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28 January 2013
Attorney Pleads Guilty in Mortgage Fraud SchemeRead the Press Release
PITTSBURGH - An attorney pleaded guilty in federal court to charges of wire fraud, filing false income tax returns , and failing to file income tax returns, United States Attorney David J. Hickton announced today.
On Jan. 25, 2013, Lisa Gerideau-Williams, 46, of New Kensington, Pa., pleaded guilty to sixteen counts before Chief United States District Judge Gary L. Lancaster.
In connection with the guilty plea, the court was advised that Gerideau-Williams was an attorney who operated a mortgage broker business called Genesis Home Solutions, and two companies specializing in closing real estate transactions called Millennium Settlement Services and Professional Settlement Solutions. Through these companies Gerideau-Williams operated a complex and multi-faceted fraud scheme.
One aspect of the scheme involved the submission of loan applications to lenders. The loan applications were fraudulent because Gerideau-Williams submitted them without the authority of the borrowers and they contained false information related to the borrowers' financial condition. For example, Gerideau-Williams submitted loan applications on behalf of her brother and her elderly aunt that were not authorized by either. In addition, Gerideau-Williams represented to lenders that her elderly aunt owned and operated a lucrative cleaning business when, in fact, her aunt was a retired state worker. Gerideau-Williams also furthered the fraud by submitted fake documents supporting the misrepresentations in the loan applications and by forging the signature of her brother and her aunt.
Gerideau-Williams' fraud also related to her operation of businesses that closed real estate transactions. Gerideau-Williams received money from lenders into her trust account that was required to be disbursed to pay liabilities associated with the collateral. In that way the lender would stand in the first lien position related to the collateral. Gerideau-Williams, rather than paying those liabilities, would simply take the money and use it to support her lavish lifestyle.
Gerideau-Williams also defrauded borrowers. Borrowers paid for title insurance and for other services such as recording deeds and mortgages. Rather than providing these services, however, Gerideau-Williams simply took the fees for those services, but failed to actually provide those services.
Title insurance companies were also victimized by Gerideau-Williams' fraud. At closings, Gerideau-Williams colleted fees from borrowers for title insurance. Gerideau-Williams, however, failed to remit those payments to the title insurance companies. In addition, some of the title insurance companies terminated Gerideau-Williams' authority to issue title insurance under their names. Despite the termination, however, Gerideau-Williams continued to issue title insurance on fraudulent transactions as if she was authorized to do so.
Gerideau-Williams' fraud was particularly egregious related to the property located in Pittsburgh, Pa. Prior to 2005, Gerideau-Williams rented that property and it was her residence. On Sept. 6, 2005, through her fraudulent businesses, she sold the property from the rightful owner of the property to her elderly aunt without the knowledge of either the owner or her aunt. A lender financed the purchase, and Gerideau-Williams simply took all of the proceeds from the transaction for her personal benefit. Gerideau-Williams, however, did not record the deed or the mortgage related to the property and therefore the property still appeared on the public record to be owned by the rightful owner of the property free of any mortgages.
On March 13, 2006, Gerideau-Williams arranged to purchase the property in her own name financed through a fraudulently obtained loan. While she recorded the deed transferring ownership of the property to her own name, she did not record the mortgage and therefore, according to the public record, it appeared that she owned the property free of any liens.
On Aug. 7, 2006, Gerideau-Williams sold the property to her brother, and her brother financed the purchase through a fraudulently obtained loan secured by Gerideau-Williams. Gerideau-Williams received the proceeds from the sale, but she did not record the deed or the mortgage and therefore the public record still showed that she owned the property free of any liens.
On Jan. 19, 2007, Gerideau-Williams sold the property to her brother again, and her brother again financed the purchase through a fraudulently obtained loan secured by Gerideau-Williams. Gerideau-Williams again received the proceeds from the sale, but she again did not record the deed or the mortgage and therefore the public record still showed that she owned the property free of any liens.
Finally, on Feb. 20, 2007, Gerideau-Williams sold the property to her brother again, and her brother again financed the purchase through a fraudulently obtained loan secured by Gerideau- Williams. Gerideau-Williams again received the proceeds from the sale, but she again did not record the deed or the mortgage and therefore the public record still showed that she owned the property free of any liens.
Equally egregious are the various loans Gerideau-Williams secured in the name of her elderly aunt. As mentioned above, Gerideau-Williams arranged for her aunt to purchase 120 Cypress Hills Drive from the rightful owner of the property. That purchase was financed through a loan fraudulently obtained by Gerideau-Williams.
Gerideau-Williams' aunt owned a home in Harrisburg, Pa. On Nov. 2, 2005, Gerideau- Williams arranged for a fraudulent refinance loan collateralized by her aunt's Harrisburg property.
On Jan. 30, 2007, Gerideau-Williams arranged for a second fraudulent refinance transaction collateralized by that same property.
On March 12, 2007 and March 21, 2007, Gerideau-Williams, without the authority of her elderly aunt, secured to other refinance transactions collateralized by that same property. For each transaction, Gerideau-Williams took the proceeds from the loans and used those proceeds to support her lavish lifestyle. In neither of those transactions, however, did she record the mortgages. In connection with those transactions she issued title insurance without the authority of the title insurance companies, forged her aunt's signature on various documents, and failed to pay the liabilities associated with the collateral as required by the lenders.
For the 2004 tax year, Gerideau-Williams, who took taxation classes at Georgetown University School of Law toward an advanced degree in tax law, filed tax returns that drastically understated her income because she failed to include the more than millions dollars earned in the course of her fraud schemes. For the 2005 and 2006 tax years, she did not file her income tax returns.
Judge Lancaster scheduled sentencing for June 7, 2013. The law provides for a total sentence of 235 years in prison, a fine of $3,700,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The Mortgage Fraud Task Force conducted the investigation that led to the prosecution of Gerideau-Williams. 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 Investigations; 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.
Ashley Ann Lamere Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on January 28, 2013, before Chief U.S. District Judge Richard F. Cebull, ASHLEY ANN LAMERE, a 32-year-old resident of Billings, appeared for sentencing. LAMERE was sentenced to a term of:
Prison: 100 months
Special Assessment: $200
Restitution: $33,823.28
Forfeiture: $244,890.00
Supervised Release: 3 years
LAMERE was sentenced in connection with her guilty plea to wire fraud and bribery.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica T. Fehr, the government stated it would have proved at trial the following:
LAMERE, aka Ashley Ann Thompson, operated numerous office supply companies and/or used various company names to defraud the United States military through various schemes, to include the following: billing government credit cards without authorization; billing more than was authorized on government credit cards; and bribing government officials to purchase additional items with cash and gift cards. LAMERE operated and/or used the following companies to accomplish her scheme: Base Suppliers, Inc., Federal Office Supply, Fresh, Government Cartridge Supply, Impac Office Supply, Red Dog Toner, Rimrock Office Supply, Servumart, and Yellowstone Office Supply. LAMERE operated the previously described companies out of two Billings addresses between 2005 and 2010. The companies focused on selling office supplies to government agencies, primarily the military, through telemarketing.
To accomplish the scheme to defraud, LAMERE and her employees gave military procurement personnel Western Union and Money Gram wires, gift cards and cash to either induce them into buying office supplies through the companies and/or as a gratuitous gift after the order was placed. LAMERE and her employees sent the military procurement personnel the wires, cards and cash via Federal Express packages, often times sent to the procurement personnel's personal address. Even after LAMERE and her employees were told by procurement personnel that they were not allowed to accept gifts over approximately $20, LAMERE and her staff continued to offer and provide amounts far in excess of $20 to military members.
Once military personnel were promised wires, cash and gift cards, LAMERE and her employees often did not send all the agreed upon supplies. At times, no supplies at all were sent by LAMERE and her employees to fulfill the individual orders. Also, after obtaining a Government Purchase Card (GPC) number from a military member, LAMERE and her employees made unauthorized charges on the GPC cards.
Military procurement personnel can authorize, without a supervising officer's approval, charges under $3,000. In an effort to circumvent the military procurement rules and regulations LAMERE set up numerous companies so more than $3,000 could be ordered from the various companies on any given day. LAMERE went so far as to provide guidance to military procurement personnel to assist them in avoiding detection from auditing authorities.
A total of 24 government procurement professionals were interviewed by law enforcement. Of the 24 interviewed, 17 individuals admitted receiving cash and/or gift cards in exchange for placing supply orders with the subject companies. In addition law enforcement used a cooperating witness and an undercover agent to record and monitor LAMERE and her business practices. Both individuals' contacts with LAMERE supported the claims that LAMERE bribed government procurement officers and billed unapproved charges to GPC cards. Specifically, the investigation uncovered that on or about March 12, 2010, at Billings, LAMERE directly offered cash to E.C., a member of the United States Navy responsible for obtaining supplies on behalf of his/her unit, if he/she continued to purchase unnecessary office supplies from LAMERE's companies. On March 15, 2010, at Billings, LAMERE caused to be transmitted by means of wire communication in interstate commerce a Money Gram wire transfer of $300 from LAMERE, in Billings, to E.C. in Jacksonville, Florida, to pay the bribe offered on March 12, 2010.
From 2008 to 2010, LAMERE obtained more than $1 million in purchases from credit cards through her various companies. LAMERE's business expenses, as deduced from her bank records, were less than $100,000 during the same time period.
The case against Ashley Lamere was an excellent example of cooperation amongst numerous agencies all over the United States," said U.S. Attorney Michael W. Cotter. "Bribery, as in this case, disrupts the good and proper functioning of the government. Today's sentence demonstrates that the District of Montana takes allegations of bribery seriously and will vigorously investigate and prosecute those perpetrating fraud on the United States."
Ethics matter for federal employees and those who do business with the federal government," said GSA Inspector General Brian D. Miller. "We have no tolerance for bribes, kickbacks, or corruption."
The Defense Criminal Investigative Service (DCIS), along with our law enforcement partners, continue to aggressively investigate public corruption and fraud involving Department of Defense and other Federal contracting matters. This sentencing demonstrates the Federal Government's continuing resolve to ensure those who violate the law are brought to justice and held accountable for their actions. This sentence will help deter others who would consider betraying the public trust", said Special Agent in Charge Janice Flores, DCIS, Southwest Field Office.
Rest assured those who find ways to fraudulently benefit from government programs will be brought to justice. IRS Criminal Investigation will work diligently with our law enforcement partners to combat such fraud," said Stephen Boyd, IRS Criminal Investigation Special Agent in Charge for the State of Montana.
Special Agent in Charge David J. Johnson of the FBI Salt Lake City Division: "The defendant's sophisticated network of bribery and fraud caused substantial losses to taxpayers. Using cash and gift cards as bait to illegally gain government purchasing card numbers, the defendant devised a far-reaching and multi-million dollar scheme against the U.S. Government. The FBI would like to thank all the investigators and prosecutors who aggressively pursued this case and brought this defendant to justice."
The highly successful nation-wide task force included Special Agents of the Western Region, Investigations Division, Office of the Inspector General, Defense Logistics Agency. Cooperation between the various law enforcement and investigative agencies was critical to the overall success of the task force." Kathy M. Roberts, Supervisory Special Agent, Chief, Western Region, DLA Office of the Inspector General Investigations Division.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that LAMERE will likely serve all of the time imposed by the court. In the federal system, LAMERE does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Federal Bureau of Investigation, the Navy Criminal Investigation Service, General Services Administration - Office of Inspector General, U.S. Department of Defense - Office of Inspector General, Criminal Investigation Division of the Internal Revenue Service, Air Force Criminal Investigation Division, and the Army Criminal Investigation Division.
25 January 2013
Yassine Brothers Sentenced to Federal Prison in Money Landering SchemeRead the Press Release
In Austin this morning, brothers Hussein Ali “Mike” Yassine, age 40, and Hadi Ali Yassine, age 36, were sentenced to 151 months and 60 months in federal prison, respectively, for their roles in a money laundering scheme.
In addition to the prison terms, U.S. District Judge Sam Sparks ordered that Mike Yassine pay a $60,000 fine; Hadi Yassine, a $30,000 fine. Judge Sparks also ordered that both defendants be placed under supervised release for a period of three years after completing their prison terms.
On October 12, 2012, following a seven-day trial, a jury convicted Mike and Hadi Yassine of one count of conspiracy to commit money laundering. The jury also convicted Mike and Hadi Yassine of three counts and two counts of money laundering, respectively. The jury found that in 2008 and 2009, Mike and Hadi Yassine used several business establishments, including nightclubs, located in downtown Austin to launder over $200,000 in cash, which they believed to be the proceeds of narcotics trafficking.
This investigation was conducted by agents and investigators with the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Austin Police Department together with the Drug Enforcement Administration, Texas Attorney General’s Office, Texas Alcoholic Beverage Commission and the Texas Comptroller’s Office. Assistant United States Attorney Gregg N. Sofer is prosecuting this case on behalf of the Government.Woonsocket Drug Dealer Sentenced to 24 Months in Federal PrisonRead the Press Release
PROVIDENCE, R.I. – Dwayne O’Hagan, 30, of Woonsocket, arrested by members of the Drug Enforcement Administration’s (DEA) Drug Task Force in April 2012 for dealing cocaine on the streets of Woonsocket, was sentenced in U.S. District Court in Providence today to 24 months in federal prison, the high end of advisory federal sentencing guidelines, announced United States Attorney Peter F. Neronha; John J. Arvanitis, Special Agent in Charge of the DEA’s New England Field Division; and Woonsocket Police Chief Thomas S. Carey.
U.S. District Court Judge William E. Smith also ordered O’Hagan to serve 3 years of supervised release upon completion of his prison term. O’Hagan pleaded guilty on August 27, 2012, to three counts of distribution of cocaine, as charged in a three-count indictment returned by a federal grand jury on May 9, 2012.
According to information presented to the court, an undercover DEA Drug Task Force investigation into O’Hagan’s drug trafficking activities, which included the use of electronic surveillance, revealed that on three occasions between March 21, 2012, and April 9, 2012, he sold various amounts of cocaine. O’Hagan admitted to the court that during that time he sold approximately 65 grams of cocaine.
O’Hagan was arrested and detained on April 24, 2012.
The case was prosecuted by Assistant U.S. Attorney Stephen G. Dambruch and Special Assistant U.S. Attorney Benjamin S. Towbin.
Contact: 401-709-5357
[email protected]Wheeling Resident Enters Plea to Cocaine ChargeRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistWHEELING, WEST VIRGINIA - A 32 year old Wheeling, West Virginia, entered a plea of guilty on January 23, 2013, in United States District Court in Wheeling before Magistrate Judge James E. Seibert.
United States Attorney William J. Ihlenfeld, II, announced that ANTON DRAKE entered a plea of guilty to “Distribution of Cocaine” on September 20, 2011, in Benwood, West Virginia. At the time of this distribution, DRAKE was on Federal supervised release and as part of his plea has admitted to violations of his supervised release and will serve a sentence of 12 months and 1 day consecutive to any sentence he receives on the current charge. DRAKE, who is on bond pending sentencing, faces up to 20 years imprisonment and a
$1,000,000 fine.The case was prosecuted by Assistant United States Attorney John C. Parr and investigated by the Ohio Valley Drug & Violent Crime Task Force, consisting of officers from the Wheeling Police Department, the Ohio County Sheriff’s Department, the West Virginia State Police, and the Drug Enforcement Administration.
Week in Review – South BendRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary L. Hatton
www.usdoj.gov/usao/inn/ Fax: (219) 852-2770
South Bend, Indiana -- The United States Attorney’s Office announced today that:
PLEAS:
Shawn Lunsford , 34, of Peru, Indiana, pled guilty before Magistrate Judge Christopher Nuechterlein to the felony offense of possession of child pornography.Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. Sentencing has been set for 4/25/13.This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the Federal Bureau of Investigation.This case is being prosecuted by Assistant United States Attorney John Maciejczyk.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS:
David Blystone, 45, of Rochester, Indiana, was sentenced by District Judge Robert Miller, Jr. to 18 months imprisonment and 1 year of supervised release after pleading guilty to the felony offense of possession of a machine gun.According to documents filed in this case, Blystone bought kits and manufactured fully automatic weapons, fireworks and destructive devices.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case was prosecuted by Assistant United States Attorney Jesse Barrett.
Week in Review – HammondRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ FAX (219) 852-2770
Hammond, Indiana - The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS:
Phillip Rucker, 42, of Gary, Indiana, a defendant in the case US v Haymon et al., was sentenced by Senior District Judge Rudy Lozano to 30 months imprisonment, restitution of $73,488.95 and 1 year of supervised release after being found guilty at trial of the felony offense of wire fraud. Rucker participated in a scheme to defraud lenders and others by providing false information on loan applications and HUD-1 settlement statements and by recruiting individuals to purchase real estate in Gary, Indiana on behalf of Jerry Haymon. This case was the result of an investigation by the Federal Bureau of Investigation.This case was prosecuted by Assistant United States Attorney Gary Bell.
Christopher Bunch, 54, of Battleground, Indiana, was sentenced by Senior District Judge Rudy Lozano to 408 months imprisonment and 20 years of supervised release after pleading guilty to the felony offense of inducing minor children to engage in sexually explicit conduct for the purpose of producing visual depictions of such conduct.According to documents filed in this case, law enforcement was dispatched to investigate a complaint of possible child pornography found at a residence shared with Bunch.A roommate reported that she found images depicting child pornography on a camera belonging to Bunch and was able to positively identify a child as a minor female who had previously spent time at the residence.Law enforcement obtained a warrant to search all of the computers, cameras and electronic media belonging to Bunch.The officers found images and videos of 2 minor females engaging in sexually explicit conduct.This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Tippecanoe County Sheriff’s Department.This case was prosecuted by Assistant United States Attorney Jill Koster.
Edward Kabella, 43, of Crown Point, Indiana, was sentenced by District Judge Joseph Van Bokkelen to 24 months imprisonment, restitution of $26,115.74 to the Internal Revenue Service, a $6,000 fine and 1 year of supervised release after pleading guilty to the felony offenses of conspiracy to provide false information to a Federal Firearms Licensee, conspiracy to defraud the Food and Drug Administration and making a false statement on a tax return.According to documents filed in this case, Kabella used his position as a law enforcement officer with the Lake County Sheriff’s Department to participate in a conspiracy to obtain machineguns and laser sights, restricted firearms. Kabella and his codefendants would then sell them on the internet. This case was the result of an investigation by the Internal Revenue Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Food and Drug Administration and the Department of Defense Criminal Investigation Service.This case was prosecuted by Assistant United States Attorney Philip Benson.
Timmothy Williams, 34, of Chicago, Illinois, was sentenced by Chief Judge Philip Simon to 80 months imprisonment, restitution of $37,340.34 and 3 years of supervised release after pleading guilty to the felony offenses of misuse of a Social Security Number, fraud with identification documents and aggravated identity theft.This case was the result of an investigation by the United States Postal Service-Office of the Inspector General and the Internal Revenue Service.This case was prosecuted by Assistant United States Attorney Gary Bell.
Week in Review – Fort WayneRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ FAX (219) 852-2770
Fort Wayne, Indiana- The United States Attorney’s Office announced the following activity:
PLEA:
Russell Cowherd, 33, of Fort Wayne, Indiana, pled guilty before Magistrate Judge Roger Cosbey to the felony offense of possession of a firearm by a convicted felon.Magistrate Cosbey is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. These charges were filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department.This case is being prosecuted by Assistant United States Attorney Lovita Morris King.
Danny Villarreal, 28, of Fort Wayne, Indiana, pled guilty before Magistrate Judge Roger Cosbey to the felony offense of possession with the intent to distribute methamphetamine.Magistrate Cosbey is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. These charges were filed as a result of an investigation by the Drug Enforcement Administration, the United States Postal Service-Office of the Inspector General and the Allen County Police Department.This case is being prosecuted by Assistant United States Attorney Lesley Miller Lowery.
Baldemar Robles, 36, of Warsaw, Indiana, pled guilty before Magistrate Judge Roger Cosbey to the felony offenses of maintaining a place for the purpose of distributing cocaine and marijuana, and possession of a firearm by a convicted felon.Magistrate Cosbey is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. These charges were filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Kosciusko County Drug Task Force and the Kosciusko County Prosecutor’s Office.This case is being prosecuted by Assistant United States Attorney Anthony Geller.
Michael Banks, 22, of Fort Wayne, Indiana, pled guilty before Magistrate Judge Roger Cosbey to the felony offense of possession of a firearm by a convicted felon.Magistrate Cosbey is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. These charges were filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department.This case is being prosecuted by Assistant United States Attorney Lovita Morris King.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS:
Terrance Martin, 30, of Fort Wayne, Indiana, was sentenced by District Judge Theresa Springmann to 57 months imprisonment and 2 years of supervised release after pleading guilty to the felony offense of possession of a firearm by a convicted felon.Martin has a prior felony conviction for resisting law enforcement.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department.This case was prosecuted by Assistant United States Attorney Tina Nommay.
Washington County Sheriff Indicted for Conspiracy, Theft of Government MoneyRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced that Richard Stephen Stringer, Sr., 67, of Deer Park, Alabama, has been indicted by a grand jury on charges of conspiracy and theft of government money.
The indictment alleges that Stringer, the Sheriff of Washington County, conspired with others to fraudulently obtain Social Security benefits for one of his employees. According to the charges, Stringer arranged to have the wages of one of his employees be paid to the employee’s wife instead of to the employee, thereby reducing the income reported to the Social Security Administration in his name, allowing the employee to obtain and retain benefits to which he was not entitled.
Stringer was charged with conspiracy and aiding and abetting the theft of government money. Conspiracy carries a maximum penalty of five years in prison and a $250,000 fine. Theft of government money carries up to ten years in prison and a $250,000 fine. The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Sean P. Costello is handling the prosecution on behalf of the United States.
An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until and unless he or she is proven guilty at trial.
Vanderwagen, N.M., Man Pleads Guilty to Unlawful Possession of a FirearmRead the Press Release
ALBUQUERQUE – Darryl L. Alexius, 37, an enrolled member of the Navajo Nation who resides in Vanderwagen, N.M., pled guilty this morning to an indictment charging him with being a felon in possession of a firearm.
Alexius was indicted on Oct. 23, 2012, and charged with unlawfully possessing a firearm and ammunition on May 12, 2012 in McKinley County, N.M. At the time, Alexius was prohibited from possessing firearms and ammunition because he previously had been convicted of aggravated assault and aggravated battery.
During today’s plea hearing, Alexius admitted that he possessed a shotgun and shotgun shells on May 17, 2012. Court records reflect that Alexius committed this offense in Jones Ranch, N.M.
At sentencing, Alexius faces a maximum penalty of ten years of imprisonment. His sentencing hearing has yet to be scheduled.
The case was investigated by the Crownpoint Division of the Navajo Nation Department of Public Safety, and is being prosecuted by Assistant U.S. Attorney Novaline D. Wilson.
Texas Man Sentenced to 2½ Years in Federal Prison for Failure to Register as Sex OffenderRead the Press Release
Jacksonville, Florida - U.S. District Judge Timothy J. Corrigan sentenced Guadalupe M. Longoria (55, Sealy, Texas) to 30 months in prison and a 10-year term of supervised release for failing to register as a sex offender in the state of Florida, after traveling from the state of Texas.
According to court documents, on July 28, 1986, Longoria was charged with two counts of indecency with a child, a second degree felony in Texas. He was found guilty by a Texas jury on December 11, 1986. Because of these convictions, Longoria was required to register as a sex offender for the remainder of his life.
On February 15, 2011, Longoria received and signed official documents advising him that he was required to register with local law enforcement in any area where he resides for more than seven days, and that his obligation to do so was for life. The documents also stated that Longoria had a duty to inform his parole officer, within seven days, before moving to a new residence, and that if moving out of the state of Texas, Longoria must register with the law enforcement agency identified by the Texas Department of Public Safety as the agency designated to receive registration information. Longoria was also required to register within 10 days of arriving in the new state.
After failing to verify registration, in Texas, on May 24, 2011, the Austin County Sheriff’s Office filed a complaint with local law enforcement. Longoria’s family members were interviewed and advised that they had not seen or heard from Longoria since approximately April 2011. A Texas state magistrate then issued an arrest warrant for Longoria’s failure to register as a sex offender.
On May 4, 2012, Longoria was arrested by U.S. Marshals at his place of residence in Jacksonville, Florida for parole violations and failure to register as a sex offender in Texas. During an interview, Longoria stated, among other things, that he knew he was supposed to register and that he had been living in Florida for about a month.
This case was investigated by the United States Marshals Service, the Jacksonville Sheriff’s Office, and the Florida Department of Law Enforcement. It was prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc for more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Stephen Scott Convicted by Jury of Illegal Firearms PossessionRead the Press Release
Jackson, TN – Stephen E. Scott, 42, of Big Sandy, TN, was convicted this week of one count of being a felon in possession of a firearm, announced U.S. Attorney Edward L. Stanton III.
# # # #
Evidence presented at trial revealed that on April 15, 2010, deputies with the Benton County Sheriff's Department responded to a shots-fired complaint. Officers encountered Scott, who admitted to target shooting a shotgun with a juvenile female, and showed deputies where they had been practicing.
Deputies discovered that Scott had been convicted of five prior felonies, including two convictions for burglary, felony theft, and a felony drug manufacturing conviction, and was prohibited from possessing a firearm. Law enforcement obtained a search warrant and served it the following day. The firearm used the previous day was found at the residence, and Scott was taken into custody.
Following the jury’s conviction Scott now faces up to 10 years imprisonment, a $250,000 fine, and supervised release to follow any term of imprisonment. There is no parole in the federal system. Sentencing is scheduled for May 2, 2013 at 9:30 a.m. before District Judge J. Daniel Breen.
The case was investigated by the Bureau of Alcohol, Tobacco and Firearms, the Tennessee Wildlife Resources Agency, and the Benton County Sheriff’s Department. The case is being prosecuted by Special Assistant United States Attorney Beth Hall and Assistant United States Attorney Matt Wilson on behalf of the government.South Florida Man Sentenced to Four Years in Federal Prison for Income Tax FraudRead the Press Release
TALLAHASSEE, FLORIDA – Marvens Jean-Paul, 21, of Opa Locka, Florida, was sentenced yesterday to 48 months in federal prison for his leadership role in a conspiracy to file false claims for federal income tax refunds, involving stolen identities. Jean-Paul was sentenced by U.S. District Judge Robert Hinkle.
Jean-Paul pled guilty in 2012 to two counts of conspiracy to file false claims, seven counts of wire fraud, and four counts of aggravated identity theft based upon his involvement in schemes to file false claims for more than $1 million in federal tax refunds in 2010 and 2011. Jean-Paul admitted to stealing personal identifying information from an office on the campus of Florida A&M University, resulting in the victimization of several recent graduates of FAMU. Illegally using the information of these victims, Jean-Paul and his co-conspirators filed false tax returns that included false wage and income information, as well as false withholding information. At Jean-Paul’s direction, his co-defendants, Kimle Fils-Aime and Guerline St. Charles, cashed tax refund checks generated by one of the schemes at JP Morgan Chase Bank in North Miami, where they worked as tellers. In addition to the checks, Jean-Paul also arranged for the illegally obtained tax refunds to be loaded onto prepaid debit cards, which were used to wire transfer cash. As a result of the false claims, Jean-Paul obtained more than $279,398 in fraudulent income tax refunds.As part of his sentence, Jean-Paul was ordered to pay $280,285 in restitution. Last year, St. Charles and Fils-Aime each pled guilty to conspiracy and were sentenced for their roles in the scheme. Fils-Aime was sentenced to 12 months in prison and ordered to pay $86,748 in restitution. St. Charles was sentenced to five years’ probation, with eight months’ home detention, and was ordered to pay $73,320.03 in restitution.
“As the number of greedy offenders willing to steal identities and tax dollars has grown, so has our ability to track, investigate, arrest, and prosecute these cases, effectively and cooperatively,” said Pamela C. Marsh, United States Attorney for the Northern District of Florida. “We are pursuing those engaged in these schemes, with intensity, and we are ready for tax season.” Ms. Marsh expressed her grateful appreciation for the work of Internal Revenue Service -- Criminal Investigations, the U.S. Postal Inspection Service, and the Leon County Sheriff’s Office, whose joint investigation led to the convictions in the case.
The case was prosecuted by Assistant U.S. Attorney Winifred Acosta NeSmith.Singer in Rock Band Charged in Multi-Million Dollar Loan Fraud CaseRead the Press Release
LOS ANGELES – The frontman of a Los Angeles-based rock band called Lights Over Paris has been charged with submitting false documents to banks to fraudulently obtain millions of dollars worth of loans, money that he allegedly used to fund his band and his lavish lifestyle.
Robert Brandon Mawhinney, who turns 30 today and who authorities believe currently resides in the luxury WaterMarke Tower in downtown Los Angeles, was ordered detained yesterday afternoon by a federal judge.
During the hearing yesterday afternoon in United States District Court, United States Magistrate Judge Charles F. Eick ordered Mawhinney held without bond after determining that he posed a flight risk, given Mawhinney’s frequent travel abroad, conflicting information about his finances and the fact that he had sent hundreds of thousands of dollars to Cyprus.
Mawhinney, who uses the stage name Robb “TaLLLLL” University, was arrested at Miami International Airport earlier this month after he returned from a trip to Buenos Aires. He was subsequently transported to Los Angeles by the United States Marshals Service. Mawhinney was arrested pursuant to a criminal complaint that alleges he applied for loans by submitting phony brokerage statements that falsely showed that he had almost $8 million in assets. The phony statements were altered versions of real statements that showed less than $10,000 in the brokerage accounts.
According to the affidavit in support of the criminal complaint, between August 2009 and April 2011, Mawhinney obtained four loans from Comerica Bank totaling approximately $6.25 million. Mawhinney defaulted on the loans, causing Comerica to suffer losses of approximately $6 million.
Mawhinney allegedly told bank officials that he needed the money to fund his music business and to purchase recording equipment. According to investigators, Mawhinney used the money from the Comerica loans and loans from other banks to pay for travel, entertainment and a luxury tour bus that cost well over $750,000.
The other banks that issued loans to Mawhinney and suffered losses were JP Morgan Chase, Zions Bank and Bank of America, according to court documents.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Mawhinney is charged with making a false statement in a loan application. If he is convicted of the charge in the criminal complaint, Mawhinney would face a maximum statutory penalty of 30 years in federal prison. Mawhinney is scheduled to be arraigned in this case on February 11.
In a related case that was unsealed late yesterday, two former Mawhinney associates were charged with conspiracy to commit loan fraud. Matt Salazar, 29, of Valley Village, and his brother, Jason Salazar, 28, of Grover Beach and Fresno, have agreed to plead guilty.
The Salazar brothers, who are co-owners of the Burbank-based Matt Salazar Recording Productions and part-owners of LA Sound Gallery, also based in Burbank, admitted in court documents that they provided false documents to Bank of America, Greystone Bank and Huntington National Bank to obtain about $1.7 million in loans for their music business.
Mawhinney also used the Salazars’ studio to bolster his own fraudulent loan applications. Mawhinney met with a Comerica loan officer at their recording studio and falsely claimed to be an owner of the studio.
The case against the Salazars has been assigned to United States District Judge Judge Cormac J. Carney, who will schedule a hearing for the brothers to enter their guilty pleas. Once they plead guilty, each of the Salazar brothers will face a statutory maximum penalty of five years in federal prison.
The cases against Mawhinney and the Salazar brothers are the product of an investigation by the Federal Bureau of Investigation and IRS - Criminal Investigation.
Release No. 13-011
Sewickley Heights Man Pleads Guilty in Fraud SchemeRead the Press Release
PITTSBURGH - A resident of Allegheny County pleaded guilty in federal court to a charge of bankruptcy fraud conspiracy, United States Attorney David J. Hickton announced today.
David F. Baker III, 62, of Sewickley Heights, Pa., pleaded guilty to one count before United States District Judge Joy Flowers Conti.
In connection with the guilty plea, Baker conspired to defraud J.P. Morgan and Washington Mutual Bank in mortgage applications in 2005 and 2007 on a $2.5 million condominium in Sarasota, Fla.
Judge Conti scheduled sentencing for May 17, 2013. The law provides for a maximum total sentence of 20 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 offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Gregory C. Melucci is prosecuting this case on behalf of the government.
The Internal Revenue Service, Criminal Investigation, conducted the investigation that led to the prosecution of David F. Baker, III.
Seattle Repeat Offender Sentenced to Ten Year Prison TermRead the Press Release
A repeat offender who was arrested dealing crack cocaine in downtown Seattle was sentenced today in U.S. District Court to 10 years in prison and three years of supervised release for possession of crack cocaine with intent to distribute, announced U.S. Attorney Jenny A. Durkan. DEVIN JENNINGS, 35, had been out of federal prison for only five months when he was arrested for dealing crack cocaine in the 1500 block of Second Avenue in downtown Seattle. Chief U.S. District Judge Marsha J. Pechman imposed two years of the sentence for supervised release violations on the sentence imposed for his 2004 conviction. In that case JENNINGS was sentenced to 100 months in prison for being a felon in possession of a firearm and possession of a firearm with an obliterated serial number. “Your addictions are controlling your decision making,” said Judge Pechman. “If drugs give you a hair trigger temper… you need to leave them behind.”
According to records filed in the case, Seattle Police began surveillance of the area around Second and Pike in downtown Seattle because of persistent street drug dealing. Officers observed JENNINGS selling what appeared to be crack cocaine to multiple customers on August 16, 2012. JENNINGS was arrested and resisted officers when they attempted to search him. JENNINGS was told he would be more thoroughly searched at the police station and was placed in the back of an empty patrol car. En route to the precinct, JENNINGS began kicking violently at the rear passenger door, bending it from its frame. JENNINGS threatened the officers as they removed him from the car. On the back seat and floorboards of the car officers discovered crack cocaine that JENNINGS had attempted to discard through the damaged car door. JENNINGS pleaded guilty in October 2012.
In asking that JENNINGS be sentenced to ten years in prison, prosecutors wrote to the court, that JENNINGS “has now been convicted of ten felony offenses and nearly twice as many non-felony offenses. In light of Jennings’ extremely long, and often times violent, criminal history, the United States believes that a substantial term of imprisonment is appropriate. We also believe that the seriousness of the offense also warrants a lengthy sentence. While the offense did not involve a large quantity of drugs, the amount of crack cocaine was substantial. Moreover, the fact that he returned to dealing drugs so quickly after his release from prison is concerning, as was his post-arrest behavior (i.e., damaging the patrol car, threatening the arresting officers, etc.). Unfortunately, Jennings continues to be a person the community needs to be protected from.”
The case was investigated by the Seattle Police Department and was prosecuted by Assistant United States Attorney Andrew Colasurdo.
School Director Pleads Guilty in Manhattan Federal Court to Bribery and Visa Fraud ChargesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and James T. Hayes, Jr., the Special Agent-in-Charge of the New York Field Office of the U.S. Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”), announced that CHRISTIE HWANG, the director of a vocational and career training school in Manhattan, guilty today in Manhattan federal court to conspiring to bribe employees of New York City Workforce1 Career Centers in order to secure federal funds for students, and to conspiring to engage in visa fraud for using her school to illegally obtain F-1 student visas.
U.S. District Judge Katherine B. Forrest presided over HWANG’s plea proceeding. Two employees of Workforce1 Career Centers in Manhattan and Queens, Romero Johnson and Lois Powell, have also pled guilty to bribery conspiracy charges as part of the scheme, and a similar scheme involving a driving school located in Manhattan. Johnson and Powell pled guilty before Judge Forrest on December 20, 2012, and January 18, 2013, respectively.
According to the Complaint, the Indictment to which HWANG pled guilty, other documents previously filed in Manhattan federal court, and statements made during plea proceedings:
The New York City Workforce Investment Board (“NYC-WIB”) disburses federal funds to student-oriented programs within New York City. Its mission, in part, is to ensure that New York City businesses have access to qualified workers by helping candidates find job openings and giving them vocational training. New York City’s Department of Small Business Services, operating under the NYC-WIB umbrella, contracts with, and oversees, several privately owned “Workforce1 Career Centers” across the five boroughs. Among other things, the career centers match student applicants to appropriate schools for job training, and approve school attendance vouchers. Staff members at Workforce1 Career Centers receive and adjudicate numerous competing applications for vouchers from students seeking to develop job skills.
HWANG was a director and owner of one such school, Global Education New York (“GENY”), a facility in Manhattan that offered training in several vocational disciplines, as well as English as a Second Language, and other career-related training. Between 2008 and 2011, HWANG arranged for an intermediary to pay employees at Workforce1 Career Centers a set percentage of NYC-WIB voucher funds secured on applications the employees handled. In return, the Workforce1 Career Center employees gave GENY vouchers special treatment and sent the school business, thereby corrupting unbiased processes that were designed to award vouchers based exclusively on the merits. During that time period, GENY received NYC-WIB vouchers totaling $575,845. Vouchers secured by Johnson, Powell and a third Workforce1 Career Center employee for GENY during this period totaled at least $300,000. Johnson and Powell also engaged in similar conduct with respect to a driving school located in Manhattan.
Additionally, HWANG participated in a visa fraud scheme, in which GENY made misrepresentations in Form I-20 student visa applications it issued that resulted in students receiving, and entering the U.S. based on, F-1 student visas to which they were not entitled.
HWANG, 50, of Weehawken, New Jersey, pled guilty today to one count of bribery conspiracy and one count of visa fraud conspiracy. She faces a maximum sentence of five years in prison on each count, and a maximum fine of $250,000 or twice the gross gain or loss from the offense on each count.
POWELL, 51, of the Bronx, New York, pled guilty to a Superseding Information charging her with two counts of conspiracy, representing the separate bribery schemes involving GENY and the driving school. She faces a maximum sentence of five years in prison on each count, and a maximum fine of $250,000 or twice the gross gain or loss from the offense on each count. JOHNSON, 42, of the Bronx, New York, also pled guilty to a Superseding Information charging him with two counts of conspiracy, representing the separate schemes involving GENY and the driving school. He faces a maximum sentence of five years in prison on each count, and a maximum fine of $250,000 or twice the gross gain or loss from the offense on each count.
Mr. Bharara praised the investigative efforts of ICE HSI.
The case is being prosecuted by the Office’s General Crimes Unit. Assistant United States Attorney Martin S. Bell is in charge of the prosecution.
U.S. v. Christie Hwang, et al. Indictment
Sarasota Man Sentenced to More Than 7 Years in Federal Prison for Firearms PossessionRead the Press Release
Tampa, Florida - U.S. District Judge Steven D. Merryday today sentenced Roderick B. Sears (34, Sarasota) to 7 years and 10 months in federal prison for being a felon in possession of firearms. The court also ordered Sears to forfeit the seven firearms and ammunition he possessed. Sears pleaded guilty on November 7, 2012.
According to court documents, Sears has multiple prior drug felony convictions. Because of the prior convictions, Sears is prohibited from possessing firearms or ammunition under federal law. In July 2012, Sears possessed seven firearms, five of which were loaded. He also had more than 300 grams of marijuana, which he intended to distribute and had packaged for sale.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Sarasota County Sheriff's Office, the Manatee County Sheriff's Office, and the Sarasota Police Department. It was be prosecuted by Assistant United States Attorney Jennifer L. Peresie.
It is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program - a nationwide, gun-violence reduction strategy led by ATF. United States Attorney Robert E. O’Neill, along with Julie Torres, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Reynoldsburg Man Pleads Guilty to Possessing More Than 10,000 Images and 300 Videos of Child PornographyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Zdenek Hrouda, 37, of Reynoldsburg, Ohio pleaded guilty in U.S. District Court to possessing child pornography after investigators found more than 10,000 still images and 300 video files stored on three computers and two external hard drives in his house.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), Reynoldsburg Police Chief James Oneill, and Franklin County Sheriff Zach Scott whose office includes the Franklin County Internet Crimes Against Children Task Force (ICAC) announced the plea entered today before U.S. District Judge Michael Watson.
According to court testimony today by a Reyoldsburg Police Officer on the ICAC task force, in June 2012 an ICAC investigator was patrolling the internet and identified an IP address that was a download candidate for suspected child pornography. Officers searched his home on July 5, 2012 and found the computers.
When Hrouda learned he was under investigation, he fled back to his home country, the Czech Republic. He returned to the United States voluntarily in October 2012.
Possession of child pornography is punishable by up to ten years in prison, a fine of up to $250,000 and at least five years of supervised release. While on supervised release, he will also have to register as a sex offender anywhere he lives, works or goes to school.
Stewart commended the investigation by the ICAC Task Force, the FBI and Assistant U.S. Attorney Deborah A. Solove, who represented the United States in the case.
Restaurateur Sentenced to Probation for Tax FraudRead the Press Release
PITTSBURGH - A resident of Pittsburgh has been sentenced in federal court three years probation on his conviction of committing tax fraud, United States Attorney David J. Hickton announced today.
Chief United States District Judge Gary L. Lancaster imposed the sentence on Thomas N. Liadis, Sr., age 61.
According to information presented to the court, Liadis was the owner of the Grecian Isles local chain of Greek restaurants in the Pittsburgh area, with locations at the PPG building, USX Tower, and Station Square. In 2010, Liadis was targeted in a proactive IRS investigation into restaurant owners that were not reporting their gross receipts accurately to the IRS. At that time, Liadis had listed his restaurants for sale and in order to sell his restaurants, was disclosing each restaurant's total revenue. As part of the undercover investigation, these figures were compared with the numbers disclosed in Liadis's IRS 1040 tax returns, and discovered to be significantly higher. During the undercover operation, Liadis provided records to an IRS agent posing as a prospective buyer that supported the higher figures that were reported as part of the sale of the business, and not the numbers reported on Liadis' prepared tax returns. Liadis further admitted to the IRS undercover agent that he under-reported income to the IRS. A search warrant was executed at Liadis' businesses and residence and records were seized. The records indicating the actual gross receipts for Liadis' businesses were recovered. Comparison of Liadis' business records with his IRS filings for the tax years 2007, 2008, and 2009 indicate that Liadis under-reported a total of $1,011,369 of receipts resulting in a tax loss of $103,706. Specifically, on or about April 15, 2010, Thomas Liadis filed his United States Individual Income Tax Return Form 1040 for the 2009 tax year, which was verified by him in a written declaration that it was made under the penalties of perjury and filed with the Internal Revenue Service, that declared that the gross receipts of the Island Café at Station Square was $121,791 when in fact records obtained from Liadis indicated that his true gross receipts for Island Café in 2009 were $414,076.51.
Assistant United States Attorney James T. Kitchen prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service (IRS) for the investigation leading to the successful prosecution of Liadis.
Pittsburgh-based Bank to Pay U.S. for Failing to Engage in Prudent Underwriting Practices on SBA Loan GuaranteesRead the Press Release
PNC Bank N.A. has agreed to pay the United States $7.1 million to settle claims under the False Claims Act that it failed to engage in prudent underwriting practices in connection with the issuance of loans guaranteed by the Small Business Administration (SBA), the Justice Department announced today. PNC has also agreed to take corrective action to prevent similar occurrences in the future. PNC is a national banking association located in Pittsburgh.
The SBA Act allows banks to partner with the SBA to make loans to qualified small businesses. Participants in the SBA’s Preferred Lenders Program, like PNC, have authority to make and close these loans without obtaining the prior approval of the SBA. SBA guaranteed 75 percent of the balance of the loans in question. Banks are required to exercise prudent lending standards when making loans under the Preferred Lenders Program.
In 2005, under the Preferred Lender Program, PNC issued 64 SBA-guaranteed loans for the purchase of 98 Uni-Marts stores located primarily in the mid-Atlantic region. The United States alleges that in connection with these loans, PNC relied upon unaudited financial statements without further verifying whether the information contained in the financial statements was accurate. Of the 64 SBA-guaranteed loans issued by PNC, 36 have defaulted, triggering SBA’s obligations to pay PNC 75 percent of the balance of the defaulted loans. In May 2008, Uni-Marts filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.
“Banks that are SBA preferred lenders have a duty to prudently guard the public funds they commit to borrowers,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “The government will pursue vigorously lenders that fail to adequately safeguard public funds due to deficient lending standards.”
Principal Deputy Assistant Attorney General Delery thanked the Justice Department’s Civil Division, the SBA Office of General Counsel and the SBA Office of Inspector General for the collaboration that resulted in the settlement announced today. The claims settled by this agreement are allegations only; there has been no determination of liability.
Paralegal Sentenced to 30 Months for Role in Property Mortgage ScamRead the Press Release
BOSTON - A Roslindale woman was sentenced yesterday for her role in a multi-year, multi-property mortgage fraud scheme.
Rebecca L. Konsevick, 40, was sentenced by U.S. District Judge Denise J. Casper to 30 months in prison, to be followed by two years of supervised release. In May 2012, Konsevick pleaded guilty to bank fraud and money laundering.From 2006 through 2008, Konsevick committed fraud in connection with condominium sales. Sirewl Cox, a developer, identified multiple-family buildings for sale and recruited straw buyers to purchase the buildings. Cox and others then recruited straw buyers to purchase individual units in buildings. The straw buyers’ financing for the purchases was obtained by falsely representing key information to mortgage lenders such as the buyers’ income, employment, assets, and/or intention to reside in the condominiums. In addition, Konsevick and Cox caused HUD-1 settlement statements to be submitted to the same lenders which falsely represented that straw buyers had paid funds in connection with the property transactions and falsely represented how the proceeds of the mortgage loans were disbursed. In Massachusetts, property transactions must be closed by attorneys so Konsevick, who was a paralegal, falsely signed certifications on these HUD-1 settlement statements and closed the relevant property deals.
Sirewl Cox was convicted by a jury of wire fraud, bank fraud, and conducting an unlawful monetary transaction. Sentencing is scheduled for Feb. 6, 2013.
United States Attorney Carmen M. Ortiz; Steven D. Ricciardi, Special Agent in Charge of the U.S. Secret Service; William P. Offord, Special Agent in Charge of Internal Revenue Service’s Criminal Investigations in Boston; Kevin Niland, Inspector in Charge of the U.S. Postal Inspection Service; and Cary Rubenstein, Special Agent In Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, New York Regional Office; made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Ryan M. DiSantis and Jeremy M. Sternberg of Ortiz’s Economic Crimes Unit.Monroe Doctor Sentenced for Distributing Growth HormonesRead the Press Release
More than $400,000 worth of illegal hormones sold
SHREVEPORT, La: United States Attorney Stephanie A. Finley announced today that Dr. Linda Camille Bunch Wells, 53, of Monroe, was sentenced Thursday to 27 months in federal prison and ordered to forfeit $200,000 in criminal proceeds for importing and distributing adult growth hormones.
In June 2010, Wells was charged in a 21-count indictment with conspiracy, distribution, and facilitation and receipt of smuggled hGH. She was administering the growth hormones at the Northeast Louisiana Anti-Aging and Wellness Center in Monroe from July 2003 until July 2008. The hormones were part of a so-called anti-aging program for patients. Most of the hormones administered were illegally imported into the U.S. Wells and her business partners would buy the drugs overseas, and the packages would be labeled non-medial products in order to pass through U.S. Customs.
Under federal law, growth hormones may only be used for the treatment of specified diseases. Although Wells was only held accountable for distributing $200,000 in illegal growth hormones, evidence at sentencing revealed that the company administered more than 26,926 units of the hormones over the five-year period totaling more than $406,000 in sales.
“We will prosecute those who circumvent the law to provide controlled substances to patients for personal gain, ”U.S. Attorney Stephanie A. Finley said. “Those involved in this operation knowingly obtained these hormones illegally and released them into the community with no concern for the safety of those who were taking them.”
The Food and Drug Administration/Office of Criminal Investigations and Louisiana State Police conducted the investigation. Assistant U.S. Attorney Earl Campbell prosecuted the case.
Missouri Man Sentenced for Production of Child PornographyRead the Press Release
Gary A. McArthur, 50, of Arnold, Missouri, was sentenced on January 25, 2013, to a term of 180 months in prison on a one-count indictment charging him with Production of Child Pornography, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
McArthur was also ordered to serve a term of lifetime supervised release following his imprisonment. There is no parole in the federal system. Additionally, McArthur was fined $1,250 and ordered to pay a $100 special assessment. McArthur pled guilty to the indictment on October 18, 2012 and has been detained (held without bond) since his arraignment on June 15, 2012.
Court documents establish that the violation occurred between September 2011 and March 31, 2012, when McArthur resided with a friend, R.H., and her minor relative in Madison County, Illinois. On March 31, 2012, R.H. reported to the Madison County Sheriff’s Department that she had discovered that McArthur had been engaged in a continuing sexual relationship with her 13-year old minor relative. In a recorded interview with the Madison County Sheriff’s Department, McArthur admitted that he had been having sexual intercourse with the 13-year old minor for several months. McArthur is currently charged in the Madison County Circuit Court with four counts of Aggravated Criminal Sexual Abuse for those acts. Of course, a charge is not proof of guilt. McArthur is presumed innocent of the charge until proven guilty beyond a reasonable doubt.
The federal charges came about when, after McArthur was arrested, a detective with the Madison County Sheriff’s Department, who also serves as a Special Investigator with the FBI Cyber Crimes Task Force, performed a forensic examination of McArthur’s cellular phone. It was discovered that on March 7, 2012, McArthur had taken a pornographic photograph of the victim depicting the minor’s nude genital area.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 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.”
The case was investigated by the Madison County Sheriff’s Department. The case was prosecuted by Assistant United States Attorneys Ali Summers and Nathan Stump.
Madison Woman Sentenced for Embezzling Funds from EmployerRead the Press Release
Amy M. Shelby, 38, of Madison, IL, was sentenced to fifteen months in prison, to be followed by three years on supervised release, and restitution of $112,383.52, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Shelby was indicted by a grand jury in July 2012 and later Shelby plead guilty to the federal offense of wire fraud.
The instant offense was investigated by the Federal Bureau of Investigations (FBI), following a complaint made by James Green Management (JGM), the owner and management office of Oakmont Mini-Storage. Prior to the complaint, Pitney Bowes Visa credit card company contacted JGM to inquire about delinquent payments on an existing Pitney Bowes account, which JGM was unaware existed. Subsequent audit results found Amy Shelby, the manager of Oakmont Mini- Storage, had applied for a Pitney Bowes commercial credit card for Oakmont Mini-Storage in 2006, which held her name. Amy Shelby had used the commercial credit card to purchase numerous fraudulent charges which included personal purchases such as for perfume and satellite television service, payments for personal bills, and a monthly credit report service. The audit also found Shelby had access to Oakmont Mini-Storage’s operating bank account(s), and she was paying the Pitney Bowes credit card bills, and additional personal bills, with company funds. In addition, the audit found Shelby had simply kept numerous cash deposits and/or payments made to Oakmont Mini- Storage for storage units.
The prosecution was handled by Assistant U.S. Attorney Norman R. Smith.
Lubbock Man Sentenced to Nine Years in Federal Prison on Child Pornography ConvictionRead the Press Release
LUBBOCK, Texas — James Galen Brown, 40, of Lubbock, Texas, was sentenced this morning by U.S. District Judge Sam R. Cummings to nine years in federal prison and a 10-year term of supervised release, following his guilty plea in October 2012 to one count of transportation of child pornography. Brown admitted that he used his cell phone, and its texting functions, to intentionally send and receive images and videos of child pornography. Judge Cummings ordered that Brown surrender to the Bureau of Prisons on March 1, 2013. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, on June 1, 2012, Special Agents with U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) interviewed Brown after receiving information that a telephone number assigned to Brown had received text messages with attachments of child pornography. Brown admitted that he used the cell phone to communicate with other individuals who shared an interest in sexually explicit images and videos of minors, and he used his cell phone to trade the material with those persons. He located these persons on Internet chat rooms and exchanged phone numbers with them, and then traded the child pornography images and videos by attaching them to text messages.
This matter 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 U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better 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.justice.gov/psc/ For more information about internet safety education, please visit www.justice.gov/psc/ and click on the tab "resources."
Assistant U.S. Attorney Steven M. Sucsy was in charge of the prosecution.
Lubbock Man Sentenced to 135 Months in Federal Prison for Downloading Child Pornography from the InternetRead the Press Release
LUBBOCK, Texas — Richard Mendoza, 22, of Lubbock, Texas, was sentenced this morning by U.S. District Judge Sam R. Cummings to 135 months in federal prison and a 15-year term of supervised release, following his guilty plea in October 2012 to one count of receipt of child pornography. He has been in custody since his arrest in August 2012. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, in January 2012, while searching on the Internet for videos depicting minors engaging in sexually explicit conduct, Mendoza intentionally and knowingly downloaded a digital video file depicting a female child, under the age of 18, engaged in sexually explicit conduct.
This matter 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 U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better 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.justice.gov/psc/ For more information about internet safety education, please visit www.justice.gov/psc/ and click on the tab "resources."
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Steven M. Sucsy.
Last of Three Defendants Sentenced to More Than 22 Years in Prison for Two Armed Robberies in MonroeRead the Press Release
CHARLOTTE, N.C. – On Wednesday, January 23, 3013, the last of three defendants involved in armed robberies of two Monroe businesses in October 2010 was sentenced to 268 months in prison, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
In addition to the prison term, U.S. District Court Judge Max O. Cogburn, Jr. ordered Reginald Lamont Chambers, 27, of Monroe, to serve three years of supervised release and to pay $3,100 as restitution.
Joining U.S. Attorney Tompkins in making today’s announcement are Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol Tobacco Firearms and Explosives (ATF), Charlotte Field Division and Chief Debra C. Duncan of the Monroe Police Department.
According to filed court documents and statements made in court, on October 18, 2010, Chambers robbed a Dollar General store on East Sunset Drive in Monroe. During the robbery, Chambers held the store clerk at gun point and forced the store clerk to open the safe. Court records show that Chambers then ripped the store’s telephones out of their jacks and took the phones with him. Chambers also attempted to lock the store clerk in the back office before leaving with the store’s money.
According to court documents and statements made in court, October 20, 2010, Chambers and his co-defendants, Anthony Polk and Trenton Raley, robbed La Chiquita store on Concord Avenue, in Monroe. Chambers and Raley held up at gun point two store clerks, and robbed money from the store and one of the clerk’s purses and its contents. Polk was the get-away driver in the robbery. Court records show that all three defendants were arrested in the early morning hours on October 21, 2010, in the get-away car and in possession of the firearms used by Chambers and Raley.
In December 2011, Chambers, who is a member of the United Blood Nation street gang, pleaded guilty to two counts of robbery of a business affecting interstate commerce, also known as “Hobbs Act” robberies, one count of carrying and brandishing a firearm in furtherance of robbery, and one count of possession of a firearm by a convicted felon. Under the United States Sentencing Guidelines, Chambers was sentenced as a an armed career criminal. v
On November 29, 2011, Raley, 20, of Peachland, N.C., pleaded guilty to one count of Hobbs Act robbery and one count of carrying and brandishing a firearm in furtherance of a crime. He was sentenced also sentenced on Wednesday, January 23, 2013, to serve 67 months in prison followed by three years of supervised release. On December 1, 2011, Polk, 30, of Monroe, pleaded guilty to one count of Hobbs Act robbery. He was sentenced on October 23, 2012, to 51 months in prison and three years of supervised release. Raley and Polk will be jointly and severally liable with Chambers for restitution to the victims of the La Chiquita robbery.
All three defendants are in local federal custody. Upon designation of a federal facility they will be transferred to the custody of the Federal Bureau of Prisons. Federal sentences are served without the possibility of parole.
The investigation was handled by the ATF and the Monroe Police Department. The prosecution was handled by Assistant United States Attorney J. George Guise.
Jury Finds Defendant Guilty of Tax Evasion, Failure to File ReturnsRead the Press Release
PITTSBURGH - After deliberating for 1½ hours, a federal jury of six men and six women found Thomas D. Tuka guilty of four counts of income tax evasion and three counts of failure to file tax returns, United States Attorney David J. Hickton announced today.
Tuka was tried before United States District Judge Terrence F. McVerry in Pittsburgh, Pa.
According to Assistant United States Attorney Leo M. Dillon, who prosecuted the case, the evidence presented at trial established that Tuka failed to file taxes, and evaded income tax on more than $480,000 in taxable disability income he received during the period from 2003 to 2008.
Judge McVerry scheduled sentencing for May 24, 2013 at 10:30 a.m. On each of the four tax evasion counts, the law provides for a maximum total sentence of five years in prison, a fine of $250,000, three years supervised release and a $100 special assessment. The maximum penalty for each of the failure to file counts is one year imprisonment, a fine of $100,000, one year supervised release and a $25 special assessment. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued the defendant on bond.
The Internal Revenue Service, Criminal Investigation conducted the investigation that led to the prosecution of Tuka.
Juneau Man sentenced to 170 months for drug conspiracyRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen Loeffler announced today that a Juneau resident was sentenced in Juneau to federal prison for drug conspiracy.
U.S. District Court Judge Timothy M. Burgess sentenced Juneau resident Darrell W. Dawson, 44, to 170 months in prison, for his role in a drug trafficking conspiracy. There is no parole in the federal system.
According to Assistant U.S. Attorney Jack S. Schmidt, who prosecuted the case, the charges arose from a joint investigation involving the Federal Bureau of Investigation, United States Postal Inspection Service and Juneau Police Department - Drug Metro Unit involving the importation of methamphetamine into Juneau, Alaska, using a United States Postal Service USPS Express Mail parcel. In July 2012, Darrell W. Dawson and Gema G. Thomas conspired to transport methamphetamine from the lower 48 to Juneau, Alaska. Dawson provided Thomas $15,000.00 in drug proceeds for six ounces of methamphetamine. Thomas arranged for and paid for the delivery of six ounces of methamphetamine to be delivered to her business, Peer-Amid Beads, from her source of supply in the lower 48 via USPS Express Mail. Once received, Thomas delivered the methamphetamine to Dawson who distributed the methamphetamine to others in the Juneau area and collected drug proceeds for future payment to Thomas for an additional six ounces of methamphetamine. Thomas is scheduled to be sentence on March 8, 2013, for her role in the drug conspiracy.
Prior to imposing sentence, Judge Burgess stated the serious of the offense, deterrence of the defendant and others, the protection of the public, and rehabilitation of the defendant related to his criminal history as reasons that supported the imposition of the above sentence.
Ms. Loeffler commended the Federal Bureau of Investigation, United States Postal Inspection Service, and Juneau Police Department - Drug Metro Unit for the investigation leading to the successful prosecution of Dawson.
Judge Sentences Miami Men for December 2010 Murder of Postal Worker in Identity Theft SchemeRead the Press Release
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Antonio J. Gomez, Acting Inspector in Charge, U.S. Postal Inspection Service, José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CI), J.D. Patterson, Acting Director, Miami-Dade Police Department, and Marc Elias Jr., Chief, North Miami Police Department, announce the sentence of Pikerson Mentor, 30, of Miami, to a life imprisonment. Saubnet Politesse, 24, was sentenced to 21 years imprisonment after pleading guilty to being Mentor’s getaway driver during the robbery resulting in U.S. Postal Service employee Bruce Parton’s death. Both sentences were imposed by U.S. District Court Judge Donald Graham.
Mentor had been previously convicted after a seven-day trial, during which approximately 40 witnesses were called. At the conclusion of that trial, the jury convicted Mentor of all fourteen counts of the Second Superseding Indictment, which included the murder of a federal government employee while in the course of his duties, in violation of Title 18, United States Code, Sections 1114 and 111; car-jacking, in violation of Title 18, United States Code, Section 2119; theft of a key for a U.S. Postal Service mail receptacle, in violation of Title 18, United States Code, Section 1704; use of a firearm in the commission of a crime of violence, in violation of Title 18, United States Code, Section 924(j); conspiracy to commit and commission of access device fraud, in violation of Title 18, United States Code, 371 and 1029(a)(2); and aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.
U.S. Attorney Wifredo A. Ferrer stated, “The sentences imposed today on the defendants for the ruthless murder of Bruce Parton, a hard-working and dedicated mail carrier, should send a clear message to our community: there are lifelong consequences to senseless acts of violence. I hope that the life imprisonment sentence of Pikerson Mentor, and 21 years imprisonment sentence of Saubnet Politesse, will bring some comfort and sense of justice to Mr. Parton’s family.”
Antonio J. Gomez, Acting Inspector in Charge for U.S. Postal Inspection Service stated, “Today’s sentencing is the result of the U.S. Postal Inspection Service working diligently with law enforcement partners to make sure that U.S. Postal Service employees are protected.”
“The death of U.S. Postal Service employee Bruce Parton is an absolute tragedy, and individuals who commit crimes of this magnitude deserve to be punished to the fullest extent of the law,” said Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI). “Faced with the unique circumstances of this case, IRS Criminal Investigation along with our law enforcement partners and the United States Attorney's Office were committed to investigating and prosecuting these individuals who chose personal monetary gain over the value of another human being's life.”
“We hope that the family of Mr. Parton has found some justice with today’s sentencing. We are grateful for the cooperation and dedication of all the agencies that lead to the successful arrests and prosecution of the case,” said J.D. Patterson, Acting Director of the Miami-Dade Police Department.
North Miami Police Department Chief Marc Elias, Jr. stated, “The North Miami Police Department is proud to have worked in partnership with the United States Postal Inspection Service and our Federal and Local law enforcement agencies in bringing the murderers of Bruce Parton of the U.S. Postal Services to justice. This is another example of law enforcement agencies collaborating to remove armed and dangerous subjects from the streets of South Florida.”
According to trial evidence, U.S. Postal Service letter carrier Bruce Parton was murdered on December 6, 2010 as he delivered mail to the Monte Carlo apartment complex in northwest Miami. Mentor and his accomplices stole the victim’s U.S Postal master key, called an Arrow Key, and the keys to the victim’s postal truck. Postal keys are used by letter carriers to access mailboxes. Witnesses testified that they heard two shots at the scene, and an eyewitness testified that she saw the defendant fleeing the apartment complex in the victim’s stolen truck. In addition, Saubnet Politesse, a co-conspirator who testified regarding his role in the conspiracy, confirmed that Mentor had shot the victim mail carrier. In addition, witnesses explained how the defendants used the stolen master key to enter mailboxes to steal private financial and personal identification information and to intercept debit cards loaded with fraudulently obtained tax refunds.
During trial, North Miami Police detectives testified about the May 4, 2011, arrest of Saubnet Politesse for driving without a license. During that arrest, the officers discovered a unique looking key with an obliterated serial number. The serial number was subsequently restored and matched the serial number of the victim’s stolen master key. Upon being questioned by the police, Politesse described his, Mentor’s and another person’s participation in the December 6 robbery and murder. Thereafter, early in the morning of May 5, 2011, defendant Mentor was arrested.
Politesse pleaded guilty to charges related to his participation in the robbery/homicide as a getaway driver. Politesse testified as a government witness and was ultimately sentenced to 21 years’ imprisonment during the sentencing hearing immediately following Mentor’s sentence.
Mr. Ferrer commended the investigative efforts of the U.S. Postal Inspection Service, IRS-CI, Miami-Dade Police Department and the North Miami Police Department. This case is being prosecuted by Assistant U.S. Attorneys Anthony LaCosta and Roy Altman.
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.
Jefferson County Man Sentenced for Nederland Bank RobberyRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A 32-year-old Nederland, Texas man has been sentenced to federal prison for robbing a bank in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Christopher Levi Woodcock pleaded guilty on Sep. 27, 2012 to bank robbery and was sentenced to 43 months in federal prison on Jan. 24, 2013 by U.S. District Judge Ron Clark. Woodcock was also ordered to pay restitution in the amount of $1,971.00.
According to information presented in court, on Jan. 13, 2012, Woodcock entered Community Bank at 2008 Hwy 365 in Nederland and presented a note demanding money from a teller. Fingerprint analysis of the demand note and community tipsters led to the arrest of Woodcock.
This case was investigated by the FBI and the Nederland Police Department and prosecuted by Assistant U.S. Attorney John Craft. ####Gambino Organized Crime Family Associate John Burke Sentenced to Life Imprisonment for Racketeering and MurderRead the Press Release
John Burke, a longtime associate of the Gambino organized crime family of La Cosa Nostra (the “Gambino family”), was sentenced today to life imprisonment without parole plus 10 years for the murder of a rival drug dealer in aid of racketeering, racketeering conspiracy, and other charges. On June 8, 2012, following a four-week trial before United States District Judge Sterling Johnson, Jr., in Brooklyn federal court, Burke was convicted of all charges in the superseding indictment.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.
As established at trial, Burke was a trusted Gambino family enforcer and drug dealer for nearly three decades. As part of the racketeering conspiracy, Burke participated in numerous acts of violence, including fatal shootings and home-invasion robberies, as well as drug trafficking involving cocaine and marijuana. Burke was convicted of two murder predicate acts, including the 1991 murder of Bruce Gotterup, who was shot in the back of the head on the boardwalk in the Rockaways, and the 1996 murder of John Gebert, who was slain under a pool table in a Woodhaven bar. The jury also found Burke guilty of the murder of John Gebert in aid of racketeering, murdering John Gebert as part of a continuing criminal enterprise, and a firearms charge.
Ms. Lynch expressed her appreciation to the Federal Bureau of Investigation, the New York State Department of Corrections and Community Supervision, the Queens County District Attorney’s Office, the United States Marshals Service, and the other members of the law enforcement community for their efforts in the investigation and prosecution of this case.
The government’s case was prosecuted by Assistant United States Attorneys Jacquelyn M. Kasulis, Evan M. Norris, and Whitman G.S. Knapp.
The Defendant:
JOHN BURKE
Age: 51Four Sentenced to Prison in Florida Community Mental Health Center CaseRead the Press Release
The owners of three Miami-area assisted living facilities and an affiliated psychologist were sentenced to prison yesterday in connection with a health care fraud scheme, involving now-defunct Miami-area health provider Health Care Solutions Network Inc. (HCSN), in which Medicare was billed for mental health treatments that were unnecessary or not provided.
The sentences were announced by U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Michael B. Steinbach, Acting Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
U.S. District Judge Cecilia M. Altonaga sentenced Serena Joslin, 32, of Looneyville, W.Va., to 63 months in prison, following her previous guilty plea to conspiracy to commit health care fraud. Raymond Rivero, 55, Daniel Martinez, 46, and Ivon Perez, 50, all of Miami, were each sentenced to 28 months in prison. All three had previously pleaded guilty to conspiracy to violate the anti-kickback statute.
According to court documents, HCSN operated community mental health centers both in Miami and North Carolina, including partial hospitalization programs (PHP) – a form of intensive treatment for severe mental illness. HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not provided.
In Miami, HCSN obtained beneficiaries by paying kickbacks to owners and operators of assisted living facilities (ALF) or by otherwise recruiting them from the facilities and from nursing homes. Rivero, Martinez and Perez admitted during their guilty pleas to referring Medicare beneficiaries to HCSN in exchange for cash bribes. Rivero, former owner of Miami-based God Is First ALF; Martinez, former owner of Homestead, Fla.-based Mi Renacer ALF; and Perez, former owner of Homestead-based Kayleen and Denis Care Corp., are no longer permitted to operate such facilities as a condition of their guilty pleas.
According to court documents, ALF residents referred to HCSN by Rivero, Martinez and Perez were not qualified to be placed in PHP and were only selected because they had Medicare or state of Florida Medicaid benefits. In some cases, ALF patients suffered from dementia, Alzheimer’s disease or mental retardation, or were otherwise unable to benefit from mental health services.
According to court documents, Joslin, a licensed psychologist, was hired by HCSN in North Carolina in April of 2010 as a clinical coordinator and later promoted to clinical director. In those roles, she conspired with other HCSN employees to fabricate medical documents to substantiate alleged PHP treatment that was medically unnecessary and, in many instances, not even provided to the beneficiaries. Joslin admitted that many of the HCSN patients were unqualified for the PHP program because they suffered from conditions such as mental retardation and dementia, and that she directed therapists to fabricate medical records to support HCSN’s fraudulent billing to the Medicare program. Joslin was also required to surrender her North Carolina license to provide mental health treatment as part of her plea agreement.
According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.
In addition to the prison terms, Judge Altonaga sentenced Joslin, Rivero, Martinez and Perez each to serve three years of supervised release, and ordered them to pay $4,464,728; $90,896; $76,358; and $89,245 in restitution, respectively.
The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorney Allan J. Medina of the Criminal Division’s Fraud Section. The cases were investigated by the FBI and HHS-OIG and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Four Highland Park Police Officers Arrested and Charged with Taking Bribes and Conspiring to Protect and Deliver Six Kilograms of CocaineRead the Press Release
Press Conference - Highland Park Police Department
A federal criminal complaint was unsealed today charging four Highland Park police officers with accepting bribes, conspiring to distribute six kilograms of cocaine, and carrying firearms in furtherance of a drug trafficking crime, 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, Chief of Police Kevin Coney, Highland Park Police Department and Michigan Attorney General Bill Schuette.
The four Highland Park police officers charged are: Anthony Bynum, 29, of Highland Park, Michigan; Price Montgomery, 38, of Highland Park, Michigan; Shawn Williams, 33, of Detroit, Michigan; and Craig Clayton, 55, of Highland Park, Michigan. Bynum and Montgomery are both police officers with the Highland Park Police Department. Bynum is also a police officer for Detroit Public Schools. Williams and Clayton are both Auxiliary (Reserve) Officers for Highland Park. Chief Coney was instrumental in assisting the FBI in its investigation of the four officers from his department.
The Criminal Complaint charges the four police officers with accepting cash bribes and with conspiring to deliver six kilograms of cocaine. According to the Criminal Complaint, Bynum and Montgomery arrested a man in August 2012 in Highland Park on a firearms offense. The officers beat the man after arresting him. While in the hospital, the man offered to pay the officers if they would dismiss the charges against him. The officers were willing to accept money in exchange for failing to appear for trial. Subsequently, the man who had been arrested by Montgomery and Bynum began working undercover for the FBI as an unpaid confidential source. During the course of the investigation, Montgomery and Bynum were captured on videotape accepting $10,000 in cash from the confidential source, in return for failing to appear at the man's trial in the Wayne County Circuit Court. On the date set for the man's trial in Circuit Court, Officers Montgomery and Bynum failed to appear as witnesses as required by subpoena, and the case was dismissed.
Later, Officers Mongtomery and Bynum agreed to transport and deliver two kilograms of cocaine for the FBI confidential source, whom the officers believed to be a drug trafficker. On November 15, 2012, Officers Montgomery and Bynum protected and delivered a shipment of what they believed to be two kilograms of cocaine from the Oakland Mall in Troy, Michigan, to a location in Taylor, Michigan. Each officer was paid $1,500 for his role in the delivery of sham cocaine. Subsequently, Officers Montgomery and Bynum recruited two additional Highland Park officers, Williams and Clayton, to help with the delivery of a second, larger shipment of cocaine. On January 23, 2013, the four Highland Park police officers delivered four kilograms of what they believed to be cocaine, again from the Oakland Mall. Each officer was paid either $1,000 or $1,500 by the confidential source for his work in protecting and transporting the sham cocaine. The four police officers each carried a firearm, and some carried their police badges, while protecting the loads of sham cocaine.
Upon conviction, each of the four defendants faces a maximum of up to forty years in prison for conspiring to distribute cocaine. In addition, the officers face a maximum of ten years in prison on the bribery charges, and an additional five year consecutive sentence for carrying a firearm during a drug trafficking offense.
United States Attorney McQuade said, "We applaud Highland Park Police Chief Coney for initiating a federal investigation into misconduct by his officers. We want to emphasize that the misconduct is limited to these four officers. Our community deserves to be served and protected by police officers who perform their jobs with integrity. Police officers who take bribes and participate in criminal activities will be discovered and prosecuted."
Special Agent in Charge Foley of the FBI said, "Police officers swear an oath to protect and serve and are held to the highest standards of ethics and conduct. The FBI led Detroit Area Public Corruption Task Force is committed to ensuring illegal acts on the part of law enforcement officers are thoroughly investigated and those officers face harsh penalties for their crimes."Highland Park Police Chief Coney stated, “"The illegal actions of these officers do not represent or reflect the ethical standards and values consistent with the Highland Park Police Department. We remain committed to providing our citizens with first class public safety and ensuring our officers display integrity at all times."
"Public corruption scandals damage the public's trust in government and harm our state's reputation," said Attorney General Schuette. "We will continue to work with U.S. Attorney Barbara McQuade, the FBI, state, and local law enforcement agencies to eliminate corruption wherever it is found."
DPS Emergency Financial Manager Roy S. Roberts stated, “"There are a corps of extremely dedicated law enforcement officers who selflessly work day and night to protect our students, teachers, staff and DPS property, and the arrest and prosecution of this one individual will ensure that their professionalism and dedication will be preserved and maintained in the public eye. While relieved that none of this activity occurred on Detroit Public Schools grounds or involved any of our students, I applaud the leadership of our police department for cooperating fully and am highly appreciative of the efforts of the agencies in the FBI-led Public Corruption Task Force who brought this matter to justice."
The case was investigated by the FBI led Public Corruption Task Force which includes Internal Revenue Service, Criminal Investigation, Environmental Protection Agency - Office of Inspector General, Housing and Urban Development - Office of Inspector General, Department of Transportation - Office of Inspector General, Michigan State Police, the Michigan Attorney General's Office and the Detroit Police Department. It is being prosecuted by Assistant United States Attorney David A. Gardey.Former Program Director and Marketers Sentenced to Prison in Florida in $205 Million Community Mental Health Fraud SchemeRead the Press Release
The former program director and two former marketers for Miami-based mental health care company American Therapeutic Corporation (ATC) have been sentenced to prison for their roles in a $205 million Medicare fraud and kickback scheme in which patients were forced to attend inappropriate treatment programs.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Special Agent-in-Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the Health and Human Services’ Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
Miami-area residents Lydia Ward, 47, a former program director, and Hilario Morris, 47, a former marketer, were sentenced today by U.S. District Judge Patricia A. Seitz in Miami federal court to 99 months and 60 months in prison, respectively. In addition to the prison term, Judge Seitz sentenced Ward and Morris each to serve three years of supervised release and ordered them to pay more than $34.1 million and $82.2 million in restitution, respectively, jointly and severally with their co-defendants.
Ward was convicted on Nov. 15, 2012, by a federal jury of conspiracy to commit health care fraud. Morris was convicted on June 1, 2012, by a federal jury of conspiracy to pay illegal health care kickbacks. Ward and Morris have been in federal custody since their convictions.
Former marketer Sandra Jimenez, 39, also from the Miami area, was sentenced to 36 months in prison yesterday, Jan. 24, 2013. In addition to the prison term, Judge Seitz sentenced Jimenez to serve three years of supervised release and ordered her to pay $20.5 million in restitution, jointly and severally with her co-defendants.
On Jan. 17, 2012, Jimenez pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and to receive and pay health care kickbacks.
In pleading guilty, Jimenez admitted that she served as a marketer for ATC and American Sleep Institute (ASI). ATC, a Florida corporation headquartered in Miami, operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. Jimenez also admitted that she and co-conspirators used related company ASI to submit fraudulent Medicare claims.
Additionally, Jimenez admitted she participated in a separate Medicare fraud scheme through Priority Home Health, a Miami home health agency that submitted fraudulent claims to Medicare for home health services. Jimenez and her co-conspirators recruited Medicare beneficiaries to Priority Home Health who did not qualify for the services.
According to the plea agreement, Jimenez’s participation in the ATC fraud and the Priority Home Health fraud resulted in $46 million in fraudulent billings to Medicare.
Evidence at Ward’s and Morris’ trials demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through ATC and ASI, and that ATC secured patients by paying kickbacks to assisted living facility owners and halfway house owners who would then steer patients to ATC.
According to the evidence, Morris was a marketer for ATC from September 2004 through October 2010, when ATC closed its doors due to the federal case. In that capacity, Morris acted as a liaison, maintaining relationships between ATC and those who were selling their patients to ATC. Morris would physically pay the kickbacks throughout North Miami and Florida’s Broward County. These patients, who attended ATC, were ineligible for the services billed to Medicare and did not receive them. After Medicare paid the claims, some of the co-conspirators then laundered the Medicare money in order to create cash to pay the kickbacks for patients.
Evidence at trial revealed that Ward was a program director at ATC’s Ft. Lauderdale, Fla., center from November 2008 until ATC’s closing in October 2010. The evidence showed Ward helped doctors at ATC sign patient files without reading them or seeing the patients, and that Ward and others would assist the owners of ATC in fabricating doctor notes, therapist notes and other documents to make it falsely appear in ATC’s patient files that patients were qualified for the individualized, specialized treatment. Included in these false and fraudulent submissions to Medicare were claims for patients who were in the late stages of diseases causing permanent cognitive memory loss and patients who had substance abuse issues and were living in halfway houses. These patients were ineligible for PHP treatments, and because they were forced by their assisted living facility owners and halfway house owners to attend ATC, they were not receiving treatment for the diseases they actually had.
ATC executives Lawrence Duran, Marianella Valera and Judith Negron were previously sentenced to 50 years, 35 years and 35 years in prison, respectively, for their roles in the fraud scheme. The 50- and 35-year sentences represent the longest federal sentences for health care fraud ordered to date in the United States.
ATC and Medlink pleaded guilty in May 2011 to conspiracy to commit health care fraud. ATC also pleaded guilty to conspiracy to defraud the United States and to pay and receive illegal health care kickbacks. On Sept. 16, 2011, the two corporations were sentenced to five years of probation per count and ordered to pay restitution of $87 million. Both corporations have been defunct since their owners were arrested in October 2010. Dozens of individuals have been convicted at trial or pleaded guilty for their participation in the scheme, including doctors Mark Willner and Alberto Ayala, who were each sentenced to 10 years in prison.
Evidence at trial showed that the ATC scheme resulted in a total of $205 million in fraudulent Medicare billings.
The cases were prosecuted by Senior Trial Attorney Jennifer L. Saulino and Trial Attorney Laura M.K. Cordova of the Justice Department Criminal Division’s Fraud Section and James V. Hayes, Assistant U.S. Attorney in the Southern District of Florida. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Former Postal Employee Pleads Guilty to Stealing Mail from People on His Route-Carrier Took Cash, Items of Value-Read the Press Release
WASHINGTON – Ronald Pretlow, 48, a former letter carrier for the U.S. Postal Service, pled guilty today to stealing mail containing checks and other items of value meant for people on his route, announced U.S. Attorney Ronald C. Machen Jr. and Paul L. Bowman, Special Agent in Charge, Capital Metro Area Field Office, U.S. Postal Service Office of Inspector General.
Pretlow pled guilty in the U.S. District Court for the District of Columbia to one count of theft of mail by a postal employee. The Honorable Rudolph Contreras scheduled sentencing for May 3, 2013. The charge carries a statutory maximum of five years in prison and a fine. Under federal sentencing guidelines, the parties have agreed that the applicable range would be a maximum of 16 months of incarceration and a fine of up to $30,000. As part of the plea agreement, Pretlow also must pay $1,500 in restitution to a victim in the case.
According to a statement of offense signed by the government as well as the defendant, Pretlow began work in February 2003 as a letter carrier with the U.S. Postal Service. In 2012, he was assigned to the Lammond-Riggs Station, 6200 North Capitol Street.
In the spring of 2012, the Postal Service received numerous complaints about missing packages and greeting cards from citizens living in zip code 20011. The U.S. Postal Service Office of Inspector General began an investigation and determined that the complaints were coming from people who resided on Pretlow’s route. Agents conducted an investigation that revealed Pretlow failed to properly handle several pieces of mail.
Additionally, on July 26, 2012, a citizen contacted the Lammond-Riggs station and reported not having received a package containing $1,500 in cash. The citizen said that the sender had written the incorrect address on the package and used the Postal Service’s online tracking service to try to find it. The package, marked as delivered by “R. Pretlow,” has never been found. Pretlow’s restitution payment is to go to this victim.
Pretlow was arrested when he reported to work on Sept. 13, 2012. In a search, agents recovered currency contained in a letter that he had stolen the previous day. In a search of Pretlow’s personal vehicle, agents recovered more than 10 items of undelivered mail that were neither addressed to nor from the defendant. These items included more than $10,000 in uncashed checks, none of which noted Pretlow as the sender or intended recipient.
In announcing the plea, U.S. Attorney Machen and Special Agent in Charge Bowman commended the work of Special Agents of the Postal Service Office of Inspector General. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Legal Assistant Angela Lawrence, Paralegal Specialist Lenisse Edloe, and Assistant U.S. Attorney Christopher R. Kavanaugh, who is prosecuting the matter.
13-024Former Middle School Teacher Pleads Guilty to Federal Child Pornography ChargeRead the Press Release
Defendant Was a Choir Teacher at Cross Timbers Middle School in Grapevine, Texas
DALLAS — Daniel Oberlender, 45, a former choir teacher at Cross Timbers Middle School in Grapevine, Texas, pleaded guilty in federal court yesterday to a criminal Information charging one count of distribution of child pornography. He faces a maximum statutory penalty of not less than five years, or more than 20 years, in federal prison, a lifetime of supervised release and a $250,000 fine. Sentencing is set for June 20, 2013, before U.S. District Judge Reed C. O’Connor. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Oberlender has been in federal custody since December 20, 2012, when he was arrested on a federal criminal complaint that was filed after law enforcement executed a search warrant at his residence in Grapevine on December 18, 2012. According to documents filed in the case, Oberlender used his Apple Macbook computer to connect to the Internet and use Skype software to share a video file depicting a minor engaged in sexually explicit conduct.
Specifically, according to the factual resume filed in the case, on August 5, 2012, Oberlender used Skype to communicate with a person known as “DJH.” During that communication, Oberlender permitted DJH to remotely view the entire contents of his computer screen. Oberlender then began playing a video file, viewable by DJH, that depicted an adult male and a minor male engaged in sexually explicit conduct. The minor male, whose eyes are shut during the entire video, appears to be approximately five or six-years-old. DJH, who was located in Dallas, used Evaer software to capture and record the contents of Oberlender’s computer screen, to include the transmission of the video.
This case 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 U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better 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.justice.gov/psc/ For more information about internet safety education, please visit www.justice.gov/psc/ and click on the tab "resources."
The investigation is being conducted by the FBI. Assistant U.S. Attorney Aisha Saleem is in charge of the prosecution.
Former Global Wealth Management Firm Employee Arrested on Insider Trading ChargesRead the Press Release
NEWARK, N.J. – An employee of a global wealth management firm (identified only as “Brokerage Firm A”) was arrested at his home this morning on insider trading charges related to Gilead Sciences Inc.’s $11 billion acquisition of New Jersey-based Pharmasset Inc., New Jersey U.S. Attorney Paul J. Fishman announced.
Kevin Dowd, 37, of Boca Raton, Fla., is charged by criminal Complaint with conspiracy to commit securities fraud. Dowd was arrested this morning by agents of the FBI at his home, and is scheduled to appear this afternoon before U.S. Magistrate Judge William Matthewman in West Palm Beach, Fla., federal court.
According to the Complaint:Dowd was a registered representative in Brokerage Firm A’s Aventura, Fla., branch office and held the titles of second vice president and financial advisor. He joined the firm in 2005 and worked there through late October 2012. A member of Pharmasset’s board of directors was the Aventura branch’s largest customer, and informed his advisors at the Aventura branch that Pharmasset was in the process of being acquired by a large pharmaceutical company, and that the acquisition price was going to be in the high $130s per share.
At approximately 7:00 a.m. on Monday, Nov. 21, 2011, Gilead publicly announced that it had entered into an agreement with Pharmasset to acquire the company for approximately $11 billion, or $137 per share in cash. The purchase price represented an approximately 89 percent premium over Pharmasset’s closing price of $72.67 on Nov. 18, 2011. In response to the announcement, Pharmasset’s stock price increased to $134.14 per share at the close of trading on Nov. 21, 2011.
On Friday, Nov. 18, 2011, prior to the public announcement of the Pharmasset acquisition, however, Dowd tipped conspirator J.F., a childhood friend, about the impending Pharmasset acquisition. Immediately following the tip, J.F. transferred $196,000 into a brokerage account he controlled that previously had no money in it and that had not been used for months, and purchased approximately $196,000 worth of Pharmasset stock in that account. J.F. also tipped conspirator “E.B.”, who purchased 100 highly speculative “out-of-the-money” call options in Pharmasset within minutes of J.F.’s purchase of Pharmasset stock.
A few minutes after the public announcement of the Pharmasset acquisition, Dowd called J.F. several times. Later that same morning J.F. and E.B. engaged in a series of phone calls, following which they liquidated the positions in Pharmasset they had built the previous Friday. J.F. netted an illegal profit of $163,621 based on Dowd’s tip, and E.B. made an illegal profit of $544,706 from his sale of his Pharmasset options. In exchange for the tip, J.F. gave Dowd a wooden dock for his jet skis and a cashier’s check for $35,000, which was deposited into Dowd’s bank account on Jan. 5, 2012. Dowd used the money for an in-ground pool at his Boca Raton home.
When confronted by FBI agents in July 2012 about his conduct, Dowd admitted that he told J.F., but falsely stated that he had never received information that Pharmasset was going to be acquired by another pharmaceutical company.
The conspiracy count with which Dowd is charged is punishable by a maximum potential penalty of five years in prison and a fine of $250,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the ongoing investigation leading to the criminal Complaint. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit and Philadelphia Regional Office, under the direction of Daniel M. Hawke for its assistance.The government is represented by Assistant U.S. Attorneys Gurbir S. Grewal and Mala Ahuja Harker of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charge and allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
13-041
Defense counsel: Peter Willis Esq., Jersey City, N.J.
Dowd Complaint
Former Education Consultant Charged with FraudRead the Press Release
BOSTON - A Los Angeles man was charged today in federal court with defrauding clients of his educational consulting firm.
Mark J. Zimny, formerly of Cambridge, was indicted on multiple counts of wire fraud and money laundering.
The Indictment alleges that Zimny operated IvyAdmit Consulting Associates, an educational consulting firm in the business of helping international applicants apply to “top” American universities and boarding schools. Zimny, who falsely claimed to be an Assistant Professor at Harvard University, told his clients that their children would improve their prospect of admission to certain schools if the clients made sizeable gifts of development contributions to the schools, through Zimny, during the application process. Zimny did not forward any of the funds collected to the schools and instead converted the funds, totaling over $600,000, for his own purposes.
The maximum penalty under the statute is up to 20 years in prison, followed by three years of supervised release and a $250,000 fine.
United States Attorney Carmen M. Ortiz and Kevin Niland, Inspector in Charge of the United States Postal Inspection Service, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Lori Holik of Ortiz’s Economic Crimes Unit.
The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Convenience Store Owner Sentenced to Nearly Five Years in Federal Prison for Food Stamp Fraud, Wire Fraud and Conducting an Unlicensed Money Transmitting BusinessRead the Press Release
Defendant, Who Owned a Convenience Store in Arlington, Texas, Also Ordered to Pay More Than $1.4 Million in Restitution
FORT WORTH, Texas — Ali Ugas Mohamud of Arlington, Texas, was sentenced this morning by U.S. District Judge John McBryde to 13 concurrent sentences of 57 months each, following his guilty plea in October 2012 to an indictment charging him with seven counts of food stamp fraud, five counts of wire fraud and one count of conducting an unlicensed money transmitting business. In addition, Judge McBryde ordered that Mohamud pay $1,418,027 in restitution, $98,000 of which is payable immediately. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, Mohamud owned Tawakal Grocery Store, located on South Collins Street in Arlington, and was authorized to participate in the United States Supplemental Nutrition Assistance Program (SNAP), formerly known as the “Food Stamp Program.” SNAP recipients are issued an electronic benefit card (EBT), commonly referred to in Texas as a “Lone Star Card,” in order to access SNAP benefits.
From time to time, beginning in 2009, Mohamud knowingly exchanged food stamp benefits for cash or wired money to other individuals in Somalia using food stamp benefits. As part of his scheme to defraud and to obtain money, from September 2008 through February 2010, Mohamud also wired thousands of dollars from Affiliated Computer Services, Inc., which operates EBT management for retailers, to his bank in Arlington.
The case was investigated by the U.S. Department of Agriculture - Office of Inspector General, Internal Revenue Service Criminal Investigation, the Texas Health and Human Services Commission - Office of Inspector General and the U.S. Department of Housing and Urban Development - Office of Inspector General.
Assistant U.S. Attorney J. Michael Worley was in charge of the prosecution.
Former CIA Officer Sentenced to 30 Months for Revealing Identity of 20-Plus-Year Covert CIA OfficerRead the Press Release
ALEXANDRIA, Va. — Former CIA officer John Kiriakou, 48, of Arlington, Va., was sentenced to 30 months in prison, followed by three years of supervised release, for revealing to a journalist the identity of a man whose 20-plus-year career as a covert CIA agent had never been disclosed publicly. Kiriakou also admitted in court that he disclosed information revealing the role of another CIA employee in classified activities.
Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia, and Debra Evans Smith, Acting Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by United States District Judge Leonie M. Brinkema.
On Oct. 23, 2012, Kiriakou pled guilty to one count of intentionally disclosing information identifying a covert agent. As part of the plea agreement, the United States and Kiriakou agreed that a sentence of 30 months in prison was the appropriate disposition of this case.
“John Kiriakou betrayed the trust bestowed upon him by the United States and he betrayed his colleagues whose secrecy is their only safety,” said U.S. Attorney MacBride. “In his own words to the FBI, John Kiriakou called actions such as his, ‘immoral’ and the potential damage done ‘terrifying.’ John Kiriakou put the life of a covert officer at risk; he put the officer’s family in danger; and he exposed our nation’s vital secrets. Oaths matter and today’s sentence should serve as reminder to those who are entrusted with classified information that damage done by leaks is not speculative or hypothetical – it is actual and substantial, and the Justice Department will hold them accountable.”
“Mr. Kiriakou was entrusted with the important responsibility of protecting the identities of America’s covert operatives,” said Acting Assistant Director in Charge Smith. “Instead of protecting this classified information, he revealed it, thereby threatening their personal safety as well as our nation’s security. Together with our intelligence community partners, the FBI will continue to investigate those who violate this special trust.”
According to court records, the case is a result of an investigation triggered by a classified filing in January 2009 by defense counsel for high-value detainees at Guantanamo Bay, Cuba. This filing contained classified information the defense had not been given through official government channels, including information about certain government employees and contractors. The investigation revealed that on multiple occasions one of the journalists to whom Kiriakou illegally disclosed classified information, in turn, disclosed that information to a defense team investigator. This information was reflected in the classified defense filing and enabled the defense team to take or obtain surveillance photographs of government personnel. The investigation concluded that no laws were broken by the defense team.
Kiriakou was a CIA intelligence officer between 1990 and 2004, serving at headquarters and in various classified overseas assignments. Upon joining the CIA in 1990 and on multiple occasions in following years, Kiriakou signed secrecy and non-disclosure agreements not to disclose classified information to unauthorized individuals. In a statement of facts filed with his plea agreement, Kiriakou admitted that he made illegal disclosures about two CIA employees and their involvement in classified operations to two journalists (referenced as “Journalist A” and “Journalist B” in court records) on multiple occasions between 2007 and 2009.
Court records indicate that the emails seized during the investigation revealed that Kiriakou disclosed information to journalists about dozens of CIA officers, including numerous covert officers of the National Clandestine Service beyond the one identified in the defense filing by lawyers for the high-value detainees in Guantanamo Bay. The government raised this with the court to demonstrate that the charged conduct was in no sense aberrational or reflective of an atypical lapse of judgment.
Kiriakou admitted that, through a series of emails with Journalist A, he disclosed the full name of a CIA officer (referred to as “Covert Officer A” in court records) whose association with the CIA had been classified for more than two decades. In addition to identifying the officer for the journalist, Kiriakou also provided information to the journalist that linked the officer to a CIA counterterrorism program known as the Rendition, Detention, and Interrogation Program and a particular RDI operation.
In addition, Kiriakou admitted that he disclosed to Journalists A and B the name and contact information of a CIA officer, identified in court records as “Officer B,” along with his association with an operation to capture terrorism subject Abu Zubaydah in 2002. Kiriakou knew that the association of Officer B with the Abu Zubaydah operation was classified. Based in part on this information, Journalist B subsequently published a June 2008 front-page story in The New York Times disclosing Officer B’s alleged role in the Abu Zubaydah operation.
Kiriakou provided this information to journalists without inquiring what the journalists would do with the information. Without Kiriakou’s knowledge, Journalist A passed the information he obtained from Kiriakou to an investigator assisting in the defense of high-value detainees at Guantanamo Bay. The investigator had been unable to successfully identify either officer until he received this information from Journalist A, which led to Officer B being secretly photographed and his photographs being tendered to high-value terrorist detainees – a result Kiriakou himself described as “terrifying.”
Kiriakou also admitted that he lied to the CIA regarding the existence and use of a classified technique, referred to as a “magic box,” while seeking permission from the CIA’s Publications Review Board to include the classified technique in a book.
This case was investigated by the FBI’s Washington Field Office, with assistance from the Central Intelligence Agency and the Air Force Office of Special Investigations. Assistant U.S. Attorneys Iris Lan of the Southern District of New York, Mark E. Schneider and Ryan Fayhee of the Northern District of Illinois, and W. Neil Hammerstrom, Jr. of the Eastern District of Virginia are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Former Bank Director Charged with Securities and Wire FraudRead the Press Release
A former director of a Georgia bank who managed two private investment funds has been charged by a federal grand jury in the Eastern District of New York with securities fraud and wire fraud. According to court documents, defendant Aubrey Lee Price sent a letter to acquaintances in mid-June 2012 in which he admitted that he had lost a large amount of investor money through trading activities and that he planned to kill himself by jumping from a ferry boat in Florida. Price remains missing. Anyone with information regarding Price’s whereabouts or the alleged crime is urged to contact the Federal Bureau of Investigation office in New York at (212) 384-1000, or at [email protected].
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office.
According to the indictment, Price managed investment funds PFG LLC (“PFG”) and the Montgomery Growth Fund (“Montgomery Growth”). Starting in or about June 2009, PFG raised approximately $40 million from approximately 115 investors from across the nation. Price unsuccessfully invested PFG funds in various equity securities, options, and real estate, including farms in South America. To cover up his losses, Price allegedly lied to his investors by posting fake account statements on a secure PFG web site that fraudulently reflected fictitious assets and fabricated investment returns.
The indictment also states that, starting in or about January 2011, Price became a director of Montgomery Bank & Trust (“MB&T”), a financial institution in Ailey, Georgia. Price also invested some of the bank’s capital, which he told the bank’s management he would invest safely in U.S. Treasury securities. Instead, Price lost much of the bank’s money through risky investments in equity securities and options. Price also embezzled MB&T money to pay redemptions to some PFG investors. The indictment charges that Price covered up his embezzlement and losses of MB&T’s funds by giving the bank’s management fabricated documents falsely indicating that approximately $17 million was on deposit in the bank’s name at a large financial services firm in New York.
“As charged in the indictment, this defendant repeatedly abused the trust placed in him by his investors and MB&T by lying about his investment losses, fabricating documents, and embezzling bank funds. Through this web of deception, Price acted to create the image of a successful investor. When that image was shown to be a lie, he then orchestrated his confession and disappearance. We are using every resource available to locate him and recover the funds he stole,” said U.S. Attorney Lynch.
FBI Assistant Director-in-Charge Venizelos stated, “As alleged, Price lied to investors about where their money would be invested, and lied to them about the solvency of his company. He lied to the bank on whose board he served about investment of bank capital, and lied again to cover up that lie. It is therefore reasonable to assume that Price’s talk of suicide was also a lie. The FBI is actively looking for Aubrey Lee Price.”
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a maximum prison sentence of 30 years for wire fraud and 25 years for securities fraud.
The government’s case is being prosecuted by Assistant United States Attorneys David C. Woll, Jr., James McMahon, and Brian Morris.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The Defendant:
Name: AUBREY LEE PRICE
Age: 46Financial Consultant Extradited to the United States for Alleged Scheme to Defraud the U.S. Export-import BankRead the Press Release
Manuel Ernesto Ortiz-Barraza, an independent financial consultant, was extradited to the United States today for his alleged role in a scheme to defraud the Export-Import Bank of the United States (Ex-Im Bank) of over $2.5 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Western District of Texas Robert Pitman and Osvaldo L. Gratacos, Inspector General of the Ex-Im Bank.
Ortiz-Barraza, 56, was charged in an indictment unsealed on Oct. 19, 2011, in the Western District of Texas with one count of conspiracy to commit wire and bank fraud, three counts of wire fraud and one count of bank fraud for his alleged role in a scheme with several others to defraud the Ex-Im Bank. Based on a provisional arrest warrant, Mexican authorities arrested Ortiz-Barraza in Mexico on Feb. 13, 2012, and he has been awaiting extradition to the United States, a process which was recently finalized by the Mexican courts.
According to the U.S. indictment and court documents, Ortiz-Barraza and his co-conspirators allegedly conspired to obtain Ex-Im Bank guaranteed loans through banks by creating false loan applications, false financial statements and other documents purportedly for the purchase and export of U.S. goods into Mexico. Ortiz-Barraza and his co-conspirators allegedly falsified shipping records to support their claims of doing legitimate business and did not ship the goods that were guaranteed by the Ex-Im Bank. After the loan proceeds were received, Ortiz-Barraza and his co-conspirators allegedly split the loan proceeds among themselves. As a result of the alleged fraud, the conspirators’ loans defaulted, causing the Ex-Im Bank to pay claims to lending banks on a loss of over $2.5 million.
The charges and allegations contained in the indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
The Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing. The Ex-Im Bank provides a variety of financing mechanisms to help foreign buyers purchase U.S. goods and services.
The case is being prosecuted by Senior Litigation Counsel Patrick Donley and Trial Attorney William Bowne of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Steven Spitzer of the Western District of Texas, El Paso Division. The case was investigated by the Ex-Im Bank Office of Inspector General, Homeland Security Investigations in El Paso, under the leadership of Acting Special Agent in Charge Dennis Ulrich; Internal Revenue Service-Criminal Investigation in Washington, D.C., under the leadership of Special Agent in Charge Rick A. Raven; and the U.S. Postal Inspection Service in Washington, D.C., under the leadership of Inspector in Charge Daniel S. Cortez. Substantial assistance was provided by the U.S. Marshals Service and the Criminal Division’s Office of International Affairs in Washington, D.C. The Department of Justice is particularly grateful to the government of Mexico for their assistance in this matter.
Federal Jury Convicts Fort Worth Man in Methamphetamine Trafficking ConspiracyRead the Press Release
FORT WORTH, Texas — Following an afternoon of testimony before U.S. District Judge John McBryde, and five hours of deliberation, a federal jury convicted Josue Martinez-Garcia, aka “Cholo,” of conspiring to possess with the intent to distribute more than 500 grams of methamphetamine. Martinez-Garcia, 29, of Fort Worth, Texas, faces a statutory sentence of not less than 10 years and up to life in federal prison and a $10 million fine. Sentencing is set for May 10, 2013. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
The government presented evidence at trial that beginning at least in 2010, Martinez-Garcia conspired to distribute more than 500 grams of methamphetamine The government’s case consisted of numerous witnesses, including two cooperators who had distributed for Martinez-Garcia and an undercover agent who had negotiated with Martinez-Garcia to purchase two kilograms of methamphetamine.
Co-defendant in the case, Jacob Fenton, aka “Solo,” 29, also of Fort Worth, who testified at trial, pleaded guilty in October 2012 to one count of conspiracy to distribute and possess with the intent to distribute methamphetamine, and faces a statutory sentence of up to 20 years in federal prison and a $1 million fine. Sentencing is set for February 1, 2013.
The case was investigated by the Drug Enforcement Administration and prosecuted by Assistant U.S. Attorneys Matt Gulde and Aisha Saleem.
Federal Grand Jury in Fort Wayne Returns IndictmentRead the Press Release
Fort Wayne, INCThe United States Attorney's Office announced that a Grand Jury sitting in Fort Wayne, Indiana, returned the following Indictment on January 23, 2013: Sheila Robinson, 48, of Fort Wayne, Indiana, is charged in a ten count Indictment with wire fraud on or about February 13, 2012, February 15, 2012, and August 6, 2012; mail fraud on or about July 27, 2012, making a false claim on or about February 13, 2012, February 15, 2012, and August 6, 2012, and aggravated identity theft on or about February 13, 2012, February 15, 2012, and August 6, 2012. These charges were filed as the result of an investigation by the Internal Revenue Service and United States Postal Inspection Service. This case has been assigned to and will be prosecuted by Assistant United States Attorney Lovita Morris King and Deborah M. Leonard.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
##END##Fairbanks Man sentenced to three years for drug cultivationRead the Press Release
Fairbanks, Alaska -U.S. Attorney Karen L. Loeffler announced today that a Fairbanks man was sentenced in federal court in Fairbanks for two counts of drug trafficking.
Johnathon Butterfield, 23, of Fairbanks, Alaska, also recently of Tucson, Arizona, was sentenced by Chief United States District Court Judge Ralph R. Beistline to 37 months in prison, to be followed by four years of supervised release.
According to Assistant U.S. Attorney Stephen Cooper, who prosecuted the case, Butterfield was one of several persons involved in a cooperative venture to manufacture marijuana and to possess the drug with intent to distribute. Butterfield pled guilty to conspiracy and also to one count of manufacturing the drug.
In entering the sentence, Judge Beistline found that Butterfield had participated in cultivating more than five hundred marijuana plants in order to produce the marijuana intended for sale. The court also found that he had possessed hand guns and ammunition in connection with his commercial operation.
Ms. Loeffler commends the Drug Enforcement Administration and the Alaska Statewide Drug Enforcement Unit for the investigation of this case.
Fairbanks Man sentenced to ten years for drug cultivationRead the Press Release
Fairbanks, Alaska- U.S. Attorney Karen L. Loeffler announced today that a Fairbanks man was sentenced in federal court in Fairbanks on January 24, 2013, for three counts of drug trafficking and one count of possessing a firearm in furtherance of the drug trafficking crimes.
Floyd Everett Harshman, 54, of Fairbanks, Alaska, was sentenced by Chief United States District Court Judge Ralph R. Beistline to 120 months in prison, to be followed by five years of supervised release.
According to Assistant U.S. Attorney Stephen Cooper, Harshman supervised several persons in a cooperative venture to manufacture marijuana and to possess with intent to distribute. Harshman pled guilty to conspiracy and two counts of manufacturing the drug at different locations in the Fairbanks area, and also to one count of possessing a firearm in furtherance of the drug trafficking crimes.
In entering the sentence, Judge Beistline found that Harshman had supervised the cultivation of more than one thousand marijuana plants in order to produce the marijuana intended for sale. The court also found that he had possessed hand guns and ammunition in connection with his commercial operation.
Ms. Loeffler commends the Drug Enforcement Administration and the Alaska Statewide Drug Enforcement Unit for the investigation of this case.
El Paso Man Sentenced to Federal Prison on Sexual Exploitation ChargesRead the Press Release
United States Attorney Robert Pitman and FBI Special Agent in Charge Mark Morgan announced that in El Paso this morning, 47-year-old Joe Tapia, III, of El Paso, was sentenced to the statutory maximum of 30 years in federal prison followed by a lifetime of supervised release after pleading guilty in October to solicitation of material relating to the sexual exploitation of children.
By pleading guilty, the former Excel Learning Center (ELC) admissions service representative and local church youth minister admitted that he had sexually explicit instant messenger chats with multiple minors on both his work and home computers. Furthermore, Tapia admitted that he recorded video and still images of two children while they were changing clothes prior to a church performance and used those recordings to solicit other sexually explicit images of children.
Tapia has remained in custody since his arrest by special agents with the Federal Bureau of Investigation in May 2012.
This case was investigated by the Federal Bureau of Investigation together with the El Paso Police Department. Assistant United States Attorney J. Brandy Gardes prosecuted this case on behalf of the Government.
East Moriches Man to Be Arraigned Today on Charge of Child Pornography PossessionRead the Press Release
Federal agents and investigators with the Suffolk County Police Department’s Computer Crimes Squad arrested an East Moriches man this morning on the charge of possessing child pornography. The defendant, Jay Lockett Sears, is scheduled to be arraigned later today before United States District Magistrate Arlene R. Lindsay at the U.S. Courthouse, 100 Federal Plaza, Central Islip, New York.1
The arrest was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge of the Federal Bureau of Investigation, (“FBI”) New York Field Office, and Edward Webber, Commissioner, Suffolk County Police Department (“SCPD”).
According to court filings, which include an application for a search warrant of the defendant’s East Moriches apartment, Sears created hundreds of images of child pornography by taking photographs of children in public settings, and then cutting and pasting the heads of the children onto images of adult bodies engaged in sexual activity. Some images included those in which Sears allegedly pasted his own facial images onto the bodies of other males so as to appear as if he were having sexual relations with children.
Sears came to the attention of the SCPD on January 11, 2013, after the discovery of numerous bags containing hundreds of child pornography images were found in trash removed from the defendant’s apartment. The images were discarded apparently in anticipation of Sears vacating his apartment.
“As alleged, Sears victimized countless children by using their innocent images to create child pornography. He then went so far as to use his own image to virtually join in the exploited scenarios he created. The sexual exploitation of children is one of our most important law enforcement priorities. Those who seek to harm children will be arrested and prosecuted,” stated United States Attorney Lynch.
Assistant Director-in-Charge Venizelos stated, “The altering of children’s photos to create child pornography victimizes those children to provide merchandise for a depraved market. We have an obligation and a commitment to protect children from exploitation.”
“Children are our most precious and vulnerable resource,” said Suffolk County Police Department Commissioner Webber. “Protecting children in our community is a high priority for our police department, and we will continue to work with other law enforcement agencies, as well as community leaders, to ensure their safety.”
If convicted, the defendant faces a maximum sentence of 10 years’ imprisonment.
Parents who believe that their children may have been the victims of persons involved in child pornography should contact the Suffolk County Computer Crimes Squad at (631) 852-6279, or the Federal Bureau of Investigation at (631) 501-8600.
The government’s case is being prosecuted by Assistant United States Attorneys Allen Bode and Thomas Sullivan.
The Defendant:
Name: JAY LOCKETT SEARS
Age: 73_____________________________
1 The charge is merely an allegation, and the defendant is presumed innocent unless and until proven guilty.