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8 March 2013
Missouri City Man Pays Price for Illegally Possessing Bald EagleRead the Press Release
CORPUS CHRISTI, Texas - Sam Mathew, 53, of Missouri City, has been ordered to pay the maximum fine allowed by law for illegally possessing a bald eagle, United States Attorney Kenneth Magidson announced today.
Mathew was indicted in May 2012 for one count of violating The Migratory Bird Treaty Act (MBTA). He was later convicted by a Victoria federal jury in on Dec. 18, 2012, following two days of trial and approximately an hour of deliberations.
Today, U.S. Magistrate Judge Brian L. Owsley, who presided over the trial, ordered Mathew to pay a $15,000 fine, the maximum allowed by law, and to serve three years of probation, during which time he must complete 150 hours of community service and anger management classes.
During trial, the government presented evidence and testimony that indicated Mathew intended to catch a juvenile bald eagle for the purpose of training it in falconry. Evidence indicated there was an active bald eagle nest located on Mathew’s property and he had already researched how to capture it.
Mathew testified in his defense and claimed the bird was out of its nest and on a tree limb and had instructed two ranch hands to remove it. However, testimony indicated the bird was actually still in its nest when they were about to capture it. The eagle apparently got scared and fell out of the tree at that time and Mathew and one of the ranch hands caught it. The MBTA does allow the possession of nongame birds, but only if they are injured, sick or orphaned and if they are immediately transported to be rehabilitated.
U.S. Fish and Wildlife Service (FWS) officials learned of the eagle and that the nest housing it had apparently been disturbed and went to the residence. Upon arrival, they noticed there were fresh tire tracks around the tree and several broken branches as well as a set of tree climbing gear with ropes.
Mathew claimed he thought the bird was injured and was rescuing it to take it to a rehabilitator. The jury disagreed and found him guilty as charged.
The MBTA provides protection for migratory birds. The MBTA prohibits to pursue, hunt, take, capture or kill, attempt to take, capture or kill, possess, offer for sale, sell, offer to purchase, purchase, deliver for shipment, ship, cause to be shipped, deliver for transportation, transport, cause to be transported, carry, or cause to be carried by any means whatever, receive for shipment, transportation or carriage, or export, at any time, or in any manner, any migratory bird, included in the terms of this Convention . . . for the protection of migratory birds . . . or any par, nest, or egg of any such bird. The bald eagle is a non-game migratory bird as defined in Title 50, Code of Federal Regulations, Part 10.13.
The case was investigated by agents from the U.S. Fish and Wildlife Service and Texas Parks and Wildlife Department. The case was prosecuted by Assistant United States Attorneys Hugo R. Martinez and Patti Hubert Booth.
Michigan Couple Pleads Guilty in Fraudulent Test Kit SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Allison C. Lerner, Inspector General, National Science Foundation (NSF), and Antonio J. Gomez, Acting Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, announced today that Alexander Lorin Davis, 40, and Dawn Marie Davis, 46, both of Pinckney, Michigan, pled guilty today in federal District Court in West Palm Beach to charges related to falsely making and forging the seal of the National Science Foundation (NSF), an agency of the United States, and mail fraud in connection with the marketing by internet of environmental test kits to the public which were not in fact analyzed by qualified laboratories as asserted in advertisements and literature accompanying the kits, in violation of Title 18, United States Code, Sections 506(a)(1), 1341, 4, and (2).
U.S. District Judge Kenneth Ryskamp accepted the guilty pleas, and set sentencing for Alexander Davis for June 27, 2013 at 2:00 p.m. in West Palm Beach. The defendant faces a term of possible imprisonment of up to five years on the count of misusing the logo of the NSF and up to 20 years for the charges related to mail fraud. Additionally, he faces a term of supervised release of up to five years. Dawn Davis, who pled guilty to a charge of misprision of a felony for failing to alert appropriate authorities to the criminal conduct, was immediately sentenced in the matter by Judge Ryskamp to a 2 year term of probation and will be subject to a restitution order after a hearing to be held on April 25, 2013.
According to court records and Joint Factual Statements submitted to the Court, during the period from May 2011 through November 2012, Alexander Davis was the owner and operator of Davis Test Kits (DTK). DTK was in the business of marketing test kits to be used in homes or businesses for the purpose of detecting the presence of various environmental pollutants and substances, such as molds, asbestos, radon, and lead. During this time, the DTK website displayed the forged and counterfeited seal of the NSF, without the permission or knowledge of the NSF. As part of the scheme, Alexander Davis also made materially false representations and promises on the DTK website, claiming that upon return of the test kit by the customer DTK would cause the kit to be submitted for testing by individuals from an established, accredited laboratory.
In this way, Davis knowingly caused hundreds of the DTK kits to be delivered to and returned from customers via the U. S. Postal Service . In fact, DTK did not operate or employ testing laboratories certified as represented on the website and many test kits returned to DTK were never submitted for testing by an accredited laboratory. In order to provide a test report to customers whose mold test kits were not in fact tested, defendant would use a template from other laboratory tests as if they were unique to the new customer’s sample. The purpose of the false representations was to obtain money from customers whose samples were not tested by the accredited laboratory and/or to induce the customers to engage DTK to provide additional services for further payment.
During the same time period, Dawn Davis, was aware that her husband was employing and using the seal of the NSF on the internet website of DTK and knew the company was marketing the test kits. She was also aware that DTK in fact did not submit all the customer test kits received through the mail to accredited laboratories for analysis as DTK represented on its website and in written materials provided to the customers. Despite her knowledge of the mail fraud being perpetrated by her husband, Dawn Davis concealed and failed to make known as soon as possible to an appropriate official that DTK was selling its testing services without any affiliation or connection to NSF, and was failing to provide the purchased testing services to some customers.
The National Science Foundation is an independent federal agency established by Congress in 1950 to promote the progress of science and to advance the national health, prosperity, and welfare. The agency meets this mission by funding approximately 20% of all federally supported basic research conducted by America’s colleges and universities with an annual budget of approximately $6.9 billion. The National Science Foundation neither tests consumer products, nor audits and inspects private laboratories.
Mr. Ferrer commended the investigative efforts of the National Science Foundation and the U. S. Postal Inspection Service. The criminal case is being prosecuted by Assistant U.S. Attorney Thomas Watts-FitzGerald.
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.
Miami County Man Pleads Guilty to Producing Sexually Explicit Videos of Children He BabysatRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON – Kevin D. Todd, 41, of Ludlow Falls, Ohio pleaded guilty in U.S. District Court to one count of sexual exploitation of children for producing sexually explicit videos of pre-pubescent children he babysat and offering online to trade the videos.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), William Hayes, acting special agent in charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Ohio and Michigan, Franklin County Sheriff Zach Scott, Miami County Sheriff Charles A. Cox, and Darke County Sheriff Toby L. Spencer announced the plea entered yesterday before U.S. District Judge Timothy S. Black.
Terms of the plea agreement call for Todd to spend at least 20 years and up to 25 years in prison. Judge Black will review the plea agreement and has scheduled sentencing for Todd for July 11.
“Sexual exploitation of children by someone who has the responsibility of caring for them is a crime that merits swift, sure punishment,” U.S. Attorney Stewart said. “I want to encourage anyone with any information involving any other possible victims of exploitation to call local law enforcement.”
According to court documents, an undercover investigator with the Franklin County Internet Crimes Against Children Task Force (ICAC) responded to an ad Todd posted on the internet in November 2012 seeking people looking for “taboo.” Through a series of emails, Todd asked the undercover investigator to meet and trade videos and pictures of child pornography. They arranged a meeting and officers arrested Todd on November 24, 2012 when he showed up for the meeting. Investigators found DVDs and other storage media containing pornographic videos and photos in Todd’s car.
Forensic examination found that Todd had produced the videos of the minor females between August 2010 and November 2012 in the bathroom of his residence.
Todd has been held without bond since his arrest.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
U.S. Attorney Stewart commended the cooperative investigation by the agencies involved, as well as Assistant U.S. Attorney Sheila Lafferty, who is representing the United States in this case.
Metro-East Businessman Sentenced in Conspiracy to Defraud the City of East St. Louis and Money LaunderingRead the Press Release
Stephen L. Carraway, 50, of Cahokia, IL, was sentenced to a total term of imprisonment of 36 months in prison, a $2,000 fine and two years of supervised release for the offenses of Conspiracy to Defraud the City of East St. Louis’ Demolition Program and Engaging in a Monetary Transaction over $10,000 in Property Derived From Specified Unlawful Activity, in addition to a supervised release revocation for a previous controlled substance conviction, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Carraway received a sentence of 30 months in prison on the new offenses and received a consecutive six month sentence of incarceration on the supervised release revocation.
Stephen L. Carraway owned and operated Steve’s Hauling Inc., an Illinois corporation with its principle place of business in the City of East St. Louis. Steve’s Hauling provided demolition services to the City of East St. Louis. The convictions are the result of Carraway's conduct in 2010 when he made a cash payment in the form of a kickback to a City of East St. Louis official in order to receive an emergency demolition contract from the City of East St. Louis. Carraway was told how much to bid in order to be awarded the contract. Carraway thereafter submitted a falsified certificate of insurance in the bid proposal when he did not have an existing liability insurance policy in effect.
The investigation was handled by the Federal Bureau of Investigation and the Internal Revenue Service/Criminal Investigations with the cooperation of the St. Clair County State’s Attorney’s Office. The prosecution of the case was handled by Assistant United States Attorney Norman R. Smith.
Man Sentenced in Federal Court for Violent Home InvasionRead the Press Release
MOBILE, Ala. - Brandon Jarrod Nobles, 26, was sentenced in federal court today for his role in a violent home invasion here during November of 2011. Nobles entered a guilty plea to the three charges, (1) conspiracy to use and carry a firearm in connection with a crime of violence and possession of a firearm in furtherance of a crime of violence, (2) the use of a firearm in furtherance of a crime of violence, and (3) kidnapping, in July of 2012. The indictment alleges that Nobles and his co-defendants, Zerrick Robinson and Miller Griffin, broke into the victims’ residence shouting “FBI,” and “Police.” They sought to steal drugs and money from one of the occupants of the residence, and when they did not get what they wanted, they shot one victim and kidnapped the other. The victim who was kidnapped was held for ransom while Nobles and the others used cell phones to make calls to collect money for her release.
The kidnap victim made a statement in court about her ordeal, and how the violence of the incident at her residence had adversely affected her minor child. She explained that the child was present when Nobles and the others broke into the home, assaulted her, shot her husband, and took her away at gunpoint. She told the judge that she could not take her child to any event where police were present, like parades and circuses, because the child had been traumatized by the actions of Nobles and his co-defendants that night at her home when they broke in, claiming to be the police.
District Court Judge Kristi Dubose ordered that Nobles serve a total sentence of 22 years imprisonment, to be followed by a supervised release term of five years. She also imposed the special mandatory assessment of $300, but no fine.
The case was investigated by the Chickasaw Police Department, the Federal Bureau of Investigations, the Mobile Police Department, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. It was prosecuted in the United States Attorney’s Office by Assistant United States Attorney Gloria Bedwell.
Local Businessman Pleads Guilty to Fraud, Bankruptcy ChargesRead the Press Release
CHARLOTTESVILLE, VIRGINIA -- A local businessman and former commercial real estate agent, who was indicted in September 2012 on a variety of federal fraud charges, pled guilty today in the United States District Court for the Western District of Virginia in Charlottesville to an Information charging him with related conduct.
Today in District Court, Michael Wayne Harding, 59, of Keswick, Va., waived his right to be indicted and entered a plea of guilty to one count of wire fraud and one count of bankruptcy fraud.
“In a series of schemes devised over several years, Mr. Harding defrauded investors and mortgage companies in order to sustain his lavish lifestyle,” United States Attorney Timothy J. Heaphy said today. “He repeatedly lied to his clients, banks, and courts of law and ultimately obtained more than $2 million for his personal use. Mr. Harding’s lies came to an end today in federal court, where he was justly held accountable for his actions.”
“Mr. Harding intentionally falsified documents to secure mortgages, and failed to comply with instructions of his bankruptcy proceedings. His guilty plea today is a result of the investigative work of our law enforcement partners, representing a unified effort to investigate those who choose to circumvent the law,” said Jeffrey C. Mazanec, Special Agent in Charge for the FBI’s Richmond Field Office.
According to a statement of facts agreed to by the defendant and admitted to the Court at this afternoon’s hearing, Harding was the president and sole employee of a company called HMC Holdings. On numerous occasions, Harding attempted to secure mortgages for properties HMC Holdings owned based on improvements that had been made to those properties. However, in order to secure the mortgages, Harding was required to provide the mortgage companies with proof that work had been done to the properties. Harding is alleged to have created fake invoices in order to secure the mortgages.
Harding also admitted that after being issued checks by the mortgage companies intended for the contractors, Harding took those checks to local businesses and had the funds converted for his own personal use.
In April 2011, Harding filed bankruptcy. The defendant admitted today that during his bankruptcy proceedings he filed false Monthly Operating Reports, failed to deposit all income into his Debtor-in-Possession account, which is required by the Court, and lied about forging signatures on releases, liens and deeds of trust.
The investigation of the case was conducted by the Albemarle County Commonwealth Attorney’s Office, the Virginia State Police, the Federal Bureau of Investigation, IRS Criminal Investigation and the Office of the United States Trustee. Special Assistant United States Attorneys Matt Quatrara, Elliott Casey and Assistant United States Attorney Ronald Huber are prosecuting the case for the United States.
Lebanon City Man Charged Federally with Enticement and Child PornographyRead the Press Release
The United States Attorney's Office for the Middle District Pennsylvania announced the indictment today by a federal grand jury in Harrisburg of Lebanon City man for child pornography offenses.
According to United States Attorney Peter J. Smith, Howard D. Davis, age 57, is charged with allegedly enticing a fourteen-year-old to engage in sexually explicit activity and requesting that these sexual images be sent through the internet. The fourteen-year-old was, in reality, an undercover officer with the Nebraska State Police. A subsequent search warrant executed at Davis’s address uncovered a computer with alleged child pornography which Davis distributed to others over the internet.
The case was investigated by the United States Postal Inspectors in conjunction with the Nebraska State Police and the Pennsylvania Office of Attorney General. Prosecution is assigned to Assistant United States Attorney Michael A. Consiglio.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this particular case, the maximum penalty under the federal statute is life imprisonment for Davis and a term of supervised release following imprisonment and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.Leader of 4x4 Drug Organization Exiled to 20 Years in PrisonRead the Press Release
Baltimore, Maryland - U.S. District Judge Catherine C. Blake sentenced Dearius Forrester, a/k/a “D,” “Little D,” “Muffler” and “Chicken,” age 24, of Rosedale, today to 20 years in prison, followed by five years of supervised release, for conspiracy to distribute and possess with the intent to distribute powder and crack cocaine.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Steven L. Gerido of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Baltimore City State’s Attorney Gregg L. Bernstein; and Commissioner Anthony W. Batts of the Baltimore Police Department.
According to Forrester’s plea agreement, the indictment and other court documents, from at least June 2009 through August 2010, Forrester led a drug distribution organization that operated in the Northeast Baltimore neighborhood known as the “4x4." The “4x4” is a small, relatively closed neighborhood consisting of four streets running north-south and four streets running east-west. Ravenwood, Elmora, Lyndale and Elmley Avenues all run east and west and are one-way streets. Greenview, St. Cloud, Highview and Longview Avenues all run north and south and are two-way streets.
The area is bordered on the east and west ends by Edison Highway and Belair Road, respectively.
According to his plea and other court documents, law enforcement overheard Forrester and his co-conspirators discussing their drug activities. Forrester admitted that during the time of the conspiracy he distributed crack and powder cocaine, collected money from drug customers and distributors, and assisted the drug trafficking activities of other members of the drug conspiracy. During the time of the conspiracy, Forrester was responsible for the distribution of 280 grams or more of crack cocaine, and 5 kilograms or more of powder cocaine.
Co-defendants Raymond Moore, a/k/a “Money,” age 20, and Tony Robinson, a/k/a “Peterman,” and “Pete,” age 30, both of Baltimore, each pleaded guilty to the same charge and were sentenced to 10 years in prison.
United States Attorney Rod J. Rosenstein thanked ATF’s Violent Crime Impact Team, the Baltimore City Police Department and Baltimore City State’s Attorney’s Office for their work in this investigation and prosecution. Mr. Rosenstein commended Assistant United States Attorney Michael C. Hanlon and former Special Assistant United States Attorney Traci L. Robinson, a cross-designated Baltimore City Assistant State’s Attorney, who prosecuted the case.
Layne Housel Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on March 8, 2013, before U.S. District Judge Dana L. Christensen, LAYNE HOUSEL, a 61-year-old resident of Philipsburg, appeared for sentencing. HOUSEL was sentenced to a term of:
Prison: 12 months and 1 day
Special Assessment: $100
Supervised Release: 3 years
HOUSEL was sentenced in connection with his guilty plea to Social Security disability fraud.
In an Offer of Proof filed by Assistant U.S. Attorney Leif M. Johnson, the government stated it would have proved at trial the following:
Between 1995 and 2009, HOUSEL received disability payments for himself and his minor children related to degenerative disc disease that prevented him from working. Pursuant to the terms of his continued eligibility to receive disability payments, HOUSEL had to periodically update his status and report whether his condition had changed.
Beginning in 1997, HOUSEL declared employment as a part-time butcher in Hamilton. He reported only $180 in wages per month, which, at that time, was the minimum amount that could be reported without triggering a reassessment of his disability status by the Social Security Administration (SSA). He would later report $200, and then $220 per month as the SSA threshold amounts indicating "substantial gainful activity" increased.
Eventually, SSA officials became aware that HOUSEL was working more than he was reporting. SSA asked HOUSEL to update his work status. HOUSEL reported no new information and reiterated his previous statements about working 2 hours a day for about $200 per month. The SSA also contacted HOUSEL's employer. The employer submitted a report indicating the same thing that HOUSEL had stated - that HOUSEL worked only a couple hours a day for a couple hundred dollars a month. In an interview in 2009 with SSA, HOUSEL stuck to the story that he only worked 2 hours a day for about $200 per month.
A search was conducted at the business. Records there indicated that HOUSEL was working far more than he reported to the SSA and that his employer was paying him cash "under the table" for any amounts above the SSA minimum threshold to qualify for disability payments.
Several former employees at the business confirmed that HOUSEL worked far more than the limited amount reported to SSA.
The cash payments dwarfed the payroll checks. For instance, in November of 2007, HOUSEL was paid nearly $5,000, while he reported only $200.
In a second interview, his employer admitted that he had lied on HOUSEL's behalf and had mis-stated HOUSEL's true work hours and earnings in an effort to help HOUSEL make ends meet.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that HOUSEL will likely serve all of the time imposed by the court. In the federal system, HOUSEL 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.
Lawrence County Man Indicted for False Tax ReturnsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – A federal grand jury has charged Harold J. “Bucky” Shafer, 66, of Pedro, Ohio with ten counts of aiding and assisting in the preparation of false and fraudulent income tax returns and two counts of filing false income tax returns.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office (IRS) announced the indictment returned March 6.
The indictment alleges that Shafer prepared returns for customers of his tax preparation service that falsely represented that the taxpayers were entitled to claim expenses and deductions he knew they were not entitled to claim. The indictment also alleges that Shafer filed fraudulent tax returns on his own behalf for two tax years reporting that his business earned income of $426 one year and $1,101 the following year, knowing that he earned more than he reported.
Each count of the indictment is punishable by up to three years in prison and a fine of up to $250,000.
Shafer will appear in U.S. District Court in Cincinnati for an initial hearing on March 14, 2013.
Assistant United States Attorney Deborah Grimes is representing the United States in this case.
U.S. Attorney Stewart commended the agents of IRS Criminal Investigation in Charleston, West Virginia, which is part of the Washington, D.C. Field Office, who conducted the investigation.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Last of the Arellano Felix Brothers Enters Guilty PleaRead the Press Release
SAN DIEGO, CA - Eduardo Arellano-Felix, 56, the last of four brothers to be targeted by U.S. prosecutors for leading one of the world’s most notorious multi-national drug trafficking organizations, pleaded guilty today in federal court in San Diego to money laundering and conspiracy charges.
The plea marks the conclusion of the U.S. government’s 20-year legal battle to dismantle the Arellano Felix Organization (AFO), which moved hundreds of tons of cocaine and marijuana from Mexico and Colombia into the U.S. and made hundreds of millions of dollars in the process. The cartel terrorized the Southwest border and beyond with executions, torture, beheadings, kidnappings and bribes to law enforcement, military personnel and government officials.
“I’m proud to say this is the end of an era,” said U.S. Attorney Laura Duffy. “When this ruthless cartel was thriving in the 1990s, we made what some considered an audacious and impossible commitment to wipe out the organization. Today, we can say we have done just that.”
“This plea agreement pounds the final nail in the coffin of what used to be the Arellano- Felix Organization,” says DEA San Diego Special Agent in Charge William R. Sherman. “The AFO, once a brutally violent cartel, now becomes a footnote in history books, while DEA and our partners focus on dismantling the drug trafficking organizations that have moved in since the AFO’s demise. We will be just as relentless in our pursuit of these new trafficking organizations and they will be brought to justice in the same manner as the AFO.”
In his plea agreement, Arellano-Felix – a medical doctor nicknamed “El Doctor” - admitted he was a senior member of the AFO. He also admitted that he laundered hundreds of millions of dollars in drug trafficking proceeds and used some of the income to pay AFO members to commit crimes; to buy firearms, ammunition and vehicles; to travel on AFO-related business; to pay bribes; and to purchase drugs. He signed his plea agreement, “Dr. Eduardo Arellano Felix.”
In connection with his plea, Arellano-Felix will also forfeit $50 million and the parties will jointly recommend that he be sentenced to serve 15 years in prison. Before he was extradited, Arellano-Felix spent almost four years in custody in Mexico, from October 25, 2008 to August 31, 2012. Sentencing was set for August 19, 2013 at 9:30 a.m., before U.S. District Judge Larry A. Burns.
“We have effectively dismantled the leadership of a notorious cartel that operated with impunity for more than a decade,” Duffy said. “Given the mission’s overall success and the prosecution challenges of building a case against the highest-ranking members of a major trafficking organization, this resolution is a very favorable disposition for the United States.”
“Today’s guilty plea by Eduardo Arellano-Felix is the final major blow to this powerful and vicious drug trafficking organization whose criminal enterprise included an elaborate money laundering scheme,” said Special Agent in Charge Jose A. Gonzalez, IRS Criminal Investigation, Los Angeles Field Office. “IRS Criminal Investigators can and will unravel sophisticated money laundering schemes, working side-by-side with our law enforcement partners, in the dismantling of these dangerous and deadly drug cartels.”
San Diego FBI Special Agent in Charge Daphne Hearn said, “Todays guilty plea demonstrates the unwavering commitment of the FBI to continue working with our domestic and international law enforcement partners to disrupt and dismantle violent criminal enterprises such as the Arellano-Felix Organization, that instill fear and threaten the safety of our citizens.”
The resolution of this case was a long time in coming.
Arellano-Felix was first indicted in 1998, along with his brothers, on drug conspiracy charges. Then in 2002, prosecutors added charges of racketeering, money laundering and conspiracy to distribute and import marijuana and cocaine in a subsequent indictment. He was arrested by Mexican authorities in Tijuana, Baja California, Mexico on October 25, 2008, following a gun battle with a Mexican Special Tactical Team. A final order of extradition to the United States was granted in 2010.
After two years of unsuccessful appeals, Arellano-Felix was extradited by the government of Mexico to the United States on August 31, 2012, to face charges in the Southern District of California.
Brothers and former leaders of the AFO, Benjamin Arellano-Felix and Francisco Javier Arellano Felix, were captured in 2002 and 2006, respectively, and are currently serving sentences in the United States following their convictions for racketeering, drug trafficking, and money laundering charges. Ramon Arellano-Felix, the cartel's enforcer, was killed in a shootout with police in 2002.
In addition to the brothers, this office has convicted a long line of top AFO lieutenants, including, in part, Arturo Paez-Martinez in 2002, Ismael and Gilberto Higuera-Guerrero in 2007 and Jesus Labra-Aviles in 2010.
This case (Case Number: 97cr2520-LAB) was investigated by agents from the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Internal Revenue Service-Criminal Investigation and prosecuted in the Southern District of California by Assistant United States Attorneys Joseph S. Green, James P. Melendres, and Daniel E. Zipp.
The Criminal Division’s Office of International Affairs provided significant assistance in the extradition. The investigation of Eduardo Arellano-Felix was coordinated by an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was created to consolidate and coordinate all law enforcement resources in this country's battle against major drug trafficking rings, drug kingpins, and money launderers.
SUMMARY OF CHARGES IN GUILTY PLEASCount 1
Count 2
Title 18, United States Code, Sections 371 (Conspiracy to launder monetary instruments) Maximum penalty: 5 years of custody.
Title 21, United States Code, Sections 854(a) and 846 (Conspiracy to use and invest illicit drug profits) Maximum penalty: 10 years of custody.
LIRR Retiree Sentenced in Manhattan Federal Court to 20 Months in Prison for Role in Massive Disability Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that GARY SATIN, a former electrician with the Long Island Railroad (“LIRR”), was sentenced today to 20 months in prison for his participation in a massive fraud scheme in which LIRR workers claimed to be disabled upon early retirement so that they could receive disability benefits to which they were not entitled. SATIN previously pled guilty to his participation in the scheme as well as to perjury for making false statements to the grand jury that was hearing evidence in this case. SATIN was sentenced by U.S. District Judge Victor Marrero.
Manhattan U.S. Attorney Preet Bharara said: “With his sentence today, Gary Satin becomes the first in a long line of perpetrators to learn the price for his participation in this reprehensible scheme, but he will not be the last.”
According to the Complaint and the Superseding Information:
The LIRR Disability Fraud Scheme
The Railroad Retirement Board (“RRB”) is an independent U.S. agency that administers benefit programs, including disability benefits, for the nation’s railroad workers and their families. A unique LIRR contract allowed employees to retire at the relatively young age of 50 – the age of eligibility has since changed to 55 – if they had been employed by the LIRR for at least 20 years. Eligible employees are entitled to receive an LIRR pension, which is a portion of the full retirement payment for which they are eligible at 65. In addition, at full retirement age (between age 60 and age 65 depending on years of service), they are eligible to receive an RRB retirement pension. For LIRR workers who retired at 50 with only an LIRR pension, they would receive less than their prior salary and substantially lower pension payments than those to which they would be entitled at full retirement age. However, LIRR employees who retired and claimed disability could receive a disability payment from the RRB on top of their LIRR pension, regardless of age. A retiree’s LIRR pension, in combination with RRB disability payments, can be roughly equivalent to the base salary earned during his or her career.
Hundreds of LIRR employees have allegedly exploited the overlap between the LIRR pension and the RRB disability program by pre-planning the date on which they would falsely declare themselves disabled so that it would coincide with their projected retirement date. These false statements, made under oath in disability applications, allowed LIRR employees to retire as early as age 50 with an LIRR pension, supplemented by the fraudulently obtained RRB disability annuity. From 2004 through 2008, 61% of LIRR employees who stopped working and began receiving RRB disability benefits were between the ages of 50 and 55. In contrast, only 7% of employees at Metro-North who stopped working and received disability benefits during the same time period were between the ages of 50 and 55.
SATIN’s Fraud
GARY SATIN was an LIRR electrician who retired in June 2005 at the age of 55. In his last year of employment, SATIN received approximately $84,000 in compensation. After retirement, he sought and obtained sickness and disability benefits from the RRB. In 2010, he received approximately $32,000 in LIRR pension payments and approximately $36,000 from his RRB disability annuity, for a total of $68,000 in annual benefits.
In applying for disability benefits, SATIN claimed that he was unable to perform his railroad job and that indoor and outdoor chores were “difficult.” However, as SATIN admitted in his plea allocution, no medical condition prevented him from performing his railroad job. Instead, SATIN had pre-planned his false disability to supplement his retirement income. In fact, in the 18 months prior to his retirement, SATIN did not take a single day of sick leave, and in the five months prior to his retirement, he worked approximately 154 overtime hours. In the years after his retirement, SATIN performed landscaping, contracting, and electrical work for pay. SATIN also exploited his false disability to obtain other benefits to which he was not entitled, such as a handicapped parking pass from New York State, claiming that his disability “severely limited” his “ability to walk.”
SATIN’s Perjury
On April 28, 2011, SATIN appeared before a grand jury in the Southern District of New York. After swearing to tell the truth, and after having been advised of his rights and his obligation to provide truthful testimony, SATIN intentionally provided false and misleading testimony on material matters, including falsely denying that he performed landscaping, contracting, and electrical work post-retirement.
In addition to the prison term, Judge Marrero sentenced SATIN, 63 of Mooresville, North Carolina, to three years of supervised release and ordered him to pay restitution and forfeiture in the amount of $247,000, and a $200 special assessment.
Manhattan U.S. Attorney Bharara praised the RRB-OIG, the FBI, and the MTA-OIG for their outstanding work in the investigation, which he noted is ongoing. He also acknowledged the previous investigation conducted by the New York State Attorney General’s Office into these pension fraud issues.
Thirty-two people have been charged in connection with the LIRR disability fraud scheme, 22 of whom have pled guilty. The charges against the remaining defendants are merely allegations and they are all presumed innocent unless and until proven guilty.
The Office’s Complex Frauds Unit is handling the case. Assistant U.S. Attorneys Justin Weddle, Nicole Friedlander, and Daniel Tehrani are in charge of the prosecution.
Ketchikan Man sentenced to 36 months in Federal Prison for drug conspiracyRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen Loeffler announced today that a Ketchikan resident was sentenced in Juneau to federal prison for drug conspiracy.
Travis E. Straight, 38, was sentenced today by U.S. District Court Judge Timothy M. Burgess to 36 months in prison for his role in a drug trafficking conspiracy.
According to Assistant U.S. Attorney Jack S. Schmidt, who prosecuted the case, the charges arose from a joint investigation including the DEA, Port of Seattle Police Department and the Ketchikan Police Department involving the importation of heroin into Ketchikan, Alaska, using commercial package delivery services. In May 2012, Straight arranged with co-conspirators in Washington to use a commercial package delivery service to send 405 grams of heroin to Ketchikan, Alaska, for subsequent distribution. Straight paid for the drugs using drug proceeds and admitted the heroin was intended to be sold to others.
Since May 2012, Straight has been incarcerated on related state drug charges to which he also pled guilty. In the State case, Straight received a sentence of three years in prison with one year suspended.Prior to imposing sentence, Judge Burgess emphasized the seriousness of the offense, the importance of deterrence regarding the defendant and others, the need for protection of the public, and rehabilitation of the defendant in light of his criminal history, as reasons that supported the imposition of the above sentence.
Ms. Loeffler commended the Drug Enforcement Administration, Port of Seattle Police Department, and the Ketchikan Police Department for the investigation leading to the successful prosecution of Travis E. Straight.Justice Department Secures Nearly $2 Billion in Consumer Protection Cases in 2012Read the Press Release
The Justice Department’s Consumer Protection Branch secured nearly $2 billion in criminal fines, forfeiture, restitution, and civil disgorgement in 2012, Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division, announced today at the Consumer Protection Working Group’s Second Annual Consumer Protection Summit. Since 2009, the consumer protection efforts of the Civil Division, working with U.S. Attorneys’ Offices around the country, have led to recoveries of more than $5.89 billion, over 140 criminal convictions, and total prison sentences exceeding 327 years.
“This summit and our other outreach efforts are essential to the fight against consumer fraud. But our real strength lies in the cases brought by the attorneys in the Consumer Protection Branch every day. The results the branch achieved in 2012 are outstanding, and reflect the determination of this Department of Justice to combatting consumer fraud,” said Principal Deputy Assistant Attorney General Delery, who serves as a co-chair of the Consumer Protection Working Group of the President’s Financial Fraud Enforcement Task Force. “The Consumer Protection Branch’s extraordinary work enforcing federal consumer protection laws has reached new levels, and is evidence that the department has made protecting consumers a top priority.”
The summit brings together over two dozen state and federal agencies to highlight some of the most significant issues facing consumers today: consumer debt, nutritional supplements, money and imposter scams and tax-related fraud. The summit exposes some of the most egregious fraud schemes, provides information on how consumers can protect themselves, and shares what the Consumer Protection Working Group is doing to combat fraud in these areas.
Recently reorganized, the Consumer Protection Branch deploys powerful enforcement tools in creative ways to protect the most vulnerable consumers from myriad forms of fraud and abuse, including financial fraud, new forms of telemarketing fraud, and immigration services fraud.
In 2012, for example, the branch prosecuted three Missouri individuals for their roles in a scheme to defraud consumers seeking immigration-related services. These individuals worked for a company that defrauded legal immigrants who were trying to abide by the rules. The firm falsely told consumers that it employed paralegals who would help customers correctly fill out immigration forms, that it handled excess call volume for U.S. Citizenship and Immigration Services (USCIS), and that fees paid to the firm included government processing fees. All three defendants in the case pled guilty to conspiring to defraud consumers.
Collaborating closely with state Attorneys General and other federal agencies, t he Consumer Protection Branch has been instrumental in the department’s effort to hold accountable those who, in violating the law, contributed toward the 2008 financial crisis. Earlier this year, the department filed a civil lawsuit against the credit rating agency Standard & Poor’s alleging that S&P engaged in a scheme to defraud investors in structured financial products known as Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDOs). The lawsuit, brought under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), alleges that investors, many of them federally insured financial institutions, lost billions of dollars on CDOs for which S&P issued inflated ratings that misrepresented the securities’ true credit risks. The complaint also alleges that S&P falsely represented that its ratings were objective, independent, and uninfluenced by S&P’s relationships with investment banks when, in reality, S&P’s desire for increased revenue and market share led it to favor the interests of these banks over investors. The Consumer Protection Branch played a key role in investigating and bringing the case, along with the Federal Programs Branch of the Civil Division and the U.S. Attorney’s Office for the Central District of California.
The Consumer Protection Branch has also responded to the financial crisis by aggressively pursuing various forms of financial fraud, including foreclosure rescue schemes targeting distressed homeowners. For instance, in 2012, the branch successfully prosecuted four individuals in connection with a firm that claimed to assist homeowners at risk of foreclosure. The defendants represented that homeowners’ properties would be sold to investors, but that the present homeowners could stay in their homes. The defendants designed sham sales to straw purchasers, created false loan applications and documents, pocketed the equity drawn out of the sham sales, and then allowed the loans to go into foreclosure. Victims lost their equity, and most were forced to move out of their homes. The defendants were sentenced to prison for terms of up to five and a half years.
In addition to playing a prominent role in the Consumer Protection Working Group, and organizing the annual Consumer Protection Summit the Consumer Protection Branch has employed new techniques to enhance its outreach and prevention efforts. For instance, the Branch has conducted webinars to educate financial institutions on the dangers of working with payment processors who may facilitate fraudulent schemes. It has also engaged consumer advocacy groups in new ways, and sought to create new partnerships with state attorneys general and military legal assistance providers.
While continuing to innovate, the branch has also sharpened its focus in traditional areas of enforcement, such as ensuring the safety of pharmaceutical products, medical devices, food, and dietary supplements. Health care fraud cases were the sources of the Consumer Protection Branch’s largest recoveries in 2012. The branch brought enforcement actions and criminal prosecutions in response to a number of violations, including the misbranding of pharmaceuticals, deficient manufacturing processes, the sale of adulterated and unsafe products, and the resale of prescription drugs that had been diverted from lawful channels of distribution. The branch recovered more than $1.9 billion in criminal fines and forfeiture and secured 16 criminal convictions in connection with these cases.
“Whether consumers are targeted by scammers looking to cheat them or manufacturers of food or pharmaceuticals that put profit ahead of consumer safety, the department will bring to bear its expertise and all available tools to root out conduct that harms consumers,” said Principal Deputy Assistant Attorney General Delery. “The success of the Consumer Protection Branch demonstrates our unwavering commitment to the protecting the health and safety of Americans.”
Another key component of the Consumer Protection Branch’s work is defense of the decisions of government agencies charged with protecting consumers. In 2012, the branch successfully defended cases involving, for example, the Food and Drug Administration’s (FDA) approval of various generic drugs to increase consumers’ market choices and the Federal Trade Commission’s (FTC) interpretation of a provision of the Fair Credit Reporting Act (FCRA) that requires lenders to disclose certain information to consumers. The branch was also instrumental in securing court orders requiring major tobacco companies to place statements on their websites, on cigarette packages, and at retail stores correcting past false statements that they had been making about the safety of their products.
Principal Deputy Assistant Attorney General Delery expressed his gratitude and appreciation for the dedicated public servants who work tirelessly to protect consumers. These individuals include attorneys, investigators, paralegals and other personnel throughout the Civil Division, the U.S. Attorneys’ Offices, the Department of Health and Human Services, the FDA, the FTC, the Consumer Product Safety Commission, the Postal Inspection Service and other federal and state agencies.
Related Materials:
Principal Deputy Assistant Attorney General Stuart F. Delery Speaks at the Second Annual Consumer Protection Summit
Jury Finds Tolutau Guilty of Walmart Robbery; Brandishing Firearm During A Violent CrimeRead the Press Release
SALT LAKE CITY – A jury convicted Tevita Tolutau, age 23, of Salt Lake City, of robbery and brandishing a firearm during a crime of violence Thursday afternoon following a four-day trial in U.S. District Court in Salt Lake City. Tolutau was charged in connection with a Sept. 25, 2008, robbery of a Riverton Walmart store.
According to documents filed in court, just after midnight on Sept. 25, 2008, two employees were gathering money from cash registers at the store to take to the office for nightly accounting. The two employees were confronted just outside the office by two men wearing hoodies. One of the men demanded the women give them their cell phones and a radio communication device. The store employees complied with the demand.
The two employees entered the outer office with the two assailants following directly behind. The assailants then began ordering the employees to open the door to the inner cash office. Not having a key to the inner office, one of the employees knocked on the door. Inside the office, another Walmart employee could see the robbery in progress through a surveillance camera and refused to open the door. The assailants eventually fled the store.
Eric Kamahele and Mataika Tuai, two members of the Tongan Crip Gang, were previously convicted of this offense and other violent crimes in furtherance of a RICO conspiracy during a fall 2011 trial in federal court. Kamahele is serving 384 months in federal prison and Tuai is serving an 84-month sentence.
Evidence at this week’s trial proved that Tolutau was the getaway driver for Kamahele and Tuai. He also provided the firearm used in the robbery and disposed of the firearm after the robbery.
The potential maximum penalty for the robbery conviction is 20 years. Brandishing a firearm during the commission of a violent crime carries a statutory maximum penalty of life in prison with a mandatory minimum sentence of seven years. The penalty for the firearm conviction must be imposed consecutively to whatever sentence is imposed for the robbery. Sentencing in the case is set for May 16, 2013, at 3:30 p.m. in U.S. District Judge Clark Waddoups’ courtroom.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by special agents of the FBI, members of the FBI’s Safe Streets Task Force, and the Unified Police Department.
Joplin Man Pleads Guilty to Disaster Fraud Related to Tornado BenefitsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Joplin, Mo., man pleaded guilty in federal court today to fraudulently receiving federal disaster benefits following the May 22, 2011 tornado.
Leslie Lynn Williams, 53, of Joplin, pleaded guilty before U.S. District Richard E. Dorr to the charges contained in a Dec. 13, 2012 federal indictment.
Williams admitted that he filed for disaster relief on May 27, 2011. Williams listed a Joplin address as his primary residence and claimed that it had been damaged by the tornado. FEMA authorized a $1,196 payment to Williams. Williams admitted today, however, that he was not living at that address at the time of the tornado, but had moved out in February 2011.
Under federal statutes, Williams is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the FBI, Department of Homeland Security-Office of Inspector General, and the Joplin, Mo., Police Department.
Disaster Fraud Hotline
Anyone with information about disaster fraud related to the Joplin tornado should call the National Center for Disaster Fraud hotline at 866-720-5721, the Joplin Police Department at 417-623-3131, or the FBI’s Joplin office at 417-206-5700.
Indictment Names Former and Current Police Officers in Charges Related to Loan-SharkingRead the Press Release
PHILADELPHIA - One former and one active Philadelphia police officer were charged by indictment, unsealed today, with extortion in an alleged loan-sharking scheme. According to the indictment, Gary Cottrell, 46, a former 14th district police officer, made high interest loans to others, including Cheryl L. Stephens, 46, an active 18th district police officer. Cottrell, who was arrested this morning, is charged with four counts of making an extortionate extension of credit, four counts of collecting an extension of credit by extortionate means, and eight counts of obstruction; Stephens is charged with two counts of making false statements to the grand jury. The charges were announced today by United States Attorney Zane David Memeger and FBI Acting Special Agent-in-Charge John Brosnan.
The indictment alleges that during the time he worked as a police officer and for a time after he left the Philadelphia Police Department, Cottrell operated a business in which he extended credit to borrowers, typically in amounts ranging from several hundred dollars to several thousand dollars. He allegedly required each borrower to repay the amount of money he loaned to them plus interest. The interest generally was in an amount equal to $25 for every $100 borrowed and generally had to be repaid in four weeks. The interest rate on these loans was substantially greater than the legally enforceable rate of 25% per annum. The indictment further alleges that some of the individuals borrowing money from Cottrell understood that he would use force, if necessary, to collect the money he loaned them plus the interest, and Cottrell did use force and the threat of force to collect money from borrowers. At times Cottrell allegedly sent threats of force to the borrowers via text messages.
It is further alleged Stephens falsely testified that Cottrell did not charge interest on her loan from him, and did not tell her to deny paying interest when talking to law enforcement officers.
If convicted, Cottrell faces a maximum statutory sentence of 320 years in prison, three years of supervised release, a $4 million fine, and a $1,600 special assessment. Stephens faces a maximum statutory sentence of 10 years in prison, three years of supervised release, a $500,000 fine, and a $200 special assessment.
The case was investigated by the Federal Bureau of Investigation/Philadelphia Police Department Public Corruption Task Force and the Philadelphia District Attorney’s Office. It is being prosecuted by Assistant United States Attorney Anthony J. Wzorek and Special Assistant United States Attorney Vicki J. Markovitz.
Click here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Howard Skaw Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on March 8, 2013, before U.S. District Judge Dana L. Christensen, HOWARD SKAW, a resident of Hamilton, appeared for sentencing. SKAW was sentenced to a term of:
Probation: 3 years
Special Assessment: $50
Restitution: $2,000
Fine: $18,000
Community Service: 200 hours
SKAW was sentenced in connection with his guilty plea to aiding and abetting the theft of public funds.
In an Offer of Proof filed by Assistant U.S. Attorney Leif M. Johnson, the government stated it would have proved at trial the following:
Between 1995 and 2009, Layne Housel received disability payments for himself and his minor children related to degenerative disc disease that prevented him from working. Pursuant to the terms of his continued eligibility to receive disability payments, Housel had to periodically update his status and report whether his condition had changed.
Beginning in 1997, Housel declared employment as a part-time butcher in Hamilton. He reported only $180 in wages per month, which, at that time, was the minimum amount that could be reported without triggering a reassessment of his disability status by the Social Security Administration (SSA). He would later report $200, and then $220 per month as the SSA threshold amounts indicating "substantial gainful activity" increased.
Eventually, SSA officials became aware that Housel was working more than he was reporting. SSA asked Housel to update his work status. Housel reported no new information and reiterated his previous statements about working 2 hours a day for about $200 per month. The SSA also contacted his employer, SKAW, who was also the owner of the business. SKAW submitted a report indicating the same thing that Housel had stated - that Housel worked only a couple hours a day for a couple hundred dollars a month. In an interview in 2009 with SSA, Housel stuck to the story that he only worked 2 hours a day for about $200 per month.
A search was conducted at the business. Records there indicated that Housel was working far more than he reported to the SSA and that SKAW was paying him cash "under the table" for any amounts above the SSA minimum threshold to qualify for disability payments.
Several former employees at the business confirmed that Housel worked far more than the limited amount reported to SSA.
The cash payments dwarfed the payroll checks. For instance, in November of 2007, Housel was paid nearly $5,000, while he reported only $200.
In a second interview, SKAW admitted that he had lied on Housel's behalf and had mis-stated Housel's true work hours and earnings in an effort to help Housel make ends meet.
Housel pled guilty to federal charges and has been sentenced.
The investigation was conducted by the Social Security Administration - Office of Inspector General.
Hazleton Woman Charged with Passing Counterfeit MoneyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a criminal Information was filed in U.S. District Court in Scranton today against Cindy Batista, age 23, of Hazleton, Pennsylvania, charging her with passing counterfeit $100 bills.
According to United States Attorney Peter J. Smith, Batista passed $100 bills at various businesses in Luzerne County between February 5, 2013 and February 12, 2013.
The case was investigated by the U.S. Secret Service and is assigned to Assistant U.S. Attorney Lorna N. Graham for prosecution.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this particular case, the maximum penalty under the federal statute is 20 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Grace Healthcare and Grace Ancillary Services Agree to Pay United States and State of Tennessee $2.7 Million to Resolve False Claims AllegationsRead the Press Release
Government Alleges Companies Billed for Medically Unnecessary Therapy
CHATTANOOGA, Tenn. -- Chattanooga based nursing home chain Grace Healthcare LLC and its affiliate, Grace Ancillary Services LLC (collectively, Grace), have agreed to pay $2.7 million, plus interest, to resolve allegations that they violated the False Claims Act by knowingly submitting or causing the submission to the Medicare and TennCare/Medicaid programs of false claims for medically unreasonable and unnecessary rehabilitation therapy. Grace Ancillary Services LLC provided the therapy in some of the skilled nursing facilities Grace Healthcare LLC owns and/or manages in Tennessee and elsewhere.
According to the settlement agreement, federal and state investigators alleged that from 2007 through June 2011, Grace pressured physical, occupational and speech therapy staff in at least 10 nursing home facilities owned or managed by Grace to increase the amount of therapy provided to patients in order to meet targets for Medicare revenue that were set without regard to patients’ individual therapy needs and could only be achieved by billing for a large amount of therapy per patient. As part of the settlement, Grace has agreed to enter into a Corporate Integrity Agreement with the Inspector General of the Department of Health and Human Services that provides for procedures and reviews to be put in place to monitor and ensure Grace’s compliance with federal health care benefit program requirements.
“The continued viability of our federal healthcare benefit programs depends, in large part, on the honesty and integrity of the program participants,” said U.S. Attorney Bill Killian. “Health care providers must make decisions regarding the level of services to be provided based solely on individual patient need rather than a desire to increase the bottom line. As this settlement demonstrates, when aggressive business practices cross the line into waste and abuse, we are committed to working with our federal and state partners to protect public funds.”
"Medicare does not pay for medically unnecessary rehabilitation services," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “The Inspector General is committed to identifying improper billing to Medicare and Medicaid and returning those dollars to the taxpayers.”
Mr. Killian noted that this settlement resulted from a joint, comprehensive investigation conducted by the Department of Justice and Tennessee Attorney General’s Office in cooperation with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the Tennessee Bureau of Investigation (TBI), and commended the efforts of all who played a role in the complex investigation, including TBI-Medicaid Fraud Control Unit Special Agent T.J. Battle, HHS-OIG Special Agent Tony Maffei, DOJ Trial Attorney Christelle Klovers, AUSAs Rob McConkey and Betsy Tonkin, HHS-OIG Senior Counsel Tonya Keusseyan, and Assistant Tennessee Attorney General Mary McCullohs. The investigation was prompted by a qui tam or whistleblower complaint filed in 2010. After investigators contacted Grace in early 2011 to request information and discuss the allegations, Grace cooperated with the investigation by providing documents as well as other information and making its personnel available for interviews.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Secretary of the Department of Health and Human Services Kathleen Sebelius in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion, with recoveries by the U.S. Attorney’s Office for the Eastern District of Tennessee alone totaling more than $75 million during the same period.
Grace Healthcare and Grace Ancillary Services Agree to Pay United States and State of Tennessee $2.7 Million to Resolve False Claims AllegationsRead the Press Release
Government Alleges Companies Billed for Medically Unnecessary Therapy
CHATTANOOGA, Tenn. -- Chattanooga based nursing home chain Grace Healthcare LLC and its affiliate, Grace Ancillary Services LLC (collectively, Grace), have agreed to pay $2.7 million, plus interest, to resolve allegations that they violated the False Claims Act by knowingly submitting or causing the submission to the Medicare and TennCare/Medicaid programs of false claims for medically unreasonable and unnecessary rehabilitation therapy. Grace Ancillary Services LLC provided the therapy in some of the skilled nursing facilities Grace Healthcare LLC owns and/or manages in Tennessee and elsewhere.
According to the settlement agreement, federal and state investigators alleged that from 2007 through June 2011, Grace pressured physical, occupational and speech therapy staff in at least 10 nursing home facilities owned or managed by Grace to increase the amount of therapy provided to patients in order to meet targets for Medicare revenue that were set without regard to patients’ individual therapy needs and could only be achieved by billing for a large amount of therapy per patient. As part of the settlement, Grace has agreed to enter into a Corporate Integrity Agreement with the Inspector General of the Department of Health and Human Services that provides for procedures and reviews to be put in place to monitor and ensure Grace’s compliance with federal health care benefit program requirements.
“The continued viability of our federal healthcare benefit programs depends, in large part, on the honesty and integrity of the program participants,” said U.S. Attorney Bill Killian. “Health care providers must make decisions regarding the level of services to be provided based solely on individual patient need rather than a desire to increase the bottom line. As this settlement demonstrates, when aggressive business practices cross the line into waste and abuse, we are committed to working with our federal and state partners to protect public funds.”
"Medicare does not pay for medically unnecessary rehabilitation services," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “The Inspector General is committed to identifying improper billing to Medicare and Medicaid and returning those dollars to the taxpayers.”
Mr. Killian noted that this settlement resulted from a joint, comprehensive investigation conducted by the Department of Justice and Tennessee Attorney General’s Office in cooperation with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the Tennessee Bureau of Investigation (TBI), and commended the efforts of all who played a role in the complex investigation, including TBI-Medicaid Fraud Control Unit Special Agent T.J. Battle, HHS-OIG Special Agent Tony Maffei, DOJ Trial Attorney Christelle Klovers, AUSAs Rob McConkey and Betsy Tonkin, HHS-OIG Senior Counsel Tonya Keusseyan, and Assistant Tennessee Attorney General Mary McCullohs. The investigation was prompted by a qui tam or whistleblower complaint filed in 2010. After investigators contacted Grace in early 2011 to request information and discuss the allegations, Grace cooperated with the investigation by providing documents as well as other information and making its personnel available for interviews.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Secretary of the Department of Health and Human Services Kathleen Sebelius in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion, with recoveries by the U.S. Attorney’s Office for the Eastern District of Tennessee alone totaling more than $75 million during the same period.
Gayle Patrick Skunkcap, Jr., Jessie Jay St. Goddard, and Woodrow Jay Wells Plead Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Helena, on March 4, 2013, before U.S. District Judge Sam E. Haddon, GAYLE PATRICK SKUNKCAP, JR., age 42, JESSIE JAY ST. GODDARD, age 50, and WOODROW JAY WELLS, age 45, residents of Browning, pled guilty to violating the Lacey Act (illegal sale of tribal wildlife) and theft from a tribal government receiving federal funding. Sentencing has been set for June 24, 2013. They are currently released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorneys Carl E. Rostad and Ryan G. Weldon, the government stated it would have proved at trial the following:
All wildlife on the Blackfeet Indian Reservation is owned by the Blackfeet Indian Tribe. In managing such wildlife, hunting is allowed. Hunting by non-members on the Blackfeet Indian Reservation is a highly regulated activity. The 2010 and 2011 Blackfeet Regulations set forth the number of tags that may be given to non-members and the price of payment required for each tag. These tags are required, are limited in number, and are highly lucrative. There are only between five and ten hunting licenses for each big-game species availabe to non-tribal members each year, with each license costing between $1,500 and $12,000, depending on the animal.
SKUNKCAP, Jr., was the Director of the Blackfeet Fish and Wildlife Department, and ST. GODDARD and WELLS were Tribal Councilmen on the Blackfeet Tribal Business Council. In 2010 and 2011, the Blackfeet Fish and Wildlife Department received federal funding in excess of $220,000, each year.
Between 2010 and 2011, SKUNKCAP, ST. GODDARD, and WELLS held four big-game hunts for country musicians participating in an outdoors television show on the Blackfeet Indian Reservation without obtaining the limited and expensive hunting licenses for non-tribal members to shoot elk, moose, deer, and a black bear. They also used tribal funds and personnel to outfit and guide the musicians, television show hosts, and a fly fishing expert.
They each face possible penalties of 10 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was a cooperative effort between the U.S. Fish and Wildlife Service, the Federal Bureau of Investigation, and the Blackfeet Internal Affairs Office.
Gainesville Accountant Pleads Guilty to Wire Fraud and Tax EvasionRead the Press Release
ALEXANDRIA, Va. – Melvin Mooring, 54, of Gainesville, Va., pleaded guilty today to wire fraud and tax evasion in connection with the theft of approximately $3.3 million from a Chantilly, Va., company where Mooring had served as the chief financial officer.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division; and Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation, made the announcement after the plea was accepted by United States District Judge Liam O’Grady.
Mooring faces a maximum penalty of 20 years in prison on the wire fraud count and five years in prison on the tax evasion count when he is sentenced on June 7, 2013.
From 2000 to 2011, Mooring served as the chief financial officer, or CFO, of K&R Industries, a private company in Chantilly, Va. In a statement of facts filed with his plea agreement, Mooring admitted that from 2004 to 2011, he stole approximately $3.3 million from the company via company checks and wire transfers, which he routed through the bank account of a company he controlled in order to conceal their fraudulent nature. Mooring also admitted to altering company financial statements to conceal the fraud and to using the stolen funds for personal purposes, including for travel and to purchase real estate, automobiles, and jewelry. Mooring also admitted to failing to report the stolen funds as income on his individual income tax returns for the years 2005 through 2010, resulting in approximately $865,000 in losses to the United States Treasury.
This case was investigated by IRS-Criminal Investigation. Assistant United States Attorney Paul J. Nathanson and Tax Division Trial Attorney Tracy L. Gostyla are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Fugitive Hedge Fund Manager Arrested in Italy in U.S. Case Alleging Market Manipulation Scam That Led to at Least $200 Million in LossesRead the Press Release
LOS ANGELES – Florian Wilhelm Jürgen Homm, a German hedge fund manager who was on the run for more than five years, has been arrested in Italy on federal fraud charges that accuse him of orchestrating a market manipulation scheme designed to artificially improve the performance of his funds, a fraud that led to at least $200 million in losses to investors around the world.
Homm, 53, was arrested at the Uffizi Gallery in Florence, Italy at approximately 12:30 p.m. on Friday (local time). Federal prosecutors in Los Angeles obtained an arrest warrant on Wednesday, March 6, after filing a criminal complaint that charges Homm with four felony charges: conspiracy to commit wire fraud, wire fraud, conspiracy to commit securities fraud and securities fraud. Homm was arrested by Italian authorities after the United States submitted a request for a provisional arrest with officials in Rome.
Homm was the founder and chief investment officer of Absolute Capital Management Holdings Limited, a Cayman Islands-based investment advisor that managed nine hedge funds from 2004 until September 2007. The criminal complaint filed in United States District Court in Los Angeles alleges that Homm directed the hedge funds to buy billions of shares of thinly traded, United States-based “penny stocks.” Homm caused many of the purchases of penny stocks to be made through Hunter World Markets, Inc., a broker-dealer in Los Angeles that Homm co-owned. Homm also allegedly obtained shares of the penny stock companies through various businesses he controlled.
After the hedge funds invested hundreds of millions of dollars in the illiquid penny stocks, Homm caused the hedge funds to trade the stocks among themselves in “cross-trades” made through the Los Angeles-based broker dealer. As part of the stock manipulation scheme, Homm and others allegedly sold their own shares of the penny stocks to the hedge funds managed by Homm. The cross-trades served to increase the trading prices of the previously illiquid stocks and, in turn, to boost the net asset values and apparent performance of the hedge funds. This apparent performance improvement at the hedge funds generated additional fees for Homm and Absolute Capital, as well as boosting Absolute Capital’s stock price on the London Stock Exchange, Alternative Investment Market.
Folllowing allegations made by a “whistleblower” in 2006, Homm also dumped tens of millions of dollars worth of his own shares in Absolute Capital prior to resigning from the firm in the middle of the night on September 18, 2007. The allegedly fraudulent conduct caused at least $200 million in losses to investors in the hedge funds. The scheme allegedly netted Homm and his co-schemers more than $53 million via trades made through Hunter World Markets alone.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The wire fraud conspiracy charge carries a statutory maximum penalty of five years in federal prison. The wire fraud count carries a maximum penalty of 20 years in prison. The two charges related to securities fraud each carry a maximum penalty of 25 years in prison.
The case against Homm is the product of an ongoing investigation by the Federal Bureau of Investigation. Agents in the FBI’s Los Angeles Field Office worked with the FBI’s Legal Attaché Office in Rome and its sub-office in Milan, where agents worked collaboratively with Italian authorities, to secure the apprehension of Homm. The U.S. Department of Justice Attaché in Rome provided substantial assistance.
The Securities and Exchange Commission provided assistance to the FBI’s investigation.Two years ago, the United States Securities and Exchange Commission filed a civil lawsuit in Los Angeles federal court against Homm and four other defendants, alleging a microcap stock manipulation scheme as part of “portfolio pumping” plot to increase the value of Absolute Capital (see: http://www.sec.gov/litigation/litreleases/2011/lr21865.htm).
Homm recently published a book that was translated into English under the title, Rogue Financier: The Adventures of an Estranged Capitalist.
Release No. 13-033a
Four Defendants Sentenced in Timeshare FraudRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Daniel C. Alexander, Chief, Boca Raton Police Department, announced yesterday that Senior United States District Judge Kenneth L. Ryskamp sentenced defendants Anthony J. Chiaramonte, 35, of New York City, Nicholas Charles Higgins, 27, of Boynton Beach, Florida, Wensley Robin McFarlane, 53, of Lake Worth, Florida, and James Michael Tomasso, 53, of Boca Raton, Florida, for conspiring to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349.
Defendant Chiaramonte was sentenced to 51 months in prison; defendant Higgins was sentenced to one year and one day in prison; defendant McFarlane was sentenced to 90 months in prison; and defendant Tomasso was sentenced to 42 months in prison.
These defendants participated in a telemarketing boiler room through which telemarketers negotiated to purchase victim-owned timeshares on condition that the victim paid an advanced fee to cover such things as a title search. This fee ranged as high as tens of thousands of dollars. The victims were also told that this fee would be refunded to them at closing together with the money the conspirators were to pay them for the timeshares. None of these purchases ever occurred. In total, the conspiracy victimized over 1,000 people, many of whom were senior citizens, and cost the victims, in aggregate, more than $2.5 million.
Mr. Ferrer commended the investigative efforts of the FBI and the Boca Raton Police Department. This case is being handled by Assistant U.S. Attorney Kerry S. Baron.
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.
Four Co-Conspirators Sentenced in Major E. Idaho Drug CaseRead the Press Release
Nine Defendants Await Sentencing in April
POCATELLO – Four co-conspirators in a large-scale methamphetamine trafficking organization were sentenced this week in United States District Court, U.S. Attorney Wendy J. Olson announced today. The defendants appeared before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
Antonio Javier Mendoza, 28, of Shelley, Idaho, was sentenced on March 5 to 96 months in federal prison followed by five years of supervised release for conspiracy to possess with intent to distribute in excess of 50 grams of methamphetamine. Mendoza was ordered to pay a $1,000 fine. He pleaded guilty to the charge on December 18, 2012.
Fabiola Esmerelda Marin Castro, 25, a Mexican national formerly living in Rexburg, Idaho, was sentenced on March 5 to 36 months in prison for conspiracy to possess with intent to distribute in excess of 50 grams of methamphetamine. She was also fined $300 and ordered to forfeit $83,575 and two vehicles. She pleaded guilty on December 18.
Daniel Quiroz, 25, a Mexican national formerly residing in Rexburg, was sentenced on Thursday to 78 months in prison for conspiracy to possess with intent to distribute in excess of 50 grams of methamphetamine. Quiroz was ordered to serve five years of supervised release and fined $500. He will be subject to deportation following his release from prison. He pleaded guilty on December 18.
Abel Garcia, 24, of Idaho Falls, Idaho, was sentenced today for making a false statement to a bank. Garcia was sentenced to one month in prison followed by two years of supervised release, and fined $750. He pleaded guilty to the charge on December 19.
Nine other defendants have pleaded guilty and are awaiting sentencing in April. One defendant is a fugitive.
Samuel Nevarez-Ayon, 26, a Mexican national formerly living in Rexburg, pleaded guilty to continuing criminal enterprise for his leadership role in the conspiracy. Sentencing is set for April 4. He faces a minimum term of 20 years up to life in prison, a maximum fine of $2 million, and a minimum term of five years of supervised release.
Juan Ortiz, Jr., 28, Ricardo Garcia Lopez, 36, Isidoro David Herrera, 31, of Idaho Falls, Idaho; and Rafael Ignacio Guerrero, 37, a Mexican national, pleaded guilty to conspiracy to possess with intent to distribute in excess of 50 grams of methamphetamine. They each face a minimum term of ten years in prison, at least five years of supervised release, and a maximum fine of $10 million. Ortiz and Lopez are set for sentencing on April 1; Guerrero on April 3, and Herrera on April 30.
Everado Tapia Torres, Jr., 30, of Idaho Falls, pleaded guilty to possession with intent to distribute five grams or more of methamphetamine. He faces at least five years in prison, a maximum fine of $5 million, and at least four years of supervised release. Sentencing is set for April 3.
Ana Rosa Valdez-Ceja, 26, of Shelley, pleaded guilty to money laundering. She faces up to 20 years in prison, a maximum fine of $500,000, at up to three years of supervised release. Sentencing is set for April 29.
Alberto Abarca, 23, of Idaho Falls, pleaded guilty to possession with intent to distribute methamphetamine. He faces up to 20 years in prison, a maximum fine of $1 million, and up to three years of supervised release. Sentencing is set for April 29.
Nicolas Levi Olsen, 30, of Idaho Falls, pleaded guilty to an information charging him with aiding and abetting possession with intent to distribute methamphetamine. He faces up to 20 years in prison, a maximum fine of $1 million, and up to three years of supervised release. Sentencing is set for April 30.
Guadalupe Meraz, 41, of Medera, California, is a fugitive from justice. A warrant has been issued for his arrest.
According to the plea agreements, from June 2005 through January 2012, a group of individuals centered around Nevarez-Ayon entered into a conspiracy to possess and distribute in excess of 50 grams of actual methamphetamine in the Idaho Falls area. In furtherance of the conspiracy, Nevarez-Ayon admitted that he distributed methamphetamine to other individuals on at least three occasions during this same time period. In furtherance of the conspiracy, Nevarez-Ayon directed activities of various co-defendants. In addition to distributing methamphetamine, several defendant laundered proceeds from the sale of the methamphetamine, and made false loan application to local banks to further the laundering of money. During the course of the conspiracy, the defendants obtained in excess of $500,000 from the distribution of methamphetamine.
The charges are the result of a nine-month investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), including the Idaho State Police, Bonneville County Sheriff's Office, Idaho Falls Police Department, Madison County Sheriff's Office, Rexburg Police Department, Bingham County Sheriff’s Office, Fremont County Sheriff’s Office, Federal Bureau of Investigation (FBI), U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), Internal Revenue Service-Criminal Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Other federal agencies participating in the OCDETF program include the Drug Enforcement Administration and the U.S. Marshals Service.
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.
Former Quincy Man Pleads Guilty to Tax Evasion Schemes and Theft from Federal Housing ProgramRead the Press Release
BOSTON – A former Quincy man, now living in New Hampshire, was convicted yesterday for carrying out two elaborate tax evasion schemes and theft of federal housing assistance funds.
Raymond Stebbins, 70, of Manchester, NH, pleaded guilty before U.S. District Judge George A. O’Toole, Jr. to two counts of conspiracy, five counts of tax evasion, two counts of making false statements and theft of public money.
Stebbins was engaged in two schemes – first, a false invoice scheme aimed at evading the ascertainment and assessment of income taxes and, second, a Section 8 housing fraud scheme.
In 2001, Christopher McGadden, the General Manager of Xcel Fire Protection, a fire protection indoor sprinkler business, hired Stebbins in a quasi-sales position. Stebbins purportedly owned numerous businesses, among them a trucking company, a moving company, a real estate company, and two or more business equipment resale companies. Stebbins prepared and sent bogus invoices in the names of the companies he purportedly owned to Xcel. The invoices falsely reflected that one of the Stebbins’ companies had provided goods or services to Xcel when they had not. Knowing the invoices were bogus, McGadden authorized Xcel to pay the invoices by check. Stebbins then deposited the Xcel checks into various bank accounts he’d opened, structuring the withdrawals of funds from those accounts. Thereafter, Stebbins gave McGadden 90 percent of the proceeds of those checks in cash and kept 10 percent for himself. In addition, McGadden caused Xcel’s customers to write checks directly in the name of one of Stebbins’ companies. Stebbins deposited those checks in to his bank account and did the same 90/10 split with McGadden. Neither Stebbins nor McGadden paid the proper income taxes on the $490,000 they took from Xcel checks and Xcel’s customer checks.
In a second conspiracy, starting around December 30, 1999, Stebbins conspired with another individual, identified as FV, to defraud the IRS. Stebbins carried out a nearly identical false invoice tax evasion scheme in which the two men fraudulently diverted more than $3.3 million in funds rightfully belonging to FV’s construction company based in Nashua, NH.
This scheme, although larger in scope, worked virtually identically to Stebbins’ scheme with McGadden. Neither Stebbins nor FV paid the proper income taxes on the money they took from FV’s company checks.For the tax years 2005 through 2009, Stebbins attempted to evade a large part of income tax due he owed to the IRS by filing erroneous returns which under-reported his income.
Furthermore, Stebbins made false statements to the U.S. Department of Housing and Urban Development when applying for the Section 8 Housing Assistance Program which provides housing assistance payments to people who need rent subsidy in order to obtain adequate housing.
Beginning in December 1997, Stebbins represented to HUD that he was unable to afford adequate housing. As a result, Stebbins received Section 8 benefits from June 1998 through May 2008. During this time, HUD periodically attempted to establish Stebbins’ continued eligibility for Section 8 benefits, and the level of those benefits, by sending him annual re-certification forms which requested information concerning his household income level and assets. Stebbins filled out the forms with false entries that under-reported his household income and assets. At the time he was receiving Section 8 benefits from HUD, Stebbins was an approved Section 8 housing assistance landlord for two multi-family properties, one in Quincy and another in Nashua, NH. Between January 1, 2002 and May 31, 2008, Stebbins effectively stole money from HUD in the form of Section 8 housing payments that he was not entitled to.
Judge O’Toole scheduled sentencing for June 11, 2013. Defendants convicted under these statutes are subject to serve a maximum sentence of five years in prison, followed by three years of supervised release and a $250,000 fine for each count of conspiracy and false statements; a maximum of five years in prison, followed by three years of supervised release and a $100,000 fine for each count of tax evasion; and a maximum of 10 years in prison, followed by three years of supervised release and a $250,000 fine for theft of public money.
In September 2011, McGadden was sentenced by U.S. District Judge William G. Young to one year in prison, followed by two years of supervised release, a fine of $7,500 and $178,435 in restitution to the IRS. In March 2011, McGadden pleaded guilty to conspiracy to defraud the United States and tax evasion.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Cary Rubenstein, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, New York Regional Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Diane Freniere of Ortiz’s Public Corruption and Special Prosecutions Unit.
Former Pima County Sheriff’s Deputy Sentenced to Five Years in PrisonRead the Press Release
TUCSON, Ariz. – On March 7, 2013, former Pima County Sheriff’s Deputy Francisco Jimenez, of Tucson, Ariz., was sentenced by U.S. District Judge Jennifer G. Zipps to five years in prison for conspiring to commit offenses against the United States, namely, theft of government money and attempted possession with the intent to distribute marijuana. In addition, Jimenez was ordered to serve a three-year term of supervised release upon his release from prison and to pay $12,000 in restitution to the government.
Jimenez pleaded guilty on June 25, 2012, to Count One of a superseding indictment charging conspiracy to commit offenses against the United States. The superseding indictment, which also charged four other defendants, alleged eight offenses involving corruption within law enforcement. The charged offenses stemmed from multiple undercover scenarios involving the defendants’ use, or the attempted use, of law enforcement officers to steal or protect drug loads and to steal money purportedly belonging to drug trafficking organizations.Two undercover scenarios leading to charges in the superseding indictment involved the theft of government money from the glove compartment of a vehicle during traffic stops conducted by defendant Jimenez, who was then a Pima County Sheriff’s Deputy. On June 26, 2010, and then again on Oct. 8, 2010, Jimenez performed a traffic stop on a vehicle which purportedly contained drug proceeds, searched the vehicle, and stole $4,000 from the glove compartment of the vehicle.
A third undercover scenario involved the purported theft of marijuana and drug money from a storage facility in Green Valley, Ariz.. On Nov. 24, 2010, Jimenez drove his patrol car near the storage facility to provide security while co-conspirators broke into a storage unit to steal marijuana and drug proceeds that were supposedly in the storage unit.
Co-defendant Miguel Arvizu, a former Pima County Sheriff’s Deputy at the time of the charged offenses, was sentenced on July 10, 2012, to five years imprisonment for his role in arranging and participating in the offenses, as well as recruiting Jimenez and other co-defendants into the conspiracy. Arvizu was also ordered to serve a three-year term of supervised release upon his release from prison and to pay $31,000 in restitution to the government.
The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Eric Markovich and Gordon Davenport, Assistant U.S. Attorneys, District of Arizona, Tucson.
CASE NUMBER: CR-11-00791-TUC-DCB
RELEASE NUMBER: 2013-021_JimenezFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Former NFL Player Freddie Mitchell Pleads Guilty to Federal Tax Fraud ConspiracyRead the Press Release
Orlando, Florida - United States Attorney Robert E. O'Neill announces that Freddie L. Mitchell II (34, Lakeland) pleaded guilty today to conspiracy to file a false tax claim with the government. Mitchell faces a maximum penalty of 10 years in federal prison. A sentencing date has not yet been. Two co-defendants, Jamie Russ-Walls and Richard Walls, already have been sentenced in the case.
According to the plea agreement, on November 30, 2009, Internal Revenue Service Criminal Investigation (IRS-CI) determined that a fraudulent 2008 Form 1040 claiming a $1,968,288 tax refund had been filed in the name of a professional athlete (A.G). Agents soon learned that A.G. had been introduced by Mitchell to a former IRS employee, Jamie Russ-Walls. A.G. had been told by Mitchell that Jamie Russ-Walls could help A.G. get extra money back from the IRS.
At the end of July 2009, Jamie Russ-Walls and Richard Walls flew to Orlando and met with A.G. and Mitchell. Jamie Russ-Walls indicated that she and her husband worked in the tax preparation business. After providing copies of his tax records to the couple, A.G. was told that he could get additional money back from the IRS because of "grey areas" in his tax returns. A.G. eventually made a $100,000 down payment to Mitchell towards the tax preparation fee. Mitchell then split the fee with Jamie Russ-Walls and Richard Walls.
Without A.G.'s knowledge, Mitchell, Jamie Russ-Walls and Richard Walls then electronically submitted a fraudulent 2008 Form 1040 in A.G.'s name to the IRS. The form included false business losses totaling $5,367,775, resulting in a fraudulent refund of $1,968,288. A.G. never had any involvement in these businesses and never had provided the information on the tax schedule to Mitchell, Jamie Russ-Walls, or Richard Walls. The false return also had included other paperwork asking the IRS to direct deposit the refund into the bank accounts of Mitchell and Jamie Russ-Walls. A.G. subsequently learned of the fraudulent activity when the IRS rejected his regular tax return that was filed in October 2009. The IRS was then able to cancel payment on the fraudulent return.
Agents also discovered five additional false 2009 returns totaling $2,264,005 that had been submitted by Mitchell, Jamie Russ-Walls and Richard Walls. Each of these claims had been accompanied by false W-2 forms showing wages in the millions of dollars from Chameleon Enterprises, LLC. Mitchell had incorporated this business in 2003, listed himself as the manager, and opened a mailbox in Kathleen, Florida, to receive correspondence. When contacted by the IRS about the wages allegedly paid to these five individuals, Mitchell falsely verified their employment and income. Records checks later revealed that Chameleon actually had been dissolved as a corporation by the State of Florida in 2007. It did not, therefore, pay any wages in 2009.
Jamie Russ-Walls and Richard Walls previously pleaded guilty for their roles in this case. On February 14, 2013, Richard Walls was sentenced to 3 years and 1 month in federal prison. Jamie Russ-Walls was sentenced on February 1, 2013, to a term of 5 years of probation.
This case was investigated by IRS-CI. It is being prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
Former Merrill Lynch Financial Advisor Sentenced for EmbezzlementRead the Press Release
TALLAHASSEE, FL B James Ryan Lanier, 33, was sentenced to 106 months in federal prison for embezzling more than $800,000 from Merrill Lynch clients. The sentence was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
Between 2008 and 2010, Lanier used his position as a financial advisor for Merrill Lynch in Tallahassee to funnel approximately $887,931 in client funds to his own personal bank accounts. Lanier was able to induce Merrill Lynch Client Associates to wire transfer client funds to bank accounts Lanier controlled by using forged client authorization letters and falsely claiming that his clients had verbally approved the transfers. To facilitate the scheme, Lanier purposely sought assistance from Merrill Lynch employees who were unfamiliar with Lanier’s clients. Lanier used the embezzled client funds to make loan payments, and to purchase vehicles, an interest in a cellular telecommunications business, and a condominium in Albany, Georgia.
Last November, Lanier pled guilty to 13 counts of wire fraud, three counts of mail fraud, four counts of money laundering, and two counts of aggravated identity theft in connection with the embezzlement.
In addition to the prison sentence, Lanier was ordered to pay $887,931 in restitution to Merrill Lynch.
U.S. Attorney Marsh commended the work of the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigations, and the United States Marshal’s Service, whose joint investigation led to the arrest in this case. Ms. Marsh stated, “This office will vigorously prosecute financial advisors and consultants who victimize and swindle their own clients. This sentence should serve as a stark warning to those who may be tempted to line their own pockets by betraying their clients’ trust.”
The case was prosecuted by Assistant U.S. Attorney Jason Coody.Former Laredo Police Officer SentencedRead the Press Release
On Wednesday, March 6, 2013, former Laredo Police Officer Eliseo Montes, Jr., age 33, was sentenced to 20 years imprisonment for his involvement in a conspiracy to distribute large amounts of marijuana, announced U.S. Attorney Robert Pitman, Western District of Texas. The case was investigated by the Internal Revenue Service(IRS) Criminal Investigation Division, the Irving Police Department, the Federal Bureau of Investigation, the Department of Homeland Security Immigration and Customs Enforcement—Homeland Security Investigations (HSI), the Waco Police Department, and the Laredo Police Department.
A federal jury in Waco, Texas, found Montes guilty of two counts of conspiracy to possess with intent to distribute marijuana and conspiracy to commit money laundering on December 20, 2012. On Wednesday, United States District Judge Walter S. Smith, Jr., sentenced Montes terms of imprisonment of 240 months on each count to run concurrently, and a $1,000 fine on each count. Judge Smith remanded Montes to the custody of the U.S. Marshals Service following sentencing.
According to court records, members of the conspiracy acquired marijuana from sources in Mexico and distributed it in Waco and Dallas, Texas, as well as other states. Evidence at trial established that Montes invested in quantities of the marijuana. In January 2009, while employed as a Patrol Sergeant with the Laredo Police Department, Montes assisted members of the conspiracy by staging a traffic stop to help two conspirators avoid paying a debt they owed for marijuana. Montes and the coconspirators staged the stop to make it appear to the marijuana supplier that law enforcement had seized monies purportedly intended to pay the marijuana debt. Montes was paid for his assistance. The conspirators conducted various financial transactions with various banking institutions to conceal the profits from the sale of marijuana.
Assistant United States Attorney Mary Kucera prosecuted this case on behalf of the Government.Former Gymnastics Coach Charged with Attempted Transfer of Obscene Material to A Minor and Attempted Receipt and Possession of Child PornographyRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced the arrest of defendant Raymond Adams, 42, of Boca Raton, in connection with a seven count indictment charging Adams with attempted transfer of obscene material to a minor, possession of child pornography, and attempted receipt of child pornography, in violation of Title 18, United States Code, Sections 1470, 2252(a)(2) and 2252(a)(4)(B).
Adams, who is also facing pending state charges in Broward County 17th Judicial Circuit in case number 09019123CF10A related to molesting a 10 year old gymnastics student of his in 2009, had his initial appearance before United States Magistrate Judge William Matthewman yesterday. A pre-trial detention hearing is set for Monday, March 18, 2013, before the duty United States Magistrate Judge. If convicted, Adams faces a mandatory statutory minimum sentence of five years and a possible maximum statutory sentence of up to twenty years in prison and a lifetime of supervised release. In addition, Adams would have to register as a sex offender.
Anyone with any information about this case should contact the FBI at (305) 944-9101.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Project Safe Childhood was launched in May 2006 by the Department of Justice and is 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.
Mr. Ferrer commended the investigative efforts of the FBI. The case is being prosecuted by Assistant U.S. Attorney Brandy Brentari Galler.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Executive Director of La Posta Gaming Commission Admits Embezzling Funds from TribeRead the Press Release
United States Attorney Laura E. Duffy announced that Troy Teague, former Executive Director of the La Posta Gaming Commission ("Commission") pled guilty today in front of Magistrate Judge Jan Adler to embezzling $57,000 from the La Posta Band of Mission Indians.
According to court records, Teague served as Executive Director of the Commission from 2006 to 2011. In that capacity, he was responsible for: (1) creating the Commission's budget and maintaining the Commission's books and records; (2) issuing checks on behalf of the Commission; and (3) monitoring, reviewing and making payments on all Commission credit cards. Teague understood that any and all checks he issued B and all credit card charges B on the Commission account could only lawfully be used for legitimate La Posta business.
Despite the fact that Teague recognized that he could not use the Commission credit card or bank account for personal expenses, he used both the credit card and checking account for personal business, including: (i) membership dues at a gun club; (ii) Home Depot charges; (iii) car audio/video components; (iv) vacation expenses; (v) legal fees; (vi) a grain mill; (vii) restaurant expenses, (viii) car rentals; and (ix) entertainment (e.g, comedy club bill). Teague admitted that (between June 2009 and April 2011) he embezzled a total of $57,000 from La Posta. Thereafter, he paid the tribe's credit card bills and concealed from the Commission that they included his personal expenses.
"The United States Attorney's Office is committed to doing its part to enhance security in Indian Country,” said Assistant U.S. Attorney Jill Burkhardt, community outreach director and tribal liaison. “The diligent prosecution of federal crimes committed on reservations is an important complement to State and Tribal law enforcement efforts.
" U.S. Attorney Duffy praised the enforcement work by the FBI agents who diligently pieced together the full scope of the fraud.
"Today's conviction proves that Mr. Teague exploited and violated his position of trust as the Executive Director with the La Posta Band of Mission Indians and unjustly enriched himself at the expense of the tribe," said Daphne Hearn, Special Agent in Charge of the San Diego FBI Field Office. “The FBI is committed to ensuring those in positions of trust are held to the highest standards and anything less will be vigorously pursued and investigated.”
DEFENDANT Criminal Case No. 13cr0852-MMA Troy Teague Age: 38 El Cajon, California SUMMARY OF CHARGESOffense: Title 18, United States Code, Section 1163 - Embezzlement and Theft from an Indian Tribal Organization
INVESTIGATING AGENCY
Maximum penalties: 5 years custody; $250,000 fine; 3 year supervised release.Federal Bureau of Investigation
Former Destin Mortgage Broker Sentenced to 2 Years in Prison for Bank FraudRead the Press Release
PENSACOLA, FLORIDA – A former mortgage broker, Randolph Branham, 46, of Destin, Florida, was sentenced in federal court yesterday to 2 years in prison and ordered to pay over $1.8 million in restitution, having been adjudicated guilty of multiple bank fraud violations.
In December of last year, Branham pled guilty to a five-count indictment, alleging that he had overstated his income to financial institutions and mortgage lenders on mortgage loan documents related to six pieces of property located in Destin, Panama City Beach, and Freeport, Florida. As a part of the scheme to defraud the lenders, Branham also submitted fraudulent letters falsely inflating his income. Approximately $2.4 million in loans were issued by the lenders as a result of Branham’s fraud. The lenders defrauded included: The First National Bank of Florida (which was closed by the FDIC in September 2011), SunTrust Mortgage, Trustmark National Bank, First City Bank of Florida, IndyMac Bank (now known as OneWest Bank), and Bank of America.
Yesterday afternoon, Senior U.S. District Judge Lacey A. Collier sentenced Branham to 2 years in prison and ordered him to pay over $1.8 million in restitution to the victim lenders and the FDIC as Receiver for The First National Bank of Florida due to the bank’s closure.
Pamela C. Marsh, United States Attorney for the Northern District of Florida, praised the work of Northwest Florida Mortgage Fraud Task Force, a partnership between the Federal Bureau of Investigation, the Okaloosa County Sheriff’s Office and the Florida Department of Law Enforcement.
U.S. Attorney Marsh stated, “The successful prosecution of this mortgage broker on mortgage fraud offenses demonstrates the commitment of the Department of Justice to combating mortgage fraud in the Northern District of Florida. It is critical that we protect the integrity of the real estate market and banking institutions in our communities, which are major contributors to the health of our economy in Florida. I commend the investigative activities of the Northwest Florida Mortgage Fraud Task Force, a partnership between the Federal Bureau of Investigation, the Okaloosa County Sheriff’s Office and the Florida Department of Law Enforcement. Together, they did an excellent job in unraveling some very complicated real estate financial transactions in this case.”
The case was prosecuted by Assistant United States Attorney Tiffany H. Eggers.Federal Officials Speak to Alban Elementary School Students About Making Responsible DecisionsRead the Press Release
U.S. Attorney Goodwin, U.S. Marshal Foster say Alban’s service learning club builds student character and strong communities
ST. ALBANS, W.Va. – United States Attorney Booth Goodwin and U.S. Marshal John D. Foster today met with students from Alban Elementary School in St. Albans, W.Va. to discuss the importance of making responsible decisions. Goodwin and Foster also commended the 44 students for their participation in a service learning project known as The Success Club at Alban Elementary.
The Success Club, established by former Alban Elementary teacher Deb Austin Brown, teaches students a variety of success strategies, focuses on community service and inspires youth leadership.
“Educating our young people is one of the most effective ways that we can solve problems in our communities.” U.S. Attorney Booth Goodwin said, “Service learning projects, like the Success Club at Alban, are invaluable. They provide more than just an outlet for students to interact with peers – they serve as a source where students can begin to develop a good ethical compass.”
Goodwin created the United States Attorney’s Ambassador for Justice Awards program in April 2012 to honor West Virginia high school juniors who have shown outstanding leadership skills and a commitment to social justice. The Ambassador for Justice program was formed following a tragic high school shooting in Chardon, Ohio, that claimed the lives of three young people and wounded two others in February of last year. The Ambassador for Justice program was also established in response to a handful of reports that involved school bullying and attempted acts of violence by students within the southern district of West Virginia.
U.S. Marshal John Foster said,“This program at Alban Elementary is an important way to equip young people with problem-solving techniques and leadership qualities. The students, in turn, can use these qualities to add value to and strengthen their communities.”
Alban Success Club director Deb Austin Brown said, “It truly meant a great deal for our students to hear from U.S. Attorney Goodwin and U.S. Marshal Foster. Our service learning club was created primarily to help students recognize the importance of community service. This is a building block for their growth. When students are motivated and set goals, they are bound to have success.”
Over the past two years, Goodwin and Foster have visited several schools throughout the southern district of West Virginia speaking to students about bullying prevention, making responsible decisions and educating youth about the harmful effects of drug abuse.
For more information about the Success Club at Alban, please visit: http://www.99successstrategies.com/
Everett Woman who was Key Player in Mexico Based Drug Distribution Ring Sentenced to PrisonRead the Press Release
An Everett resident, who was deeply involved in a conspiracy to distribute drugs from Mexico and obtain guns to take back across the border was sentenced today in U.S. District Court in Seattle to five years in prison and four years of supervised release for Conspiracy to Distribute Controlled Substances, announced U.S. Attorney Jenny A. Durkan. During the 2012 investigation, MICALIA VALENZUELA, 32, was captured on court authorized wiretaps discussing drug distribution, obtaining weapons and was reported to advocate violence against targets in Mexico. VALENZUELA, who split her time between Mexico and Everett during the course of the investigation, was arrested March 29, 2012. She was indicted along with 34 other members of the drug trafficking ring including her father and other relatives. At sentencing U.S. District Judge Robert S. Lasnik recommended that VALENZUELA get drug treatment while incarcerated.
According to records filed in the case, during the investigation, agents seized a significant quantity of heroin, methamphetamine, and firearms, including military-style assault rifles and sniper rifles which were bound for Mexico. VALENZUELA was actively involved in the distribution of the drugs and discussing the weapons the group was trying to obtain to smuggle back to Mexico. When she was arrested at her apartment investigators found approximately an ounce of heroin, together with smaller amounts of methamphetamine, cocaine and heroin; a loaded revolver and ammunition; body armor; and a “shopping list” of firearms, including AK-47s and AR-15 style assault rifles. In her plea agreement VALENZUELA admits distributing heroin in November 2011. VALENZUELA served the drug trafficking organization as a drug courier.
“The same cartels responsible for violence in Mexico have infiltrated Washington communities,” said Brad Bench, special agent in charge of HSI Seattle. “These are people who resort to violence to protect their criminal enterprise. HSI is focused on rooting these operatives out of our communities by disrupting every level of their illicit business.”
Ten members of the conspiracy have pleaded guilty. Trial for the other defendants is scheduled for May 6, 2013.
The case was investigated by the ICE’s Homeland Security Investigations, the Bureau of Alcohol, Tobacco and Firearms (ATF), the Drug Enforcement Administration (DEA), the Snohomish Police Department, Washington State Patrol, the Snohomish Regional Drug Task Force and the Seattle Police Department.
The case is being prosecuted by Assistant United States Attorneys Vince Lombardi, Jeffrey Backhus and J. Tate London.
Elmira Woman sentenced for filing false tax returnsRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Dawn White, 28, of Elmira, N.Y., who was convicted by a federal jury of conspiracy and filing false federal income tax returns, was sentenced by U.S. District Court Judge Charles J. Siragusa to 33 months in prison and ordered to pay $67,926 in restitution to the Internal Revenue Service.
Assistant U.S. Attorney Richard A. Resnick, who handled the trial of the case, stated that in 2005 and 2006, White and her sister Jennifer Ford, filed several false income tax returns with the IRS and New York State. Specifically, White and her sister filed tax returns which contained false wage and tax withholding information that resulted in tax refunds to which Ford knew she was not entitled.
For example, for the 2005 tax year, White submitted an income tax return claiming to have earned $94,000 from General Revenue Corporation with $39,000 withheld in federal taxes. In actuality, the defendant earned only approximately $4,000 from General Revenue Corporation and had only $325 in taxes withheld from her earnings. As a result, White received a refund from the IRS in the amount of approximately $21,000. In total, 13 false tax returns were filed, resulting in a loss of approximately $100,000 to the IRS.
Jennifer Ford was convicted of conspiracy and filing false income tax returns in January 2012 and will be sentenced on March 26, 2013.The sentencing is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Toni Weirauch, Special Agent-In-Charge, New York Field Office.
East St. Louis Man Pleads Guilty to Firearm OffenseRead the Press Release
On February 7, 2013, Detrin C. Spraggins, a 46-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. Spraggins is scheduled for sentencing on May 31, 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. Spraggins also agreed to the forfeiture of the firearm.
Court proceedings revealed that on February 15, 2012, law enforcement officers patrolling in East. St. Louis, Illinois, observed individuals standing around a pickup truck with the door open parked across from an apartment building. As officers drove closer, the driver of the pickup truck closed the driver’s door and quickly sped off. Other officers stopped Spraggins when he pulled into a driveway. Spraggins consented to a body search, where contraband was discovered. This find led to an officer further opening the ajar door of the pickup truck to look for additional contraband. As he did so, he noticed the butt of a firearm sticking out of the driver’s side door pocket.
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. The WAVE Task Force receives financial support through the Department of Justice’s Project Safe Neighborhoods (PSN) initiative, a nationwide federal program which endeavors to address gun-related violence.
This case is assigned to Assistant United States Attorney Daniel T. Kapsak for prosecution.
Drug Dealer Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. - Joseph Augustus Reed, 36, of Fairhope, was sentenced in federal court yesterday for his role in the distribution of crack cocaine there. Reed entered a guilty plea to the charge of possession with intent to distribute crack cocaine in May of 2012. He was sentenced on March 7, 2013, by District Court Judge William H. Steele. Judge Steele ordered that Reed serve 114 months imprisonment, to be followed by a supervised release term of three years. Judge Steele ordered that the defendant receive drug treatment, and that during his supervised release term, he will be subject to drug testing. Judge Steele also ordered that Reed pay a $100 special mandatory assessment. No fine was imposed.
The case was investigated by the Fairhope Police Department and the Federal Bureau of Investigations. It was prosecuted in the United States Attorney’s Office by Assistant United States Attorney Gloria Bedwell.
District Man Sentenced to Five Years in Prison for Shooting High-Powered Rifle- Incident Took Place in Broad Daylight in Southeast Washington-Read the Press Release
WASHINGTON –Nathaniel Carter, 34, of Washington, D.C., was sentenced today to five years in prison on charges stemming from a shooting that took place in broad daylight in Southeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Carter pled guilty in January 2013, in the Superior Court of the District of Columbia, to charges of assault with a dangerous weapon and possession of a firearm during a crime of violence. He was sentenced by the Honorable Lynn Leibovitz. Upon completion of his prison term, Carter will be placed on three years of supervised release.
According to the government’s evidence, the shooting took place at 9:30 a.m. on Dec. 14, 2011, in an apartment community in the 3400 block of 13th Place SE. Carter fired six shots from a high-powered rifle at another man who tried to flee from the gunfire. The dispute stemmed from an alleged altercation that occurred between the two men in 2009. The men had largely avoided each other until a verbal altercation on the morning of the shooting. No one was injured by the gunfire, including numerous innocent bystanders who were in the area at the time of the shooting. At least one round pierced an apartment door, striking the steps inside.
Detectives from the Metropolitan Police Department (MPD), acting on information from the community, quickly located the firearm and other hidden evidence from the crime scene.
In announcing the sentence, U.S. Attorney Machen commended the detectives of MPD’s Seventh District who were involved in the arrest and investigation of this case, as well as the members of the community whose cooperation led to the successful prosecution of this case. Finally, U.S. Attorney Machen expressed his appreciation to Paralegal Specialists D’Yvonne Key and Richard Cheatham and Assistant U.S. Attorney Mervin A. Bourne, Jr., who investigated and prosecuted the case.
13-087District Man Pleads Guilty to Robbery Charge in Attack of Senior Citizen-Defendant Accosted the Victim in Broad Daylight in Northwest Washington-Read the Press Release
WASHINGTON – Reggie Gordon, 29, of Washington, D.C., has pled guilty to a charge of robbery for an attack against a senior citizen that took place earlier this year in Northwest Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Gordon pled guilty on March 7, 2013 in the Superior Court of the District of Columbia. The Honorable Heidi M. Pasichow scheduled sentencing for May 30, 2013. Under the court’s voluntary sentencing guidelines, Gordon faces a likely range of 30 to 42 months in prison.
According to the government’s evidence, Gordon accosted a 69-year-old man at about 2:40 p.m. on Feb. 8, 2013, in area of 14th and Newton Streets NW. Gordon approached the victim from behind, with a knife in his hand, and demanded, “Give me the bag, give me the cash.” The victim handed over a bag, which contained cigarettes, and took money out of his pocket and handed it to Gordon. After Gordon fled, the victim flagged police, who immediately began searching the area. Gordon was stopped soon afterward by police and arrested.
In announcing the plea, U.S. Attorney Machen commended the work of the officers of the Metropolitan Police Department (MPD), whose quick work led to the defendant’s arrest. He also praised those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Debra McPherson and Todd McClelland, and Intelligence Specialist Sharon Johnson. Finally, he thanked Assistant U.S. Attorney Phil Selden, of the Fourth District Unit of the Felony Major Crimes Section, who investigated and prosecuted the case.
13-091District Man Pleads Guilty to Federal Charges After Search Turns up A Semiautomatic Gun and PCP-Defendant Arrested After A Struggle with Police-Read the Press Release
WASHINGTON - Antowaun Lynch, 29, of Washington, D.C., has pled guilty to federal drug and weapons offenses stemming from a search last fall in which he was caught by police with a gun and phencyclidine (PCP), U.S. Attorney Ronald C. Machen Jr. announced today.
Lynch pled guilty on March 7, 2013 in the U.S. District Court for the District of Columbia to unlawful possession with intent to distribute phencyclidine and unlawful possession of a firearm and ammunition by a person convicted of a crime. The Honorable Rosemary M. Collyer scheduled sentencing for May 16, 2013. Lynch faces up to 20 years in prison. Judge Collyer ordered that he be held without bond pending his sentencing.
According to the government’s evidence, in the early morning hours of Sept. 30, 2012, officers with the Metropolitan Police Department (MPD) were called to the 600 block of Edgewood Street NE to investigate several robberies. Lynch was part of a group of people that the officers encountered. When the officers approached him, Lynch appeared nervous and asked, “Why are you doing this?” Lynch continued to turn his body to the right toward the police car and away from the officers. He put his right hand on his waistband at his side. An officer then put his hand on Lynch’s waistband and noticed a weapon was concealed in the area.
When Lynch attempted to grab the weapon and remove it from his waistband, the officers grabbed onto the gun. Lynch kicked and resisted the officers who were trying to remove the gun and arrest him. After this struggle, the officers were able to retrieve the weapon, a semiautomatic handgun loaded with six rounds of 9mm ammunition in the magazine and one round in the chamber. After his arrest, officers also found a clear glass vial with a black top containing a yellow liquid of approximately one ounce of fluid PCP in Lynch’s pants pocket.
Lynch has a 2005 felony conviction in Virginia.
In announcing the plea, U.S. Attorney Machen commended the actions of the MPD officers who participated in this arrest and the removal of the handgun and drugs. He also acknowledged the efforts of Assistant U.S. Attorneys Emory V. Cole and Brittan Heller, who investigated and prosecuted the case.
13-088Department of Justice and Federal Trade Commission Extend <br /> Public Comment Period for Patent Assertion Entity WorkshopRead the Press Release
WASHINGTON – The Department of Justice and the Federal Trade Commission (FTC) announced today that the deadline for submitting written comments on their recent Patent Assertion Entity Activities Workshop has been extended from March 10, 2013 to April 5, 2013.
The workshop, held on Dec. 10, 2012, explored the impact of patent assertion entity (PAE) activities on innovation and competition and the implications for antitrust enforcement and policy. Additional information about the workshop is available at the Department of Justice and FTC websites. Comments may be submitted via e-mail to: [email protected]. Submitted comments will be made publicly available on the Department of Justice and FTC websites.Press contacts:
Department of Justice
Office of Public Affairs
Gina Talamona
202-514-2007Federal Trade Commission
Office of Public Affairs
Peter Kaplan
202-326-2334Defendant in Children Charity Fraud Case Pleads GuiltyRead the Press Release
Nehemiah Muzamhindo Admits Bilking W.K. Kellogg Foundation of $800,000GRAND RAPIDS, MICHIGAN – Nehemiah Muzamhindo, a resident of Grand Rapids, Michigan and citizen of Zimbabwe, pled guilty to federal money laundering and income tax charges before U.S. Magistrate Judge Ellen Carmody, U.S. Attorney Patrick Miles announced today. Joining Miles in the announcement were Scott Collins, Special Agent in Charge of the Diplomatic Security Service (“DSS”) and Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation.
Muzamhindo faces a maximum sentence of 23 years in prison; an order of restitution and criminal fines, and deportation. Sentencing, which will be conducted by U.S. District Judge Janet T. Neff, has not yet been scheduled.
Muzamhindo was investigated by federal agents in 2008 for his role in a scheme to obtain fraudulent U.S. passports. While conducting a search warrant on his home, agents discovered evidence that Muzamhindo had received large wire transfers from bank accounts held by the W.K. Kellogg Foundation (“WKKF”) in the Republic of South Africa. WKKF has its headquarters in Battle Creek, Michigan and is one of the world’s largest children’s charities. The investigation ultimately determined that Muzamhindo was part of a fraudulent scheme to submit bogus invoices for payment to WKKF, which paid members of the scheme approximately $800,000 between 2006 and 2008 before learning that it was being swindled.
By pleading guilty to a federal money laundering charge, Muzamhindo admitted to being part of the scheme, and to wiring roughly half of the fraudulent funds back to Africa, where one of his accomplices lived. He also admitted that he had filed false income tax returns during 2006 and 2008 because he did not report any of the money he received from WKKF during those years.
U.S. Attorney Miles commented that “The positive result in this case is directly attributable to the dedicated and coordinated efforts of federal law enforcement, beginning with the Diplomatic Security Service uncovering Muzamhindo’s scheme in the course of an unrelated passport fraud investigation. Their diligence prevented the loss of even more money meant to help disadvantaged children. Then agents of the IRS worked to have Muzamhindo held accountable for his attempt to cheat on his taxes, reinforcing the message that swindlers will be held accountable for the full measure of their deceit in this district.”
“The worldwide presence and investigative capabilities of the Diplomatic Security Service enabled us to pull all of the pieces together – uncovering the connections to South Africa; allowing DS agents to compile the evidence that assisted the prosecution team to accepting Muzamhindo’s guilty plea,” said Scott Collins, Assistant Special Agent in Charge of the Chicago Field Office of the Diplomatic Security Service. “Our Detroit Resident Office led our investigation and worked collaboratively with the IRS and U.S. Attorney’s Office. DSS takes very seriously our charge to protect the integrity of the U.S. passport and visa. Those who fraudulently acquire U.S. travel documents often do so in order to commit other crimes.”
Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation added that Muzamhindo’s crime was worse than many typical fraud cases: “He diverted money intended for children for his own greedy purposes.”
The case was prosecuted by Assistant U.S. Attorney Timothy VerHey and was investigated by special agents of the IRS-Criminal Investigation and of the Diplomatic Security Service.
END
Davenport Man Sentenced After Federal Drug ConvictionRead the Press Release
DAVENPORT, IA- On March 8, 2013, Leeandrel Quinn-Lake, age 35, from Davenport, Iowa, was sentenced by United States District Court Judge John A. Jarvey to 168 months imprisonment, announced United States Attorney Nicholas A. Klinefeldt. Quinn-Lake was also ordered to serve five years of supervised release and pay $100 towards the Crime Victims Fund. As part of the plea proceeding, Quinn-Lake admitted that from October 2007 to February 2009 he joined a conspiracy to distribute cocaine, obtained quantities of crack cocaine from multiple sources, and then distributed this cocaine in the Davenport area. Quinn-Lake admitted that he was responsible for between 840 grams to 2.8 kilograms of crack cocaine.
This case was investigated by the Drug Enforcement Administration, the Iowa Division of Narcotics Enforcement, the Davenport Police Department and the United States Marshals Service and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Davenport Man Sentenced After Federal Conviction for Felon in Possession of AmmunitionRead the Press Release
DAVENPORT, IA- On March 8, 2013, Yusuf Hasan Shariff, age 56, from Davenport, Iowa, was sentenced by United States District Court Judge John A. Jarvey to 15 months imprisonment on the charge of possession of ammunition as a felon, announced United States Attorney Nicholas A. Klinefeldt. Shariff was also ordered to serve three years supervised release and pay $100 towards the Crime Victims Fund.
On April 13, 2012, Scott County, Iowa, Sheriff deputies responded to a local gas station when Shariff was unable to pay for gasoline. When Shariff was unable to find a means to pay the bill, he handed the deputy a .32 caliber bullet and said “. . . let’s take this to the next level.” During a transport to jail, Shariff made verbal threats to kill the deputy. The Clinton County dispatcher also reported that police had made contact with Shariff earlier that day, and that Shariff made statements about revenge against the police department.
On April 17, 2012, a Davenport police officer conducted a traffic stop of a mini-van driven by Shariff. Shariff ended up crashing his vehicle into a retaining wall near Genesis West in Davenport. When a Davenport police officer approached Shariff, he refused several orders to remain still and to go down to his knees. As the officer approached, Shariff stood up, pulled away from the officer, and then swung at and punched the officer in the mouth. A second police officer arrived and Shariff physically struggled with both officers. As they went to the ground, Shariff obtained control of a knife and stabbed at the police officers. With the assistance of a third officer, Shariff was taken into custody. While being transported to jail, Shariff again made verbal threats to kill a Davenport police officer.
On April 19, 2012, Davenport police officers searched Shariff’s Davenport residence and seized an additional 15 rounds of .32 caliber ammunition. On October 22, 2012, Shariff pled guilty to possession of ammunition as a felon, having previously been convicted in 1999 of a felony drug offense.
This case was investigated by the Bureau of Alcohol, Tobacco and Firearms, the Davenport Police Department, and the Scott County Sheriff’s Office, and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the Project Safe Neighborhoods initiative.
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Dallas-Area Businessmen Charged in Plot Involving Illegal Export of Approximately $12 Million Worth of Computers to IranRead the Press Release
Defendants Allegedly Shipped Computers to Dubai, Concealing That They Were Ultimately Destined for Iran
DALLAS — Borna Faizy, aka “Brad,” and Touraj Ghavidel, aka “Brent Dell,” corporate owners/operators of Signal Microsystems in Addison, Texas, a company that sold computers domestically and internationally, were arrested yesterday by members of the North Texas Counterproliferation Task Force on an indictment alleging that they illegally shipped computer equipment to Iran through Dubai. They made their initial appearances yesterday afternoon and were released on bond. In addition, both pleaded not guilty to the charges. Today’s announcement was made by Sarah R. Saldaña, United States Attorney for the Northern District of Texas and Diego Rodriguez, Special Agent in Charge for the FBI Dallas Division.
The indictment, which was returned under seal by a federal grand jury in Dallas earlier this week, alleges that from 2005 to January 2012, Faizy, 42, of Frisco, Texas, and Ghavidel, 44, of Plano, Texas, conspired together and with others to export computers and computer equipment from the United States to Iran, in violation of the prohibitions imposed upon that country by the United States Government, without first having the required authorizations or licenses from the Office of Foreign Assets Control (OFAC).
As part of their conspiracy, the indictment alleges that Faizy and Ghavidel acquired computers from U.S. companies to supply to end-users in Iran and concealed from the United States that the computers were destined for Iran. They allegedly evaded regulations, prohibitions and licensing requirements of the Iranian Transactions and Sanctions Regulations (ITSR), which prohibit, among other things, the export, re-export, sale, or supply, directly or indirectly, from the United States to Iran, without prior authorization from the Secretary of the Treasury. These regulations further prohibit the unauthorized exportation of goods from the United States to a third country if the goods are intended or destined for Iran.
Faizy and Ghavidel allegedly actively recruited Iranian customers by marketing their computer business to business owners and individuals in Iran, and, in 2008 or 2009, attended a computer trade show, known as “GITEX,” in Dubai to recruit Iranian customers. The defendants allegedly used freight-forwarding companies in Dubai to ship the equipment to Iran and communicated with coconspirators using fictitious names and coded language to obscure the true identities and locations of the ultimate consignees and end-users. They also created invoices and export forms that falsely identified the ultimate consignees of the shipments as parties in Dubai.
Each defendant is charged with one count of conspiracy to illegally export to Iran, nine substantive counts charging illegal export and attempted export of goods to Iran and one count of making false statements to a federal agency. Upon conviction, the conspiracy count carries a maximum statutory penalty of 20 years in federal prison. Each of the substantive counts carries a maximum statutory penalty of 20 years in federal prison and each of the false statement counts carries a maximum penalty of five years in federal prison. In addition, upon conviction, each count carries a maximum fine of $250,000.
The investigation is being conducted by members of the North Texas Counterproliferation Task Force, which includes the FBI, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Department of Commerce and Defense Criminal Investigative Service.
The prosecution is being handled by Assistant U.S. Attorneys J. Mark Penley, Gary C. Tromblay and Katherine Miller of the Northern District of Texas and Trial Attorney David Recker of the Justice Department’s National Security Division.
An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.
Dallas Man Sentenced to 20 Years in Federal Prison for Role as Leader of Methamphetamine Distribution ConspiracyRead the Press Release
DALLAS — Todd Ray Walker, 39, of Dallas, was sentenced this afternoon by U.S. District Judge Barbara M. G. Lynn to 240 months in federal prison for conspiring to possess with the intent to distribute methamphetamine, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Walker has been in custody since June 27, 2011, when he was arrested by officers with the Dallas Police Department.
According to documents filed in the case, Walker admitted that on multiple occasions from January 2011 to the date of his arrest, he received multi-ounce quantities of methamphetamine from multiple Dallas-based supply sources, stored the drugs at residences on Westglen Drive and Forney Road in Dallas, and distributed the drugs from the residences. During the time of the conspiracy, Walker possessed and/or distributed more than two kilograms of methamphetamine.
In addition, Walker admitted that in retaliation for the theft of drugs and drug proceeds from the Westglen residence, on or about June 27, 2011, he held a female against her will for several hours at the residence. He forced her to strip so that he could search her for drugs and/or money and admits that he was armed with a handgun while he held her inside the residence. Her hands were then bound by co-defendant James Darnell Brown, and Walker took photographs of her being assaulted by co-defendants Amy Suzanne Benat and Rachel Marie Anderson. Walker, Brown, Benat and Anderson were arrested when officers with the Dallas Police Department arrived at the residence on June 27, 2011, and a subsequent search of the residence resulted in the seizure by law enforcement of approximately 250 grams of methamphetamine and multiple firearms.
Walker was ordered to forfeit his residence on Westglen Drive and 36 firearms to the United States.
This Organized Crime Drug Enforcement Task Force (OCDETF) investigation was conducted by the FBI. To date, a total of 50 defendants, mostly customers of Walker, have been named in multiple indictments.
Deputy Criminal Chief Assistant U.S. Attorney Rick Calvert was in charge of the prosecution.
Dale City Man Sentenced to 220 Months for Producing Child PornographyRead the Press Release
ALEXANDRIA, Va. – MacArthur Taylor, 40, of Dale City, Va., was sentenced to 220 months in prison, followed by 15 years of supervised release, for creating child pornography by himself engaging in sexual activity with a 14-year-old girl.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Stephan M. Hudson, Prince William County Chief of Police, made the announcement after sentencing by United States District Judge Anthony J. Trenga.
Taylor pleaded guilty on June 11, 2012, to producing child pornography. He was identified by law enforcement after he provided his Dell Streak Tablet to an acquaintance to repair. While attempting to repair the tablet, the acquaintance saw still images of a female minor in various states of undress. A video produced by Taylor was also later discovered on the tablet showing the victim engaging in sexually explicit conduct. When law enforcement interviewed the young girl, she admitted to engaging in sexually explicit conduct with Taylor for the past two years.
The investigation was conducted by the Prince William County Police Department and FBI Washington Field Office’s Child Exploitation Task Force. Assistant United States Attorney Jay V. Prabhu and Department of Justice Trial Attorney Maureen C. Cain are prosecuting the case on behalf of the United States.
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.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Coon Rapids Man Charged for Stealing Prosthetics from the U of M, Selling Them OnlineRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 52-year-old Coon Rapids man was charged with allegedly stealing prosthetics and related supplies from the University of Minnesota Medical Center-Fairview and selling them online. Peter Stasica was charged via an Information with one count of wire fraud.
Allegedly, from February to August 2011, Stasica, who was then Prosthetics manager for Fairview’s Orthotics and Prosthetics Department, began removing prosthetics and prosthetic-related supplies without authorization to sell on eBay. In addition, Stasica allegedly solicited under false pretenses from several patients prosthetics they were not using. Stasica did not disclose to those patients that he intended to sell their prosthetics.
If convicted, Stasica faces a potential maximum penalty of 20 years in prison. All sentences will be determined by a federal district court judge. This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David M. Genrich.
A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.