Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
26 February 2013
Tuscaloosa Man Sentenced to Nearly Six Years in Prison for Possessing Child PornographyRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Tuscaloosa man to nearly six years in prison for possessing child pornography obtained over the Internet, announced U.S. Attorney Joyce White Vance, U.S. Immigration and Customs Enforcement Special Agent in Charge Raymond R. Parmer Jr. and Alabama Department of Public Safety Director Hugh B. McCall.
BRUCE HENRY, 37, pleaded guilty before U.S. District Judge Inge P. Johnson to one count of possessing child pornography. Judge Johnson then sentenced Henry to 70 months in prison and ordered that he be taken into custody immediately. He must serve five years of supervised release after completing his prison term.
According to Henry’s plea agreement with the government, he possessed more than 300 images of child pornography that he obtained over the Internet between April 1, 2009, and April 1, 2011. The images are of real children engaged in sexually explicit conduct.
Henry victimized specific children and harmed our society by his illegal conduct, the government said in its sentencing memorandum to the court. Individuals who view and possess child pornography enable and support its continued production by providing the incentive for its creation and distribution, the memorandum notes.
“This defendant did not just look at a few images once in his life, but used technology for years to possess hundreds of images that depict the rape and exploitation of prepubescent children,” according to the memorandum.
ICE and the Alabama Bureau of Investigation investigated the case, and it was prosecuted by Assistant U.S. Attorney Daniel J. Fortune.
Three Individuals Enter Pleas in Federal CourtRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA — Three individuals entered pleas of guilty on February 25, 2013, in United States District Court in Martinsburg before Magistrate Judge David J. Joel.
United States Attorney William J. Ihlenfeld, II announced that:
ISMAIL OMARA, age 34, formerly of Wallingford, Pennsylvania, entered a plea of guilty to “Bank Fraud.” Between March 16 and April 15, 2011, OMARA utilized a mobile telephone app that the USAA Federal Savings Bank offers to allow customers to make deposits from their mobile phone using scanner technology, to deposit ten checks totaling $27,530 from a bank account in which OMARA had nearly no money. After making the deposits to the USAA Federal Savings Bank account, OMARA immediately withdrew the funds via ATM withdrawals at casinos in Atlantic City, New Jersey, and Charles Town, West Virginia. As part of his plea, OMARA will make restitution to USAA for the total loss of $25,152.32. OMARA, who is free on bond pending sentencing, faces up to 30 years imprisonment and a
$1,000,000 fine. This case was prosecuted by Assistant United States Attorney John C. Parr and was investigated by the United States Secret Service.VAUGHAN J. HENRY, age 27, of Kearneysville, West Virginia, enter a plea of guilty to “Possession with Intent to Distribute Crack Cocaine” in Martinsburg. HENRY, who is in custody pending sentencing, faces a maximum exposure of 20 years imprisonment and a
$1,000,000 fine. This case was prosecuted by First Assistant United States Attorney Betsy C. Jividen and was investigated by the Eastern Panhandle Drug & Violent Crime Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, and the Berkeley County Sheriff’s Department.CARLOS VINCENT RIVERA, age 43, of Martinsburg, entered a plea of guilty to “Felon in Possession of a Firearm.” On June 21, 2012, RIVERA possessed a firearm despite having a prior felony convictions for possession of cocaine and aggravated robbery. RIVERA, who is in custody, pending sentencing, faces up to 10 years imprisonment and a $250,000 fine. This case was prosecuted by Assistant United States Attorney Shawn A. Morgan and investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Martinsburg Police Department.
Three Atlanta Men Indicted for Trafficking Counterfeit Super Bowl TicketsRead the Press Release
BIRMINGHAM – A federal grand jury today indicted three Atlanta men for trafficking in counterfeit Super Bowl XLVII tickets, announced U.S. Attorney Joyce White Vance and Homeland Security Investigations Special Agent in Charge Raymond R. Parmer Jr.
The grand jury also charged two of the three men with possessing and concealing counterfeit U.S. currency. The fake money and 57 counterfeited tickets were seized following a Jan. 31 traffic stop in Sumter County.
The indictment filed in U.S. District Court charges DWIGHT E. WILCOXSON, 53, ANTHONY A. HUNTER, 47, AND DARRYL A. WESBY, 45, with conspiring to transport and sell, and possessing counterfeit tickets to the Feb. 3 Super Bowl in New Orleans.
The indictment also charges that Wilcoxson, with intent to defraud, possessed and concealed $4,820 in counterfeit $100 and $20 bills on Jan. 31. Hunter faces the same charge for possessing and concealing $2,240 in counterfeit $100 and $20 bills.
U.S. Immigration and Customs Enforcement’s Homeland Security Investigations investigated the case. Assistant U.S. Attorney J. Pat Meadows is prosecuting the case.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Texas Firm and Field Operations Supervisor Agree to Plead Guilty to Involvement in the Harboring and Transporting of Illegal Aliens Used in North Central Pennsylvania Oil and Gas Survey WorkRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that GPX/GPX, USA, a seismic surveying company based in Sealy, Texas, and its field operations supervisor, Douglas C. Wiggill, have agreed to plead guilty to federal charges involving harboring and transporting 19 illegal aliens for a project in the Williamsport, PA area.
GPX has agreed to plead guilty to conspiracy to harbor illegal aliens. The company has agreed to forfeit $250,000 and pay a $25,000 fine. Wiggill, age 43, a Canadian citizen residing in Ft. Worth, Texas, has agreed to plead guilty to a misdemeanor violation of aiding and abetting the improper entry of aliens to the United States.
As part of the plea agreement, GPX agreed to implement a corporate compliance program for confirming the employment eligibility and identity of all current and prospective employees.
Both plea agreements are subject to the approval of the Court. A court date has not yet been scheduled. The case is assigned to U.S. District Court Chief Judge Yvette Kane.
According to United States Attorney Peter J. Smith, in May 2012, a 20-count indictment was filed charging GPX/GPX, USA and Wiggill with harboring and transporting illegal aliens, and conspiracy to commit those offenses. GPX is engaged in the business of providing seismic and surface mapping surveys for the oil and gas industry.
The indictment alleged that in May 2011 GPX and Wiggill hired 19 illegal aliens to work on a seismic surveying project in Lycoming County. The indictment alleged that GPX and Wiggill failed to verify the immigration status of the aliens and did not prepare the required Form I-9 and supporting documentation concerning the aliens’ authorization to be in the United States.
According to the indictment, GPX executed a contractor compliance agreement certifying that all personnel were authorized to work legally in the United States when, in fact, they were not. On June 23 and 24, 2011, officers of the Williamsport Bureau of Police and agents of U.S. Department of Homeland Security Investigations arrested the 19 aliens employed by GPX at, or in the vicinity of, apartments rented for them in Williamsport by Wiggill and GPX. The arrests were a result of an investigation of one of the aliens by Williamsport Police.
The case was investigated by Homeland Security Investigations and the Federal Bureau of Investigation, with assistance from the Williamsport Bureau of Police. Prosecution of this matter is assigned to Assistant United States Attorney George J. Rocktashel.
Steven Sann 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 January 26, 2013, before U.S. District Judge Dana L. Christensen, STEVEN SANN, a 58-year-old resident of Lolo, appeared for sentencing. SANN was sentenced to a term of:
- Probation: 4 years
- Special Assessment: $100
- Forfeiture: Warehouse
SANN was sentenced in connection with his guilty plea to conspiracy to maintain drug-involved premises.
In an Offer of Proof filed by Assistant U.S. Attorney Tara J. Elliott, the government stated it would have proved at trial the following:
Beginning in January 2011, and continuing into June 2011, SANN and others maintained a drug premises for the purpose of manufacturing marijuana. This facility was known as "The Wye" located in Missoula. "The Wye" had between 1,000 and 1,200 marijuana plants at various growth stages and was capable of producing at least 30 pounds of marijuana a month. The marijuana was distributed through Big Sky Health marijuana dispensaries to marijuana cardholders and individuals who were not marijuana cardholders.
SANN was the original owner of "The Wye" and sold the facility to another individual for approximately $300,000 over a number of months.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that SANN will likely serve all of the time imposed by the court. In the federal system, SANN does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Drug Enforcement Administration and the Missoula High Intensity Drug Trafficking Area (HIDTA) Task Force.
Steven Sann 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 January 26, 2013, before U.S. District Judge Dana L. Christensen, STEVEN SANN, a 58-year-old resident of Lolo, appeared for sentencing. SANN was sentenced to a term of:
- Probation: 4 years
- Special Assessment: $100
- Forfeiture: Warehouse
SANN was sentenced in connection with his guilty plea to conspiracy to maintain drug-involved premises.
In an Offer of Proof filed by Assistant U.S. Attorney Tara J. Elliott, the government stated it would have proved at trial the following:
Beginning in January 2011, and continuing into June 2011, SANN and others maintained a drug premises for the purpose of manufacturing marijuana. This facility was known as "The Wye" located in Missoula. "The Wye" had between 1,000 and 1,200 marijuana plants at various growth stages and was capable of producing at least 30 pounds of marijuana a month. The marijuana was distributed through Big Sky Health marijuana dispensaries to marijuana cardholders and individuals who were not marijuana cardholders.
SANN was the original owner of "The Wye" and sold the facility to another individual for approximately $300,000 over a number of months.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that SANN will likely serve all of the time imposed by the court. In the federal system, SANN does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Drug Enforcement Administration and the Missoula High Intensity Drug Trafficking Area (HIDTA) Task Force.
Steven Sann Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on February 26, 2013, before U.S. District Judge Dana L. Christensen, STEVEN SANN, a 58-year-old resident of Lolo, appeared for sentencing. SANN was sentenced to a term of:
- Probation: 4 years
- Special Assessment: $100
- Forfeiture: Warehouse
SANN was sentenced in connection with his guilty plea to conspiracy to maintain drug-involved premises.
In an Offer of Proof filed by Assistant U.S. Attorney Tara J. Elliott, the government stated it would have proved at trial the following:
Beginning in January 2011, and continuing into June 2011, SANN and others maintained a drug premises for the purpose of manufacturing marijuana. This facility was known as "The Wye" located in Missoula. "The Wye" had between 1,000 and 1,200 marijuana plants at various growth stages and was capable of producing at least 30 pounds of marijuana a month. The marijuana was distributed through Big Sky Health marijuana dispensaries to marijuana cardholders and individuals who were not marijuana cardholders.
SANN was the original owner of "The Wye" and sold the facility to another individual for approximately $300,000 over a number of months.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that SANN will likely serve all of the time imposed by the court. In the federal system, SANN does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Drug Enforcement Administration and the Missoula High Intensity Drug Trafficking Area (HIDTA) Task Force.
Statement Concerning Death of Correctional Officer Eric WilliamsRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania issued the following statement concerning the death of Correctional Officer Eric Williams at the United States Penitentiary, Canaan, Pennsylvania:
The staff at the United States Attorney’s Office for the Middle District of Pennsylvania extends its condolences to the family of Officer Williams, his coworkers and staff of the U.S. Bureau of Prisons facility at Canaan, Pennsylvania. This matter is under investigation by the FBI, with the cooperation and assistance of the Bureau of Prisons. Attorneys from the U.S. Attorney’s Office have been assigned to the matter.
We have no further comment at this time.
South Jordan Woman Pleads Guilty to Money Laundering; Admits Embezzling $462,455.80 from EmployerRead the Press Release
SALT LAKE CITY – Monica Paris, age 30, of South Jordan, pleaded guilty to one count of money laundering in federal court Monday, admitting she embezzled approximately $462,455.80 from Ultradent Products, Inc., her former employer. She used the funds she embezzled from her employer to pay for personal expenses, including car payments, airline tickets, vacations, personal items, food, and entertainment, according to a Felony Information filed by federal prosecutors in January.
According to the Felony Information, Paris worked at Ultradent, a privately-owned Utah corporation involved in the production and distribution of dental products, from 1997 until her termination around February 2012. Her last position at the company was assistant to the director of major accounts.According to court documents, as a part of her job duties, Paris was responsible for purchasing promotional materials used by Ultradent. The standard practice at the company involved Paris purchasing the items using her personal credit card and then seeking reimbursement for charges she had incurred on the company’s behalf.
As a part of her guilty plea Monday, Paris admitted that beginning around August 2010 and continuing through February 2012, she fraudulently submitted expense reports for personal reimbursement payments for items she never actually purchased. She then fraudulently approved the expense reports on behalf of Ultradent and directed that the reimbursement payments be sent to her personal bank account. She also admitted that she fraudulently claimed that personal items she purchased at Sam’s Club, including large amounts of pre-paid credit cards, were company expenses for which she sought reimbursement payments. Using her Sam’s Club membership, she admitted she bought personal items using the credit cards of two other company employees. She then submitted the purchases for reimbursement and created false invoices to show that the purchases were for company expenses.
Paris admitted that in August 2011, she sent a check for $10,891.29 to her credit union as payment for a car loan. She admitted she knew that the funds she transferred were stolen from her employer.
Sentencing in the case is set for June 27, 2013, at 2:30 p.m. before U.S. District Judge Ted Stewart. The potential maximum sentence for a money laundering conviction is 10 years in federal prison and a fine of up to $250,000.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by IRS Criminal Investigation Division special agents.Smith County, Texas Man Sentenced for Dealing Cocaine in East TexasRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 41-year-old Lindale, Texas man has been sentenced to federal prison for drug trafficking crimes in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Christopher Florence pleaded guilty on Sep. 11, 2012, to possession with intent to distribute cocaine and was sentenced to 38 months in federal prison today by U.S. District Judge Leonard Davis.
According to information presented in court, on Jan. 27, 2011, law enforcement officers executed a search warrant at a residence on County road 141 in Overton, Rusk County, Texas during which Florence was observed attempting to discard a semi-automatic pistol, $1,757 in cash and approximately 6.16 grams of cocaine base in the yard of the residence. Florence admitted to possessing the cocaine with the intent to distribute it to others in the area. Florence was indicted by a federal grand jury on Sep. 15, 2011.
This case was investigated by the Rusk County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Jim Noble.
Smith County Man Sentenced for Bank RobberyRead the Press Release
Department of Justice
Office of Public AffairsMARSHALL, Texas – A 52-year-old Hawkins, Texas man, formerly of Louisiana, has been sentenced to federal prison for bank robbery in the Eastern District of Texas, announced U.S. Attorney John M. Bales.
Robin Marion Allen pleaded guilty on Sep. 11, 2012, to bank robbery and was sentenced to 160 months in federal prison today by U.S. District Judge Rodney Gilstrap.According to information presented in court, on June 25, 2012, Allen borrowed a car and drove to the Wells Fargo Bank on East Main Street in Atlanta, Texas. Allen approached a bank teller and gave the teller a hand-written note with instructions to fill a black bag with cash. The teller placed $1,944 in cash in the bag and returned it to Allen. Allen was arrested on June 27, 2012 in Atlanta, Texas. Allen was indicted by a federal grand jury on July 11, 2012 and charged with bank robbery.
This case was investigated by FBI and the Atlanta Police Department and prosecuted by Assistant U.S. Attorney Allen Hurst.Smith County Man and Woman Guilty of Methamphetamine ViolationsRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A Tyler, Texas man and woman have pleaded guilty to federal drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Juan Dedias Herrera, 29, and Lamanda McCoy, 34, both pleaded guilty to the distribution of more than 50 grams of pure methamphetamine today before U.S. Magistrate Judge Judith K. Guthrie.
According to information presented in court, on Oct. 31, 2011, Herrera agreed to acquire and distribute methamphetamine with another person. McCoy admitted to being in possession of methamphetamine on Apr.20, 2011.
A federal grand jury returned an indictment on Feb. 1, 2012 charging Herrera and McCoy with federal drug trafficking crimes.
Herrera faces a minimum of 10 years and up to life in federal prison. McCoy faces up to 20 years in federal prison at sentencing. Sentencing dates have not been set.
This case is being investigated by the Drug Enforcement Administration and the Smith County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Bill Baldwin.
Six Members of “Show Out” Crew Plead Guilty to Charges in Series of Assaults-Group Targeted Victims in Chinatown and Other Areas-Read the Press Release
WASHINGTON – Six men, all from Washington, D.C., pled guilty today to charges stemming from various gang-related crimes, including beatings, attempted robberies, and obstructing justice, announced U.S. Attorney Ronald C. Machen Jr. and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
The defendants admitted actively participating in a crew called “Show Out” that committed crimes in the Chinatown, U Street and Adams Morgan areas. Since at least Jan. 1, 2012, the crew’s members canvassed the areas looking for targets of opportunity and teamed up to assault their victims, rob them of items of value, or both. The crew was also accused of engaging in “flash mob” style robberies at drug stores, convenience stores, and gas stations, in which multiple members flooded in to the business at the same time, overwhelming and intimidating the staff, and stealing items.
The guilty pleas took place in the Superior Court of the District of Columbia. The Honorable Lynn Leibovitz scheduled sentencing for May 10, 2013. All six defendants remain in custody pending sentencing.
Those pleading guilty included Bernard Trowell, also known as “McLovin,”19, described in an indictment as “the self-styled president” of the group, and two others who allegedly had senior positions, identified as Deandre M. Williams, 19, and Quayshawn L. Leggett, 20. Also pleading guilty were James D. Matheny, 19; Ricardo J. Williams, 20, and Travis L. Morris, 20.
Trowell pled guilty to one count each of conspiracy, aggravated assault, and committing a crime while affiliated with a criminal street gang. He faces a statutory maximum of 30 years in prison for the crimes. Deandre Williams pled guilty to one count each of aggravated assault, assault with significant bodily injury, obstructing justice, and committing a crime while affiliated with a criminal street gang. He faces a statutory maximum of 48 years in prison. Leggett pled guilty to one count each of aggravated assault, attempted robbery, and committing a crime while affiliated with a criminal street gang. He faces a statutory maximum of 18 years in prison.
Matheny pled guilty to one count each of aggravated assault, obstructing justice, threats to do bodily harm, and committing a crime while affiliated with a criminal street gang. He faces a statutory maximum of 45 ½ years in prison. Ricardo Williams pled guilty to one count each of aggravated assault, attempted robbery, and committing a crime while affiliated with a criminal street gang. He faces a statutory maximum of 18 years in prison. Morris pled guilty to one count each of aggravated assault and committing a crime while affiliated with a criminal street gang. He faces a statutory maximum of 15 years in prison.
Two other defendants in the case earlier pled guilty to charges, and a third adult member of the crew is being sought. The investigation into other members of the crew is ongoing.
“Today’s guilty pleas by six members of the Show Out Crew should serve as a warning to young people tempted by the lure of gang life,” said U.S. Attorney Machen. “This violent group took pleasure in targeting innocent victims for beatings and robberies. As a result of the decision to participate in this crew violence, each of these criminals – none older than twenty – will now spend many years behind bars. This prosecution demonstrates our clear resolve to crush the gangs that terrorize our city.”
“The gratuitous, unprovoked robberies and assaults perpetrated by this gang were motivated primarily by the gang’s desire to establish credibility and notoriety, which was promoted by the gang through social media,” said Chief Lanier. “They preyed upon individuals whom they perceived to be vulnerable. I applaud the officers and detectives from the First District, the members of the Intelligence Division and our partners at the US Attorney’s Office for getting these thugs off our streets.”
As part of their plea agreements, the defendants admitted participating in various crimes, including these incidents:
-June 5, 2012: Beating in the 600 block of H Street NW
All six defendants admitted taking part in the beating of a man near a bus stop in the 600 block of H Street NW. As the victim approached the bus stop, at about 3:20 a.m., he was surrounded and assaulted. Deandre Williams and a juvenile member of Show Out knocked the man to the ground, and then multiple members punched, kicked and stomped him. Deandre Williams and others stole items from the victim while he was on the ground, including his cellphone and bank card. The victim was knocked unconscious for several minutes. He eventually found a police officer and received medical attention. He was treated later for a concussion, broken nose, and bruises to the head, face and torso.
--June 5, 2012: Beating near 2d and K Streets NW
Crew members targeted a second victim at about 3:45 a.m. The victim was walking to work near 2d and K Streets NW when Deandre Williams approached him and struck him repeatedly about the face and head with his fists. The victim received medical treatment on the scene and later was given stitches to close a bleeding laceration to the side of his face. Deandre Williams pled guilty to assault with significant bodily injury for his role in this attack.
-June 7, 2012: “Flash Mob” near North Capitol Street and Florida Avenue
Ricardo Williams and several others approached a gas station and convenience store at about 4:20 a.m., in the area of North Capitol Street and Florida Avenue. After the station attendant opened the locked door, Williams and the others overwhelmed and intimidated him. They grabbed food or beverage items and fled without paying. Ricardo Williams pled guilty to attempted robbery for his participation in this attack.
-June 19, 2012: Obstruction of Justice
During the evening hours, Deandre Williams and others approached a former associate at a bus stop in Chinatown and threatened him that he would be harmed if he talked to police. Deandre Williams pled guilty to obstruction of justice for this incident.
-June 21, 2012: Attack at Metro Center
Leggett and others were on the lower platform at the Metro Center Metro station when they confronted a man at about 5:20 a.m. Leggett demanded money and threatened the victim. The victim did not give him any money, and one of the individuals punched him in the face, knocking him down. Leggett pled guilty to attempted robbery for his role in this attack.
-July 31-Aug. 1, 2012: Threats to Do Bodily Harm, Obstruction of Justice
Matheny posted audio recordings to his Facebook page, in which he is rapping. In three of them, he accused a Show Out member of “snitching.” The songs carried a threat that this member would be shot “on sight.” Matheny pled guilty to threats to do bodily harm and obstruction of justice for these threats.
In announcing the guilty pleas, U.S. Attorney Machen and Chief Lanier commended the work of the officers, detectives and crime scene technicians who worked on the case for the MPD. They also expressed appreciation for the efforts of the Metro Transit Police Department, which assisted in the investigation. Additionally, they thanked local businesses for their assistance in the investigation, including Transwestern, a property management company, and employees of Securitas, a private security firm. Finally, they praised the work of those who are handling the case for the U.S. Attorney’s Office, including Assistant U.S. Attorneys Thomas Bednar and Clare Pozos, who are prosecuting the matter.
13-070Owner of Ocean County, N.J., Architectural Firm Admits Submitting False Corporate ReturnsRead the Press Release
NEWARK, N.J. – The owner of an Ocean County, N.J. architectural and engineering firm today admitted filing fraudulent tax returns on behalf of his firm, U.S. Attorney Paul J. Fishman announced.
Pravin H. Patel, 67, of Toms River, N.J., pleaded guilty before U.S. District Judge Stanley R. Chesler to an Information charging him with subscribing to false corporate tax returns on behalf of his firm, Pravin H. Patel Associates Inc., of Toms River, N.J.
According to documents filed in this case and statements made in court:
Patel was the owner and operator of Pravin H. Patel Associates, Inc. for more than 25 years; in recent years, the firm’s primary clients included the Toms River Board of Education and Ocean County College. Between 2005 and 2009, Patel filed corporate tax returns which falsely passed off personal expenses as legitimate business deductions.
Among the personal expenses which Patel admitted to improperly using to reduce the tax liability owed by his company was $112,650 in payments for renovations on his personal residence in 2006. Patel also admitted that the corporate tax return for the year ending in March 2007 improperly included more than $8,200 in expenses related to a personal country club membership and associated fees, as well as numerous personal expenses paid through a corporate credit card. Patel admitted that the corporate tax return for the year ending in March 2007 included false deductions of more than $145,000 and that the tax loss over a four-year period for which he is criminally liable totaled $63,815.
The count to which Patel pleaded guilty is punishable by a maximum potential penalty of three years in prison and a maximum fine of $250,000. Sentencing is scheduled for June 4, 2013.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and special agents of the FBI under Acting Special Agent in Charge David Velazquez, with the investigation that resulted in today’s plea.The government is represented by Special Litigation Counsel Mark J. McCarren of the U.S. Attorney’s Office Special Prosecutions Division.
13-091
Defense counsel: Lawrence Horn Esq. and Richard Sapinski Esq.Patel Information
Owner of Mental Health Facilities Sentenced to 168 Months in Prison in Connection with $63 Million Health Care Fraud SchemeRead the Press Release
A former owner of mental health facilities in Florida and North Carolina was sentenced yesterday to serve 168 months in prison for his leadership role in a health care fraud scheme involving defunct health provider Health Care Solutions Network Inc. (HCSN), announced U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Assistant Attorney General Lanny A. Breuer of the Justice Department's Criminal Division; Michael B. Steinbach, Special Agent in Charge of the FBI's Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Armando Gonzalez, 50, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida. In addition to his prison term, Gonzalez was sentenced to serve three years of supervised release and ordered to pay 28,092,283 in restitution, which, under the terms of Gonzalez's plea agreement, will be satisfied in part by seized assets including $987,000 in currency seized in July 2012 and Gonzalez's mansion in Hendersonville, N.C.
On Dec. 17, 2012, Gonzalez pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering.
According to court documents, HCSN operated community mental health centers at three locations in Miami-Dade County, Fla., and one location in Hendersonville. HCSN purported to provide partial hospitalization program (PHP) services to individuals suffering from mental illness. A PHP is a form of intensive treatment for severe mental illness. According to court documents, HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not even provided.
Gonzalez orchestrated the HCSN fraud scheme, which centered on the recruitment and admission of patients who could not benefit from PHP services. In Miami, Gonzalez utilized patient recruiters to pay cash kickbacks in exchange for referrals from Assisted Living Facilities (ALF) patients who often suffered from conditions such as dementia and mental retardation. Once the unqualified patients were admitted to HCSN, Gonzalez's employees would fabricate virtually every portion of the patients' mental health medical records. The fake medical records were then utilized to support false billings to government sponsored health care benefit programs and to avoid detection by Medicare auditors.
In North Carolina, HCSN employees also routinely submitted false billing for patients watching movies, attending BBQs and, more commonly, patients who were not even present at the Miami and North Carolina facilities.
Gonzalez also admitted to his role in a money laundering scheme involving Psychiatric Consulting Network Inc. (PCN), a Florida corporation that was utilized by HCSN as a shell corporation to launder millions in health care fraud proceeds.
According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services that resulted in more than $28 million in payments.
Fifteen defendants have been charged for their alleged roles in the HCSN health care fraud scheme, and ten defendants have pleaded guilty. Alleged co-conspirators Wondera Eason and Paul Layman are scheduled for trial on March 11, 2013, before Judge Altonaga in Miami. Alleged co-conspirators Dr. Alina Feas, Dana Gonzalez and Lisset Palmero are scheduled for trial on June 3, 2013. Defendants are presumed innocent until proven guilty at trial.
The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorney Allan J. Medina of the Criminal Division's Fraud Section. This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida. In support of the Medicare Fraud Strike Force, the FBI Criminal Investigative Division's Financial Crimes Section has funded the Special Trial Attorney position.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS's Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
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.
Orleans Parish Sheriff’s Deputies Charged with Receiving BribesRead the Press Release
JOHN P. SENS, age 52, a resident of New Orleans, Louisiana, and GERARD J. HOFFMAN, age 59, a resident of Mandeville, Louisiana, were charged today in two separate bills of information with conspiracy to commit bribery, announced U.S. Attorney
Dana J. Boente.According to court documents, SENS was employed as the Director of Purchasing at the Orleans Parish Sheriff’s Office (“OPSO”), from in or around 2006 through 2013. HOFFMAN was employed at the OPSO from in or around 1976 through 2012, rising to the rank of Colonel in charge of the maintenance department at the OPSO.
Beginning in 2007, according to the bills of information filed against them, SENS and HOFFMAN began receiving things of value from two contractors, identified as Businessman A and Businessman B in court documents, in exchange for a rigged bidding system they employed to steer OPSO work to Businessman A and Businessman B. In particular, from 2007 through 2011, Businessman A and Businessman B would submit bids for OPSO work in the names of their respective companies but, with the knowledge and participation of SENS and HOFFMAN, would also submit phony or fake bids for these same projects in the names of other local companies, in an effort to give the appearance of a competitive bidding process. In many cases, the phony bids would intentionally be higher than the bids from Businessman A or Businessman B and, consequently, SENS and/or HOFFMAN would award the work to Businessman A or Businessman B.
In exchange for this rigged bidding process, SENS and HOFFMAN received various things of value from Businessman A and Businessman B, according to the bills of information. For example, from 2007 through 2011, SENS received approximately $30,000 in cash from Businessman A, as well as the digging and installation of a pool at a residence owned by SENS, at no cost to him. Similarly, during this same period of time, Businessman B paid for the purchase, framing, and matting of several paintings (so-called “Blue Dog” prints) for SENS. During this same period of time, Businessman B also provided things of value, including free electrical work and a trailer, to HOFFMAN, all at no cost to him.
If they are convicted of the conspiracy count charged against them, SENS and HOFFMAN face a maximum penalty of five years imprisonment, three years supervised release, a $250,000 fine, and a $100 special assessment.
U.S. Attorney Boente reiterated that a Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Boente, as well as the investigative and prosecution team, offer their thanks to Rafael Goyeneche and the Metropolitan Crime Commission for providing valuable assistance in this case.
The case was investigated by special agents of the Federal Bureau of Investigation.The case is being prosecuted by Assistant U.S. Attorneys Matt Chester and Jon Maestri.
(Download Bill of Information- SENS )
(Download Bill of Information- HOFFMAN )
North Carolina Poultry Processing Plant Sentenced for Violating Clean Water ActRead the Press Release
A federal judge sentenced House of Raeford Farms Inc., a poultry slaughtering and processing facility located in Raeford, N.C., to a fine of $150,000, a two year period of probation and to pay a special assessment of $4,000 on Feb. 26, 2013, for 10 counts of knowingly violating the Clean Water Act.
House of Raeford Inc. allowed plant employees to bypass the facility’s pretreatment system and send its untreated wastewater directly to the City of Raeford’s Wastewater Treatment Plant, without notifying city officials. House of Raeford Inc. failed to prevent employees from sending thousands of gallons of wastewater into a pretreatment system that did not have the capacity to adequately treat the amount of wastewater before it discharged to the city plant. The untreated wastewater discharged directly to the city plant was contaminated with waste from processing operations, including blood, grease, and body parts from the slaughtered turkeys. A House of Raeford, Inc. former employee admitted that the facility would continue to “kill turkeys” despite being warned that the unauthorized bypasses had an adverse impact on the city’s Wastewater Treatment Plant. The city plant was responsible for treating industrial, commercial and residential wastewater before it was discharged to Rockfish Creek in Hoke County.
The bypasses and failure to report them were in violation of House of Raeford’s pretreatment permit as well as the city’s sewer use ordinance. Many of the bypasses took place while House of Raeford was subject to a consent order with the city that required it to construct a new pretreatment system and comply with all requirements of its pretreatment permit. A number of the bypasses were recorded in log books kept by House of Raeford Inc. wastewater operators, and were never revealed to the City.
The case was prosecuted by the Justice Department’s Environmental Crimes Section and was investigated by U.S. Environmental Protection Agency-Criminal Investigation Division and North Carolina State Bureau of Investigation.
North Carolina Poultry Processing Plant Sentenced for Violating Clean Water ActRead the Press Release
WASHINGTON— A federal judge sentenced House of Raeford Farms Inc., a poultry slaughtering and processing facility located in Raeford, N.C., to a fine of $150,000, a two year period of probation and to pay a special assessment of $4,000 on Feb. 26, 2013, for 10 counts of knowingly violating the Clean Water Act.
House of Raeford Inc. allowed plant employees to bypass the facility’s pretreatment system and send its untreated wastewater directly to the City of Raeford’s Wastewater Treatment Plant, without notifying city officials. House of Raeford Inc. failed to prevent employees from sending thousands of gallons of wastewater into a pretreatment system that did not have the capacity to adequately treat the amount of wastewater before it discharged to the city plant. The untreated wastewater discharged directly to the city plant was contaminated with waste from processing operations, including blood, grease, and body parts from the slaughtered turkeys. A House of Raeford, Inc. former employee admitted that the facility would continue to “kill turkeys” despite being warned that the unauthorized bypasses had an adverse impact on the city’s Wastewater Treatment Plant. The city plant was responsible for treating industrial, commercial and residential wastewater before it was discharged to Rockfish Creek in Hoke County.
The bypasses and failure to report them were in violation of House of Raeford’s pretreatment permit as well as the city’s sewer use ordinance. Many of the bypasses took place while House of Raeford was subject to a consent order with the city that required it to construct a new pretreatment system and comply with all requirements of its pretreatment permit. A number of the bypasses were recorded in log books kept by House of Raeford Inc. wastewater operators, and were never revealed to the City.
The case was prosecuted by the Justice Department’s Environmental Crimes Section and was investigated by U.S. Environmental Protection Agency-Criminal Investigation Division and North Carolina State Bureau of Investigation.
###New Britain Transportation Company, Manager, Admit Falsifying and Destroying Driving RecordsRead the Press Release
February 26, 2013David B. Fein, United States Attorney for the District of Connecticut, today announced that WISLA EXPRESS, LLC, a New Britain-based transportation company, and its office manager, DARIUSZ SZTEBOROWSKI, 49, of Rocky Hill, have pleaded guilty to federal charges related to their falsification and destruction of driver records required to be maintained under federal motor carrier safety regulations for inspection.
“Federal regulations on passenger-carrying vehicles exist to keep drivers, passengers and American highways safe,” stated U.S. Attorney Fein. “Transportation companies and their employees who violate these important laws face federal prosecution.”
According to court documents and statements made in court, WISLA EXPRESS, located at 157 Broad Street in New Britain, is a commercial motor carrier that employs drivers to operate vans and minibuses to transport individuals to and from airports, and tour buses carrying passengers to locations outside of Connecticut. SZTEBOROWSKI, a manager of WISLA EXPRESS, was responsible for the day-to-day operations of the company, including scheduling driving assignments and maintaining the company’s driving records.
The Federal Motor Carrier Safety Administration (“FMCSA”), a division of the U.S. Department of Transportation, administers and enforces the federal commercial motor vehicle laws and regulations to ensure that commercial motor vehicle carriers and drivers fully comply with the responsibilities imposed on them to operate their vehicles in a safe and unimpaired manner. Federal regulations prohibit drivers from driving in excess of certain maximum allowable driving hours over defined periods, and require commercial motor carriers to maintain truthful and accurate driving records.
Between September 2008 and September 2011, SZTEBOROWSKI scheduled and assigned drivers to trips knowing that the drivers would be exceeding the regulated limits of on-duty driving time, and also instructed drivers and others to falsify driving logs by recording that the drivers were off-duty during times when they were, in fact, driving. In order to pay drivers for time actually spent working for WISLA, STZEBOROWSKI instructed drivers to submit separate pay sheets and notes that accurately detailed their hours. SZTEBOROWSKI then destroyed the pay sheets and other documentation that accurately recorded the drivers’ hours.
In response to an FMCSA investigation of WISLA that was initiated in August 2010, SZTEBOROWSKI produced the falsified driver logs and withheld other records that would conflict with the logs.
On February 22, 2013, SZTEBOROWSKI pleaded guilty before U.S. Magistrate Judge Donna F. Martinez in Hartford to one count of submitting a false statement to the U.S. Department of Transportation.
Yesterday, WISLA pleaded guilty before Judge Martinez to the same charge.
Sentencing has been scheduled for May 17, 2013. SZTEBOROWSKI faces a maximum term of imprisonment of five years and fine of up to $250,000. He also has agreed to a three-year term of supervised release during which he cannot be involved, directly or indirectly, in WISLA or any other business under the jurisdiction of the U.S. Department of Transportation.
WISLA faces a maximum term of probation of five years and a fine of up to $500,000.
U.S. Attorney Fein commended the investigative efforts of the agents of the New England Regional Office of the U.S. Department of Transportation, Office of Inspector General, and the Federal Motor Carrier Safety Administration. The Connecticut Department of Motor Vehicles Commercial Safety Division has provided valuable assistance to the investigation.
This matter is being prosecuted by Assistant United States Attorneys Felice M. Duffy and David E. Novick.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Nanuet Man Charged for Threatening to Kill Federal and State Officials and Illegal Possession of A WeaponRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Thomas P. Zugibe, the Rockland County District Attorney, George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Chief Michael Sullivan of the Clarkstown Police Department, announced today the filing of federal and state criminal charges today against LAWRENCE MULQUEEN of Nanuet, New York. MULQUEEN faces federal charges for threatening to kill federal officials and others, and separate state charges for criminal possession of a weapon. He was initially taken into custody on the state charges on February 21, 2013, and was charged federally today. He is scheduled to appear before a U.S. Magistrate Judge in White Plains federal court tomorrow.
U.S. Attorney Bharara stated: “As alleged, Lawrence Mulqueen used the power and reach of Facebook to make incendiary threats, including the use of deadly force, against federally-elected officials and others. He even provided his like-minded Facebook friends with a virtual ‘how to’ on the most effective weapons to use in making good on those threats. The internet is a forum for free expression, but it does not give anyone a carte blanche to break the law.”
Rockland County District Attorney Zugibe stated: "In our fast-paced world of status updates and tweets, behavior of this type must be treated seriously and investigated promptly to ensure that all threats or indications of potential violence are mitigated and do not escalate. Overt threats of the sort made by this defendant against our elected leaders are especially troubling and must be dealt with to the fullest extent of the law. I want to thank U.S. Attorney Bharara and his team for their good work and partnership in bringing this dangerous individual to justice."
FBI Assistant Director-in-Charge George Venizelos stated: “The defendant is alleged not only to have threatened to kill elected officials. He did the virtual equivalent of standing in the town square with a megaphone, using his Facebook page to exhort others to carry out these assassinations. Freedom of speech is a fundamental right, but making overt threats is not protected speech, it’s a crime.”
Clarkstown Police Chief Sullivan stated: “ We’re pleased and proud to work with other local and federal law enforcement agencies to bring this person into custody and to protect our elected officials and all other citizens.”
According to the allegations in the Complaint filed today in White Plains federal court:
In February 2013, MULQUEEN posted numerous messages to his page on the online social networking site “Facebook,” threatening to kill members of the United States Congress, state and local elected officials, and others. Among other things, MULQUEEN posted on February 20 that he “[could] not wait to start killing” multiple United States Senators and Members of the United States House of Representatives, as well as a Governor and Mayor, adding that their “dirt nap [was] coming very soon.”
MULQUEEN instructed people who commented on his posts to secure a “high powered rifle,” and recommended a particular Italian-manufactured shotgun as “very light and . . . semi-automatic, [with] no need to pump or reload.” He added that readers should “[u]se blades when you can to conserve bullets.” In other posts, MULQUEEN commanded readers to seek out and kill other individuals, including at least one political activist.
According to the allegations in the Indictment returned today in Rockland County Court:
MULQUEEN is charged with criminal possession of a weapon in the third degree, a class D felony. MULQUEEN faces a maximum term of three and a half to seven years on this charge
MULQUEEN, 49, is charged with one count of threatening to kill federal officials and one count of transmitting threats in interstate commerce. He faces a maximum federal penalty of 15 years in prison.
Mr. Bharara and Mr. Zugibe praised the investigative efforts of the Federal Bureau of Investigation and the Clarkstown Police Department.
The charges contained in the federal Complaint and the state Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Ilan Graff is in charge of the prosecution.
Mulqueen Complaint Signed
Nacogdoches County Man Sentenced for Drug TraffickingRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A 26-year-old Nacogdoches, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Rodney Stevenson pleaded guilty on Aug. 29, 2012, to conspiracy to distribute and possess with intent to distribute 5 kilograms or more of crack cocaine and was sentenced to 120 months in federal prison today by U.S. District Judge Ron Clark.
According to information presented in court, from 2008 to June 20, 2012, Donald Dixon, a.k.a. “Black”, Cedrick Fowler, a.k.a. “C” and “C-Murder”, Kerry Wayne Griffin, a.k.a. “Big Boy”, Omar Paunetto, Jose Angel Bustillos, Michael John Pereira, Rodney Stevenson, a.k.a. “Arod”, Darius Thorn, a.k.a. “Bs” and “Beez”, Tremaine Smith and Anthony Fowler conspired to traffic cocaine and crack cocaine throughout East Texas.
Stevenson's role in the organization was to assist Cedrick Fowler in acquisition of cocaine and the distribution of cocaine base. Stevenson traveled with Cedrick Fowler on one or more occasions to purchase cocaine from Donald Dixon. On May 25, 2012, investigators executed an arrest warrant at Stevenson’s apartment and detained him after he attempted to flee. They found C. Fowler in a second bedroom of the apartment and Stevenson’s girlfriend in his bedroom. Underneath a pillow on Stevenson’s bed, agents recovered a FEG, 9mm, Model P9R, semiautomatic pistol. They also found 4 pounds of marijuana in the bedroom closet and a small amount of cocaine in a kitchen cabinet. Stevenson was responsible for distributing over 5 kilograms of cocaine.
On June 20, 2012, a federal grand jury returned a 10-count indictment charging 10 defendants, including Stevenson, with drug trafficking violations.This case is the result of an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) joint investigation. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
This case was investigated by the Drug Enforcement Administration, the Nacogdoches Police Department, and the Nacogdoches County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Baylor Wortham.
NYC Man Sentenced on Drug ChargesRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that James Brome, a/k/a Trouble, a/k/a B, 35, of New York City, who was convicted of conspiracy to possess with intent to distribute and distribution of five kilograms or more of cocaine, was sentenced to 17 years in prison by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Robert A. Marangola, who handled the case, stated that Brome, a parolee, was the supplier to a Wayne County-based group of cocaine and crack cocaine distributors. The defendant delivered kilograms of cocaine from New York City to distributors in Wayne and Seneca Counties where the cocaine was processed, weighed, packaged, and resold in various quantities. Brome also utilized women to deliver cocaine to Wayne County and pick up drug money to return to New York City.
As part of the joint state and federal wiretap investigation, multiple search warrants were executed in Wayne County in November 2010. Drugs, drug paraphernalia, firearms, and cash were seized at various locations. Brome was one of seven individuals indicted by a federal grand jury in May 2011. All seven defendants have been convicted.
The sentencing is the culmination of an investigation conducted by the Wayne County Narcotics Enforcement Team under the direction of John Colella, Chief of the Town of Macedon Police Department and Robert Hetzke, Chief Deputy of the Wayne County Sheriff’s Office, the Wayne County Sheriff’s Office under the direction of Sheriff Barry Virts, the New York State Police, under the direction of Lieutenant Martin E. McKee, the Drug Enforcement Administration, under the Direction of Special Agent in Charge Brian R. Crowell, New York Field Division, with assistance provided by the Wayne County District Attorney’s Office, under the direction of Richard Healy.
Montgomery County Pastor and Mortgage Broker Convicted of Mortgage FraudRead the Press Release
PHILADELPHIA - Michael Wilkerson, 47, of Pottstown, PA, and Denise Haines, 43, of Birdsboro, PA, were convicted today of engaging in a scheme to defraud JP Morgan Chase’s predecessor, Chase Manhattan Bank, by fraudulently obtaining home loans valued at more than $6 million for properties located in Schwenksville and Glenmoore, Montgomery County, PA.
Michael Wilkerson, pastor of New Millennium Life Restoration Fellowship, with locations in Phoenixville and Spring City, recruited several of his congregants, and the congregants’ families and friends, to participate in a number of real estate transactions. If they had good credit and acted as “straw purchasers” - meaning they would sign loan documents as the purchaser of a house and attend the property settlement - Michael Wilkerson would pay them $15,000. Wilkerson paid the recruits another $5,000 if they referred other straw purchasers to him. Wilkerson recruited at least six individuals who agreed to be straw purchasers of homes. Denise Haines, a mortgage broker with American Group Mortgage Corporation, submitted fraudulent loan applications in the transactions to Chase Manhattan Bank. These fraudulent loan applications falsely represented the appraised value of the homes, the identification of the “straws,” the source of funds, the borrower’s income and assets, and their intent to take possession of the homes as their primary residence. Based on the representations made in the loan documents, Haines knew she could get Chase Manhattan Bank to approve the loans with little verification of the information on the loan applications.
Wilkerson’s wife Joyce, who pleaded guilty, assisted in the scheme by writing out the checks to the “straws,” and also pretended to be a co-purchaser of each of the homes at the time of settlement. Lee Garell, a real estate broker who pleaded guilty, prepared the sales paperwork for each of the homes that was sold to the “straws” and, along with Michael Wilkerson, dictated the fraudulent terms set out in the settlement sheets.
When the loans were funded at the time of settlement, the defendants manipulated the documents prepared at settlement and, later, forwarded the settlement documents to Chase Manhattan Bank to make it appear to the bank that the “straws” brought considerable cash to the closings. In fact, all of the money involved at the settlement actually came from Chase Manhattan Bank. The defendants shared in the profits from the fraudulent sales.
After settlement on the homes, Michael Wilkerson took possession of all of the homes, rented at least two of them and lived in another. He paid the mortgages with the proceeds from the fraudulent mortgage transactions and with rental income for approximately six months, then told the “straw” purchasers that they had to pay the mortgages. This last act led to the loans falling into default and then foreclosure, resulting in a loss of approximately $3 million.
U.S. District Court Judge Mitchell S. Goldberg scheduled a sentencing hearing for June 3, 2013 for Michael Wilkerson and for June 17, 2013 for Denise Haines. Each face a maximum possible sentence of 180 years in prison, five years supervised release, a fine of up to $6 million, and a $600 special assessment. Sentencing hearings are scheduled for Garrell and Joyce Wilkerson on April 30, 2013 and May 6, 2013, respectively.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Anita Eve.
President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Middlesex County, N.J., Man Admits Tax Evasion and Concealing $1.2M in Income in Undeclared Indian Bank AccountsRead the Press Release
NEWARK, N.J. – A Middlesex County, N.J., man who co-owns and operates a wholesale adult paraphernalia business in New York City today admitted concealing more than a million dollars in income in various domestic and foreign bank accounts, U.S. Attorney Paul J. Fishman announced.
Sameer Gupta, 33, of Edison, N.J., pleaded guilty before U.S. Magistrate Judge Patty Shwartz in Newark to an Information charging him with one count of tax evasion in connection with his diverting funds from the wholesale merchandise business, J.S. Marketers Inc. Some of the diverted funds were deposited and held in undisclosed foreign accounts at HSBC in India.
According to documents filed in this case and statements made in court:
Gupta is a 50 percent owner of J.S. Marketers Inc., which sold adult paraphernalia to large adult-store chains and smaller retail video stores and bodegas. From 2006 through 2009, Gupta diverted $822,916 of J.S. Marketer business receipts into 17 different personal bank accounts held in the names of various individuals, including himself, his wife, identified only as “A.G.,” and his daughter, identified as “D.G.” He directed more than $250,000 of those diverted funds into six different accounts held offshore at a branch of HSBC in India. From 2007 through 2009, Gupta caused 22 J.S. Marketers corporate checks to be made payable to himself, or his father, identified as “J.G.,” in amounts identical to invoices from J.S. Marketers’ suppliers. Gupta endorsed those checks, which totaled $375,138, and deposited them into bank accounts that he controlled. Gupta filed individual income tax returns for the years 2006 through 2009 that did not report his income arising from the diverted J.S. Marketers funds.
Gupta evaded taxes on $1,198,054 in income for 2006 through 2009. He also failed to file Reports of Foreign Bank and Financial Accounts, (FBARs), for 2005 through 2008. As part of his plea agreement, Gupta has agreed to pay a one-time FBAR penalty of $259,045. The tax loss resulting from Gupta’s conduct is greater than $200,000 but less than $400,000.
Gupta faces a maximum sentence of five years in prison and a fine of $250,000 or twice his gain from the offense, together with the costs of prosecution. Gupta agreed to file true and accurate tax returns and to pay to the IRS all taxes and penalties owed, in addition to the $259,045 penalty imposed for his failure to disclose the foreign accounts. Judge Shwartz scheduled sentencing for June 13, 2013, before U.S. District Court Judge Faith Hochberg.
U.S. Attorney Fishman credited special agents with IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Joseph Mack of the U.S. Attorney’s Healthcare and Government Fraud Unit and Trial Attorney Michael C. Vasiliadis of the Department of Justice Tax Division.13-092
Defense counsel: Kevin H. Marino Esq., Chatham, N.J.
Gupta Information
Mexican Man Charged with Illegal ReentryRead the Press Release
A criminal information was filed against Pedro Barrios-Hernandez, aka Faraon Castillo-Hernandez, age 38, of Mexico, charging him with unlawful reentry into the United States on February 10, 2013, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
If convicted, the defendant’s sentence will be determined by the court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the United States Border Patrol, Port Clinton, Ohio. The case is being handled by Assistant United States Attorney Alissa M. Sterling.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Maryland Resident Sentenced to More Than 21 Years Imprisonment for Distribution of Crack Cocaine Within 1,000 Feet of an Elementary SchoolRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA — A 37-year old Baltimore, Maryland, resident was sentenced on February 25, 2013, in United States District Court in Martinsburg by Judge Gina M. Groh.
United States Attorney William J. Ihlenfeld, II announced that: KEVIN EDWARD MOSES was sentenced to 262 months imprisonment to be followed by 6 years of supervised release. MOSES entered a plea of guilty on April 16, 2012, to one count of distribution of crack cocaine within 1,000 feet of Winchester Avenue Elementary School in Martinsburg, West Virginia. MOSES was part of a Baltimore-Martinsburg conspiracy which distributed heroin and crack cocaine in the Martinsburg area between 2008 and 2011. As part of his plea, MOSES admitted to distributing 211 grams of crack cocaine and 127 grams of heroin as part of his drug activity. MOSES’ sentence was enhanced because of his leadership role, use of a minor, and distributing drugs within 1,000 feet of protected locations. MOSES, who was remanded to the custody of the United States Marshal pending designation to a Federal institution, became the sixth defendant sentenced as part of the investigation conducted by the Eastern Panhandle Eastern Panhandle Drug & Violent Crime Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, and the Berkeley County Sheriff’s Department.
This case was prosecuted by Assistant United States Attorneys John C. Parr and Erin
K. Reisenweber.Marion County Woman Sentenced for Drug TraffickingRead the Press Release
Department of Justice
Office of Public AffairsMARSHALL, Texas – A 45-year-old Jefferson, Texas woman has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Tracy Renee Hampton pleaded guilty on Mar. 27, 2012, to possession of pseudoephedrine with intent to manufacture methamphetamine and was sentenced to 84 months in federal prison today by U.S. District Judge Rodney Gilstrap.
According to information presented in court, Hampton was involved in a conspiracy with others to purchase cold pills containing pseudoephedrine at multiple pharmacies across East Texas.
Hampton was indicted by a federal grand jury on Feb. 1, 2012 and charged with federal drug trafficking violations
This case was investigated by the Texas Department of Public Safety and the Harrison County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Allen Hurst.Man Sentenced to Serve 35 Years in Federal Prison for Production of Child PornographyRead the Press Release
United States Attorney Laura E. Duffy announced the sentencing of David Kinh Duc Tran in federal court yesterday based upon his convictions for production of child pornography, in violation of Title 18, United States Code, Section 2251(a) and (e). United States District Judge Thomas J. Whelan sentenced the defendant to serve 420 months (35 years) in federal prison and also ordered the defendant to serve 5 years of supervised release and register as a sex offender.
On April 25, 2012, during the second day of his jury trial, Tran elected to plead guilty to all five counts of producing child pornography outside of the United States, in violation of Title 18, United States Code, Sections 2251(a) and (e). Specifically, he admitted to producing five videos of sexual exploitation of several children while he was teaching in Vietnam.
According to court documents, Tran stated that he lived in Vietnam for approximately two years and returned to the United States before his arrest. Based on a tip, on August 19, 2010, the San Diego Internet Crimes Against Children Task Force (ICAC) executed a search warrant on Tran's motel room. 2 Agents seized a laptop computer that was sent to the Regional Computer Forensics Laboratory (RCFL) to be analyzed. That analysis revealed a video of Tran teaching English in Vietnam and videos of the defendant having sex with girls who appear to be between 6 and 12 years old. The defendant has been in custody since his arrest in August 2010.
This case stems from an investigation by San Diego Police Department officers assigned to the San Diego Internet Crimes Against Children Task Force, whose members include the Federal Bureau of Investigation, the Immigration and Customs Enforcement's Homeland Security Investigations, the San Diego County Sheriff's Department, the Chula Vista Police Department, the United States Attorney's Office, the San Diego District Attorney's Office, the United States Postal Inspection Service, the Naval Criminal Investigative Service, the United States Marshals Service, the Regional Computer Forensics Laboratory, the Defense Criminal Investigative Service, the National City Police Department, the La Mesa Police Department, the Oceanside Police Department, the El Cajon Police Department, the San Diego State University Police Department, the Riverside County Sheriff's Department, and the Riverside County District Attorney's Office. For additional information regarding ICAC, please visit www.sdicac.org.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative designed to protect children from online exploitation and abuse. Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about PSC and Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
DEFENDANT Case Number: 10cr3668W David Kinh Duc Tran SUMMARY OF CHARGES Five CountsTitle 18, United States Code, Section 2251(a) and (e) (Production of Images of Minors Engaged in Sexually Explicit Conduct)
INVESTIGATING AGENCIESSan Diego Internet Crimes Against Children (ICAC) Task Force
Man Indicted for Illegal ReentryRead the Press Release
A grand jury returned a one-count indictment charging Luis Manuel Diaz-Quintero, 24, with illegally reentering the United States following his deportation, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Diaz-Quintero is an alien who was previously removed or deported from the United States on February 2, 2010, after having been previously convicted of one or more felonies.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Phillip J. Tripi, following investigation by agents of the U.S. Immigration and Customs Enforcement.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Madison Man Indicted for Possessing Guns Despite Prior Mental CommitmentRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Madison County man for possessing 18 guns although he previously had been committed to a mental institution, announced U.S. Attorney Joyce White Vance and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Jeffrey L. Fulton.
A two-count indictment filed in U.S. District Court charges JAMES WANN VAUGHAN, 69, with possessing the firearms on Jan. 17 “after having been adjudicated as a mental defective and committed to a mental institution.” The indictment also charges Vaughan with making a false statement to a licensed firearms dealer regarding his prior mental health commitment.
“My office is committed to reducing gun violence and protecting the citizens of North Alabama,” Vance said. “It is a crime for someone who has been committed to a mental institution to possess a firearm and it is illegal for anyone to lie on ATF forms that are required for the legal purchase of a gun. We will enforce these laws,” Vance said.
“ATF continues to lead a collaborative effort to remove firearms from the streets and ensure they are not in the hands of prohibited individuals,” Fulton said.
According to the indictment, when Vaughan purchased a Colt Defender .45-caliber pistol from a Birmingham-area gun store Jan. 14, he falsely stated on a required ATF form that he had not been committed to a mental institution, and that he was born in 1942 and lived in Scottsboro, when he was born in 1943 and lives in Madison.
Madison Police and ATF agents later found the Colt .45, along with 17 other guns at Vaughan’s home. According to the indictment, those guns were: a Winchester Model 94 .30-30-caliber rifle, a Browning Model Mag 20 20-gauge shotgun, a Browning Model Sweet 16 16-gauge shotgun, a Browning Model Lite 12 12-gauge shotgun, a Browning Model Mag 12 12-gauge shotgun, a Browning Model over/under Invector Plus 12-gauge shotgun, a Weatherby Model Mark XXII .22-caliber rifle, a Smith and Wesson Model 66-1 .357-caliber revolver, a Colt Model Frontier Scout .22-caliber revolver, a Smith and Wesson Model 29-2 .44 Magnum revolver, a Smith and Wesson Model Air weight 37 .38-caliber revolver, a Smith and Wesson Model 36 .38-caliber revolver, a North American Arms Corp. Model 22LR derringer, a Ruby Model 1914 .25-caliber pistol, a Western Field 12-gauge shotgun, a Browning BAR 30-06-caliber rifle, and a Weatherby Model 300 mag Mark V .300-caliber rifle.
The maximum penalty for possession of a firearm by someone who has been adjudicated as a mental defective or who has been committed to a mental institution is 10 years in prison and a $250,000 fine. The maximum penalty for making a false statement to a licensed firearms dealer is five years in prison and a $250,000 fine.
The ATF, in cooperation with Madison Police, is investigating the case, and Assistant U.S. Attorney Russell E. Penfield is prosecuting it.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Larry Moses, Jr. Pleads Guilty in Federal Court to Arson ChargesRead the Press Release
LARRY MOSES, JR., age 31, a resident of New Orleans, Louisiana, pled guilty yesterday before U. S. District Judge Susie Morgan to a four-count indictment for conspiring to commit two acts of arson at a gasoline station located in New Orleans, announced U. S. Attorney Dana J. Boente.
MOSES pled guilty to conspiring to maliciously burn a building used in interstate commerce, conspiring to use a destructive device during a crime of violence; and two separate counts of arson. The conspiracy to commit arson carries a sentence of 5 to 20 years of incarceration. The conspiracy to possess a destructive device during a crime of violence carries a maximum sentence of life imprisonment. The two arson counts carry a sentence of 5 to 20 years incarceration. The fine potential is $250,000 for each count and the maximum term of federal supervision after the completion of his prison sentence is 5 years. Sentencing is scheduled for May 22, 2013.
The Fuel Zone gas station/convenience store was the victim of two separate acts of arson in June of 2010. According to court documents, MOSES offered Lennie Brown $1,500.00 cash to maliciously start a fire inside the store. On the evening of June 5, 2010, MOSES and Brown purchased a plastic squeeze bottle and filled it with gasoline. MOSES and Brown then drove their vehicle to a parking lot adjacent to the Fuel Zone. Before entering the Fuel Zone store, Brown called MOSES’ cell phone so that MOSES, who remained in the getaway vehicle, could hear what was happening while Brown was inside the store. Surveillance video showed Brown, wearing a motorcycle helmet to disguise his identity, entered the store and proceeded to spray gasoline onto contents of shelves down one of the store aisles. Brown started the fire using a lighter and exited the store as the fire erupted. Brown ran back to the getaway vehicle and MOSES quickly drove away from the scene.
In the days following the June 5th arson, MOSES informed Brown that he would not be paid until he committed a second more destructive fire at the Fuel Zone store but increased his offer to $3,000.00. Brown then hired Michael Collins to assist him in a second act of arson. MOSES instructed Brown that for this second arson, the fire should be started near the store’s cash register area.
Shortly after 1:00 a.m. on June 22, 2010, Brown and Collins constructed three Molotov Cocktails, a destructive device, and drove to a parking lot cater-cornered from the Fuel Zone. Collins entered the Fuel Zone store, lit and tossed the three Molotov Cocktails behind the cash register area. The store clerk, armed with a pistol, fired a shot at Collins, hitting him in the leg. Collins called Brown to inform him that he had been shot. Brown, who drove away from the scene leaving Collins behind, called MOSES to inform him of what had happened. Ultimately, Collins was driven to University Hospital for his bullet wound. While at the hospital, Collins confessed to ATF agents that he had been shot while committing an arson at the Fuel Zone convenience store. Through Collins’ statements, ATF agents were able to arrest Brown who in turn confessed as to MOSES’ involvement in both crimes.
The Fuel Zone gas station suffered extensive fire damage during the second arson and had to be completely shut down for over one month.
This case was investigated by the New Orleans Fire Department along with Special Agents of the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives and is being prosecuted by Assistant United States Attorneys Rick Veters and Edward Rivera of the Violent Crime Unit.
(Download Factual Basis )
Kansas City, Kan., Woman Pleads GuiltyTo Theft of Social Security BenefitsRead the Press Release
KANSAS CITY, KAN. – A Kansas City, Kan., woman pleaded guilty today to theft of federal program benefits, U.S. Attorney Barry Grissom said.
Wanda Herdman, 57, pleaded guilty to stealing government money. She admitted to stealing $43,158 from three needs-based federal programs. Specifically, the programs she defrauded were: the Supplemental Security Income “SSI” Program, the Supplemental Nutrition Assistance Program (more commonly known as the Food Stamp Program), and the Medicaid Program.
In Herdman’s plea, she admitted that she intentionally did not report her spouse’s income from the Department of Veterans Affairs because she knew her household’s financial resources would preclude her from receiving SSI payments. Between December 2011 and May 2013, she fraudulently obtained $8,584 in SSI payments.
In her plea, she also admitted this was not the first time she was overpaid by the Social Security Administration because of her failure to comply with her reporting obligations. From 1998 to 2006, she received an additional $22,560 in SSI payments she was not entitled to receive.
Due to Herdman’s intentional failure to report her spouse’s income she also received food stamp and Medicaid benefits she was not entitled to receive. She fraudulently obtained $3,254 in food stamp benefits and $8,760 in Medicaid benefits.
A sentencing will be scheduled after the United States Probation Office completes a presentence investigation. Herdman faces a maximum penalty of 10 years in federal prison and a fine up to $250,000.
Grissom commended the Social Security Administration - Office of Inspector General, the Legal Services Division of the Kansas Department for Children and Families, and Special Assistant U.S. Attorney Trey Alford for their work on the case.Justin Hanley Bright Wings Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on February 26, 2013, before Chief U.S. District Judge Richard F. Cebull, JUSTIN HANLEY BRIGHT WINGS, a 27-year-old resident of Lodge Grass, pled guilty to assault resulting in serious bodily injury. Sentencing has been set for May 29, 2013. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Lori Harper Suek, the government stated it would have proved at trial the following:
JUSTIN HANLEY BRIGHT WINGS, is a 27 year old male, and is an enrolled member of the Crow Tribe of Indians, a federally recognized tribe. The crime occurred within the exterior boundaries of the Crow Indian Reservation.
On June 9, 2012, at approximately noon, BRIGHT WINGS was driving a vehicle with five passengers, one of whom was his 11-month-old son. BRIGHT WINGS was drunk while driving, and lost control of the vehicle on Highway 1, approximately one mile from the intersection of Hwy 1 and Hwy 313, south of Hardin. The vehicle rolled several times and ended up in an irrigation ditch. BRIGHT WINGS's 11-month-old son suffered an epidural hematoma in his head (blood leaking into a layer of the tissue covering the brain) as a result of the wreck. The child was taken to St. Vincent's Hospital in Billings where he was treated.
BRIGHT WINGS's blood was drawn shortly after the crash, and the FBI lab analyzed the blood. The FBI lab report indicates that the defendant's BAC at 14:15 (approximately 1 hr after the crash), was 0.318. Using back-extrapolation calculations to estimate the BAC at the time of the crash, the FBI lab report estimates that the BRIGHT WINGS's BAC at the time of the crash would have been approximately 0.34 (with a possible range of 0.33 to 0.35).
BRIGHT WINGS faces possible penalties of 10 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was conducted by a cooperative effort between the Federal Bureau of Investigation and the Bureau of Indian Affairs.
Justice Department Reaches Settlement with School District of Palm Beach County, Fla., to Prevent and Address Discrimination in School Enrollment and Student DisciplineRead the Press Release
The Justice Department announced that it has reached a comprehensive settlement agreement with the School District of Palm Beach County, Fla., the nation’s eleventh-largest school district, to prevent and address discrimination in school enrollment and student discipline. The agreement resolves the department’s investigation into complaints that the district failed to enroll children based on their or their parents’ national origin or immigration status, and that its system of discipline discriminated against students based on national origin and limited English proficiency. The district serves more than 179,000 students, including 20,000 English language learners (ELLs).
“All children deserve an equal opportunity to learn, no matter where they are from or what language they speak,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We commend the School District of Palm Beach County for working collaboratively with the department to remove barriers to student enrollment, and for taking strong action to promote a safe, inclusive school environment for all students.”
Under the agreement, the district will enroll all area students regardless of background and will provide translation and interpretation services throughout the registration process. The district will also limit the use of disciplinary measures that remove students from the classroom and implement behavior management and discipline practices that support and protect students. The agreement:
- Requires that ELL students and parents who are limited English proficient receive translation and interpretation services throughout the discipline process ;
- Places limits on exclusionary discipline, such as suspension, and prohibits exclusionary discipline for minor misbehavior;
- Expands the use of positive behavior interventions and supports, and requires that these interventions and supports be accessible to ELL students, including through appropriate translation or interpretation services;
- Prohibits school officials from involving law enforcement officers to respond to behavior that can be safely and appropriately handled under school disciplinary procedures;
- Requires school law enforcement officers to communicate with students in a language the student understands, including by securing an interpreter when appropriate;
- Requires monitoring of discipline data to identify and respond to disparities; and
- Requires training for relevant personnel on all revised policies and procedures.
The enforcement of Title IV of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race or national origin, among other bases, in public schools, and the Equal Educational Opportunities Act of 1974, which requires schools to take appropriate action to overcome language barriers that impede students’ equal participation in instructional programs, are top priorities of the Justice Department’s Civil Rights Division. The Civil Rights Division also works to protect the right of all children to enroll in public schools regardless of immigration status, as set forth in the Supreme Court’s Plyler v. Doe decision. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
Related Materials:
Palm Beach County Settlement Agreement
Jefferson County Man Sentenced for Drug TraffickingRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A 39-year-old Nederland, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
George Alexander Faulk pleaded guilty on Oct. 11, 2012, to possession with intent to distribute over 5 grams of methamphetamine and was sentenced to 100 months in federal prison today by U.S. District Judge Thad Heartfield.
According to information presented in court, on June 20, 2011, Faulk sold an “8-ball” (3.5 grams) of methamphetamine to another person for $300 at Faulk’s residence. On Jan. 18, 2012, officers executed an arrest warrant for Faulk at his residence for delivery of methamphetamine. Officers located Faulk and he was arrested without incident. Officers asked if he was in possession of any methamphetamine or if any methamphetamine was inside his residence. Faulk advised methamphetamine was located in a safe in his kitchen, and he provided the combination to officers. Inside the safe, officers located a clear bag containing 20.83 grams of 97% pure d-methamphetamine hydrochloride. Nearby, a black nylon bag contained 14 individually packaged bags containing a total of 13.94 grams of 94% pure d-methamphetamine hydrochloride. Many of the individually packaged bags were labeled with “G” or “1/16”, which indicates 1 gram or 1/16 of an ounce (1.75 grams). Digital scales, hypodermic syringes, a metal spoon, and several empty re-sealable bags were also located.
Faulk was indicted by a federal grand jury on May 16, 2012 and charged with federal drug trafficking violations
This case was investigated by the Drug Enforcement Administration and the Jefferson County Narcotics Task Force and prosecuted by Assistant U.S. Attorney Baylor Wortham.Informational: Federal Court ArraignmentsRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on February 26, 2013, before U.S. Magistrate Judge R. Keith Strong, the following individuals were arraigned:
THOMAS MARK MARCEAU, a resident of Browning, appeared on charges of aggravated sexual abuse and abusive sexual contact. He is currently detained. If convicted of these charges, MARCEAU faces possible penalties of a mandatory minimum of 30 years in prison up to life in prison, a $250,000 fine, and at least 5 years up to lifetime supervised release. Assistant U.S. Attorney Ryan Weldon is the prosecutor for the United States. The investigation was conducted by the Federal Bureau of Investigation.
RONALD JAY MILLER, a 56-year-old resident of East Helena, appeared on charges of access with intent to view child pornography, possession of child pornography, and felon in possession of firearms. He is currently detained. If convicted of these charges, MILLER faces possible penalties of a mandatory minimum of 10 years up to 20 years in prison, a $250,000 fine, and at least 5 years up to lifetime supervised release. Assistant U.S. Attorney Marcia Hurd is the prosecutor for the United States. The investigation was conducted by a cooperative effort between the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms, & Explosives, Montana Division of Criminal Investigation, and the Helena Police Department.
CHRISTOPHER JOSEPH LADUE, a 26-year-old resident of Browning, appeared on a charge of sexual abuse of a minor. He is currently detained. If convicted of this charge, LADUE faces possible penalties of 15 years in prison, a $250,000 fine, and at least 5 years up to lifetime supervised release. Assistant U.S. Attorney Ryan Weldon is the prosecutor for the United States. The investigation was conducted by the Federal Bureau of Investigation.
The defendants pled not guilty to the charges.
The charge, an indictment, information or complaint, is merely an accusation and all persons named as defendants are presumed innocent until proven guilty. A pre-trial conference and a trial date will be set and the United States will be required to prove the allegations set forth in the indictment beyond a reasonable doubt.
Informational: Federal Court ArraignmentRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on February 26, 2013, before U.S. Magistrate Judge Jeremiah C. Lynch, the following individual was arraigned:
RODNEY ROYCE MILLER, a 60-year-old resident of Kalispell, appeared on charges of receipt of child pornography and accessing child pornography with the intent to view. He is currently detained. If convicted of these charges, MILLER faces possible penalties of a minimum of 15 years in prison up to 40 years in prison, a $250,000 fine, and at least 5 years up to lifetime supervised release. Assistant U.S. Attorney Cyndee L. Peterson is the prosecutor for the United States. The investigation was conducted by a cooperative effort between the Internet Crimes Against Children Task Force, Flathead County Sheriff's Office, Montana Division of Criminal Investigation, and United States Probation.
The defendant pled not guilty to the charges.
The charge, an indictment, information or complaint, is merely an accusation and all persons named as defendants are presumed innocent until proven guilty. A pre-trial conference and a trial date will be set and the United States will be required to prove the allegations set forth in the indictment beyond a reasonable doubt.
Houston Man Sentenced for Firearms Violations in East TexasRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A 29-year-old Houston man has been sentenced to federal prison for firearms violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Michael John Pereira pleaded guilty on Oct. 3, 2012, to possession of a firearm during a drug trafficking crime and was sentenced to 60 months in federal prison today by U.S. District Judge Ron Clark.
According to information presented in court, from 2008 to June 20, 2012, Donald Dixon (Dixon), a.k.a. “Black”, Cedrick Fowler, a.k.a. “C” and “C-Murder” (C. Fowler), Kerry Wayne Griffin (Griffin), a.k.a. “Big Boy”, Omar Paunetto, Jose Angel Bustillos, Michael John Pereira, Rodney Stevenson (Stevenson), a.k.a. “Arod”, Darius Thorn (Thorn), a.k.a. “Bs” and “Beez”, Tremaine Smith (Smith) and Anthony Fowler (A. Fowler) conspired to traffic cocaine and "crack" cocaine base throughout East Texas.
Pereira's role in the organization was to work at the direction of Dixon. Pereira’s job was to provide protection for Dixon when drug transactions were occurring. On April 30, 2012, agents conducted surveillance of a controlled purchase of 2 kilograms of cocaine. During the course of the investigation, officers conducted a stop on Pereira's vehicle and found him in possession of multiple firearms and ammunition, including:
-A Sig Sauer, Sig 516, carbine assault rifle, serial number 20A009905; -A S&W, M&P, assault rifle, serial number 93683; -A Colt, Anaconda, .44 caliber gun, serial number MM31387; -A S&W, SW9VE pistol, serial number DUY4897; -A Two S&W magazines for a 9mm firearm; two Aris magazines with a 30-round capacity; -A 29-round Glock magazine; -A .45 caliber Clock magazine; -A Two 100-round capacity drum magazines for an assault rifle; and
-Assorted ammunition.
On June 20, 2012, a federal grand jury returned a 10-count indictment charging 10 defendants, including Pereira, with multiple violations.This case is the result of an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) joint investigation. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
This case was investigated by the Drug Enforcement Administration, the Nacogdoches Police Department, and the Nacogdoches County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Baylor Wortham.
###High Ranking Gulf Cartel Member Convicted in Washington for Drug TraffickingRead the Press Release
Aurelio Cano Flores, a Mexican national and high ranking member of the Gulf Cartel, was found guilty today by a federal jury of conspiring to import multi-ton quantities of cocaine and marijuana into the United States, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Administrator Michele M. Leonhart of the Drug Enforcement Administration (DEA).
Cano Flores, 40, aka “Yankee” and “Yeyo,” was convicted by a federal jury in U.S. District Court in the District of Columbia. Cano Flores was one of 19 defendants charged in a superseding indictment on Nov. 4, 2010, with conspiracy to manufacture and distribute five kilograms or more of cocaine and 1,000 kilograms or more of marijuana for importation into the United States. Cano Flores was extradited to the United States from Mexico in August 2011 and was ordered detained in federal custody pending trial.
“Aurelio Cano Flores was convicted today of leading one of the world’s most notorious criminal organizations in a conspiracy to traffic massive quantities of illegal drugs into the United States,” said Assistant Attorney General Breuer. “Cano Flores is the highest ranking Gulf Cartel member to be convicted by a U.S. jury in the past 15 years, and his conviction demonstrates the Justice Department’s commitment to hold ruthless cartel leaders responsible for importing narcotics into the United States – no matter where they conduct their illegal business. Along with our domestic and international law enforcement partners, we will continue to bring our resource to bear to ensure that cartel members and associates are brought to justice for the damage they inflict on both sides of the border.”
“Our strategy of targeting the highest levels of the Gulf Cartel continues to pay off,” said DEA Administrator Leonhart. “DEA and our law enforcement counterparts on both sides of the border remain committed to using every law enforcement tool available to attack these criminal organizations, while taking out their financial infrastructure to thwart their illicit business models and deprive them of their ill-gotten gains.”
Evidence presented at trial included dozens of lawfully intercepted telephone conversations between Cano Flores and other leaders of the Gulf Cartel, as well as testimony from previously convicted Cartel members. According to evidence presented at trial, Cano Flores began working for the Gulf Cartel in approximately 2001 while serving as a police officer in Mexico. While serving as a police officer, Cano Flores recruited others into the Gulf Cartel, collected drug money and escorted large shipments of cartel drugs to the U.S. border.
Cano Flores ultimately rose through the ranks of the Gulf Cartel to become a major transporter of narcotics within Mexico to the U.S. border and became the cartel’s top representative in the important border town of Los Guerra, Tamaulipas, Mexico. As the “plaza boss” for Los Guerra, Cano Flores oversaw the mass distribution of cocaine and marijuana into the United States on a daily basis. Testimony also established that between 2000 and 2010, the Gulf Cartel grew from an organization of only 100 members controlling three border towns to an organization of 25,000 people controlling the drug trade over approximately half of Mexico. As established during the trial, the means and methods of this conspiracy included corruption, murder, kidnapping and intimidation.
At sentencing, scheduled for May 13, 2013, before U.S. District Judge Barbara J. Rothstein, Cano Flores faces a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
The case was prosecuted by Trial Attorneys Darrin McCullough and Sean Torriente of the Criminal Division’s Narcotic and Dangerous Drug Section. The Criminal Division’s Office of International Affairs provided significant assistance in the provisional arrest and extradition of Cano Flores. The investigation in this case was led by the DEA Houston Field Division’s Organized Crime Drug Enforcement Strike Force and the DEA Bilateral Investigation Unit.Gregg County Man Sentenced to 40 Years for Drug TraffickingRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 39-year-old Longview, Texas man has been sentenced to 40 years in federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Spencer Garod Elam was convicted by a jury on Oct. 3, 2012, of conspiracy to possess with intent to distribute hydrocodone, two counts of possession of a firearm during a drug trafficking crime, felon in possession of a firearm, and use of a communications facility to facilitate a felony. Elam was sentenced to a total of 480 months in federal prison today by U.S. District Judge Leonard E. Davis.
According to information presented in court, Elam was arrested on May 16, 2011 following a lengthy investigation into a drug trafficking enterprise in Gregg County, Texas. A federal grand jury returned an indictment on May 11, 2011, charging 13 Longview residents, including Elam, with multiple drug and gun violations.
This case was investigated by the Drug Enforcement Administration, the Bureau of Alcohol, tobacco, Firearms, and Explosives, the Gregg County C.O.D.E. Unit, the Gregg County Sheriff’s Office and the Longview Police Department and prosecuted by Assistant U.S. Attorney Richard L. Moore.Former Wood County Rancher Sentenced for Selling Mortgaged CattleRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 26-year-old Ainsworth, Nebraska man has been sentenced for misapplying funds owed to the Farm Services Agency in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Michael Kord Chapman pleaded guilty on Aug. 22, 2012 to conversion of mortgaged property and was sentenced to five years probation today by U.S. District Judge Leonard Davis. Chapman was also ordered to pay restitution of $83,622.42 to the U.S. Department of Agriculture Farm Services Agency.
According to information presented in court, between Feb. 18, 2011 and Apr. 7, 2011, Chapman sold approximately 158 head of cattle valued at over $83,400.00 that had been pledged as collateral on a loan from the Farm Services Agency. Instead of paying the loan, Chapman kept the proceeds of the sale for himself and converted them to his own use.
This case was investigated by the U.S. Department of Agriculture, Office of the Inspector General, Office of Investigations, and prosecuted by Assistant U.S. Attorney Jim Noble.
Former Owners of Los Angeles-Area Medical Equipment Wholesaler Plead Guilty to Conspiring with Customers<br /> to Defraud MedicareRead the Press Release
Two former owners of a Los Angeles-area medical equipment wholesale supply company pleaded guilty today to conspiring with their customers to defraud Medicare.
The pleas were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Joseph Fendrick, Special Agent in Charge of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse (Cal-DOJ).
Rajinder Singh Paul, 69, and Baljit Kaur Paul, 65, of Redlands, Calif., each pleaded guilty before U.S. District Judge Percy Anderson in the Central District of California to one count of conspiracy to commit health care fraud.
In court documents, Rajinder and Baljit Paul admitted that they were the president and vice president, respectively, and shareholders of AHPK Inc., a medical equipment wholesale supply company located in Redlands and Ontario, Calif., and formally known as Major’s Wholesale Medical Supply Inc. The Pauls later sold Major’s Wholesale Medical Supply Inc. to Major’s Wholesale Medical Supply LLC (collectively, “Major’s”) and, according to court documents, remained employed at Major’s Wholesale Medical Supply LLC as consultants until they were terminated in February 2009.
During the time the Pauls either owned or worked as consultants for Major’s, Major’s sold durable medical equipment (DME) almost exclusively to customers who owned and operated DME supply companies, according to court documents. A majority of Major’s customers were Medicare providers and relied on Medicare to make money, which they did by billing Medicare for the DME that they purchased from Major’s.
One of the more popular items of DME that the Pauls sold at Major’s were power wheelchairs. Court documents indicate that to attract customers, the Pauls sold power wheelchairs to Major’s customers wholesale for between $850 to $1,000 each. Major’s customers, however, billed these power wheelchairs to Medicare at a rate of between $3,000 to $6,000 per wheelchair.
The Pauls admitted they knew that Major’s customers were dependent on Medicare for their revenue, and that Major’s customers could not pay Major’s unless Medicare paid the customers first. To foster customer loyalty, the Pauls engaged in a variety of conduct over a period of six years that helped Major’s customers defraud Medicare, including by providing Major’s customers with false inventory purchase agreements that showed they had higher credit limits than they really did. Major’s customers submitted these false inventory purchase agreements to Medicare to prove, as required by Medicare, the ability to purchase the volume of DME they billed.
The Pauls also admitted they provided Major’s customers with backdated invoices, knowing customers were billing Medicare for power wheelchairs and DME before the customers actually purchased or delivered the equipment. The Pauls admitted that by backdating these invoices, they provided Major’s customers with the paper trail the customers needed to prove to Medicare that they had both purchased the DME and purchased it before they submitted their claims to Medicare. According to court documents, the Pauls backdated or falsified invoices for more than 100 different customers.
Court documents indicate that two of many customers who conspired with the Pauls to defraud Medicare owned and operated a number of fraudulent DME supply companies in the Los Angeles area, including one customer who used “straw” or nominee owners to operate the customer’s companies. The Pauls admitted they provided these two customers with false inventory purchase agreements and backdated invoices that the customers used to defraud Medicare. The Pauls admitted that as a result of their conduct, these two customers were able to use their fraudulent DME supply companies to submit approximately $16,662,143 in false claims to, and receive approximately $9,743,609.42 in ill-gotten reimbursement payments from, Medicare.
At sentencing, scheduled for July 8, 2013, the Pauls each face a maximum penalty of 10 years in prison and a $250,000 fine.
This case is being prosecuted by Jonathan T. Baum of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG, and Cal DOJ and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers. To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Former Liberty Lake Pastor Sentenced to Five Years in Federal Prison for Distributing Child PornographyRead the Press Release
Spokane - Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Lonnie W. Castillo, age 49, of Liberty Lake, Washington, was sentenced today after having previously pleaded guilty to distribution of child pornography. United States District Court Judge Fremming Nielsen sentenced Castillo to a five year term of imprisonment, to be followed by a life term of court supervision after he is released from Federal prison. In addition, Castillo was ordered to forfeit the computer and digital storage media he used to distribute and possess the child pornography.
According to information disclosed during the court proceedings, Castillo had been a pastor for over 15 years at the Liberty Lake Community Church and had also been a former YMCA Spokane Valley swim coach. United States Secret Service agents executed a federal search warrant at Castillo's residence in Liberty Park, Washington. The Secret Service agents discovered Castillo was in possession of 37 images and six videos of child pornography. The investigation revealed that Castillo was sharing images of child pornography with other individuals via the Internet. The images Castillo was distributing to others contained file names"pdo", "preteen", "underage", 5yo", "6yo", and "7yo", which are consistent with child pornography.
Michael C. Ormsby stated, "The United States Attorney's Office in the Eastern District of Washington is, and will continue to be, committed to prosecuting aggressively and seeking appropriate punishment for child pornography crimes. Prosecuting these types of crimes is particularly important because of the age of the innocent victims."
This case was pursued as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. The Project Safe Childhood (PSC) Initiative has five major components:
- Integrated federal, state, and local efforts to investigate and prosecute child exploitation cases, and to identify and rescue child victims;
- Participation of PSC partners in coordinated national initiatives;
- Increased federal enforcement in child pornography and enticement cases;
- Training of federal, state, and local law enforcement agents; and
- Community awareness and educational programs.
For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
This investigation was conducted United States Secret Service and the Spokane County Police Department. The case was prosecuted by Stephanie J. Lister, an Assistant United States Attorney and PSC Coordinator for the Eastern District of Washington.
CR-12-0003-WFN
Former Executive of Beverly Company Sentenced to Prison for Securities FraudRead the Press Release
BOSTON - The former CFO of Locateplus Holdings Corporation was sentenced yesterday for his role in a number of fraudulent schemes which artificially inflated his company’s assets and revenues.
James C. Fields, 45, of Brookline, was sentenced by U.S. District Judge Douglas P. Woodlock to five years in prison, followed by three years of supervised release and ordered to pay restitution to his victims. In November 2012, Fields was convicted by a jury, after a three-week trial, for conspiracy, securities fraud, false statements to company auditors, false statements in required SEC filings, wrongful certifications of SEC filings, aggravated identity theft, and money laundering.
Beginning in about 2002, Fields, the former Chief Financial Officer of Locateplus Holdings Corporation, and later acting Chief Executive Officer, pursued several fraudulent schemes intended to artificially inflate Locateplus’ assets and revenues. Locateplus was a publicly-traded company, based in Beverly, Mass., that sold access to personal data and other information. Working with Jon Latorella, the former CEO of the company, Fields engaged in a series of fraudulent activities, including:
- Creating a fake company called Andover Secure Resources, using the identity of a deceased man as the head of Andover, and then fabricating a loan transaction between Andover and Locateplus under which Andover supposedly borrowed over $1 million from Locateplus at a favorable interest rate;
- Creating another fake company called Omni Data Services and opening bank accounts and a post office box in its name and then falsifying revenue streams to make it look like Omni Data was paying Locateplus millions of dollars under the terms of a fake contract;
- Deceiving the SEC and other regulatory authorities to avoid registering securities being sold by a company called Paradigm Tactical Products, including fabricating Paradigm investors using the identities of Fields’ acquaintances, girlfriend, skydiving instructors, and two deceased men; and
- Routinely deceiving Locateplus’ independent accountants and the SEC about the nature of Locateplus’s revenues and assets in order to keep these fraudulent schemes going and to attract investment in Locateplus.
In March 2012, Latorella pleaded guilty and was sentenced in June 2012 to five years in prison, followed by three years of supervised release.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, made the announcement today. The U.S. Attorney’s Office also acknowledges the valuable assistance it received from the Boston Office of the U.S. Securities & Exchange Commission.
The case was prosecuted by Assistant U.S. Attorneys Andrew E. Lelling and Paul G. Levenson of Ortiz’s Economic Crimes Unit.
Former Department of Defense Auditor charged with conflict of interest for representing contractor on issues she previously handled for the govermentRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that an Anchorage woman was indicted by the federal grand jury in Anchorage, Alaska, for violating federal conflict of interest laws.
According to the indictment Jodi Ann Andres, 48, of Anchorage, Alaska, was an auditor with the Department of Defense’s Defense Contract Audit Agency (“DCAA”) from January 2003 to September 2006. During that time, she was the primary auditor of cost proposals, labor rates and claims for the Missile Defense Agency. The Missile Defense Agency is responsible for developing, testing and fielding an integrated Ballistic Missile Defense System for the United States.
The Alaska Aerospace Corporation, formerly the Alaska Aerospace Development Corporation, was established in 1991 by the State of Alaska to develop a high technology aerospace industry in the state. Alaska Aerospace became a contractor for the Missile Defense Agency in 2003 and under a five year contract, provided support for launches from the Kodiak Launch Complex in Kodiak, Alaska.
In September 2006, Andres left employment with the DCAA and began employment with Alaska Aerospace as its Controller. The indictment alleges that in July 2008, Andres represented Alaska Aerospace during communications and negotiations with the DCAA about the same Missile Defense Agency contract she had previously audited, with the intent to influence the DCAA about that contract, in violation of a lifetime restriction which barred such communications.
The maximum penalty for violating the conflict of interest statute, which imposes a permanent restriction against communicating on behalf of another on a matter in which the person participated personally and substantially as a government employee, is up to five years in prison and a $250,000 fine. An arraignment date has been set for March 22, 2013.
Ms. Loeffler commends the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, for the investigation of this case.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Former Commodities Broker Sentenced to Four Years in Prison for Fraud Causing Half-Dozen Clients to Lose $1.3 MillionRead the Press Release
CHICAGO — A former commodities broker was sentenced to four years in federal prison for defrauding a half-dozen customers of approximately $2.5 million and causing them to lose approximately $1.3 million. The defendant, JOSHUA T.J. RUSSO, 31, of Chicago, a former vice president of alternative investments for Olympus Futures, Inc. (previously Peak Trading Group), was sentenced after pleading guilty last November to commodities fraud.
Russo was ordered to pay $1.175 million in restitution to the Joshua T.T. Russo Settlement Fund, which was established by the National Futures Association to be distributed to the victims. He was ordered to begin serving the sentence on May 24 by U.S. District Judge Charles Norgle, who imposed the sentence last Wednesday in Federal Court.
“Using falsified e-mails, account statements, and annual reports, Russo caused his clients to raid their IRA accounts and give him their hard-earned savings to purchase what he claimed were conservative investments that hedged against risks in the commodity futures markets. In reality, Russo placed highly speculative trades that routinely lost money,” the government argued at sentencing.
In pleading guilty, Russo admitted that between March 2007 and April 2011, he fraudulently obtained approximately $2.5 million from six investors and caused losses of more than $1.3 million, including approximately $208,000 in commissions for himself that he spent on gambling, vacations, clothing, theater tickets, meals, and entertainment. Russo obtained the funds by misrepresenting to investors that their money would be used to purchase various investments, including shares of the Peak Performance Fund, which he knew had never accepted individual investors and no money was ever invested with the fund. Russo made false statements about his prior performance investing in commodity futures, the level of risk, the existence and trading performance of the Peak Performance Fund, and the uses of the funds he obtained from investors.
Instead of investing the funds as he purported, Russo misappropriated the money to make speculative trades — and regularly lost money — in various commodity futures, including energy sources, precious metals, agriculture products, foreign currencies, and stock indices. After providing one investor with false information about positive returns, Russo successfully encouraged that investor to refer friends and relatives to open accounts through him, resulting in additional victims.
The sentencing was announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois, and Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Commodity Futures Trading Commission and the National Futures Association assisted in the investigation.
The government was represented by Assistant U.S. Attorney Christopher McFadden.
The investigation falls under the umbrella of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: StopFraud.gov.
Former Colorado Springs Man Sentenced to 43 Months in Prison for Orchestrating Mortgage Fraud SchemeRead the Press Release
DENVER – William M. Silvi, age 45, was sentenced today by U.S. District Court Judge Wiley Y. Daniel to serve 43 months in federal prison for wire fraud U.S. Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Silvi was ordered to spend 3 years on supervised release after he serves his term of imprisonment. Judge Daniel also ordered Silvi to pay restitution totaling $606,096.81. Silvi is currently serving time for state charges and will be turned over to the Bureau of Prisons once his time is served on the state charges.
Silvi was indicted by a Federal Grand Jury in Denver on August 9, 2010. At the time of his indictment, he was in custody in New Jersey pending state charges, but lived in Colorado Springs during the time of the offenses. Silvi appeared in Denver on March 14, 2011 where he was advised of the charges pending against him and remand in custody. He pled guilty on November 2, 2011 to one count of wire fraud.
According to the information contained in the indictment as well as the plea agreement, beginning in March 2005, and continuing through January 2008, Silvi devised and executed a scheme to defraud various financial institutions and commercial lenders in connection with the residential mortgage loans related to eleven properties in Colorado Springs, Larkspur and Fountain, CO, some of which were bought and sold multiple times during the scheme.
To execute the fraudulent scheme, Silvi found people he knew to purchase residential properties. In order to qualify each buyer for the mortgage loans needed to purchase these residential properties, Silvi made false statements on the Uniform Residential Loan Applications ("URLA") and in the supporting documentation, including: (1) inflating or fabricating the employment income, rental income, and/or assets of the buyer; (2) providing a false IRS Form W-2 and/or paycheck stub for the buyer; (3) false verifications of rent for the buyer; and (4) falsely stating that the property would be a primary residence for the buyer.
As part of the transactions for these property purchases, Silvi and the property seller inflated the sale price of the property so that Silvi would receive the inflated portion of the sale price at, or shortly after, the closing of the purchase transaction. This money was usually paid to the seller at the closing of the purchase transaction; however, the seller then paid Silvi from the disbursement funds. These disbursements to Silvi were not disclosed on the HUD-1 Settlement Statement. In furtherance and execution of the scheme, interstate wires were used to send the funds for the mortgage loans.
"In this case, the defendant approached people he knew to participate in this mortgage fraud scheme," said U.S. Attorney John Walsh. "Entangling friends with false promises of easy money will almost certainly get you in trouble, including going to prison."
"Mortgage fraud creates significant financial harm to individuals, businesses and our economy,” said Stephen Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. "Those who line their pockets with profits from these schemes should know they will not go undetected and will be held accountable."
This case was investigated by Internal Revenue Service - Criminal Investigation (IRS - CI), and was prosecuted by Assistant U.S. Attorney Pegeen Rhyne.
####
Florida Couple Pleads Guilty for Roles<br /> in Procurement Contract Bribery SchemeRead the Press Release
A Florida couple who owned a military contracting company pleaded guilty today in federal court in Salt Lake City for their roles in a bribery and fraud scheme involving federal procurement contracts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David B. Barlow for the District of Utah.
Sylvester Zugrav, 70, of Sarasota, Fla., pleaded guilty to conspiracy to commit bribery and procurement fraud. His wife, Maria Zugrav, 67, also of Sarasota, pleaded guilty to misprision of a felony related to her efforts to conceal the conspiracy. The Zugravs were charged in an indictment, returned on Oct. 12, 2011, along with Jose Mendez, 51, of Farr West, Utah, a procurement program manager for the U.S. Air Force Foreign Materials Acquisition Support Office (FMASO) at Hill Air Force Base, in Ogden, Utah.
Mendez was charged in the indictment with conspiracy, bribery and procurement fraud, and has since pleaded guilty to all charges and agreed to forfeit more than $180,000 he received as part of the bribery scheme and awaits sentencing.
According to court documents, the Zugravs owned Atlas International Trading Company, a business that contracted to provide foreign military materials to the U.S. government through FMASO.
In his plea agreement, Sylvester Zugrav admitted that, from 2008 through August 2011, he gave Mendez more than $180,000 in bribe payments, and offered Mendez more than $1.05 million in additional bribe payments contingent upon Atlas’s receipt of future contracts with FMASO. In exchange for Sylvester Zugrav’s bribe payments and offers, Mendez ensured that Atlas and Sylvester Zugrav received favorable treatment in connection with procurement contracts, including, among other things, assisting Atlas in obtaining and maintaining procurement contracts; assisting Atlas in receiving payments on such contracts; and providing Atlas with contract bid or proposal information or source selection information before the award of procurement contracts.
In her plea agreement, Maria Zugrav admitted that she was aware of Sylvester Zugrav’s bribe payments to Mendez and assisted with concealment of the crime. According to court records, Sylvester Zugrav provided bribe payments to Mendez in three ways: cash payments via Federal Express to Mendez’s residential address; in-person payments of cash and other things of value; and electronic wire transfers to a bank account in Mexico opened by and in the name of Mendez’s cousin. Between November 2009 and August 2011, Sylvester Zugrav sent nine FedEx packages to Mendez’s home address. Each package contained $5,000 in cash, except the last package, containing $3,000, which was seized by law enforcement. Maria Zugrav assisted her husband and Mendez’s bribe scheme by limiting cash withdrawals from Atlas’ bank account to not more than $5,000 to avoid scrutiny by banking officials and law enforcement.
According to the plea documents, on multiple occasions when Sylvester Zugrav and Mendez traveled to the same location, Sylvester Zugrav would give Mendez cash payments and other things of value. From 2008 through August 2011, Sylvester Zugrav gave Mendez seven in-person cash payments ranging from $500 to $10,000, and purchased a laptop computer and software package worth over $2,900.As Mendez admitted, during the course of the corrupt scheme, Mendez opened a foreign bank account so that Sylvester Zugrav could pay Mendez larger bribe payments. Mendez asked his cousin in Mexico to open an account there. After the account was opened by Mendez's cousin, Maria Zugrav made wire transfers to the bank account located in Mexico in the name of Mendez's cousin to avoid detection of the larger bribe payments by law enforcement. From 2008 through August 2011, Maria Zugrav sent 10 wire transfers to the Mexico account ranging from $350 to $26,700.
Court records also describe additional steps taken to conceal the bribery scheme, including creating and using covert e-mail accounts, using encrypted documents, adopting false names and using code words. For instance, to avoid detection of their e-mail communications, Sylvester Zugrav and Mendez established e-mail accounts to be used only to communicate requests and offers for bribe payments. Sylvester Zugrav and Mendez also created password-protected documents for e-mail communications, and used code words and false names. Within the encrypted documents, Mendez adopted the moniker “Chuco” and Sylvester Zugrav used the codename “Jugo.” They referred to cash as “literature.”
Sylvester Zugrav faces a maximum potential penalty of five years in prison and a $250,000 fine on the conspiracy count, and Maria Zugrav faces a maximum penalty of three years in prison and a $250,000 fine on the misprision count. Sentencing for the Zugravs is scheduled for June 19, 2013.
The case was investigated by the FBI and the Air Force Office of Special Investigations. The case is being prosecuted by Trial Attorneys Marquest J. Meeks and Edward P. Sullivan of the Criminal Division’s Public Integrity Section, Assistant U.S. Attorney Carlos A. Esqueda for the District of Utah and Trial Attorney Deborah Curtis of the National Security Division’s Counterespionage Section.
Federal Court Enjoins Former Los Angeles Instant Tax Service FranchiseeRead the Press Release
A federal court in Los Angeles permanently barred a Rancho Palos Verdes, Calif., married couple – Henock Teferi and Ruth Berhane – and their company, Plover Financial Services LLC, from engaging in certain abusive tax-preparation practices, the Justice Department announced today. The defendants are former owners of a Los Angeles-area Instant Tax Service franchise. Instant Tax Service is a national tax-preparation chain based in Dayton, Ohio, and claims to be the fourth-largest tax-preparation firm in the nation.
According to the government complaint in the civil case the defendants operated Instant Tax Service offices at multiple locations in the Los Angeles area until 2011. During that time, defendants’ employees allegedly engaged in a variety of misconduct, including preparing tax forms with unsubstantiated business income, falsely claiming education credits, improperly claiming false filing status, reporting false dependents, selling deceptive loan products, and preparing tax returns based on information from employee paystubs rather than employer-issued W-2 forms.
Judge Michael Fitzgerald of the U.S. District Court for the Central District of California signed the permanent injunction order, barring the defendants from violating the federal tax laws and consumer protection laws, and requiring an outside monitor to review a sample of tax returns that the defendants prepare in connection with their current tax preparation business, and report to a designated representative of the United States to ensure compliance with the injunction. The order also bars the defendants from marketing abusive loan products, including holiday or instant cash loans or advance loan products offered to customers based on information obtained from customers’ paystubs. The defendants consented to the permanent injunction without admitting the allegations against them.
The Justice Department brought five civil injunction suits against Instant Tax Service and some franchisees last year. One of those suits is pending against the nationwide franchisor of Instant Tax Service and its owner, Fesum Ogbazion, in Dayton. The court in that case has entered a preliminary injunction , and trial on the government’s request to shut down the Instant Tax Service franchisor permanently is scheduled for May 2013.
In the past ten years, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department’s website .
Related Materials:
United States v. Henock Teferi, et al.
Complaint for Permanent Injunction and Other Relief (PDF)
Order of Permanent Injunction Against Henock Teferi, Ruth Berhane, and Plover Financial Services LLC (PDF)Fairfield County Hedge Fund Executives Charged with Conspiracy, Securities Fraud and Wire Fraud OffensesRead the Press Release
February 26, 2013David B. Fein, United States Attorney for the District of Connecticut, and Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that a federal grand jury sitting in New Haven has returned a 19-count indictment charging three executives of New Stream Capital, LLC, a Ridgefield-based hedge fund, with conspiracy, securities fraud and wire fraud offenses.
DAVID BRYSON, 44, of Ridgefield, BART GUTEKUNST, 61, of Weston, and RICHARD PEREIRA, 40, of Ridgefield, surrendered this morning to the FBI in New Haven. BRYSON and GUTEKUNST were managing partners and principals at New Stream Capital, LLC, (“New Stream”) and PEREIRA was the Chief Financial Officer. The defendants appeared before U.S. Magistrate Judge Donna F. Martinez in Hartford and pleaded not guilty to the charges. BRYSON and GUTEKUNST were released on $5 million bonds and PEREIRA was released on a $300,000 bond. The indictment, which was returned on February 22, was unsealed at that time.
“As alleged, fearing the loss of their fund’s largest investor, these defendants orchestrated a scheme to deceive investors in order to obtain and maintain investments,” stated U.S. Attorney Fein. “The U.S. Attorney’s Office and our many partners on the Connecticut Securities, Commodities and Investor Fraud Task Force are committed to protecting investors and the integrity of American capital markets.”
“It goes without saying that investing carries certain risks,” stated FBI Special Agent in Charge Mertz. “Those risks, however, should not include any chance that hedge fund managers or other investment professionals are lying to or deceiving their investors about the current state of investments. Investors have a right to full disclosure. Today’s arrests underscore the FBI’s continuing commitment to investigate those who provide material misrepresentations to investors.”
According to the indictment and statements made in court, in November 2007, New Stream launched new feeder funds, one based in the United States (“U.S. Fund”) and a series of funds based in the Cayman Islands (“Cayman Fund”). New Stream also announced that its existing Bermuda Fund would be closing, and all foreign investors would have to move their investments into the Cayman Fund. Rather than transfer into the new structure, New Stream’s largest investor placed a redemption on its whole investment in the Bermuda Fund in March 2008. At risk of losing their largest investor, it is alleged that BRYSON, GUTEKUNST and PEREIRA set in motion a scheme to secretly keep the Bermuda Fund open and give priority to Bermuda Fund investors in an effort to reverse the redemption. As part of the scheme, BRYSON, GUTEKUNST and PEREIRA had New Stream staff secretly reorganize the fund structure so as to effectuate the priority change.
The indictment further alleges that New Stream failed to inform investors who had transferred from the Bermuda Fund into the Cayman Fund that the Bermuda Fund was remaining open or that it was being given priority over the Cayman Fund. Moreover, New Stream continued to market New Stream to investors by concealing from them the magnitude of the actual pending redemptions and by using deceptive marketing materials that failed to disclose the existence of New Stream’s Bermuda Fund.
Each of the defendants is charged with one count of conspiracy, 10 counts of securities fraud and eight counts of wire fraud. The conspiracy charge carries a maximum term of imprisonment of five years, and the securities fraud and wire fraud charges carry a maximum term of imprisonment of 20 years on each count.
This matter is being investigated by the Federal Bureau of Investigation and the U.S. Department of Labor, Office of Inspector General, with the assistance of the Securities and Exchange Commission. The case is being prosecuted by Assistant United States Attorneys Liam Brennan and Michael S. McGarry.
The Connecticut Securities, Commodities and Investor Fraud Task Force investigates matters relating to insider trading, market manipulation, Ponzi schemes, investor fraud, financial statement fraud, violations of the Foreign Corrupt Practices Act, and embezzlement. The Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Secret Service; U.S. Postal Inspection Service; U.S. Department of Justice’s Criminal Division, Fraud Section and Antitrust Division; U.S. Securities and Exchange Commission (SEC); U.S. Commodity Futures Trading Commission (CFTC); Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Office of the Chief State’s Attorney; State of Connecticut Department of Banking; Greenwich Police Department and Stamford Police Department.
Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an email to [email protected].
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]