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Thursday 24 January 2013
Former Consultant for Clarksville Department of Electricity Found Guilty of Honest Services Mail and Wire FraudRead the Press Release
Two Co-defendants Previously Pleaded Guilty
Tommy L. Walton II, 39, of Huntersville, North Carolina, was found guilty late yesterday by a federal jury on nine counts of honest services mail fraud and seven counts of honest services wire fraud after a week-long trial, announced Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee. The jury also recommended a monetary judgment against Walton in the amount of $95,211.38.
U.S. Attorney Jerry Martin stated, “Corrupt practices by public officials and those who corruptly pay public officials undermine the confidence that citizens must have in their governmental institutions. The costs of corruption are borne by taxpayers, ratepayers, honest vendors and honest public employees. The Department of Justice is committed to prosecuting individuals who fraudulently game the system and line their own pockets at the expense of the public and of all those who labor honestly and follow the rules.”
According to testimony at trial, on November 3, 2008, Walton was hired as a consultant for the Clarksville, Tennessee Department of Electricity by Rick R. Ingram, Sr., then president of the Clarksville Department of Electricity. Between that date and June 29, 2009, Walton and his consulting firm, IntelliNet Consulting LLC, invoiced and received from the Clarksville Department of Electricity a total of $156,139,39. The payment of each invoice was approved by Ingram and during that same time, Walton paid $51,500 directly to Ingram or to one of Ingram’s creditors.
The payments made by Walton to Ingram were not disclosed to members of the Clarksville Electric Power Board or to other employees at the Clarksville Department of Electricity. The United States alleged that these payments by Walton were bribes and kickbacks and that the concealment of these payments from the Clarksville Department of Electricity deprived the Clarksville Department of Electricity and its customers of the honest services of Ingram.
On May 25, 2012, Rick Ingram pleaded guilty to two counts of honest services mail fraud and two counts of honest services wire fraud related to this same scheme and to a separate scheme involving Walton’s father, Tommy L. Walton, Sr. Rick Ingram testified at the trial that he would not have approved the payment of all invoices submitted to the Clarksville Department of Electricity by Walton and IntelliNet Consulting had Walton and IntelliNet Consulting not continued making payments to Ingram and to Ingram’s creditor.
Tommy L. Walton, Sr. pleaded guilty to eight counts of honest services mail fraud and to five counts of honest services wire fraud on January 14, 2013.Sentencing hearings will be scheduled for each of these defendants. Each defendant faces up to twenty years in prison, fines of up to $250,000, and orders requiring payment of restitution to the Clarksville Department of Electricity.
This case was investigated by agents of the Tennessee Valley Authority- Office of Inspector General. The case was prosecuted by Assistant United States Attorneys Byron Jones and John Webb.
Former Co-Owner of Contracting Company Sentenced <br /> in San Antonio to 30 Months in Prison for Scheme to Defraud the U.S. GovernmentRead the Press Release
A former co-owner of a U.S. civilian contractor company was sentenced today in San Antonio to serve 30 months in prison for falsifying official documents in connection with Iraq reconstruction government contracts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Robert Pitman for the Western District of Texas.
Jill Ann Charpia, 33, formerly of San Antonio and currently of Colorado, was sentenced today by U.S. District Judge Orlando L. Garcia in the Western District of Texas. In addition to her prison term, Charpia was sentenced to serve three years of supervised release and ordered to pay $920,000 plus interest in restitution to the United States.
According to court documents, from 2008 through 2009, Charpia was the co-owner of Sourcing Specialist LLC, a privately owned company that contracted with the U.S. government to provide services in Iraq. In September 2008, she contracted to provide a turn-key housing facility located outside Iraq’s International Zone to facilitate the introduction of multi-national firms desiring to develop business opportunities in Iraq. That same month, Charpia signed and submitted to the Department of Defense (DOD) Joint Contracting Command Iraq/Afghanistan, for payment through the contract, a false invoice in the amount of $1,270,075 purportedly for mobilization costs. She followed up with two invoices, one representing that she had paid $700,000 for the rental of two villas in Baghdad, and the other representing that she had paid $570,075 on the purchase of three armored vehicles from an Iraqi company. In October 2008, as a result of her false and fraudulent statements, DOD caused $1,270,075 to be wired to Charpia’s bank account. Charpia admitted that she fabricated both invoices and forged the signatures on the documents. She also admitted that she did not purchase any armored vehicles and paid only half the submitted cost for the villas.
This case is being prosecuted by Special Trial Attorney Mark Grider of the Criminal Division’s Fraud Section, on detail from the Special Inspector General for Iraq Reconstruction (SIGIR), and by Assistant U.S. Attorney Judith A. Patton of the Western District of Texas. The case is being investigated by SIGIR, Internal Revenue Service-Criminal Investigation and the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command.
Former Car Dealership Employee Sentenced for EmbezzlementRead the Press Release
BOSTON – A former employee of a car dealership in Hanover was sentenced today for embezzling $96,920 from her employer.
Susan Morris, 44, was sentenced by U.S. District Judge Zobel to four months in prison, to be followed by two years of supervised release and restitution of $96,920. In October 2012, Morris pleaded guilty to wire fraud.
From April 2010 through March 2012, while Morris was working in the accounting department of Dave Delaney’s Buick GMC car dealership, she embezzled $96,920 from the company’s bank account. Morris processed dozens of bogus return transactions, each time fraudulently “returning” the funds to her own debit card.United States Attorney Carmen M. Ortiz and Steven D. Riccardi, Special Agent in Charge of the Boston office of the U.S. Secret Service, made the announcement today. The case was investigated by the Boston office of the U.S. Secret Service. The case was prosecuted by Assistant U.S. Attorney Jeremy Sternberg of Ortiz’s Economic Crimes Unit.
Florida Man Charged with Income Tax EvasionRead the Press Release
JOHNSTOWN, Pa. - On Jan. 15, 2013, a resident of Winter Garden, Fl., was indicted by a federal grand jury in Johnstown on charges of income tax evasion, United States Attorney David J. Hickton announced today.
The four-count indictment named Walter C. Pruchnik, Jr.
According to the indictment presented to the court, from April 15, 2008, until April 15, 2011, Pruchnik owed substantially more federal income tax for the calendar years 2007 through 2010 than he declared on his income tax returns. Specifically, Pruchnik stated his taxable income for the calendar year 2007 was the sum of $66 and the amount of tax he owed was $5,316, when, in actuality, his taxable income for that year was $198,713, upon which he owed to the United States of America income tax of $66,079. For the calendar year 2008, Pruchnik stated his taxable income was -$3,638 and the amount of tax he owed was $4,380. However, in actuality, his taxable income for that year was $180,595, upon which he owed to the United States of America income tax of $58,890. For the calendar year 2009, Pruchnik stated his taxable income was $55,998 and the amount of tax he owed was $18, 677. However, in actuality, his taxable income for that year was $110,630, upon which he owed to the United States of America income tax of $35,125. For the calendar year 2010, Pruchnik stated his taxable income was $35,447 and the amount of tax he owed was $12,197. However, in actuality, his taxable income for that year was $50,795, upon which he owed to the United States of America income tax of $16,833.
The law provides for a maximum total sentence of 20 years in prison and a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Internal Revenue Service Criminal Investigation conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Florida Commercial Fisherman Pleads Guilty to False StatementsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Otha Easley, Acting Special Agent in Charge, NOAA Fisheries Office of Law Enforcement, Southeast Division, and Major Jeff Hubert, Regional Commander, South A Region, Florida Fish & Wildlife Conservation Commission (FWC), announced that Jason Cardinale, 41, pled guilty today to one count of making false statements to the NOAA Southeast Fisheries Science Center, in violation of Title 18, United States Code, Section 1001. Sentencing has been scheduled for April 4, 2013 before U.S. District Judge Donald M. Middlebrooks.
According to the allegations in the indictment and statements made in court, from about January 15, 2010 through February 24, 2012, Cardinale submitted false No Fishing Activity Reports to the NOAA Southeast Fisheries Science Center, potentially compromising the management of fisheries under NOAA’s jurisdiction.
U.S. Attorney Wifredo A. Ferrer stated, “The U.S. Attorney’s Office will continue to do its part to help protect our fragile eco-system, including our fisheries.”
“Falsely reporting data leaves fishery scientists with an incomplete picture of what is truly happening on the water, which can ultimately lead the entire industry to shorter seasons and weaker fish populations,” said Dr. Bonnie Ponwith, Director for NOAA Fisheries’ Southeast Fisheries Science Center. “We applaud those who understand the integral role they play in an effective fishery management process by taking the time to supply high-quality, timely data.”
Mr. Ferrer commended the investigative efforts of NOAA Office of Law Enforcement and FWC. This case is being prosecuted by Assistant U.S. Attorney Norman O. Hemming, III.
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.
Federal Judge Sentences Two for Trafficking MethRead the Press Release
Seven Await Sentencing for Conspiracy, Distributing Meth, Money Laundering
BOISE – Jimenez Valencia a/k/a Jorge Jimenez, 25, a Mexican national formerly living in Nampa, Idaho, and Tanna Spencer, 30, of Parma, Idaho, were sentenced to serve federal prison sentences today, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill sentenced Valencia to 57 months for conspiracy to distribute methamphetamine; Spencer was sentenced to 15 months for possession with intent to distribute methamphetamine. Each will serve three years of supervised release following their release from prison. They pleaded guilty to the charge on November 8, 2012.
According to court documents, beginning in January 2011 and continuing through December 16, 2011, the defendants conspired with co-defendant Alfredo Dominguez-Villareal and others to possess and distribute in excess of 50 grams of methamphetamine in the Treasure Valley, and transported methamphetamine from California to Idaho for this purpose.
Seven co-defendants entered into plea agreements last year on related charges and currently await sentencing: Cynthia Casillas, 24, and Juan Carlos Arredondo-Sicairos a/k/a Victor Kalil Medina-Feliciano, 34, both of Delano, California, on February 5; Alfredo Dominguez-Villareal a/k/a Alfredo Vasquez-Dominguez, 29, and Nelson Fernando Garcia-Soto, 39, both of Boise, on February 6; Hector Morales, 29, of Tallamantez, California, on February 7; and Delia Garcia-Pineda, 44, of Boise, and Alonso Martinez, 26 a Mexican national, of Delano, California, on April 10.
The remaining defendant, Samuel Chavez, 32, of Boise, is set for trial on March 25 at the federal courthouse in Boise. He is charged with conspiracy to distribute methamphetamine and use of a communication facility.
The case was the result of a joint investigation of the Organized Crime and Drug Enforcement Task Force (OCDETF), led by the Drug Enforcement Administration in conjunction with the Boise Police Department and the Ada County Sheriff's Office. The OCDETF program is a federal multi agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. Federal task force members include the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration (DEA), the Federal Bureau of Investigation (FBI), Internal Revenue Service-Criminal Investigation, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and U.S. Marshals Service.
Federal Grand Jury Indicts Two Utah Men for Violating Migratory Bird Treaty ActRead the Press Release
Defendants Charged with Unlawfully Offering for Sale Bald Eagle,
Red-Tail Hawk and Northern Flicker Feathers.ALBUQUERQUE – A federal grand jury sitting in Albuquerque has indicted two men from Bluff, Utah, for violating the Migratory Bird Treaty Act, announced U.S. Attorney Kenneth J. Gonzales and Nicholas E. Chavez, Special Agent in Charge of the Southwest Region, U.S. Fish and Wildlife Service Office of Law Enforcement.
Peterson Oliver Black, Jr., 30, and Jonas Brown, 31, are charged in a three-count indictment that was filed on Jan. 23, 2013. The indictment alleges that Black and Brown offered for sale Bald Eagle, Red-Tail Hawk, and Northern Flicker feathers on Jan. 31, 2009, in San Juan County, N.M. Arraignment dates for Black and Brown have yet to be scheduled.
If convicted, Black and Brown each face a maximum penalty of two years imprisonment, one year of supervised release, and a $250,000 fine on each of the three counts of the indictment. Charges in indictments are merely accusations. All criminal defendants are presumed innocent unless proven guilty.
Eagles, Red-Tail Hawks, Northern Flickers, and other migratory birds are protected under federal wildlife laws, including the Migratory Bird Treaty Act. These laws prohibit the possession, use, and sale of the feathers or other parts of federally protected birds, as well as the unauthorized killing of these birds, to help ensure that the Eagle and other bird populations remain healthy and sustainable.
“Protecting our Nation's Wildlife from unlawful commercial exploitation of protected U.S. Species is a high priority for the U. S. Fish and Wildlife Service Office of Law Enforcement,” said Special Agent in Charge Nicholas Chavez of the U.S. Fish and Wildlife Service. “We also work with our local, state, tribal, and other federal law enforcement partners to apprehend individuals that violate wildlife laws."
The case is being prosecuted by Assistant U.S. Attorney Paul H. Spiers, and was investigated by the U.S. Fish and Wildlife Service and the Navajo Department of Fish and Wildlife Conservation. The mission of the U.S. Fish and Wildlife Service is working with others to conserve, protect, and enhance fish, wildlife, plants, and their habitats for the continuing benefit of the American people. It is both a leader and trusted partner in fish and wildlife conservation, known for its scientific excellence, stewardship of lands and natural resources, dedicated professionals, and commitment to public service. For more information on its work and the people who make it happen, visit www.fws.gov. Connect with its Facebook page at www.facebook.com/usfws, follow its tweets at www.twitter.com/usfwshq, watch its YouTube Channel at http://www.youtube.com/usfws and download photos from its Flickr page at http://www.flickr.com/photos/usfwshq.
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Indictment
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Federal Grand Jury in Fort Wayne Returns IndictmentsRead the Press Release
FortWayne,IN C TheUnited States Attorney's Office announced that a Grand Jury sitting in Fort Wayne, Indiana, returned the following Indictments on January 23, 2013:
Dashawn Jones, 23, of Fort Wayne, Indiana, is charged in a single count Indictment with beingafeloninpossessionofafirearmonoraboutDecember21,2012.Thischargewasfiledas aresultofaninvestigationbytheBureauof Alcohol,Tobacco,FirearmsandExplosives,andthe AllenCountyCommunityCorrections.Thiscasehasbeenassignedtoandwillbeprosecutedby Assistant United States Attorney Anthony W. Geller.
JuliusLawson,34,ofFortWayne,Indiana,ischargedinathreecountIndictmentwith attemptedrobberyofapersonhavingcustodyof mailmatter,moneyorpropertyoftheUnited States;using,carryingandbrandishingafirearmduringandinrelationtoacrimeofviolence,and interference with performanceofdutiesofanemployeeofthe United States all occurring on or about December 19, 2012.These charges were filed as a result of an investigation by the United StatesPostalInspection ServiceandtheFortWaynePoliceDepartment. Thiscasehasbeen assigned to and will be prosecuted by Assistant United States Attorney Lovita MorrisKing.
Scot Silvers, 47, of Angola, Indiana, is charged in a five count Indictment with using counterfeitaccessdevicesbetweenonoraboutOctober8,2012,andOctober11,2012,fraudwith identificationdocumentsonoraboutOctober8,2012,possessingdevice makingequipmentonor aboutOctober31,2012,makingcounterfeitobligationonoraboutOctober31,2012,andpassing counterfeitobligationsorsecuritiesonoraboutOctober31,2012.TheIndictmentalsoseeksfor forfeitureofcomputerrelateditems.Thesecharges were filed as a result of an investigation by theUnitedStatesSecretServiceandtheAngolaPoliceDepartment.Thiscasehasbeenassigned to and will be prosecuted by Assistant United States Attorney Tina L. Nommay.
TheUnitedStatesAttorney'sOfficeemphasizedthatanIndictmentismerelyanallegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Federal Authorities Share Seized Assets with Arapahoe County Sheriff's OfficeRead the Press Release
DENVER – United States Attorney John Walsh and IRS – Criminal Investigation Special Agent in Charge Stephen Boyd presented the Arapahoe County Sheriff’s Office with a check yesterday for $589,826.12, which represents proceeds forfeited by a criminal defendant who was convicted of operating an interstate prostitution business. The check was presented to Undersheriff David Walcher during a private ceremony.
The money seized, forfeited and ultimate presented to the Arapahoe County Sheriff’s Office was part of a $1 million seizure that came from an investigation into the prostitution business dealings of Michelle Schramm, aka Uk Chin Schramm, of Aurora, Colorado. Schramm was indicted, pled guilty, and was sentenced to four months in federal prison. Part of her plea agreement was the stipulation that she not contest the forfeiture of the money seized by law enforcement. Schramm was deported to South Korea immediately after serving her prison sentence, and she is not allowed to return to the United States.
Beginning on December 7, 2005, and continuing through March 17, 2009, the defendant, Michelle Schramm, controlled and operated three businesses in the Denver Metropolitan Area. The businesses were: Bali Spa, located in Arapahoe County, Malley Spa, located in Northglenn, and Green Garden Spa, also known as Beach Tanning Spa, located in Edgewater. In the course of running her spas, the she regularly provided prostitution services, provided by a rotating staff of prostitutes. The prostitutes would provide messages as well as routinely perform sexual acts for customers in exchange for money.
“The citizens of Arapahoe County and Metro Denver benefit twice thanks to the hard work of the Arapahoe County Sheriff and IRS – Criminal Investigation,” said U.S. Attorney John Walsh. “The community benefits by the dismantling of an interstate prostitution organization. They also benefit because that organization’s financial assets were forfeited and shared with the Arapahoe County Sheriff’s Office, for law enforcement use to protect the citizens of Arapahoe County.”
“In cases like this we take away the prize from the crime,” said Stephen Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.
“The money received as a result of this effort with our federal partners will benefit public safety at the local level. We will invest the money in our continued efforts to protect the citizens of Arapahoe County,” said Arapahoe County Undersheriff David Walcher.
The Schramm case was investigated by IRS Criminal Investigation and the Arapahoe County Sheriff’s Office.
Schramm was prosecuted by Assistant U.S. Attorneys Tim Neff and Tonya Andrews.
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Erie County Man Pleads Guilty to Receiving Child PornographyRead the Press Release
ERIE, Pa. - A resident of Girard, Pennsylvania, pleaded guilty in federal court to a charge of violating federal laws relating to the sexual exploitation of children, United States Attorney David J. Hickton announced today.
David E. Newcomer, 35, pleaded guilty to one count before United States District Judge Sean J. McLaughlin.
In connection with the guilty plea, the court was advised that Newcomer received computer images depicting minors engaging in sexually explicit conduct.
Judge McLaughlin scheduled sentencing for May 30, 2013 The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Pending sentencing, the court ordered that Newcomer be detained.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation that led to the prosecution of Newcomer.
Launched in February 2006, Project Safe Childhood is a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys' Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
East St. Louis Man Pleads Guilty to Firearm OffenseRead the Press Release
On January 24, 2013, Joseph L. Edwards, a 25 year old East St. Louis, Illinois, man pled guilty in United States Federal District Court, in East St. Louis, to Unlawful Possession of a Firearm by a Previously Convicted Felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Edwards is scheduled for sentencing on May 20, 2013, at which time he faces a maximum potential sentence of 10 years’ in prison and a fine of up to $250,000, not more than 3 years’ of supervised release after his prison term, and a mandatory special assessment of $100. Edwards also agreed to the forfeiture of the firearm.
Court proceedings revealed that on October 25, 2011, law enforcement officers approached a residence in East St. Louis, Illinois, to investigate an anonymous tip regarding the firing of guns at the home. As officials approached, an officer heard a woman standing on the porch of the home tell Edwards, who was still inside the home, “The feds are here.” An officer spotted Edwards going to the rear of the home and later returning to the front of the house. The officer also noticed a strong marijuana odor coming from the home. After obtaining consent to search the residence from the property owner, who was present, law enforcement located a firearm on a bedroom floor in the rear of the residence. Edwards admitted to taking the gun to the rear of the house and leaving it on a back bedroom floor. Prior to October 25, 2011, Edwards had been convicted of a crime that was punishable by a term of imprisonment of more than one year.
This case was investigated by the WAVE (Working Against Violent Elements) Task Force, which focuses its efforts on combating violent crime in East St. Louis, Washington Park and surrounding communities.
This case is assigned to Assistant United States Attorney Daniel T. Kapsak for prosecution.
East Aurora Man Sentenced for Money LaunderingRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today John Sorrentino, 46, of East Aurora, N.Y., who was convicted of money laundering, was sentenced to 31 months in prison by Chief U.S. District Judge William M. Skretny.
Assistant U.S. Attorney Maura K. O'Donnell, who handled the case, stated that the defendant used fraudulent loan applications to induce five banks in Arizona and Western New York into lending him large sums of money. Sorrentino then filtered the proceeds from the fraudulent loans into a down payment for the purchase of a home in East Aurora. In applying for a mortgage for the property, the defendant provided false information regarding his salary, employer, and address. In addition, Sorrentino used a fraudulent loan application to obtain a mortgage and a home equity line of credit on a property in Arizona.
As part of the defendant's plea, his home in East Aurora will be forfeited to the Government as well as the computers used to facilitate the unlawful activity and a truck purchased with illegally obtained funds.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal
executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.The plea was the culmination of an investigation on the part of Special Agents of the Secret Service, under the direction of Special Agent in Charge Tracy Gast.
Eagle Butte Man Pleads Guilty to Possession of Stolen FirearmRead the Press Release
US Attorney Brendan V. Johnson announced that Judson His Law, a/k/a Judson Two Dogs, age 18, of Eagle Butte, South Dakota, appeared before US District Judge Roberto A. Lange on January 23, 2013, and pled guilty to Count I of the Indictment that charged him with Possession of a Stolen Firearm. The maximum penalty upon conviction is 10 years' imprisonment, a $250,000 fine or both, and a period of supervised release of 3 years.
The conviction arose from an October 2012 incident when His Law stole a Remington shotgun from a vehicle parked outside a convenience store in Eagle Butte, South Dakota.
The investigation was conducted by the Cheyenne River Sioux Tribal Law Enforcement Services. The case is being prosecuted by Assistant US Attorney Mikal Hanson.
A presentence investigation was ordered, and a sentencing date was set for April 15, 2013. The defendant was remanded to the custody of the US Marshal pending sentencing.
Drug Distribution Conspiracy Earns Brownsville Man 151 Month Prison SentenceRead the Press Release
Jackson, TN – Mario Seymour, 29, of Brownsville, TN, was sentenced yesterday to 151 months in prison for his role in a conspiracy to distribute crack cocaine, cocaine and marijuana, announced U.S. Attorney Edward L. Stanton III.
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In an October 11, 2012, appearance before U.S. District Judge J. Daniel Breen, Seymour pleaded guilty to one count of conspiracy to possess and distribute more than 280 grams of cocaine base (crack cocaine), five kilograms of cocaine, and marijuana.
In 2011, agents with the Drug Enforcement Administration, Tennessee Bureau of Investigation, and Bolivar Police Department became aware of a drug trafficking organization based out of Brownsville, Tennessee. As stated in court, the investigation revealed that Seymour was a prominent member of the trafficking organization and was engaged in actively distributing and directing others to distribute crack cocaine, cocaine and marijuana. Investigators were able to intercept shipments of crack cocaine and cocaine with the assistance of the Tennessee Highway Patrol.
On January 25, 2012, during the execution of an arrest and search warrant after a criminal complaint was filed, Seymour was found in possession of a handgun, as well as approximately $103,000 in United States currency, believed to be drug related. The currency was administratively forfeited to the investigating agencies to further future narcotics investigations.
In addition to the 151 month prison term, Breen also sentenced Seymour to five years of supervised release. There is no parole in the federal system.
The case was investigated by the Drug Enforcement Administration, the Tennessee Bureau of Investigation, the Tennessee Highway Patrol and the Bolivar Police Department. The case was prosecuted by Assistant United States Attorney Matt Wilson on behalf of the government.Douglas Edward Cottrell 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 January 23, 2013, before U.S. District Judge Sam E. Haddon, DOUGLAS EDWARD COTTRELL, a 42-year-old resident of Great Falls, appeared for sentencing. COTTRELL was sentenced to a term of:
Probation: 3 years
Special Assessment: $100
Restitution: $7,707
COTTRELL was sentenced in connection with his guilty plea to supplemental social security income benefit fraud.
In an Offer of Proof filed by Assistant U.S. Attorney Bryan R. Whittaker, the government stated it would have proved at trial the following:
Beginning in August 2007, and continuing until December 2009, COTTRELL, intentionally concealed and failed to disclose his incarceration in Montana State Prison in order to continue to receive SSI and SSDI benefits payments provided to him by the Social Security Administration.
On April 13, 2007, COTTRELL applied for Social Security Supplemental Security Income ("SSI") benefits. COTTRELL was advised by the claims representative that he must legally report events that could affect his eligibility for SSI and Social Security Disability Insurance ("SSDI").
On May 25, 2007, the SSA claims representative conducted an SSI application review with COTTRELL and again advised him of his legal obligation to report events affecting his eligibility to SSI. Several of those events included his fugitive felon and parole or probation violation status, his living arrangements, his resources, and his income. He was approved for both SSI and SSDI.
On June 1, 2007, SSA sent COTRELL a "Notice of Award" letter for his SSI application. The letter also included a pamphlet, "What you need to know when you get SSI." Both the pamphlet and the letter again advised COTTRELL of his legal reporting requirements regarding events affecting his eligibility to SSI. Indeed, the pamphlet informed COTTRELL he must report his incarceration and stated, "benefits usually are not paid to someone who commits a crime and is confined to an institution by court order and at public expense." SSA sent another letter and pamphlet to COTTRELL on June 3, 2007 relating to the SSDI payments.
On June 8, 2007, COTTRELL was convicted of felony sexual assault in Cascade County and was sentenced to 10 years with 6 years suspended in Montana State Prison. He was admitted to prison on August 13, 2007.
Several years later, the SSA Great Falls Office received an anonymous call stating that the caller did not think it was right that COTTRELL could collect SSI and SSDI benefits while incarcerated in Deer Lodge. The SSA began an investigation and verified that COTTRELL was incarcerated and had a scheduled release date of July 3, 2011.
Shortly thereafter, SSA interviewed COTTRELL and he stated that he knew that he was required to report his incarceration and that if he did he would lose his SSI and SSDI benefits. He indicated that he had attempted to send one letter to SSA to notify them of his incarceration. No letter was ever received by SSA. He said he made no further attempts to contact SSA after the letter. He stated, "Yes, I knew that if I was getting the payments [SSA benefits], then the SSA probably didn't know I was in prison, but it was on the government."
During COTTRELL's incarceration, he was visited by his fiancé. COTTRELL told investigators that he told her to take the SSA benefit payments out of his personal bank account to pay rent, car payments, bills, and to deposit some of the money into his prison account.
The total amount of overpayment based upon the unauthorized payments and upon COTTRELL's failure to report the required events was $18,464.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that COTTRELL will likely serve all of the time imposed by the court. In the federal system, COTTRELL 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 Social Security Administration - Office of Inspector General.
Dominican National Sentenced to Nearly Six Years in Federal Prison on Drug and Firearm ChargesRead the Press Release
PROVIDENCE, R.I. – Richard Paulino, a/k/a Jose Nieves and Jose Ayala, 30, a Dominican national living in Providence, was sentenced today to 57 months in federal prison for possession with the intent to distribute crack cocaine and being a felon in possession of a firearm, announced United States Attorney Peter F. Neronha and Providence Police Chief Colonel Hugh T. Clements, Jr.
U. S District Court Judge William E. Smith also ordered Paulino to serve three years of supervised release upon completion of his prison term. Paulino pleaded guilty on July 18, 2012, to one count each of possession with the intent to distribute cocaine base and felon in possession of a firearm. Upon completion of his federal prison sentence, Paulino will be referred to Homeland Security Investigations immigration officials for deportation proceedings.
According to information presented to the court, on April 18, 2012, detectives from the Providence Police Narcotics and Organized Crime Unit executed a court authorized search warrant at a Providence residence used by Paulino as a stash house. During the search, detectives seized a total of 107 grams of cocaine and 15 grams of crack cocaine; a .22 caliber handgun and a .45 caliber handgun; ammunition; $1,460 in cash; and a variety of items used in the preparation and street sale of crack cocaine. Paulino admitted to the court that all of the items seized belonged to him.
Paulino, who was previously convicted in Rhode Island state court on felony drug charges, has been detained since his arrest on April 18, 2012.
The case was prosecuted by Assistant U.S. Attorney Milind M. Shah.
United States Attorney Peter F. Neronha acknowledged the efforts of the Providence Police Narcotics and Organized Crime Unit for their investigation of Paulino’s illegal drug activities and for their arrest of the defendant.
The Bureau of Alcohol, Tobacco, Firearms and Explosives assisted Providence Police in the investigation of the firearms seized from Paulino.
Contact: 401-709-5357
[email protected]District Man Sentenced to 4½-Year Prison Term for Robbery and Credit Card Fraud-Defendant Used Victim's Credit Cards Within an Hour of the Robbery-Read the Press Release
WASHINGTON – Robert Reese, 44, of Oxon Hill, Md., has been sentenced to a 4 ½year prison term for robbery and credit card fraud, U.S. Attorney Ronald C. Machen Jr. announced today.
Reese was found guilty by a jury in August 2012, following a trial in the Superior Court of the District of Columbia, on charges of robbery, theft, and credit card fraud. He was sentenced on Jan. 11, 2013, by the Honorable Michael Ryan. Upon completion of his prison term, Reese will be placed on three years of supervised release.
The government’s evidence at trial established that Reese entered the Sweet Green Restaurant, in the 200 block of Pennsylvania Avenue SE, on Capitol Hill, at about 6:45 p.m. March 7, 2012, intending to rob an unsuspecting customer. Reese sat directly behind the victim and robbed her of her credit cards without her knowledge. Reese then proceeded directly to Maryland, where, within an hour of the robbery, he charged over $1,500 worth of items on the victim’s credit cards at a Home Depot store and a Target store.
When Reese committed this crime, he was on parole for an almost-identical crime out of Maryland, in which he robbed a woman of her credit cards and within hours had charged her cards for over a thousand dollars. At Reese’s sentencing, Judge Ryan noted the defendant’s criminal history and the ordeal for the victim, who had to straighten out the credit card issues.
In announcing the sentence, U.S. Attorney Machen commended the work of the Metropolitan Police Department, which investigated the case. He also acknowledged those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Tameka Garcia and Litigation Technology Specialists Leif Hickling and Josh Ellen. Finally, he praised the work of Assistant U.S. Attorney Kathleen Connolly, who indicted and tried the case.
13-023Disbarred Chicago Lawyer Surrenders After More Than Six Years on the Run; Allegedly Skipped Prison TermRead the Press Release
CHICAGO — A disbarred Chicago lawyer was indicted in a new federal case for allegedly failing to surrender to begin serving a federal fraud sentence in 2006. The defendant, STEVEN J. DELLA ROSE, surrendered to authorities in Puerto Vallarta, Mexico, on Dec. 11, 2012, more than six years after he was ordered to self-surrender to begin serving a 41-month sentence for defrauding a client of $64,000.
Della Rose, 61, formerly of Chicago, was charged with failing to surrender to begin serving a sentence in a single-count indictment returned yesterday by a federal grand jury. The indictment was announced today by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and Darryl McPherson, United States Marshal for the Northern District of Illinois.
Della Rose was returned to the U.S. and immediately began serving his original sentence once he was in U.S. custody last month. No date has been set yet for his arraignment on the new charge in U.S. District Court.
According to the indictment, Della Rose was released on his own recognizance after he was charged with mail fraud in 2002. After a trial in March 2003, a jury found him guilty of defrauding a client of $64,000 in a worker’s compensation case. On Dec. 5, 2003, a judge sentenced him to serve 41 months in prison. Service of the sentence was delayed by two appeals, and on June 22, 2006, Della Rose was ordered to surrender to a designated U.S. Bureau of Prisons facility on Aug. 7, 2006. He allegedly failed to self-surrender at a prison on that date and he remained a fugitive until he turned himself in to authorities in Mexico last month.
The new charge carries a maximum penalty of 10 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines, and any new sentence must be served consecutively to the original sentence.
The Government is being represented in court by Assistant U.S. Attorney Clifford Histed.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Dayton Man Receives 13-year Sentence for Assaulting an Officer, Conspiracy, Drug and Tax CrimesRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON –Charles D. Warren, 38, of Dayton was sentenced today to 156 months in prison for crimes including assaulting an officer by running his car into a car driven by a federal task force officer, illegal possession of a firearm, possession of a firearm with an obliterated serial number, conspiracy to distribute marijuana, conspiracy to launder money, illegally structuring financial transactions, and interstate travel in furtherance of a drug conspiracy.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation Cincinnati Division (FBI), Stephanie R. Shoemaker, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS) and Dayton Police Chief Richard Biehl announced the sentences handed down by U.S. District Judge Timothy S. Black.
According to court documents, Warren was wanted on an outstanding illegal gun possession warrant when DPD officers stopped him for a traffic violation on July 7, 2011. Warren fled in his car as members of the FBI Safe Streets Task Force approached the scene. Warren stopped several blocks away. As a task force officer was beginning to exit his vehicle, Warren put his car in reverse and rammed the officer’s vehicle.
Court documents also state that Warren and others trafficked more than 100 kilograms of marijuana from suppliers in California to the Dayton area between 2009 and 2011. IRS investigators determined that the conspirators used several different methods of laundering approximately $1,100,000 of drug proceeds including depositing the cash using other people’s names in order to avoid currency reporting requirements.
Warren pleaded guilty on February 23, 2012. Stewart commended the cooperative investigation by the federal and local agencies, along with Assistant U.S. Attorney Sheila Lafferty, who is prosecuting the case.
David Coleman Headley Sentenced to 35 Years in Prison for Role in India and Denmark Terror PlotsRead the Press Release
David Coleman Headley, a U.S. citizen partly of Pakistani descent, was sentenced today to 35 years in prison for a dozen federal terrorism crimes relating to his role in planning the November 2008 terrorist attacks in Mumbai, India, and a subsequent proposed attack on a newspaper in Denmark. Headley pleaded guilty in March 2010 to all 12 counts that were brought against him following his arrest in October 2009 as he was about to leave the country. Immediately after his arrest, Headley began cooperating with authorities.
Headley, 52, was ordered to serve 35 years, followed by five years of supervised release by U.S. District Judge Harry Leinenweber. There is no federal parole and defendants must serve at least 85 percent of their sentence. “Mr. Headley is a terrorist,” Judge Leinenweber said in imposing the sentence.
“There is little question that life imprisonment would be an appropriate punishment for Headley’s incredibly serious crimes but for the significant value provided by his immediate and extensive cooperation,” the government argued in seeking a sentence of 30 to 35 years.
In pleading guilty and later testifying for the government at the trial of a co-defendant, Headley admitted that he attended training camps in Pakistan operated by Lashkar e Tayyiba, a terrorist organization operating in that country, on five separate occasions between 2002 and 2005. In late 2005, Headley received instructions from three members of Lashkar to travel to India to conduct surveillance, which he did five times leading up to the Mumbai attacks in 2008 that killed approximately 164 people, including six Americans, and wounded hundreds more. Headley’s plea agreement in March 2010 stated that he “has provided substantial assistance to the criminal investigation, and also has provided information of significant intelligence value.”
In consideration of Headley’s past cooperation and anticipated future cooperation, which would include debriefings for the purpose of gathering intelligence and national security information, as well as testifying in any foreign judicial proceedings held in the United States by way of deposition, video-conferencing or letters rogatory, the Attorney General of the United States authorized the U.S. Attorney’s Office in Chicago not to seek the death penalty.
“Today’s sentence is an important milestone in our continuing efforts to hold accountable those responsible for the Mumbai terrorist attacks and to achieve justice for the victims. Our investigations into Mumbai attacks and the Denmark terror plot are ongoing and active. I thank the many agents, analysts and prosecutors responsible for this investigation and prosecution,” said Lisa Monaco, Assistant Attorney General for National Security.
Headley was convicted of conspiracy to bomb public places in India; conspiracy to murder and maim persons in India; six counts of aiding and abetting the murder of U.S. citizens in India; conspiracy to provide material support to terrorism in India; conspiracy to murder and maim persons in Denmark; conspiracy to provide material support to terrorism in Denmark; and conspiracy to provide material support to Lashkar.
According to Headley’s guilty plea and testimony, he attended the following training camps operated by Lashkar: a three-week course starting in February 2002 that provided indoctrination on the merits of waging jihad; a three-week course starting in August 2002 that provided training in the use of weapons and grenades; a three-month course starting in April 2003 that taught close combat tactics, the use of weapons and grenades, and survival skills; a three-week course starting in August 2003 that taught counter-surveillance skills; and a three-month course starting in December 2003 that provided combat and tactical training.
Mumbai Terror Attacks
After receiving instructions in late 2005 to conduct surveillance in India, Headley changed his given name from Daood Gilani in February 2006 in Philadelphia to facilitate his activities on behalf of Lashkar by portraying himself in India as an American who was neither Muslim nor Pakistani. In the early summer of 2006, Headley and two Lashkar members discussed opening an immigration office in Mumbai as a cover for his surveillance activities.
Headley eventually made five extended trips to Mumbai — in September 2006, February and September 2007, and April and July 2008 — each time making videotapes of various potential targets, including those attacked in November 2008. Before each trip, Lashkar members and associates instructed Headley regarding specific locations where he was to conduct surveillance. After each trip, Headley traveled to Pakistan to meet with Lashkar members and associates, report on the results of his surveillance, and provide the surveillance videos.
Before the April 2008 surveillance trip, Headley and co-conspirators in Pakistan discussed potential landing sites in Mumbai for a team of attackers who would arrive by sea. Headley returned to Mumbai with a global positioning system device and took boat trips around the Mumbai harbor and entered various locations into the device.
Between Nov. 26 and 28, 2008, 10 attackers trained by Lashkar carried out multiple assaults with firearms, grenades and improvised explosive devices against multiple targets in Mumbai, including the Taj Mahal and Oberoi hotels, the Leopold Café, the Chabad House and the Chhatrapati Shivaji Terminus train station, each of which Headley had scouted in advance, killing approximately 164 victims and wounding hundreds more.
The six Americans killed during the siege were Ben Zion Chroman, Gavriel Holtzberg, Sandeep Jeswani, Alan Scherr, his daughter Naomi Scherr and Aryeh Leibish Teitelbaum.
In March 2009, Headley made a sixth trip to India to conduct additional surveillance, including of the National Defense College in Delhi, and of Chabad Houses in several cities.
Denmark Terror Plot
Regarding the Denmark terror plot, Headley admitted and testified that in early November 2008, he was instructed by a Lashkar member in Pakistan, to conduct surveillance of the Copenhagen and Aarhus offices of the Danish newspaper Morgenavisen Jyllands-Posten in preparation for an attack in retaliation for the newspaper’s publication of cartoons depicting the Prophet Mohammed. After this meeting, Headley informed co-defendant Abdur Rehman Hashim Syed (Abdur Rehman), also known as “Pasha,” of his assignment. Abdur Rehman told Headley words to the effect that if Lashkar did not go through with the attack, Abdur Rehman knew someone who would. Although not identified by name at the time, Headley later learned this individual was co-defendant Ilyas Kashmiri. Abdur Rehman previously told Headley that he was working with Kashmiri and that Kashmiri was in direct contact with a senior leader of Al Qaeda
While in Chicago in late December 2008 and early January 2009, Headley exchanged emails with Abdur Rehman to continue planning for the attack and to coordinate his travel to Denmark to conduct surveillance. In January 2009, at Lashkar’s direction, Headley traveled from Chicago to Copenhagen to conduct surveillance of the Jyllands-Posten newspaper offices in Copenhagen and Aarhus and scouted and videotaped the surrounding areas.
In late January 2009, Headley met separately with Abdur Rehman and a Lashkar member in Pakistan, discussed the planned attack on the newspaper, and provided them with videos of his surveillance. About the same time, Abdur Rehman provided Headley a video produced by the media wing of Al Qaeda in approximately August 2008, which claimed credit for the June 2008 attack on the Danish embassy in Islamabad, Pakistan, and called for further attacks against Danish interests to avenge the publication of the offending cartoons.
In February 2009, Headley and Abdur Rehman met with Kashmiri in the Waziristan region of Pakistan, where they discussed the video surveillance and ways to carry out the attack. Kashmiri told Headley that he could provide manpower for the operation and that Lashkar’s participation was not necessary. In March 2009, a Lashkar member advised Headley that Lashkar put the newspaper attack on hold because of pressure resulting from the Mumbai attacks. In May 2009, Headley and Abdur Rehman again met with Kashmiri in Waziristan. Kashmiri told Headley to meet with a European contact who could provide Headley with money, weapons and manpower for the Denmark attack, and relate Kashmiri’s instructions that this should be a suicide attack and the attackers should prepare martyrdom videos beforehand. Kashmiri also stated that the attackers should behead captives and throw their heads on to the street in Copenhagen to heighten the response from Danish authorities, and added that the “elders,” whom Headley understood to be Al Qaeda leadership, wanted the attack to happen as soon as possible.
In late July and early August 2009, Headley traveled from Chicago to various places in Europe, and met with and attempted to obtain assistance from Kashmiri’s contacts and, while in Copenhagen, he made approximately 13 additional surveillance videos. When he returned to the United States on Aug. 5, 2009, Headley falsely told a U.S. Customs and Border Protection inspector in Atlanta that he had visited Europe for business reasons. On Oct. 3, 2009, Headley was arrested at O’Hare International Airport in Chicago, intending ultimately to travel to Pakistan to deliver the approximately 13 surveillance videos to Abdur Rehman and Kashmiri.
One of Headley’s co-defendants, Tahawwur Rana, 52, of Chicago, was sentenced last week to 14 years in prison for conspiracy to provide material support to the Denmark terror plot and providing material support to Lashkar. Headley testified for the government at Rana’s trial in June 2011.
The government is being represented by Assistant U.S. Attorneys Daniel Collins and Sarah E. Streicker, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division. Federal prosecutors in Los Angeles have worked on a broader investigation of the Mumbai attacks. The investigation was conducted by the Chicago Joint Terrorism Task Force, led by the Chicago Office of the FBI, with assistance from FBI offices in Los Angeles, Philadelphia and Washington, D.C., as well as both U.S. Customs and Border Protection and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
David Coleman Headley Sentenced to 35 Years in Prison for Role in India and Denmark Terror PlotsRead the Press Release
CHICAGO — DAVID COLEMAN HEADLEY, a U.S. citizen partly of Pakistani descent, was sentenced today to 35 years in prison for a dozen federal terrorism crimes relating to his role in planning the November 2008 terrorist attacks in Mumbai, India and a subsequent proposed attack on a newspaper in Denmark. Headley pleaded guilty in March 2010 to all 12 counts that were brought against him following his arrest in October 2009 as he was about to leave the country. Immediately after his arrest, Headley began cooperating with authorities.
Headley, 52, was ordered to serve 35 years, followed by five years of supervised release by U.S. District Judge Harry Leinenweber. There is no federal parole and defendants must serve at least 85 percent of their sentence.
“Mr. Headley is a terrorist,” Judge Leinenweber said in imposing the sentence.
“There is little question that life imprisonment would be an appropriate punishment for Headley’s incredibly serious crimes but for the significant value provided by his immediate and extensive cooperation,” the government argued in seeking a sentence of 30 to 35 years.
In pleading guilty and later testifying for the government at the trial of a co-defendant, Headley admitted that he attended training camps in Pakistan operated by Lashkar e Tayyiba, a terrorist organization operating in that country, on five separate occasions between 2002 and 2005. In late 2005, Headley received instructions from three members of Lashkar to travel to India to conduct surveillance, which he did five times leading up to the Mumbai attacks in 2008 that killed approximately 164 people, including six Americans, and wounded hundreds more. Headley’s plea agreement in March 2010 stated that he “has provided substantial assistance to the criminal investigation, and also has provided information of significant intelligence value.”
In consideration of Headley’s past cooperation and anticipated future cooperation, which would include debriefings for the purpose of gathering intelligence and national security information, as well as testifying in any foreign judicial proceedings held in the United States by way of deposition, video-conferencing or letters rogatory, the Attorney General of the United States authorized the U.S. Attorney’s Office not to seek the death penalty.
“Today’s sentence is an important milestone in our continuing efforts to hold accountable those responsible for the Mumbai terrorist attacks and to achieve justice for the victims. Our investigations into Mumbai attacks and the Denmark terror plot are ongoing and active. I thank the many agents, analysts and prosecutors responsible for this investigation and prosecution,” said Lisa Monaco, Assistant Attorney General for National Security.
Headley was convicted of conspiracy to bomb public places in India; conspiracy to murder and maim persons in India; six counts of aiding and abetting the murder of U.S. citizens in India; conspiracy to provide material support to terrorism in India; conspiracy to murder and maim persons in Denmark; conspiracy to provide material support to terrorism in Denmark; and conspiracy to provide material support to Lashkar.
According to Headley’s guilty plea and testimony, he attended the following training camps operated by Lashkar: a three-week course starting in February 2002 that provided indoctrination on the merits of waging jihad; a three-week course starting in August 2002 that provided training in the use of weapons and grenades; a three-month course starting in April 2003 that taught close combat tactics, the use of weapons and grenades, and survival skills; a three-week course starting in August 2003 that taught counter-surveillance skills; and a three-month course starting in December 2003 that provided combat and tactical training.
Mumbai Terror Attacks
After receiving instructions in late 2005 to conduct surveillance in India, Headley changed his given name from Daood Gilani in February 2006 in Philadelphia to facilitate his activities on behalf of Lashkar by portraying himself in India as an American who was neither Muslim nor Pakistani. In the early summer of 2006, Headley and two Lashkar members discussed opening an immigration office in Mumbai as a cover for his surveillance activities.
Headley eventually made five extended trips to Mumbai — in September 2006, February and September 2007, and April and July 2008 — each time making videotapes of various potential targets, including those attacked in November 2008. Before each trip, Lashkar members and associates instructed Headley regarding specific locations where he was to conduct surveillance. After each trip, Headley traveled to Pakistan to meet with Lashkar members and associates, report on the results of his surveillance, and provide the surveillance videos.
Before the April 2008 surveillance trip, Headley and co-conspirators in Pakistan discussed potential landing sites in Mumbai for a team of attackers who would arrive by sea. Headley returned to Mumbai with a global positioning system device and took boat trips around the Mumbai harbor and entered various locations into the device.
Between Nov. 26 and 28, 2008, 10 attackers trained by Lashkar carried out multiple assaults with firearms, grenades and improvised explosive devices against multiple targets in Mumbai, including the Taj Mahal and Oberoi hotels, the Leopold Café, the Chabad House and the Chhatrapati Shivaji Terminus train station, each of which Headley had scouted in advance, killing approximately 164 victims and wounding hundreds more.
The six Americans killed during the siege were Ben Zion Chroman, Gavriel Holtzberg, Sandeep Jeswani, Alan Scherr, his daughter Naomi Scherr, and Aryeh Leibish Teitelbaum.
In March 2009, Headley made a sixth trip to India to conduct additional surveillance, including of the National Defense College in Delhi, and of Chabad Houses in several cities.
Denmark Terror Plot
Regarding the Denmark terror plot, Headley admitted and testified that in early November 2008, he was instructed by a Lashkar member in Pakistan, to conduct surveillance of the Copenhagen and Aarhus offices of the Danish newspaper Morgenavisen Jyllands-Posten in preparation for an attack in retaliation for the newspaper’s publication of cartoons depicting the Prophet Mohammed. After this meeting, Headley informed co-defendant Abdur Rehman Hashim Syed (Abdur Rehman), also known as “Pasha,” of his assignment. Abdur Rehman told Headley words to the effect that if Lashkar did not go through with the attack, Abdur Rehman knew someone who would. Although not identified by name at the time, Headley later learned this individual was co-defendant Ilyas Kashmiri. Abdur Rehman previously told Headley that he was working with Kashmiri and that Kashmiri was in direct contact with a senior leader of Al Qaeda.
While in Chicago in late December 2008 and early January 2009, Headley exchanged emails with Abdur Rehman to continue planning for the attack and to coordinate his travel to Denmark to conduct surveillance. In January 2009, at Lashkar’s direction, Headley traveled from Chicago to Copenhagen to conduct surveillance of the Jyllands-Posten newspaper offices in Copenhagen and Aarhus and scouted and videotaped the surrounding areas.
In late January 2009, Headley met separately with Abdur Rehman and a Lashkar member in Pakistan, discussed the planned attack on the newspaper, and provided them with videos of his surveillance. About the same time, Abdur Rehman provided Headley a video produced by the media wing of Al Qaeda in approximately August 2008, which claimed credit for the June 2008 attack on the Danish embassy in Islamabad, Pakistan, and called for further attacks against Danish interests to avenge the publication of the offending cartoons.
In February 2009, Headley and Abdur Rehman met with Kashmiri in the Waziristan region of Pakistan, where they discussed the video surveillance and ways to carry out the attack. Kashmiri told Headley that he could provide manpower for the operation and that Lashkar’s participation was not necessary. In March 2009, a Lashkar member advised Headley that Lashkar put the newspaper attack on hold because of pressure resulting from the Mumbai attacks. In May 2009, Headley and Abdur Rehman again met with Kashmiri in Waziristan. Kashmiri told Headley to meet with a European contact who could provide Headley with money, weapons and manpower for the Denmark attack, and relate Kashmiri’s instructions that this should be a suicide attack and the attackers should prepare martyrdom videos beforehand. Kashmiri also stated that the attackers should behead captives and throw their heads on to the street in Copenhagen to heighten the response from Danish authorities, and added that the “elders,” whom Headley understood to be Al Qaeda leadership, wanted the attack to happen as soon as possible.
In late July and early August 2009, Headley traveled from Chicago to various places in Europe, and met with and attempted to obtain assistance from Kashmiri’s contacts and, while in Copenhagen, he made approximately 13 additional surveillance videos. When he returned to the United States on Aug. 5, 2009, Headley falsely told a U.S. Customs and Border Protection inspector in Atlanta that he had visited Europe for business reasons. On Oct. 3, 2009, Headley was arrested at O’Hare International Airport in Chicago, intending ultimately to travel to Pakistan to deliver the approximately 13 surveillance videos to Abdur Rehman and Kashmiri.
One of Headley’s co-defendants, Tahawwur Rana, 52, of Chicago, was sentenced last week to 14 years in prison for conspiracy to provide material support to the Denmark terror plot and providing material support to Lashkar. Headley testified for the government at Rana’s trial in June 2011.
The government is being represented by Assistant U.S. Attorneys Daniel Collins and Sarah E. Streicker, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division. Federal prosecutors in Los Angeles have worked on a broader investigation of the Mumbai attacks. The investigation was conducted by the Chicago Joint Terrorism Task Force, led by the Chicago Office of the Federal Bureau of Investigation, with assistance from FBI offices in Los Angeles, Philadelphia, and Washington, D.C., as well as both U.S. Customs and Border Protection and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Creator of Two Retail Marijuana Stores Sentenced to Serve 100 Months in Federal PrisonRead the Press Release
SAN DIEGO - A man who created two medical marijuana dispensaries and a phony board of directors as a front for a multimillion-dollar drug trafficking operation was sentenced today to serve 100 months in federal prison. The defendant was immediately remanded into custody.
Joshua John Hester of San Diego pleaded guilty January 3, 2012, to eight felony charges, including conspiracy to distribute over 1,000 kilograms of marijuana, conspiracy to maintain drug-related premises, conspiracy to launder money, and criminal forfeiture. He was sentenced by United States District Judge Irma E. Gonzalez.
According to his plea agreement, Hester admitted that he was the silent owner of two marijuana dispensaries known as the “Downtown Kush Lounge” in downtown San Diego and the “Green Kross Collective” in Mission Beach, where he made millions of dollars in the retail sale of marijuana.
This is the most significant prosecution of a large-scale dispensary operator in the Southern District of California. And, this was the first time federal authorities used wiretaps in an investigation of medical marijuana dispensaries.
“Joshua Hester is the poster boy for the types of marijuana dispensary operations that the federal government is criminally targeting,” said U.S. Attorney Laura Duffy. “He wasn’t overseeing a non-profit collective that served sick people. He was a convicted drug trafficker making millions of dollars selling high-quality marijuana to recreational users and exploiting state laws that were meant to help the seriously ill.”
“The role of IRS Criminal Investigation (CI) in the investigation of Joshua Hester was to follow the money laundered as part of the conspiracy to distribute illegal marijuana,” said N. Dawn Mertz Acting Special Agent in Charge of IRS CI's Los Angeles Field Office. “IRS CI will continue to collaborate with our law enforcement partners to trace the proceeds in this highly lucrative industry and enforce our nation’s federal tax and money laundering laws.”
“This case illustrates the kind of criminal activity going on within medical marijuana dispensary operations,” said San Diego Drug Enforcement Administration Acting Special Agent in Charge William R. Sherman. “The proprietors of these operations are simply drug dealers who are hiding behind the guise of compassionate care, when in fact their only motivation is making money. We will continue to investigate these criminal enterprises that are not only violating the Federal Controlled Substances Act, but are also involved in a variety of other criminal activities.”
Since October 2011, the United States Attorney’s Office in coordination with the DEA, has issued cease and desist letters to approximately 253 marijuana dispensaries operating in the district. There has been a 95% self-closure rate in response to the letters, with less than 12 dispensaries remaining open.
In his plea agreement, Hester admitted to two types of trafficking in this case. First, he went the traditional route, using a supplier, distributing over 1,000 kilograms of high-quality marijuana known as “Canadian BC Bud,” and laundering millions of dollars of profits. When his supplier was arrested, Hester opened dispensaries and started selling and manufacturing his own marijuana and purchased bulk quantity from others.
Hester admitted that he set up a “sham” Board of Directors at the Green Kross Collective and Downtown Kush Lounge, which had no authority or control over the management of the cooperatives. Hester also admitted that he laundered over $2 million in connection with the purchase of a residence in Rancho Santa Fe, California, where he manufactured marijuana at that location. Hester also admitted selling the supposedly non-profit Green Kross Collective for $250,000 in cash.
Hester acknowledged that he was the true owner of the 37-acre Palomar Mountain Property, but placed the property in another name to conceal his ownership. And, he acknowledged that he intended to grow marijuana at that location. As part of his plea agreement, Hester agreed to forfeit over $575,000 in assets, including cash, vehicles, and jewelry.
An investigation of Hester by federal drug agents began in spring of 2008 in connection with marijuana trafficking in San Diego County that was unrelated to dispensaries. It was a chance encounter with police in Glendale, California, on December 8, 2008, that propelled Hester into the dispensary business.
Glendale police had been following a suspected small-time marijuana dealer to a storage locker in Calabasas, California. “The local officers were extremely surprised to find $843,000 in cash inside the locker as they accidentally stumbled into a multi-million dollar international drug operation,” according to Hester’s sentencing memorandum.
Hester came on the radar when he and his key marijuana supplier, Rajeev Kaushal, arrived at the locker to pick up the cash. Hester was detained but not charged. But Kaushal was taken into custody in Los Angeles and ultimately pleaded guilty in Los Angeles. Court documents said that in the two years leading up to Kaushal’s arrest in December 2008, Hester had purchased over 3,000 pounds of high-grade Canadian marijuana from Kaushal for almost $9 million, and distributed it throughout San Diego County.
With his key supplier in custody in December 2008, Hester “turned to medical marijuana dispensaries” in the spring of 2009, according to the sentencing memorandum.
In February of 2010, the investigation shifted to the dispensary operations and agents from the Internal Revenue Service and the DEA’s Narcotics Task Force obtained federal wiretaps, intercepting text messages for a 30-day period, then expanding for another 30 days to both text messages and phone conversations.
According to the Government’s sentencing memorandum, “These wiretaps demonstrated that defendant Joshua Hester, who was making millions of dollars in connection with these ‘medical marijuana dispensaries,’ was using these ‘dispensaries’ as retail marijuana outlets and distribution centers. He had assembled management teams and had a Board of Directors, who worked under his direction.” Hester has admitted the board was a sham, and directors had no power.
The wiretap revealed that the Green Kross Collective and the Downtown Kush Lounge were making between $5,000 -7,000 each day at each location on the average, the sentencing memorandum said. Assuming that together, both locations generated at least $10,000 each day, Hester was grossing approximately $3.5 million dollars annually. The California sales tax records for the collectives show far less reported income.
According to court documents, the products seized by federal agents included: Many plastic bottles of THC-laden soft drinks labeled “7 High,” “Dr. Feelgood,” “Laughing Lemonade,” “Rasta Berry Iced Tea,” “Danktopia,” “Orange Cush,” “Root Buzz,” and “Marijuana Dank.” There were cookies and brownies labeled “White Chip Hash Brownie,” “Reese’s Crumbled Hash Brownie,” “Cannabis Creation Brownie,” “Reefers Peanut Butter Cup,” “M&M Hash Brownies,” Reefers Peanut Butter Cup with Nuts,” “Cannabis Creation Sugar Free Cookies,” and “Cannabis Creation Cookies.” Agents also seized marijuana candy, including “Jolly Stones THC Medicated Hard Candies,” and “Stone Candy,” and different flavored lollipops, including strawberry, watermelon, bubble gum, cotton candy, orange, lemon, pina colada, and grape. The officers also seized “Bud Head Bubblegum.”
The office computer showed that Green Kross Collective had approximately 1,732 members - most of the members were between the ages of 18-22, court records said. The computerized records also showed that the Downtown Kush Lounge had 811 members. Judge Gonzalez ordered restitution in an amount to be determined at a later date.
Likewise, in a related development, the Court on January 14, 2013, ordered Hester’s realtor on the Rancho Santa Fe and Palomar Mountain properties, Marco Luis, to pay restitution in the amounts of $329,767 to CitiGroup and $615,935 to JP Morgan. Luis pleaded guilty in August to money laundering charges in connection with those properties and was sentenced to 48 months in prison.
DEFENDANT Criminal Case No. 10CR2967-IEG Joshua John Hester SUMMARY OF CHARGESTitle 21, United States Code, Sections 846 and 841(a)(1)[count 1] - Conspiracy to distribute over 1,000 kilograms of marijuana
Title 21, United States Code, Sections 856(a)(1) and 846 [counts 6, 7 and 8] - Conspiracy to maintain drug related premises Title 18, United States Code, Sections 1956(a)(1)(A)(I) and 1956(h) [count 15] - Conspiracy to launder money
Title 18, United States Code, Sections 1957 and 1956(h) [count 16] - Conspiracy to launder money
Title 18, United States Code, Sections 1957 and 1956(h) [count 25] - Conspiracy to launder money
Title 18, United States Code, Sections 1956(a)(1)(B)(I) and 1956(h) [count 33] - Conspiracy to launder money
INVESTIGATING AGENCIESThis investigation was conducted by the Internal Revenue Service, Criminal Investigation, San Diego, and the San Diego Drug Enforcement Administration’s Narcotics Task Force. The lead prosecutor is Sherri Walker Hobson.
Comandante Wicho Heads to Federal PrisonRead the Press Release
BROWNSVILLE, Texas – Jose Luis Zuniga-Hernandez, 44, of Control, Tamaulipas, Mexico, is headed to prison for a term of seven years, United States Attorney Kenneth Magidson announced today. Zuniga-Hernandez aka “El Wicho” or “Comandante Wicho” or “XW” pleaded guilty to being an alien found within the United States after deportation and being an alien in possession of a firearm on Jan. 8, 2013.
Today, U.S. District Judge Andrew Hanen, who accepted the guilty plea, handed Zuniga-Hernandez a total term of 84 months in prison. At the hearing, additional testimony was presented including that Zuniga-Hernandez was a high ranking member of the Gulf Cartel in charge of the Rio Bravo and Matamoros plazas at different times during the years prior to his arrest. Testimony further indicated that Zuniga-Hernandez had paid $57,000 dollars for a diamond, gold and ruby encrusted 38 super hand gun.
Zuniga-Hernandez’s sentence includes upward adjustments or increases in his calculated sentencing guideline range because he was in possession of the firearm in connection with another felony offense. The sentence also represents a departure from the sentencing guidelines because of the defendant’s prior criminal history, his possession of a loaded handgun, 3.7 grams of cocaine and almost $40,000 dollars at the time of his arrest. Evidence indicated that the defendant had previously been convicted for possessing with intent to distribute more than a ton of marijuana in 1990.
He was further ordered to pay a $10,000 fine. As an illegal alien, Zuniga-Hernandez is expected to face deportation proceedings following his release from prison. In handing down the sentence, Judge Hanen stated the crime committed represented a serious threat to the well-being of the citizens of South Texas.
Zuniga-Hernandez was previously convicted in January 2012, but later permitted to withdraw that plea. At the time he ultimately was convicted in January 2013, he admitted he had entered the United States illegally after he had been previously deported from the United States on Aug. 8, 1997. Prior to his deportation, Zuniga had been convicted of possession with intent to distribute marijuana on Feb. 14, 1990. Zuniga also admitted that at the time of his arrest he was in possession of a customized gold, diamond and ruby encrusted Colt 38 Super handgun.
Zuniga-Hernandez has been in jail since his arrest on Oct. 26, 2011, where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charges was conducted by Homeland Security Investigations. The case is being prosecuted by Assistant U.S. Attorney Angel Castro.
Colorado River Man Pleads Guilty to Second-degree MurderRead the Press Release
PHOENIX – On Jan. 23, 2013, Loren Kaysang Tahbo, 33, of Parker, Ariz., and a member of the Colorado River Indian Tribes, pleaded guilty in federal district court to second-degree murder.
On Aug. 10, 2012, Tahbo stabbed and ultimately killed a man on the Colorado River Indian Tribes reservation. Tahbo left the scene of the murder and crashed the victim’s car into a canal. He later fled to a woman’s home where tribal police apprehended him. Tahbo is currently held in federal custody pending sentencing.
A conviction for second-degree murder carries a maximum penalty of life in prison, a $250,000 fine, or both. Sentencing is set before Judge Frederick J. Martone on April 2, 2013.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Colorado River Indian Tribes Police Department. The prosecution is being handled by Jennifer E. Green, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-12-01773-PHX-FJM
RELEASE NUMBER: 2013-008_TahboFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Colorado Man Sentenced for Receiving Child PornographyRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 26-year-old Denver, Colorado, man, formerly of Plymouth, Minnesota, was sentenced for receiving, via his computer, thousands of images of child pornography. United States District Court Judge Patrick J. Schiltz sentenced Russell Ronald Brimeyer to 85 months in federal prison on one count of receipt of child pornography. Brimeyer was charged on May 7, 2012, and pleaded guilty on June 26, 2012.
In his plea agreement, Brimeyer admitted that on April 15, 2009, he received, by way of his computer, thousands of images of a minor under the age of 12 engaged in sexually explicit conduct. He received the images through an Internet peer-to-peer, file-sharing program. Authorities discovered the images on Brimeyer’s computer and other media devices on September 24, 2009, during the execution of a search warrant at his residence.
This case was the result of an investigation by the Minnesota Cyber Crimes Task Force, which is sponsored by the Federal Bureau of Investigation and the U.S. Secret Service, and the National Center for Missing and Exploited Children. It was prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.Presently, the Justice Department is funding a study concerning the correlation between involvement in child pornography and the hands-on sexual abuse of children. A 2008 study (The Butner Study) published in the Journal of Family Violence found that up to 80 percent of federal inmates incarcerated for possession, receipt, or distribution of child pornography also admitted to hands-on sexual abuse of children, ranging from touching to rape.
The U.S. Department of Justice is committed to combating the sexual exploitation of
children, particularly via the Internet. In Fiscal Year 2010, 2,235 defendants pleaded guilty to
federal child pornography charges, 2,222 of whom were sentenced to prison. In Fiscal Year
2009, 2,083 defendants were sentenced to prison on child pornography charges. For more
information about these efforts, please visit the Department’s Project Safe Childhood website,
at www.projectsafechildhood.gov.Clearwater Armed Career Criminal Sentenced to More Than 15 Years in Federal PrisonRead the Press Release
Tampa, Florida - U.S. District Judge James S. Moody, Jr. sentenced Michael Anthony Moody (28, Clearwater) yesterday to 15 years and nine months in federal prison for being a felon in possession of a firearm and ammunition. Moody was sentenced under the Armed Career Criminal Act because of his extensive criminal history. Moody pleaded guilty in October 2012.
According to court documents, on May 8, 2012, Pinellas County Sheriff's Office deputies stopped Moody for a vehicle window tint violation. As deputies approached the vehicle, Moody tried to destroy a marijuana joint that he was smoking. During a search of Moody's vehicle, officers found a loaded Hi-Point 9mm semi-automatic handgun, with an attached laser and pressure switch attached to the grip. At the time of his arrest, Moody had eighteen prior felony convictions dating back to age sixteen, including multiple violent crime and narcotics offenses. As a previously convicted felon, he is prohibited from possessing firearms or ammunition.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Pinellas County Sheriff's Office. It was prosecuted by Assistant United States Attorney Josephine W. Thomas.
It is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program - a nationwide, gun-violence reduction strategy led by ATF. United States Attorney Robert E. O’Neill, along with Julie Torres, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Charlotte Man Sentenced to 15 Years in Prison for Firearms OffenseRead the Press Release
CHARLOTTE, N.C. – A Charlotte man has been sentenced to 15 years in prison for a firearms related offense announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. On Wednesday, January 23, 2013, U.S. District Court Judge Max O. Cogburn, Jr. sentenced Ramsey Dean Lewis, 44, of Charlotte to serve 180 months in prison, followed by three years of supervised release.
U.S. Attorney Tompkins is joined in making today’s announcement by Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Chief Rodney D. Monroe of the Charlotte Mecklenburg Police Department (CMPD).
In July 2011, a criminal bill of indictment charged Lewis with one count of possession of a firearm by a convicted felon. According to filed court documents and statements made in court, on December 8, 2010 Lewis possessed a loaded .22 caliber revolver in the car he was driving. Court records indicate that law enforcement recovered the firearm in the car after the defendant was involved in a car accident. Lewis pleaded guilty to the charge in December 2011.
Lewis’s prior convictions prohibit him from carrying a weapon and he was therefore sentenced as an armed career criminal by the Court.
Lewis has been in federal custody since July 2011. He will be transferred to the custody of the Federal Bureau of Prisons upon the designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the ATF and CMPD. The case was prosecuted by Assistant United States Attorney Robert J. Gleason of the U.S. Attorney’s Office in Charlotte.
California Hedge Fund Manager Doug Whitman Sentenced to 24 Months in Prison in Manhattan Federal Court for Insider TradingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that DOUG WHITMAN, a portfolio manager at Whitman Capital, LLC, was sentenced today in Manhattan federal court to 24 months in prison for his involvement in two insider trading schemes that earned his firm more than $900,000 in illegal profits. As part of the schemes, WHITMAN executed trades based on material, non-public information (“Inside Information”), related to three publicly traded companies: Marvell Technology Group, Ltd. (“Marvell”); Polycom, Inc. (“Polycom”); and Google, Inc. (“Google”). WHITMAN was convicted in August 2012 on two counts of conspiracy to commit securities fraud and two counts of securities fraud. He was sentenced by U.S. District Judge Jed S. Rakoff.
Manhattan U.S. Attorney Preet Bharara said: “With his sentence today, Doug Whitman joins scores of other privileged professionals who traded on inside information to gain an illegal edge and now live behind bars. His punishment shows yet again that supposedly elite financial players must operate by the same rules that apply to everyone else.”
According to the Indictment, evidence presented at Whitman’s trial, and testimony from other trials and court proceedings:
From 2007 through 2009, while running Whitman Capital, WHITMAN bought and sold Marvell stock and options based on Inside Information, including earnings, revenue, and/or other material financial and business information. The Inside Information was provided to WHITMAN by Karl Motey, an independent research consultant, who had obtained it from certain Marvell employees. In exchange for the Inside Information, WHITMAN paid Motey through a soft dollar payment arrangement between Whitman Capital and Motey’s consulting firm. WHITMAN also provided the Marvell Inside Information to Wesley Wang in exchange for other Inside Information.
In another scheme, from 2006 to 2007, WHITMAN obtained Inside Information, including earnings information and other material financial information pertaining to Polycom and Google from Roomy Khan, who worked in the hedge fund industry. Khan obtained the Polycom Inside Information from an employee at the company, and she obtained the Google Inside Information from an employee of a firm that provided investor relations services to Google. WHITMAN used the Polycom and Google Inside Information to execute securities transactions that earned his firm more than $900,000 in illegal profits. In exchange for the Inside Information, WHITMAN provided Khan with information about other publicly traded technology companies.
In addition to his prison term, WHITMAN, 55, of Atherton, California, was sentenced to one year of supervised release. He was also ordered to pay a $250,000 fine, a special assessment of $400, and to forfeit $935,306.
In issuing Whitman’s sentence, Judge Rakoff said, “Mr. Whitman was someone who had no compunctions about going across the legal lines that he was very well aware of, and excusing them, and even carrying those excuses into the courtroom when it served his interest.”
WHITMAN’s co-conspirators, Karl Motey, Roomy Khan, and Wesley Wang, previously pled guilty to insider trading charges. Wang was sentenced in Manhattan federal court to two years’ probation on January 9, 2013 by Judge Rakoff. Khan and Motey are scheduled to be sentenced by Judge Rakoff on January 31, 2013 and February 4, 2013, respectively.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation (“FBI”) and thanked the U.S. Securities and Exchange Commission.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Jillian Berman, Christopher LaVigne, and Micah Smith are in charge of the prosecution.
Calexico Resident Found Guilty of Receipt of Child PornographyRead the Press Release
United States Attorney Laura E. Duffy announced that Lawson Hardrick, a retired United States Customs and Border Protection Officer was found guilty by a federal jury earlier today in San Diego of two counts of receipt of images of minors engaged in sexually explicit conduct, each a felony. The verdicts follow a one-day trial before United States District Judge Marilyn L. Huff.
According to the evidence presented at trial, agents with Immigration and Customs Enforcement’s Homeland Security Investigations conducted an investigation of persons using peer to peer file-sharing programs to make child pornography available to others. According to the forensic evidence introduced at trial, the defendant received videos of children as young as four and nine years old through a file-sharing program in 2008 through 2010. The indictment was handed up by a federal grand jury sitting in San Diego in July 2012.
The defendant is next scheduled to be in court on April 29, 2013 at 9:00 a.m., before Judge Huff for a sentencing hearing.
DEFENDANT Case Number: 12cr3061-H Lawson Hardrick SUMMARY OF CHARGESCounts: 2
INVESTIGATING AGENCY
Receipt of Images of Minors Engaged in Sexually Explicit Conduct- Title 18, United States Code, Section 2252(a) (2)
Maximum Penalties: 20 years’ incarceration with a five year mandatory minimum sentence, $250,000 fine, a minimum of 5 years and up to a lifetime of supervised release and registration as a sex offender.Immigration and Customs Enforcement’s Homeland Security Investigations
Baltimore Armed Robber Sentenced to over 15 Years in Prison for Robbing Two StoresRead the Press Release
Pointed a Gun at a Store Owner and Her Nine Year-Old SonBaltimore, Maryland - U.S. District Judge Catherine C. Blake sentenced Cedric Lamont Scott, age 39, of Baltimore, today to 183 months in prison, followed by three years of supervised release, for robbery and using a gun in relation to the robbery. Judge Blake also ordered Scott to pay restitution of $1,175.
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 Commissioner Anthony W. Batts of the Baltimore Police Department.
According to his plea agreement, on January 21, 2012, Scott entered a store in the 6700 block of Reisterstown Road in Baltimore and selected some items which he took to the cash register. The store owner’s nine year-old son asked his mother if he could ring up the sale. As the boy rang up the sale, Scott pointed a handgun at the boy and his mother and demanded all the cash. The boy and his mother handed Scott all the cash from the register. Scott also took an envelope filled with cash proceeds from the business, the coin drawer from beneath the register and the mother’s cell phone, before fleeing.
On February 16, 2012, Scott robbed a business in the 4600 block of W. Northern Parkway in Baltimore, pretending to want to purchase an item, then demanding money from the cashier. The store manager approached the cash register and realizing that a robbery was taking place, ran out the front door to get help. Scott chased the manager and during a struggle between the two, Scott fired his gun at least once. Scott reentered the store and fired a shot into the cash register drawer lock. When the register failed to open, Scott slammed it to the ground which caused the cash drawer to open. Scott took all the bills and some coins, and fled on foot.
Baltimore Police officers arrived, saw Scott running away and ordered him to stop. Scott continued running, but the officers were eventually able to capture and arrest Scott. Officers seized from Scott a loaded .22 caliber revolver, $282 stolen in the second robbery, and the cell phone Scott took from the store owner during the first robbery.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in this investigation. Mr. Rosenstein thanked Assistant United States Attorney Debra L. Dwyer, who prosecuted the case.
BRosebud Woman Pleads Guilty to Assault by Striking, Beating and Wounding and Simple AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that Sarah Richenda Richards, age 25, of Rosebud, South Dakota, appeared before United States Magistrate Judge Mark A. Moreno on January 22, 2013, and pled guilty to Assault by Striking, Beating and Wounding and Simple Assault. The maximum penalty upon conviction on each count is 6 months in custody, a $5,000 fine, or both; and a $10 special assessment.
The conviction stems from an incident that took place on November 30, 2011, when Richards stabbed the victim with a butcher knife.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The case is being prosecuted by Assistant United States Attorney Marie H. Ruettgers.
A presentence investigation was ordered. The defendant was released to a third party custodian pending sentencing. A sentencing date has been set for March 22, 2013.
Another Orthofix Defendant Sentenced for Committing Medicare FraudRead the Press Release
BOSTON – A former Orthofix territory manager was sentenced yesterday for defrauding Medicare by forging patient medical records.
Michael J. McKay, 32, was sentenced by U.S. District Court Judge Denise J. Casper to one year of probation, with the first three months to be served in home confinement, and ordered to forfeit $10,000 and pay a fine of $3,000. In May 2012, McKay pleaded guilty to healthcare fraud.
Between 2008 and 2009 McKay was a territory manager for Orthofix, a company that manufactured and distributed bone growth stimulator medical devices that were intended to assist patients with bone fractures that did not heal properly. Medicare and many private insurance carriers have specific guidelines describing when it will pay for bone growth stimulators. When McKay received orders for patients that did not satisfy these guidelines, McKay frequently falsified the patients’ medical records to make it appear as though the order met Medicare’s rules so that Medicare would pay for a claim that otherwise would not be covered. Between 2008 and 2010, federal insurance carriers paid more than $70,000 for bone growth stimulators for claims where McKay falsified medical records. McKay altered physician’s chart notes, changing the dates of patient visits, describing patient visits that did not occur, and inserting false diagnoses. McKay also forged prescriptions and Medicare Certificates of Medical Necessity within the orders. Orthofix fired McKay after it discovered his fraud. Even after he was fired, however, McKay continued to submit orders for stimulators by submitting them to a colleague, Derrick Field, who split the commissions with Field. Even after he was fired, McKay continued to forge chart notes, prescriptions and CMNs in the orders he submitted to Field. On January 9, 2013, Field was sentenced to five months home confinement, two years of probation, and $44,000 in fines and forfeiture.
In addition to the McKay sentence, the Orthofix investigation has to date resulted in a number of felony charges against employees and contractors of Orthofix, including the following:
- In December 2012, Orthofix was convicted of obstruction of a federal audit, and ordered to pay $42 million in criminal fines and civil payments, and was sentenced to probation for five years;
- On January 22, 2013, Tom Guerrieri, the former vice president of sales for Orthofix, was sentenced to eight months in prison and ordered to pay $50,000 in fines and forfeiture for paying kickbacks;
- In July 2012, Michael Cobb, a physician’s assistant, was sentenced to six months in prison, six months home confinement, and ordered to forfeit $10,000 and pay a $3,000 fine for accepting kickbacks from Orthofix;
- In December 2011, Mitchell Salzman pleaded guilty while he was a regional manager for Orthofix and is scheduled to be sentenced on Jan. 31, 2013; and
- In September 2012, Brian Racey pleaded guilty to health care while he was a territory manager for Orthofix and is scheduled to be sentenced on Feb. 20, 2013 in the U.S. District Court for the Eastern District of Pennsylvania.
This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations; the Federal Bureau of Investigation Boston Field Division; and the Department of Defense, Defense Criminal Investigative Service – Boston Resident Agency. It was being prosecuted by Assistant U.S. Attorneys David Schumacher and Jeremy Sternberg of Ortiz's Health Care Fraud Unit.
Alleged Reno Pimp Indicted on Federal Charges of Transporting 15-year-old Girl from California to Reno for ProstitutionRead the Press Release
Las Vegas, Nev. – An alleged pimp from the Reno area has been indicted by the federal grand jury on a sex trafficking charge for transporting a 15-year-old girl from Bakersfield, Calif. to Reno, Nev. to work as a prostitute, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Vernon McCullum III, aka “Fifth,” 20, of Reno, was indicted on Wednesday, Jan. 23, 2013, and is charged with one count of illegal transportation of a minor for prostitution or other illegal sexual activity. If convicted, McCullum faces a minimum of 10 years to life in prison and up to a $250,000 fine. McCullum is scheduled to appear before a federal magistrate judge in Reno today at 3:00 p.m. for an arraignment and plea.
According to the indictment and criminal complaint, on Jan. 10, 2013, the Bakersfield, California Police Department received a report of a missing 15-year-old girl and opened an investigation. The investigation revealed that an advertisement had been posted on the internet website “Myredbook.com” stating that an individual using the name “Babyfaith” was available for prostitution services. The telephone number listed in the advertisement was that of the missing girl. The investigation further revealed that two days earlier, on Jan. 8, 2013, in Bakersfield, the 15-year-old girl was introduced to McCullum by a female acquaintance who had been working for McCullum as a prostitute. On Jan. 9, 2013, McCullum drove the 15-year-old and the other female to a hotel room in Reno and directed the female acquaintance to take nude pictures of the 15-year-old, which were then uploaded onto the Myredbook.com website. Following the posting of the advertisement on the website, the 15-year-old engaged in prostitution at McCullum’s direction, and was required to provide proceeds of the prostitution activity to the female acquaintance who provided it to McCullum.
The case is being investigated by the Bakersfield Police Department and the Reno Police Department Street Enforcement Team, which includes the Sparks Police Department and Washoe County Sheriff’s Office, and the FBI, as part of their Innocence Lost Task Force. It is being prosecuted by Assistant United States Attorney Carla B. Higginbotham.
An indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
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.
Wednesday 23 January 2013
Winchester Man Found Guilty on Tax ChargesRead the Press Release
LYNCHBURG, VIRGINIA -- A Winchester, Va. man charged with a variety of tax charges, was found guilty last week in the United States District Court for the Western District of Virginia in Lynchburg following a four-day jury trial.
James Bowers Johnson was indicted in April 2012 on one count of embarking in a corrupt endeavor to obstruct the due administration of the Internal Revenue Code and three counts of willfully failing to file a tax return.
Following a four-day trial, a Federal jury sitting in U.S. District Court in Lynchburg found Johnson guilty last Friday afternoon, on all four counts. A sentencing date has yet to be set.
“Each and every American has a duty to pay his or her fair share of taxes,” United States Attorney Timothy J. Heaphy said today. “Mr. Johnson attempted to evade his tax obligation and took measures to hide his income. For that conduct, he has been held accountable.”
“There are numerous variations of abusive tax schemes used today in an attempt to conceal income from the IRS. The use of these abusive tax schemes isn't tax planning; it's criminal activity,” said Sheila Olander, Acting Special Agent in Charge, IRS Criminal Investigation Washington DC Field Office. “There is no secret formula that can eliminate a person's tax obligations and Mr. Johnson's guilty verdict reinforces IRS Criminal Investigation's commitment to the American taxpayer that individuals who engage in illegal financial transactions designed to evade the payment of taxes will be held accountable to the fullest extent of the law.”
Based on evidence presented at trial by Assistant United States Attorney C. Patrick Hogeboom III, the jury found that Johnson, who was self-employed, hid his gross income, derived from the sale of prepaid telephone cards, rental receipts and capital gains, from the Internal Revenue Service in a number of ways. He requested that customers place payments in a variety of nominee entities he controlled, used money orders or cash and concealed his owners of assets by placing assets, including his residence, and bank accounts in the names of limited liability companies, foundations, companies, corporations and domestic and foreign trusts. Between 1999 and 2007, Johnson attempted to conceal more than $1.4 million in income.
In addition, the jury found that Johnson, despite earning $160,000 in income in 2005, $385,000 in income in 2006 and $123,000 in income in 2007, willfully failed to file a tax return in any of those years.
The investigation of the case was conducted by Internal Revenue Service. Assistant United States Attorney C. Patrick Hogeboom III and Special Assistant United States Attorney Shannon Wright prosecuted the case for the United States.
Wanblee Man Sentenced for Drug DistributionRead the Press Release
United States Attorney Brendan V. Johnson announced that a Wanblee man convicted of Distribution of a Controlled Substance was sentenced on January 14, 2013 by Chief U.S. District Judge Jeffrey L. Viken. Royce Gone, age 32, was sentenced to time served, 2 years' supervised release, and a $100 special assessment to the Victims' Assistance Fund.
On April 3, 2012, Gone distributed more than 5 grams of marihuana at Wanblee, South Dakota. Gone pled guilty to the charge on October 11, 2012.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services, the Oglala Sioux Tribe Department of Public Safety, the Northern Plains Safe Trails Drug Enforcement Task Force, and the Federal Bureau of Investigation. Assistant U.S. Attorney Ted L. McBride prosecuted the case.
Victoria Man Sent to Prison for Distributing Child PornRead the Press Release
CORPUS CHRISTI, Texas - Joseph Fellhauer, 64, of Victoria, has been sentenced to federal prison for distribution of child pornography, United States Attorney Kenneth Magidson announced today. He pleaded guilty Oct. 29, 2012.
Today, U.S. District Judge Nelva Gonzales Ramos handed Fellhauer a sentence of 120 months to be followed by a lifetime term of supervised release. Additional information was also presented today, including the defendant’s age and health. In handing down the sentence, Judge Ramos stated that the sentence was sufficient but not greater than necessary to deter future criminal conduct and protect the public. Fellhauer will also be ordered to register as a sex offender.
At the time of his guilty plea, Fellhauer admitted to the government’s rendition of facts concerning the offense. Fellhauer came to the attention of law enforcement when a Homeland Security Investigations (HSI) undercover agent downloaded several items of child pornography from a computer that was linked to Fellhauer in October 2010 and April 2011. HSI contacted the Corpus Christi Police Department’s (CCPD) Internet Crimes Against Children Task Force and enlisted their assistance in a joint investigation of the unlawful activity.
On Oct. 6, 2010, an HSI agent downloaded several images of child pornography from an individual later identified as Fellhauer. A federal search warrant was executed by HSI agents and CCPD officers on Fellhauer’s residence in Victoria on April 12, 2011, at which time several electronic media storage devices were seized. Fellhauer, who lived alone and away from children, was not arrested at the time.
A subsequent forensic review of Fellhauer’s media devices by CCPD computer forensics experts revealed more than 12,000 images and 350 videos of child pornography, resulting in a protracted time consuming analysis. Fellhauer was arrested pursuant to a federal criminal indictment in January 2012. At the time of his arrest, Fellhauer was actively downloading child pornography. Fellhauer admitted to acquiring child pornography from the Internet and to having an interest in child pornography for more than 15 years.
Fellhauer has been in custody since his January 2012 arrest where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This case, prosecuted by Assistant United States Attorney Lance Duke, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Valdez Couple sentenced for long running tax evasion schemeRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that Gary and Marladeen Jokela of Valdez, Alaska, were sentenced for willfully evading Gary Jokela’s tax liabilities for more than a decade. U.S. District Court Judge H. Russel Holland sentenced Gary Jokela to one year in federal prison. Marladeen Jokela was sentenced to six months in federal prison, followed by six months of home confinement.
According to court filings, the Jokelas last filed a tax return in 1984. Meanwhile, Gary Jokela had outstanding tax liabilities that had not been paid since at least 1998. The Internal Revenue Service previously assessed taxes against Mr. Jokela and sent him numerous notices that the Service intended to levy his wages and bank accounts. When the Jokelas received these notices, both Gary and Marladeen began cashing Gary’s paychecks rather than depositing them to their joint bank account. In total, Gary cashed more than $170,000 of his paychecks.
Around the same time, Mrs. Jokela opened a separate bank account in her own name. Neither Gary Jokela's name nor his social security number were associated with this new account. During several of the years at issue in the case, Mrs. Jokela deposited more than $112,000 into her separate account.
The Jokelas also made sure that no taxes were withheld from Gary’s wages. In 2004, Gary submitted an IRS Form W-4 on which he claimed to be “exempt” from federal income tax withholding. When the IRS subsequently attempted to levy Gary’s wages directly from his employer, both of the Jokelas convinced the office’s bookkeeper not to honor the IRS notices.
The Jokelas admitted that they consistently failed to make any payments to the IRS between 1998 and 2008, they continually spent income on other personal items, including a motor home, a timeshare, and vacations. Between 2002 and 2008, the couple made more than $150,000 in credit card purchases, including vacations to Mexico and Hawaii; more than $30,000 on a motor home; and of more than $35,000 on other personal vehicles. Likewise, between 1998 and 2008, the Jokelas made $15,000 in payments on a timeshare in Florida.In addition to their prison sentences, the judge ordered the Jokelas to pay restitution in the amount of $51,889, with the express understanding that the IRS will seek interest and penalties on top of that amount. Judge Holland described the Jokelas’ conduct as “a blatant case of tax evasion” and said that their actions showed a “total lack of respect” for their obligations as citizens, despite their apparent willingness to accept both direct and indirect government benefits. The judge warned that tax evasion schemes that seem “too good to be true” almost always are.
The case was investigated by the Internal Revenue Service–Criminal Investigation, and is being jointly prosecuted by Assistant United States Attorneys Thomas C. Bradley and Stephanie C. Courter of the United States Attorney’s Office for the District of Alaska.
Utah Man and Nevada Woman Charged with Tax ConspiracyRead the Press Release
A federal grand jury in Salt Lake City returned an indictment Wednesday afternoon charging Gerrit Timmerman III, 70, of Midvale, Utah, and Carol Sing, 73, of Henderson, Nevada, with one count of conspiracy to defraud the United States. The indictment was announced by Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division and U.S. Attorney for the District of Utah David B. Barlow.
According to the indictment, from April 23, 2004, through March 5, 2007, Timmerman and Sing conspired to defraud the United States by marketing corporations sole as a part of a scheme to evade the assessment and payment of federal income taxes. Timmerman and Sing falsely told their clients that so-called “corporations sole” were exempt from United States income tax laws, had no obligation to file tax returns, and had no obligation to apply for tax exempt status. They further claimed that individuals could render their own income non-taxable by assigning it to the corporation sole, could draw a tax-free stipend from their corporation sole, and could render property immune from Internal Revenue Service (IRS) collection activity by transferring property to the corporation sole. During the life of the conspiracy, Timmerman and Sing were responsible for the creation of approximately 90 corporations sole; at the time their corporation soles were created, these clients had outstanding federal income tax assessments totaling at least $5,000,000.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Timmerman and Sing each face a maximum of five years in prison and a fine of up to $250,000.
The case is being investigated by IRS-Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Michael Romano and Dennis Kihm.
U.S. Attorney’S Office Reaches Settlement with Mills College over Compliance with Americans with Disabilities ActRead the Press Release
SAN FRANCISCO – Mills College, a liberal arts college for women in Oakland, Calif., entered an agreement with the United States to bring its campus into full compliance with Title III of the Americans with Disabilities Act, United States Attorney Melinda Haag announced.
The settlement agreement resolves an investigation and compliance review of barriers to access by individuals with disabilities in buildings throughout the campus. Mills College fully cooperated in the review. The College agreed to remove all architectural barriers in its existing facilities, and to undertake alterations and construct new facilities so that they are readily accessible to and usable by people with disabilities.
“The ADA requires that people with disabilities have full access to public and private institutions,” U.S. Attorney Haag said . “We commend Mills College for its cooperation and commitment to providing people with disabilities unfettered access to its facilities. This agreement guarantees students and visitors with disabilities such access for years to come.”
Under the settlement, Mills is required to remedy approximately 260 separate violations that were revealed in a campus-wide survey conducted in March 2010. Mills is required to complete the majority of the remedial work by the end of 2014, while it will have a longer time to complete others. Remedial measures required under the agreement include installing or moving grab bars, towel dispensers, and signs; adjusting the force required to open doors; installing or adjusting the slope of ramps; installing accessible toilet stalls, and adjusting the height and center lines of existing toilet seats; adjusting the height of equipment and lab counters; adjusting the height of drinking fountains; making lecture halls, auditoriums, and the gymnasium fully wheelchair accessible; installing handrails; and installing more van-accessible parking.
Assistant U.S. Attorney Steven J. Saltiel handled the matter on behalf of the U.S. Attorney’s Office, together with Program Architect Diane Perry from the U.S. Department of Justice, Civil Rights Division, Disability Rights Section.
(Mills College Signed Settlement Agreement )
Two Pecos, N.M., Men Plead Guilty to Unlawful Logging in the Santa Fe National ForestRead the Press Release
Both Sentenced to Probation and Ordered to Pay $1,495.20 in Restitution.
ALBUQUERQUE – This morning in federal court, Kevin J. Quintana, 27, and Kevin C. Vigil, 28, both of Pecos, N.M., each entered a guilty plea to the misdemeanor offense of unlawfully cutting and destroying trees growing on federal public lands. The guilty pleas were announced by U.S. Attorney Kenneth J. Gonzales and Aban Lucero, Regional Patrol Commander of Law Enforcement and Investigations of the Southwestern Region of the U.S. Forest Service.
According to court records, Quintana and Vigil were arrested on Nov. 3, 2012, after a U.S. Forest Service Officer observed them cutting and loading timber onto a truck that was parked on National Forest Systems Lands (NFS lands) in the Santa Fe National Forest in San Miguel County, N.M. At the time, both Quintana and Vigil claimed that the timber was harvested on private property with permission from the landowner. Shortly thereafter, Vigil admitted that a large amount of the timber that was already loaded on the truck was harvested on NFS lands.
During today’s plea hearings, Quintana and Vigil each pled guilty to cutting and harvesting 15 Engelmann Spruce pine trees from the Santa Fe National Forest on Nov. 3, 2012. Each admitted entering the Santa Fe National Forest in the Pecos/Las Vegas Ranger District and cutting down approximately 15 standing trees. They also admitted not having a proper permit for cutting and harvesting those trees.
Quintana and Vigil each was sentenced to a year of probation and ordered to pay $1,495.20 in restitution to the U.S. Forest Service which will be used for reforestation projects and community awareness to deter future timber crimes. Quintana and Vigil also were required to forfeit the chainsaws they used to unlawfully cut and harvest the trees.
The case was prosecuted by Assistant U.S. Attorney William J. Pflugrath, and was investigated by the U.S. Forest Service, Law Enforcement & Investigations. It is the mission of the U.S. Forest Service to sustain the health, diversity, and productivity of the nation’s forests and grasslands to meet the needs of present and future generations. The agency manages 193 million acres of public land, provides assistance to state and private landowners, and maintains the largest forestry research organization in the world.
Two Conspirators Each Sentenced to 32 Years in Prison for Six Armed Robberies of Dunbar Armored VehiclesRead the Press Release
Purchased “Throw Away” Cars and Used Shotguns, Rifles and Handguns to Steal $765,000 and Six Dunbar Employee HandgunsPurchased “Throw Away” Cars and Used Shotguns, Rifles and Handguns to Steal $765,000 and Six Dunbar Employee Handguns
Baltimore, Maryland - U.S. District Judge Marvin J. Garbis sentenced Erick Wilson, age 28, of Columbia, Maryland, today to 32 years and a day in prison, followed by five years of supervised release, for robbery and gun charges arising from a scheme to rob armored car employees who were transporting large amounts of cash. Judge Garbis sentenced David Marquise Howard, age 29, of Baltimore, yesterday also to 32 years and a day in prison, followed by five years of supervised release, for his participation in the scheme.
The sentences were 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; Chief J. Thomas Manger of the Montgomery County Police Department; Howard County Police Chief William McMahon; Howard County State’s Attorney Dario Broccolino; and Montgomery County State’s Attorney John McCarthy.
According to their guilty pleas, on six occasions Howard, Wilson and other co-conspirators robbed employees of Dunbar Armored at gunpoint, in each instance stealing cash and a handgun from a Dunbar employee. The first robbery occurred in Washington, D.C. on May 22, 2008, and another robbery took place on December 27, 2010, in Ellicott City, Maryland. Four of the robberies took place in Silver Spring, Maryland, on April 29 and December 23, 2009, May 17, 2010 and April 4, 2011.
Howard and Wilson wore disguises and purchased “throw-away” cars to commit the robberies.
Additionally, Howard, Wilson and their co-conspirators: used disposable cell phones to communicate during the robberies; arranged for vehicles and drivers, including Wilson’s mother Regina McCullom, and Howard’s girlfriend Gloria Martino, to be near the robberies in order to quickly flee and help transport the stolen guns and money; and on several occasions rented hotel rooms on the days of the robberies where they met and divided the stolen cash and arranged for the disposal of the stolen
guns.
Howard hid some of the stolen cash from the April 4, 2011 robbery in a storage unit in Pennsylvania. After his arrest for the Montgomery County robberies in May 2011, Howard removed $2,000 in stolen new $20 bills from his person and took law enforcement to the corner of Eldorado Avenue and Carleview Road in Baltimore where he had buried a bag containing $10,000 of stolen money, along with a disposable cell phone box.
In the six robberies, Howard and Wilson stole a total of approximately $765,000.
Regina McCullom, a/k/a Regina Wilson, age 49, of Laurel, Maryland, and Gloria Martino, a/k/a Netty, aged 29, of Silver Spring, previously pleaded guilty to their roles in the armored car robberies and are scheduled to be sentenced on January 25 and 30, 2013, respectively.
United States Attorney Rod J. Rosenstein praised the FBI, Montgomery County Police Department, Howard County Police Department; Howard County State’s Attorney’s Office and Montgomery County State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant United States Attorneys Mark Crooks and Paul Budlow, who prosecuted the case.
Two Conneaut Residents Sentenced for Trafficking in Counterfeit MerchandiseRead the Press Release
U.S. District Judge James S. Gwin sentenced Trang Doan Hoang, 37, and Quoc-Thang Ngo Mai, 39, both of Conneaut, Ohio, in connection with their recent conviction for trafficking in counterfeit merchandise, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Hoang was sentenced to four months in the custody of the Bureau of Prisons, to be followed by two years of supervised release, the first four months of which must be served in home confinement with electronic monitoring.
Mai was sentenced to two years probation, the first six months of which must be served in home confinement with electronic monitoring. The counterfeit merchandise will be forfeited to the United States and destroyed.
On September 13, 2012, a federal grand jury in Cleveland returned an indictment charging Hoang and Mai with one count each of trafficking in counterfeit merchandise. Hoang and Mai each entered guilty pleas to the charge on November 6, 2012.
The indictment charged that between on or about December 21, 2011, and on or about February 14, 2012, Hoang and Mai intentionally trafficked and attempted to traffic in approximately 146 designer handbags, 47 designer wallets and 16 counterfeit Rolex watches which contained counterfeit marks, logos, labels, hang tags, patches, stickers, emblems, holograms and packaging. The marks on the merchandise were identical to and substantially indistinguishable from marks used on genuine merchandise, and were in use and registered for such goods on the principle register of the United States Patent and Trademark Office. Also, the indictment charged that the use of such counterfeit and spurious marks was likely to cause confusion, mistake or to deceive, according to the indictment.
This case was prosecuted by Assistant U.S. Attorney Robert W. Kern, Cybercrime Coordinator for the Cleveland U.S. Attorney’s Office, following an investigation by the Cleveland Office of the Department of Homeland Security, Office Immigration and Customs Enforcement.
Three Plead Guilty to Defrauding the Veterans AdministrationRead the Press Release
RONALD BELL, age 41, of Gretna; REGINA DAVIS, age 63, of New Orleans; and YODONNALISA EVANS, age 45, of New Orleans pled guilty today before the U. S. District Court Judge Martin L.C. Feldman to a one-count Bill of Information for conspiracy to commit health care fraud, announced U.S. Attorney Dana Boente.
According to court documents, the defendants were employed by the Veterans Health Administration at the New Orleans VA Medical Center. BELL was employed as a Program Manager. His duties included supervision of employees responsible for the authorization and coordination of payment of care provided to veterans in the community at VA expense as well as the coordination of consultations ordered by VA providers. DAVIS was employed as a Program Support Assistant. Her duties included entering authorizations in conjunction with case management referrals for inpatient and outpatient fee basis programs, and entering vendors’ activity for various health care programs. EVANS was employed as a Clerk/Secretary to the Supervisor of Medical Administration Service, a Fee Clerk, and a Payroll Clerk. As a Clerk/Secretary, she was responsible for preparing correspondence, tracking action items, time keeping and various other administrative duties. As a Fee Clerk, she was responsible for verifying days of care on invoice, ensuring funds were obligated to pay invoices, and various other duties. As a Payroll Clerk, she was responsible to verify payroll output and release payroll, handle garnishments, research pay information, and handle W-2 corrections and wage verifications.
Between January 2001 and December 2008, the defendants devised a scheme to defraud the VA by creating false companies and billing patient files for fraudulent services. Defendants DAVIS and BELL created false companies called Davis Health Care Consulting, LLC and Caring Hearts Healthcare. BELL then obtained the identities of veterans registered with the Veterans Administration and submitted fraudulent bills from Davis Health Care Consulting, LLC and Caring Hearts Healthcare for health care services falsely claimed to have been provided to the veterans whose identities he had obtained. BELL then arranged for the payments associated with the fraudulently submitted bills to be sent to the custody of defendant DAVIS. Once DAVIS received the payments, she split the money with BELL. In total, DAVIS and BELL fraudulently obtained approximately $203,007.91 from the Veterans Administration.
Defendants EVANS and BELL created a false company called C&E Rehabilitation Clinic. BELL then obtained the identities of veterans registered with the Veterans Administration and submitted fraudulent bills from C&E Rehabilitation Clinic for health care services falsely claimed to have been provided to the veterans whose identities he had obtained. BELL then arranged for the payments associated with the fraudulently submitted bills to be sent to the custody of EVANS. Once EVANS received the payments, she split the money with BELL. In total, EVANS and BELL fraudulently obtained approximately $360,978.56 from the Veterans Administration.
The defendants face a maximum term of imprisonment of five (5) years, a fine of $250,000 and two (2) years of supervised release following any term of imprisonment. Sentencing has been scheduled for May 15, 2013.
The case was investigated by Veterans Administration, Office of Inspector General and prosecuted by Assistant U.S. Attorney G. Dall Kammer.
(Download Factual Basis )
Three Chicago Men Indicted in Series of Violent Robberies of Retail Stores and Businesses Last Year in ChicagoRead the Press Release
CHICAGO — Three Chicago men were indicted on federal robbery conspiracy and other charges relating to series of a dozen armed hold-ups of retail stores and businesses last year in Chicago. In all, tens of thousands of dollars were taken in 12 robberies on the city’s northwest side between January and October 2012.
The defendants, ROBERT L. BERRIOS, 45; JULIO RODRIGUEZ, 31; and DAVID REVIS, 32, all of Chicago, were charged in a 19-count indictment that was returned yesterday by a federal grand jury. The charges were announced today by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Chicago Police Department assisted in the investigation.
The defendants, ROBERT L. BERRIOS, 45; JULIO RODRIGUEZ, 31; and DAVID REVIS, 32, all of Chicago, were charged in a 19-count indictment that was returned yesterday by a federal grand jury. The charges were announced today by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Chicago Police Department assisted in the investigation.
No date has been set yet for the defendants to be arraigned in U.S. District Court.
Berrios, also known as “Chazzo,” and Revis, aka “Red,” were arrested together on Nov. 6, 2012, as they were about to rob a currency exchange, according to court documents. Rodriguez, aka “Jelly,” was arrested on Dec. 17, 2012. All three were ordered detained in federal custody without bond.
As part of the conspiracy, the defendants allegedly identified commercial establishments as targets, obtained intelligence on the businesses before striking, and brandished firearms during the robberies. They allegedly agreed to, and did, physically restrain some employees of the victim businesses with zip ties, and concealed their identity by wearing masks and gloves.
The indictment seeks forfeiture of a .22 caliber semi-automatic handgun and 94 rounds of .22 caliber long rifle ammunition that were seized.
The indictment alleges the following robberies in which Berrios was charged alone or together with one of the co-defendants, as noted:
Jan 23, 2012 — Walgreens, 5140 W. Diversey;
July 1, 2012 — Walgreens, 5935 W. Addison;
July 28, 2012 — a currency exchange located at 2753 N. Ashland;
Aug. 15, 2012 — a currency exchange located at 2814 N. Milwaukee; Berrios and Revis;
Sept. 2, 2012 — a cellular telephone store located at 5355 W. Diversey;
Sept. 19, 2012 — a cellular telephone store located at 1552 W. Chicago; Berriois and Rodriguez;
Sept. 28, 2012 — a cellular telephone store located at 1958 W. Irving Park;
Oct. 2, 2012 — a cellular telephone store located at 4000 W. Fullerton; Berrios and Revis;
Oct. 13, 2012 — a cellular telephone store located at 3951 N. Kimball; Berrios and Rodriguez;
Oct. 16, 2012 — a cellular telephone store located at 3200 W. Armitage; Berrios and Rodriguez;
Oct. 22, 2012 — a cellular telephone store located at 3935 W. Belmont; Berrios and Rodriguez; and
Oct. 27, 2012 — a cellular telephone store located at 5355 W. Diversey.The robbery conspiracy count and each count of intestate robbery carry a maximum sentence of 20 years in prison. The felon-in-possession of a firearm or ammunition counts carry a maximum sentence of 10 years in prison, and brandishing a firearm during a violent crime carries a mandatory consecutive term of 7 years and a maximum of life in prison, and each count carries a maximum fine of $250,000. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The Government is being represented in court by Assistant U.S. Attorney Angel Krull.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Three Charged with Operating Online Counterfeit Credit Card Retailer Responsible for Estimated $34.5 Million in FraudRead the Press Release
Fakeplastic.net Taken Over By Federal Law Enforcement,
Ongoing Investigation Has Led to 11 Additional ArrestsNEWARK, N.J. – Three men who allegedly ran a one-stop online shop selling counterfeit credit cards and holographic overlays, to be used by criminals to make fake identifications, face federal charges in an ongoing investigation that has already resulted in 11 additional arrests, including a customer facing federal charges.
New Jersey U.S. Attorney Paul J. Fishman and U.S. Attorney Anne M. Tompkins for the Western District of North Carolina announced the charges today.
Sean Roberson, 39, of Palm Bay, Fla., who allegedly ran the site, is charged in an amended complaint, unsealed today in the District of New Jersey, with conspiracy to commit wire fraud; conspiracy to traffic in counterfeit goods or services; and conspiracy to commit fraud and related activity in connection with authentication features. A superseding indictment returned today in the Western District of North Carolina charges Roberson’s two conspirators, Vinicio Gonzalez, 30, of Melbourne, Fla., and Hugo Rebaza, 31, of Palm Bay, Fla. with conspiracy to traffic in counterfeit goods and conspiracy to commit mail fraud, wire fraud and bank fraud. The superseding indictment also charges a customer of the website, Nashancy Johnny Colbert, 27, of Charlotte, N.C., with one count of conspiracy to commit mail fraud, wire fraud and bank fraud. All four men are expected to appear this week in U.S. District Courts in Newark and Charlotte to face the charges. Roberson is expected to appear in Newark federal court this afternoon before U.S. Magistrate Judge Mark Falk. The North Carolina court dates have not yet been set.
The FBI and U.S. Postal Inspection Service (USPIS) assumed control of the website, fakeplastic.net, on Dec. 5, 2013, and made more than 30 controlled deliveries of ordered materials – not allowing those materials to leave law enforcement control. Those controlled deliveries have resulted in 11 additional arrests of alleged fakeplastic customers, including Colbert, being handled by federal, state and local prosecutors across the United States.
“According to the complaint, Sean Roberson and his conspirators ran a large-scale, online operation filling custom orders for counterfeit cards,” said U.S. Attorney Fishman. “This made-to-measure service provided the last link in the chain necessary for criminals to make money from stolen credit card numbers and identities.”
U.S. Attorney Tompkins stated, “This ring of computer criminals ran an online one-stop shop where counterfeit credit cards were a mouse click away. As consumer fraud becomes more sophisticated, law enforcement and prosecutors across the country are joining forces to pull aside the veil of cyberspace anonymity and take down criminal enterprises that pilfer the identities of innocent victims for personal gain.”
“This investigation is yet another example of the unrelenting pursuit of cyber criminals by federal law enforcement,” said Newark FBI Special Agent in Charge Aaron T. Ford. “The FBI and its law enforcement partners will continue to identify and investigate individuals that try to hide in the supposed anonymity of Internet crime organizations in order to steal from innocent parties.”
“The defendants in this alleged criminal enterprise used convenience, greed and their technical ability to commit a massive fraud,” USPIS Inspector in Charge Maria L. Kelokates. “Their undoing came when they underestimated the vigilance of Postal Inspectors and their law enforcement partners to bring to justice anyone who uses the U.S. Mail for illegal activities.”
According to the amended complaint unsealed today in Newark federal court and charging documents filed in the Western District of North Carolina:
The FBI and the USPIS have been investigating the online retail shop, fakeplastic.net, since January 2013. The site specialized in selling high-quality, custom-made counterfeit credit and debit cards (collectively, “payment cards”) as well as holographic overlays used to create fake driver’s licenses.
Roberson began selling counterfeit cards and related items as early as April 2011 and launched the fakeplastic website in June 2012. Roberson owned and operated the site with the assistance of Gonzalez and Rebaza. Since April 2011, Roberson and his conspirators fulfilled orders for approximately 69,000 counterfeit credit cards – both embossed and unembossed – more than 35,000 holographic stickers used to make counterfeit cards appear more legitimate and more than 30,000 state identification card holographic overlays. The orders – more than 3,600 parcels – were shipped through the U.S. mail.
Gonzalez was primarily responsible for manufacturing the counterfeit payment cards, packaging the contraband for mailing and placing U.S. Express Mail envelopes in the mail for delivery to the fakeplastic customers. The conspirators used a storage facility in Florida to store supplies and to manufacture the counterfeit payment cards and Gonzalez frequently visited the storage unit to create the custom-embossed cards and to prepare mail packages. Law enforcement arrested Gonzalez on Dec. 4, 2013, while he was in the storage space – seizing computers, printers, counterfeit cards, an embosser and other contraband.
Rebaza was a “runner” for the criminal operation, responsible for picking up packages containing criminal proceeds and supplies from a “mail drop” for the fakeplastic website.
Colbert was a members-only customer of the website, who placed and received orders of counterfeit payment cards delivered to him through the mail. Law enforcement executed a search warrant on Jan. 3, 2014, at Colbert’s Charlotte residence seizing, among other things, 41 counterfeit payment cards embossed with Colbert’s name or the names of other individuals. Law enforcement also recovered a discarded U.S. Express Mail envelope sent from the fakeplastic website.
Using a conservative estimate of loss of $500 associated with each counterfeit payment card (derived from the federal sentencing guidelines estimation of loss associated with stolen payment card information), law enforcement estimates the losses associated with just the counterfeit payment cards trafficked by Roberson and his conspirators at more than $34.5 million. Roberson personally made more than $1.7 million from the scheme.
The fakeplastic website was used by various groups of criminals across the country often referred to as “carding” or “cash out” crews. These crews buy stolen payment card numbers and related information – referred to as “track data” or “dumps” – which typically appear on the magnetic stripe on the back of legitimate payment cards. Illegal vendors of that information usually get it through hacking or skimming operations involving the installation of specialized equipment at ATM locations or point-of-sale terminals. The stolen data is ultimately put on a blank card and used to make unauthorized transactions.
More sophisticated cash out operations use custom-made counterfeit payment cards embossed with the same account numbers that have been encoded on the back of the card, and often acquire fake identification cards in order to reduce the likelihood of detection from law enforcement.
The criminal underground has evolved from fractured, regional operations to an Internet-based market where buyers and sellers across the globe can advertise, purchase and transmit stolen track data. The fakeplastic website brought the physical tools needed by cash out operations to the world of e-commerce, as it eliminated the need for crews to purchase expensive hardware.
By December 2013, the site had more than 400 members. Members with access to the fakeplastic website and seeking to purchase counterfeit payment cards could browse the website’s available counterfeit card templates. Members could then choose whether to input specific information to be embossed on the cards and whether they wanted additional authentication features – such as holographic stickers.
At one time the website accepted Liberty Reserve online currency, but shortly after federal charges against Liberty Reserve were made public in the Southern District of New York in May 2013, the fakeplastic website stopped accepting that currency and began accepting Bitcoin, a cryptographic-based digital currency. As set forth on the site’s “news” section, Bitcoin was viewed as a “safe” and “anonymous” method of payment for contraband.
The maximum potential penalties for each count are as follows:
DefendantCharge
Maximum Penalty
Conspiracy to commit wire fraud
30 years; $1 million fine or twice the gain or loss from the offense
Gonzalez
Rebaza
ColbertConspiracy to commit mail fraud, wire fraud and bank fraud
30 years; $1 million fine or twice the gain or loss from the offense
Roberson
Gonzalez
RebazaConspiracy to traffic in counterfeit goods or services
10 years; $2 million fine or twice the gain or loss from the offense
Roberson
Conspiracy to commit fraud and related activity in connection with authentication features
20 years; $250,000 fine or twice the gain or loss from the offense
U.S. Attorneys Fishman and Tompkins credited special agents of the FBI, under the direction of Special Agent in Charge Ford in Newark; and inspectors of the USPIS, under the direction of Inspector in Charge Maria L. Kelokates in Newark and Inspector in Charge Keith Fixel in Charlotte, for the ongoing investigation. The Computer Crimes and Intellectual Property Section (CCIPS) of the Justice Department’s Criminal Division is a partner in the prosecution. The U.S. Attorneys also thanked the Charlotte Division of the U.S. Secret Service and Rutherfordton, N.C., Police Department for their vital roles.
The government is represented in the District of New Jersey by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section and Assistant U.S. Attorney Andrew Kogan, both of the office’s Economic Crimes Unit, and Barbara Ward of the office’s Asset Forfeiture and money laundering unit; in the Western District of North Carolina by Assistant U.S. Attorney Tom O’Malley and Ben Bain-Creed; and in Washington by CCIPs Trial Attorney Evan Williams.
The charges and allegations contained in the various charging instruments are merely accusations and the defendants are considered innocent unless and until proven guilty.
14-025Defense counsel:
Sean Roberson: Assistant Federal Public Defender Patrick McMahon, Esq.
Hugo Rebaza: Jose Rodriguez Esq., Orlando, Fla.
Vinicio Gonzalez: Christopher C. Fialko Esq., Charlotte; Ernest Leo Chang Esq., Melbourne, Fla.
Nashancy Colbert: Laura M. Cobb, James Bradley Smith, Esqs., CharlotteRoberson, Sean Complaint
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Exhibit L
Exhibit M
Exhibit N
Exhibit OThree Charged with Operating Online Counterfeit Credit Card Retailer Responsible for Estimated $34.5 in FraudRead the Press Release
Fakeplastic.net Taken Over By Federal Law Enforcement, Ongoing Investigation Has Led To 11 Additional Arrests
CHARLOTTE, N.C. – Three men who allegedly ran a one-stop online shop selling counterfeit credit cards and holographic overlays, to be used by criminals to make fake identifications, face federal charges in an ongoing investigation that has already resulted in 11 additional arrests, including a customer facing federal charges.
U.S. Attorney Anne M. Tompkins for the Western District of North Carolina and New Jersey U.S. Attorney Paul J. Fishman announced the charges today.
Sean Roberson, 39, of Palm Bay, Fla., who allegedly ran the site, is charged in an amended complaint, unsealed today in the District of New Jersey, with conspiracy to commit wire fraud; conspiracy to traffic in counterfeit goods or services; and conspiracy to commit fraud and related activity in connection with authentication features. A superseding indictment returned today in the Western District of North Carolina charges Roberson’s two conspirators, Vinicio Gonzalez, 30, of Melbourne, Fla., and Hugo Rebaza, 31, of Palm Bay, Fla. with conspiracy to traffic in counterfeit goods and conspiracy to commit mail fraud, wire fraud and bank fraud. The superseding indictment also charges a customer of the website, Nashancy Johnny Colbert, 27, of Charlotte, N.C., with one count of conspiracy to commit mail fraud, wire fraud and bank fraud. All four men are expected to appear this week in U.S. District Courts in Newark and Charlotte to face the charges. Roberson is expected to appear in Newark federal court this afternoon before U.S. Magistrate Judge Mark Falk. The North Carolina court dates have not yet been set.
U.S. Postal Inspection Service (USPIS) and the FBI assumed control of the website, fakeplastic.net, on Dec. 5, 2013, and made more than 30 controlled deliveries of ordered materials – not allowing those materials to leave law enforcement control. Those controlled deliveries have resulted in 11 additional arrests of alleged fakeplastic customers, including Colbert, being handled by federal, state and local prosecutors across the United States.
U.S. Attorney Tompkins stated, “This ring of computer criminals ran an online one-stop shop where counterfeit credit cards were a mouse click away. As consumer fraud becomes more sophisticated, law enforcement and prosecutors across the country are joining forces to pull aside the veil of cyberspace anonymity and take down criminal enterprises that pilfer the identities of innocent victims for personal gain.”
“According to the complaint, Sean Roberson and his conspirators ran a large-scale, online operation filling custom orders for counterfeit cards,” said U.S. Attorney Fishman. “This made-to-measure service provided the last link in the chain necessary for criminals to make money from stolen credit card numbers and identities.”
Inspector in Charge Keith Fixel of USPIS in Charlotte stated, “Protecting the integrity of the nation’s mail system is a top priority for the Postal Inspection Service. Even though these defendants went to great lengths to avoid detection, their scheme was uncovered by Postal Inspectors committed to enforcing the laws that protect the mail from illegal use and bringing to justice those who attempt to compromise the public’s trust in the mail.
“This investigation is yet another example of the unrelenting pursuit of cyber criminals by federal law enforcement,” said Newark FBI Special Agent in Charge Aaron T. Ford. “The FBI and its law enforcement partners will continue to identify and investigate individuals that try to hide in the supposed anonymity of Internet crime organizations in order to steal from innocent parties.”
According to the amended complaint unsealed today in Newark federal court and charging documents filed in the Western District of North Carolina:
USPIS and the FBI, assisted by the U.S. Secret Service, have been investigating the online retail shop, fakeplastic.net, since January 2013. The site specialized in selling high-quality, custom-made counterfeit credit and debit cards (collectively, “payment cards”) as well as holographic overlays used to create fake driver’s licenses.
Roberson began selling counterfeit cards and related items as early as April 2011 and launched the fakeplastic website in June 2012. Roberson owned and operated the site with the assistance of Gonzalez and Rebaza. Since April 2011, Roberson and his conspirators fulfilled orders for approximately 69,000 counterfeit credit cards – both embossed and unembossed – more than 35,000 holographic stickers used to make counterfeit cards appear more legitimate and more than 30,000 state identification card holographic overlays. The orders – more than 3,600 parcels – were shipped through the U.S. mail.
Gonzalez was primarily responsible for manufacturing the counterfeit payment cards, packaging the contraband for mailing and placing U.S. Express Mail envelopes in the mail for delivery to the fakeplastic customers. The conspirators used a storage facility in Florida to store supplies and to manufacture the counterfeit payment cards and Gonzalez frequently visited the storage unit to create the custom-embossed cards and to prepare mail packages. Law enforcement arrested Gonzalez on Dec. 4, 2013, while he was in the storage space – seizing computers, printers, counterfeit cards, an embosser and other contraband.
Rebaza was a “runner” for the criminal operation, responsible for picking up packages containing criminal proceeds and supplies from a “mail drop” for the fakeplastic website.
Colbert was a members-only customer of the website, who placed and received orders of counterfeit payment cards delivered to him through the mail. Law enforcement executed a search warrant on Jan. 3, 2014, at Colbert’s Charlotte residence seizing, among other things, 41 counterfeit payment cards embossed with Colbert’s name or the names of other individuals. Law enforcement also recovered a discarded U.S. Express Mail envelope sent from the fakeplastic website.
Using a conservative estimate of loss of $500 associated with each counterfeit payment card (derived from the federal sentencing guidelines estimation of loss associated with stolen payment card information), law enforcement estimates the losses associated with just the counterfeit payment cards trafficked by Roberson and his conspirators at more than $34.5 million. Roberson personally made more than $1.7 million from the scheme.
The fakeplastic website was used by various groups of criminals across the country often referred to as “carding” or “cash out” crews. These crews buy stolen payment card numbers and related information – referred to as “track data” or “dumps” – which typically appear on the magnetic stripe on the back of legitimate payment cards. Illegal vendors of that information usually get it through hacking or skimming operations involving the installation of specialized equipment at ATM locations or point-of-sale terminals. The stolen data is ultimately put on a blank card and used to make unauthorized transactions.
More sophisticated cash out operations use custom-made counterfeit payment cards embossed with the same account numbers that have been encoded on the back of the card, and often acquire fake identification cards in order to reduce the likelihood of detection from law enforcement.
The criminal underground has evolved from fractured, regional operations to an Internet-based market where buyers and sellers across the globe can advertise, purchase and transmit stolen track data. The fakeplastic website brought the physical tools needed by cash out operations to the world of e-commerce, as it eliminated the need for crews to purchase expensive hardware.
By December 2013, the site had more than 400 members. Members with access to the fakeplastic website and seeking to purchase counterfeit payment cards could browse the website’s available counterfeit card templates. Members could then choose whether to input specific information to be embossed on the cards and whether they wanted additional authentication features – such as holographic stickers.
At one time the website accepted Liberty Reserve online currency, but shortly after federal charges against Liberty Reserve were made public in the Southern District of New York in May 2013, the fakeplastic website stopped accepting that currency and began accepting Bitcoin, a cryptographic-based digital currency. As set forth on the site’s “news” section, Bitcoin was viewed as a “safe” and “anonymous” method of payment for contraband.
The charges and maximum potential penalties for each count are as follows:
Roberson: charged with conspiracy to commit wire fraud; penalty: 30 years and $1 million fine or twice the gain or loss from the offense.
Gonzalez, Rebaza and Colbert: charged with conspiracy to commit mail fraud, wire fraud and bank fraud; penalty: 30 years and $1 million fine or twice the gain or loss from the offense.
Roberson, Gonzalez and Rebaza: charged with conspiracy to traffic in counterfeit goods or services; penalty: 10 years and $2 million fine or twice the gain or loss from the offense.
Roberson: charged with conspiracy to commit fraud and related activity in connection with authentication features; penalty: 20 years and $250,000 fine or twice the gain or loss from the offense
U.S. Attorneys Tompkins and Fishman credited inspectors of USPIS, under the direction of Inspector in Charge Keith Fixel in Charlotte and Maria L. Kelokates in Newark; special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and special agents of the Charlotte Division of the U.S. Secret Service under the direction of Special Agent in Charge Russell F. Nelson for the ongoing investigation. The Computer Crimes and Intellectual Property Section of the Justice Department’s Criminal Division is a partner in the prosecution.
U.S. Attorney Tompkins also thanked Chief Kevin Lovelace and the Rutherfordton, N.C. Police Department for the department’s vital role in this case. Chief Lovelace stated, “I would like to commend the efforts of all of our officers involved with this case in ensuring that the information they obtained was shared with the appropriate agencies. Communication between law enforcement agencies plays a vital role in resolving many cases.”
The government is represented in the Western District of North Carolina by Assistant U.S. Attorneys Tom O’Malley and Ben Bain-Creed and in the District of New Jersey by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section and Assistant U.S. Attorney Andrew Kogan, both of the office’s Economic Crimes Unit, and Barbara Ward of the office’s Asset Forfeiture and money laundering unit; and in Washington by CCIPs Trial Attorney Evan Williams.
The charges and allegations contained in the various charging instruments are merely accusations and the defendants are considered innocent unless and until proven guilty.
The charges and allegations contained in the various charging instruments are merely accusations and the defendants are considered innocent unless and until proven guilty.
Gonzalez et al Superseding Indictment
The Colbert Complaint
The Roberson Complaint
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Exhibit L
Exhibit M
Exhibit N
Exhibit O
Three Alleged International Cyber Criminals Responsible for Creating and Distributing Virus That Infected over One Million Computers and Caused Tens of Millions of Dollars in Losses Charged in Manhattan Federal CourtRead the Press Release
NASA Computers Among the 40,000 U.S. Computers Infected With Gozi Virus
Preet Bharara, the United States Attorney for the Southern District of New York, Lanny A. Breuer, the Assistant Attorney General of the U.S. Department of Justice’s Criminal Division, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of Indictments against three individuals who played critical roles in creating and distributing the Gozi Virus, one of the most financially destructive computer viruses in history. The Gozi Virus infected over one million computers globally and caused tens of millions of dollars in losses. NIKITA KUZMIN, a Russian national who created the Gozi Virus, was arrested in the U.S. in November 2010 and pled guilty before U.S. District Judge Leonard B. Sand to various computer intrusion and fraud charges in May 2011. DENISS CALOVSKIS, a/k/a “Miami,” a Latvian national who allegedly wrote some of the computer code that made the Gozi Virus so effective, was arrested in Latvia in November 2012. MIHAI IONUT PAUNESCU, a/k/a “Virus,” a Romanian national who allegedly ran a “bulletproof hosting” service that enabled cyber criminals to distribute the Gozi Virus, the Zeus Trojan and other notorious malware, and conduct other sophisticated cyber crimes, was arrested in Romania in December 2012.
Manhattan U.S. Attorney Preet Bharara said: “In an information-age update on Willie Sutton, these men allegedly ran a modern-day bank robbery ring, and like Sutton, they targeted banks because that’s where the money still is. But as we have seen with increasing frequency, cyber criminals’ bank heists require neither a mask nor a gun, just a clever program and an Internet connection. This case should serve as a wake-up call to banks and consumers alike, because cybercrime remains one of the greatest threats we face, and it is not going away any time soon.”
FBI Assistant Director-in-Charge George Venizelos said: “This long-term investigation uncovered an alleged international cybercrime ring whose far-reaching schemes infected at least one million computers worldwide and 40,000 in the U.S., and resulted in the theft or loss of tens of millions of dollars. Banking Trojans are to cyber criminals what safe-cracking or acetylene torches are to traditional bank burglars – but far more effective and less detectable. The investigation put an end to the Gozi virus.”
According to the allegations in the Indictments and the Complaint unsealed today in Manhattan federal court:
The Gozi Virus
The Gozi Virus is malicious computer code or “malware” that steals personal bank account information, including usernames and passwords, from the users of affected computers. It was named by private sector information security experts in the U.S. who, in 2007, discovered that previously unrecognized malware was stealing personal bank account information from computers across Europe on a vast scale, while remaining virtually undetectable in the computers it infected. To date, the Gozi Virus has infected over one million victim computers worldwide, among them at least 40,000 computers in the U.S., including computers belonging to the National Aeronautics and Space Administration (“NASA”), as well as computers in Germany, Great Britain, Poland, France, Finland, Italy, Turkey and elsewhere, and it has caused tens of millions of dollars in losses to the individuals, businesses, and government entities whose computers were infected.
The Gozi Virus was distributed to victims’ computers in several different ways. In one method, the virus was disguised as an apparently benign .pdf document which, when opened, secretly installed the Gozi Virus on the victim’s computer. Once installed, the Gozi Virus – which was intentionally designed to be undetectable by anti-virus software – collected data from the infected computer in order to capture personal bank account information including usernames and passwords. That data was then transmitted to various computer servers controlled by the cyber criminals who used the Gozi Virus. These cyber criminals then used the personal bank account information to transfer funds out of the victims’ bank accounts and ultimately into their own personal possession.
The Creation of the Gozi Virus
KUZMIN conceived of the Gozi Virus in 2005 when he created a list of technical specifications for the virus and hired a sophisticated computer programmer (“CC-1”) to write its source code, which is the unique code that enabled the Gozi Virus to operate. Once the Gozi Virus had been coded, KUZMIN began providing it to co-conspirators in exchange for a weekly fee through a business he ran called “76 Service.” Through “76 Service,” KUZMIN made the Gozi Virus available to co-conspirators, allowed them to configure the virus to steal data of their choosing, and stored the stolen data for them. He advertised “76 Service” on one or more Internet forums devoted to cybercrime and other criminal activities. Beginning in 2009, KUZMIN began to sell the Gozi Virus outright to his co-conspirators.
The Refinement of the Gozi Virus
KUZMIN and his co-conspirators regularly paid others to refine, update, and improve the Gozi Virus. For example, CALOVSKIS, a co-conspirator, was hired to develop certain computer code, known as “web injects,” which altered how the webpages of particular banks appeared on infected computers. Specifically, CALOVSKIS’s web injects changed the webpages of banks so that, when a victim used an infected computer to access the webpage, the victim was tricked into divulging additional personal information that cyber criminals would need in order to successfully steal money from the victim’s bank account. One web inject CALOVSKIS designed altered the customer welcome page of a bank so that the victim was prompted to disclose additional personal information – mother’s maiden name, social security number, driver’s license information, and a PIN code – in order to continue accessing the website.
The Gozi Virus and Bulletproof Hosting Services
Bulletproof hosting” services helped cyber criminals distribute the Gozi Virus with little fear of detection by law enforcement. Bulletproof hosts provided cyber criminals using the Gozi Virus with the critical online infrastructure they needed, such as Internet Protocol (“IP”) addresses and computer servers, in a manner designed to enable them to preserve their anonymity.
PAUNESCU operated a “bulletproof host” that helped cyber criminals distribute the Gozi Virus and commit other cyber crimes, such as distributing malware including the “Zeus Trojan” and the “SpyEye Trojan,” initiating and executing distributed denial of service (“DDoS”) attacks, and transmitting spam. PAUNESCU rented servers and IP addresses from legitimate Internet service providers and then in turn rented them to cyber criminals; provided servers that cyber criminals used as command-and-control servers to conduct DDoS attacks; monitored the IP addresses that he controlled to determine if they appeared on a special list of suspicious or untrustworthy IP addresses; and relocated his customers’ data to different networks and IP addresses, including networks and IP addresses in other countries, to avoid being blocked as a result of private security or law enforcement scrutiny.
A chart setting forth the names, ages and residences of the defendants, the charges each defendant faces, and the statutory maximum penalty associated with these charges is attached. Extradition proceedings against CAVLOSKIS in Latvia and PAUNESCU in Romania are ongoing.
The case against PAUNESCU is being prosecuted jointly with the Department of Justice’s Computer Crime and Intellectual Property Section (“CCIPS”), which is overseen by Assistant Attorney General Lanny A. Breuer. Mr. Bharara thanked CCIPS for its important partnership in this matter, and he also thanked the Department of Justice’s Office of International Affairs. Mr. Bharara praised the FBI for its outstanding work in the investigation, which he noted is ongoing. He also specially thanked the National Aeronautics and Space Administration Office of Inspector General, the Central Criminal Police Department of the Latvian State Police, the Romanian Intelligence Service, the Romanian Directorate for Combating Organized Crime, the Romanian Directorate for Investigating Organized Crime and Terrorism, and the Romanian Ministry of Justice.
The cases are being handled by the Complex Frauds Unit of the United States Attorney's Office. Assistant United States Attorneys Sarah Lai, Nicole Friedlander, and Thomas G.A. Brown, along with Trial Attorney Carol Sipperly of the Computer Crime and Intellectual Property Section of the Department of Justice on the PAUNESCU case, are in charge of the prosecution.
The charges contained in the Indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty.
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The U.S. Attorney's Office Filed 176 Firearms Indictments Last YearRead the Press Release
The United States Attorney’s Office for the Northern District of Ohio filed 176 illegal firearms indictments last year as part of Project Safe Neighborhood (PSN), U.S. Attorney Steven M. Dettelbach announced.
“This office places a high priority on keeping firearms out of the hands of those who are forbidden by law from obtaining them,” Dettelbach said. “Whether it is a person using a gun to commit a violent crime, a felon illegally obtaining a firearm or a straw purchaser trying to circumvent the law, we will aggressively pursue those who would violate our nation’s firearms laws.”
“Ensuring public safety and pursuing individuals who illegally use and possess firearms in furtherance of their activities is a top priority of the ATF,” said ATF Special Agent in Charge Robin Shoemaker, Columbus Field Division. “We will continue to perfect criminal cases against these types of individuals and hold them accountable for their actions.”
Broken down by geography in the district, the most indictments filed came out of the Cleveland office, with 86. That was followed by the Toledo office (31), Akron office (30) and Youngstown office (29).
There were 146 defendants sentenced last year for firearms crimes and the average sentence was more than six years in prison (73.9 months).
Details of selected cases:
U.S. v. Stafford
Akeem Stafford, 25, of Elyria, was sentenced last year to more than 20 years in prison for being a felon in possession of a firearm and ammunition. Stafford fired several rounds from a .45-caliber pistol into a crowd of people outside Uncle Vic’s nightclub in Elyria.U.S. v. Katrenick
David Katrenick was sentenced to more than nine years in prison in June after pleading guilty to two counts of being a felon in possession of a firearm. Katrenick owned and operated Lazy Dave’s Tattoo Shop on Lorain Road in North Olmsted. He possessed three rifles, two shotguns and ammunition, despite previous convictions for rape, aggravated assault, burglary and other crimes.U.S. v. Atwal
Amarjit S. Atwal, 65, of Maple Heights, was indicted last month on charges of using a false identity to purchase a firearm. Atwal used the identity of another person to purchase a Glock 9 mm and Smith and Wesson .357-caliber revolver and intentionally failed to disclose his true name and identity when attempting to purchase firearms at the Berea Gun Show.U.S. v. Gilbert and Moses
Tyrone Gilbert and Rodney Moses, both of Youngstown, were charged with being felons in possession of firearms and ammunition in June as part of a broader investigation into a criminal enterprise that dealt heroin in the Youngstown area.U.S. v. Taylor
Isiah Taylor III, of Youngstown, was sentenced to seven years in prison last year after being convicted of brandishing a firearm during a crime. That sentence is being served concurrent to a sentence of more than 10 years related to more than 40 armed robberies he committed in Akron, Warren, Boardman, Alliance, Youngstown and other locations.Project Safe Neighborhoods (PSN) is a nationwide commitment to reduce gun and gang crime in America by networking existing local programs that target gun and gun crime and providing these programs with additional tools necessary to be successful. Since its inception in 2001, approximately $2 billion has been committed to this initiative. This funding is being used to hire new federal and state prosecutors, support investigators, provide training, distribute gun lock safety kits, deter juvenile gun crime, and develop and promote community outreach efforts as well as to support other gun and gang violence reduction strategies.
As a point of reference, PSN prosecution statistics for calendar year 2002 through 2011 are as follows:
2002: 117 indictments
2003: 155 indictments
2004: 184 indictments
2005: 220 indictments
2006: 187 indictments
2007: 191 indictments
2008: 157 indictments
2009: 156 indictments
2010: 166 indictments
2011: 218 indictments
2012: 176 indictments
Tax Charges Filed Against Women from Toledo and TexasRead the Press Release
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, today announced an indictment was filed against Beverly Burns, age 26, of Arlington, Texas, Lajuana Batey, age 35, of Toledo, Ohio, Latoya Batey, age 24, of Arlington, Texas, and Shereece Coffey, age 30, of Toledo, Ohio.
The indictment charges defendants with conspiracy and making false, fictitious, or fraudulent claims. The defendants devised a scheme to enrich themselves through the submission of false, fictitious and fraudulent tax returns filed with the Internal Revenue Service during the years 2009 to 2011. The defendants, and others, shared the proceeds obtained from the false return scheme, by converting the refund checks to their own use.
If convicted, the defendants’ sentence will be determined by the Court after reviewing factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Internal Revenue Service, Toledo, Ohio. The case is being handled by Assistant United States Attorney Joseph R. Wilson.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Tarrant County Man Sentenced to 10 Years in Federal Prison in Murder-for-Hire CaseRead the Press Release
Ryan Walker Grant Operated Sexually-Oriented Business in Arlington, Texas
FORT WORTH, Texas — Ryan Walker Grant, 34, Kennedale, Texas, was sentenced yesterday by U.S. District Judge Terry Means to 120 months in federal prison following his guilty plea in September 2012 to one count of murder-for-hire, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Grant has been in custody since his arrest on April 9, 2012, on a related charge outlined in a criminal complaint filed the previous day.
Grant is a co-owner of Flashdancer, a sexually-oriented business in Arlington, Texas, that had been the subject of a nuisance lawsuit filed by the Texas Attorney General’s Office and the City of Arlington, which resulted in the club’s closing. According to the criminal complaint filed in the case and testimony at Grant’s preliminary and detention hearing, Grant tried to hire individuals from Mexico, through an intermediary, to kill Arlington Mayor Robert Cluck and Tom Brandt, a Dallas attorney who represents the City of Arlington in cases involving sexually-oriented businesses. Grant was angry at the men because he felt that they were costing him money by trying to prevent him from re-opening Flashdancer.
On April 3, 2012, according to the factual resume filed in the case, Grant sent a text message from his cell phone to a confidential informant (CI) requesting a return call. When the CI called Grant, Grant requested a personal meeting with him and discussed, using coded language, Grant’s desire that a murder be committed. The CI traveled to Grant’s home in Kennedale where Grant provided the CI with pictures of two individuals, Robert Cluck and Tom Brandt, whom he wanted killed. Grant asked if the CI was able to direct individuals from Mexico to travel to the U.S. and murder them. Grant offered to pay $10,000 per victim.
Shortly thereafter, when law enforcement executed a search warrant at Grant’s residence, they seized 22 firearms and nearly $150,000 in cash.
The investigation was conducted by the FBI and the Drug Enforcement Administration. Assistant U.S. Attorney Chris Wolfe prosecuted.