Sheriff’s Office, the Carlton County Attorney’s Office, the Cass County Attorney’s Office, the Cass County Sheriff’s Office, the Crow Wing County Sheriff’s Office, the Douglas County Sheriff’s Office of Wisconsin, the Duluth Police Department, the Fon du Lac Tribal Police Department, the Fridley Police Department, the Itasca County Sheriff’s Department, the Hennepin County Attorney’s Office, the Hennepin County Sheriff’s Office, the Hubbard County Sheriff’s Office, the Leech Lake Tribal Police Department, the LCO Reservation Police Department, the Lower Sioux Tribal Police Department, the Mahnomen County Sheriff’s Office, the Minnesota State Patrol, the Mille Lacs County Attorney’s Office, the Mille Lacs County Sheriff’s Office, the New Brighton Police Department, the North Central Drug Task Force, the Prior Lake Police Department, the Red Lake Tribal Police Department, the Redwood County Sheriff’s Office, Richfield Police Department, the Sherburne County Sheriff’s Office, the St. Paul Police Department, the U.S. Marshals Service, the Minneapolis Violent Offender Task Force, the Washington County Sheriff’s Office, and the White Earth Tribal Police Department.
This case was prosecuted by Assistant U.S. Attorneys Andrew R. Winter and Steven L. Schleicher.Chart
Federal Grand Jury in South Bend Returns IndictmentsRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary L. Hatton
www.usdoj.gov/usao/inn/ Fax: (219) 852-2770
South Bend, IN—The United States Attorney's Office announced that a Grand Jury sitting in South Bend, Indiana, returned the following Indictments on March 13, 2013:
Christina Glen, 43, of LaPorte, Indiana, was charged in a five-count Indictment with one count theft of government property and four counts of wire fraud.These charges were filed as a result of an investigation by the Indiana Department of Workforce Development and the United States Department of Labor.This case has been assigned to and will be prosecuted by Assistant United States Attorney Barbara Z. Brook.
Francisco Perez, 32, of Gary, Indiana, and Gilberto Galindo-Lopez, age 32, of Los Angeles, California, were charged in a one-count Indictment with possession with the intent to distribute a controlled substance.These charges were filed as the result of an investigation by the Drug Enforcement Administration.This case has been assigned to and will be prosecuted by Assistant United States Attorney Frank E. Schaffer.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
Emissions Inspectors at Vehicle Inspection Stations in Arlington, Texas, Sentenced for Falsifying Texas State Emissions Test ResultsRead the Press Release
DALLAS — Six residents of Arlington, Texas, who pleaded guilty to their respective roles in falsifying Texas state emissions tests at two state-certified inspections stations in Arlington, have been sentenced, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
“Everyone has a right to breathe clean air, free from excessive vehicle emissions,” said Ivan Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Texas. “In order to protect the public from harmful air pollutants, governments must have accurate and honest vehicle emissions tests. The defendants generated thousands of fraudulent inspections and certificates and cynically lined their pockets as they thumbed their noses at our nation’s environmental laws. This is one of the largest vehicle emission fraud cases in the country and is an excellent example of government agencies working together to protect both the public and the environment.”
“I commend the excellent investigative work by the U.S. Environmental Protection Agency, Criminal Investigation Division; the Texas Department of Public Safety; and the Texas Commission on Environmental Quality,” said U.S. Attorney Saldaña. “As these convictions illustrate, this office, in partnership with these agencies, will aggressively prosecute those who deliberately ignore the nation’s Clean Air Act.”
The Clean Air Act authorizes the U.S. Environmental Protection Agency (EPA) to establish National Ambient Air Quality Standards (NAAQS) to protect the public health and welfare and to regulate emissions of hazardous air pollutants. Areas that exceed the NAAQS are known as “non-attainment areas.” Depending on the amount of pollution that exceeds the standards, areas are classified as marginal, moderate, serious, severe or extreme. The North Texas Region that includes Dallas and Tarrant counties, is classified as a “serious” non-attainment area by the EPA. Vehicles are required to pass annual inspections to ensure that their emissions do not exceed limits for hydrocarbons, nitrogen oxide and other compounds.
Nghiem Van Tran, 54, and Nghi Cong Tran, 32, who each pleaded guilty to one count of conspiracy to violate the Clean Air Act, were sentenced by U.S. District Judge Barbara M. G. Lynn to 15 months in federal prison. In addition, Nghiem Van Tran was ordered to pay a $5,000 fine.
Ngan Tien Tran, 29, pleaded guilty to one count of making a Clean Air Act false statement and was sentenced by Judge Lynn to 12 months in federal prison.
Dahn Cong Tran, 26, Bich Dong Ngo, 26, and Huy Ngoc Nguyen, 26, were each sentenced to 12 months of probation, following each of their guilty pleas to one count of making a Clean Air Act false statement. Judge Lynn ordered that Danh Cong Tran’s probation include eight months of home confinement.
According to documents filed in the case, the inspection stations, Mike’s Autocare, located on North Mesquite Street in Arlington and Tommy Tech, located on Peach Street in Arlington, performed approximately 7,656 fraudulent emissions tests between August 2009 and March 2011. The defendants circumvented the required emissions testing procedures by substituting vehicles that would pass the emissions test in place of vehicles that had previously failed or showed equipment malfunctions. In most instances, the vehicle needing an emissions test was not present at Mike’s or Tommy Tech when the emissions tests were conducted, and the defendants who conducted the fraudulent tests received the necessary identifying vehicle information from Nghiem Van Tran and Nghi Cong Tran via a text message or a handwritten slip of paper. The defendants generated fraudulent emissions certificates and transmitted fraudulent testing results to the Texas Information Management System (TIMS) database managed by the Texas Department of Public Safety.
The defendants demanded up to $80 for each fraudulent test, well above the state-mandated maximum charge of $39.75. Proceeds from the fraudulent emissions tests were deposited into a bank account for “Upland Investment,” which was controlled by Nghiem Van Tran.
Assistant U.S. Attorney Stephen P. Fahey prosecuted.
Ebensurg Woman Admits Assisting A Co-Conspirator Conceal Money from IRSRead the Press Release
JOHNSTOWN, Pa. - A resident of Ebensburg, Pa., pleaded guilty in federal court to a charge of conspiracy, United States Attorney David J. Hickton announced today.
Roxanne Lamer, 46, pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, from June 9, 2007, to April 15, 2008, Lamer conspired with others to defraud the United States by assisting a co-conspirator in concealing money from the Internal Revenue Service in order for the co-conspirator to avoid paying income tax.
Judge Gibson scheduled sentencing for Aug. 9, 2013, at 10:30 a.m. The law provides for a maximum total sentence of 5 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation conducted the investigation that led to the prosecution of Lamer.
Dustin Roy Gilpin Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on March 18, 2013, before U.S. District Judge Dana L. Christensen, DUSTIN ROY GILPIN, a 33-year-old resident of Kalispell, pled guilty to receipt of obscenity. Sentencing has been set for July 2, 2013. He is currently released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorney Cyndee L. Peterson, the government stated it would have proved at trial the following:
As part of an Internet Crimes Against Children Task Force investigation, a Madison County Deputy Sheriff determined an IP address in Kalispell was offering known child pornography files available for download via the Internet. The subscriber information for that IP address was GILPIN'S residence. The Flathead County Sheriff's Office obtained a search warrant for that residence.
On July 3, 2012, the warrant was served, and two generic desktop computers were seized and subsequently forensically examined.
On the first computer the examiner located image files which depict obscene matters of indecent character, specifically children engaged in sexual conduct. The examiner determined that some of the files were associated with the peer-to-peer file sharing program LimeWire. The examiner also determined the files were created between May 2012 and July 2012.
On the second computer the examiner located image files which depict obscene matters of indecent character, specifically children engaged in sexual conduct. The examiner determined these files were also associated with the peer-to-peer file sharing program LimeWire. The files were created between September 29, 2011, and March 13, 2012.
GILPIN faces possible penalties of 5 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was a cooperative effort between the Internet Crimes Against Children (ICAC) Task Force, the Madison County Sheriff's Office, the Flathead County Sheriff's Office, and the Montana Division of Criminal Investigation.
Drug Dealer Sentenced to 77 Months in Federal PrisonRead the Press Release
EUGENE, Ore. – On March 19, 2013, Demarcos Montel Wright, 33, of Springfield, Oregon, was sentenced by U.S. District Court Chief Judge Ann Aiken to 77 months in federal prison for possession with intent to distribute crack cocaine and felon in possession of a firearm. Upon his release from prison, Wright will be on supervised release for three years.
On March 13, 2012, Springfield Police Department detectives executed a search warrant on Wright’s person and his residence in Springfield, Oregon. Wright had a small amount of crack cocaine on his person. At Wright’s residence detectives located approximately one ounce of crack cocaine, scales and three pistols. One pistol was stolen and another had an extended capacity magazine. Wright admitted that he was involved in distributing cocaine. Wright was previously a member of the Gangster Disciples gang.
This case was investigated by the Springfield Police Department, the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives and was prosecuted by Assistant U.S. Attorney Jeffrey S. Sweet.
District Man Sentenced to Five Years in Prison for Stabbing A Man in the Neck-Defendant Used Screwdriver in the Attack-Read the Press Release
WASHINGTON - Alonzo Douglas Hebron, 53, of Washington, D.C., was sentenced today to five years in prison for stabbing a man in the neck with a screwdriver during an altercation in Northeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Hebron pled guilty in January 2013 in the Superior Court of the District of Columbia to assault with a dangerous weapon. He was sentenced by the Honorable Patricia A. Broderick. Upon completion of his sentence, Hebron will be placed on three years of supervised release.
According to the government’s evidence, on Nov. 23, 2012, at approximately 2:45 p.m., the Metropolitan Police Department (MPD) was called to an apartment in the 1100 block of Queen Street NE, where officers found a man suffering from a stab wound to the neck area. Police determined that the victim, Hebron, and two others had been inside the apartment talking. At one point, Hebron had gotten into an altercation with the victim, escalating to the point that he stabbed the victim in the neck with a screwdriver.
The victim suffered massive bleeding from the wound and was transported to a hospital for emergency attention. Hebron fled the scene. The two eyewitnesses helped the police identify Hebron through the use of a photo-array and he was later arrested based on an arrest warrant.
In announcing today's sentence, U.S. Attorney Machen commended the work of the Metropolitan Police Department. He also expressed appreciation for the efforts of Assistant U.S. Attorney John C. Truong, who investigated and prosecuted the case.
13-102Deported Alien Sentenced to Time Served for Illegally Re-entering United StatesRead the Press Release
PITTSBURGH - An individual found in Coraopolis, Pa., 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 Cathy Bissoon imposed the sentence on Mauro Zerecero-Soto, 24, formerly from Mexico.
According to the information presented to the court, Mauro Zerecero-Soto, an alien, was removed from the United States by U.S. Immigration and Customs Enforcement on April 5, 2011. Mauro Zerecero-Soto was found in Coraopolis on Jan. 4, 2013.
Assistant United States Attorney Paul E. Hull prosecuted this case on behalf of the government.
The U.S. Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
Deported Alien Charged with Immigration ViolationRead the Press Release
PITTSBURGH, Pa. - An individual found in Adams Township, Butler County, Pa., has been indicted by a federal grand jury in Pittsburgh on a charge of re-entry into the United States after deportation, United States Attorney David J. Hickton announced today.
The one-count indictment named Marcio Martinez-Bustamante, 31, formerly from Honduras, as the sole defendant.
According to indictment, Marcio Martinez-Bustamante, an alien, was removed from the United States by United States Immigration and Customs Enforcement on Feb. 26, 2010 and January 26, 2011. Marcio Martinez-Bustamante was found on March 9, 2013, by the Adams Township Police Department during a traffic stop.
The law provides for a maximum total sentence of two years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
An indictment or information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Creston Man Pleads Guilty to Bankruptcy Fraud SchemeRead the Press Release
United States Attorney Deborah R. Gilg announced that on March 19, 2013, Ross Boydston, age 57 of Creston, Nebraska, pleaded guilty to an Information charging him with bankruptcy fraud. Sentencing has been set for June 24, 2013, before United States District Court Judge John M. Gerrard. The maximum punishment for the offense is up to five years imprisonment and/or a $250,000.00 fine with any term of imprisonment to be followed by a term of supervised release of up to three years.
According to the Information, Boydston knowingly devised a scheme to defraud American Mortgage Company, (AMC), and, as part of the scheme, subsequently filed a Chapter 12 bankruptcy. The Information alleges that it was part of the scheme to defraud that Boydston sold livestock which had been pledged as collateral to American Mortgage Company without notifying AMC of the sales and without remitting the proceeds of the sales to AMC. It was a further part of the scheme to defraud that Boydston made material false statements, representations and omissions in his Chapter 12 bankruptcy case in an attempt to conceal the fact that he had transferred and sold the collateral without remitting the proceeds. Specifically, the Information alleges Boydston’s bankruptcy schedules failed to list all of the transfers and sales of pledged livestock collateral within the two years preceding the bankruptcy filing. The Information further alleges that, in order to further conceal the transfers and sales of livestock, Boydston attended the first meeting of creditors in his bankruptcy case and falsely testified that there had not been any sales of livestock in which the proceeds had not been turned over to the lien of AMC. Boydston admitted these allegations as part of his plea agreement with the United States.
“Concealing sales and transfers of assets in a bankruptcy proceeding is a crime that threatens the integrity of the bankruptcy process and public confidence in that process,” stated Nancy J. Gargula, United States Trustee for Nebraska, Missouri, and Arkansas (Region 13). “We are grateful to all of our law enforcement partners in this case, and, in particular, to U.S. Attorney Deborah Gilg for her commitment to pursuing those who commit bankruptcy fraud.” Region 13 of the U.S. Trustee Program is headquartered in Kansas City, with additional offices in Omaha, St. Louis, and Little Rock. The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.
The United States Trustee’s Office and members of the Nebraska Bankruptcy Fraud Working Group assisted the United States Attorney’s Office with the investigation of this matter.
Contractors Arrested for Fraud, Arson and Aggravated AssaultRead the Press Release
CAMDEN, N.J. – Two principals of a Pennsylvania construction company were arrested today in connection with an employee kickback scheme that occurred during a reconstruction project at the Ft. Dix military base in Burlington County, U.S. Attorney Paul J. Fishman announced today.
A federal grand jury returned a five-count Indictment on March 4, 2013, charging Leonard Santos, 66, of Yardley, Pa., and Alex Rabinovich, 57, of Richboro, Pa., with one count each of conspiracy to obtain kickbacks from public works employees; malicious destruction of a vehicle by fire; travel in interstate commerce to commit a crime of violence; conspiracy to accept kickbacks on federal projects; and conspiracy to commit false payroll records. Both men are expected to make their initial court appearances today before U.S. Magistrate Judge Anne Marie Donio in Camden federal court.
According documents filed in this case and statements made in court:
Between November 2009 and September 2010, Santos and Rabinovich operated Sands Mechanical Inc. as a subcontractor on the restoration and rehabilitation of the Marine Corps Reserve Training Center at Joint Base-McGuire-Dix-Lakehurst in Burlington County, N.J. Sands provided sheet metal, electrical and plumbing work. The general contractor was a company headquartered in Marriotsville, Md. Santos and Rabinovich demanded that select employees kickback a percentage of their weekly paychecks or face termination. Two Sands’ supervisors have already pleaded guilty to these charges: Richard Cottone (Santos’ son-in-law) pleaded guilty Dec. 11, 2012, and will be sentenced Oct. 10, 2013; Michael Featherston pleaded guilty Jan. 10, 2012 and will be sentenced Oct. 9, 2013.
In February 2010, the U.S. Department of Labor’s Wage and Hour Division (WHD) was tipped off that the Sands employees were not being paid the prevailing wage for Burlington County. Santos conceded that Sands failed to pay the proper prevailing wage to its employees and agreed to repay $80,000 to those deprived employees. Santos cut settlement checks to those employees who were owed back wages. However, Cottone and Featherston warned those employees not to cash their settlement checks. Instead, Cottone and Featherston took the employees to a nearby check cashing business, where many of these checks were then endorsed over to Cottone, who cashed them and returned the funds to Santos. Since these kickbacks were removed from employees’ checks, Santos and Rabinovich routinely submitted inaccurate weekly payroll forms that are required whenever the federal government subsidizes a construction project.
The general contractor’s site manager was routinely critical of the work performance of Sands’ employees, which, at times, necessitated that work be done over. The site manager was targeted by Santos, Cottone and others by having his truck torched in front of his residence at 4 a.m. on May 17, 2010. This tactic failed to warn off the site manager. On June 10, 2010 at 5 AM, while riding his bike, the site manager was intentionally run down by a car driven by Cottone’s nephew and two friends. The victim sustained multiple serious injuries.
The defendants are charged with providing kickbacks to a prime contractor to improperly obtain subcontracts on federally funded construction projects. Between November 2009 and January 2013, Santos and Rabinovich paid off a Philadelphia contractor’s representative to get “last looks” at other competitors’ bids. Santos accumulated a total of $46,200 in kickbacks owed for the 10 subcontracts awarded to Sands Mechanical. By the summer of 2012 he still owed about $15,000 in kickbacks. On two occasions, in November and December 2012, at the behest of Santos, Alex Rabinovich was recorded giving a total of $4,156 in cash to the contractor’s representative in payment of the kickbacks still due and owing.
The counts of conspiracy to demand kickbacks from employees on a federally subsidized project, conspiracy to provide kickbacks to a prime contractor and conspiracy to submit false payroll records each carry a maximum potential penalty of five years in prison and a $250,000 fine. The count of traveling in interstate commerce to commit a crime of violence is punishable by a maximum potential penalty of 20 years in prison; and the arson count is punishable by up to 20 years in prison, with a mandatory minimum of five years in prison.
Seven defendants have previously pled guilty to various charges ranging from collecting kickbacks, arson and aggravated assault.
Fishman credited special agents of the Department of Labor, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent-in-Charge Robert Panella; the Department of Labor-Wage and Hour Division, under the direction of George Ference, regional administrator; Naval Criminal Investigative Service, under the direction of Special Agent in Charge Cheryl DiPrizio, Northeast field office; and the Air Force Office of Special investigations, under the direction of Special Agent Seth Neville, detachment commander, Joint Base McGuire-Dix-Lakehurst.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office Organized Crime\Gangs Unit in Newark.
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Santos, Leonard and Rabinovich, Alex Indictment
Colorado Man Indicted for Failure to AppearRead the Press Release
United States Attorney Brendan V. Johnson announced that a Colorado man was indicted by a federal grand jury for failing to appear in federal court on another matter pending against him.
Hoang C. Huynh, 47, was indicted on December 21, 2010, for Failure to Appear on a child support case. He appeared before U.S. Magistrate Judge Veronica L. Duffy on March 8, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 2 years of imprisonment and/or a $250,000 fine. The charge is merely an accusation and Huynh is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Office of Inspector General, Health and Human Services. Assistant U.S. Attorney Sarah B. Collins is prosecuting the case. Huynh was remanded to the custody of the U.S. Marshal. A trial date has not been set.
Clarence Mumford, Jr. Becomes Twelfth to Plead Guilty in Teacher Test Taking ScandalRead the Press Release
Memphis, TN – Clarence Mumford, Jr., 29, of Memphis, TN, pled guilty today to aiding and abetting identification fraud in connection with the teacher certification cheating scam directed by ringleader Clarence Mumford, Sr., 59, of Memphis, announced United States Attorney for the Western District of Tennessee, Edward L. Stanton III. This plea, along with previous guilty pleas by Mumford, Sr.,; John Bowen, 64; Felippia Kellogg, 42; Jeryl Shaw, 40; Shantell Shaw, 40; Carlos Shaw, 38; Jacklyn McKinnie, 44; Steve Holmes, 54; all of Memphis; Valerie Humprey, 47, of Oakland, Tennessee; Carlo McClelland, 35, of Meridian, Mississippi; and Dante Dowers, 40, of Belle Glade, Florida; brings to twelve the total number of guilty pleas thus far in Mumford Sr.’s teacher certification cheating scam.
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The original indictment in the case, filed in July 2012, charged Mumford Sr. with orchestrating a scheme that began as early as 1995 to pay test-takers to take teacher certification examinations on behalf of teachers and hopeful teachers. In August, a superceding indictment charged Dowers, and Mumford Jr. And in September, a second superceding indictment charged 10 more individuals, including Samuel Campbell, 39, of Jackson, Mississippi; Darcel Gardner, 35, of Columbus, Mississippi; Holmes; Humphrey; McClelland; McKinnie; Jadice Moore, 30, of Port Gibson, Mississippi; Sarah Richard, 54, of Richland, Mississippi; Jeryl Shaw; and Kimberly Taylor, 36, of Charleston, Mississippi. Cedrick Wilson, 34, of Memphis, Tennessee, was charged in a separate indictment related to the scam in October 2012.
During the guilty plea hearing, Mumford, Jr. admitted that Bowen took a Principles of Learning and Teaching examination on Mumford, Jr.’s behalf in January 2008 at the University of Mississippi and that he subsequently obtained a professional teaching license from the Tennessee Department of Education based, in part, on the examination taken by Bowen. In addition to having this test taken by Bowen, Mumford, Jr. also admitted to taking examinations on behalf of others including Willie Knox, 55; Carlo McClelland; and Cedrick Wilsonn of Memphis, TN.
This investigation is being conducted by the Tennessee Bureau of Investigation and the United States Secret Service. Assistant U.S. Attorney John Fabian and Special Assistant U.S. Attorney Kirby May represent the government.Child Molester Sentenced to 25 Years in Federal Prison for Documenting Sexual Abuse and Sending Photos to Other PedophilesRead the Press Release
RIVERSIDE, California – An Inland Empire man who molested at least three children, photographed the abuse and traded those images over the Internet with other pedophiles was sentenced this morning to 25 years in federal prison.
Peter Ruiz, 33, of San Bernardino, who was described by prosecutors in court papers as a “ruthless predator,” was sentenced by United States District Judge Virginia A. Phillips.
In 2009 and 2010, Ruiz repeatedly molested a boy who lived in an apartment near where Ruiz resided with his family. Ruiz documented the abuse with photographs and videos, which he distributed to pedophiles, sometimes in exchange for money. When authorities searched Ruiz’s computer on Halloween in 2010, they discovered more than 6,000 images and over 600 videos of child pornography, which included images of Ruiz molesting the then-12-year-old victim.
Ruiz pleaded guilty on October 23, 2012, to one count of production of child pornography.
In addition to the molestation of his neighbor, Ruiz also sexually abused two other boys, who were 9 and 10 when they were attacked. Ruiz groomed all of his victims with small gifts and access to video games, according to prosecutors.
“Ruiz sexually abused at least three children, nearly destroying them and their families in the process,” federal prosecutors wrote in a document filed in relation to today’s sentencing hearing.
Prosecutors wrote in their sentencing memo that Ruiz “appears to show no remorse for his crimes.” Ruiz maintains a “brazen and nonchalant attitude toward his abuse of children...bragg[ing] about these sexual exploits to a fellow inmate.” Ruiz developed a pattern of “grooming his victim[s], professing his love for them, and eventually intimidating them into keeping silent,” prosecutors wrote.
The case against Ruiz is the result of an investigation by the Federal Bureau of Investigation.
Release No. 13-038
Career Criminal Sentenced for Possessing A Semi-automatic PistolRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 43-year-old career criminal was sentenced for possessing a stolen .45-caliber, semi-automatic pistol. United States District Court Judge Joan N. Ericksen sentenced Michael Scott Canfield, of St. Paul, to 188 months in federal prison on one count of being a felon in possession of a firearm. He was also ordered to pay $1,000 in restitution concerning a related burglary. Canfield was indicted on July 11, 2012, and pleaded guilty on September 28, 2012.
In his plea agreement, Canfield admitted that on June 25, 2012, he was in possession of a Colt, .45-caliber handgun after having been previously convicted of one or more felonies. He also admitted that the handgun had traveled in interstate commerce prior to his possession of the weapon.
The investigation in this case indicated that on June 25, 2012, an Xcel Energy meter reader saw Canfield coming out of a house in Stillwater, Minnesota, carrying a firearm. Canfield claimed that “his” house had just been robbed. Canfield went to the back of the house, and the meter reader heard gunfire. The police responded to the scene and determined that Canfield had stolen several items from the house. They recovered two .45-caliber shell casings. The police later found Canfield’s get-away car with some of the stolen goods in it. Near the car was a Colt Commander, .45-caliber, semi-automatic pistol.
Because he was a felon, Canfield was prohibited under federal law from possessing a firearm at any time. His prior Ramsey County convictions included unauthorized use of a motor vehicle (1988), damage to property (1989), receiving stolen property (1991 and 1993), theft (1992 and 1994), and fleeing a peace officer (2006). In addition, Canfield was convicted of receiving stolen property in Kanebec County (1993), second-degree burglary in Sherburne County (1996), fleeing police in a motor vehicle in Dakota County (2006), two counts of first-degree burglary in Stearns County (2006), and recklessly endangering safety in St. Croix County, Wisconsin (2000).
Since at least three of Canfield’s prior offenses constituted crimes of violence, his sentence was subject to the federal Armed Career Criminal Act. That act mandates a minimum of 15 years in federal prison. And because the federal system does not have parole, offenders spend virtually their entire prison sentences behind bars.
This case was the result of an investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives and the Stillwater Police Department. The case was prosecuted by Assistant U.S. Attorney Thomas M. Hollenhorst.Cambria County Man Pleads Guilty to Conspriacy and Firearms ViolationsRead the Press Release
Prosecution is Part of Project Safe Neighborhoods Initiative
JOHNSTOWN, Pa. - A resident of Ebensburg, Pa., pleaded guilty in federal court to charges of conspiracy and violating federal firearms laws, United States Attorney David J. Hickton announced today.
David Eugene Lamer, 47, pleaded guilty to three counts before United States District Judge Kim R. Gibson.
In connection with the guilty plea, from June 9, 2007, to April 15, 2008, Lamer conspired with others to defraud the United States by concealing money from the Internal Revenue Service in an effort to avoid paying income taxes. Also, on Sept. 2, 2010, Lamer possessed a FIE, Model Standard .38 caliber pistol, and on Sept. 3, 2010, Lamer possessed a Remington, Model 760, .30-06 caliber rifle, a Marlin, Model 1894, .357 caliber rifle, and a Savage/Stevens (Western Field) Model 30, 16 gauge shotgun. On Jan. 8, 1986, Lamer was convicted in Cambria Co., Pa., of burglary, which is a crime punishable by imprisonment for a term exceeding one year. Federal law prohibits persons who have been convicted of a crime punishable by a term of imprisonment exceeding one year from possessing firearms or ammunition.
Judge Gibson scheduled sentencing for Aug. 9, 2013, at 9:30 a.m. The law provides for a maximum total sentence of 25 years in prison, a fine of $750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history of the defendant.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation conducted the investigation that led to the prosecution of Lamer.
According to Mr. Hickton, this case is being prosecuted as part of the Project Safe Neighborhoods initiative, a collaborative effort by federal, state, and local law enforcement, agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
Cadena-Solis Sentenced for Reentry of Deported AlienRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on March 19, 2013, Fermin Cadena-Solis, 49, of Municipio De Petalon, Queretaro, Mexico, pleaded guilty and was sentenced by U.S. District Judge Daniel L. Hovland on a charge of reentry of deported alien.
Judge Hovland sentenced Cadena-Solis to serve two years and nine months in federal prison. Cadena-Solis was ordered to pay a $100 special assessment to the Crime Victim’s Fund.
On Sept. 10, 2012 , Cadena-Solis was encountered by the Minot Police Department in Minot, N.D., while responding to a report of a fight near the Guest Lodge Motel. U.S. Border Patrol officials discovered that Cadena-Solis was a citizen of Mexico and in the United States illegally. Cadena-Solis had previously been deported from the United States eight times. He had been convicted of eight felonies in the United States from 1996 to 2008, including burglary in California state court in 2003.
The case was investigated by the U.S. Border Patrol and the Minot Police Department.
Assistant U.S. Attorney David Hagler prosecuted the case.
Baltimore Store Robber Exiled to over 12 Years in PrisonRead the Press Release
Robber Identified After Drinking a Red Slurpee Prior to the RobberyBaltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced Anthony Griffin, age 44, of Baltimore, today to 151 months in prison followed by three years of supervised release for robbery. Judge Hollander enhanced Griffin’s sentence upon finding that Griffin is a career offender based on four prior convictions for robbery related crimes. His federal sentence will be served concurrent to a 15 year state sentence Griffin is currently serving for a 2010 robbery conviction in Baltimore County.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Baltimore City State’s Attorney Gregg L. Bernstein; and Baltimore Police Commissioner Anthony W. Batts.
According to his plea agreement, on February 5, 2007 Griffin selected several items at a lingerie store located at 1003 South Charles Street in Baltimore that he pretended to want to purchase. After the store owner placed the items in a bag, Griffin told her “this is a robbery” and demanded money from the register. The store owner placed approximately $200 in the bag with the items, and upon Griffin’s further demand, gave him her diamond engagement ring.
At this point, a customer entered the store. Griffin forced the store owner to tie the hands and feet of the customer with pantyhose, and then Griffin tied the owner’s hands and feet with pantyhose. A friend of the owner who was coming to meet her saw Griffin leave the store and suspecting something was wrong, alerted a nearby policeman who located the owner and customer. The owner told the policeman that the robber’s mouth was red, as if he had been drinking a red beverage. Griffin had discarded the Slurpee straw and cup at a nearby jewelry store soon before the robbery. A clerk at the nearby jewelry store identified Griffin in a photo lineup as the man who had drank and discarded the Slurpee at the jewelry store. DNA was recovered from the straw used by Griffin to drink the Slurpee. The lingerie store owner/victim also identified Griffin in a photo lineup.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department and Baltimore City State’s Attorney=s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Benjamin M. Block , who prosecuted the case.
Altoona Man Sentenced to Four Years Imprisonment for Mortgage FraudRead the Press Release
DES MOINES, IA – On March 18, 2013, Lane Anderson, age 38, was sentenced to four years imprisonment for conspiracy to commit bank fraud and wire fraud, announced United States Attorney Nicholas A. Klinefeldt. Chief United States District Judge James E. Gritzner also sentenced Anderson to five years supervised release following imprisonment.
From 2006 to 2008 Anderson, along with co-defendants Shannon Flickinger, Dave Mable, and Paul Kramer, executed a scheme to defraud lenders by using straw buyers and fraudulent loan applications to obtain inflated mortgage loans. Mable and Flickinger previously pled guilty and were sentenced. Kramer was found guilty after a joint jury trial with Anderson, and Kramer’s sentencing is currently set for Friday, April 12, 2013, at 1:30 p.m.
Anderson, Flickinger, and Mable owned and operated LDF Development (LDF) in Urbandale, Iowa. LDF purchased, renovated, and resold residential real estate, and initially acquired approximately thirty properties but struggled to renovate and resell the properties. LDF needed additional capital to continue to operate, but was saddled with properties and debt and could not obtain additional financing. Anderson, Flickinger, and Mable submitted thirteen fraudulent loan applications in Flickinger’s name when the true buyer was LDF. In an effort to qualify Flickinger for the loans, Anderson knowingly falsified Flickinger’s income and liabilities. When the applications were approved Kramer knowingly closed the fraudulent transactions at his closing company, Iowa Closing and Escrow. LDF and Flickinger were unable to keep up with the mortgage payments and the thirteen properties were eventually foreclosed upon. The scheme caused more than $600,000 in losses to the lenders.
This case was investigated by the Federal Bureau of Investigation, and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Alleged Pharmacy Robbers IndictedRead the Press Release
Edward Schaeffer, 29, and William Webb, 50, both of Philadelphia, were charged today by Indictment with conspiracy, interference with interstate commerce by robbery, and brandishing a firearm during a crime of violence, announced United States Attorney Zane David Memeger. The indictment alleges that the defendants conspired to target approximately 19 pharmacies in order to steal prescription pharmaceuticals, including oxycontin, oxycodone, and percocet.
If convicted, the defendants face a maximum sentence of life imprisonment, five years of supervised release, a fine of up to $1.25 million, and a $500 special assessment. They face a mandatory 32 years in prison consecutive to any other sentence.This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Philadelphia Police Department, Abington Twp. Police Department and Glenolden Borough Police Department. It is being prosecuted by Assistant United States Attorney Jennifer Chun Barry.
Click here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Alden man sentenced for distrubution and receipt of child pornography; obstruction of justiceRead the Press Release
BUFFALO, N.Y.– U.S. Attorney William J. Hochul, Jr. announced today that Chad A. Salvatore, 40, of Alden, N.Y., who was convicted of distribution of child pornography, receipt of child pornography, and obstruction of justice, was sentenced to 20 years in prison and lifetime supervised release by Chief U.S. District Judge William M. Skretny.
Assistant U.S. Attorney Aaron J. Mango, who handled the case, stated that between December 2, 2010 and December 15, 2010, an agent with Immigration and Customs Enforcement, Homeland Security Investigations, downloaded graphic child pornography over the internet using a private peer-to-peer software program from a user who was later identified as the defendant. In addition, on December 15, 2010, Salvatore distributed child pornography to an FBI agent in Rochester, N.Y., as well as an agent with the Colorado Internet Crimes Against Children Task Force.
During the investigation, it was also determined that on June 1, 2010 and July 11, 2010, Salvatore received child pornography from other individuals via email. Following the defendant’s distribution of child pornography, a search warrant was conducted at his residence on December 17, 2010. The defendant was not present at the time of the search warrant, but subsequently admitted that after being made aware of the search warrant, he destroyed a digital media device by snapping it in half.
At the time of his arrest, it was revealed in court that the defendant was a foster parent to a young teenage child, despite having been convicted of molesting three children when Salvatore himself was a teenager.
"This case demonstrates the need for any social service agency that places children in home settings to have full access to the criminal history of the prospective care givers," said U.S. Attorney Hochul. "It also demonstrates that if you attempt to take advantage of, or in any way further the victimization of children, you will be prosecuted and could be sentenced to multiple years behind bars."
“This sentence should serve as a warning to those who are involved in any way with the distribution of child pornography," said James C. Spero, Special Agent in Charge for HSI Buffalo. "HSI will ensure this type of criminal activity is aggressively pursued and child predators are held accountable for their despicable behavior."
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), 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 to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.The sentencing is the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero, Special Agent-In-Charge.
31 Individuals Indicted for Drug Trafficking in the Municipality of CanovanasRead the Press Release
Defendants facing a narcotics forfeiture allegation of one million dollars
SAN JUAN, PR – On March 7, 2013, a federal grand jury indicted 31 individuals as a result of an investigation led by the Drug Enforcement Administration (DEA) and the Puerto Rico Police Department (PRPD), announced today United States Attorney Rosa Emilia Rodríguez-Vélez.
The defendants are charged in a five-count indictment with conspiracy to possess with intent to distribute controlled substances within 1,000 feet of the real property comprising a public or private school and/or playground. The object of the conspiracy was to distribute “crack” (cocaine base), cocaine and marihuana at the San Isidro Ward, including but not limited to the drug points located at Monte Verde, Villa Hugo and Las Casitas sectors, and in other areas nearby within the Municipality of Canovanas, Puerto Rico, for significant financial gain and profit.
According to the indictment, from on or about the year 2007, the defendants conspired to purchase wholesale quantities of cocaine and marihuana in order to distribute the same in street quantity amounts in different areas of the Municipality of Canovanas. The main leader of the organization was Miguel Canales-Villalongo, aka “Buby,” “El Boss.” The other leaders were: José A. Rivera-Ayala, aka “Joito;” Luis M. De Jesús-López, aka “Willo;” Raymond E. Hiraldo-Figueroa; Juan C. Ortega-Rivera, aka “Kili” and Jorge Quiñonez-Osorio, aka “Jorgito.”According to the indictment, the 31 co-conspirators had many roles, in order to further the goals of the conspiracy. These were: six leaders; one enforcer; three runners; 21 sellers; drug processors, look-outs and facilitators.
The indictment alleges that, as part of the manner and means of the conspiracy, the co-conspirators would commit home invasions, robberies and other violent acts against residents of the San Isidro Ward in order to intimidate and make them abandon their homes. Afterwards, they would invade and take over those properties in order to use them for their drug trafficking activities. It was further part of the manner and means of the conspiracy that some members of the drug trafficking organization would routinely possess, carry, brandish and use firearms to protect themselves and their drug trafficking organization. Twelve members of the drug trafficking organization are facing one count for using and carrying firearms during and in relation to a drug trafficking crime.
“The efforts of the federal and state law enforcement agencies resulted in the dismantling of a violent criminal organization which held various communities hostage through its drug trafficking activities,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. “These arrests validate the Justice Department’s commitment to hold ruthless drug traffickers responsible for selling narcotics and promoting the rampant violence we are seeing in our communities.”
Pedro Janer, DEA Acting Special Agent in Charge for the Caribbean Division stated: “The joint efforts of the Drug Enforcement Administration, the Puerto Rico Police Department and the US Attorney’s Office, has led to the arrest of these violent drug dealers who do not have any respect for the life of innocent people.”
This case is being prosecuted by Assistant United States Attorney Alberto López-Rocafort.
If convicted, the defendants face a minimum of ten (10) years imprisonment and a maximum of life imprisonment, with fines of up to $10 million. Criminal indictments are only charges and not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty.
18 March 2013
Woman Sentenced Federally for Mailing Death Threats While Serving State SentenceRead the Press Release
POCATELLO – Linda Joyce Lakes, 54, of Pocatello, Idaho, was sentenced today to 12 months in prison followed by three years of supervised release for mailing threatening communications, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also imposed a no contact order with the victims. Lakes pleaded guilty to the charge in November 2012.
According to court records, from November 2010 to July 2012, Lakes wrote six letters in which she threatened to injure and kill a man from her past. At the time Lakes wrote the letters, she was incarcerated at the Pocatello Women’s Correctional Center. Lakes continued writing the letters even after being given a direct order to stop contacting the target of her letters. In the letters, Lakes counted down the days until she was to be released from prison and would be able to act out her threats. When interviewed by an agent of the Federal Bureau of Investigation, Lakes admitted writing and mailing the letters and said she wanted to kill the man when she wrote the letters. Later, Lakes wrote another letter in which she said she knew it was a federal offense to send threatening letters in the mail but did it anyway, because she “doesn’t care.”
The case was investigated by the Federal Bureau of Investigation, with assistance by the Idaho Department of Correction.
Weare Woman Sentenced to 13 Months in Federal Prison for Embezzling More Than $52,000 of Federal FundsRead the Press Release
CONCORD, NH –Heidi Lacerte, 48, of Weare, has been sentenced in United States District Court for the District of New Hampshire to 13 months in federal prison, three years of supervised release and ordered to pay $55,000 in restitution for embezzling Social Security Administration and Veterans Affairs benefits, announced United States Attorney John P. Kacavas.
Lacerte pleaded guilty in November of 2012. She admitted that while she was employed by the Office of Public Guardian (OPG) (a private non-profit corporation that provides guardianship and advocacy services to hundreds of legally incapacitated adults in New Hampshire, including those with developmental disabilities, mental illness, dementia and traumatic brain injury) she embezzled more than $52,000 of federal benefits that had been paid to OPG for the benefit of 23 individuals for whom OPG was guardian. Lacerte also admitted that she accomplished the embezzlement by: 1) having checks written to herself drawn against beneficiaries' funds; 2) having gift cards purchased using money from beneficiaries' accounts; and, 3) taking cash intended for beneficiaries' accounts, and then converting the proceeds for her own benefit, or for the benefit of others. Lacerte, who has been released on bail since being charged, was ordered to report to federal prison to start serving her sentence on April 12, 2013.
The case was investigated by the United States Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, the United States Social Security Administration, Office of Inspector General, Office of Investigation, and the Concord, NH Police Department and was prosecuted by Assistant United States Attorney Arnold H. Huftalen.
Washington Man Sentenced for Gun ChargeRead the Press Release
BISMARCK– U.S. Attorney Timothy Q. Purdon announced that on March 18, 2013, Victor L. Fields, 47, Pasco, Wash., was sentenced by U.S. District Judge Daniel L. Hovland on a charge of possession of firearm and ammunition by a person convicted of domestic violence. Fields pleaded guilty to the charge on Dec. 18, 2012.
Judge Hovland sentenced Fields to serve one year and nine months in federal prison, to be followed by three years of supervised release. Fields was ordered to pay a $100 special assessment to the Crime Victim’s Fund.
On Sept. 15, 2011, Fields was involved in a fight with another male at the Knife River man camp near Williston, N.D. Fields possessed a loaded .357 pistol during the altercation. Fields was charged in Williams County Court with the misdemeanor crime of unlawfully carrying a loaded firearm. He was convicted and sentenced to serve 10 days in jail. Fields failed to report to serve his jail sentence and absconded to the state of Washington. He was arrested on the Federal warrant in September 2012 and returned to North Dakota to answer to the Federal charge.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Williams County Sheriff’s Department.
Assistant U.S. Attorney David Hagler prosecuted the case.
Two Plead Guilty to Money LaunderingRead the Press Release
Jackson, Miss - On Monday, March 18, 2013, Bridget Michelle Bland, 44, of Forest, and Willie Charles Rhodes, 54, of Brandon, pled guilty in U.S. District Court to money laundering the drug proceeds of Forest, Mississippi drug dealer, Jessie Hall, announced U.S. Attorney Gregory K. Davis. Bland also pled guilty to causing a business to file a false report to the Internal Revenue Service.
Bland and Rhodes will be sentenced on June 6, 2013. The maximum penalty for money laundering is 20 years in prison and a $500,000 fine. The maximum penalty for the IRS reporting violation is five years in prison and a $25,000 fine.
Three co-defendants in this case previously pled guilty to money laundering: Shannon Denise Hall, 41 of Forest, Sylvania Laranda Young, 41, currently of Jackson, and Jessie Hall, 39, of Forest. All five defendants participated in an extensive scheme to launder the drug proceeds of Jessie Hall through his business operating as Hall’s Trucking. Numerous assets were acquired through Hall’s drug trade and given the appearance of legitimate wealth through the business. Over $900,000 was found to have been laundered over a two year period.
The Internal Revenue Service Criminal Investigation Division and the Drug Enforcement Administration conducted the criminal investigation of the financial affairs leading to the current indictment. The Drug Enforcement Administration, in conjunction with officers from the Ridgeland Police Department, Jackson Police Department, Hinds County Sheriff’s Office, and the Mississippi Bureau of Narcotics, initially investigated the drug trafficking organization of Jessie Hall. The case was prosecuted by Assistant U.S. Attorney Darren LaMarca.###
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Two Narcotic Treatment Programs Face Financial PenaltiesRead the Press Release
Programs Allegedly Violated Inventory Provisions of the Controlled Substances Act
ATLANTA – New Horizons Treatment Center and Epiphany Center, Rome Inc. located in Rome, Ga., have agreed to civil settlements and will pay penalties to resolve allegations they violated inventory requirements of the Controlled Substances Act. Epiphany Center, Rome Inc. has also agreed to voluntarily surrender its DEA license.
“Narcotic treatment programs that distribute prescription drugs must maintain proper records of the drugs they distribute. By failing to keep an accurate count of their controlled substances inventories, these narcotic treatment programs created the potential that prescription drugs would be diverted to illegitimate uses,” said United States Attorney Sally Quillian Yates. “We are committed to detecting and stopping the diversion of controlled substances by enforcing the recordkeeping requirements of the Controlled Substances Act,” she said.
The government alleges that Epiphany Center, Rome Inc. failed to maintain a current, complete and accurate record of all controlled substances received, sold, delivered, or otherwise disposed of. Accountability audits conducted by the DEA revealed overages of methadone in 2011 and shortages of methadone in 2012. Significantly, the 2012 audit found a shortage of approximately 460,000 milligrams of methadone. The government also alleges that Epiphany Center failed to conduct its first biennial inventory of methadone, failed to conduct a biennial inventory in compliance with all applicable laws and regulations, failed to maintain a dispensing log, and failed to comply with all applicable laws and regulations regarding written orders for methadone.
The government alleges that New Horizons Treatment Center failed to maintain a current, complete and accurate record of all controlled substances received, sold, delivered, or otherwise disposed of. A 2011 accountability audit of New Horizons conducted by the DEA revealed overages of methadone liquid and buprenorphine and a shortage of methadone diskettes.
“The civil penalties set forth in this case are appropriate for the civil violations that these businesses engaged in,” said Harry S. Sommers, the Special Agent in Charge of the DEA Atlanta Field Division. “DEA is in the business of keeping the public safe by making sure that such establishments are playing by the rules which will make the diversion of controlled analgesics less likely.”
Both claims settled in these civil settlements are allegations only, and there has been no determination of liability. Epiphany Center has agreed to voluntarily surrender its DEA license and to pay $12,500 to resolve these allegations. New Horizons has agreed to pay $5,000 and to additional oversight from the DEA.
The Controlled Substances Act was enacted to ensure that controlled substances are properly regulated and to help prevent drug diversion. Thus, narcotic treatment programs that receive and dispense controlled substances are required to maintain complete and accurate inventories and records of all controlled substances that they purchase, receive, dispense, or destroy. In order to enforce the recordkeeping requirements of the Controlled Substances Act, the Act imposes civil penalties for refusing or negligently failing to maintain the records required by the Act.
These cases, which are unrelated, were investigated by Diversion Investigators from the Drug Enforcement Agency.
The civil settlements were reached by Assistant United States Attorneys Lena Amanti and Darcy Coty.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Suwannee County Man Pleads Guilty to Federal Charges of Failure to Register as Sex OffenderRead the Press Release
Jacksonville, Florida - United States Attorney Robert E. O’Neill announces today that Denny Junior Jenkins (41, Live Oak) has pleaded guilty to failing to register as sex offender in Florida after traveling from South Carolina. Jenkins faces up to 10 years in federal prison, and a potential lifetime term of supervised release. Jenkins has been in custody since February 15, 2013. A sentencing date has not yet been set.
According to court documents, on September 4, 1992, Jenkins was convicted in Suwannee County, Florida of two counts of attempted sexual battery upon a child under 12 years of age. Because of these convictions, Jenkins is required to register as a sex offender under Florida law for the remainder of his life. After being released from prison, Jenkins received and executed documents that advised him of this requirement.
According to court documents, in 2010, Jenkins moved to South Carolina and executed documents that advised, among other things, that if he moved to another state he must register as a sex offender in that state. In April 2012, Jenkins moved back to Florida and established residence in Suwannee County. He failed to register with the State of Florida under the Sex Offender Registration and Notification Act (SORNA). On February 15, 2013, he was arrested by deputies from the U.S. Marshals Service.
The Sex Offender Registration and Notification Act is part of the Adam Walsh Child Protection and Safety Act of 2006. The Adam Walsh Act also provides for the use of federal law enforcement resources, including the U.S. Marshals Service, to assist the states in locating and apprehending non-compliant sex offenders. This case was investigated by the United States Marshals Service, the Suwannee County Sheriff’s Office, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc for more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Spencer Glenn Price Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on March 18, 2013, before U.S. District Judge Sam E. Haddon, SPENCER GLENN PRICE, a 46-year-old resident of Great Falls, appeared for sentencing. PRICE was sentenced to a term of:
Prison: 232 months
Special Assessment: $100
Supervised Release: 4 years
PRICE was sentenced in connection with his guilty plea to possession with intent to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica A. Betley, the government stated it would have proved at trial the following:
In July 2012, law enforcement learned PRICE was potentially involved in methamphetamine distribution around Great Falls. Law enforcement searched PRICE's home around that time and found numerous items of drug paraphernalia, as well as five empty small zip lock bags with a red die design commonly used for methamphetamine distribution.
Law enforcement returned to speak with PRICE a few days later. PRICE answered and told the officers he had recently gone out of state to purchase methamphetamine and he had four ounces of methamphetamine under the couch. Great Falls detectives found and seized cash, methamphetamine, empty sandwich bags with methamphetamine residue, and rolling paper.
PRICE agreed to speak further with detectives and said he began traveling in June to Spokane, Washington, to buy methamphetamine to bring back to Great Falls. Around June 1, 2012, he purchased a half ounce of methamphetamine for $600. Approximately two weeks later he purchased an additional one ounce of methamphetamine for $1200.00. Two weeks later, he purchased two ounces of methamphetamine for $2,400. On his most recent trip to Spokane, just a few days before, he purchased four ounces of methamphetamine for $4,800. PRICE had not yet sold the four ounces of methamphetamine.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that PRICE will likely serve all of the time imposed by the court. In the federal system, PRICE does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Russell County Drug Task Force.
Shiprock Man Sentenced to Sixteen Years in Prison for Federal Child Sex Abuse ConvictionRead the Press Release
ALBUQUERQUE – Samuel Jackson, 56, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., was sentenced this morning to 16 years in prison for his abusive sexual contact conviction. Jackson will be on supervised release for five years after he completes his prison sentence. He also will be required to register as a sex offender.
Jackson pled guilty to the abusive sexual contact charge on July 17, 2012. In entering his guilty plea, Jackson admitted sexually assaulting a Navajo child under the age of 16 years in a residence in Shiprock on Aug. 5, 2011. At the time of the offense and until his arrest in Jan. 2012, Jackson was employed as a back-up bus driver at Shiprock division of the Central Consolidated School District No. 22.
The case was investigated by the Farmington office of the FBI and the Shiprock Division of the Navajo Nation Department of Public Safety, and was prosecuted by Assistant U.S. Attorney Presiliano A. Torrez.
Security Contractors Plead Guilty in Virginia<br /> to Illegally Obtaining $31 Million from Contracts <br /> Intended for Disadvantaged Small BusinessesRead the Press Release
Executives at two Arlington, Va.-based businesses have pleaded guilty to fraudulently obtaining more than $31 million in government contract payments that should have gone to disadvantaged small businesses.
The guilty pleas were announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and NASA Inspector General Paul K. Martin.
“These executives used their knowledge and experience to abuse a program created to ensure minority small business owners could compete for government contracts,” said U.S. Attorney MacBride. “They not only illegally obtained millions from the United States, they also victimized legitimate minority owners who didn’t get the bids.”
“Keith Hedman and his co-conspirators fraudulently obtained valuable government contracts intended for minority-owned small businesses, and pocketed millions of dollars for themselves,” said Acting Assistant Attorney General Raman. “They abused an important government program, and will now face the consequences.”
“This investigation confirmed that these executives repeatedly took actions that gave them a fraudulent advantage in the contracting process,” said NASA Inspector General Martin. “I commend the outstanding efforts of our agents and our law enforcement partners involved in this case in protecting the integrity of the 8(a) program.”
According to court documents, Keith Hedman, 53, of Arlington, formed an Arlington-based security service consulting company in approximately 2001. Hedman formed the company, listed as Company A in court filings, with an African-American woman who was listed as its president and CEO to enable the company to participate in the Small Business Administration’s (SBA) Section 8(a) program, which enables certain small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses. In 2001, Hedman’s company received approval to participate in the 8(a) program on the basis of the African-American president and CEO’s listed role, but when she left the company in 2003, Hedman became its sole owner and the company was no longer 8(a)-eligible.
Hedman admitted that in 2003 he created a shell company, listed as Company B in court records, to ensure he could continue to gain access to 8(a) contracting preferences for which Company A was not qualified. Prior to applying for the shell company’s 8(a) status, Hedman selected an employee, Dawn Hamilton, 48, of Brownsville, Md., to serve as a figurehead owner based on her Portuguese heritage and history of social disadvantage, when in reality the new company would be managed by Hedman and senior leadership at Company A. To deceive the SBA, they falsely claimed that Hamilton formed and founded the company and that she was the only member of the company’s management. They continued to mislead the SBA through 2012, even lying to the SBA to overcome a protest filed by another company accusing Hedman’s former company and the shell company of being inappropriately affiliated.
From Company B’s creation through February 2012, Hedman – not Hamilton – exercised ultimate decision-making authority and control over the company by controlling its finances, allocation of personnel and government contracting activities. Hedman nonetheless maintained the impression that Hamilton was leading the company, including through forgeries of signatures by Hamilton to documents she had not seen or drafted. Hedman also retained ultimate control over the shell business’s bank accounts throughout its existence. In 2011, Hedman withdrew $1 million in cash from Company B’s accounts and gave the funds in cash to Hamilton and three other co-conspirators. In total, Hedman and Hamilton secured through the shell company more than $31 million in government contract payments, which generated more than $6 million in salary and payments for the conspirators that they were not entitled to receive.
In addition, Hedman admitted that he agreed to pay a $50,000 bribe through the shell business to a U.S. government contracting official for the official’s help in securing contracts for Company B.
Hedman and Hamilton pleaded guilty on March 13 and March 15, 2013, respectively, in U.S. District Court for the Eastern District of Virginia to major government fraud and face a maximum penalty of 10 years in prison and a multimillion-dollar fine for that charge. Hedman also pleaded guilty to conspiracy to commit bribery, which carries a maximum penalty of five years in prison. Hedman agreed to forfeit more than $6.3 million, and Hamilton agreed to forfeit more than $1.2 million. Hedman is scheduled to be sentenced on June 21, 2013, before U.S. District Judge Gerald Bruce Lee. Hamilton’s sentencing is scheduled for June 21, 2013, before U.S. District Judge T. S. Ellis, III.
In addition, the following individuals have also pleaded guilty to major fraud or conspiracy to commit major fraud:
• David George Lux, 62, of Springfield, Va., pleaded guilty today before U.S. District Judge Leonie M. Brinkema. Lux served as the chief financial officer at Company A from 2007 through February 2012 and performed work for Company B throughout that time while officially on Company A’s payroll. He is scheduled to be sentenced on June 14, 2013, by Judge Brinkema.
• Joseph Richards, 51, of Arlington, pleaded guilty on March 14, 2013, before U.S. District Judge Brinkema in the Eastern District of Virginia. Richards served as the chief operating officer and chief of staff for Company A from 2005 through 2008 and then vice president from 2010 through February 2012. He also served as Company B’s chief of staff from 2008 through 2010. According to court documents, Richards performed work for Company B throughout his time at both companies. He is scheduled to be sentenced on June 14, 2013, by Judge Brinkema.
• David Sanborn, 60, of Lexington, S.C., pleaded guilty on March 13, 2013, before U.S. District Judge Claude M. Hilton in the Eastern District of Virginia. Sanborn served as vice president at Company A from 2001 through 2009 and the company’s president from 2010 through February 2012. According to court documents, Sanborn performed work for Company B from its inception while on Company A’s payroll. He is scheduled to be sentenced on June 28, 2013, by Judge Hilton.
This case was investigated by the NASA Office of the Inspector General (OIG), the SBA OIG, the Defense Criminal Investigative Service, the General Services Administration OIG and the Department of Homeland Security OIG. Assistant U.S. Attorneys Chad Golder and Ryan Faulconer, a former Trial Attorney for the Criminal Division’s Fraud Section, are prosecuting the case on behalf of the United States.
Security Contractors Plead Guilty to Illegally Obtaining $31 Million from Contracts Intended for Disadvantaged Small BusinessesRead the Press Release
ALEXANDRIA, Va. – Executives at two Arlington-based businesses have pleaded guilty to fraudulently obtaining more than $31 million in government contract payments that should have gone to disadvantaged small businesses.
The guilty pleas were announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and NASA Inspector General Paul K. Martin.
“These executives used their knowledge and experience to abuse a program created to ensure minority small business owners could compete for government contracts,” said U.S. Attorney MacBride. “They not only illegally obtained millions from the United States, they also victimized legitimate minority owners who didn’t get the bids.”
“Keith Hedman and his co-conspirators fraudulently obtained valuable government contracts intended for minority-owned small businesses, and pocketed millions of dollars for themselves,” said Acting Assistant Attorney General Raman. “They abused an important government program, and will now face the consequences.”
“This investigation confirmed that these executives repeatedly took actions that gave them a fraudulent advantage in the contracting process,” said NASA Inspector General Martin. “I commend the outstanding efforts of our agents and our law enforcement partners involved in this case in protecting the integrity of the 8(a) program.”
According to court documents, Keith Hedman, 53, of Arlington, Va., formed an Arlington-based security service consulting company in approximately 2001. Hedman formed the company, listed as Company A in court filings, with an African-American woman who was listed as its president and CEO to enable the company to participate in the Small Business Administration’s (SBA) Section 8(a) program, which enables certain small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses. In 2001, Hedman’s company received approval to participate in the 8(a) program on the basis of the African-American president and CEO’s listed role, but when she left the company in 2003, Hedman became its sole owner and the company was no longer 8(a)-eligible.
Hedman admitted that in 2003 he created a shell company, listed as Company B in court records, to ensure he could continue to gain access to 8(a) contracting preferences for which Company A was not qualified. Prior to applying for the shell company’s 8(a) status, Hedman selected an employee, Dawn Hamilton, 48, of Brownsville, Md., to serve as a figurehead owner based on her Portuguese heritage and history of social disadvantage, when in reality the new company would be managed by Hedman and senior leadership at Company A. To deceive the SBA, they falsely claimed that Hamilton formed and founded the company and that she was the only member of the company’s management. They continued to mislead the SBA through 2012, even lying to the SBA to overcome a protest filed by another company accusing Hedman’s former company and the shell company of being inappropriately affiliated.
From Company B’s creation through February 2012, Hedman – not Hamilton – exercised ultimate decision-making authority and control over the company by controlling its finances, allocation of personnel and government contracting activities. Hedman nonetheless maintained the impression that Hamilton was leading the company, including through forgeries of signatures by Hamilton to documents she had not seen or drafted. Hedman also retained ultimate control over the shell business’s bank accounts throughout its existence. In 2011, Hedman withdrew $1 million in cash from Company B’s accounts and gave the funds in cash to Hamilton and three other co-conspirators. In total, Hedman and Hamilton secured through the shell company more than $31 million in government contract payments, which generated more than $6 million in salary and payments for the conspirators that they were not entitled to receive.
In addition, Hedman admitted that he agreed to pay a $50,000 bribe through the shell business to a U.S. government contracting official for the official’s help in securing contracts for Company B.
Hedman and Hamilton pleaded guilty on March 13 and March 15, 2013, respectively, in U.S. District Court for the Eastern District of Virginia to major government fraud and face a maximum penalty of 10 years in prison and a multimillion-dollar fine for that charge. Hedman also pleaded guilty to conspiracy to commit bribery, which carries a maximum penalty of five years in prison. Hedman agreed to forfeit more than $6.3 million, and Hamilton agreed to forfeit more than $1.2 million. Hedman is scheduled to be sentenced on June 21, 2013, before U.S. District Judge Gerald Bruce Lee. Hamilton’s sentencing is scheduled for June 21, 2013, before U.S. District Judge T. S. Ellis, III.
In addition, the following individuals have also pleaded guilty to major fraud or conspiracy to commit major fraud:
- David George Lux, 66, of Springfield, Va., pleaded guilty today before U.S. District Judge Leonie M. Brinkema. Lux served as the chief financial officer at Company A from 2007 through February 2012 and performed work for Company B throughout that time while officially on Company A’s payroll. He is scheduled to be sentenced on June 14, 2013, by Judge Brinkema.
- Joseph Richards, 51, of Arlington, Va., pleaded guilty on March 14, 2013, before U.S. District Judge Brinkema in the Eastern District of Virginia. Richards served as the chief operating officer and chief of staff for Company A from 2005 through 2008 and then vice president from 2010 through February 2012. He also served as Company B’s chief of staff from 2008 through 2010. According to court documents, Richards performed work for Company B throughout his time at both companies. He is scheduled to be sentenced on June 14, 2013, by Judge Brinkema.
- David Sanborn, 60, of Lexington, S.C., pleaded guilty on March 13, 2013, before U.S. District Judge Claude M. Hilton in the Eastern District of Virginia. Sanborn served as vice president at Company A from 2001 through 2009 and the company’s president from 2010 through February 2012. According to court documents, Sanborn performed work for Company B from its inception while on Company A’s payroll. He is scheduled to be sentenced on June 28, 2013, by Judge Hilton.
This case was investigated by the NASA Office of the Inspector General (OIG), the SBA OIG, the Defense Criminal Investigative Service, the General Services Administration OIG and the Department of Homeland Security OIG. Assistant U.S. Attorneys Chad Golder and Ryan Faulconer, a former Trial Attorney for the Criminal Division’s Fraud Section, 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.Philadelphia Man Sentenced for Defrauding the CityRead the Press Release
PHILADELPHIA - Barry Jones, 67, of Philadelphia, was sentenced today to 21 months in prison for devising and executing a scheme to defraud the City of Philadelphia out of more than $1.2 million. Jones, who was charged with one count of mail fraud, was the president of Mara Management Services Inc. (“Mara”) when he knowingly submitted false bills in connection with a series of computer services contracts that Mara had entered into with City agencies.
Between July 2004 and June 2008, Mara had contracts to provide computer programming, maintenance, and consulting services to multiple agencies, including the City’s revenue and water departments, and Community Behavioral Health (“CBH”), a charitable corporation contracted by the City to provide mental health and substance abuse services for Philadelphia County Medicaid recipients. Mara hired subcontractors to perform much of the work on these contracts, repeatedly overstating the number of hours that these subcontractors worked on the projects in order to get inflated monthly payments from the City’s agencies and CBH.Jones also overstated the number of hours that he was working on the contracted-for projects and between 2006 and 2008, he even sought and received compensation from the City for work by a subcontractor who had stopped working on the projects in 2005. In total, Jones caused the City to make payments to Mara totaling more than $5.9 million between January 1, 2005 and June 30, 2008, in connection with Mara’s contracts with the Revenue Department, the Water Department, and CBH. Jones admitted that he kept approximately $2.7 million for himself, which greatly exceeded the amount he was entitled to receive from the City.
In addition to the prison term, U.S. District Court Judge Robert F. Kelly ordered Jones to pay restitution in the amount of $1.2 million and ordered three years of supervised release.
The case was investigated by the United States Postal Inspection Service and the City of Philadelphia’s Office of the Inspector General. It was prosecuted by Assistant United States Attorney Mark B. Dubnoff.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Pendleton Man Sentenced to 21 Months in Federal Prison for Vehicular HomicideRead the Press Release
Vehicular Homicide Occurred on the Umatilla Indian ReservationPORTLAND, Ore. –Today, Roberto Medellin, 54, of Pendleton, was sentenced 21months in prison by U. S. District Judge Ancer L. Haggerty for vehicular homicide. On December 10, 2012, the defendant pled guilty to involuntary manslaughter. Judge Haggerty ordered the defendant to spend three years on supervised release after he is released from the Bureau of Prisons. As conditions of supervised release, the defendant must not possess or consume alcohol. Judge Haggerty ordered the defendant to surrender to the Bureau of Prisons on May 2, 2013.
“This case is another tragic reminder that drinking and driving kills,” stated U.S. Attorney Amanda Marshall. “Vehicular homicide is a serious crime with long lasting consequences for families and communities. My office will vigilantly prosecute these cases in Indian Country.”
According to the prosecutor’s statements in court, on May 14, 2012, on the Umatilla Indian Reservation, defendant Roberto Medellin was driving his jeep on a highway in which Misty Dawn Sheoships, a member of the White Mountain Apache Tribe, was a front seat passenger. Medellin’s vehicle went off the highway, crashed into a ditch, and Sheoships died as a result due to severe head and neck trauma. Witnesses called 911 to report the crash.
In a mirandized statement, Medellin said that he had been drinking earlier in the afternoon, prior to going out driving with Sheoships, and that he had fallen asleep at the wheel. He also said, in essence, that he knew he was too tired to continue driving and should have pulled over to rest. Medellin was taken to the hospital due to complaints of body stiffness and just under two hours following the crash, a hospital blood draw revealed that defendant’s blood alcohol content was still 0.096, which is in excess of the legal driving limit of 0.08.
The federal case was investigated by the Umatilla Tribal Police Department and the FBI’s office in Pendleton, Oregon. Assistant U. S. Attorney Craig Gabriel prosecuted the case.
Parkman Thompson SentencingRead the Press Release
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced today that SANDRA PARKMAN THOMPSON, 58, of New Orleans, Louisiana, was sentenced to 18 months in prison and ordered to pay $129,330 in restitution for her convictions on health care fraud and conspiracy to pay and receive illegal remunerations.
On August 21, 2012, THOMPSON was convicted after a jury trial on 13 counts of health care fraud and one count of conspiracy to pay and receive illegal remunerations. The convictions arose as a result of THOMPSON’s participation in a scheme to defraud involving the Baton Rouge-based company known as Lobdale Medical Services which was owned by Beatrice and Young Anyanwu. As part of the scheme to defraud, THOMPSON and others procured the names and personal information of Medicare beneficiaries in and around the New Orleans area and delivered these names to Dr. Anthony Jase, a co-defendant in the prosecution who currently is awaiting sentencing, who then signed false and fraudulent prescriptions for power wheelchairs and other durable medical equipment for which the Medicare beneficiaries had no medical need. THOMPSON subsequently delivered the fraudulent prescriptions to the Anyanwus, who submitted claims to Medicare through Lobdale Medical Services for the medically unnecessary equipment. The total billings to Medicare by Lobdale Medicare Services exceeded $1,000,000.
THOMPSON, along with the Anyanwus, also participated in a conspiracy to pay and receive illegal remuneration for the durable medical equipment billed by Lobdale. The Anyanwus paid THOMPSON and others a kickback for every claim for power wheelchairs and other durable medical equipment items that were submitted to, and paid by, Medicare. The kickback was based on a percentage of the reimbursement value of the equipment to the price of the particular item, thereby providing an incentive to recruit beneficiary claims for the most expensive models of durable medical equipment.
Dr. Anthony Stephen Jase pled guilty to the health care fraud scheme to defraud on October 31, 2012, and is awaiting sentencing. Beatrice and Young Anyanwu pled guilty to the health care fraud scheme to defraud as well as the illegal remuneration conspiracy on August 14, 2012, and were sentenced on February 1, 2013.
U.S. Attorney Donald J. Cazayoux, Jr., stated, “This is another victory for the good guys and the American taxpayers, as we attempt to stymie the attempts at pilfering our Medicare system.” “
Judge Brady called Parkman's actions ‘pure greed’ and this greed is what propels Medicare fraud in our community,” said Assistant Special Agent in Charge William Root. “Hopefully her sentence today sends an important message to others contemplating this type of fraud.”
The investigation of THOMPSON and AUGUSTUS was conducted by the Department of Health and Human Service, Office of Inspector General, the Federal Bureau of Investigation, and the Louisiana Department of Justice. The case was prosecuted by Assistant United States Attorneys Catherine M. Maraist, J. Christopher Dippel, Jr., and Reginald E. Jones.
Owner of ‘Davy Crockett’ Barge Sentenced to Prison for Clean Water Act Violations for Oil Spill on Columbia RiverRead the Press Release
Owner of Salvage Company was Informed of Oil on Barge and Failed to Act before Salvage; then Ignored Leaks, failing to Report them to Authorities
The Ellensburg, Washington man responsible for a $22 million oil clean up and salvage operation on the Columbia River was sentenced today to four months in prison, eight months of home detention, 100 hours of community service and three years of supervised release, announced U.S. Attorney Jenny A. Durkan. BRET A. SIMPSON, 53, the owner of Principle Metals, LLC, pleaded guilty in July 2012 to two criminal violations of the Clean Water Act; failing to report a discharge of oil, and unlawfully discharging oil into the Columbia River near Camas, Washington. At sentencing U.S. District Judge Benjamin H. Settle told him, “it has to be known that when you undertake a responsibility that has the potential to ruin an ecosystem you’re going to bear the consequences.”
“This defendant’s singular focus on maximizing his profits, at the expense of even minimal environmental safeguards, cost taxpayers millions of dollars,” said U.S. Attorney Jenny A. Durkan. “Mr. Simpson exhibited no regard for the likelihood that his misguided salvage efforts could, and in fact did, lead to an environmental emergency that was only partially averted by a massive federal and state response.”
With his guilty plea SIMPSON admitted that he was informed about oil left on the ‘Davy Crockett’ barge before salvage operations began. However, SIMPSON failed to have the oil removed before workers started cutting up the metal barge. When the first oil spill occurred in early December 2010, SIMPSON failed to notify authorities and failed to take adequate steps to monitor the vessel or protect it from natural forces and further structural damage. Subsequent spills in January 2011 led U.S. Coast Guard investigators to identify the ‘Davy Crockett’ as the source and initiate a federally funded cleanup effort. Ultimately the U.S. Coast Guard and state authorities spent eight months and approximately $22 million to clean up the spill and remove the derelict barge from the river.
“Today Mr. Simpson is being held accountable for his criminal acts,” said Rear Adm. Keith A. Taylor, Commander of the 13th Coast Guard District. “The next step is holding him accountable for the more than $22 million spent from the Oil Spill Liability Trust Fund during the extensive, Coast Guard led, multi-agency cleanup. We continue to work closely with the Department of Justice on all aspects of this case. The Coast Guard is committed to protecting the maritime environment of the Pacific Northwest and our nation. Actions like Mr. Simpson's will not be tolerated.”
“Paying a serious price for environmental crime is unfortunately not new for Defendant Simpson,” said Tyler Amon, Special Agent-in-Charge for the U.S. EPA’s Criminal Investigation Division in Seattle. “His negligence degraded the Columbia River, created a hazard to navigation and cost more than $22 million to clean up. His sentencing today should serve as notice to irresponsible vessel owners who doubt our resolve to vigorously pursue and prosecute environmental crimes.”
The M/V Davy Crockett is a former U.S. Navy ship that had been converted to a flat deck barge. SIMPSON’s company planned to cut the barge apart and sell the metal for scrap. SIMPSON assembled a crew to begin dismantling the M/V Davy Crockett at its place of moorage in the Columbia River in October 2010. He made no arrangements to remove the fuel oil and diesel fuel from the vessel before the scrapping operation began. On December 1, 2010, a member of the scrapping crew cut into a structural beam of the barge, and the ship began breaking apart and leaking oil. Neither SIMPSON nor anyone else with Principle Metals LLC notified authorities about the leak. The scrapping operation was halted.
SIMPSON initially addressed the oil release by ceasing all scrapping operations, procuring a boom to limit the release of oil into the Columbia River, and directing an employee to monitor vessel conditions. The employee monitored vessel conditions for approximately one week following the initial release before being relieved of his employment. SIMPSON took no further steps to monitor the ship, or the boom, and took no steps to protect the barge from further structural damage. On January 19, 2011, an accumulation of debris next to the barge forced it to move, and additional oil was released. The Coast Guard responded to the additional movement of the barge, and issued an administrative order for SIMPSON to remove any remaining visible oil from machinery spaces and deck tubes together with other salvage debris from the vessel. SIMPSON complied and authorities believed the barge no longer posed an environmental danger. However on January 27, 2011, additional oil was released from the vessel and state and federal authorities immediately responded in an effort to limit environmental damage.
Detailed timeline of the clean up and material removed from the water is available here: http://www.ecy.wa.gov/programs/spills/incidents/DavyCrockett/DavyCrockett.html
The case was investigated by the Environmental Protection Agency Criminal Investigation Division (EPA-CID), the U.S. Coast Guard, the U.S. Coast Guard Investigative Service, the Washington State Department of Ecology, and the Oregon Department of Environmental Quality. The case is being prosecuted by Assistant United States Attorney James Oesterle and Special Assistant United States Attorney Lieutenant Commander Marianne Gelakoska of the U.S. Coast Guard. Mr. Oesterle heads the U.S. Attorney’s Office working group on environmental crimes.
Owner of Concrete Company Sentenced to Prison for $3.7 Million Tax Evasion SchemeRead the Press Release
March 18, 2013David B. Fein, United States Attorney for the District of Connecticut, announced that DOUGLAS CARTELLI, also known as “Douglas Martin,” 42, of Killingworth, was sentenced today by Chief United States District Judge Alvin W. Thompson in Hartford to 40 months of imprisonment, followed by three years of supervised release, for engaging in an extensive tax evasion scheme.
According to court documents and statements made in court, since 1992, CARTELLI has owned and operated several Connecticut-based concrete companies including DMC Concrete Corp., Commercial Concrete Construction LLC, Commercial Concrete NE LLC and Commercial High Rise Concrete LLC. As part of a scheme to avoid withholding and paying employee taxes, CARTELLI routinely characterized his employees as “independent contractors.” After the U.S. Department of Labor and Internal Revenue Service began an investigation of DMC Concrete, CARTELLI continued to misclassify employees as independent contractors and took steps to make it more difficult for the Department of Labor and the IRS to monitor his companies’ payroll. CARTELLI used a convenience store in Middletown that provided him with cash so he, in turn, could pay his employees in cash, and the store owner was reimbursed by checks from CARTELLI’s business checking accounts. Between July 2004 and February 2008, the store owner received checks from CARTELLI totaling more than $1.15 million.
CARTELLI also convinced the owner of a Middletown liquor store to cash payroll checks for his employees. Each Friday from July 2005 to March 2006, Commercial Concrete NE wired payroll funds into the store’s business checking account. CARTELLI’s employees would go to the store, provide their payroll checks to the store owner and receive cash. The store owner would then return the payroll checks to CARTELLI. During this time period, the store owner withdrew more than $1.266 million in cash that CARTELLI had wired to the liquor store’s bank account.
Over the course of several years, CARTELLI attempted to thwart investigators and evade paying taxes and penalties by twice changing the name of his business and falsely representing to the IRS that he no longer owned the businesses, by writing business checks to his wife or to cash, and by using business checks to pay for numerous personal expenses, including credit card bills, personal real estate taxes and high-end renovations of his home.
The IRS has determined that CARTELLI’s under-reporting of employee wages and payroll taxes, his failure to withhold employment taxes and his failure to pay penalties related to this conduct has resulted in loss to the IRS of more than $3.45 million.
CARTELLI also failed to file personal income tax returns for the 2004 through 2007 tax years, during which he had total taxable income of approximately $959,936.25, resulting in loss to the IRS of $275,275.
Judge Thompson ordered CARTELLI to cooperate with the IRS to resolve his outstanding tax liability.
On March 21, 2011, CARTELLI waived his right to indictment and pleaded guilty to three counts of tax evasion.
This matter was investigated by the U.S. Department of Labor, Office of Inspector General, and the Internal Revenue Service – Criminal Investigation. The case was prosecuted by Assistant United States Attorneys Christopher W. Schmeisser and Sarah P. Karwan.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Old Saybrook Man Charged with Bank FraudRead the Press Release
March 18, 2013David B. Fein, United States Attorney for the District of Connecticut, and Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that PAUL E. BRENNAN III, 44, formerly of Old Saybrook, has been charged by criminal complaint with bank fraud. BRENNAN, who is currently detained in state custody, appeared on March 15 before United States Magistrate Judge Joan G. Margolis in New Haven.
As alleged in the criminal complaint, from at least 2009 until at least 2011, BRENNAN engaged in a check fraud scheme through which he defrauded and attempted to defraud numerous financial institutions. During the course of the scheme, BRENNAN convinced individuals to cash checks for him using their bank accounts even though he knew that the checks were drawn on closed accounts or accounts with a zero balance and would be returned for nonpayment. BRENNAN also passed fraudulent checks at several check cashing businesses in Connecticut.
The charge of bank fraud carries a maximum term of imprisonment of 30 years.
U.S. Attorney Fein stressed that a complaint is only a charge and is not evidence of guilt. The defendant is entitled to have this matter presented to a grand jury and, in the event an indictment is returned, he is entitled to a trial at which it will be the Government’s burden to prove guilt beyond a reasonable doubt.
Citizens with information that may be helpful to the investigation are encouraged to contact FBI Special Agent Daniel S. Harkness at (860) 439-6107.
This matter is being investigated by the Federal Bureau of Investigation with assistance from the Old Saybrook Police Department. The case is being prosecuted by Special Assistant United States Attorney Kerry L. Quinn.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]New York State Assemblyman William F. Boyland Charged with Mail Fraud for Defrauding New York StateRead the Press Release
A superseding indictment against New York State Assemblyman William F. Boyland, Jr. was filed today in the United States District Court for the Eastern District of New York, which added new charges of mail fraud in connection with a scheme to defraud New York State by submitting fraudulent vouchers for travel expense and per diem payments. The Superseding Indictment also includes the charges from the underlying indictment against Boyland, charging him with bribery and attempted Hobbs Act extortion for soliciting more than $250,000 in bribes and accepting thousands of dollars of bribe money in exchange for performing official acts for the bribe payers.1 The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office.
As charged in the Superseding Indictment, from January 2007 to December 2011, Boyland fraudulently submitted New York State Assembly Member Travel Vouchers (Vouchers) in which he falsely claimed to be in Albany on legislative business when he in fact was not in Albany. New York State records show that in reliance on Boyland’s fraudulent Vouchers, New York State paid Boyland tens of thousands of dollars in mileage expense and per diem payments.
For example, on some of the days on which Boyland falsely claimed that he was in Albany and thus entitled to mileage expense and per diem payments, Boyland was actually not in Albany and was instead in New York City meeting with individuals he believed to be out-of-state businessmen and real estate developers, but who actually were the undercover FBI agents from whom he solicited bribes. In addition, E-ZPass records associated with Boyland’s vehicle and New York State Assembly records reflect that Boyland was not in Albany on the days when he claimed on Vouchers to be there on legislative business. By falsely overstating the number of days in which he was in Albany for legislative business, Boyland fraudulently secured tens of thousands of dollars in taxpayer funds to which he was not entitled.
If convicted, Boyland faces a maximum sentence on each fraud charge of 20 years in prison, a $250,000 fine and restitution.
United States Attorney Lynch and Assistant Director-in-Charge Venizelos expressed their thanks to the New York State Comptroller’s Office for its assistance in this phase of the investigation.
The government's case is being prosecuted by Assistant United States Attorneys Robert Capers and Lan Nguyen.
The Defendant:
WILLIAM F. BOYLAND, JR.
Age: 42_____________________________
1 The charges contained in the superseding indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
New York Man Sentenced to 41 Months in Prison for Hacking AT&T’s ServersRead the Press Release
Stole E-mail Addresses and Personal Information Belonging to 120,000 Apple iPad 3G Subscribers; Disclosed Information to Internet Magazine
NEWARK, N.J. – The head of a self-described “security research” hacking group was sentenced today to 41 months in prison for breaching AT&T’s servers, stealing e-mail addresses and other personal information belonging to approximately 120,000 Apple iPad users, and disclosing that information to an Internet magazine, U.S. Attorney Paul J. Fishman announced.
Andrew Auernheimer, 27, of New York, was convicted Nov. 20, 2012, of both counts of a Superseding Indictment: Conspiracy to access AT&T’s servers without authorization and disclose that information to a reporter at Gawker magazine, and possession and transfer of means of identification for more than 120,000 iPad users. Auernheimer was tried before U.S. District Judge Susan D. Wigenton, who imposed the sentence today in Newark federal court. His co-conspirator, Daniel Spitler, 27, of San Francisco, Calif., previously pleaded guilty to the same charges and is awaiting sentencing.
“Andrew Auernheimer knew he was breaking the law when he and his partner hacked into AT&T’s servers and stole personal information from unsuspecting iPad users,” U.S. Attorney Fishman said. “When it became clear that he was in trouble, he concocted the fiction that he was trying to make the Internet more secure, and that all he did was walk in through an unlocked door. The jury didn’t buy it, and neither did the Court in imposing sentence upon him today.”“Auernheimer coordinated a self-serving cyber attack on a United States corporation and tens of thousands of innocent customers, in order to promote his business,” FBI Acting Special Agent in Charge David Velazquez said. “Immediately after the attack he attempted to hide all the evidence. Auernheimer's conviction and today's sentence signifies the continued and growing efforts of the U.S. Attorney's Office and the FBI in investigating and prosecuting computer hacking and intellectual property crimes.”
According to documents filed in this case and the evidence at trial:
The iPad is a touch-screen tablet computer, developed and marketed by Apple Computers Inc., which allows users to, among other things, access the Internet and send and receive electronic mail. Since its introduction in January 2010, AT&T has provided iPad users with Internet connectivity via AT&T’s 3G wireless network. During the registration process for subscribing to the network, a user is required to provide an e-mail address, billing address, and password.
Prior to mid-June 2010, AT&T automatically linked an iPad 3G user’s e-mail address to the Integrated Circuit Card Identifier (“ICC-ID”), a number unique to the user’s iPad, when he or she registered. Every time a user accessed the AT&T website, the ICC-ID was recognized and the e-mail address was automatically populated for faster, user-friendly access to the site. AT&T kept the ICC-IDs and associated e-mail addresses confidential.
At that time, when an iPad 3G communicated with AT&T’s website, its ICC-ID was automatically displayed in the Universal Resource Locator, or “URL,” of the AT&T website in plain text. Seeing this, and discovering that each ICC-ID was connected to an iPad 3G user e-mail address, hackers wrote a script termed the “iPad 3G Account Slurper” and deployed it against AT&T’s servers.The Account Slurper attacked AT&T’s servers for several days in early June 2010 and was designed to harvest as many ICC-ID/e-mail address pairings as possible. It worked by mimicking the behavior of an iPad 3G so that AT&T’s servers would be deceived into granting the Account Slurper access. Once deployed, the Account Slurper used a process known as a “brute force” against the servers, randomly guessing at ranges of ICC-IDs. An incorrect guess was met with no additional information, while a correct guess was rewarded with an ICC-ID/e-mail pairing for a specific, identifiable iPad 3G user.
From June 5, 2010, through June 9, 2010, the Account Slurper stole for its hacker-authors approximately 120,000 ICC-ID/e-mail address pairings for iPad 3G customers.
Immediately following the theft, the hacker-authors of the Account Slurper provided the stolen e-mail addresses and ICC-IDs to the website Gawker, which published the stolen information in redacted form, along with an article concerning the breach. The article indicated that the breach “exposed the most exclusive email list on the planet,” and named a number of famous individuals whose emails had been compromised, including Diane Sawyer, Harvey Weinstein, New York Mayor Michael Bloomberg, and then-White House Chief of Staff Rahm Emanuel. The article also stated that iPad users could be vulnerable to spam marketing and malicious hacking. A group calling itself “Goatse Security” was identified as obtaining the subscriber data.
Goatse Security is a so-called “security research” group, comprised of Internet hackers, to which both Spitler and Auernheimer belonged.
During the data breach, co-defendant Daniel Spitler and Auernheimer communicated with one another using Internet Relay Chat, an Internet instant messaging program. Those chats not only demonstrated that Spitler and Auernheimer were responsible for the data breach, but also that they conducted the breach to simultaneously damage AT&T and promote themselves and Goatse Security. As the data breach continued, so, too, did the discussions between Spitler, Auernheimer, and other Goatse Security members about the best way to take advantage of the breach and associated theft. On June 10, 2010, immediately after going public with the breach, Spitler and Auernheimer discussed destroying evidence of their crime.In addition to the prison term, Judge Wigenton sentenced Auernheimer to three years of supervised release and ordered him to pay restitution of $73,162.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to the charges. He also thanked special agents of the FBI, under the direction of Special Agent in Charge Valerie Parlave in Little Rock, Ark., and the U.S. Attorney’s Office for the Western District of Arkansas, under the direction of U.S. Attorney William Conner Eldridge.
The government is represented by Executive Assistant U.S. Attorney Michael Martinez and Assistant U.S. Attorney Zach Intrater of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit.
12-121
Defense counsel: Tor Ekeland Esq., Brooklyn, N.Y.
Navajo Man Pleads Guilty to Assault and Gun ChargesRead the Press Release
PHOENIX – Lee Kinder Tso, 50, of Many Farms, Ariz. and a member of the Navajo Nation, pleaded guilty on March 15, 2013 in a federal district court in Phoenix, to assault with a dangerous weapon and brandishing a firearm during a crime of violence.
Tso had been charged with four counts of assault and four counts of using a firearm during a crime of violence. On Feb. 3, 2012, Tso used a rifle to shoot two victims on the Navajo Nation Indian Reservation, causing the victims serious physical injury. The victims were hospitalized with one victim being admitted for about two months.
A conviction for assault with a dangerous weapon carries a maximum penalty of 10 years in prison, a $250,000 fine, or both. A conviction for brandishing a firearm during a crime of violence carries a minimum of seven years in prison to life, consecutive to any other prison time imposed, a $250,000 fine, or both.
Sentencing is set before Judge Neil V. Wake on June 3, 2013.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Nation Police Department. The prosecution is being handled by Jennifer E. Green, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-12-8051-PCT-NVW
RELEASE NUMBER: 2013-022_TsoFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Minneapolis Woman Sentenced for Attempted Sex Trafficking of A MinorRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 34-year-old Minneapolis woman was sentenced on one count of sex trafficking a minor. United States District Court Judge Ann D. Montgomery sentenced Kimberly Susan Latham to 132 months in federal prison. Latham was indicted on January 19, 2012, and pleaded guilty on May 4, 2012.
Following today’s sentencing, J. Chris Warrener, Special Agent in Charge of the FBI’s Minneapolis Field Office, the lead federal investigative agency on this case, said, “This case underscores the FBI’s continued commitment to stop crimes against children. Hopefully, this conviction and sentence will serve to deter similar criminal behavior.”
In her plea agreement, Latham admitted that in November of 2011, she met two young women, reportedly ages 17 and 18, and invited them to stay with her in her Minnetonka apartment. She then asked the 17-year-old minor to engage in commercial sex acts and used the apartment for that purpose. Latham also used the Internet and cell phones to advertise the services. Because of her sex trafficking activity, Latham admittedly received financial benefit.This case was the result of an investigation by the Federal Bureau of Investigation and the Minnetonka Police Department. It was prosecuted by Assistant U.S. Attorney David P. Steinkamp.
In 2012, Yuri Fedotov, the head of the United Nations’ Office on Drugs and Crime reported to those attending a U.N. General Assembly meeting that an estimated 2.4 million people worldwide are victims of human trafficking at any one time, with 80 percent of them being exploited as sex slaves. He also said approximately $32 billion is earned collectively every year by the criminals who operate human trafficking networks. The U.S. Department of Justice reports that an estimated 14,500 to 17,500 people are trafficked within the U.S. alone each year.
For more information, visit http://www.fbi.gov/about-us/investigate/civilrights/human_traffickingMiami Man Pleads Guilty in Identity Theft Tax Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Antonio J. Gomez, Acting Inspector in Charge, U.S. Postal Inspection Service, Miami Division, and Sergio Velazquez, Chief, Hialeah Police Department, announced that defendant Lineten Belizaire, 22, of Miami, pled guilty today for his role in a stolen identity tax refund scheme.
More specifically, Belizaire pled guilty to conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. Sentencing is scheduled for May 28, 2013 at 8:30 a.m. before U.S. District Judge Cecilia M. Altonaga. At sentencing, the defendant faces a possible statutory maximum sentence of up to 12 years in prison.
According to the plea documents, beginning in mid-2011 and 2012, Belizaire was involved in a scheme to use stolen personal identification information of others to file fraudulent and unauthorized tax returns claiming refunds on debit cards. Belizaire exchanged personal identification information of victims by text message for use in the tax refund fraud scheme. During a traffic stop conducted on January 31, 2012, law enforcement found notebooks and papers containing personal information on more than 1,000 victims and approximately 40 prepaid debit cards, including some of the identities exchanged by Belizaire. In addition, more than 80 fraudulent tax returns using stolen identifications were electronically filed from the IP address belonging to the defendant. The defendant was also observed on ATM video withdrawing money on multiple occasions from debit cards loaded with fraudulent tax refunds.
Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to IRS-CI, U.S. Postal Inspection Service, and the Hialeah Police Department. The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Mark Kness Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on March 18, 2013, before U.S. District Judge Sam E. Haddon, MARK KNESS, a 54-year-old resident of Great Falls, appeared for sentencing. KNESS was sentenced to a term of:
Prison: 172 months
Special Assessment: $100
Supervised Release: 5 years
KNESS was sentenced in connection with his guilty plea to conspiracy to possess with intent to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica A. Betley, the government stated it would have proved at trial the following:
In July 2012, detectives from the Great Falls Police Department became alerted to a potential methamphetamine distribution ring in Great Falls. Detectives believed the methamphetamine was being brought to Montana from somewhere near Spokane, Washington.
On September 6, 2012, police received information from an anonymous caller, who stated Linda Reynolds was dealing methamphetamine out of her apartment in Great Falls. Based on this information, police executed a search warrant at Reynolds' apartment. Law enforcement learned Reynolds obtained methamphetamine from Joe and Ann Wetzel, as well as KNESS.
According to Reynolds, KNESS brought his drug dealer, Louis Kanyid, to Reynolds's apartment in the winter of 2012. Kanyid regularly went by "Washington" in Great Falls, because he traveled from the state of Washington. Reynolds observed methamphetamine deals between KNESS and Kanyid, and KNESS would brag about how the methamphetamine was of great quality. KNESS also introduced Joe and Ann Wetzel to Kanyid in the summer of 2012. KNESS routinely met with Kanyid to obtain methamphetamine. He then sold the methamphetamine to Joe and Ann Wetzel, as well as other people throughout Great Falls. Law enforcement seized over 50 grams of actual (pure) methamphetamine in their investigation.
Reynolds, Kanyid, and Joe and Ann Wetzel pled guilty to federal charges.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that KNESS will likely serve all of the time imposed by the court. In the federal system, KNESS does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Russell County Drug Task Force.
Manufacturer of Counterfeit Designer Handbags Sentenced to One Year in Federal Prison for Trafficking the Bogus ProductsRead the Press Release
LOS ANGELES – A Los Angeles woman was sentenced today to one year and one day in federal prison for trafficking in counterfeit handbags and wallets, including accessories bearing counterfeit marks belonging to Chanel, Gucci, Dolce & Gabbana, Fendi, Prada, and Versace.
Yeon Soon Lee, also known as Susie Lee, 55, who resides in the Koreatown District of Los Angeles, was sentenced today by United States District Judge George H. King.
Lee operated Anna Collection, a wholesale accessory distributor in the Fashion District in downtown Los Angeles. Lee attached emblems with counterfeit trademarks to generic bags and shipped them to retailers across the United States. After authorities executed a search warrant at Anna Collection in 2009 and seized more than 1,000 handbags and counterfeit emblems, Lee resumed operating her business in 2011. A second search in 2011 resulted in the seizure of additional goods and emblems.
During today’s sentencing hearing, Judge King said Lee had committed a “large-scale,” “serious offense.” Lee was a “clear recidivist,” who had shown “repeated disrespect for the law” by continuing to traffic in counterfeit goods after previously being convicted in state court (that conviction has been expunged) and being the subject of two search warrants, the judge said.
“The public has to know that these are not merely victimless crimes,” Judge King emphasized.
The case against Lee is the product of an investigation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Customs and Border Protection, and the Los Angeles County Sheriff's Department.
Release No. 13-037