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29 January 2013
Illinois Man Sentenced to Two Years for Role in Credit Union CollapseRead the Press Release
An Illinois man who played a role in one of the largest credit union collapses in American history was sentenced to two years in prison, United States Attorney Steven M. Dettelbach said.
Bujar Sejdic, 33, Ottawa, Illinois, was also ordered to repay $1.6 million in restitution by U.S. District Judge Christopher Boyko.
Sejdic pleaded guilty last year to financial institution fraud, giving gifts for procuring loans and three counts of money laundering related to his activities at St. Paul Croatian Federal Credit Union, located in Eastlake, Ohio.
The credit union closed in 2010, costing the National Credit Union Share Insurance Fund more than $170 million.
Between January 2004 through March 2010, Sejdic obtained 25 loans totalling more than $1.6 million from SPCFCU. These loans were made fraudulently, under false and fraudulent pretenses, and many were made after Sejdic had already defaulted on previous loans, according to court documents.
He obtained these loans with the assistance of the credit union’s then-chief operating officer, Anthony Raguz. In return, Sejdic gave Raguz $40,000 in cash and one check, according to court documents.
Raguz is currently serving a 14-year prison sentence for his crimes related to the credit union’s collapse.
In 2009 and 2010, Sejdic wired $240,000 from his SPCFCU account to an account in Belgrade, Serbia, according to court documents.As a result of Sejdic’s actions, SPCFCU and the National Credit Union Association lost more than $1.6 million, according to court documents.
This case is being prosecuted by Assistant U.S. Attorney Bridget M. Brennan following an investigation by the Cleveland Offices of the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division, with the assistance of the Eastlake Police Department.
Homero Varela Pleads Guilty to Federal Drug Trafficking and Financial CrimesRead the Press Release
ALBUQUERQUE – Homero Varela, 30, of Albuquerque, N.M., entered a guilty plea today to federal drug trafficking and money laundering offenses under a plea agreement that requires a sentence of 120 to 135 months in prison. Varela’s guilty plea was announced U.S. Attorney Kenneth J. Gonzales, Special Agent in Charge Joseph M. Arabit of the El Paso Field Division of the DEA, Special Agent in Charge Carol K.O. Lee of the Albuquerque Division of the FBI, and Acting Special Agent in Charge Gabriel L. Grchan of the Phoenix Division of the IRS Criminal Investigation.
Varela was arrested on Jan. 26, 2012, on a 29-count federal indictment charging him and 14 co-defendants with drug trafficking, money laundering and currency structuring offenses. The indictment charged Varela and his 14 co-defendants with conspiracy to distribute cocaine, methamphetamine and marijuana in New Mexico between May 2011 and January 2012. It also charged Varela and two co-defendants with participation in a money laundering conspiracy. Varela also was charged with distributing methamphetamine, money laundering, and using a communications device to facilitate drug trafficking offenses. The indictment included provisions seeking forfeiture of property constituting, or derived from proceeds obtained from the defendants’ illegal drug trafficking and financial crimes.
This morning, Varela pled guilty to the following three counts of the indictment: Count 1, charging him with conspiracy to distribute controlled substances; Count 5, charging him with conspiracy to launder money; and Count 6, charging him with money laundering. In entering his guilty plea, Varela admitted using cellular telephones on a regular basis to facilitate the distribution of illegal drugs in and about Albuquerque and his money laundering activities.
In his plea agreement, Varela acknowledged the nature and extent of his drug trafficking activities by admitting that he distributed half a kilogram of methamphetamine to a DEA source in July 2011 and again in Sept. 2011. He also admitted facilitating the distribution of 244 kilograms of marijuana and 26 kilograms of cocaine in early Nov. 2011. The marijuana and cocaine were seized on Nov. 10, 2011, when law enforcement authorities arrested co-defendant Ramon Gonzales, Sr., as he was transporting the drugs. Varela also admitted that he and codefendant Roy Madrid arranged for others transport a large amount of currency to Mexico in July 2011. On July 22, 2011, law enforcement authorities seized $112,270 from individuals who were taking drug proceeds from Varela’s drug trafficking activities to Mexico.
Varela also acknowledged the nature and extent of his money laundering activities in his plea agreement. He also agreed to the imposition of a $150,000 money judgment and to forfeit his right and interest in his Albuquerque residence.
Varela remains in federal custody pending his sentencing hearing, which has yet to be scheduled.
Thirteen of Varela’s co-defendants have entered not guilty pleas to the indictment and are pending trial; the 14th co-defendant, Manuel Villa-Mayorquin, has not been apprehended and is considered a fugitive. The charges in the indictment against Varela’s 14 co-defendants are only accusations, and they are presumed innocent unless proven guilty beyond a reasonable doubt.
The indictment in this case was the result of a multi-agency investigation into a major drug trafficking and money laundering organization operating out of the Albuquerque metropolitan area that was designated as part of the Organized Crime Drug Enforcement Task Force (“OCDETF”) program. OCDETF is a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
The case is being prosecuted by Assistant U.S. Attorney Reeve Swainston and was investigated by DEA, IRS and FBI with support from the New Mexico State Police, the Albuquerque Police Department and, the El Paso County Sheriff’s Office.
Gunnery Sergeant Pleads Guilty to Soliciting BribesRead the Press Release
Raleigh – United States Attorney Thomas G. Walker announced that in federal court today JULIO ARREOLA, 36, of Camp Lejuene, North Carolinapled guilty before Senior United States District Judge James C. Fox to demanding and seeking a bribe in violations of Title 18, United States Code, Sections 201(b)(2)(A) and (B).
U.S. Attorney Walker stated, “Corruption among staff non-commissioned officers in the military like ARREOLA’S undermines our ability to ensure that our service members in the field have the resources they need to fulfill our nation’s missions overseas.”
According to the Indictment filed on July 17, 2012 and information stated in open court, ARREOLA was a Gunnery Sergeant in the United States Marine Corps (USMC). From in or about February, 2008, and continuing to in or about September, 2008, ARREOLA was assigned to the I Marine Expeditionary Forces Headquarters Group (I MHG), Engineer Company, at Camp Fallujah, Iraq. During his deployment to Camp Fallujah, ARREOLA served as a non commissioned officer who supervised construction projects. In this capacity he obtained quotes from contractors, initiated purchase orders on behalf of the U.S. Government, and oversaw the delivery of supplies. ARREOLA would submit the quotes for approval through the military chain of command.
Sometime in or about June 2008, the exact date unknown, ARREOLA solicited a bribe from Davut Construction and Services Company, a company offering engineering, logistics, construction and life support services to the U.S. Government. Specifically, ARREOLA told a company representative that he, ARREOLA, would recommend to the Department of Defense that various items be purchased from Davut in return for cash payments. ARREOLA further told the representative that the cash payments could be generated from the manipulation of the contracting relationship to be established between Davut and the Department of Defense; that is, ARREOLA told the representative to generate the bribe money by having Davut inflate the costs in the proposed quote and/or deliver less than the items listed in the quote, and then give him, ARREOLA, the difference in price as a bribe.
A sentencing hearing is scheduled for the Court’s May 13th term of court. At sentencing, ARREOLA faces a total maximum sentence of 15 years imprisonment and/or a $250,000 fine, and 3 years of supervised release.
Defense Criminal Investigative Service (DCIS) Special Agent in Charge John F. Khin, Southeast Field Office, commented, "It is disheartening when a military member abandons his code of conduct and violates a position of trust for personal enrichment. The DCIS investigates fraud and corruption that undermines the integrity of the Department of Defense. We continue to aggressively investigate violators to preserve precious American taxpayer dollars and better support our Warfighters serving honorably and selflessly in Southwest Asia."
The criminal investigation of this case was conducted by United States Defense Criminal Investigative Service and the United States Naval Criminal Investigative Service. Assistant United States Attorney Banumathi Rangarajan is handling the prosecution on behalf of the Eastern District of North Carolina.
Gregg County Man Sentenced for Identity Theft SchemeRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 39-year-old Longview, Texas man has been sentenced to federal prison for federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Benjamin Rojas pleaded guilty on Oct. 9, 2012, to conspiracy to commit identity theft and was sentenced to 21 months in federal prison today by U.S. District Judge Michael H. Schneider. Rojas was also ordered to pay restitution in the amount of $20,293.93.
According to information presented in court, from January to May 2012, Rojas conspired with others to possess and use false identification documents and means of identification of others unlawfully. The scheme involved stealing mail from mailboxes in East Texas and using the information from the stolen mail to produce false Texas driver licenses, which appeared to be actual Texas temporary driver licenses. The fictitious driver licenses were used for identification when passing stolen checks, as well as counterfeit and forged checks, at various businesses in East Texas.
Co-defendant, Robin Watkins is scheduled to be sentenced on Mar. 7, 2013.
This case was investigated by the U.S. Secret Service, the Federal Bureau of Investigation, the U.S. Postal Inspection Service, the Smith County Sheriff’s Office, the Tyler Police Department, the Tyler Police Department, and the Longview Police Department and prosecuted by Assistant U.S. Attorney Nathaniel C. Kummerfeld.
####Fulton County Man Sentenced for Producing and Possessing Child PornographyRead the Press Release
Sentenced to 720 Months in Prison
Albany, New York — NATHAN BROWN, age 33, of Fulton County, New York, was sentenced today by Chief United States District Court Judge Gary L. Sharpe, in Albany to 720 months of imprisonment and a lifetime period of supervised release for producing and possessing child pornography still images and videos, announced United States Attorney Richard S. Hartunian and Nick DiNicola, Assistant Special Agent in Charge of Homeland Security Investigations (HSI) Albany. BROWN, who had entered guilty pleas on June 19, 2012, was also ordered to pay restitution to his victims, forfeit various computer equipment, have no unsupervised contact with minors, and to register with the New York State Sex Offender Registry Program.
Between January 2010 and November 2011, BROWN produced still images and videos of three different children engaged in sexually explicit conduct. On March 9, 2012, pursuant to a federal search warrant, investigators searched BROWN’s residence and recovered several computers and smart phones. In addition to the child pornography images and videos actually produced by BROWN, over 150,000 still images and 1,500 videos containing child pornography, depicting children from throughout the nation, were recovered during the forensic examinations of the computer media seized.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched by the U.S. Department of Justice in May 2006 to protect children from online exploitation and abuse. Led by the United States Attorneys Offices, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. The goal of Project Safe Childhood is to enhance the national response to the growing threat to America’s youth posed by online sexual solicitation, abuse, and child pornography.
As technology improves and the Internet becomes more vast and accessible, the number of computer-facilitated sexual crimes against children continues to grow. According to one recent study, one in seven children, ages 10 to 17, who are regular Internet users, are sexually solicited online. That statistic translates to millions of kids at risk, and it suggests that there are thousands of offenders whom we have not yet identified and brought to justice. In order to address this problem, the Department of Justice initiated Project Safe Childhood which includes the following five core elements:
1. The creation of integrated partnerships of federal, state, and local law enforcement to investigate and prosecute offenders and identify, rescue, and assist victims; 2. Participation of these partnerships in coordinated national initiatives to pursue evidentiary leads sent out as a result of national operations; 3. Increased federal involvement in child exploitation cases so that all the resources of the federal government are brought to bear to ensure that investigations of online child exploitation crimes are effectively conducted and that offenders receive optimal punishment for their crimes; 4. Training of federal, state, and local law enforcement to ensure that law enforcement keeps up with technological advances; and
5. Increased efforts to raise community awareness and educate the public about the dangers facing children from sexual exploitation and abuse facilitated by technology.U.S. Attorney Richard S. Hartunian noted that, in the Northern District of New York, the U.S. Attorney’s Office and its federal, state, and local law enforcement partners are actively pursuing the various aspects of the Project Safe Childhood initiative. According to Mr. Hartunian, “these prosecutions, arising from joint investigations by federal and local law enforcement authorities, reflect our deep commitment to work together to target sexual abusers and pornographers who prey on the most innocent and vulnerable of our society–our children.”
Nick DiNicola, assistant special agent in charge of the HSI office in Albany, the office that led the investigation of BROWN, noted that “protecting children from dangerous sexual predators is one of HSI's highest priorities. Even commercial child pornography is not a victimless crime. Such crimes prey on the most vulnerable and innocent segment of society – our children.”
This case was investigated by Homeland Security Investigations, with assistance from members of the New York State Police, the National Center for Missing & Exploited Children (NCMEC), Customs & Border Protection Air Branch in Plattsburgh, N.Y., and HSI’s Cyber Crimes Center (C3) in Fairfax, Virginia.
LOCAL CONTACT: Thomas Spina Jr.
Assistant U.S. Attorney
Tel: (518) 431-0247Frederick Paul Deputee, Jr. 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 January 29, 2013, before Chief U.S. District Judge Richard F. Cebull, FREDERICK PAUL DEPUTEE, JR., a 25-year-old resident of Hardin and an enrolled member of the Crow Tribe, pled guilty to theft from an Indian organization. Sentencing has been set for May 1. He is released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorney Carl E. Rostad, the government stated it would have proved at trial the following:
The Crow Tribal Historic Preservation Office (CTHPO) on the Crow Indian Reservation was created in 2005. The CTHPO is a designated office of the Crow Indian Tribe that provides for direct Tribal involvement and leadership in the protection and enhancement of Crow lands and cultural resources. It serves to identify, inventory, and protect culturally, archeologically, and historically important resources both on and off the reservation.
Each year, the CTHPO receives grant funds from the National Park Service, U.S. Department of the Interior. A requirement for any enterprise seeking to do work on the reservation that may disturb tribal lands - utilities, construction, energy exploration, development - is that the business employ the services of a CTHPO employee (archeological technician) to monitor the project to insure that lands of cultural or historic importance are not destroyed. The company is then charged for this monitoring service and payments are made to the Crow Tribe.
The Director of the CTHPO from approximately 2005 until November 15, 2011 is identified here as X.X. During the time X.X. was Director, most of the monitors were his family members. Two other monitors, one of which was DEPUTEE, were not hired as Crow Tribe employees but were assigned as project monitors and received payment directly from the companies.
Sometime in the summer of 2009, X.X. approached the Vice-Chairman of the Tribe and tried to get the process changed so that the companies could make direct payments to the monitors. When he was told he couldn't do that, he indicated he would take the matter up with the Chairman. The Chairman was never approached and did not provide any approval for X.X.'s request.
Even though his request was denied, X.X. began advising companies that payments would now be made directly to the tribal monitors assigned to the project. At first, in the summer of 2009, few direct payments were arranged. However, in the summer of 2010, the CTHPO staff person who insured that companies were properly billed and that CTHPO payments went to the Tribe left the office, and direct billing - having companies pay monitors personally instead of remitting the fee to the Crow Tribe - became much more prevalent.
From July 2009 to November 2011, a total of over $500,000 in monitoring service payments from the companies doing business on the Crow Reservation were diverted to the personal use and benefit of the employees of the CTHPO and the two non-employees - one of which was DEPUTEE - assigned to projects as a monitor.
In the Summer of 2011 - from June to August - DEPUTEE was assigned as a monitor to the Sarpy Creek project, which was the Westmoreland Resources expansion of the Absaloka Coal Mine in the Powder River Basin. DEPUTEE's assignment was to monitor the progress of the project to insure that no culturally, archeologically, or historically important sites were disturbed.
A Westmoreland sub-contractor, GCM Services, went forward with an extensive excavation of the site with the approval of X.X., who, as Director of the CTHPO, had assigned DEPUTEE and others as project monitors. As a result of the approved site plan, a 2,000-year-old bison kill site was unearthed in 2011 with heavy equipment, causing significant, irreparable damage to the site. The largest bison bone bed was estimated to cover almost 3,000 square meters and contained the remains of hundreds, perhaps thousands, of butchered bison remains and prehistoric spear points dating back to the Late Archaic period.
When interviewed, DEPUTEE maintained that he was authorized by his aunt to work as a monitor on the site and denied knowing that the money paid by the companies were tribal fees which should have been deposited with the tribal government. His aunt had no supervisory role at the CTHPO. DEPUTEE was convinced - based on the assurances given to him by his aunt - that he could act, and was participating in the CTHPO activities, as an independent contractor role and also received payment directly from GCM. He admitted, however, that he did not work the hours for which he billed the company and acknowledged the wrongfulness of billing for hours not worked. According to a GCM Services company representative, "the monitors often did not show up, and, if they did, they often only worked one to three hours."
I meet regularly with tribal officials on each of Montana's reservations, and at each meeting they ask this office to do more to put an end to corruption and theft in the administration of federal grants and programs. I take - and have taken - their pleas to heart when my office created the Guardians Project with just that mission in mind. The change of plea today represents just one of many, many steps this office will take to respond the concerns of our Indian communities for honesty and integrity in tribal government." Michael W. Cotter, United States Attorney for the District of Montana.
DEPUTEE faces possible penalties of 10 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was conducted by a team of agents and auditors working with the U.S. Attorney's Guardians Project, including the Office of Inspector General for the Department of Interior, the Federal Bureau of Investigation, and the Criminal Investigation Division of the Internal Revenue Service.
A copy of the Offer of Proof can be obtained by contacting Sally Frank at (406) 247-4638.
Frederick Paul Deputee, Jr. 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 January 29, 2013, before Chief U.S. District Judge Richard F. Cebull, FREDERICK PAUL DEPUTEE, JR., a 25-year-old resident of Hardin and an enrolled member of the Crow Tribe, pled guilty to theft from an Indian organization. Sentencing has been set for May 1, 2013. He is currently released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorney Carl E. Rostad, the government stated it would have proved at trial the following:
The Crow Tribal Historic Preservation Office (CTHPO) on the Crow Indian Reservation was created in 2005. The CTHPO is a designated office of the Crow Indian Tribe that provides for direct Tribal involvement and leadership in the protection and enhancement of Crow lands and cultural resources. It serves to identify, inventory, and protect culturally, archeologically, and historically important resources both on and off the reservation.
Each year, the CTHPO receives grant funds from the National Park Service, U.S. Department of the Interior. A requirement for any enterprise seeking to do work on the reservation that may disturb tribal lands - utilities, construction, energy exploration, development - is that the business employ the services of a CTHPO employee (archeological technician) to monitor the project to insure that lands of cultural or historic importance are not destroyed. The company is then charged for this monitoring service and payments are made to the Crow Tribe.
The Director of the CTHPO from approximately 2005 until November 15, 2011 is identified here as X.X. During the time X.X. was Director, most of the monitors were his family members. Two other monitors, one of which was DEPUTEE, were not hired as Crow Tribe employees but were assigned as project monitors and received payment directly from the companies.
Sometime in the summer of 2009, X.X. approached the Vice-Chairman of the Tribe and tried to get the process changed so that the companies could make direct payments to the monitors. When he was told he couldn't do that, he indicated he would take the matter up with the Chairman. The Chairman was never approached and did not provide any approval for X.X.'s request.
Even though his request was denied, X.X. began advising companies that payments would now be made directly to the tribal monitors assigned to the project. At first, in the summer of 2009, few direct payments were arranged. However, in the summer of 2010, the CTHPO staff person who insured that companies were properly billed and that CTHPO payments went to the Tribe left the office, and direct billing - having companies pay monitors personally instead of remitting the fee to the Crow Tribe - became much more prevalent.
From July 2009 to November 2011, a total of over $500,000 in monitoring service payments from the companies doing business on the Crow Reservation were diverted to the personal use and benefit of the employees of the CTHPO and the two non-employees - one of which was DEPUTEE - assigned to projects as a monitor.
In the Summer of 2011 - from June to August - DEPUTEE was assigned as a monitor to the Sarpy Creek project, which was the Westmoreland Resources expansion of the Absaloka Coal Mine in the Powder River Basin. DEPUTEE's assignment was to monitor the progress of the project to insure that no culturally, archeologically, or historically important sites were disturbed.
A Westmoreland sub-contractor, GCM Services, went forward with an extensive excavation of the site with the approval of X.X., who, as Director of the CTHPO, had assigned DEPUTEE and others as project monitors. As a result of the approved site plan, a 2,000-year-old bison kill site was unearthed in 2011 with heavy equipment, causing significant, irreparable damage to the site. The largest bison bone bed was estimated to cover almost 3,000 square meters and contained the remains of hundreds, perhaps thousands, of butchered bison remains and prehistoric spear points dating back to the Late Archaic period.
When interviewed, DEPUTEE maintained that he was authorized by his aunt to work as a monitor on the site and denied knowing that the money paid by the companies were tribal fees which should have been deposited with the tribal government. His aunt had no supervisory role at the CTHPO. DEPUTEE was convinced - based on the assurances given to him by his aunt - that he could act, and was participating in the CTHPO activities, as an independent contractor role and also received payment directly from GCM. He admitted, however, that he did not work the hours for which he billed the company and acknowledged the wrongfulness of billing for hours not worked. According to a GCM Services company representative, "the monitors often did not show up, and, if they did, they often only worked one to three hours."
I meet regularly with tribal officials on each of Montana's reservations, and at each meeting they ask this office to do more to put an end to corruption and theft in the administration of federal grants and programs. I take - and have taken - their pleas to heart when my office created the Guardians Project with just that mission in mind. The change of plea today represents just one of many, many steps this office will take to respond the concerns of our Indian communities for honesty and integrity in tribal government." Michael W. Cotter, United States Attorney for the District of Montana.
DEPUTEE faces possible penalties of 10 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was conducted by a team of agents and auditors working with the U.S. Attorney's Guardians Project, including the Office of Inspector General for the Department of Interior, the Federal Bureau of Investigation, and the Criminal Investigation Division of the Internal Revenue Service.
A copy of the Offer of Proof can be obtained by contacting Sally Frank at (406) 247-4638.
Fraudster Sentenced to 9 Years in Prison for Schemes to Obtain Maryland Unemployment Benefits, Defraud More than 10,000 Credit Card Holders and DirecTvRead the Press Release
Also Ordered to Pay Over $202,000 in RestitutionBaltimore, Maryland - U.S. District Judge Ellen L Hollander sentenced Amiee Arora, age 32, of Washington, D.C., today to nine years in prison, followed by three years of supervised release, for conspiracy to commit and committing credit/debit card fraud, and aggravated identity theft in connection with a series of fraud schemes. Judge Hollander also ordered Arora to pay restitution of $161,782.23 to the State of Maryland for fraudulent unemployment benefits paid to Arora and his co-conspirators, and $41,209.82 to the merchant to cover his losses in the credit card scheme.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent-in-Charge Michael Barcus, U.S. Department of Labor-Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division. Mr. Rosenstein thanked the Maryland Department of Labor, Licensing and Regulation (DLLR) for its assistance in this investigation and prosecution.
According to his plea agreement, Arora was the sole director and resident agent of Top Of The Line Marketing, Inc. (TOTL Marketing) and co-defendant Vivek Jain worked for him. From February 14, 2010 through February 14, 2011, Arora and Jain used identifying information that they obtained through TOTL Marketing to fraudulently apply for Maryland unemployment benefits. Arora instructed Jain as to how to fraudulently apply for Maryland unemployment benefits, which DLLR, who administered unemployment benefit programs in Maryland, provided to applicants on prepaid debit cards. Once the fraudulent benefits were approved, Arora and Jain changed the mailing address for the debit cards to mailboxes that they rented, then used the cards to withdraw cash from ATM machines. On February 14, 2011, law enforcement officers in Georgia recovered 42 debit cards issued through the Maryland unemployment insurance program, from Jain’s car. Police officers also located several pages and a computer file containing the personal identifying information of approximately 1,200 Maryland residents from the Eastern Shore, Hagerstown, Baltimore and Gaithersburg. Arora had obtained the list of individuals from AV Wireless, a telecommunications business that he operated from 2004 through March 2009, and supplied the list to Jain for his use in the scheme.
Arora and Jain obtained more than 45 unauthorized debit cards worth more than $340,000 in fraudulent unemployment benefits as a result of the scheme.
Vivek Jain, age 27, of Gaithersburg, Maryland, pleaded guilty to his role in the unemployment scheme and is awaiting sentencing.
Credit Card Fraud Scheme
From May 2011 through about August 2011, Arora made fraudulent representations to a merchant, that he was marketing a shopping club membership for a fee of $9.95. Arora obtained the credit card information of more than 30,000 individuals, which he planned to use to charge the membership fee. The merchant agreed to allow Arora to use his credit card processing account to “test” approximately 18,000 credit card numbers, and to actually charge the membership fee more than 10,000 times. The merchant forwarded Arora an agreed upon percentage of funds he received from each transaction. Eventually, the credit card and other companies began reversing the fraudulent charges and the merchant ended up being charged more than $40,000 in chargeback fees.
Pretrial Release Violations
Arora was placed on pre-trial release on August 26, 2011, under rigorous conditions, including that he stay at his parents’ home on 24/7 electronic home monitoring and that he not use a computer or other electronic device to access the Internet. Despite this, Arora arranged with a third party to purchase a cellular telephone in another name and have the phone delivered covertly to the basement door of his parents’ home. In this way, he was able to continue a scheme to defraud DirecTV.
DirecTV Fraud Scheme
Under federal regulations, DirecTV and its dealers are forbidden from engaging in unsolicited telemarketing pitches. DirecTV dealers receive a $200 commission from each new DirecTV subscription. In November 2011, Arora and others agreed to sell DirecTV subscriptions through unsolicited telemarketing, which DirecTV dealers would submit as their own sales, splitting the $200 commission with Arora. Arora and a co-conspirator also assumed the identities of dormant DirecTV dealer accounts to submit subscriptions that they intended to sell through telemarketing, in order to keep the full commission themselves.
On December 8, 2011, federal agents arrested Arora and executed a search warrant at his parents’ home in Potomac and recovered the cell phone Arora had illegally obtained, thereby preventing Arora from fully carrying out the DirecTV fraud.
United States Attorney Rod J. Rosenstein praised the U.S. Department of Labor-Office of Inspector General, Office of Labor Racketeering and Fraud Investigations and the U.S. Postal Inspection Service for their work in the investigation and thanked the Maryland DLLR, District Attorney’s Office, Atlantic Judicial District in Liberty County, Georgia and the Darien, Georgia, Police Department for their assistance. Mr. Rosenstein thanked Assistant United States Attorneys Harry M. Gruber and Tamera L. Fine, who prosecuted the case.
Four Indicted in Tax Fraud SchemeRead the Press Release
TALLAHASSEE, FLORIDA B Kimberly Watson, 32, Malcolm Lipscomb, 35, Shavone Ricketts, 31, and Alfretta Jones, 37, all of Tallahassee, have been indicted for conspiracy to file false claims for more than $80,000 in federal tax refunds. The indictment was announced today by Pamela C. Marsh, U.S. Attorney for the Northern District of Florida.
The indictment alleges that between June 2009 and September 2012, the defendants conspired to file false federal income tax returns that included fabricated wage, tax withholding, and tax credit information. When refunds were issued on the bogus returns, the conspirators had them deposited into their own bank accounts or placed onto pre-paid debit cards.
Watson, Lipscomb, and Ricketts are also charged with multiple counts of filing false claims, wire fraud, as well as aggravated identity theft, based on the unauthorized use of the personal identifying information of others.
The defendants have been arrested and are scheduled for trial on March 4, 2013, before United States District Judge Robert L. Hinkle.
If convicted of conspiracy, each defendant faces up to ten years in prison. Wire fraud carries a maximum sentence of 20 years in prison. The offense of filing false claims is punishable by five years in prison. Each count of aggravated identity theft carries a mandatory sentence of two years in prison, which must be served consecutively to any other sentence.
Jones is additionally charged with obstruction of justice, which carries a maximum sentence of ten years in prison, and with making false statements and perjury, each of which carries a maximum sentence of five years in prison.
U.S. Attorney Marsh commended the work of the Internal Revenue Service – Criminal Investigations, the Leon County Sheriff=s Office, and the United States Postal Inspection Service, whose joint investigation led to the indictment in this case.
- The case is being prosecuted as part of a Department of Justice initiative to fight stolen identity refund fraud (SIRF). In September 2012, the Department issued Tax Division Directive 144, which sets forth expedited Department review procedures for SIRF cases, enabling law enforcement to respond quickly and effectively to the grave challenges presented in SIRF cases and to prevent the victimization of innocent taxpayers whose identities are stolen by fraudsters.
Assistant United States Attorney Corey J. Smith is prosecuting the case.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Fort Lauderdale Woman Convicted in Identity Theft Tax Refund Fraud Scheme Involving the Filing of Approximately 2,000 Fraudulent Tax Returns Seeking $11 Million Dollars in RefundsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), Miami Field Office, and Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, announced yesterday’s conviction at trial of Alci Bonannee, 36 of Fort Lauderdale, of one count of conspiracy to defraud the government in violation of Title 18, United States Code, Section 286, nine counts of filing false claims in violation of Title 18, United States Code, Section 287, nine counts of aggravated identity theft in violation of Title 18, United States Code, Section 1028A, and fourteen counts of wire fraud in violation of Title 18, United States Code, Section 1343.
According to testimony and evidence presented at trial, the defendant was the primary perpetrator of an identity theft tax fraud scheme that operated from December 2010 to June 2012. During the course of the fraud scheme, there were approximately 2,000 fraudulent tax returns submitted to the Internal Revenue Service for payment seeking $11 million dollars in refunds. The Department of Treasury paid out several million dollars into bank accounts in the name of and controlled by the defendant and her co-conspirators. The defendant and her co-conspirators withdrew this money in cash.
According to testimony and evidence presented at trial, the defendant filed a large percentage of these fraudulent returns from her house in Fort Lauderdale, from her friends’ houses in Broward County and from a hotel in Charlotte, North Carolina. The defendant filed many of these fraudulent returns using compromised personal identification information obtained from a nurse at a local hospital.
Bonannee is scheduled to be sentenced on April 26, 2013. She faces a possible maximum prison sentence of 351 years.
Defendant’s co-conspirator, Chante Mozley, pled guilty to conspiracy to file fraudulent claims on January 9, 2013. Mozley faces a possible maximum prison sentence of 10 years. Sentencing is scheduled for March 28, 2013.
Defendant’s co-conspirator, Sonyini Clay, pled guilty to conspiracy to file fraudulent claims and aggravated identity theft on January 14, 2013. Clay faces a possible maximum prison sentence of 12 years. Sentencing is scheduled for April 26, 2013.
Mr. Ferrer commended IRS-CID and USSS for their work on the case. The case is being prosecuted by Assistant U.S. Attorneys Michael N. Berger and Wilfredo Fernandez.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former USP Hazelton Inmate Convicted on Obstruction and Assault ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA — A 42 year old Federal inmate was convicted on January 29, 2013, by a Clarksburg jury on six counts. The trial lasted six days, concluding late afternoon Tuesday afternoon. Judge Irene M. Keeley presided over the trial.
United States Attorney William J. Ihlenfeld, II, announced that: TARVIS LEVITICUS DUNHAM, a former inmate at the United States Penitentiary in Hazelton, West Virginia, was convicted on one count of “Obstructing Justice by Retaliating Against a Witness,” and five counts of “Assaulting, Resisting and Impeding Certain Officers or Employees of the Bureau of Prisons.”
Trial evidence indicated that on June 14, 2011, DUNHAM attempted to retaliate against a case manager for producing a record and document during disciplinary proceedings conducted by the Bureau of Prisons relating to an incident that occurred on November 8, 2010. DUNHAM forcibly assaulted the case manager and when other Correctional Officers attempted to restrain DUNHAM, he forcibly assaulted them by kicking and biting them. He also refused to comply with their orders before they were able to restrain and handcuff him. DUNHAM was transferred to another United States Penitentiary that same day. A week after the incident, the staff at USP Lee recorded a telephone call between DUNHAM and his mother where DUNHAM told his mother that he “about near killed that woman.”
DUNHAM, who is in custody where he is currently serving a 318-month sentence, faces up to 89 years imprisonment and a $1,350,000 fine.
This case was prosecuted by Assistant United States Attorney Brandon S. Flower and investigated by the Federal Bureau of Investigation and the Special Investigative Services Unit at USP Hazelton.
Former Town Creek Police Officer Indicted for Using Excessive ForceRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a former Town Creek police officer for violating an individual’s civil rights during the course of an arrest, announced U.S. Attorney Joyce White Vance, Assistant Attorney General Thomas E. Perez, chief of the Department of Justice’s Civil Rights Division, and FBI Special Agent in Charge Richard D. Schwein Jr.
The indictment filed in U.S. District Court charges BRANDON SHANE MUNDY, 32, of Oxford, with striking a man with a dangerous weapon and causing bodily injury during the man’s November 2009 arrest in Town Creek, a small northern Alabama town. Mundy’s action deprived the man, identified as J.T., of the constitutional right to be free from the use of unreasonable force by someone acting under the color of law, according to the indictment.
If convicted, Mundy could face a maximum sentence of 10 years in prison and a $250,000 fine. An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The FBI is investigating the case, and it is being prosecuted by Assistant U.S. Attorney Elizabeth Holt and Justice Department Civil Rights Division Trial Attorney Daniel H. Weiss.
Former President and Executive Director of Vanguard Public Foundation Sentenced to 40 Months in Prison for Fraud and Money LaunderingRead the Press Release
SAN FRANCISCO – Hari J. Dillon, the former President and Executive Director of the Vanguard Public Foundation, was sentenced today to 40 months in prison for diverting funds directed for the benefit of the Vanguard Public Foundation to his own purposes, United States Attorney Melinda Haag announced.
Dillon pleaded guilty in July 2010 to wire fraud and money laundering. According to the plea agreement and trial testimony in United States v. Samuel “Mouli” Cohen (CR 10-0547 CRB), Dillon met Mouli Cohen (aka Samuel Cohen) in approximately August 2002. Cohen presented Dillon with an investment opportunity through which Dillon and others associated with the Vanguard Public Foundation – a non-profit charitable organization – could purchase Cohen’s founder’s shares in his company, Ecast, which Cohen falsely claimed was soon to be acquired by Microsoft. According to Cohen, this would allow Dillon, Vanguard donors, and Vanguard to reap substantial profits after the acquisition of Ecast.
From late 2002 through mid-2003, individuals associated with Vanguard, including Dillon, paid more than $6 million to Cohen to purchase some of Cohen’s founder’s shares in Ecast. During the ensuing years, Cohen claimed the acquisition was suffering various delays by United States and European regulators, and that the investors had to pay additional bonds and fees to maintain their stake in the deal. From approximately late 2004 through 2007, individuals associated with Vanguard contributed more than an additional $25 million purportedly to cover these fees. In fact, there never was any such acquisition.
Dillon admitted that while soliciting and collecting these fees, he defrauded various victims by intentionally failing to tell them that he intended to and did use some of their contributions for his own personal expenses. For example, according to his plea agreement, Dillon used approximately $60,000 to pay his American Express bills. In addition, the government noted in connection with sentencing that Dillon used victim money toward luxury hotel expenses, fine dining, limousine travel and other personal expenses. In all, Dillon admitted that of the tens of millions he solicited and collected for this investment, most of which he passed on to Cohen, Dillon skimmed not less than $2.5 million, defrauding his victims out of that amount.
Dillon, 64, formerly of San Francisco, was charged by Information in June 2010. He was charged with two counts of wire fraud and two counts of money laundering. He pleaded guilty to all four counts.
In November 2011, after a one-month trial, a federal jury convicted Samuel “Mouli” Cohen of 15 counts of wire fraud, 11 counts of money laundering, and 3 counts of tax evasion. Dillon testified at that trial. In April 2012, Cohen was sentenced to 264 months in prison. He is currently in custody, and he has appealed his convictions and sentence.
The sentence was handed down by United States District Court Judge Charles R. Breyer. Judge Breyer also sentenced Dillon to a three-year period of supervised release following his prison term. The parties are scheduled to appear before Judge Breyer on Feb. 19 to discuss a date for Dillon to surrender to serve his prison sentence.
Hallie Hoffman and Doug Sprague are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Rayneisha Booth and Beth Margen. The prosecution is the result of a one-year investigation by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation.
Former Postal Service Employee Indicted for Fraud in Travel ExpensesRead the Press Release
Former Postal Service Employee Indicted for Fraud in Travel Expenses
BIRMINGHAM – A federal grand jury today indicted a former U.S. Postal Service employee for a wire fraud scheme in which he falsified electronic travel vouchers totaling more than $30,000, announced U.S. Attorney Joyce White Vance and Postal Service Office of Inspector General Assistant Special Agent in Charge Christopher Nugent.
The indictment filed in U.S. District Court charges BOBBY W. BRUCE JR., 36, of Gadsden, with submitting 39 false expense vouchers through the Postal Service’s electronic travel expense system. Bruce sought mileage reimbursement between January 2012 and October 2012 for official travel that he never took, according to the indictment. Once the fictitious expense claim was submitted, Bruce used his manager’s computer login information to approve the voucher, the indictment says.
The Postal Service Finance and Account Center in Minnesota approved the falsified vouchers and paid $31,126 as mileage reimbursement into Bruce’s credit union account in Gadsden, according to the indictment.
The indictment seeks to have Bruce forfeit that amount as proceeds of illegal activity.
The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine.
The U.S. Postal Service Office of Inspector General investigated the case, which Assistant U.S. Attorney Terence M. O’Rourke is prosecuting.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Former Postal Employee Pleaded Guilty to $265,000 FraudRead the Press Release
A former employee of the United States Postal Service pleaded guilty to fraudulently collecting approximately $265,000 in benefits by exaggerating her medical condition and other acts, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Robert LaPina, Special Agent in Charge for the U.S. Postal Service Office of Inspector General.
Melissa Scherz Leist, age 37, of Coshocton, and formerly of Sandusky, pleaded guilty to one count of fraud in the obtaining of Federal Employee’s Compensation Act (FECA) benefits.
Leist is scheduled to be sentenced on May 20. She resigned from the Postal Service prior to her plea.
Leist fraudulently exaggerated her medical condition and limitations, fraudulently rejected limited duty job offers by the United States Postal Service, falsely represented her physical abilities and range of activities and deliberately concealed activities which would have made her ineligible for disability benefits, all for the purpose of fraudulently obtaining FECA benefits in excess of $265,000, according to court documents.
“The majority of postal employees who collect compensation benefits have legitimate claims due to on-the-job injuries and are truly unable to perform any postal jobs,” LaPina said. “A small percentage, however, abuse the system and cost the Postal Service millions of dollars in fraudulent claims. This guilty plea should put those employees who choose to abuse the system on notice that USPS OIG agents will vigorously investigate worker compensation fraud and will seek criminal prosecution and termination of their job and benefits when appropriate.”
The case is being prosecuted by Assistant United States Attorney Thomas A. Karol following an investigation by the United States Postal Service, Office of Inspector General.
Former Philadelphia Police Officer Sentenced for Role in Steroid Distribution CaseRead the Press Release
PHILADELPHIA - Joseph McIntyre, 38, of Philadelphia, was sentenced today to six months incarceration for his role in a conspiracy to illegally distribute anabolic steroids. McIntyre, a former Philadelphia Police Officer, was charged in an indictment that named 14 others including fellow officers Keith Gidelson and George Sambuca. McIntyre pleaded guilty, August 24, 2011, to conspiracy, possession with intent to distribute anabolic steroids, and possession with intent to distribute anabolic steroids.
The indictment charged Gidelson with operating the anabolic steroid distribution organization in Philadelphia and throughout the United States, acquiring steroids from foreign suppliers and then selling the steroids to his co-conspirators who distributed to their own customers. McIntyre bought the steroids from Gidelson for his own use and to distribute to others. Numerous intercepted calls and text messages between the men demonstrate that McIntyre discussed with Gidelson the acquisition of steroids from Gidelson’s suppliers; the acquisition from Gidelson of specific types of anabolic steroids for McIntyre’s customers; and the use and effects of the steroids Gidelson and McIntyre were distributing. In many of these intercepted calls and text messages, McIntyre discussed acquiring steroids for people who worked at a local night club.
In addition to the prison term, U.S. District Court Judge Paul S. Diamond ordered three years of supervised release, a $300 special assessment, and ordered McIntyre to pay a fine of $10,000.
The case was investigated by the Drug Enforcement Administration, the Federal Bureau of Investigation, the Philadelphia Police Department, and the United States Postal Inspection Service. It was prosecuted by Assistant United States Attorney David L. Axelrod.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former Michigan Supreme Court Justice Diane Marie Hathaway Pleads Guilty to Bank FraudRead the Press Release
Press Conference - Former Michigan Supreme Court Justice Diane M. Hathaway
Diane M. Hathaway, a former Michigan Supreme Court Justice, pleaded guilty today to committing bank fraud in connection with a property owned at 15834 Lakeview Court, Grosse Pointe Park, Michigan, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III of the Federal Bureau of Investigation ("FBI"), and Michigan Attorney General, Bill Schuette.
During a hearing this morning before United States District Judge John Corbett O’Meara, Hathaway, 58, of Grosse Pointe, Michigan, admitted that between 2010 and 2011 she knowingly engaged in a scheme to defraud ING Direct bank by concealing assets from the bank to qualify for a “short sale.” A short sale is a forgiveness of debt by the bank to a borrower who claims financial hardship.
Based on her guilty plea and felony conviction for committing bank fraud Hathaway is facing a maximum of thirty years in prison, a fine of up to $1,000,000 and up to five years of supervised release.United States Attorney McQuade said, "We have made mortgage fraud a priority in this district because of the harm this crime causes to our housing markets in the aggregate. Homeowners who play by the rules should know that those who don't will be held accountable, no matter who they are."
Robert Foley, Special Agent in Charge of the FBI said, "Regardless of a person's stature or position in life, we must all follow the same set of rules. In this case, an individual in a prominent position of public trust made extremely poor choices that have resulted in criminal activity. The FBI is committed to stopping these illegal acts."
Michigan Attorney General Bill Schuette said, “"Public corruption scandals have damaged the public's trust in government and tarnished our state's reputation. But today, we begin to move forward, beyond the cloud of controversy that hung over our state's Supreme Court. I appreciate the hard work of U.S. Attorney Barbara McQuade and FBI Special Agent In Charge Bob Foley, who brought this case to a swift and just end."
This case was investigated by the FBI with assistance from Michigan Attorney General’s Office.Former Little Rock Diagnostic Clinic Nurse Pleads Guilty to Aiding and Abetting Ceo in Obtaining Hydrocodone by FraudRead the Press Release
Little Rock - Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Drug Enforcement Administration Assistant Special Agent in Charge William J. Bryant announced Catherine L. Minor waived indictment and pled to a felony information charging her with one count of aiding and abetting James Derek Johnston to obtain hydrocodone by fraud.
Although hydrocodone abuse is rising among all ages and across all ethnic and socioeconomic groups, it has been called the ‘white-collar’ addiction because so many professionals have become caught in its trap,” stated Thyer. “Prescription drug abuse knows no boundaries. Its effect on careers and lives is devastating. If someone you know is involved in the abuse of prescription drugs, educate yourself, talk to them, take them to a substance abuse program, and seek medical advice. You can help prevent a loved one or co-worker from losing their career and you must might save their life.”
According to the felony information, Minor, age 62, who was employed as a nurse, aided and abetted James Derek Johnston, age 42, to knowingly and intentionally obtain hydrocodone, a Schedule III narcotic controlled substance, on or about February 8, 2012, when she submitted a false prescription for the drug to a pharmacy in Johnston’s name, when in fact, no such prescription had been issued or authorized by a physician with DEA prescribing authority.
At the hearing held today before United States District Judge J. Leon Holmes, Minor admitted that she worked as a nurse at Little Rock Diagnostic Clinic for 15 years, and retired in late 2012. She admitted that in approximately 2007, James Derek Johnston, who was employed at the clinic as Chief Executive Officer, began to request that she call in or fax prescriptions for hydrocodone in his name to a number of different pharmacies in the Little Rock area. While Johnston had received hydrocodone prescriptions legitimately from a physician at Little Rock Diagnostic Clinic in the past, the prescriptions Minor submitted for Johnston between approximately 2007 and July 2012 were submitted without the knowledge or consent of any prescribing physician at Little Rock Diagnostic Clinic or elsewhere.
According to the factual summary offered by the Assistant United States Attorney at the hearing, during the time frame in which the fraud occurred, Minor called in or faxed approximately 200 fraudulent hydrocodone prescriptions in Johnston’s name, allowing Johnston to obtain approximately 25,000 pills.
Johnston, who is no longer employed by Little Rock Diagnostic Clinic, waived indictment and pled guilty on December 18, 2012, to a felony information charging him with one count of obtaining hydrocodone by fraud.
The maximum statutory penalty for aiding and abetting another to obtain a controlled substance by fraud is 4 years imprisonment, a fine of $250,000, and one year of supervised release. Sentencing for both Minor and Johnston will be set at a later date to be determined by the Court.
LRDC was fully cooperative with federal authorities in the investigation, and the investigation did not reveal any evidence that compromised any patient information or identities.
This investigation was conducted by the newly formed Tactical Diversion Squad at the DEA Little Rock District Office, whose main priority is to investigate individuals involved in the diversion of Prescription Drugs. DEA special agents, DEA diversion investigators, United States Secret Service agents and task force officers from the Little Rock Police Department participated in this investigation. The case was prosecuted by Assistant United States Attorneys Patricia S. Harris and Kristin Bryant.
Former Iraqi Terrorists, Living in Kentucky, Sentenced for Terrorist ActivitiesRead the Press Release
– Defendants Attempted to Ship Weapons and Money from the United States to Iraqi Insurgents
– Defendants Admitted to Extensive Terrorist Activities Against U.S. Soldiers in IraqBOWLING GREEN, Ky. – Two Iraqi citizens living in Bowling Green, Kentucky, who admitted using IEDs against U.S. soldiers in Iraq and who attempted to send weapons and money to Al-Qaeda in Iraq (AQI) for the purpose of killing U.S. soldiers, were sentenced today to serve federal prison terms by Senior Judge Thomas B. Russell in U.S. District Court, announced Lisa Monaco, Assistant Attorney General for National Security; David J. Hale, U.S. Attorney for the Western District of Kentucky; and Perrye K. Turner, Special Agent in Charge of the FBI Louisville Division. Mohanad Shareef Hammadi, 25, a former resident of Iraq, was sentenced to life imprisonment in federal prison; and Waad Ramadan Alwan, age 31, a former resident of Iraq, was sentenced to 40 years in federal prison, followed by a life term of supervised release. Both defendants had pleaded guilty to federal terrorism charges.
"These two former Iraqi insurgents participated in terrorist activities overseas and attempted to continue providing material support to terrorists while they lived here in the United States. With today's sentences, both men are being held accountable," said Lisa Monaco, Assistant Attorney General for National Security. “I thank the dedicated professionals in the law enforcement and intelligence communities who were responsible for this successful outcome.”
“These are experienced terrorists who willingly and enthusiastically participated in what they believed were insurgent support operations designed to harm American soldiers in Iraq,” stated David J. Hale, United States Attorney. “The serious crimes of both men merit lengthy punishment, and only the value of Alwan’s immediate and extensive cooperation with law enforcement justifies our recommendation of a reduced sentence for him. Bringing these men to justice is the result of a comprehensive law enforcement effort. The FBI agents of the Louisville Division, along with the federal and local law enforcement members of the Joint Terrorism Task Forces here in Kentucky, including the Bowling Green Police Department, and our many other partners, are to be commended.”
"Protecting the United States from terrorist attacks remains the FBI's top priority," said Perrye K. Turner, Special Agent in Charge of the FBI in Kentucky. "Using our growing suite of investigative and intelligence capabilities, FBI Agents and Analysts assigned to our Bowling Green office were able to neutralize a potential threat. Our local Joint Terrorism Task Force, comprised of FBI Agents and other local, state and federal agencies from across the Commonwealth, remains committed to dismantling extremist networks and cutting off financing and other forms of support provided by terrorist sympathizers, whether they are operating in Kentucky or worldwide."
"Today, the sentencing of Alwan and Hammadi represents the culmination of the extensive, effective and focused efforts of the U.S. Attorney's Office and the Kentucky Division of the FBI for their roles in the investigation and prosecution of these would-be terrorists. I want to thank U.S. Attorney David Hale, the Kentucky Division of the FBI and the members of the FBI Bowling Green local office for their individual and collective efforts in bringing Alwan and Hammadi to justice for their crimes against the people of Kentucky and the United States,” stated Chief Doug Hawkins, Bowling Green Police Department.
Alwan, whose fingerprints were found on an unexploded IED found in Iraq, pleaded guilty earlier in the case on December 16, 2011 to all counts of a 23-count federal indictment. He pleaded guilty to conspiring to kill U.S. nationals abroad; conspiring to use a weapon of mass destruction (explosives) against U.S. nationals abroad; distributing information on the manufacture and use of IEDs; attempting to provide material support to terrorists and to Al Qaeda in Iraq (AQI); and conspiring to transfer, possess and export Stinger missiles. Hammadi pleaded guilty on August 21, 2012 to a 12-count superseding indictment. Charges against him included attempting to provide material support to terrorists and to Al Qaeda in Iraq (AQI); conspiring to transfer, possess and export Stinger missiles; and making a false statement in an immigration application. At today’s sentencing, at the request of the United States, Alwan received a reduced sentence due to his cooperation with federal law enforcement. The United States asked for no reduction of Hammadi’s sentence.
According to information presented by the United States in connection with today’s sentencings, Hammadi and Alwan both admitted, in FBI interviews that followed waiver of their Miranda rights, to participation in the purported material support operations in Kentucky, and both provided the FBI details of their prior involvement in insurgent activities while living in Iraq. Both men believed their activities in Kentucky were supporting AQI. Alwan admitted participating in IED attacks against U.S. soldiers in Iraq, and Hammadi admitted to participating in 10 to 11 IED attacks as well as shooting at a U.S. soldier in an observation tower.
Court documents filed in this case reveal that the Bowling Green office of the FBI’s Louisville Division initiated an investigation of Alwan in which they used a confidential human source (CHS). The CHS met with Alwan and recorded their meetings and conversations beginning in August 2010. The CHS represented to Alwan that he was working with a group to ship money and weapons to Mujahadeen in Iraq. From September 2010 through May 2011, Alwan participated in ten separate operations to send weapons and money that he believed were destined for terrorists in Iraq. Between October 2010 and January 2011, Alwan drew diagrams of multiple types of IEDs and instructed the CHS how to make them. In January 2011, Alwan recruited Hammadi, a fellow Iraqi national living in Bowling Green, to assist in these material support operations. Beginning in January 2011 and continuing until his arrest in late May 2011, Hammadi participated with Alwan in helping load money and weapons that he believed were destined for terrorists in Iraq.
Documents filed by the United States describe in detail the material support activities of the men in Bowling Green. Without Hammadi present, Alwan loaded money and weapons he believed were being sent to Iraq on five occasions from September 2010 through February 2011, handling 5 rocket-propelled grenade launchers, 5 machine guns, 2 sniper rifles, 2 cases of C4 explosive, and what he believed to be $375,000. After Hammadi joined Alwan in January 2011, the two men loaded money and weapons together on five occasions from January to May 2011. Together, on these five occasions, they loaded 5 rocket-propelled grenade launchers, 5 machine guns, 5 cases of C4 explosive, 2 sniper rifles, 1 box of 12 hand grenades, 2 Stinger surface-to-air missile launchers, and what they believed to be a total of $565,000. Alwan and Hammadi were recorded by video during these operations.
In speaking with the CHS, Alwan spoke of his efforts to kill U.S. soldiers in Iraq, stating “lunch and dinner would be an American.” Hammadi told the CHS that he had experience in Iraq with “Strelas” (a Russian made, portable, shoulder-fired surface-to-air missile launcher) and discussed shipping “Strelas” in future operations.
According to the charging documents, Hammadi entered the United States in July 2009, and, after first residing in Las Vegas, moved to Bowling Green. Hammadi and Alwan were arrested on May 25, 2011, in Bowling Green on criminal complaints. Both defendants were closely monitored by federal law enforcement authorities in the months leading up to their arrests. Neither was charged with plotting attacks within the United States. All of the weapons, including Stinger missiles, had been rendered inert before being handled by Hammadi and Alwan. The weapons and money handled by the men in the United States were never provided to AQI, but instead were carefully controlled by law enforcement as part of the undercover operation.
The prosecution was handled by Assistant U.S. Attorneys Michael Bennett and Bryan Calhoun from the U.S. Attorney’s Office for the Western District of Kentucky and Trial Attorney Larry Schneider from the Counterterrorism Section of the Justice Department’s National Security Division.
This case was investigated by the Louisville Division of the FBI. Assisting in the investigation were members of the Louisville and Lexington Joint Terrorism Task Forces, U.S. Immigration and Customs Enforcement, U.S. Marshals Service, U.S. Department of Defense, U.S. Citizenship and Immigration Services and the Bowling Green Police Department.
Former Iraqi Terrorists Living in Kentucky Sentenced for Terrorist ActivitiesRead the Press Release
Two Iraqi citizens living in Bowling Green, Ky., who admitted using improvised explosive devices (IEDs) against U.S. soldiers in Iraq and who attempted to send weapons and money to Al-Qaeda in Iraq (AQI) for the purpose of killing U.S. soldiers, were sentenced today to serve federal prison terms by Senior Judge Thomas B. Russell in U.S. District Court for the Western District of Kentucky.
The sentences was announced Lisa Monaco, Assistant Attorney General for National Security; David J. Hale, U.S. Attorney for the Western District of Kentucky; and Perrye K. Turner, Special Agent in Charge of the FBI Louisville Division.
Mohanad Shareef Hammadi, 25, a former resident of Iraq, was sentenced to life in federal prison, and Waad Ramadan Alwan, 31, a former resident of Iraq, was sentenced to 40 years in federal prison, followed by a life term of supervised release. Both defendants had pleaded guilty to federal terrorism charges.
“These two former Iraqi insurgents participated in terrorist activities overseas and attempted to continue providing material support to terrorists while they lived here in the United States. With today’s sentences, both men are being held accountable,” said Assistant Attorney General Monaco. “I thank the dedicated professionals in the law enforcement and intelligence communities who were responsible for this successful outcome.”“These are experienced terrorists who willingly and enthusiastically participated in what they believed were insurgent support operations designed to harm American soldiers in Iraq,” stated U.S. Attorney Hale. “The serious crimes of both men merit lengthy punishment, and only the value of Alwan’s immediate and extensive cooperation with law enforcement justifies our recommendation of a reduced sentence for him. Bringing these men to justice is the result of a comprehensive law enforcement effort. The FBI agents of the Louisville Division, along with the federal and local law enforcement members of the Joint Terrorism Task Forces here in Kentucky, including the Bowling Green Police Department, and our many other partners, are to be commended.”
“Protecting the United States from terrorist attacks remains the FBI's top priority,” said FBI Special Agent in Charge Turner. “Using our growing suite of investigative and intelligence capabilities, FBI agents and analysts assigned to our Bowling Green office were able to neutralize a potential threat. Our local Joint Terrorism Task Force, comprised of FBI Agents and other local, state and federal agencies from across the Commonwealth, remains committed to dismantling extremist networks and cutting off financing and other forms of support provided by terrorist sympathizers, whether they are operating in Kentucky or worldwide.”
“Today, the sentencing of Alwan and Hammadi represents the culmination of the extensive, effective and focused efforts of the U.S. Attorney's Office and the Kentucky Division of the FBI for their roles in the investigation and prosecution of these would-be terrorists. I want to thank U.S. Attorney David Hale, the Kentucky Division of the FBI and the members of the FBI Bowling Green local office for their individual and collective efforts in bringing Alwan and Hammadi to justice for their crimes against the people of Kentucky and the United States,” stated Chief Doug Hawkins, Bowling Green Police Department.Alwan, whose fingerprints were found on an unexploded IED found in Iraq, pleaded guilty earlier in the case on Dec. 16, 2011, to all counts of a 23-count federal indictment. He pleaded guilty to conspiring to kill U.S. nationals abroad; conspiring to use a weapon of mass destruction (explosives) against U.S. nationals abroad; distributing information on the manufacture and use of IEDs; attempting to provide material support to terrorists and to AQI and conspiring to transfer, possess and export Stinger missiles.
Hammadi pleaded guilty on Aug. 21, 2012, to a 12-count superseding indictment. Charges against him included attempting to provide material support to terrorists and to AQI; conspiring to transfer, possess and export Stinger missiles; and making a false statement in an immigration application. At today’s sentencing, at the request of the United States, Alwan received a reduced sentence due to his cooperation with federal law enforcement. The United States asked for no reduction of Hammadi’s sentence.
According to information presented by the United States in connection with today’s sentencings, Hammadi and Alwan both admitted, in FBI interviews that followed waiver of their Miranda rights, to participation in the purported material support operations in Kentucky, and both provided the FBI details of their prior involvement in insurgent activities while living in Iraq. Both men believed their activities in Kentucky were supporting AQI. Alwan admitted participating in IED attacks against U.S. soldiers in Iraq, and Hammadi admitted to participating in 10 to 11 IED attacks as well as shooting at a U.S. soldier in an observation tower.
Court documents filed in this case reveal that the Bowling Green office of the FBI’s Louisville Division initiated an investigation of Alwan in which they used a confidential human source (CHS). The CHS met with Alwan and recorded their meetings and conversations beginning in August 2010. The CHS represented to Alwan that he was working with a group to ship money and weapons to Mujahadeen in Iraq. From September 2010 through May 2011, Alwan participated in ten separate operations to send weapons and money that he believed were destined for terrorists in Iraq. Between October 2010 and January 2011, Alwan drew diagrams of multiple types of IEDs and instructed the CHS how to make them. In January 2011, Alwan recruited Hammadi, a fellow Iraqi national living in Bowling Green, to assist in these material support operations. Beginning in January 2011 and continuing until his arrest in late May 2011, Hammadi participated with Alwan in helping load money and weapons that he believed were destined for terrorists in Iraq.Documents filed by the United States describe in detail the material support activities of the men in Bowling Green. Without Hammadi present, Alwan loaded money and weapons he believed were being sent to Iraq on five occasions from September 2010 through February 2011, handling five rocket-propelled grenade launchers, five machine guns, two sniper rifles, two cases of C4 explosive and what he believed to be $375,000. After Hammadi joined Alwan in January 2011, the two men loaded money and weapons together on five occasions from January to May 2011. Together, on these five occasions, they loaded five rocket-propelled grenade launchers, five machine guns, five cases of C4 explosive, two sniper rifles, one box of 12 hand grenades, two Stinger surface-to-air missile launchers and what they believed to be a total of $565,000. Alwan and Hammadi were recorded by video during these operations.
In speaking with the CHS, Alwan spoke of his efforts to kill U.S. soldiers in Iraq, stating “lunch and dinner would be an American.” Hammadi told the CHS that he had experience in Iraq with “Strelas” (a Russian made, portable, shoulder-fired surface-to-air missile launcher) and discussed shipping “Strelas” in future operations.
According to the charging documents, Hammadi entered the United States in July 2009, and, after first residing in Las Vegas, moved to Bowling Green. Hammadi and Alwan were arrested on May 25, 2011, in Bowling Green on criminal complaints. Both defendants were closely monitored by federal law enforcement authorities in the months leading up to their arrests. Neither was charged with plotting attacks within the United States. All of the weapons, including Stinger missiles, had been rendered inert before being handled by Hammadi and Alwan. The weapons and money handled by the men in the United States were never provided to AQI, but instead were carefully controlled by law enforcement as part of the undercover operation.
This case was investigated by the Louisville Division of the FBI. Assisting in the investigation were members of the Louisville and Lexington Joint Terrorism Task Forces, U.S. Immigration and Customs Enforcement, U.S. Marshals Service, U.S. Department of Defense, U.S. Citizenship and Immigration Services and the Bowling Green Police Department.
The prosecution was handled by Assistant U.S. Attorneys Michael Bennett and Bryan Calhoun from the U.S. Attorney’s Office for the Western District of Kentucky and Trial Attorney Larry Schneider from the Counterterrorism Section of the Justice Department’s National Security Division.
Former Finance Director of the Flood Team Pleads Guilty to Fraud ChargesRead the Press Release
St. Louis, MO - Ruth Jackson pled guilty to embezzling over $40,000 by diverting checks and funds payable to The Flood Team.
The Flood Team provides remediation and restoration services related to water damage, and in August 2011, hired Ruth Jackson as Director of Finance for the business. In that capacity, Jackson had responsibility for a variety of matters relating to the books, records and finances of The Flood Team. Jackson's responsibilities included paying bills, preparing deposits and managing various bank accounts.
According to court documents, Jackson secretly kept an old corporate account open and hidden from the owner of the business. Between November 2011 and late April 2012, Jackson embezzled over $40,000 by diverting checks and funds payable to The Flood Team into the secret account and wrote checks to herself, which she cashed at various locations in the area.
RUTH JACKSON, St. Louis, MO, pled guilty to one felony count of bank fraud before United States District Judge John Ross. Sentencing has been set for May 2, 2013.
Bank fraud carries a maximum penalty of 30 years in prison and/or fines up to $1 million.
In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.The case was investigated by the United States Postal Inspection Service. Assistant United States Attorney John Bodenhausen is handling the case for the U.S. Attorney's Office.
Former Executive Convicted for Role in Price-Fixing Conspiracy Involving Coastal Freight Services Between the Continental United States and Puerto RicoRead the Press Release
WASHINGTON – Following a two-week trial, a federal jury in Puerto Rico today convicted a former executive of a Florida-based coastal water freight transportation company for his participation in a conspiracy to fix rates and surcharges for water transportation of freight between the continental United States and Puerto Rico, the Department of Justice announced.
Frank Peake, the former president of Sea Star Line LLC, was found guilty today in the U.S. District Court for the District of Puerto Rico, of participating in a conspiracy to fix rates and surcharges for water transportation of freight between the continental United States and Puerto Rico from at least as early as late 2005, until at least April 2008.
“The coastal shipping price-fixing conspiracy affected the price of nearly every product that was shipped to and from Puerto Rico during the conspiracy,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice's Antitrust Division. “This successful prosecution shows that the division will hold accountable high-level executives who perpetuate these crimes.”
Sea Star pleaded guilty on Dec. 20, 2011, and was sentenced by Judge Daniel R. Dominguez to pay a $14.2 million criminal fine for its role in the conspiracy from as early as May 2002, until at least April 2008. Sea Star transports a variety of cargo shipments, such as heavy equipment, perishable food items, medicines and consumer goods, on scheduled ocean voyages between the continental United States and Puerto Rico.
According to evidence presented at trial, Sea Star, Peake and co-conspirators carried out the conspiracy by agreeing during meetings and communications to allocate customers of Puerto Rico freight services and to rig bids and fix the rates and surcharges to be charged to purchasers of water transportation of freight between the continental United States and Puerto Rico. The department said the conspirators also engaged in meetings for the purpose of monitoring and enforcing adherence to the agreed-upon rates and sold Puerto Rico freight services at collusive and noncompetitive rates.
Including today’s jury conviction, as a result of this ongoing investigation, three companies and six individuals have pleaded guilty or been convicted at trial. The five individuals and three companies that have been sentenced have been ordered to serve a total of more than 11 years in prison and to pay more than $46 million in criminal fines.
Peake was convicted of price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s conviction arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the coastal water freight transportation industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section; the Baltimore Resident Agency of the Department of Defense’s Office of the Inspector General, Defense Criminal Investigative Service (DCIS); the Miami Field Office of the Department of Transportation’s Office of Inspector General; and the J acksonville Field Office of the FBI. Anyone with information concerning anticompetitive conduct in the coastal water freight transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm or contact DCIS’s Baltimore Resident Agency at 410-347-1620.
Former Dockworker Sentenced to 30 Months in Prison for Extortion Conspiracy Involving Christmastime Tribute PaymentsRead the Press Release
NEWARK, N.J. – A former International Longshoremen’s Association (“ILA”) member was sentenced to 30 months in prison today for conspiring to extort ILA Local 1235 longshoremen on the New Jersey piers for Christmastime tribute payments, New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.
Edward Aulisi, 53,of Flemington, N.J., previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh in Newark federal court to conspiring to extort Christmastime tributes from the ILA Local 1235 members – Count Three of the Second Superseding Indictment against him.
According to documents filed in this case and statements made in court:Edward Aulisi conspired with his father, Vincent Aulisi – the former President of ILA Local 1235 who succeeded another co-defendant, Albert Cernadas – and Michael Coppola, a Genovese organized crime family captain, in the scheme. Coppola was convicted in July 2009 following a trial in the Eastern District of New York of racketeering and racketeering conspiracy, based in part on acts relating to extortion and wire fraud concerning ILA Local 1235.
Edward Aulisi admitted he participated in telephone calls in furtherance of the extortion conspiracy in March 2007 with Coppola – who was then a fugitive from a New Jersey state murder after having been served with a summons to provide DNA in 1996. Edward Aulisi agreed that he passed information to Coppola on the calls – specifically that Cernadas had told Vincent Aulisi the Christmastime extortion scheme would cease once Cernadas left the presidency, and Vincent Aulisi stated it would continue. Edward Aulisi also admitted Vincent Aulisi had asked him to tell Coppola the Christmastime extortion collections had almost doubled.
Edward Aulisi admitted it had been his intention to deliver Christmastime tribute money extorted from ILA Local 1235 members to Coppola had Coppola not been arrested shortly after the phone calls.
In addition to the prison term, Judge Cavanaugh sentenced Edward Aulisi to two years of supervised release and fined him $10,000.
Coppola is serving a 16-year prison term on his conviction.
U.S. Attorneys Fishman and Lynch credited the FBI in New Jersey and New York and the Department of Labor’s Office of Inspector General with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Jacquelyn M. Kasulis and Jack Dennehy of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.
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Defense counsel: Robert E. Lytle Esq., Lawrenceville, N.J.Former Dockworker Sentenced to 30 Months in Prison for Extortion Conspiracy Involving Christmastime Tribute PaymentsRead the Press Release
NEWARK, N.J. – A former International Longshoremen’s Association (“ILA”) member was sentenced to 30 months in prison today for conspiring to extort ILA Local 1235 longshoremen on the New Jersey piers for Christmastime tribute payments, New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.
Edward Aulisi, 53,of Flemington, N.J., previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh in Newark federal court to conspiring to extort Christmastime tributes from the ILA Local 1235 members – Count Three of the Second Superseding Indictment against him.
According to documents filed in this case and statements made in court:
Edward Aulisi conspired with his father, Vincent Aulisi – the former President of ILA Local 1235 who succeeded another co-defendant, Albert Cernadas – and Michael Coppola, a Genovese organized crime family captain, in the scheme. Coppola was convicted in July 2009 following a trial in the Eastern District of New York of racketeering and racketeering conspiracy, based in part on acts relating to extortion and wire fraud concerning ILA Local 1235.
Edward Aulisi admitted he participated in telephone calls in furtherance of the extortion conspiracy in March 2007 with Coppola – who was then a fugitive from a New Jersey state murder after having been served with a summons to provide DNA in 1996. Edward Aulisi agreed that he passed information to Coppola on the calls – specifically that Cernadas had told Vincent Aulisi the Christmastime extortion scheme would cease once Cernadas left the presidency, and Vincent Aulisi stated it would continue. Edward Aulisi also admitted Vincent Aulisi had asked him to tell Coppola the Christmastime extortion collections had almost doubled.
Edward Aulisi admitted it had been his intention to deliver Christmastime tribute money extorted from ILA Local 1235 members to Coppola had Coppola not been arrested shortly after the phone calls.
In addition to the prison term, Judge Cavanaugh sentenced Edward Aulisi to two years of supervised release and fined him $10,000.
Coppola is serving a 16-year prison term on his conviction.
U.S. Attorneys Fishman and Lynch credited the FBI in New Jersey and New York and the Department of Labor’s Office of Inspector General with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Jacquelyn M. Kasulis and Jack Dennehy of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.
Defense counsel: Robert E. Lytle Esq., Lawrenceville, N.J.
Former CENTCOM Employee Pleads Guilty to Attempted Sexual Enticement of A ChildRead the Press Release
Orlando, Florida - United States Attorney Robert E. O'Neill announces today that Stephen Governale (49, Tampa) pleaded guilty to attempted enticement of a minor to engage in a sexual activity. Governale is facing a mandatory minimum of 10 years, up to life in federal prison. His sentencing hearing has been set for June 13, 2013. Governale was indicted on October 10, 2012.
Governale is a United States Air Force Reserve Lieutenant Colonel, who, at the time of his arrest, was a protocol officer at CENTCOM in Tampa. According to court documents, on September 11, 2012, the Federal Bureau of Investigation was contacted by the parents of a 17-year-old child who was receiving sexually inappropriate messages from Governale. In an interview, the child victim explained meeting Governale through an organization affiliated with the military. The child victim stated that he had gone with Governale to conferences and had stayed in Governale’s hotel room. The victim also said that they had watched pornographic movies in the hotel room and engaged in sexual activity.
On September 21, 2012, as Governale was planning to travel to Central Florida for business, a Task Force Agent with the FBI assumed the child victim’s on-line identity. The agent began to communicate with Governale using FaceBook. In the FaceBook chats, Governale attempted to entice the child victim to engage in sexual activity. Governale arranged to meet the victim at a location in Central Florida. When Governale arrived, he was arrested by the FBI.
This case was investigated by the Federal Bureau of Investigation and the Seminole County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Roger B. Handberg.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Former Bessemer Housing Authority Bookkeeper Sentenced to 30 Months in PrisonRead the Press Release
BIRMINGHAM – A federal judge today sentenced a former bookkeeper for the Bessemer Housing Authority to 30 months in prison and six months home detention for stealing nearly $200,000 from the agency with forged checks, announced U.S. Attorney Joyce White Vance and Housing and Urban Development Inspector General David A. Montoya.
U.S. District Judge L. Scott Coogler sentenced LAWANA R. LAWRENCE, 50, of Jasper, to six months in prison and six months of home detention for theft of government property, plus two years in prison for aggravated identity theft. Lawrence pleaded guilty to the charges in August. Lawrence also must forfeit $198,700 to the government as proceeds of illegal activity and pay the same amount in restitution.
She is scheduled to report to prison April 8.
“This defendant worked for a government agency whose mission is to help low-income families find affordable rental housing. She undercut that mission and took advantage of her position to steal from the program and the tax payers who support it,” Vance said. “Her abuse of the public trust warrants this sentence.”
HUD governs the rental assistance program and annually provides money to the Bessemer Housing Authority to support it.
Lawrence worked as a bookkeeper for the Bessemer Housing Authority in 2010. From June through September that year, she wrote 28 checks to herself or to the person she was living with and affixed electronic signatures of the Housing Authority’s executive director and its board chairman to the checks, according to Lawrence’s plea agreement with the government. She had access to the signatures on her work computer, but placed them on the checks without authorization.
Between July 6, 2010, and Sept. 13, 2010, Lawrence deposited the checks into a bank account assigned to Lawana R. Lawrence, doing business as Woni’s Bookshelf. Lawrence owned Woni’s, a bookstore in Sumiton, according to the plea agreement. Housing Authority checks deposited into that account totaled $198,700.
The HUD Office of Inspector General, in cooperation with the Bessemer Police Department and the Jefferson County District Attorney’s Office in Bessemer, investigated the case, and it is being prosecuted by the U.S. Attorney’s Office for the Northern District of Alabama.
Former Alabama Officer Indicted for Using Excessive ForceRead the Press Release
A federal grand jury today indicted a former Town Creek, Ala., police officer for violating an individual’s civil rights during the course of an arrest, announced Assistant Attorney General for the Civil Rights Division Thomas E. Perez, U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
The indictment charges Brandon Shane Mundy, 32, of Oxford, Ala., with striking a man with a dangerous weapon and causing bodily injury during the man’s November 2009 arrest in a northern Alabama town. Mundy’s action deprived the man, identified as J.T., of the constitutional right to be free from the use of unreasonable force by someone acting under the color of law, according to the indictment.
If convicted, Mundy could face a maximum sentence of 10 years in prison and a $250,000 fine. An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The FBI is investigating the case, and is being prosecuted by Assistant U.S. Attorney Elizabeth Holt and Justice Department Civil Rights Division Trial Attorney Daniel H. Weiss.
Federal Prosecutors Charge Adams Produce CEORead the Press Release
BIRMINGHAM – Federal prosecutors today charged the CEO of Adams Produce Company with fraud against the company, failure to report a felony against the government and failure to file federal income tax returns, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and IRS Criminal Investigation Division Acting Special Agent in Charge Veronica Hyman-Pillot.
The U.S. Attorney’s Office charged former Adams Produce Chief Executive Officer SCOTT DAVID GRINSTEAD in a four-count information filed in U.S. District Court. Prosecutors also filed a plea agreement with Grinstead, in which he acknowledges his guilt and agrees to plead guilty.
As part of his plea agreement, Grinstead, 45, of Birmingham, must pay $450,000 in restitution to the bankruptcy estate of Adams Produce for the benefit of the company’s employees who were not fully paid because of Adams’ abrupt closing and its filing for bankruptcy last year.
“This case involves the chief executive officer of a company who allowed officers and employees to continue cheating the government on contracts involving military bases and schools while, at the same time, he continued to steal from the company,” Vance said. “This plea holds him responsible for criminal acts that harmed the government and his company. We are pleased that resolution of this case will bring some compensation to the employees who lost their jobs and did not receive their final paychecks from Adams Produce,” she said. “The investigation of wrongdoing by former officers and employees continues, and any who have committed crimes will be held accountable.”
Grinstead is the second Adams Produce official prosecutors have charged in connection with fraud at the Birmingham-based company that had been a leading distributor of fresh fruits and vegetables across the Southeast for many years. In December, the U.S. Attorney’s Office charged Christopher Alan Pfahl, 41, of Birmingham, with conspiracy to defraud the federal government of several hundred thousand dollars through a scheme to create false invoices and purchase orders. Pfahl was a purchasing program specialist for Adams Produce. He pleaded guilty to the charge last week.
That conspiracy involved Pfahl and other officers and employees of Adams Produce engaging in a scheme to create false records that reflected a higher purchasing cost for fruits and vegetables than the company actually paid. The inflated costs were then presented to the U.S. Government, which had agreed to pay a certain amount over Adams’ cost for produce.
The federal government, through the Defense Supply Center Philadelphia, was one of Adams’ customers. The supply center contracted with Adams Produce to provide fresh fruits and vegetables to military bases, public school systems, junior colleges and universities. Adams Produce entered into contracts with the government worth millions of dollars, according to court records.
One of the charges against Grinstead is misprision of a felony for knowing of the fraud Pfahl and others were engaged in and allowing it to continue and end slowly, so as to avoid raising red flags with the government, rather than stopping it immediately and reporting it to authorities.
Grinstead also is charged with wire fraud for wiring hundreds of thousands of dollars from an Adams Produce account to American Express to pay for clothing, jewelry, personal travel for himself and his family, lawn care at his home, and items for a house on Lake Martin, according to the information.
Grinstead faces two counts of failure to file a federal tax return, one for 2009 and one for 2010. The information charges that Grinstead had a gross income of about $748,801 for the 2009 calendar year and willfully failed to file an income tax return with the Internal Revenue Service. In 2010, according to the information, Grinstead received about $1,878,700 in gross income and willfully did not file a return with the IRS.
The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine. For misprision of a felony, the maximum sentence is three years in prison and a $250,000 fine. The maximum penalty for failure to file an income tax return is one year in prison and a $100,000 fine.
The FBI and the IRS investigated the case, and it is being prosecuted by Assistant U.S. Attorney George A. Martin Jr.
Federal Jury Finds Mortgage Broker Guilty in $100 Million Fraudulent Loans SchemeRead the Press Release
PITTSBURGH - After deliberating for three hours, a federal jury of five men and seven women found Lewis Whoolery guilty of wire fraud conspiracy, United States Attorney David J. Hickton announced today.
Whoolery, 44, currently of Delray Beach, Fla., and formerly of Port Vue, Pa., was tried before United States District Judge Joy Flowers Conti in Pittsburgh.
According to Assistant United States Attorney Brendan T. Conway, who prosecuted the case, the evidence presented at trial established that Whoolery operated a mortgage broker business called First Capital Home Equity ("First Capital"). In 2003, Whoolery recruited an unlicensed appraiser named Kenneth Cowden to prepare fraudulent appraisals for First Capital. Between 2003 and 2005 Cowden prepared more than $67 million in fraudulent appraisals for Whoolery and First Capital. The appraisals were fraudulent not only because they falsely represented that a licensed appraiser prepared the appraisals, but also because the appraisals overstated the values of the properties serving as collateral for the loans. In addition, Cowden altered the pictures of the properties being appraised to make it look like the properties were in better condition than they really were, and in some cases he substituted pictures of completely different properties than the properties subject to the appraisals.
Also in 2003, Whoolery recruited Jeannette Gray, who was a licensed appraiser from the Philadelphia area, and Whoolery's sister, Kimberly Baldwin, to join the conspiracy. Gray, for $4,000 a month, agreed to allow Baldwin to prepare appraisals for First Capital and to sign Gray's name to the appraisals as if Gray prepared the appraisals. The appraisals, however, were not just fraudulent because they falsely represented that a licensed appraiser prepared the appraisals, but also because the appraisals overstated the values of the properties serving as collateral for the loans. Baldwin, like Cowden, also substituted pictures of properties.
In 2004, Gray stopped authorizing First Capital's use of her license. At that point, Whoolery recruited Jason Sheraw, a licensed appraiser from Irwin, Pa., to join the conspiracy. Similar to Gray, Sheraw, in exchange for $4,000 per month, agreed to allow Baldwin to prepare appraisals under his license as if he were actually preparing the appraisals. Baldwin then began to prepare her fraudulent appraisals for First Capital under Sheraw's name. Between 2003 and 2007, Baldwin prepared hundreds of fraudulent appraisals for First Capital resulting in the funding of tens of millions of dollars of fraudulent loans.
Whoolerly supervised loan officers who submitted loans using the fraudulent appraisals, including Lawrence Kraynak, Daniel O'Connor, Mark Hipsley, John Polosky, Daniel Gillen, Shawn Cupp, Elizabeth Drake, and others. The submissions to the lenders, however, were not just fraudulent because of the appraisals. Rather, the submissions to the lenders also often included representations that overstated the borrowers' financial condition, including their income and assets. Whoolery and the loan officers also often submitted fake documents in support of those false representations, including fake pay stubs and bank statements. Cowden, Kraynak, O'Connor, Hipsley, Polosky, Gillen, Cupp, Drake, Gray, Sheraw, and Baldwin have all been convicted of mortgage fraud related offenses.
In total, the government estimates that the fraudulent submissions related to this scheme led to the funding of more than $100 million in fraudulent loans, making this case the largest mortgage fraud case ever to go to trial in the Western District of Pennsylvania. The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offense and the criminal history, if any, of the defendant.
The Mortgage Fraud Task Force conducted the investigation that led to the prosecution of Whoolery and the other individuals referred to above. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service - Criminal Investigation; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff's Office; the Pennsylvania Attorney General's Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee's Office.
Federal Jury Convicts Newark, N.J., Man of Illegal Firearm/Drug PossessionRead the Press Release
CAMDEN, N.J. – A Newark, N.J., man was convicted by a federal jury today of possession of cocaine and marijuana with intent to distribute, possession of a firearm in furtherance of a drug trafficking offense and unlawful possession of a loaded handgun by a convicted felon, U.S. Attorney Paul J. Fishman announced.
Jimmil Henderson, 29, was convicted of all three counts of a Superseding Indictment following a five-day trial before U.S. District Judge Joseph H. Rodriguez in Camden federal court.According to documents filed in this case and the evidence at trial:
On Feb. 18, 2011, Newark Police Department officers were patrolling the area of Lincoln Park in Newark and saw Henderson engaging in a hand-to-hand drug transaction. Upon seeing the officers, Henderson ran through Lincoln Park, tossing a 9mm firearm loaded with 11 rounds of ammunition into the park. When the officers apprehended him at the corner of Broad and Pennington streets, they recovered quantities of cocaine and marijuana.
At sentencing, Henderson faces potential penalties as follows:
∙ Count One (possession with intent to distribute) – maximum of 20 years in prison and a $1 million fine.
∙ Count Two (possession of a firearm in furtherance of a drug trafficking offense) – minimum of 5 years in prison, maximum of life in prison, and a $250,000 fine; sentence to run consecutively to any other sentence
∙ Count Three (unlawful possession of a firearm by a convicted felon) – maximum of 10 years in prison and a $250,000 fine).U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge Donald J. Soranno; and the Newark Police Department, under the direction of Police Director Samuel A. DeMaio and Chief Sheilah A. Coley, for the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorney Dara A. Govan and Special Assistant U.S. Attorney James Donnelly of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
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Defense counsel: Michael Huff Esq., PhiladelphiaHenderson Superseding Indictment
Federal Jury Convicts Albuquerque Man for Transporting an Illegal AlienRead the Press Release
ALBUQUERQUE – This afternoon, a federal jury sitting in Albuquerque, N.M., convicted Efrain Gonzales-Perez, 42, of Albuquerque, for transporting an illegal alien after a two-day trial. The guilty verdict was announced by U.S. Attorney Kenneth J. Gonzales, Special Agent in Charge Carol K.O. Lee of the Albuquerque Division of the FBI, and Chief Patrol Agent Scott A. Luck, El Paso Sector, U.S. Border Patrol.
Gonzales-Perez was indicted on May 8, 2012, and charged with transporting an illegal alien in New Mexico on March 15, 2012. Trial of the case began on Jan. 28, 2013 and concluded this afternoon when the jury returned a guilty verdict on the sole count of the indictment.
The evidence at trial established that, in summer 2011, the FBI and U.S. Border Patrol obtained information about Gonzales-Perez’s alien smuggling activities. The agents used the information to initiate a covert investigation into Gonzales-Perez during which they recorded telephone conversations relating to alien smuggling. The recorded telephone conversations revealed that in March 2012, Gonzales-Perez made arrangement for others to transport an illegal alien from El Paso, Texas, to Albuquerque. Gonzales-Perez was arrested on March 15, 2012, in the vicinity of an Albuquerque-area truck stop after he had picked up the illegal alien and paid a $1200 transportation fee.
The jury deliberated for approximately an hour and a half before returning the guilty verdict.
At sentencing, Gonzales-Perez faces a maximum penalty of ten years in prison. He remains on conditions of release pending his sentencing hearing, which has yet to be scheduled.
The case was investigated by the Albuquerque office of the FBI and the U.S. Border Patrol, and is being prosecuted by Assistant U.S. Attorney Norman Cairns and Special Assistant U.S. Attorney Raquel Ruiz-Velez.
Family Members Charged in Mail Fraud Conspiracy Involving Local Travel Agency Are Arrested by U.S. Postal Inspectors in New YorkRead the Press Release
DALLAS — Three Dallas residents, Jorge Armando Flores, 45, his wife Roxana Flores, 43, and her son, Julio C. Funes-Alas, 27, were arrested by U.S. Postal Inspectors this morning in Amityville, New York, on conspiracy and mail fraud charges outlined in a 19-count indictment returned by a federal grand jury in Dallas last week, and unsealed today, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. All three defendants appeared before a U.S. Magistrate Judge, who ordered that they be detained and transported to the Northern District of Texas for further court proceedings.
According to the indictment, Jorge and Roxana Flores were employed as sales agents in the Latin Department by U.S.A. Gateway, Inc., an international wholesale travel agent, located on Spring Valley Road in Dallas. Gateway was registered with the Airline Reporting Corporation which enabled it to purchase airline tickets directly from the airlines. Gateway then sold these tickets to subagents, or retail travel agencies, that in turn would sell the tickets to their customers. Among the subagents that purchased airline tickets from Gateway were Ramon Travel & Services, Inc., located in Providence, Rhode Island; Your Travel Agent Con Sabor Latino, located in Carrollton, Texas; and Jeanette Travel, located in Lowell, Massachusetts.
The indictment alleges that beginning at least as early as March 2007, and continuing until August 2011, the three defendants conspired with each other, and others, to commit mail fraud by converting to their benefit, checks that were mailed to Gateway from subagents. As part of the conspiracy Jorge Flores circumvented accounting procedures and caused checks mailed by subagents to Gateway to be diverted and deposited into bank accounts that the defendants set up and controlled. When a check was received, Jorge Flores would forge the signatory’s notation on a photocopy to indicated the subagent’s check had been received and then deliver the falsified photocopy to the accounts receivable department for recording. The original check would be diverted into bank accounts that the defendants had set up to receive the stolen funds. The defendants would then write checks, withdraw funds, make electronic withdrawals or transfers, make ATM withdrawals, and make debit purchases on these accounts for their personal benefit and use.
In addition to the conspiracy count, Jorge Flores is charged with 18 counts of mail fraud; Roxana Flores is charged with 12 counts of mail fraud; and Julio C. Funes-Alas is charged with six counts of mail fraud. Each of these counts represents a check of between $9,000 and $33,000 from the subagent to Gateway, which was diverted by the defendants.
A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. Upon conviction, however, each count of the indictment carries a maximum penalty of 20 years in federal prison and a $250,000 fine.
The case is being investigated by the U.S. Postal Inspection Service. Assistant U.S. Attorney Christopher Stokes is in charge of the prosecution.
FBI Arrests Glendale Man in ‘Sextortion’ CaseRead the Press Release
Defendant Allegedly Coerced Young Women to Expose Themselves on Internet
LOS ANGELES – A Glendale man accused of hacking into hundreds of Facebook, Skype and email accounts and extorting women into showing him their naked bodies was arrested today on federal computer hacking charges.
Karen “Gary” Kazaryan, 27, was arrested this morning without incident by special agents with the FBI. Kazaryan, who was named in a 30-count indictment returned last Friday by a federal grand jury, is being arraigned this afternoon in United States District Court.
According to the indictment, Kazaryan gained unauthorized access to – in other words, hacked into – the victims’ accounts, and changed the passwords, which locked victims out of their own online accounts. Once he controlled the accounts, Kazaryan searched emails or other files for naked or semi-naked pictures of the victims, as well as other information, such as passwords and the names of their friends. Using that information, Kazaryan posed online as women, sent instant messages to their friends, and persuaded the friends to remove their clothing so that he could view and take pictures of them.
When the victims discovered that they were not speaking with their friends, Kazaryan often extorted them again, using the photos he had fraudulently obtained to again coerce the victims to remove their clothing on camera.
The indictment charges Kazaryan with 15 counts of computer intrusion and 15 counts of aggravated identity theft.
According to a search warrant executed in 2011 and unsealed today, Kazaryan repeatedly contacted victims to demand that they expose their breasts to him on Skype, and used their email and Facebook accounts to make contact with other victims. Kazaryan allegedly posted nude photos of some victims on their Facebook pages when they failed to comply with his demands.
Investigators estimate that Kazaryan victimized more than 350 women, but they have not identified all of the victims whose accounts were hacked. Authorities found approximately 3,000 pictures of nude or semi-nude women – some of which were taken from their online accounts, and some of which were taken by Kazaryan on Skype – on Kazaryan’s computer. Anyone who believes they may have been a victim in this case should contact the FBI’s Los Angeles Field Office at (310) 477-6565.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted on all counts, Kazaryan faces a statutory maximum penalty of 105 years in federal prison.
The investigation was conducted by the Federal Bureau of Investigation.
Release No. 13-016
Ex-Augusta Tax Preparer Sentenced to 41 Months in Prison for Preparing False Tax ReturnsRead the Press Release
AUGUSTA, GA: PAULA M. PENDLETON, 54, formerly of Augusta, Georgia, was sentenced last week by United States District Court Dudley H. Bowen, Jr. to 41 months in prison for conspiring to obtain names, dates of birth, and social security numbers of other individuals to be used in false income tax returns, to prepare and file false income tax returns, and then attempt to conceal such acts.
Evidence presented at hearings in this case showed that PENDLETON taught others how to prepare false income tax returns that exploited the Earned Income Tax Credit. Two tax preparers who learned from PENDLETON are KISHA KUWANDA MCCLADDIE and LINDA PERKINS ZIEGLER who were sentenced in federal court in 2011 to 20 and 18 months imprisonment, respectively.
United States Attorney Edward J. Tarver said, “This defendant not only prepared false tax returns that stole tens of thousands of dollars from our country, she taught others to do the same. Her sentence should serve as a lesson to all who are tempted to follow her example; lying on tax returns can result in a lengthy prison stay.”
IRS-Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot said, “Return preparer fraud is like a contagious disease, it affects not only the preparer, but the individuals who have filed false information with the Internal Revenue Service. It is our hope that Ms. Pendleton's sentence will send a strong message that tampering with the integrity of our nation's tax system can result in jail time.”
In addition to her prison sentence, PENDLETON was ordered to pay restitution, as well as serve three years of supervised release after she is released from prison. Regarding the length of the prison sentence, Tarver noted that there is no parole in the federal system.
IRS Special Agents Andres Hernandez and Brian Mohrmann conducted the investigation of PENDLETON. Assistant United States Attorney David Stewart prosecuted the case. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Essex County, N.J., Man Indicted for Using Stolen Identities to Obtain Tax Refund ChecksRead the Press Release
NEWARK, N.J. – An Essex County, N.J., man was indicted today by a federal grand jury for using stolen identities to file false tax returns and obtain more than $1 million in tax refund checks, U.S. Attorney Paul J. Fishman announced.
Hakeem Awe, 39, of Irvington, N.J., was previously arrested on a Complaint. He was indicted today on one count of mail fraud, one count of filing false claims to the United States government, and two counts of aggravated identity theft.
According to documents filed in this case and statements made in court: Awe acquired the names, Social Security numbers, and other personally identifying information from identity theft victims, and then used this information to commit a three-part scheme: (1) Awe filed false tax returns, using fictitious financial information to make it appear that the filer was entitled to a tax refund; (2) Awe listed the filer’s address as one of several post office boxes that he controlled in and around New Jersey; (3) Awe received the checks at his post office boxes and then deposited them into bank accounts that he controlled.
On the mail fraud count, Awe faces a maximum sentence of 20 years in prison and a fine that is $250,000 or double the total loss or gain, whichever is greatest.
U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation under the direction of Acting Special Agent in Charge Shantelle P. Kitchen in Newark, with the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorneys Andrew J. Bruck of the General Crimes Unit and Jacques S. Pierre of the Special Prosecutions Division, both of the U.S. Attorney’s Office in Newark.
13-042Defense counsel: Timothy R. Anderson Esq., Red Bank, N.J.
Awe, Hakeem Indictment
Dover Developer Indicted for Bank Fraud and Money LaunderingRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Michael A. Zimmerman, age 55, of Dover was indicted by a federal grand jury on January 23, 2013 for numerous bank fraud-related offenses. More specifically, Mr. Zimmerman was charged with one count of conspiracy to commit bank fraud and seven counts of making a false statement to a financial institution, each punishable by a maximum term of 30 years imprisonment and a fine of $1,000,000.00. The indictment also charges Mr. Zimmerman with one count of money laundering in violation of Title 18, United States Code, § 1957. This charge carries a maximum term of 10 years imprisonment and a fine of $250,000.00.
Zimmerman, a developer operating primarily in Kent and Sussex Counties, obtained financing in excess of $37 million from the Wilmington Trust Company (“Wilmington Trust”) in connection with three development projects— Salt Pond Plaza, Compass Pointe, and the Shoppes at Fieldstone. In March 2011, prior to its acquisition by M&T Bank, Wilmington Trust sold the debt associated with these, as well as other projects in which Zimmerman was a buyer, to a third party. Wilmington Trust incurred a loss on these three projects alone in excess of $26 million.
The Indictment alleges that in 2007 and 2008, in connection with the Salt Pond Plaza, Compass Pointe, and Shoppes at Fieldstone projects, Zimmerman and uncharged co-conspirators submitted false draw requests for payment from the bank and requested and received advanced funds in violation of the terms of the loan agreements with Wilmington Trust. Wilmington Trust funded the draw requests, which were not utilized for the purposes that Zimmerman and his co-conspirators had represented. In one instance, Zimmerman requested and received $150,000.00 in funds from Wilmington Trust that he represented to be for architectural and engineering costs, but instead used the money to finance acquisition of a personal interest in a development in the Bahamas.
United States Attorney Oberly said, “The Indictment reflects this Office’s commitment to hold accountable those who criminally contributed to the failure of the Wilmington Trust Company. The shareholders and employees of the bank, as well as the community, have been harmed by this failure, and the government remains firmly committed to prosecuting those whose fraudulent acts compromised the soundness and viability of a Delaware institution. The investigation continues.”
“The FBI is committed to ensuring banks and similar financial institutions are seen as sound and stable institutions, said Stephen Vogt, Special Agent in Charge of the FBI’s Wilmington Office. “Those who perpetrate sophisticated fraud schemes threaten the stability of financial institutions and, with the assistance of our law enforcement partners, will be prosecuted to the fullest extent of the law.”
“The IRS, along with our law enforcement partners, will vigorously pursue unscrupulous individuals who abuse our financial systems and violate the public trust,” said Akeia Conner, Special Agent in Charge, IRS Criminal Investigation. “This indictment demonstrates the federal law enforcement agencies’ collective determination to restore and ensure that trust.”
“Zimmerman’s alleged large scale fraud against a TARP bank included diverting construction loans for unauthorized purposes, such as for a project in the Bahamas,” said Christy Romero, Special Inspector General for Troubled Asset Relief Program (SIGTARP). “Defrauding a TARP bank is the same as defrauding American taxpayers who funded the bailout, and SIGTARP and our law enforcement partners will bring to justice those responsible for crimes related to TARP.”
“We are committed to working with our law enforcement partners in holding accountable wrongdoers whose fraudulent actions materially impact the safety and soundness of financial institutions regulated by the Federal Reserve Board,” said Mark Bialek, Inspector General of the Board of Governors of the Federal Reserve System.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Office of Inspector General, Board of Governors of the Federal Reserve System. The case is being prosecuted by Assistant United States Attorneys Robert F. Kravetz and Lesley F. Wolf.Members of the public are reminded that an Indictment is only an allegation and that a defendant is presumed innocent until proven guilty.
Indictment
Dominican National Sentenced to 63 Months in Prison <br /> for Leading Role in Identity Trafficking SchemeRead the Press Release
A Dominican national was sentenced today to 63 months in prison for his leading role in trafficking the identities of Puerto Rican U.S. citizens and corresponding identity documents, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Rosa E. Rodríguez-Vélez of the District of Puerto Rico; Director John Morton of U.S. Immigration and Customs Enforcement (ICE), which oversees Homeland Security Investigations (HSI); Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service (USPIS); Gentry Smith, Acting Director of the U.S. State Department’s Diplomatic Security Service (DSS); and Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber.
Rafael Joaquin Beltre-Beltre, 36, formerly of Caguas, Puerto Rico, was sentenced by U.S. District Judge Gustavo A. Gelpí, in the District of Puerto Rico. In addition to Beltre-Beltre’s prison term, Judge Gelpí ordered him to forfeit $424,793 in illegal proceeds and ordered the removal of Beltre-Beltre from the United States to the Dominican Republic after the completion of his sentence. On Sept. 4, 2012, Beltre-Beltre pleaded guilty in Puerto Rico to one count of conspiracy to commit identification fraud, one count of conspiracy to commit alien smuggling for financial gain and one count of international money laundering.
Beltre-Beltre was charged in a superseding indictment returned by a federal grand jury in Puerto Rico on March 22, 2012. To date, a total of 53 individuals have been charged for their roles in the identity trafficking scheme, and 25 defendants have pleaded guilty.
Court documents allege that individuals located in the Savarona area of Caguas, Puerto Rico (Savarona suppliers), obtained Puerto Rican identities and corresponding identity documents. Other conspirators located in various cities throughout the United States (identity brokers) allegedly solicited customers and sold Social Security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set. The superseding indictment alleges that identity brokers ordered the identity documents from Savarona suppliers, on behalf of the customers, by making coded telephone calls. The conspirators are charged with using text messages, money transfer services and express, priority or regular U.S. mail to complete their illicit transactions.
Court documents allege that some of the conspirators assumed a Puerto Rican identity themselves and used that identity in connection with the trafficking operation. Their customers allegedly generally obtained the identity documents to assume the identity of Puerto Rican U.S. citizens and to obtain additional identification documents, such as legitimate state driver’s licenses. Some customers allegedly obtained the documents to commit financial fraud and attempted to obtain a U.S. passport.
According to court documents, various identity brokers were operating in Rockford, Ill.; DeKalb, Ill.; Aurora, Ill.; Seymour, Ind.; Columbus, Ind.; Indianapolis; Hartford, Conn.; Clewiston, Fla.; Lilburn, Ga.; Norcross, Ga.; Salisbury, Md.; Columbus, Ohio; Fairfield, Ohio; Dorchester, Mass.; Lawrence, Mass.; Salem, Mass.; Worcester, Mass.; Grand Rapids, Mich.; Nebraska City, Neb.; Elizabeth, N.J.; Burlington, N.C.; Hickory, N.C.; Hazelton, Pa.; Philadelphia; Houston; Abingdon, Va.; Albertville, Ala.; and Providence, R.I.
Beltre-Beltre admitted that he operated as a Savarona supplier and was a leader and organizer in the conspiracy. He also admitted that he and his co-conspirators sold personal identifying information pertaining to real Puerto Rican U.S. citizens, including minors, and that he knew some of the identities would be used to commit tax fraud and some would be used to fraudulently apply for U.S. passports. According to court documents, in June 2011, an unauthorized alien in Arlington, Va., applied for a U.S. passport using legitimate Puerto Rico identity documents that had been supplied by Beltre-Beltre. Law enforcement agents uncovered the fraudulent application and prevented the issuance of the U.S. passport.
On Jan. 11, 2012, Beltre-Beltre was arrested and found to be in possession of over 100 legitimate identity documents in other people’s names, in addition to four legitimate but blank Puerto Rico birth certificates. Beltre-Beltre admitted that at the time of his arrest he possessed a firearm with an obliterated serial number in relation to his identity trafficking and alien smuggling operation. Beltre-Beltre is the 12th defendant to be sentenced in this case.
The charges are the result of Operation Island Express, an ongoing, nationally-coordinated investigation led by the ICE-HSI Chicago Office and USPIS, DSS and IRS-CI offices in Chicago, in coordination with the ICE-HSI San Juan Office and the DSS Resident Office in Puerto Rico. The Illinois Secretary of State Police; Elgin, Ill., Police Department; Seymour, Ind., Police Department; and Indiana State Police provided substantial assistance. The ICE-HSI Assistant Attaché office in the Dominican Republic and International Organized Crime Intelligence and Operations Center (IOC-2) as well as various ICE, USPIS, DSS and IRS-CI offices around the country provided invaluable assistance.
The case is being prosecuted by Trial Attorneys James S. Yoon, Hope S. Olds, Courtney B. Schaefer and Christina Giffin of the Criminal Division’s Human Rights and Special Prosecutions Section, with the assistance of Acting Assistant Deputy Chief Jeannette Gunderson of the Criminal Division’s Asset Forfeiture and Money Laundering Section, and the support of the U.S. Attorney’s Office for the District of Puerto Rico. The U.S. Attorney’s Offices in the Northern District of Illinois, Southern District of Indiana, District of Connecticut, District of Massachusetts, District of Nebraska, Middle District of North Carolina, Southern District of Ohio, District of Rhode Island, Southern District of Texas and Western District of Virginia provided substantial assistance.
Potential victims and the public may obtain information about the case at: www.justice.gov/criminal/vns/caseup/beltrerj.html. Anyone who believes their identity may have been compromised in relation to this investigation may contact the ICE toll-free hotline at 1-866-DHS-2ICE (1-866-347-2423) and its online tip form at www.ice.gov/tipline. Anyone who may have information about particular crimes in this case should also report it to the ICE tip line or website.
Anyone who believes that they have been a victim of identity theft, or wants information about preventing identity theft, may obtain helpful information and complaint forms on various government websites including the Federal Trade Commission ID Theft Website, www.ftc.gov/idtheft. Additional resources regarding identity theft can be found at www.ojp.usdoj.gov/ovc/pubs/ID_theft/idtheft.html; www.ssa.gov/pubs/10064.html; www.fbi.gov/about-us/investigate/cyber/identity_theft; and www.irs.gov/privacy/article/0,,id=186436,00.html.
Deported Alien Charged with Illegally Re-entering U.S.Read the Press Release
PITTSBURGH, Pa. - An individual found in Coraopolis, Pa., has been indicted by a federal grand jury in Pittsburgh on a charge of re-entry into the United States after deportation, United States Attorney David J. Hickton announced today.
The one-count indictment named Mauro Zerecero-Soto, 24, formerly from Mexico, as the sole defendant.
According to indictment, Mauro Zerecero-Soto, an alien, was removed from the United States by United States Immigration and Customs Enforcement on April 5, 2011. Mauro Zerecero-Soto was found in Coraopolis on Jan. 4, 2013.
The law provides for a maximum total sentence of two years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
The U.S. Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
An indictment or information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Delwayne Denny Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on January 29, 2013, before U.S. Magistrate Judge Keith Strong, DELWAYNE DENNY, a 30-year-old resident of Box Elder and an enrolled member of the Chippewa Tribe, pled guilty to sexual abuse. Sentencing has been set for May 10, 2013.
In an Offer of Proof filed by Assistant U.S. Attorney Danna R. Jackson, the government stated it would have proved at trial the following:
On March 11, 2012, DENNY, along with three other adults, returned to a house located on the Rocky Boy's Indian Reservation. The victim, who was very intoxicated, was taken into one of the bedrooms, by two concerned teenage boys, to "sleep it off." At some point in the evening DENNY went into the bedroom and engaged in sexual intercourse with the victim, even though she was passed out.
The victim regained consciousness and demanded that DENNY stop having sex with her. The victim grabbed clothes and left the house to look for help. Law enforcement had been called by a neighbor. Law enforcement found the victim in the fetal position in the middle of the roadway, crying hysterically. The victim was transported to the emergency room in Havre and consented to a sexual assault exam.
DENNY faces possible penalties of life in prison, a $250,000 fine and lifetime supervision.
The investigation was a cooperative effort between the Federal Bureau of Investigation and the Rocky Boy's Police Department.
Delmont Man Sentenced to Probation with Home Detention for Defrauding Social Security AdministrationRead the Press Release
PITTSBURGH, Pa. - A resident of Delmont, Pa., has been sentenced in federal court to five years probation with six months home detention and restitution of $62,360.24 on his conviction of theft of government property, United States Attorney David J. Hickton announced today.
Senior United States District Judge Gustave Diamond imposed the sentence on Gavin Fowkes, 40.
According to information presented to the court, over a period of six years, Fowkes stole $62,360.24 worth of Social Security Disability Income payments to which he knew he was not entitled. The payments had been directly deposited by the Social Security Administration into a bank account held by a relative of Fowkes.
Prior to imposing sentence, Judge Diamond took into consideration the defendant's lack of a criminal history, his early acceptance of responsibility and the defendant's ability to pay restitution through his full-time employment as a mechanic.
Assistant United States Attorney Tonya Sulia Goodman prosecuted this case on behalf of the government. The Office of the Inspector General for the Social Security Administration conducted the investigation that led to the prosecution of Fowkes.
Defendants Sentenced to Prison and Ordered to Pay $8.5 Million to Victims of Mortgagte-Fraud SchemeRead the Press Release
PANAMA CITY, FLORIDA – Pamela C. Marsh, United States Attorney for the Northern District of Florida, announced that earlier today, United States District Judge Richard Smoak ordered defendants, who were convicted several months ago for their roles in a complicated mortgage-fraud scheme, to pay more than $8.5 million to victims of the scheme. Avinie Maurice Bates, III, 41, of Miami; Jill Beth Newman Zuravel, 47, of Boynton Beach; Alan Jay Nathan, 60, of Boca Raton; and Meredith Lelann King, 38, of Destin were held jointly responsible for repaying the victims $8.5 million in losses caused by the scheme, and Joann V. Walter, 56, of Parkland was held jointly responsible for repaying $2.4 million of the losses.
The evidence presented in the case showed that Bates held himself out as a real-estate investor with a Miami investment company, known as Right Choice Housing, LLC. Zuravel acted as the attorney for Right Choice Housing. Nathan owned Mortgage Bankers of America Group, Inc., a mortgage company located in Boca Raton, and Walter was a mortgage broker with Mortgage Bankers of America. King was a closing agent employed by Blue Dolphin Title, LLC, a title company located in Panama City Beach.
The evidence further showed that, in 2005 and 2006, the defendants obtained over $9 Million in mortgages from lenders to purchase ten properties in Panama City and Panama City Beach. Bates found properties, entered into sales contracts to purchase the properties at one price (the “lower sales price”), and listed the buyer on the contracts as “Right Choice Housing, LLC and/or assigns.” Then Bates, Zuravel, Nathan, and Walter convinced individuals in the Miami area to release their credit information in exchange for up to $30,000. Once these individuals (the “straw buyers”) were in place, Zuravel prepared the legal documents to assign the sales contracts from Bates and Right Choice Housing to the straw buyers at a much higher price (the “higher sales price”).
Once these assignments were made, Nathan and Walter prepared loan applications for the straw buyers, in which they falsely inflated the straw buyers’ income, employment, bank account balances, and intent to reside at the properties – all for the purpose of fraudulently qualifying the straw buyers for the millions of dollars in loans.
After the loans had been approved by the lenders, King conducted the property closings at Blue Dolphin Title in Panama City Beach. At the closing, she used the difference between the lower and higher sales prices to cover the straw buyers’ required down payments and then paid the rest to Bates, Zuravel, and Nathan. Of that balance, King wired over $1.2 million to Bates or to companies owned by Bates, such as Gold by Gold and Bates Enterprises.
By the end of 2006, all of the mortgages were in default, and all of the properties have since been foreclosed upon or are in foreclosure proceedings.
At the sentencing hearings for the defendants, held in September, the Court determined the following terms of imprisonment for each defendant, but reserved ruling on the issue of restitution until a hearing could be held:Bates was sentenced to just over 12 years in prison.
Zuravel, who cooperated in the case, was sentenced to 4 years in prison.
Nathan, who cooperated in the case, was sentenced to just under 3 years in prison.
King, who cooperated in the case, was sentenced to 2½ years in prison.
Walter, who cooperated in the case, was sentenced to 20 months in prison.
Restitution Hearing
The Court held an evidentiary hearing regarding the restitution a week ago, but reserved ruling until today. The Court ordered the defendants Bates, Zuravel, Nathan and King to pay a total of
8,596,595.24 in restitution to the victims on all ten properties as set forth below, and ordered Walter to pay a total of $2,409,462.38 for her involvement with three of the properties. At the hearing, the Government admitted dozens of exhibits reflecting the outstanding balances on the mortgages, as well as the price for which the properties were sold after foreclosure or current taxable value to establish the amount owed to the victim financial institutions and sellers. The Government’s evidence showed that, to date, the total loss on all of the mortgages was approximately $12 million, and the fair market value of the properties was just under $3 million.Property
Restitution Ordered
Victim
23001 Front Beach Road
Panama City Beach, Florida$610,489.42
JP Morgan Chase
$486,865.63
$200,000.00Aurora Loan Services
Ocwen Loan Servicing, LLC21222 Front Beach Road
Panama City Beach, Florida$747,704.42
$375,000.00American Home Mortgage Servicing Inc.
Ocwen Loan Servicing, LLC1501 Trout Lane
Panama City Beach, Florida$421,268.54
$160,000.00
$95,000.00Aurora Loan Services
Wingspan Portfolio Advisors
Marie Beamer483 Wahoo Road
Panama City Beach, Florida$822,957.64
$194,250.00HSBC Bank
Ocwen Loan Servicing, LLC1522 Trout Lane
Panama City Beach, Florida$1,310,350.58
$116,640.00Ocwen Loan Servicing, LLC
Thomas & Deborah Frowert2729 Kings Road
Panama City, Florida$474,640.15
Bank of America
4452 Ashland Road
Panama City, Florida$1,112,849.77
$120,000.00Selene Finance
DTA Solutions, LLC2843 Longleaf Road
Panama City, Florida$895,394.50
Selene Finance
342 Fairway Boulevard
Panama City Beach, Florida$453,184.59
Deutsche Bank
TOTAL
8,596,595.24
“This case is a stark reminder of the lengths to which greed-motivated criminal minds will go,” said U.S. Attorney Marsh. “At a time when the economy and the real-estate market were on a downward trajectory, these defendants were not afraid to make a bad situation worse. In cases driven by greed, restitution to the victims is a critical part of the penalty paid by these offenders.” Ms. Marsh also expressed her deep gratitude to the work of the Florida Office of Financial Regulation – Bureau of Financial Investigations, the Florida Department of Financial Services - Division of Insurance Fraud, and the U.S. Postal Inspection Service, whose excellent work led to the results in this case.
The case was prosecuted by Assistant U.S. Attorney Gayle Littleton.Dayton Man Charged with Viewing Child Pornography While A Patient at VA Medical CenterRead the Press Release
CONTACT: Fred Alverson
Public Affairs OfficerDAYTON – A federal grand jury has charged Charles E. Suttles, 55, of Dayton with Fairfield with one count of possession of child pornography for allegedly viewing sexually explicit images of minor children while he was a patient at the Veterans Affairs Medical Center in Dayton in 2010.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Gavin McClaren, Resident Agent in Charge, Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division, announced the indictment today.
The indictment, which was returned on January 22, 2013, alleges that in July 2010 Suttles possessed one or more matters which contained visual depictions involving the use of a minor engaging in sexually explicit conduct. Suttles was an inpatient at the Dayton VAMC. Suttles allegedly had the material on a removable computer storage device and viewed it in a computer room available to patients at the center.
The crime of possession of child pornography is punishable by at least ten years and up to 20 years in prison when the defendant has been previously convicted of that crime, plus a period of supervised release and requirements to register as a sex offender anywhere he lives, works or raises a family. Suttles was convicted in 2003 of possessing child pornography.
U.S. Magistrate Judge Michael R. Merz ordered Suttles held without bond pending trial at a detention hearing yesterday. U.S. District Judge Timothy S. Black will schedule the trial.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
U.S. Attorney Stewart commended the investigation by the VA Inspector General’s Criminal Investigation Division, the Dayton VA Medical Center Police who assisted with the investigation and Assistant U.S. Attorney Benjamin Glassman, who is representing the United States in the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Dallas Man in Federal Custody for Aiming A Laser Pointer at AircraftRead the Press Release
DALLAS — Kenneth Santodomingo, aka “Juan Joel Pagan,” 22, has been charged in a federal criminal complaint with aiming a laser pointer at an aircraft. It is anticipated that he will make his first appearance in federal court in Dallas this afternoon at 2:00 p.m., before U.S. Magistrate Judge Paul D. Stickney. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to the complaint filed late yesterday in federal court in Dallas, at approximately 4:08 a.m. yesterday morning, January 28, 2013, uniformed Dallas Police Department (DPD) officers were operating a DPD helicopter, flying over the area of 8000 Umphress in Dallas, when the cockpit was illuminated, approximately four times, by a laser pointer. The intensity of the light obscured the vision of the pilot and impaired the pilot’s ability to control the aircraft.
The DPD officers in the helicopter pinpointed the location in Dallas where the laser originated and directed officers on the ground to a residence at 7719 Lake June Road, where the laser light originated from the back yard. Santodomingo answered the officers’ knock at the front door of the residence. Officers explained that an individual was observed illuminating the DPD helicopter with a laser pointer from the back yard and was then seen running into the house through the back door. After officers informed Santodomingo that the incident had been recorded, he admitted pointing the green laser light at the helicopter to see how far it would go. The officers obtained the laser pointer from Santodomingo.
The complaint further notes that the video taken by the DPD helicopter showed that the individual using the laser in the backyard fit the description of Santodomingo and appeared to wear the same short style underwear at the time of the offense that Sandodomingo was wearing when talking with officers.
A federal criminal complaint is a written statement of the essential facts of the offense charged, and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment. The maximum penalty for the offense charged, however, is five years in prison and a $250,000 fine.
The case is being investigated by the DPD and the FBI. Assistant U.S. Attorney Katherine Miller is in charge of the prosecution.
Couple Handed Lengthy Sentences in International Cocaine Trafficking ConspiracyRead the Press Release
BROWNSVILLE, Texas – Norma Alicia Gallegos, 30, and her husband Jose Carlos Aguilar, 32, have been sentenced for their roles in a large-scale international cocaine trafficking conspiracy, United States Attorney Kenneth Magidson announced today. Gallegos aka “La Muchacha” and Aguilar, both of Harlingen, entered pleas of guilty Feb. 28, 2012, to conspiracy to possess with intent to distribute more than five kilograms of cocaine.
Today, U.S. District Judge Hilda G. Tagle, sentenced Gallegos to a total of 112 months in federal prison noting her lack of criminal history. Aguilar will serve 168 months of imprisonment.
At the hearing, additional testimony was presented including that Gallegos was the highest ranking member of the Gallegos Drug Trafficking Organization in the United States and worked closely with the Gulf Cartel in Mexico to move cocaine into the United States. Gallegos utilized her family members, including her sister Conchita Gallegos, brother Erik Gallegos and husband, to transport the cocaine she received from Mexico to various points in the United States including Houston and St. Louis, Mo.Gallegos arranged for the Gulf Cartel to deliver drugs to her and then arranged for her own family members and drivers to assist with the transport of the drugs to the interior of the United States. On June 6, 2011, approximately 25 kilograms of cocaine from the Gallegos Drug Trafficking Organization was intercepted en route from Harlingen to St. Louis by agents with the Drug Enforcement Administration (DEA).
On Dec. 10, 2011, another five kilograms of cocaine was tracked by DEA agents as it was transported from Houston to St. Louis which led to the arrests of nearly all of the leadership of the Gallegos Drug Trafficking Organization.
The 30 kilograms of cocaine was all intended for members of the Black Mafia Family Street Gang - a nationally present and highly organized street gang responsible for numerous drug related and violent crimes throughout the United States. Members of the Black Mafia Family are responsible for the distribution of a significant amount of cocaine, heroin and marijuana in the St. Louis area.
Conchita Gallegos, of Houston, also pleaded guilty and will serve 38 months in prison. Erik Gallegos, of Harlingen, and others were prosecuted in the Eastern District of Missouri and have already been sentenced to federal prison. Additionally, numerous members of the Black Mafia Family of Saint Louis and their associates have been arrested and are pending prosecution in the Eastern District of Missouri in connection with this case.
The investigation leading to the criminal charges was a joint effort between DEA in both Brownsville and Saint Louis, as well as the Harlingen and Saint Louis County Police Departments and the Franklin County, Mo., Drug Task Force.
Assistant United States Attorney Holly D’Andrea prosecuted the case.
Cottage Grove Man Sentenced to Federal Prison for $879,000 Tax FraudRead the Press Release
Defendant filed more than 70 false federal excise tax returns on behalf of his business, Side Pocket Food Company, and owes more than $879,000 in federal excise taxes
Eugene, Ore. - Today, Chief U.S. District Court Judge Ann Aiken sentenced William Myers, 66, of Cottage Grove, Oregon, to serve one year and one day in prison for failing to pay $879,000 in federal excise taxes and for filing more than 70 false federal excise tax returns on behalf of his company, the Side Pocket Food Company. Upon release from prison, the defendant must serve three years of supervised release, including 100 hours of community service each of the three years and pay restitution in the amount of $873,186.88. Pursuant to a plea agreement, defendant admitted that he owes more than $879,000 in federal excise taxes and filed more than 70 false excise tax returns. Additionally, defendant was operating an illegal still inside the company warehouse.
According to court records, the Side Pocket Food Company is a distilled spirits plant, primarily in the business of blending and bottling distilled spirits, in Cottage Grove, Oregon. It purchases bulk alcohol and bulk distilled spirits from manufacturers or bulk distillers, and the Alcohol and Tobacco Tax and Trade Bureau (TTB) issued the company an operating permit to operate as a rectifier (processor), warehouseman, and bottler. As a licensed distilled spirits plant, the company was required to file federal excise tax returns with the TTB and to pay federal excise taxes to the TTB.
Despite collecting federal excise taxes from the company's clients, Meyers failed to pay the federal excises taxes to the TTB. Instead, Meyers and others used this money to pay for personal expenses, including car, house, and credit card payments, and business expenses. When approached by TTB about the excise taxes, defendant engaged in a repeated pattern of evasion, intentionally avoiding TTB's efforts to audit his company and to rectify his federal excise tax situation. Defendant operated the illegal still in the middle of the company warehouse, distilling wine for local wineries. When tested, the distilled alcohol had dangerous levels of lead and copper, creating a public health risk to unknowing members of the community.
U.S. Attorney S. Amanda Marshall noted, "Defendant cheated his clients, the taxpayers, and the regulatory system, acting as if the rules did not apply to him or his business. Business owners need to understand that this type of conduct will not be tolerated. There are legitimate ways, like bankruptcy, to work through difficult financial times. Theft and tax fraud puts individuals and communities at risk, it is illegal, and will land you in jail."
Timothy Marsh, Deputy Director for Criminal Enforcement, Alcohol and Tobacco Tax and Trade Bureau, (TTB) said, "Failure to pay taxes is not a victimless crime. It robs the community of revenue and hurts law-abiding businesses. TTB is committed to ensuring a level playing field where businesses can compete on an equal and lawful basis."
This case was investigated by the Alcohol and Tobacco Tax and Trade Bureau and is being prosecuted by Assistant U.S. Attorney Scott E. Bradford.
Corpus Christi Teacher Sentenced for Possessing Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – Jesus Orta, an English as a Second Language teacher in Corpus Christi, has been ordered to prison for 110 months, United States Attorney Kenneth Magidson announced today. Orta, 41, was convicted of possessing child pornography following his guilty plea Nov. 13, 2012.
Today, U.S. District Judge Janis Graham Jack imposed the sentence and expressed the need to protect the public from Orta and to recognize the harm he inflicted upon the victims whose images he possessed. Judge Jack further ordered Orta to serve a lifetime of supervised release following completion of the prison term, noting his crime and his troubling history of employment which placed himself around children. Orta was previously employed as a high school teacher and worked at Mental Health and Mental Retardation State School and La Raza Runaway shelter.
Orta, was arrested by the Corpus Christi Police Department’s (CCPD) Internet Crimes Against Children Task Force following the discovery of child pornography during a routine domestic disturbance call in Corpus Christi. CCPD officers responded to a complaint made by Orta against his brother for criminal trespassing. During the investigation of the trespassing case, the brother notified police that Orta was in possession of child pornography. Orta denied the accusations and refused officers consent to search his home for contraband. After the officers left the home to write up the criminal trespass warnings, Orta was observed discarding items of child pornography in a community dumpster on the housing complex grounds. Officers were able to gain entry into the home and several electronic media storage devices were discovered that contained child pornography in addition to the material removed from the dumpster. A subsequent computer forensic analysis was completed on the seized items and numerous images and videos were discovered. Orta was arrested and admitted to possessing the child pornography discovered in his home and the dumptser.
The case was jointly investigated by CCPD and Homeland Security Investigations.
This case, prosecuted by Assistant United States Attorney Lance Duke, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Conspirator Indicted in Bank Fraud SchemeRead the Press Release
Allegedly Used His Employment With a Residential Mental Health Program To Steal Identity Information of Clients to Open Fraudulent Bank Accounts for Personal UseBaltimore, Maryland - A federal grand jury today indicted Derrick Elrod, age 35, of Philadelphia, Pennsylvania in connection with a bank fraud scheme to use stolen, personal identifying information of individuals to open bank accounts and fraudulently obtain cash, merchandise and services.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Wicomico County Sheriff Michael A. Lewis; Acting Special Agent in Charge Sheila Olander of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Michael McGill of the Social Security Administration - Office of Inspector General, Philadelphia Field Division.
“Identity theft and bank fraud is often associated with refund fraud schemes, said Sheila Olander,” Acting Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office. “The object of these schemes is to defraud the government, financial institutions and the taxpaying public. IRS Criminal Investigation welcomed the opportunity to lend its financial expertise in this investigation to assist in dismantling this criminal enterprise.”
Elrod worked for Resources for Human Development, Inc. (RHD), a nonprofit social services organization headquartered in Philadelphia. Elrod was an advisor at a residential program that supports individuals with mental health needs.
According to the five count indictment, from December 2008 through December 22, 2011, Elrod stole the personal identifying information of past or present residents of RHD. He provided the information to co-conspirators Christopher Devine, Quanishia Williamson-Ross, Lenee E. Williamson, Quashonna Williamson, and John Waters. In Maryland, Pennsylvania and elsewhere, Elrod and his conspirators allegedly used the stolen information to open accounts at banks, which Elrod’s conspirators then controlled. Elrod’s conspirators allegedly deposited fraudulent checks into the accounts and obtained check cards, then used the associated check cards at ATM machines to make cash withdrawals from the accounts.
The indictment further alleges that Elrod’s conspirators made fraudulent identification documents using the stolen personal information, with photographs of Devine, Williamson-Ross and Lenee Williamson, which they used, along with the check cards, to make purchases at retail stores, later returning the purchased items for cash.
The indictment further alleges that Elrod’s conspirators also used the check cards to obtain services, such as utilities, cable and cell phone service, and make purchases for their personal benefit at restaurants, drug stores, grocery stores, gas stations and video rentals and other businesses. Elrod and his conspirators allegedly would not pay for the services and merchandise, and the banks suffered a loss when the fraudulent checks deposited by the defendants were returned as unpaid.
Elrod faces a maximum sentence of: 30 years in prison for the bank fraud conspiracy; and two years in prison, consecutive to any other sentence, on each of three counts of aggravated identity theft. No court appearance has been scheduled.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
In related cases, co-conspirators Christopher Andre Devine, age 33; Quanishia Williamson-Ross, age 31; Quashonna Williamson, age 26, and Lenee E. Williamson, age 22, all of Salisbury, Maryland, Frederica, Delaware and Philadelphia, Pennsylvania, and John Waters, age 38, of Philadelphia, previously pleaded guilty to their participation in the conspiracy. Judge Blake has scheduled sentencing for Devine on March 1, 2013 at 9:30 a.m., and for Quashonna Williamson and Waters on March 29, 2013 at 10:30 a.m. and 2:00 p.m., respectively. Williamson-Ross and Lenee Williamson are scheduled to be sentenced on March 5 and March 6, 2013, respectively.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
United States Attorney Rod J. Rosenstein thanked HSI Baltimore, the Wicomico County Sheriff’s Office, IRS-CI and the Social Security Administration - Office of Inspector General for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys Paul E. Budlow and Kristi N. O’Malley, who are prosecuting the case.
Colorado River Man Sentenced to 15 Years in Federal Prison for Child AbuseRead the Press Release
PHOENIX – On Jan. 28, 2013, Brice Little, 29, of Parker, Ariz., and a member of the Colorado River Indian Tribes, was sentenced by U.S. District Judge Frederick J. Martone to 15 years in federal prison followed by supervised release. Little pleaded guilty on Oct. 2, 2012 to child abuse under an assimilated Arizona statute.
Little was watching his girlfriend’s daughter, a four-month old infant, in a motel room on the Colorado River Indian Tribes Indian reservation. While under his care, the victim suffered serious injury, including severe head trauma. Little failed to obtain any medical treatment for her, and instead, he watched television. The victim later died as a result of the injuries.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Colorado River Indian Tribes Police Department. The prosecution was handled by Dyanne Greer and Jennifer E. Green, Assistant U.S. Attorneys, District of Arizona, Phoenix.CASE NUMBER: CR-12-0206-PHX-FJM
RELEASE NUMBER: 2013-009_LittleFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Colorado Man Sentenced for Scheming Investors Out of $7 MillionRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 37-year-old Colorado man was sentenced for scheming investors out of more than $7 million. United States District Court Judge Patrick J. Schiltz sentenced Evan Matthew Flaxman, of Silverthorne, Colorado, to 52 months in prison on one count of mail fraud in connection to the crime. Flaxman was charged on June 14, 2012, and pleaded guilty on July 25, 2012.
In his plea agreement, Flaxman admitted that from December of 2009 through March of 2012, he induced investors to give him money, telling them he had extensive financial expertise and personal wealth and resources. That was not the case. He subsequently provided one investor with documents indicating investment gains. In reality, however, Flaxman had used investment funds for personal use, including the purchase of a Ferraris and Porsche automobiles and a Rolex watch. He also paid his taxes with the money.
This case was the result of an investigation by the U.S. Postal Inspection Service and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Thomas Calhoun-Lopez.Citizen of Jamaica Admits Illegally Reentering the U.S. After DeportationRead the Press Release
January 29, 2013David B. Fein, United States Attorney for the District of Connecticut, announced that HAROLD ANTHONY SOLTAU, 43, a citizen of Jamaica last residing in Bridgeport, waived his right to indictment and pleaded guilty today before United States Magistrate Judge Thomas P. Smith in Hartford to one count of illegal reentry of a removed alien.
According to court documents and statements made in court, SOLTAU was deported from the United States to Jamaica in June 1990 after he was convicted of a felony drug trafficking offense. He subsequently reentered the United States without first obtaining the consent of the Attorney General of the United States or his successor, the Secretary for the Department of Homeland Security, to reapply for admission into the United States.
SOLTAU has been detained since his arrest on July 31, 2012.
SOLTAU is scheduled to be sentenced by Senior United States District Judge Alfred V. Covello on April 23, 2013, at which time SOLTAU faces a maximum term of imprisonment of 20 years.
This case was investigated by U.S. Immigration and Customs Enforcement and is being prosecuted by Assistant United States Attorney Felice M. Duffy.
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