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25 January 2013
District Man Sentenced to Six Years in Prison for Obstructing Justice in Investigation of 2011 Murder-Defendant Admits Making False Statements to A Grand Jury-Read the Press Release
WASHINGTON – Jefferson Joseph, 23, of Washington, D.C., was sentenced today to six years and one month in prison after earlier pleading guilty to charges of obstructing justice in a criminal investigation and unlawful entry, U.S. Attorney Ronald C. Machen Jr. announced.
Joseph pled guilty in August 2012 in the Superior Court of the District of Columbia and was sentenced today by the Honorable Ronna L. Beck.
According to the government’s evidence, Joseph obstructed justice in the investigation into the murder of Jeffrey Covington, 19, who was killed early July 2, 2011 in the 600 block of 46th Place SE. Mr. Covington was shot once in the neck, and the entire murder was captured on video surveillance footage. The government has charged William Faison, 23, with first-degree murder while armed and other offenses in the murder. Mr. Covington’s father, Jeffrey Blount, 42, is charged with obstructing justice, carrying a pistol without a license, and other offenses.
On the video, several individuals can be seen in the area during a craps game. An individual, alleged to be Faison, walked up to Mr. Covington and Blount. The man pushed Mr. Covington and Blount out of the way, pulled out a handgun, and announced a robbery. Blount then began to flee, with the gunman in pursuit. During the chase, Mr. Covington appeared to pull out a handgun, which was broken, and pointed it in the direction of the gunman, apparently to defend his father. The gunman then turned toward Mr. Covington and shot and killed him.
Joseph was among the individuals who would have been in a position to identify the gunman. Joseph can be seen walking to the craps game and backing up as the gunman approached Blount to rob him, and then watching a portion of the shooting before fleeing.
A grand jury investigation commenced shortly after the homicide. Joseph was subpoenaed, and eventually testified twice. In his plea, Joseph acknowledged that he had made numerous false statements to the grand jury in an effort to obstruct the investigation into the murder, including conflicting statements about his sobriety that evening, denying his knowledge of other individuals present for the murder, and conflicting accounts about the nature of his relationship with Faison. He also denied remembering what happened on the night of the murder.
The unlawful entry charge stems from a previously issued Court order that barred Joseph from the area where the murder took place.
Faison and Blount are scheduled to stand trial in July 2013, and both men have pled not guilty to the charges.
In announcing the sentence, U.S. Attorney Machen commended the work of the Metropolitan Police Department’s Violent Crimes Branch. He also praised the work of Paralegal Specialist Fern Rhedrick and thanked Assistant U.S. Attorneys Melinda Williams and Jeff Pearlman, who have been investigating the case.
13-027District Man Sentenced to 18 Months in Prison for Assaulting Another Man Inside Metro Station– Victim Fell onto the Track at L’Enfant Plaza Metro Station–Read the Press Release
WASHINGTON - Roderick Hill, also known as Rodrick Delvon Hill, 22, of Washington, D.C., was sentenced today to 18 months in prison for assaulting another man last year inside the L’Enfant Plaza Metro station, announced U.S. Attorney Ronald C. Machen Jr.
Hill pled guilty in September 2012 in the Superior Court of the District of Columbia to a charge of assault with significant bodily injury. He was sentenced by the Honorable Heidi M. Pasichow. Following his prison term, Hill will be placed on three years of supervised release.
This was the second sentencing for Hill this week. On Jan. 23, 2013, he was sentenced in the U.S. District Court for the District of Columbia to a 20-month prison term for assaulting a Deputy United States Marshal. Hill struck the deputy marshal with a closed fist numerous times in the face and head area while he was in Superior Court for a hearing in June 2012 in the case involving the assault at the Metro station.
The attack at the L’Enfant Plaza Metro station took place at about 9:10 p.m. on June 3, 2012. Hill struck a man with a closed fist. The blow was with such force that it caused the victim to fall from the platform onto the train track, causing him to lose consciousness momentarily. Other bystanders helped the victim get back onto the platform. Hill left the scene, but the police canvassed the area and later found him inside the Minnesota Avenue Metro station. The victim was transported to the hospital that evening for immediate medical care. As a result of the assault, the victim suffered a broken jaw and had to wear a wire for four weeks.
Judge Pasichow ordered that Hill’s sentence be run consecutively to the sentence in the federal court matter, meaning that Hill now faces a total of 38 months of incarceration.
In announcing today’s sentence, U.S. Attorney Machen praised the work of the Metro Transit Department, which investigated the case. He also commended the efforts of Assistant U.S. Attorneys Emory V. Cole and John C. Truong, who investigated and prosecuted the case.
13-025District Man Charged with Series of Car Loan Scams That Cheated Victims Out of More Than $185,000- Accused of Posing as Car Dealer to Deceive Unsuspecting Victims -Read the Press Release
WASHINGTON -- Benjamin Grey, 32, of Washington, D.C., was indicted today on federal charges in connection with a scheme in which he posed as a car dealer to defraud individuals and banks of more than $185,000, announced U.S. Attorney Ronald C. Machen Jr., David Beach, Special Agent in Charge of the Washington Field Office of the U.S. Secret Service, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Grey was indicted by a grand jury in the U.S. District Court for the District of Columbia. The 23-count indictment includes charges of bank fraud, wire fraud and other offenses. It also includes a forfeiture allegation seeking all proceeds that can be traced to the scheme. Grey has been in custody since his arrest on Aug. 22, 2012.
According to the indictment, Grey claimed that he ran car dealerships named Planet Cars and GreyMaxx. Grey persuaded various individuals to apply for car loans purporting to buy luxury cars, such as BMWs, from him and Planet Cars. After the bank or credit union issued a loan and check to buy the car, Grey took the money but never produced the promised car, and avoided contact with the victim. The indictment alleges Grey never owned the cars in question.
The indictment alleges that on five separate occasions in 2009, including four times in October 2009, Grey fraudulently obtained auto loan checks in this way. Each loan was between $29,000 and $35,000. The victimized banks included BB&T and Navy Federal Credit Union. All told, these loans were worth more than $160,000.
In addition, according to the indictment, Grey executed other similar confidence schemes. For example, in April 2010, Grey – holding himself out as the owner of Planet Cars – obtained a car from a legitimate car dealership in Bethesda, Md., using a worthless check drawn on a Planet Cars bank account that had been closed for a year. Further, the indictment alleges that in 2010, Grey defrauded a would-be business partner out of at least $26,000 by pretending that the money would finance their purchase and re-sale of luxury cars. Finally, the indictment alleges that in 2012 Grey sought a payment of thousands of dollars to obtain a Range Rover for an undercover Special Agent with the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives - but, again, Grey had no intention of providing the car.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
In announcing the charges, U.S. Attorney Machen, Special Agent in Charge Beach and Chief Lanier commended the efforts of those who worked on the case from the U.S. Secret Service and MPD, as well as those who provided assistance from the Bureau of Alcohol Tobacco, Firearms and Explosives. They also commended the work of Assistant U.S. Attorneys Jonathan Hooks and Christopher R. Kavanaugh, who are prosecuting the case.
13-026Delaware Man Pleads Guilty to Extortion, Computer IntrusionRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Donald Christopher Dailey, 37, of Delaware, Ohio pleaded guilty in U.S. District Court today to extortion for demanding money from the company where he was the information technology administrator in exchange for not disclosing internal financial and other information. Dailey also admitted to “hacking” into an ex-girlfriend’s email account.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI) announced the guilty pleas entered today before U.S. District Judge Michael Watson.
According to court documents, Dailey abruptly resigned from the engineering company where he worked on October 1, 2012. Employees found a laptop connected to the company network and streaming live email of the company’s CEO. It was hidden in Dailey’s private and secure workroom. In a resignation letter he sent to the CEO, Dailey claimed he had knowledge of what he alleged was damaging financial and other information regarding internal company communications that he would disclose to authorities and certain customers unless the CEO and his business partner sat down and talked with him.
On October 13, Dailey called the CEO and made an opening demand of 75 percent of the $92,500 expected salary if he had stayed with the company. FBI agents arrested Dailey on October 16 and searched his residence. An analysis of Dailey’s computer revealed that he had gathered personal information about the company’s employees including everyone’s name and salary, and had stored the data on his personal computer. The alleged documents or information referenced by Dailey as part of the extortion were not found.
Dailey also admitted illegally accessing an ex-girlfriend’s email and bank accounts from a computer at the engineering company where he worked before he resigned.
Dailey remains on house arrest pending sentencing on a date to be set by Judge Watson. Extortion is punishable by up to two years in prison and a fine of $250,000. Intentionally accessing a computer without authorization is punishable by up to one year in prison.
U.S. Attorney Stewart commended the FBI agents who investigated the case and Assistant U.S. Attorney Deborah A. Solove, who represented the United States in the case.
Collinsville Man Sentenced to Prison for Possession of Stolen Firearm and Possession of Firearm by User of MarijuanaRead the Press Release
A Collinsville, Illinois, man was sentenced today to a prison term by the federal district court for possession of a stolen firearm and possession of a firearm by a user of marijuana, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced.
Michael C. Campbell, 54, was sentenced to 24 months in prison to be followed by 3 years of supervised release, a $200 special assessment, and a fine of $7500, following his plea of guilty, on June 12, 2012, to an Indictment charging him with Possession of a Stolen Firearm, and Possession of a Firearm by a User of Marijuana. The charges relate to an incident that occurred on December 21, 2011, in Collinsville, Illinois, when investigating agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives learned that Campbell had purchased a stolen firearm from Jason Simmons, who pled guilty to similar charges on May 31, 2012. Documents filed with the Court indicate that Simmons received over 90 stolen firearms from a person in Missouri who had given the guns to Simmons for storage. Simmons sold one of the stolen firearms to Campbell, who knew that it had been stolen. Campbell also admitted to being a daily user of marijuana.
Simmons was sentenced last December, to 46 months in prison to be followed by three years of supervised release, a $300 special assessment, and a $750 fine.
The case was investigated by members of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case was prosecuted by Assistant U.S. Attorney Stephen B. Clark.
Chinese Business Owner, Employee Plead Guilty, Sentenced for Stealing Trade Secrets from Sedalia PlantRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Chinese business owner and his employee pleaded guilty and were sentenced in federal court today for conspiring to steal trade secrets from Pittsburgh Corning Corporation, which has a manufacturing plant in Sedalia, Mo., that produces FOAMGLAS® insulation.
“These defendants intended to inflict significant economic harm on an American corporation for their own illicit profit,” Dickinson said. “Theft of trade secrets from U.S. companies by foreign businesses is a national concern. Such thefts can cripple U.S. companies in the marketplace and cost the jobs of workers in the United States. Well-heeled business owners like Huang are put on notice that theft from U.S. companies will be prosecuted and will be punished.”
Ji Li Huang, 46, and Xiao Guang Qi, 32, both citizens of China, pleaded guilty before U.S. District Judge Brian C. Wimes to participating in a conspiracy to steal trade secrets. Huang is the CEO of Ningbo Oriental Crafts Ltd., which employs 200 factory workers to manufacture promotional products for export to the United States and Europe. Qi was his employee.
Huang was sentenced to 18 months in federal prison without parole and ordered to pay a fine of $250,000. Qi was sentenced to time served and ordered to pay a fine of $20,000. Both of the fines were paid today.
“A crime of this nature provides an unfair advantage to competing industries based solely upon an individual, a company or a foreign power’s ability to cheat and steal proprietary information,” stated Michael Kaste, Special Agent in Charge of the Kansas City Division of the FBI. “This results in a significant impact to the economy, a devastating result to the businesses targeted and a threat to the economic security of the United States.”
Pittsburgh Corning, headquartered in Pittsburgh, Penn., manufactures various grades or densities of cellular glass insulation sold under the trade name FOAMGLAS®. That material is used to insulate buildings, industrial piping systems and liquefied natural gas storage tank bases. Pittsburgh Corning’s customers include energy companies, petro chemical companies, and natural gas facilities. Pittsburgh Corning considers the product formula and manufacturing process for FOAMGLAS® proprietary and trade secrets.
By pleading guilty today, Huang and Qi admitted that they attempted to illegally purchase trade secrets of Pittsburgh Corning for the purpose of opening a plant in China to compete with Pittsburgh Corning.
Under the federal sentencing guidelines, Huang and Qi are held accountable for any reasonably foreseeable loss that would have resulted from their crime. The court ruled that the intended loss to Pittsburgh Corning exceeded $7 million, based on the company’s investment of time and resources to research, develop and protect the proprietary information the defendants attempted to steal.
Huang and Qi were arrested when they met with an individual they believed to be an employee of Pittsburgh Corning who had stolen documents that contained trade secret information and was willing to sell it to them for $100,000. That employee, however, was cooperating with law enforcement and the meetings in Kansas City were a sting operation that led to their arrests on Sept. 2, 2012.
On July 22, 2012, an advertisement was published in the local newspaper that solicited “technical talent” with experience at Corning Pittsburgh to lead a project to build a foam glass factory in the Asian market. A confidential source – working with the FBI – responded to the contact e-mail address cited in the newspaper advertisement. While in the United States for business, Huang met with the cooperating source. They agreed that $25,000 would be exchanged upfront (with $75,000 to follow later) for a package of Pittsburgh Corning’s processes and formulary on FOAMGLAS®. They also discussed paying the cooperating source to travel to China several times for consulting.
On Sept. 1, 2012, the cooperating source met with Huang and Qi at a Kansas City restaurant. Qi participated in the meeting and also acted as a translator for Huang for parts of the conversation. A follow-up meeting was scheduled for the next day, at which the cooperating source would bring the stolen proprietary information and Huang and Qi would bring the payment. The cooperating source told Huang and Qi that he had to drive back to Pittsburgh Corning and break into the engineering department to steal the documents and drawings for the equipment.
The next day, Huang and Qi met the cooperating source at a prearranged location and brought a bag containing the money. The cooperating source showed them documents that were purportedly Pittsburgh Corning’s trade secret information, some of which were stamped with secret and confidential markings. Shortly afterward, FBI agents arrested Huang and Qi at their hotel room.
The court ordered Huang and Qi to forfeit to the government $29,778 that was seized by law enforcement officers at the time of their arrest, which the defendants had brought to the United States in order to illegally purchase trade secrets.
This case was prosecuted by Assistant U.S. Attorneys Brian Casey and Matt Wolesky. It was investigated by the FBI.
Charleston Man Sentenced to Five Years in Prison for Selling Crack CocaineRead the Press Release
Defendant Listed Among Charleston’s West Side DMI Offenders
CHARLESTON, W.Va. – U.S. Attorney Booth Goodwin today announced that a Charleston man was sentenced to five years in prison for distributing crack cocaine. Fred Taylor, 23, of Charleston, admitted that on December 1, 2010, he sold a quantity of crack cocaine to a confidential informant working for the Metropolitan Drug Enforcement Network Team (MDENT). Taylor further admitted that on December 7, 2010, he sold crack cocaine to an informant working for MDENT. Both illegal drug transactions took place in Charleston.
On December 22, 2010, MDENT officers executed a search warrant at an apartment shared by the defendant and his associate located on Hutchinson Street in Charleston. Officers located and seized a quantity of crack cocaine, two sets of scales and approximately $2,474 cash.
The Metropolitan Drug Enforcement Network Team (MDENT) conducted the investigation. Assistant United States Attorney Joshua Hanks handed the prosecution. The sentence was imposed by United States District Judge John T. Copenhaver, Jr.
This case was prosecuted as part of the Charleston area’s Drug Market Intervention (DMI) initiative. The DMI initiative was launched in February 2012 by Charleston Police Chief Brent Webster and U.S. Attorney Booth Goodwin, in collaboration with Kanawha County Prosecuting Attorney Mark Plants, other federal, state, local law enforcement agencies and leaders representing several West Side community development organizations. The DMI initiative was initiated in Charleston as a strategic problem-solving effort aimed at closing down open-air drug markets that breed crimes of violence and disorder.
Cahokia Woman Sentenced on Social Security Fraud ChargeRead the Press Release
Jacqueline L. Burrell, 45, of Cahokia, was sentenced today in the U.S. District Court in East St. Louis for concealing a material fact from the Social Security Administration (SSA), the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced. Burrell received a sentence of 10 months in prison to be followed by three years of supervised release. The court also ordered Burrell to pay $53,992 restitution to SSA and a special assessment of $100.
At her guilty plea on October 3, 2012, Burrell admitted that she fraudulently applied for and received assistance for her children in her custody in the form of Supplemental Security Income Benefits payments. During these times, however, she did not actually have custody of the children, who were with their father in California. Burrell, while acting as Representative Payee for her minor children, failed to disclose and concealed the fact that the children no longer resided with her in order to receive payments intended to benefit the children.
The investigation was conducted by the Social Security Administration’s Office of Inspector General and was prosecuted by Assistant United States Attorney Liam Coonan.
If you suspect or know of an individual or company that is committing fraud against any Social Security Administration (SSA), you may report this to the SSA Office of Inspector General by calling 800.269.0271.
Blackfoot Man Pleads Guilty to ArsonRead the Press Release
POCATELLO –Trevor James Hurley, 20, of Blackfoot, Idaho, pleaded guilty yesterday in United States District Court in Pocatello to arson, U.S. Attorney Wendy J. Olson announced.
According to the plea agreement, in the early morning hours of August 6, 2012, Hurley set fire to a manufactured home or trailer located on the Fort Hall Shoshone Bannock Indian Reservation. Witnesses observed Hurley earlier in the night purchasing cotton balls and lighter fluid at a convenience store. Hurley later returned to the convenience store, bragging about how he had set someone's trailer on fire. In an interview with law enforcement on September 11, 2012, Hurley explained how he poured lighter fluid on the cotton balls, lit them on fire, and pushed them through a hole in the screen to the trailer's master bedroom window. He said that the trailer ignited fast, flames shot up, and then he ran back to his friends in a nearby vehicle. Although the trailer was a total loss, and another person was sleeping in a camp trailer located approximately ten feet away, no one was injured in the fire.
The charge is punishable by up to 25 years in prison, a maximum fine of $250,000, and up to five years of supervised release.
Sentencing is set for April 30, 2013, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
The case was investigated by the Fort Hall Police Department, Idaho State Fire Marshal, and the Bingham County Sheriff's Office.
Belleville Man Sentenced for Defrauding Federal Unemployment Insurance ProgramRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced that Kevin Veath, 54, of Belleville, Illinois, was sentenced today in the United States District Court for defrauding the unemployment insurance program. Following his plea of guilty on October 3, 2012, to a one-count indictment for Embezzlement of Public Funds, the District Court sentenced Veath to a 5 year term of probation. He also was ordered to repay approximately $15,245 in restitution to the Office of the Illinois Attorney General and to pay a $100 special assessment.
“Everyone should know that lying and cheating to receive unemployment compensation is a crime.” said United States Attorney Wigginton. “Those who defraud the unemployment insurance program undermine support for an important public program and hurt and insult every law-abiding citizen of Southern Illinois, particularly as public programs face economic crises. I will continue to place a high priority on pursuing those who steal from the United States Treasury.”
At the time of his guilty plea, Veath admitted to being employed between February 2009 and September 2009 while also filing for and receiving unemployment insurance benefits. In order to receive the benefits, Veath had to certify, approximately every two weeks, to the Illinois Department of Employment Security (IDES) that he was not working and that he was ready, willing, and able to work. He also had to verify that he was actively seeking work. Veath was supposed to inform IDES of any income he received during the certification period, but he did not report that he was employed and earning money, instead choosing to collect both wages and benefits simultaneously. Between February and September of 2009, Veath collected $16,645 in employment insurance benefits to which he was not entitled; however, Veath began repaying the money he stole before sentencing, resulting in the lower restitution order.
This case was investigated by the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; the United States Postal Inspection Service; and the Illinois Department of Employment Security. This case was prosecuted by Special Assistant United States Attorney Katherine L. Lewis.
Bank Robbery Suspect ChargedRead the Press Release
US Attorney Brendan V. Johnson announced that a suspect has been charged by complaint in U.S. District Court for robbing the First Bank and Trust in Toronto, South Dakota on January 2, 2013.
Nathan Michael Reisetter, age 38, of White, South Dakota made his first court appearance before US Magistrate Judge William D. Gerdes on January 23, 2013. The maximum penalty upon conviction for bank robbery is 20 years in prison and/or a $250,000 fine, plus restitution. The charge is merely an accusation and Reisetter is presumed innocent until and unless proven guilty.
Investigation indicates that a man entered the First Bank and Trust at about 3:45 p.m. on January 2, 2013, carrying a large handgun and two garbage bags and wearing a black snowmobile helmet liner or mask over his head and face. The man gave a garbage bag to a teller and told her to fill it up with money from the vault. The man forced two tellers to a back room of the bank and told them to stay there until they counted to one hundred.
As soon as they heard the bank’s door close, the tellers went to the bank’s windows and saw the robber drive away in a red SUV that one of the tellers had noticed park across the street just before the robbery. Footprints and tire tread prints in the snow found around the parking spot were photographed and a plaster cast was made of the tire tread prints.
Investigation led law enforcement to Reisetter’s vehicle, which is a red SUV and has tires that matched the tire tread prints made in the snow outside the bank.
On January 22, law enforcement interviewed Reisetter. He admitted robbing the bank and disclosed that evidence of the crime and some of the stolen money were at his home. Police searched Reisetter’s home and seized cash, guns, and the clothing worn by Reisetter the day he robbed the bank.
The investigation is being conducted by the Deuel County Sheriff’s Office, the SD Division of Criminal Investigation, and the Federal Bureau of Investigation. Assistant US Attorney John E. Haak is prosecuting the case.
Reisetter was remanded to the custody of the US Marshal. A trial date has not yet been set.
Alton Man Sentenced for Defrauding Federal Unemployment Insurance ProgramRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced that Charles Brumley, 42, of Alton, Illinois, was sentenced today in the United States District Court for defrauding the unemployment insurance program. Following his plea of guilty on October 3, 2012, to a one-count indictment for Embezzlement of Public Funds, the District Court sentenced Brumley to a 5 year term of probation. He also was ordered to repay approximately $17,732 in restitution to the Illinois Department of Employment Security and to pay a $100 special assessment.
“Even little children know that lying and cheating to receive unemployment compensation is a crime.” said United States Attorney Wigginton. “Those who defraud the unemployment insurance program undermine support for an important public program and hurt and insult every law-abiding citizen of Southern Illinois, particularly as public programs face economic crises. I will continue to place a high priority on pursuing those who steal from the United States Treasury.”
At the time of his guilty plea, Brumley admitted to being employed between February 2009 and January 2010 while also filing for and receiving unemployment insurance benefits. In order to receive the benefits, Brumley had to certify, approximately every two weeks, to the Illinois Department of Employment Security (IDES) that he was not working and that he was ready, willing, and able to work. He also had to verify that he was actively seeking work. Brumley was supposed to inform IDES of any income he received during the certification period, but he did not report that he was employed and earning money, instead choosing to collect both wages and benefits simultaneously. Between February 2009 and January 2010, Brumley collected $17,732 in employment insurance benefits to which he was not entitled.
This case was investigated by the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; the United States Postal Inspection Service; and the Illinois Department of Employment Security. This case was prosecuted by Special Assistant United States Attorney Katherine L. Lewis.
24 January 2013
Woman Charged with Embezzling Funds from the City of Marion, Illinois, Water DepartmentRead the Press Release
Linda Heyde, 59, of Marion, IL, was indicted by a grand jury and charged with three counts of embezzlement and theft, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. The offenses each carry a statutory maximum sentence of up to ten years in prison, a fine of up to $250,000 and mandatory restitution. The Indictment also seeks forfeiture of $524,100 in criminal proceeds.
The Indictment alleges that Linda Heyde, from 1996, through May, 2012, engaged in a scheme to defraud the City of Marion, Illinois, Water Department while she was the water department’s manager who had primary control over the billing accounts. The Indictment alleges that the City of Marion Police Department was advised that Heyde was handling the water department’s deposit funds in a suspicious manner and that daily bank deposits did not contain cash. The City of Marion Police Department installed covert cameras in the water department to monitor suspicious activities of Heyde. Heyde was observed on camera placing money in her purse. An audit was performed and showed that falsified adjustments had been made to customer accounts resulting in approximately $500,000 in missing funds.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge and is entitled to a fair trial at which the Government must prove guilt beyond a reasonable doubt.
The Indictment is the result of an investigation conducted by the City of Marion Police Department and the Federal Bureau of Investigation. The prosecution is being handled by Assistant U.S. Attorney Norman R. Smith.
Utah Man and Nevada Woman Charged with Tax ConspiracyRead the Press Release
SALT LAKE CITY -- A federal grand jury in Salt Lake City returned an indictment Wednesday afternoon charging Gerrit Timmerman III, 70, of Midvale, Utah, and Carol Sing, 73, of Henderson, Nev., with one count of conspiracy to defraud the United States. The indictment was announced by Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division and U.S. Attorney for the District of Utah David B. Barlow.
According to the indictment, from April 23, 2004, through March 5, 2007, Timmerman and Sing conspired to defraud the United States by marketing corporations sole as a part of a scheme to evade the assessment and payment of federal income taxes. Timmerman and Sing falsely told their clients that so-called “corporations sole” were exempt from United States income tax laws, had no obligation to file tax returns, and had no obligation to apply for tax exempt status. They further claimed that individuals could render their own income non-taxable by assigning it to the corporation sole, could draw a tax-free stipend from their corporation sole, and could render property immune from Internal Revenue Service (IRS) collection activity by transferring property to the corporation sole. During the life of the conspiracy, Timmerman and Sing were responsible for the creation of approximately 90 corporations sole; at the time their corporation soles were created, these clients had outstanding federal income tax assessments totaling at least $5,000,000.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Timmerman and Sing each face a maximum of five years in prison and a fine of up to $250,000.
The case is being investigated by IRS-Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Michael Romano and Dennis Kihm.
Unsealed Federal Indictment Charges 27 Members of Check Fraud ConspiracyRead the Press Release
The Co-conspirators Stole More Than $1 Million From Financial Institutions
CHARLOTTE, N.C. – A federal criminal indictment unsealed in U.S. District Court today charges 27 members of a check fraud scheme with bank fraud conspiracy and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. (See chart below for a list of federal charges and maximum penalties for each defendant).
Russell F. Nelson, Special Agent in Charge of the United States Secret Service, Charlotte Field Division and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department join U.S. Attorney Tompkins in making today’s announcement.
Of the 27 defendants charged in the indictment, 17 were arrested today, three are pending arrest (have agreed to turn themselves in), four are in state custody on state charges and three have not been arrested yet (photos of those not arrested are attached):
• Phillip Gregory Harris, Sr., aka “Cash P,” 30, of Charlotte. (arrested)
• Olwin Brown, aka “Juice” and “OJ,” 22, of Charlotte. (arrested)
• Kevin Smith, 33, of Charlotte. (arrested)
• Renardo Perry, aka “S-Dub,” 28, of Charlotte. (arrested)
• Jerry McDuffie, aka “J,” 31, of Whiteville, N.C. (arrested)
• Craig McInnis, 24, of Charlotte. (arrested)
• Yarral Wilson, 26, of Charlotte. (arrested)
• Kalif Wilson, aka “Scrap,” 28, of Charlotte. (arrested)
• Jarral Thompson, 28, of Clover, S.C. (arrested)
• Jakari Rutledge, 24, of Charlotte. (arrested)
• Martell Mackey, aka “Telly,” 26, of Charlotte. (arrested)
• Jade Brown, 24, of Charlotte. (arrested)
• Christopher Moat, 28, of Charlotte. (arrested)
• Rashad Johnson, 26, of Charlotte. (arrested)
• Quillie Smith, 29, of Charlotte. (arrested)
• Keosha Mack, aka “Kiki,” 28, of Charlotte. (arrested)
• Stanley Rutledge, Jr., 27, of Charlotte. (arrested)
• Jordan Forster, aka “2-3,” 26, of Charlotte. (pending)
• Pamela Kerns, 26, of Davidson, N.C. (pending)
• Tierra Love, 22, of Charlotte. (pending)
• Anthony Woods, aka “Gerod,” 30, of Charlotte. (in state custody)
• Tomonta Simmons, aka “Montay,” 21, of Charlotte. (in state custody)
• Christian Robertson, 20, of Charlotte. (in state custody)
• Walter Boyd, aka “Web,” 26, of Chester, S.C. (in state custody)
• Elijah Grant, aka “Box,” 28, of Charlotte. (not in custody)
• Travis Gabriel, aka “Gangster,” 27, of Charlotte. (not in custody)
• Demarcus Shankle, 25, of Charlotte. (not in custody)
According to allegations contained in the indictment:
From 2007 to 2014, the co-conspirators were involved in a check fraud scheme that operated in Mecklenburg, Gaston, Iredell and Cabarrus counties. The co-conspirators obtained checks linked to active bank accounts, either by purchasing or stealing them from the legitimate account holders. The co-conspirators then deposited these worthless checks made out for various amounts into bank accounts with very little or no available funds, thereby tricking the bank system into crediting the accounts with the funds. During the time it took the bank to process the bad checks, the co-conspirators used ATM cards and other methods to withdraw cash from those accounts. Over the course of the conspiracy, the defendants stole more than $1 million from numerous financial institutions.
“Combating financial fraud remains priority for my office. Fraud schemes like the one perpetrated by the defendants compromise the integrity of our financial system and leave the rest of us to pay for the incurred losses,” said U.S. Attorney Tompkins.
“Technology has forever changed the way we do business, making every day financial transactions a prime target for fraud,” said Charlotte Field Office Special Agent in Charge Russell F. Nelson. “The Secret Service, in conjunction with the Charlotte-Mecklenburg Police Department, and other task force agencies, continues to successfully combat these financial crimes by adapting our investigative methodologies. The U.S. Secret Service Electronic Crimes Task Force is a strategic alliance of law enforcement, academia and the corporate sector; dedicated to investigating, disrupting, and deterring cybercrime,” stated Nelson, “and this case serves as a great example of how these partnerships can strike a serious blow to organized crime groups that target our financial sector.”
“Financial frauds have been on the rise both on a national and on a local level,” said Chief Rodney Monroe, Charlotte-Mecklenburg Police Department. “With this recent check fraud conspiracy, I am so proud that our respective agencies were able to work together. Only through our partnerships are we able to bring about large indictments as this.”
All 27 defendants involved in the scheme have been charged with one count of bank fraud conspiracy and they face up to 30 years in prison and a $1 million fine. All defendants except Tomonta Simmons have also been charged with one count of bank fraud. Kevin Smith is also charged with one count of possession of counterfeit securities, one count of possession of stolen mail and one count of possession of firearms by a convicted felon. Phillip Harris faces an additional charge of aggravated identity theft, and Tomonta Simmons is charged with two counts of theft of firearms.
The defendants arrested today will appear in U.S. District Court before U.S. Magistrate Judge David S. Keesler. Elijah Grant, Travis Gabriel and Demarcus Shankle are still wanted by law enforcement.
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
The investigation of this case was conducted by the U.S. Secret Service and CMPD. Assistant United States Attorney Kevin Zolot of the U.S. Attorney’s Office in Charlotte is prosecuting the case.
Law enforcement are still looking for (see photos): Travis Gabriel
Elijah Grant
Demarcus ShankleU.S. Attorney and Metro Drug Unit Commander Visit Lincoln County Schools to Discuss the Effects of Illegal Drug UseRead the Press Release
HAMLIN, W.Va. – United States Attorney Booth Goodwin and Metropolitan Drug Enforcement Network Team (MDENT) Commander Chad Napier today met with faculty and students from Duval Middle School and Lincoln County High School in Hamlin, Lincoln County, W.Va. to talk about the dangers and consequences of illegal drug use. The school visits provided law enforcement officials with the opportunity to talk one-on-one with students and faculty about the consequences associated with the region’s prescription drug abuse epidemic.
Prescription drug abuse is one of the leading sources of crime in the Southern District of West Virginia.
U.S. Attorney Booth Goodwin said, “"Education and awareness are the most essential tools that we have in our toolbox."Goodwin stated that reaching young people as early as possible is one of the most important ways to turn the tide against our state's prescription drug epidemic.
"The Metro Drug Unit saw a five-fold increase in illegal heroin seizure's in a year's time.” Goodwin continued, “That staggering statistic alone illustrates the battle that we are facing with opiate-based drugs. It is critical that students understand how incredibly addictive these substances can be if they head down the destructive path of drug abuse."
According to the Office of National Drug Control Policy, 2,500 youth (age 12 to 17) abuse a prescription pain reliever for the very first time every day. The Office of National Drug Control Policy research also found that the vast majority of teenagers abusing prescription drugs get them from friends or relatives.
MDENT Commander Lt. Chad Napier stated that Lincoln County has been particularly hard-hit by the prescription drug crisis.Lt. Napier said, "We are losing an entire generation to prescription drug abuse. If today's presentation reached just one student, then it was well worth the effort."
In November 2012, Goodwin and Napier also visited schools in Boone County as part of an ongoing awareness initiative led by the U.S. Attorney’s Office for the Southern District to educate faculty and students about the dangers of prescription drug abuse. Goodwin and Napier have also previously visited several schools in Jackson County as part of the awareness effort.
U. S. Attorney’s Office Collects $30.8 Million in Civil & Criminal Actions and Forfeitures in Fiscal Year 2012Read the Press Release
(Albany, New York) - United States Attorney Richard S. Hartunian announced today that the Northern District of New York collected a total of $30,811,828.88 in Fiscal Year (FY) 2012 in civil and criminal actions and forfeitures, comprised of $9,876,524.88 in criminal and civil actions and $20,935,304.00 in criminal, civil and administrative forfeitures. Of the $9,876,524.88, $2,715,873.25 was collected in criminal actions, as fines, restitution, and bail bond forfeitures, and $7,160,651.63 was collected in civil actions, as civil settlements, civil penalties, and defaulted loan recoveries.
Nationwide, the U.S. Attorneys’ Offices collected $13.16 billion in criminal and civil actions during FY 2012, more than doubling the $6.5 billion collected in FY 2011. A portion of this amount, $5.3 billion, was collected in shared cases involving more than one U.S. Attorney’s Office and/or Department of Justice litigating division. The $13.16 billion represents more than six times the appropriated budget of the combined 94 U.S. Attorney’s Offices for FY 2012.
“During these challenging economic times, collections are critically important,” said U.S. Attorney Richard S. Hartunian. “The U.S. Attorney’s Office is dedicated to protecting the public and recovering funds for the federal treasury and for victims of federal crime. We are also committed to holding accountable those who seek to profit from their illegal activities.”
Northern District of New York cases resulting in significant recoveries include the following:
A. Criminal Actions
In January of 2012, Lieze Associates, Inc., d/b/a Eagle Recycling, paid a criminal fine of $500,000 in connection with the unlawful disposal of millions of pounds of asbestos contaminated construction and demolition debris in a farmer's field in Frankfort, New York, from June through October of 2006. The owner of Eagle Recycling and his partner created a false New York State Department of Environmental Conservation permit to make it appear that the site was legal when it had nothing that a normal landfill would require, such as fences, scales, methods to capture and treat waste water runoff, intended sets backs from wetlands (and the Mohawk River), and hydro-geologic studies. Defendants included the principal Eagle operator, the landowner, the landfill operator, the owner of another recycling facility and his company from New Jersey (who also sent asbestos contaminated waste), and a waste broker who arranged for truckloads of material to be shipped. All defendants were convicted of conspiracy to violate the Clean Water Act and to commit mail fraud. Several others were convicted of obstruction of justice and making false statements to investigators.
B. Civil Actions
In February of 2012, the Northern District of New York recovered $2,000,000 as part of the settlement in the United States ex rel. Kuney v. Cablexpress Corp. (CXTEC) civil case. The settlement resolved allegations that CXTEC falsely represented where the computer parts it sold to the federal government had been manufactured. CXTEC signed a contract with the General Services Administration to provide computer parts, including cables and gigabit interface converters1 (GBICs), to the federal government. The contract was subject to the Trade Agreements Act, which requires that all products sold under it be manufactured in one of a list of designated countries. The settlement resolves allegations that CXTEC knowingly sold products to the United States from countries which are not on the designated list, such as China, a country that does not have reciprocal trade agreements with the United States. The settlement agreement also resolved allegations that CXTEC sold the government generic GBICs while falsely representing that they were name-brand GBICs.
In January of 2012, the Northern District of New York also recovered $3,576,056 as part of a settlement in the United States ex rel. Jorgenson v. Cayuga Medical Center, et. al. civil case. This settlement resolved a qui tam lawsuit alleging that Cayuga Medical Center recruited physicians into the local Ithaca area pursuant to recruitment agreements which violated a federal law known as the Stark Act. This law (42 U.S.C. §1395nn) applies to recruitment agreements between hospitals and physicians; it prohibits a physician from referring patients to a hospital if the physician has a financial relationship with the hospital, unless an exception applies. The Stark Act also prohibits a hospital from billing Medicare for a prohibited referral. Federal regulations and related guidelines do allow for hospitals to pay for certain expenses of medical practices who employ physicians recruited to the area by the hospital. However, the complaint alleged that Cayuga Medical Center recruited physicians to the area and paid for expenses that were not permitted by said regulations and guidelines, and improperly extended a physician recruitment agreement.
C. Forfeiture Cases
In November of 2012, the Northern District of New York forfeited approximately $11.28 million dollars in the case of United States v. Eric Canori. Canori pled guilty to participating in a conspiracy to distribute 100 or more kilograms of marijuana and was ultimately sentenced to 30 months imprisonment. The execution of search warrants at Canori’s residences in Wilton, New York, and Ross, California, resulted in seizures of currency, marijuana, and drug packaging. Subsequent investigation led to the recovery of precious metals, gold and silver, that were proceeds of the conspiracy. As part of his plea, Canori agreed to forfeit the currency and precious metals to the United States.
In April of 2012, the Northern District of New York collected $6,000,000 in forfeiture proceeds in the case of United States v. IFCO Systems North America (IFCO). IFCO, a Houston based company with a plant in Albany, New York, operated the largest pallet manufacturing company in the United States. The amount collected in April was part of a $20.7 million corporate settlement agreement, entered into in December of 2008, that resolved allegations that IFCO employed illegal aliens in its plants around the country.
The U.S. Attorneys’ Offices, along with the Department of Justice’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. Statistics indicate that the aggregate amount collected nationally in federal criminal actions totaled $3.035 billion in restitution, criminal fines, and felony assessments. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid directly to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The statistics also indicate that a total of $10.12 billion was collected by the U.S. Attorneys’ Offices in individually and jointly handled civil actions. The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Departments of Housing and Urban Development, Health and Human Services, and Education, as well as the Internal Revenue Service and Small Business Administration.
Additionally, the U.S. Attorneys’ Offices, working with partner agencies and divisions, collected a total of $4.389 billion in asset forfeiture actions in FY 2012. Forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund and Department of Treasury Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes.
The $13.16 billion collected nationwide by the U.S. Attorneys’ offices for FY 2012 nearly matches the $13.18 billion collected in FY 2010 and FY 2011 combined.
For further information, the United States Attorneys’ Annual Statistical Reports can be found on the internet at http://www.justice.gov/usao/resources/annual-statistical-reports.
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1A gigabit interface converter 1 is a hot-swappable input/output device that plugs into a gigabit ethernet port or slot, linking the port with the network.
Three Men Charged with Possession of A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that Dennis Red Elk, age 32, of Rapid City, South Dakota; Maurice Johnson, age 33, of Rapid City, South Dakota; and Daniel Gangone, age 35, of Mission, South Dakota, appeared before United States Magistrate Judge Mark A. Moreno on January 17, 2013, and pled guilty to the Superseding Information that charged them with Possession of a Controlled Substance. The maximum penalty upon conviction is 1 year of custody, a $1,000 minimum fine but not more than $100,000 fine, or both; not more than 1 year of supervised release; and a $25 special assessment.
The charges stem from an incident wherein Red Elk, Johnson, and Gangone, on October 1, 2009 and April 19, 2010, came into contact with law enforcement officers, who discovered marihuana in the defendants’ possession.
The investigation was conducted by the Northern Plains Safe Trails Drug Enforcement Task Force and Assistant United States Attorney Kathryn N. Rich is prosecuting the case.
Red Elk and Gangone were released on bond pending sentencing. Johnson was remanded to the custody of the United States Marshals pending sentencing. A sentencing date has been set for April 16, 2013.
Three Individuals Indicted for Prescription Drug Diversion ConspiracyRead the Press Release
Over $58 Million in Pharmaceuticals Diverted
Charles Jeffrey Edwards, 51, and Brenda Elise Edwards, 42, both of Houston, Texas, and Jerrod Nichols Smith, 43, of Sugar Land, Texas, were indicted by a federal grand jury on January 17, 2013, on charges that they conspired to obtain prescription pharmaceuticals from “street collectors” in New York and Miami, and to sell those prescription drugs to independent pharmacies as though the drugs had been obtained from legitimate wholesale distribution companies, announced Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee.
All three defendants were indicted on charges of conspiracy and mail fraud related to the scheme. Additionally, Charles and Brenda Edwards were indicted on money laundering charges and Charles Edwards and Jerrod Smith were indicted for obstruction of justice. The indictment alleges that the scheme resulted in gross proceeds of over $58 million and that the defendants gained over $14 million in profits.
“The diversion of pharmaceuticals and the resulting risks of adulteration poses a grave threat to the public,” said U.S. Attorney Martin. “The U.S. Attorney’s Office and our regulatory and enforcement partners will aggressively pursue those who would seek to profit from such illegal activity and display such a total disregard for the safety of our citizens.”
According to the indictment, between December 2006 and August 2009, Charles Edwards and Jerrod Smith owned and operated Cumberland Distribution, Inc., (“Cumberland”) a wholesale prescription drug distribution business licensed in Tennessee. Brenda Edwards was an employee of Cumberland. Cumberland maintained a corporate office in Houston, Texas, and drug distribution warehouses in Nashville, Tennessee that were used to receive, sort, organize, package and ship pharmaceuticals to pharmacies throughout the United States.
The defendants allegedly purchased pharmaceuticals from a network of street collectors who obtained the drugs on the streets of New York and Miami from individuals who had legitimate prescriptions. The defendants then diverted the pharmaceuticals by repackaging and distributing them to independent pharmacies, making it appear as though the diverted pharmaceuticals had been obtained from a licensed wholesale distributor.As a part of this conspiracy, the defendants directed warehouse employees to cleanse the packaging of the pharmaceuticals to conceal the true origin of the drugs and to create false pedigrees and false entries in Cumberland’s books and records that made it appear as though the drugs had been legitimately obtained. Also, the defendants created a layer of distribution between the diverted pharmaceuticals and Cumberland by incorporating or causing others to incorporate various, separate businesses throughout the conspiracy and by causing the pharmaceuticals to be shipped to Cumberland through intermediaries. One such intermediary company was Tristate Management, in Texarkana, Arkansas. Charles and Brenda Edwards also directed wire transfers to pay for the pharmaceuticals obtained from the street collectors and to make payments to themselves.
The indictment also alleges that on July 15, 2009, Charles Edwards and Jerrod Smith submitted to a federal grand jury, 21false pedigree documents that each stated that Tristate Management had acquired the pharmaceuticals listed on the pedigrees from a licensed wholesaler, Ocean Pharmed in Irmo, SC. The pedigree documents were false because the pharmaceuticals had not been acquired from Ocean Pharmed, but had been acquired through a network of street collectors on the streets of South Florida, or New York City and surrounding areas.
"The FDA Office of Criminal Investigations, along with our law enforcement and regulatory partners work diligently to preserve the integrity of the pharmaceutical supply chain and will vigorously pursue those that threaten the safety of the American public," said David W. Bourne, Special Agent in Charge, U.S. Food and Drug Administration, Office of Criminal Investigations- Miami Field Office.
The wholesale distribution of prescription drugs in the United States is subject to regulation. Regulating the wholesale market ensures that drugs dispensed to patients are authentic and not counterfeit, properly labeled, and have been handled and maintained according to industry standards and Food and Drug Administration (FDA) requirements. Regulations also require that the prescription drugs be in the possession of state-licensed entities, and have a verifiable chain of custody, also known as a pedigree.Congress enacted the Prescription Drug Marketing Act in 1987 to combat a practice known as prescription drug diversion. In essence, diverted pharmaceuticals are those that have been removed from the regulated distribution channels but then reintroduced into the wholesale marketplace through various means, including the falsification of the accompanying pedigrees. Once a pharmaceutical is diverted outside of the regulated distribution channels, it becomes difficult, if not impossible, for the regulators or the end-users to know whether the pharmaceutical was altered, stored in improper conditions, or its potency adversely affected.
In a practice known as street diversion, diverters repurchase medications that have already been dispensed, remove the patient labels, and reintroduce them into the wholesale market. The aim of prescription drug diversion is to acquire drugs at steep discount and reintroduce them into the wholesale market in a manner that obscures the fact that the drugs were ever diverted. When done effectively, neither the pharmacist nor the consumer know that the diverted drugs are handled, packaged, and labeled by parties not authorized or qualified to do so.
In addition, federal law generally requires wholesale distributors to provide pedigrees with each wholesale distribution of a prescription drug, and prohibits any alteration or modification of the same. The pedigree lists all previous sales of that drug back to the last authorized distributor of record. Requiring such disclosure discourages the introduction of drugs that come from illegitimate sources like unlicensed wholesalers, closed-door pharmacies, street diverters, and drug counterfeiters. Separate and apart from the federal requirement, many states also require that wholesalers provide pedigrees with each wholesale distribution.
If convicted, the defendants face up to 20 years in prison on each count of mail fraud, 10 years on each count of money laundering, five years on the count of conspiracy, and five years on the count of obstruction of justice. They face fines of $250,000 on each count.This investigation was conducted by the FDA- Office of Criminal Investigations. Assistant U.S. Attorneys Kathryn B. Ward and Sandra G. Moses represent the government.
An indictment is merely an accusation and is not evidence of guilt. All defendants are presumed innocent unless and until proven guilty in a court of law.
Ten Charged in Superseding Indictment in Time Share Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – A federal grand jury for the District of New Jersey, sitting in Camden, has returned a 44-count Superseding Indictment against six individuals from southern New Jersey and four others for their alleged roles in a $3 million mail and wire fraud conspiracy involving time share mortgages, U.S. Attorney Paul J. Fishman announced today.
The six indicted defendants from New Jersey are: Adam Lacerda, 28, and his wife, Ashley R. Lacerda, 32, of Egg Harbor Township; Ian Resnick, 37, of Absecon; Steven Cox, 48, of Ventnor City; Francis Santore, 52, of Northfield; and Joseph Diventi, 32, of Somers Point.
Also indicted are: Alfred Giordano, 32, of Hurry County, S.C.; Brian Corley, 27, of Little River, S.C.; Joseph Saxon, 38, of St. Thomas, Virgin Islands; and Genevieve Manzoni, 46, of Lake Worth, Fla. The indictment was returned by a federal grand jury on Jan. 23, 2013.
Ian Resnick, Joseph Saxon, and Genevieve Manzoni previously were charged by criminal complaint. Adam Lacerda, Ashley R. Lacerda, Steven Cox, Alfred Giordano, Francis Santore, Brian Corley, and Joseph Diventi previously were indicted on the same charges by a federal grand jury sitting in Trenton on May 3, 2012.
The defendants are expected to be arraigned before U.S. District Judge Noel L. Hillman in Camden federal court in the coming weeks.
According to the Superseding Indictment and the Complaints previously filed:
In July 2010, law enforcement officers commenced an investigation into The Vacation Ownership Group, a/k/a VO Group LLC. The investigation revealed that beginning at least from March 2009 and continuing to Sept. 1, 2011, the defendants through the VO Group participated in a fraudulent scheme in which representatives of the VO Group called owners of timeshare vacation properties purchased from Flagship Resort Development, Wyndham Vacation Resorts Inc., and other timeshare developers and convinced the owners to submit money to the VO Group, purportedly to pay off their “mortgages” on their timeshares. The VO Group claimed that the timeshare owner could pay off the mortgage balance at a substantially reduced amount – often by as much as 50 percent of the amount of the owner’s original mortgage – by mailing payment to the VO Group at a P.O. Box in Pleasantville, N.J. The VO Group representatives also persuaded timeshare owners to send the VO Group money purportedly to have timeshares cancelled or sold. Rather than paying off the timeshare owner’s mortgage, cancelling the owner’s timeshare, or selling the timeshare, the conspirators kept the timeshare owner’s money for their personal use.
The investigation also revealed that in an attempt to cover up the scheme, the conspirators in most cases engaged in a “bait and switch” tactic by purchasing an additional timeshare in the victim’s name without the victim’s knowledge. The victim purportedly had assented to the purchase based on documents the VO Group previously emailed to the victim for signature even though the victim had been led to believe that the victim was simply paying off the victim’s original timeshare mortgage.
According to the Complaint, during the course of the investigation, law enforcement officers interviewed approximately 225 victims of the conspirators’ scheme identified to date. Many of the victims are elderly, causing them to be more vulnerable to the scheme. The Indictment states that law enforcement has determined that the conspirators defrauded the victims of more than $3 million.
The mail and wire fraud conspiracy charge – with which all defendants named in the Superseding Indictment are charged – is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. Each additional, substantive charge of mail fraud or wire fraud carries an additional, maximum potential penalty of 20 years in prison and a $250,000 fine. The conspiracy to commit money laundering charge subjects defendants Adam and Ashley Lacerda to an additional, maximum potential penalty of 20 years in prison and a $500,000 fine. Defendants Adam and Ashley Lacerda also face an additional, maximum potential penalty of 10 years in prison for each substantive money laundering count in which they are charged.U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge David Velazquez in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Robert Panella, New York Region, for the investigation leading to today’s Indictment. He also thanked the N.J. Department of Labor, Benefit Payment Control Unit, for its assistance.
The government is represented by Assistant U.S. Attorneys Alyson M. Oswald and R. David Walk, Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations contained in the Superseding Indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Anyone who believes they are a victim of the fraud should contact the FBI’s Atlantic City Resident Agency at 609-677-6400.
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Defense counsel: Adam Lacerda: Marc Neff Esq., Philadelphia, and Mark E. Cedrone Esq., Philadelphia
Ashley Lacerda: Charles Nugent, Marlton
Ian Resnick: Michael E. Reilly Esq., Philadelphia
Steven Cox: Jeffrey M. Miller Esq., Philadelphia
Alfred Giordano: Martin I. Isenberg Esq., Gibbsboro
Francis Santore: Robert A. Mintz Esq., Philadelphia
Brian Corley: José L. Ongay Esq., Camden
Joseph Saxon: David S. Rudenstein Esq. Philadelphia
Genevieve Manzoni: Ralph A. Jacobs Esq., PhiladelphiaLacerda, Adam and Ashley, et al., Superseding Indictment
Steelworkers Rep Sentenced for Stealing from UnionRead the Press Release
PITTSBURGH - A resident of St. Paul, Minn., has been sentenced in federal court to eight months imprisonment, to run concurrent to his Minnesota state charge, on his conviction of union embezzlement, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on Curtis Reed, 56.
According to information presented to the court, Reed, a Staff Representative of the International Union of United Steelworkers, stole approximately $3,700 from the union by charging personal expenses to the union credit and fuel cards over the five-year period from March of 2005 to May of 2010.
Assistant United States Attorney Leo M. Dillon prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Department of Labor, Office of Labor Management Standards for the investigation leading to the successful prosecution of Reed.
Sixteen People Indicted for Their Role in Trafficking Ring That Brought Drugs to ClevelandRead the Press Release
Sixteen people were indicted on charges including drug trafficking, possessing illegal firearms and money laundering for their roles in a group that is accused of bringing cocaine, heroin and marijuana from Chicago and selling it in Cleveland, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Robert L. Corso, Special Agent in Charge of the Drug Enforcement Administration.
The ring operated between March and September 2012, according to the indictment. The defendants are from Cleveland unless otherwise noted.
The indictment charges Richard Price, Jr., aka "Richie," age 23; Alexander Abreu, aka "Cuba," age 42; Geraldo Maldonado, aka "Lalo," age 37; Richard Maldonado, age 27; Joshua Johnson, age 21; Robert Hoover, age 27; Gordon Egan, age 19; Reginald Hart, age 34, of Bedford; Pedro Gonzalez, age 29; John Childrey, age 22, of Brook Park; John Hoch, age 19, of Middleburg Heights; Michael Young, age 24; Patrick Corrigan, aka "Patrick Marflak," of Lakewood; and Cory Box, age 20, of Westlake, with conspiracy to distribute and possess with intent to distribute at cocaine, heroin, and marijuana.
Richard Price, Jr., is also charged with distributing cocaine and heroin, possessing with intent to distribute heroin, possessing a firearm in furtherance of a drug trafficking offense, being a felon in possession of firearms, maintaining a premises for drug trafficking, and money laundering. Joshua Johnson is also charged with distributing heroin. John Hoch and Alexander Abreu additionally are charged with money laundering.
Finally, Breanna Johnson, age 19, of Cleveland, Ohio, is charged with distributing heroin while Richard Price, Sr., age 49, is charged with being a felon in possession of a firearm.
“This groups is accused of bringing a variety of drugs, including heroin, cocaine and marijuana, from Chicago to the west side of Cleveland,” Dettelbach said. “Today’s arrests should send a message to those who seek to profit from the drug trade.”
Corso said: “This drug-trafficking organization, led by Richard Price, was unique in that it supplied the west side of Cleveland with such a vast array of illegal drugs. These arrests effectively cut off a pipeline that fed the streets of Cleveland. The success of this sophisticated investigation is directly related to the strong cooperation and support between DEA and our law-enforcement partners.”
The indictment describes a conspiracy in which Price, Jr., obtained cocaine, heroin, and marijuana from Abreu and other suppliers and then distributed the drugs to numerous dealers in the Cleveland area, while being assisted by several of the co-conspirators.
This case is being prosecuted by Assistant United States Attorneys Matthew W. Shepherd and Henry F. DeBaggis. This case was investigated through the combined efforts of the Drug Enforcement Administration (DEA) and Cuyahoga County Sheriff’s Office.
If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including the defendants’ prior criminal records, if any, the defendants’ roles in the offenses and the characteristics of the violations. In all cases, the sentences will not exceed the statutory maximum and in most cases they will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Six Sentenced in Multi-million Dollar Stolen Goods CaseRead the Press Release
CHARLOTTE, N.C. – U.S. District Court Judge Max O. Cogburn, Jr. sentenced six members of an organized retail crime ring that sold and distributed over $16 million in stolen over-the-counter (“OTC”) products, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Today’s sentencings of four co-defendants and the sentencings in October 2012 of two co-defendants are the result of “Operation Cash Back,” a multi-agency investigation that began in September 2010 into the buying and selling of stolen OTC and health and beauty aid (HBA) products. The prison sentences imposed on the six defendants range from 18 to 86 months’ imprisonment and include an order of restitution totaling $4,035,626. Judge Cogburn also ordered forfeiture of over $17,000 in cash, 20 motor vehicles, two real estate properties and a forfeiture money judgment of $7 million.
U.S. Attorney Tompkins is joined in making today’s announcement by Russell F. Nelson, Special Agent in Charge of the United States Secret Service, Charlotte Field Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); Chief James W. Buie of Gaston County Police Department; and Chief Stacy Conley, of the Gastonia Police Department.
In June 2011, a total of six defendants were charged with and pleaded guilty to one count of conspiracy to commit interstate transportation of stolen property. The defendants are, Bonnie Knight Bridges, 63, and Kimberley Bridges Morris, 37, both of Bessemer City, N.C.; Michael David Morris, 40, of Charlotte; Darlene Bridges Schoener, 39, and William Christopher Schoener, 33, both of Kings Mountain, N.C.; and Darryl Keith Brock, 45, of Cowpens, S.C. Bonnie Bridges, Kimberley and Michael Morris, and Darlene and William Schoener were also charged with and pleaded guilty to one count of tax evasion conspiracy. Bonnie Bridges is the mother of Kimberley Bridges Morris, who is married to Michael David Morris, and of Darlene Bridges Schoener, who is married to William Schoener.
Today, Judge Cogburn sentenced Kimberley Morris and Darlene Schoener to serve 18 months in prison, followed by three years of supervised release. Michael Morris was sentenced to 84 months in prison and two years of supervised release. William Schoener was sentenced to 86 months in prison and two years of supervised release. The defendants also were ordered to pay $4,035,636 in restitution.
Judge Cogburn sentenced Bonnie Bridges on October 19, 2012, to serve 70 months in prison followed by two years of supervised release, and ordered her to pay $4,035,636 in restitution. Judge Cogburn sentenced Darryl Keith Brock on October 30, 2012, to serve 20 months in prison followed by two years of supervised release, and ordered him to pay restitution in the amount of $2,128,059.
According to filed court documents and court proceedings, the defendants had participated in what is known as Organized Retail Crime (“ORC”) and Organized Retail Theft (“ORT”), an annual multi-billion crime affecting retail merchants. Court documents show that from 2006 to March 2011, the defendants engaged in a scheme whereby they bought and then sold stolen over-the-counter products, including medications and dietary supplements, and health and beauty aid products.
According to court records and court hearings, organized retail theft begins with individuals, known as “boosters,” who shoplift popular OTC and HBA products from the shelves of various pharmacy and retail stores. In this case, the “boosters” stole OTC and HBA products from stores in North Carolina, South Carolina West Virginia, Georgia, Pennsylvania and Connecticut. The “boosters” then sold the shoplifted goods far below retail and wholes prices to first-level “fences.” First-level fences in turn serve as middlemen between the “boosters” who steal the OTC and HBA products from retail merchant stores and second-level fences who further distribute the stolen goods to a higher-level fence or distributor, who then distribute the stolen products back into the retail marketplace.
According to court records and court hearings, the Bridges’ family members served as first-level fences who purchased stolen OTC and HBA products from “boosters.” The Bridges family members then sold the stolen OTC and HBA products to second-tier fences at prices far below the retail and wholesale prices of the stolen goods. Organized retail theft crime is a cash-only business, and the Bridges paid cash to “boosters” when purchasing the stolen OTC and HBA products, and were paid in cash by their second-tier fences for the stolen OTC and HBA products.
According to court records and court hearings, OTC and HBA goods stolen by “boosters” had to be “cleaned” of retail store security labels, tags, stickers, and pricing labels before they could be re-introduced through the various levels of fences into the retail marketplace. Cleaning stolen OTC and HBA products of genuine retail store security and pricing labels is a task performed by both first-level and second-level fences before reaching higher-level product distribution channels. The amount of stolen property involved in the Bridges case from 2006 to 2011 exceeded $16 million.
“The Congressional Research Service issued a report in December of 2012 that estimated the annual economic loss to businesses and consumers from Organized Retail Crime is between of $15 billion to $37 billion. The cooperative effort of the law enforcement agencies involved in this case was instrumental in breaking up this extensive conspiracy that plagued a wide range of retail businesses,” said U.S. Attorney Tompkins. “Retail theft means that consumers end up paying higher prices for goods sold by businesses impacted by those thefts. My office will continue to go after professional theft rings that engage in this form of organized retail crime.”
“The hard work and diligence of these investigators has paid off as they rooted out and followed the trail of this multi-million dollar theft scheme,” stated Special Agent in Charge Jeannine A. Hammett, IRS CI. “We should not expect the honest taxpayers to foot the bill for those who attempt to hide income from the IRS.
Bonnie Bridges has commenced serving her prison sentence. Michael Morris and William Schoener have been in custody since late 2011. Darryl Brock, Kimberly Bridges and Darlene Schoener will self-report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by USSS, IRS-CI, the Gaston County Police Department and the Gastonia Police Department. This prosecution is handled by Assistant United States Attorneys Tom O’Malley and William Brafford of the Western District of North Carolina.
Sentences for January 23, 2013Read the Press Release
Michael Relyea, 26, of Gillette, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 23, 2013, for possession of a firearm not registered in the National Firearms Registration and Transfer Record. Relyea was arrested in Gillette, Wyoming. He received 21 months of imprisonment, to be followed by three years of supervised release and was ordered to pay a $100.00 special assessment. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Eleanor Perry, 41, of Thermopolis, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 23, 2013, for misappropriation of postal funds. Perry received five years probation and was ordered to pay restitution in the amount of $5,861.05. This case was investigated by the U.S. Postal Service.
Alonso Chavez-Loya, 28, of Mexico, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 23, 2013, for misuse of a social security number. Chavez-Loya was arrested in Casper, Wyoming. He received time served plus ten day, was ordered to pay a $100.00 special assessment and is subject to deportation upon release from custody. This case was investigated by the Diplomatic Security Service.
Hector Alvarado-Romero, 22, of Mexico, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 23, 2013, for illegal re-entry of a previously deported alien into the United States. Alvarado-Romero was arrested in Rawlins, Wyoming. He received time served plus ten days, was ordered to pay a $100.00 special assessment and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Victor Bacho-Miguel, 27, of Mexico, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 23, 2013, for illegal re-entry of a previously deported alien into the United States. Bacho-Miguel was arrested in Cheyenne, Wyoming. He received time served plus ten days, was ordered to pay a $100.00 special assessment and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Sarasota Man Sentenced to Five Years in Federal Prison for Sophisticated Mortgage Fraud SchemeRead the Press Release
Tampa, Florida - U.S. District Judge Steven D. Merryday today sentenced Arthur R. Seaborne (70, Sarasota) to 5 years in federal prison for conspiring to commit bank fraud. In addition, Seaborne was ordered to forfeit $4,269,886.55 in proceeds from the offense. The matter of restitution will be addressed at a later date. Seaborne pleaded guilty on November 6, 2012.
According to court documents and information presented in court, from as early as March 2003 through July 2008, Seaborne and others conspired to commit bank fraud. Throughout that time, Seaborne used several corporate entities to perpetuate the fraud scheme, including Southeast Capital Advisors, LLC. Through this entity, Seaborne marketed a “no money down” residential purchase program that operated by making loans to Seaborne’s clients, so that those clients could make down payments in connection with their purchases of residential properties.
Thereafter, Seaborne and his co-conspirators prepared and submitted mortgage loan applications to lenders for these same clients. The applications were fraudulent in that they omitted the fact that the clients’ down payments had been loaned to them. Further, the applications usually overstated the clients’ assets and understated their liabilities. Some loan applications also included the fraudulent misrepresentation that the clients intended to make the properties their primary residences, when in fact they were investment properties. Over the course of the fraud scheme, some of the loans on the residential properties went into default. Although the total loss amount has not yet been definitively determined, the losses incurred by the lenders amount to approximately $4 million.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Rachelle DesVaux Bedke and Joseph W. Swanson.
Rosebud Man Indicted for Third Degree Burglary and LarcenyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota, man has been indicted by a federal grand jury for Third Degree Burglary and Larceny.
Justin Gabriel, age 21, was indicted by a federal grand jury on December 12, 2012. He appeared before United States Magistrate Judge Mark A. Moreno on January 22, 2013, and pled not guilty to the indictment. The maximum penalty upon conviction is up to 10 years’ in custody, a $250,000 fine, or both; 3 years of supervised release; and a $100 Special Assessment. Restitution may also be ordered.
The charge is merely an accusation and Gabriel is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant United States Attorney Tim Maher is prosecuting the case.
Gabriel was remanded to the custody of the United States Marshal pending trial. A trial has not been set.
Rochester Man Sentenced in Child Pornography CaseRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Jason Koscielski, 24, of Rochester, N.Y., who was convicted of receipt, distribution and possession of child pornography, was sentenced to 135 months in prison and 30 years supervised release by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Marisa J. Miller, who handled the case, stated that the defendant came to the attention of law enforcement in January 2009 when members of the Toronto Police Service, in Toronto, Canada discovered Koscielski was online and sharing images of child pornography through a peer-to-peer file sharing program. The case was referred to Special Agents with Homeland Security Investigations who obtained a search warrant for the defendant’s residence. During the search, agents located more than 200 videos and 1,000 images of child pornography on digital media owned by the defendant.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The sentencing is the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero.
Rapid City Man Charged with Theft of Government Property and False StatementRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for allegedly converting to his own use funds of the United States Air Force between August and December of 2011.
Derrick Scott, age 22, was indicted by a federal grand jury on November 19, 2012, for Theft of Government Property and False Statement. Scott appeared before United States Magistrate Judge Veronica L. Duffy on January 15, 2013, and pleaded not guilty to the indictment. The maximum penalty upon conviction is 10 years' imprisonment and a $250,000 fine. The charges are merely accusations and Scott is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Department of the Air Force. Scott was released on bond pending trial. A trial date has been set for March 26, 2013.
Pure Meth Lands Kyle Man in Prison for 20 YearsRead the Press Release
CORPUS CHRISTI, Texas – A Man from Kyle has been sentenced to 240 months in federal prison without parole for conspiracy to possess with intent to distribute more than 500 grams of methamphetamine, United States Attorney Kenneth Magidson announced today. Anthony Rolls, 28, pleaded guilty April 30, 2012.
Today, U.S. District Judge Nelva Gonzales Ramos sentenced him to 240 months in prison to be followed by a five-year-term of supervised release.
In March 2012, Border Patrol agents at the Sarita checkpoint arrested Rolls after agents discovered approximately 3.5 kilograms of methamphetamine concealed within the vehicle’s battery. Additionally, agents were able to identify and detain another vehicle traveling with Rolls, driven by co-conspirator Jesus Castillo Jr. at a gas station in Riviera. A detailed inspection of the second vehicle resulted in the discovery of approximately 3.5 kilograms of methamphetamine also concealed within the battery. Laboratory analysis determined that the methamphetamine had a purity of more than 95%.
Castillo is currently serving a 235-month sentence in the U.S. Bureau of Prisons for his involvement.
In federal custody since his arrest, Rolls will remain in custody and serve his sentence at a U.S. Bureau of Prisons facility to be designated in the near future.
The charge stems from an investigation by Drug Enforcement Administration and the United States Border Patrol. Assistant U.S. Attorney Lance Watt prosecuted the case.
Pittsburg Woman Sentenced to 18 Months in Prison for Filing Tax Returns Using Stolen IdentitiesRead the Press Release
SAN FRANCISCO – Taneshia Stephenson yesterday was sentenced to 18 months in prison for conspiring to file false claims, United States Attorney Melinda Haag and Internal Revenue Service Criminal Investigation (IRS-CI) Special Agent in Charge Jose M. Martinez announced.
Stephenson pleaded guilty on Oct. 3, 2012. According to her plea agreement, beginning in July 2008, Stephenson helped other individuals obtain fraudulent tax refunds from the Internal Revenue Service based on tax returns that were filed using stolen identities. Stephenson admitted that each of the tax returns she assisted in filing claimed fictitious Social Security income and withholding as a basis for the fraudulent tax refund. As part of the scheme, Stephenson and her coconspirators asked the IRS to directly deposit the fraudulent refunds into a bank account that Stephenson could access. In 2008, Stephenson allowed her bank account to be used by another individual for that purpose.
According to documents filed with the court, this case is part of a larger investigation involving more than 20 other defendants. In response to these types of cases, the Justice Department’s Tax Division issued a new directive to further the efforts of the Tax Division and help U.S. Attorneys’ Offices respond quickly and effectively to the challenges in stolen identity refund fraud (SIRF) cases. To further this goal, Tax Division Directive 144, which took effect on Oct. 1, 2012, was issued to streamline the process for prosecuting these offenses.
Thomas Newman is the Assistant U.S. Attorney who prosecuted this case. The prosecutions are the result of an investigation by the Pittsburg Police Department and the Internal Revenue Service, Criminal Investigation Division.
Philadelphia Man Charged with Bank RobberyRead the Press Release
Keith McCracken, 34, of Philadelphia, was charged today by Indictment with one count of bank robbery announced United States Attorney Zane David Memeger. In particular, the indictment charges the defendant with having robbed the M&T Bank, 7121 Frankford Avenue, Philadelphia, on December 31, 2012.
If convicted, McCracken faces a maximum sentence of 20 years imprisonment, a three-year term of supervised release, a $250,000 fine, and a $100 special assessment.
The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Paul G. Shapiro.
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PATTY HARTMAN, Media Contact, 215-861-8525Parmelee Man Acquitted on Sexual Abuse ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that a Parmelee man was acquitted on two counts of Abusive Sexual Contact as a result of a federal jury trial in Pierre, South Dakota. Randy Never Misses A Shot was indicted by a federal grand jury in November of 2012.
The charges relate to the alleged abusive sexual contact with the victim in October of 2012.
The investigation was conducted by the Federal Bureau of Investigation, and the United States Attorney's Office prosecuted the case.
Owners of Gun Store/Beauty Shop Plead Guilty to Firearms ViolationsRead the Press Release
WICHITA, KAN. – A Butler County couple who ran a combined beauty shop and gun store have pleaded guilty to federal firearms violations, U.S. Attorney Barry Grissom said today.
Jeffrey Eberhart, 51, Augusta, Kan., pleaded guilty to one count of dealing firearms without a license. His wife, Tracey Eberhart, 42, Augusta., Kan., pleaded guilty to one count of failing to keep records of firearms transactions.
The Eberharts operated Traceys Dream Weavers Salon And Sporting Goods at 431 State Street in Augusta, Kan. The store advertised that it was “Where Beauty and Bullets Collide.” In his plea, Jeffrey Eberhart admitted that he bought and sold hundreds of firearms at the store and at gun shows from Oct. 1, 2009, to Aug. 22, 2012. Throughout that time, he was not licensed as a federal firearms dealer because he was a previously convicted felon.
In her plea, Tracey Eberhart admitted that while she held a license as a federal firearms dealer she failed to keep records and make reports to the Bureau of Alcohol, Tobacco, Firearms and Explosives on at lease 33 firearms transactions.
Sentencing is set for April 15. Prosecutors are recommending a sentence of five years in federal prison for Jeffrey Eberhart and three years probation for Tracey Eberhart.
Grissom commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and Assistant U.S. Attorney Matt Treaster for their work on the case.
Operator of Delaware-Based Software Piracy Websites Sentencted to 58 Months for Copyright Infringement and Identity TheftRead the Press Release
WILMINGTON, Del. - Jamie Lynn Snyder, age 35, of Newark, Delaware, was sentenced to 58 months in prison today for criminal copyright infringement and identity theft in which she obtained over $1 million in illicit proceeds. Snyder also was sentenced to 3 years of supervised release, which will commence following her prison term, and was ordered to pay a total of $1,013,407.69 in restitution to her victims.
According to statements made at today’s hearing and documents filed in court, between January 1, 2008 and April 27, 2010, Snyder operated websites through which she sold, without authorization, at least 24,044 individual copies of pirated software products copyrighted by at least 81 different software manufacturers to thousands of customers. The total estimated retail value of the pirated software sold by Snyder surpassed $5.9 million.
The FBI made undercover purchases of over 20 software titles from the websites, which were located online at www.cheapestsoftwareanywhere.com and www.cheapestlegalsoftware.com. Included among the purchased software were some of the most popular titles manufactured by Adobe, Apple, Autodesk and Microsoft. The FBI also received numerous complaints from consumers across the country who believed they were lawfully purchasing software from Snyder’s websites, only to learn that Snyder was not authorized to sell the software, which could not be updated properly or registered with the manufacturers. In fact, the professional-looking websites also contained various statements attesting to their legitimacy and lawful sale of the software to consumers.
The FBI’s investigation further revealed that Snyder personally profited in the amount of $971,935.10 from the unlawful software transactions between February 26, 2008 and March 3, 2010.
In April 2010, the FBI executed a search warrant at Snyder’s Newark residence and interviewed Snyder. During that interview, Snyder confessed to operating the websites while knowing that it was unlawful for her to sell the software titles without authorization. She estimated that she was advertising approximately 400 software titles on the website, and had been earning approximately $25,000 to $35,000 per month from sales over past two years.
On November 16, 2011, Snyder pled guilty to criminal copyright infringement and was released on her own recognizance pending sentencing. Upon learning of Snyder’s guilty plea from news reports, the owners of TriMark Enterprises LLC, which employed Snyder as a bookkeeper, reported to the Delaware State Police and the FBI that Snyder had embezzled approximately $40,000 from the Wilmington-based company between February 2011 and January 2012. According to the business owners, Snyder forged numerous checks payable to herself and her creditors and also made unauthorized purchases of personal items on a company credit card. When confronted by a Delaware State Police detective about the allegations, Snyder admitted to the fraud.
Following the sentencing hearing, United States Attorney Charles M. Oberly, III, stated, “Fueled by the Internet, American companies lose billions of dollars each year to the unlawful distribution of products that they invent and manufacture. What Snyder did from computers in her living room was digital theft of over $5.9 million in merchandise. While in the process of pleading guilty to that offense, she went on to steal $40,000 from her local employer. Today’s sentence demonstrates that serial fraudsters should expect to receive stiff sentences.”
This case is being investigated by the Federal Bureau of Investigation and the Delaware State Police, and is being prosecuted by Assistant United States Attorney Edward J. McAndrew.
Ohio Insurance Salesman Sentenced to 20 Months in Prison for Tax Obstruction and Currency StructuringRead the Press Release
A federal judge in Cleveland today sentenced William R. Herder of Bellville, Ohio, to 20 months in prison for tax crimes, Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally, U.S. Attorney for the Northern District of Ohio Stephen M. Dettelbach and Special Agent in Charge, Internal Revenue Service (IRS) - Criminal Investigation, Cincinnati Field Office, Darryl K. Williams announced. U.S. District Judge Donald C. Nugent also ordered Herder to pay restitution to the IRS of $149,238 plus interest and penalties.
Herder pleaded guilty in October 2012 to corruptly endeavoring to obstruct the administration of the tax laws and currency structuring. According to documents filed in the case, Herder, an independent insurance salesman for Aflac Inc., failed to file timely and accurate income tax returns for the years 2000-2009 despite earning substantial insurance commissions and receiving warnings and notices from the IRS. Herder filed returns for the years 2010 and 2011 on which he reported that he owed taxes to the government, but failed to pay the almost $50,000 in taxes that he owed for those years.
According to the plea agreement and indictment filed in this case, to prevent the IRS from collecting his unpaid taxes, Herder attempted to conceal his assets and income. In 2004, Herder formed two entities in Nevada – one for the purpose of hiding his automobiles and another for the purpose of hiding his insurance business. Herder also began converting his insurance commission checks to cash and paying his expenses in cash to prevent the IRS from collecting his taxes from his bank account.
The plea agreement and indictment filed in this case also stated that Herder submitted numerous obstructive letters and documents to the IRS, Aflac and his credit union in an effort to prevent the IRS from assessing and collecting his taxes. In these letters, Herder falsely claimed, among other things, that the tax laws were not applicable to him. In 2005, Herder attempted to pay his taxes with a fake financial instrument called an “International Bill of Exchange.”
Last year, William R. Herder’s father, William A. Herder, was found guilty at trial of tax evasion, corruptly endeavoring to obstruct the administration of the tax laws and five counts of failing to file tax returns and was sentenced to 37 months in prison. William A. Herder also sold insurance for Aflac Inc. as an independent contractor. Another insurance salesman, Thomas Mitchell, the uncle of William R. Herder, also pleaded guilty to failing to file a tax return in 2012. William R. Herder has admitted in court papers that he, his father and his uncle participated in a tax defier “program” promoted by convicted felon Joseph Flickinger.
Assistant Attorney General Keneally commended the efforts of Special Agents of IRS – Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Melissa S. Siskind and Jeffrey A. McLellan, who prosecuted the case.
Nine Elmore County Residents and One Montgomery County Resident Arrested in Early Morning Drug RaidRead the Press Release
Montgomery, Alabama - Nine Elmore County residents and one Montgomery County resident were arrested today by the Federal Bureau of Investigation (FBI) and the Central Alabama Drug Task Force (CADTF) for conspiring to distribute crack cocaine, United States Attorney George L. Beck, Jr. announced today. The arrests stemmed from a federal indictment that charged 14 people from Elmore and Montgomery Counties.
During this morning’s raid, law enforcement arrested Terry Tyrone Humphrey, 41, of Montgomery; Tristan Travis Rawls, 33, of Wetumpka; Jacky Sagers, 32, of Wetumpka; Arthur Rodrequis Young, 41, of Wetumpka; British Tremaine George, 34, of Wetumpka; Damichael Orlane Chapman, 23, of Wetumpka; Duke George, 33, of Wetumpka; Patrick Demond Hicks, 35, of Wetumpka; and Robert McKenzie, 22, of Wetumpka. Kevin Levan Elmore, 36, of Montgomery; Stacy Rodrekus Calloway, 24, of Wetumpka; Markevius Jerrell Calloway, 22, of Wetumpka; and Tyrone Devontae George, 24, of Wetumpka are all already in custody on other charges. Carlos Montrell Harris , 25, of Wetumpka is still at large.
The 57-Count Indictment charges Kevin Levan Elmore, Stacy Rodrekus Calloway, Terry Tyrone Humphrey, Tristan Travis Rawls, Markevius Jerrell Calloway, Jacky Sagers, Tyrone Devontae George, Arthur Rodrequis Young, British Tremaine George, Damichael Orlane Chapman, Carlos Montrell Harris, Duke George, Patrick Demond Hicks, and Robert McKenzie conspired to possess with intent to distribute and distribute over 280 grams of crack cocaine.
Defendants Terry Humphrey, Stacy Calloway, Markevius Calloway, British Tremaine George, Robert McKenzie, Tyrone Devontae George, Arthur Rodrequis Young, and Damichael Orlane Chapman are also charged with distributing crack or powder cocaine on specific dates between June 2011 and January of 2012. A number of the defendants are charged with using cellular telephones to facilitate drug trafficking. Stacy and Markevius Calloway are also each charged with possessing firearms in relation to their drug trafficking offenses.
“These people were spreading poison to our residents and to our children,” stated U.S. Attorney Beck. “To make a profit from poisoning your community with drugs is horrendous. Those that spread this poison should be and will be prosecuted”
Federal Bureau of Investigation, Special Agent in Charge, Stephen E. Richardson, stated: “This investigation is an example of the collaboration between the FBI, DEA and the Elmore County Drug Taskforce’s efforts to ensure that our streets and communities continue to be protected against those who traffic in illegal drugs.”
“Today's arrests show what successful cooperation between all levels of law enforcement can accomplish,” said Elmore County Sheriff, Bill Franklin. “This case has delivered a tremendous blow to both drug dealers and violent criminals that attempted to operate in Elmore County and the county is safer because of it.”
If convicted, the defendants are facing a minimum of 10 years in prison and a maximum of life in prison. An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The investigation of this case was spearheaded by the FBI and the CADTF. Other law enforcement agencies assisted with the execution of the arrest warrants, including the United States Marshals Service, the Drug Enforcement Administration, the Elmore County Sheriff’s Office, and the Montgomery Police Department. The case is being prosecuted by Assistant United States Attorney Brandon K. Essig.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Nine Charged in $10 Million Mortgage Fraud SchemeRead the Press Release
NEWARK, N.J. – Nine people involved in a long-running, large-scale mortgage fraud scheme that caused losses of approximately $10 million were charged in two Complaints with conspiracy to commit bank fraud, U.S. Attorney Paul J. Fishman announced.
Jose Luis Salguero Bedoya, also known as Jose Salguero, 36, of Elizabeth and Verona, N.J.; Paul Chemidlin, Jr., 41, of Morganville, N.J.; Delio Coutinho, 50, of Colonia, N.J.; Joseph DiValli, 44, of Jackson, N.J.; Christopher Ju, 26, of East Brunswick, N.J.; Carmine Fusco, 44, of East Hanover, N.J.; Jose Martins, 31, of Newark, N.J.; Yazmin Soto-Cruz, also known as Yazmin Soto, 32, of Elizabeth, N.J.; and Kenneth Sweetman, 32, of Lyndhurst and Nutley, N.J., were arrested this morning by FBI special agents.
Salguero, Chemidlin, Coutinho, DiValli, Ju, Fusco, Martins, Soto, and Sweetman, are scheduled for initial appearances and bail hearings this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark.
According to the Complaints:
From March 2008 to July 2012, the defendants engaged in multiple mortgage fraud conspiracies targeting at least 15 properties in and around Newark and Elizabeth, N.J. The defendants mortgage frauds took several forms, including obtaining control of properties through fraudulent “short sale” transactions, short sale flips, and identity theft. They submitted materially false mortgage loan documents to lenders in order to obtain loan proceeds, which the defendants then used for their own financial gain. The defendants also obtained money through various sales to straw buyers.
From March 2008 to June 2010, Salguero, Coutinho, Ju, and Soto conspired with each other and others to release liens on encumbered properties via fraudulently arranged short sale transactions. This allowed the defendants to profit from new fraudulent mortgage loans obtained on the properties from other mortgage lenders. To complete the short sale transactions, the defendants submitted materially false closing and other documents to mortgage lenders. They submitted materially false mortgage loan applications to mortgage lenders to obtain new mortgage loans on properties in and around Elizabeth, New Jersey, including a property on Fulton Street.
From March 2011 to July 2012, Salguero, Chemidlin, DiValli, Fusco, Martins, and Sweetman submitted false mortgage loan applications to mortgage lenders for a property on Smith Street, Elizabeth. The defendants submitted gift letters to mortgage lenders that falsely stated that the borrower was obtaining the funds necessary to close the real estate transaction from a relative or friend in the form of a gift, when the funds used as the borrowers’ down payments were actually provided by Salguero. The defendants also submitted false appraisal reports in order to support inflated property values and therefore obtain mortgage loans in larger amounts. The defendants formed limited liability companies (“LLCs”) in the names of companies similar to those of licensed title companies in order to open bank accounts in the LLC names to conceal the defendants’ identities and to control the receipt and distribution of fraudulently obtained mortgage loan proceeds. They submitted fraudulent documents that misrepresented Salguero’s ownership in various properties and the disposition of mortgage loan proceeds related to various transactions. The defendants then distributed fraudulently obtained mortgage loan proceeds to themselves and others and concealed those distributions by failing to include them on the HUD-1 Settlement Statements.
As a result of the mortgage fraud schemes described in the two Complaints, which involved at least 15 properties, the defendants and others defrauded financial institutions out of approximately $10 million.
The defendants played different roles in the schemes. Salguero was a real estate investor who, along with his girlfriend, Soto, provided much of the funds used by the defendants to perpetuate their fraudulent schemes. Coutinho was a loan officer at a Northern New Jersey mortgage brokerage company; he submitted false documents in support of the schemes. Chemidlin provided fraudulent real estate appraisals for the defendants although he was not a licensed real estate appraiser. DiValli was a loan officer at a Northern New Jersey mortgage brokerage company who also submitted false documents in support of the schemes. Ju negotiated the fraudulent short sale real estate transactions. Fusco and Sweetman conducted fraudulent real estate closings for the defendants although they were not licensed attorneys or title agents. Martins was a bank employee who facilitated certain financial transactions for the defendants.
The criminal Complaints charge each of the defendants with one count of conspiracy to commit bank fraud, which is punishable by a maximum potential penalty of 30 years in prison and a fine of $1,000,000.
U.S. Attorney Fishman credited law enforcement agents of the FBI Newark Mortgage Fraud Task Force for the investigation leading to today’s charges. Specifically, U.S. Attorney Fishman thanked special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Maria Kelokates, special agents of the U.S. Housing and Urban Development, Office of Inspector General, Northeast Region of Investigations, under the direction of Special Agent in Charge Cary Rubenstein, special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Inspector General Steve Linick, special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Romero, and special agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and the Hudson County Prosecutor’s Office, under the direction of Acting Prosecutor Gaetano Gregory.The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman, Aaron Mendelsohn, and Charlton Rugg of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The charge and allegations contained in the Complaints against each defendant are merely accusations, and the defendants are considered innocent unless and until proven guilty.
13-038Coutinho, Delio et al. Complaint
Chemidlin, Pau et al. ComplaintNew Haven Drug Dealer Sentenced to More Than Five Years in Federal PrisonRead the Press Release
January 24, 2013David B. Fein, United States Attorney for the District of Connecticut, today announced that JOHNNY SERRANO, also known as “BeBe,” 24, of New Haven, was sentenced yesterday by United States District Judge Robert N. Chatigny in Hartford to 70 months of imprisonment, followed by four years of supervised release, for distributing narcotics in New Haven.
According to court documents and statements made in court, in April 2011, the Bureau of Alcohol, Tobacco, Firearms and Explosives, in conjunction with the Drug Enforcement Administration and the New Haven Police Department’s Tactical Narcotics Unit, began an intensive investigation into drug dealing in the vicinity of 36 Maltby Place in the Fair Haven section of New Haven. The investigation, which included the use of court-authorized wiretaps, law enforcement surveillance and controlled purchases of crack cocaine and cocaine from a number of individuals, revealed that SERRANO and others operated an open-air narcotics market where they sold crack cocaine, cocaine, and heroin to customers on a daily basis.
SERRANO has been detained since his arrest on November 16, 2011. On October 1, 2012, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 28 grams or more of cocaine base (“crack”) and a quantity of cocaine.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration and the New Haven Police Department’s Tactical Narcotics Unit. The Stamford Police Department has provided critical assistance to the investigation.
This case is being prosecuted by Assistant United States Attorneys Anthony E. Kaplan and Marc H. Silverman.
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(203) 821-3722 [email protected]Multi-State Mortgage Fraudster Sentenced to 10 Years in PrisonRead the Press Release
PENSACOLA, FLORIDA – Lonett Rochell Williams47, Woodland Hills, California, was sentenced yesterday to 10 years in prison for conspiracy to commit mail fraud, conspiracy to commit money laundering, and six substantive counts of mail fraud.
In October of last year, Williams pled guilty to an eight-count indictment alleging that she participated in a conspiracy to defraud multiple lenders as part of a scheme to fraudulently purchase thirty-seven properties located in Texas, Georgia, and California, and in Navarre, Panama City Beach, and Sarasota, Florida. Approximately $20,448,767 in loans were issued by the lenders in connection with the real estate deals. Williams and her company received more than $4.5 million in kickbacks as a result of the scheme.
In September 2011, Williams’ son, Raysean K. Richardson, 28, New York, New York, was separately indicted on charges of conspiracy to commit mail fraud, mail fraud, and conspiracy to commit money laundering based on his role in the scheme. Richardson was convicted as charged following a jury trial held before Chief United States District Judge M. Casey Rodgers in September 2012. He is scheduled to be sentenced on February 19, 2013, by Judge Rodgers. Richardson faces up to twenty years in prison on each of the three counts of conviction.
Pamela C. Marsh, United States Attorney for the Northern District of Florida, praised the work of IRS-Criminal Investigations, the FBI and the Florida Department of Law Enforcement, whose joint investigation led to the convictions in these cases.
“Mortgage fraud, like all financial crimes, adds to the underground economy, erodes the integrity of our tax system and threatens the financial health of our communities as has been witnessed over the past several years” stated Special Agent in Charge James Robnett of the IRS Criminal Investigation Tampa Field Office. “Our agency, in cooperation with other federal and state law enforcement partners, target the offenders of mortgage fraud in our attempt to stem the tide of criminal activities that lay waste to the underpinnings of our financial system and this sentence should serve as a deterrent to those thinking about committing the same crimes.”
United States Attorney Marsh noted that prosecution is a continuation of this office’s vigorous efforts to combat mortgage fraud as part of Operation Stolen Dreams, a nationwide sweep that targeted mortgage fraud throughout the country. The largest collective enforcement effort ever brought to bear in confronting mortgage fraud, Operation Stolen Dreams was organized by the Mortgage Fraud Working Group of President Obama’s Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated effort to investigate and prosecute financial crimes.
The case was prosecuted by Assistant United States Attorney Tiffany H. Eggers.
Morrison Man Arrested for Possession of Improvised Explosive DevicesRead the Press Release
DENVER – Richard Lawrence Sandberg, age 35, of Morrison, Colorado, was arrested this morning by Special Agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), United States Attorney John Walsh and ATF Special Agent in Charge Andrew Traver announced. Sandberg appeared in U.S. District Court this afternoon where he was advised of his rights and the charges pending against him. He is being held without bond pending a detention hearing. The detention hearing and a preliminary hearing is scheduled for January 29, 2013 at 10:00 a.m. before U.S. Magistrate Judge Michael Watanabe.
Because there was a likelihood of improvised explosive devices in the Sandberg home, ATF agents, working closely with the Jefferson County Sheriff’s Office cordoned off an area around the home while conducting their search. Agents ultimately removed multiple improvised explosive devices, which were taken to a remote location and rendered safe. Three different bomb squads assisted the ATF, including the Denver Police Department Bomb Squad, the Jefferson County Sheriff Bomb Squad and the Colorado Springs Regional Explosives Unit. All were at the scene this morning, documenting evidence and assisting in handling the devices.
According to the affidavit in support of the Criminal Complaint, the investigation began when a Denver Police detective learned from a confidential informant that an individual who possessed improvised explosive devices. The detective contacted ATF regarding this information. ATF, acting on this information, worked with the confidential informant to introduce an undercover agent to meet the subject, who turned out to be Richard Sandberg. After a number of phone conversations the undercover agent and the confidential informant went to Sandberg’s residence, where they were shown improvised explosive devices. Sandberg reportedly said he wanted to trade the devices for cocaine, or for $300 each.
During the meeting Sandberg made numerous threatening statements towards law enforcement and specifically ATF. He stated that he was a former Marine, which is when he learned how to build powerful explosive devices. At the conclusion of the meeting, Sandberg gave the undercover agent three devices, which contained explosive powder, a fuse and shrapnel in the form of stainless steel ball bearings. ATF confirmed that Sandberg was not allowed to possess such devices according to the National Firearms Registry.
“Improvised Explosive Devices – IEDs – are against federal law, and with good reason: They have no legitimate purpose, and put an entire neighborhood at risk,” said U.S. Attorney John Walsh. “Thanks to strong cooperation between state, local and federal law enforcement in this case, a person who built IEDs has been apprehended and those devices recovered and neutralized.”
“ATF agents, working closely with our local law enforcement partners, identified and arrested a potentially violent individual who was posing a significant danger to the community,” said ATF Special Agent in Charge, Andrew Traver. “Through this cooperative effort, we were able to remove numerous destructive devices and stop any further potential harm to the citizens of Morrison, Colorado.”
Sandberg is currently charged with one count of possession of a firearm (which includes explosive devices) which is not registered in the National Firearms Registration and Transfer Record. If convicted, the defendant faces not more than 10 years in federal prison, and a fine of not more than $250,000.
This case was investigated by ATF, the Denver Police Department and the Jefferson County Sheriff’s Office.
Sandberg is being prosecuted by Assistant U.S. Attorney Jeremy Sibert.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a federal felony crime has a Constitutional right to be indicted by a federal grand jury.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
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Minneapolis Man Pleads Guilty to Conspiring to Distribute Controlled SubstancesRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, a 38-year-old Minneapolis man pleaded guilty to distributing cocaine, crack cocaine, and the semisynthetic psychedelic drug MDPV, commonly known as ecstasy. Antoine Kenyetta Poole specifically pleaded guilty to one count of conspiracy to distribute controlled substances. Poole, who was indicted along with Jermaine Aquarius Edison on September 11, 2012, entered his plea before United States District Court Judge Donovan W. Frank. On December 18, 2012, Edison, age 40, also of Minneapolis, pleaded guilty to one count of conspiracy.
In their plea agreements, the defendants admitted that from February 14 through August 16, 2012, they conspired with others to distribute 500 or more grams of cocaine, 28 grams of crack cocaine, and ecstasy. The conspiracy involved sending large amounts of cash to California for the purchase of cocaine. For example, on May 2012, law enforcement seized a package containing $18,000, which Edison was sending to California. In entering their pleas, the defendants also admitted distributing the controlled substances once they were received from their California suppliers.According to a law enforcement affidavit filed in the case, authorities began investigating Edison in February of 2012 and subsequently made several controlled purchases of cocaine, crack cocaine, and ecstasy.
For their crimes, the defendants face a potential maximum penalty of 40 years in prison. Judge Frank will determine their sentences at a future hearing, yet to be scheduled.
This case is the result of an investigation by the U.S. Drug Enforcement Administration, the Minneapolis Police Department, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Jeffrey S. Paulsen.Man Who Threatened to Rob Bank with Explosives SentencedRead the Press Release
PHILADELPHIA - Dragos Ungurean, 30, of Wyomissing, PA, was sentenced today to 63 months in prison for attempting to rob the Wyomissing branch of M & T Bank. He pleaded guilty to the charge on June 27, 2012. On March 19, 2012, Ungurean walked into the bank, at 800 Penn Avenue in Wyomissing, threatened to blow up a bomb or explosive device attached to his person, and demanded money. Ungurean was subdued and handcuffed after a scuffle with an on-duty plain clothes investigator, George R. Bell, Jr., from the Wyomissing Police Department. The officer was utilizing the bank as a customer at the time of the attempted robbery. The bomb or explosive device was fake.
In addition to the prison term, U.S. District Court Judge Lawrence F. Stengel ordered three years of supervised release and a $1,000 fine. The judge also referred to the actions of investigator Bell as “heroic” for subduing the defendant on his own.
This case was investigated by the Federal Bureau of Investigation, Allentown, PA Resident Agency, the Wyomissing, Berks County Police Department, and the Berks County District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Ewald Zittlau.
UNITED STATES ATTORNEY'S OFFICE Contact: PATTY HARTMAN
EASTERN DISTRICT, PENNSYLVANIA Media Contact
Suite 1250, 615 Chestnut Street 215-861-8525
Philadelphia, PA 19106COPIES OF NEWS MEMOS AND RELATED DOCUMENTS CAN ALSO BE FOUND AT HTTP://www.justice.gov/usao/pae
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Major New Jersey Hospital Pays $12.5 Million to Resolve Kickback AllegationsRead the Press Release
NEWARK, N.J. – The Cooper Health System has agreed with the U.S. Attorney’s Office for the District of New Jersey and the State of New Jersey to pay $12.6 million to settle allegations that it violated the federal False Claims Act and New Jersey False Claims Act by making improper payments to physicians under so-called “consulting” and “compensation” agreements as it sought to build its cardiology program.
U.S. Attorney Paul J. Fishman, Executive Assistant N.J. Attorney General John Hoffman, and Thomas O’Donnell, Special Agent in Charge of the U.S. Department of Health and Human Service's Office of Inspector General region that includes New Jersey, announced the settlement, which was unsealed today.
“Payments to outside physicians by hospitals require heightened scrutiny because those payments may be improper if they are based on patient referrals,” said U.S. Attorney Fishman. “Such kickback arrangements interfere with the physician-patient relationship and can lead to problems of overutilization and increased costs. Federal health care participants, such as Cooper, who run afoul of the prohibitions against kickbacks must be held responsible.”
“Cooper has taken responsibility for its past misconduct,” said Executive Assistant Attorney General Hoffman. Attorney General Jeffrey S. Chiesa is recused from the Cooper matter. “We commend Cooper for implementing substantial internal reforms and accountability measures designed to address the government's concerns and avoid any future transgressions."“People in Medicare and Medicaid should be confident that health providers are not being inappropriately influenced by financial gain," said Special Agent in Charge O’Donnell. “We will aggressively pursue all those who abuse Federal programs for personal gain.”
According to the results of the joint investigation:
The United States and New Jersey contend that from Oct. 1, 2004, through December 31, 2010, Cooper recruited local outside physicians to serve on the Cooper Heart Institute Advisory Board (“CHIAB”). Physicians were paid approximately $18,000 a year to attend four meetings over the course of any given year. The United States and New Jersey allege that at least one purpose of these payments was to induce the referral of patients to Cooper, that the payments did, in fact, induce such referrals to Cooper, and that Cooper’s subsequent billing of the Medicare and Medicaid programs for services resulting from those tainted referrals were in violation of federal and state anti-kickback and self-referral laws and thus, false claims.
The civil settlement agreement is between (1) the United States of America – acting through the United States Attorney’s Office for the District of New Jersey and on behalf of the Office of Inspector General of the United States Department of Health and Human Services (HHS OIG); (2) the State of New Jersey; and (3) the Cooper Health System. In resolution of the federal and state civil claims, Cooper has agreed to pay $10,200,000 to the United States and $2,300,000 to the State of New Jersey. Cooper has further enacted and agreed to maintain a number of corporate reforms designed to enhance accountability, training, and other aspects of its compliance operations.
The settlement resolves a False Claims Act suit by a physician who was recruited to take part in the CHIAB, but, instead, recognizing its potentially unlawful purpose, demurred and filed a whistleblower – “qui tam” – action. The qui tam provisions of both the federal and state False Claims Acts permit private individuals, known as relators, to file such actions and share in a portion of the proceeds recovered.
U.S. Attorney Fishman credited special agents of HHS OIG, under the direction of Special Agent in Charge O’Donnell, for the investigation leading to today’s settlement. Acting New Jersey Attorney General Hoffman also credited Deputy Attorney’s General Michelle Weiner and Lisa Kutlin for their handling of this matter.
The government is represented by Assistant U.S. Attorney David E. Dauenheimer of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, and Deputy Attorney General Samuel Cornish of the N.J. Attorney General’s OfficeThe claims settled by this agreement are allegations only; there have been no admissions of liability.
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Defense counsel: John M. Vazquez Esq., Michael Critchley Sr. Esq., both Roseland, N.J
Cooper Health Settlement Agreement
Cooper, Signed OrderLisle Man Admits to Serial Bank RobberiesRead the Press Release
Richard S. Hartunian, United States Attorney for the Northern District of New York; Peter J. Smith, United States Attorney, Middle District of Pennsylvania; George L. Piro, Acting Special Agent in Charge, Albany Division - Federal Bureau of Investigation; New York State Police Superintendent Joseph D’Amico; Joseph T. Zikuski, Chief, City of Binghamton Police Department; Carl Graziano, Acting Chief, City of Scranton Police Department; and, Larry Hurley, Chief, Athens Township Police Department, make the following announcement:
Samuel A. Parrotti, II, 44, of the Town of Lisle, Broome County, NY, admitted today in United States District Court, Binghamton, to committing a series of bank robberies last summer in Broome County, New York, Lackawanna County, Pennsylvania, and Bradford County, Pennsylvania. During his plea of guilty to four felony counts of bank robbery, Parrotti admitted to committing the following bank robberies in Broome County - the first, on July 16th, 2012, at the M&T Bank branch located at 1170 Vestal Avenue in the City of Binghamton; the second, on August 1st, 2012, at the NBT Bank branch located at 2950 State Route 11 in Whitney Point.
In addition, Parrotti admitted committing two other bank robberies similar to the Broome County robberies - one on August 6, 2012, at the Pennstar Bank branch located at 117 Meadow Avenue, Scranton, PA., and the other on August 27, 2012, at the Visions Federal Credit Union located at 2121 Elmira Street, Sayre, PA. In each of the four bank robberies, Parrotti indicated he possessed a gun, and passed notes to tellers demanding money. Parrotti obtained a total of approximately $38,000 between the four robberies.
Parrotti faces a maximum sentence of 20 years imprisonment, and a maximum fine of $250,000 dollars, on each of the four bank robberies. Parrotti is scheduled to be sentenced on May 23, 2013, by Senior U.S. District Court Judge Thomas J. McAvoy in United States District Court, Binghamton.
The case is being prosecuted by Assistant United States Attorney Thomas P. Walsh. Further inquiries may be directed to the United States Attorney’s Office, Binghamton branch office, at (607) 773-2887.
Lincoln County Man Indicted on Federal Child Pornography ChargesRead the Press Release
St. Louis, MO - Matthew M. Hansen was indicted for allegedly attempting to entice minor boys to engage in sexually explicit conduct for him to videotape between 2007 and 2012.
MATTHEW M. HANSEN, Winfield, MO, was indicted by a federal grand jury on eight felony counts of attempted production of child pornography and one felony count of possession of child pornography.
If convicted, each count of attempted production of child pornography carries a penalty range of 15 to 30 years in prison; possession carries a maximum penalty of ten years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), and St. Charles County Cyber Crime Unit. Assistant United States Attorney Rob Livergood is handling the case for the U.S. Attorney’s Office.As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Las Cruces Man Charged with Unlawful Production of Counterfeit Law Enforcement CredentialsRead the Press Release
ALBUQUERQUE – A federal grand jury sitting in Albuquerque, N.M., has indicted Richard A. Stack, 70, of Las Cruces, N.M., for unlawfully producing false identification documents. The indictment was announced by U.S. Attorney Kenneth J. Gonzales, Special Agent in Charge Carol K.O. Lee of the Albuquerque Division of the FBI, and Resident Agent in Charge Richard Ferretti of Albuquerque Resident Office of the U.S. Secret Service.
The three-count indictment, which was filed on Jan. 23, 2013, alleges that Stack unlawfully produced fraudulent law enforcement identification credentials that appeared to be issued by and under the authority of the U.S. Government. Stack is charged with unlawfully producing counterfeit Federal Air Marshal identification credentials on Jan. 6, 2012, and counterfeit U.S. Secret Service identification credentials on Jan. 9, 2012 and March 14, 2012. An arraignment date for Stack has yet to be scheduled.
“Counterfeit law enforcement credentials can be used by criminals, terrorists, and spies for illegal purposes, including penetrating our nation’s most secure government buildings, airports, and other facilities,” said Special Agent in Charge Lee of the FBI. “I would like to thank the U.S. Attorney's Office and the U.S. Secret Service for their assistance in this investigation. The FBI will continue to work aggressively with our law enforcement partners to investigate and prosecute those who put our national security and public safety at risk by making fake law enforcement badges and credentials available to those who might seek to abuse them."
“Richard Stack allegedly manufactured and sold counterfeit law enforcement credentials to an undercover U.S. Secret Service Agent,” said Resident Agent in Charge Ferretti of the U.S. Secret Service. “These fake credentials could have allowed an unauthorized subject to gain access to federally protected facilities or aircraft and thus erode the public's trust in law enforcement. We therefore must ensure that individuals like Stack are prosecuted and held accountable for their actions, if convicted.”
If convicted, Stack faces a maximum penalty of 15 years in prison and a $250,000 fine on each of the three charges in the indictment. Charges in indictments are merely accusations. All criminal defendants are presumed innocent unless proven guilty.
Assistant U.S. Attorney Jon K. Stanford is prosecuting the case. The investigation was conducted by the Las Cruces office of the FBI, and the Albuquerque Resident Office of the U.S. Secret Service. They were assisted by the New South Wales Police in Australia, the Boston Division of the FBI, the Norfolk Resident Office of the U.S. Secret Service, the U.S. Transportation Security Administration in Dallas, Texas and the Austin, Texas, Police Department.
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Indictment
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Ladybug Family Restaurant and Restaurant Employee Agree to Pay $62,000 to Resolve False Claims Act Allegations of Food Stamp FraudRead the Press Release
CHARLOTTE, N.C. – Ladybug Family Restaurant, Inc. and Retha Kendall Lindsey (“Defendants”) have agreed to pay $62,000 in damages and civil penalties to resolve allegations of food stamp fraud, announced Anne M. Tompkins, United States Attorney for the Western District of North Carolina.
U.S. Attorney Tompkins is joined in making today’s announcement by Karen Citizen-Wilcox, Special Agent in Charge, Office of the Inspector General, Office of Investigation of the U.S. Department of Agriculture (USDA-OIG).
On October 10, 2012, the United States filed a civil complaint against the Ladybug restaurant and Lindsey, who was employed by the restaurant, for violation of the United States False Claims Act. According to the filed complaint, the Defendants used other people’s Electronic Benefit Transaction (“EBT”) cards, formerly known as food stamps, to purchase food and other items for the Ladybug restaurants. The complaint alleged that from about August 2011 to about June 2012, the Defendants and others used EBT cards belonging to other people in at least 49 transactions to make bulk purchases of meat and other items for use at the Ladybug restaurants.
Today, the United States and Defendants submitted to the U.S. District Court a consent motion for a final order pursuant to which Defendants will pay $21,116.01 in damages and $40,883.99 in civil penalties under the False Claims Act. The proposed final judgment is subject to approval by a United States District Court Judge.
The Supplemental Nutrition Assistance Program (“SNAP”) provides assistance to low or no income individuals to allow them to purchase qualified food and nutrition items. Benefits are issued in the form of EBT cards similar to debit cards that can be swiped in a merchant’s credit card machine.
The civil action arose out of an investigation by the Inspector General’s Office of the U.S. Department of Agriculture, which administers the SNAP program. The False Claims Act allows the United States to recover triple the amount paid in fraudulent claims plus civil penalties of $5,000 to $11,000 per false claim. Each time an unauthorized party uses an EBT card constitutes a false claim to the United States subjecting the party to treble damages and civil penalties. The complaint in this case alleges that Defendants engaged in at least 49 fraudulent transactions. Each transaction is a false claim against the United States.
In making today’s announcement, U.S. Attorney Tompkins stated, “The SNAP program is in place to ensure that low income families and individuals are able to buy food staples to combat hunger and prevent malnutrition. Fraud on this program harms not only every American taxpayer but the vulnerable recipients who need it the most. My office will continue to use the False Claims Act to vigorously investigate and prosecute allegations of fraud on important government programs such as SNAP.”
Special Agent in Charge Citizen-Wilcox stated, “USDA-OIG aggressively investigates allegations of Supplemental Nutrition Assistance Program (SNAP) fraud with the goal of rooting out such activity to ensure that taxpayers’ funds are reserved for those who are truly in need. We would like to thank U.S. Attorney’s Office for their efforts in helping to combat SNAP fraud.”
The case was investigated by USDA-OIG. The prosecution was handled by Assistant United States Attorneys Paul B. Taylor and Jonathan H. Ferry of the U.S. Attorney’s Office for the Western District of North Carolina.
Jury Convicts Mountain View Man of Heroin SmugglingRead the Press Release
SAN JOSE, Calif. – Mike Gama was convicted by a federal jury Tuesday of both possession with intent to distribute a kilogram or more of heroin and importation of a kilogram or more of heroin , United States Attorney Melinda Haag announced.
The jury found that Gama had knowingly participated in a scheme to import heroin into the United States from Mexico when he accepted delivery of a package containing more than a kilogram of heroin concealed within a wooden tortilla press, and that he had possessed that heroin with the intent to distribute it to someone else. The guilty verdict followed a one-week jury trial before U.S. District Court Judge Edward J. Davila.
Evidence at trial showed that on June 20, 2011, Gama, 23, of Mountain View, Calif., received a package shipped from an address in Michoacan, Mexico via the commercial shipping company, DHL Express. The DHL package, which was addressed to him personally, contained, among other things, a wooden tortilla press containing 1.07 kilograms of a black tar-like substance, which subsequent lab testing confirmed as Mexican black tar heroin. Gama signed for the package and a search warrant was executed immediately thereafter to recover the package containing the heroin.
The DHL package addressed to Gama containing the heroin was first intercepted by Customs and Border Protection officers inspecting international shipments arriving at the DHL hub in Cincinnati, Ohio. HSI agents in San Jose were alerted to the package and were prepared to seize the package and the heroin when it arrived in California.
Gama was indicted by a federal grand jury on July 6, 2011. He was charged with one count of possession with intent to distribute a kilogram or more of heroin and one count of importation of a kilogram or more of heroin.
Following the guilty verdict, Gama, who had been free on bond pending trial, was remanded immediately into the custody of the United States Marshal Service. Gama’s sentencing is scheduled for April 15, 2013, before United States District Court Judge Edward J. Davila in San Jose. The maximum statutory penalty for each count in violation of Title 21 of the United States Code, Sections 841 and 952 is life in prison, with a statutory mandatory minimum term of 10 years in prison, and a maximum fine of $10 million. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Gary G. Fry and Amie D. Rooney are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Tracey Andersen and Laurie Worthen. The prosecution is the result of an 18-month investigation by U.S. Immigration and Customs Enforcement, Homeland Security Investigations and Customs and Border Protection.
Judge Sentences Former Bank Manager to 90 Months for Scheme That Closed Local Federal Credit UnionRead the Press Release
PHILADELPHIA - Ignacio Morales, a/k/a “Nacho,” 49, of Philadelphia, was sentenced today to 90 months in prison for conspiracy to defraud the government in a case that led to the closure of the Borinquen Federal Credit Union (BFCU). Morales used his position as the bank’s Manager to misuse and embezzle more than $2.3 million of BFCU funds through a variety of schemes, and between 2006 and June 2011, Morales further enriched himself by cashing hundreds of fraudulent U.S. tax refund checks through BFCU, keeping 20% of each check for himself as commission. Morales pleaded guilty September 4, 2012.
BFCU was a federal credit union in Philadelphia. Between 2008 and 2009, Morales embezzled $600,000 from BFCU to purchase real estate, and during the period of September through December 2009, he took $560,000 from BFCU to attempt to purchase 15 kilograms of cocaine. In September 2008, he failed to deposit $700,000 into an account of a BFCU member, and instead used the money for his own purposes. Morales also allowed a member of the BFCU board of directors to withdraw money from a BFCU account despite the absence of funds in the account resulting in a deficit of approximately $500,000. Morales then intentionally altered bank records and other reports provided to the National Credit Union Administration and their auditors in order to conceal his misuse of BFCU funds. In June 2011, the National Credit Union Administration took over the operation of the BFCU but closed the credit union within a month and liquidated its assets.
In addition to the conspiracy to defraud the government with respect to claims, Morales pleaded guilty to misapplication and embezzlement, false reports on federal credit institution entries, engaging in monetary transaction in property derived from specified unlawful activity, filing false federal income tax returns, and attempted possession with intent to distribute more than five kilograms of cocaine.
In addition to the prison term, U.S. District Court Judge R. Barclay Surrick ordered restitution to the National Credit Union Administration $2.3 million, restitution to the IRS $7,311,747.50, five years of supervised release, and a special assessment of $800.This case was investigated by the United States Postal Inspection Service, the Internal Revenue Service, and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Arlene D. Fisk.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Johnstown Man Pleads Guilty to Possessing Child PornographyRead the Press Release
JOHNSTOWN, Pa. - A resident of Johnstown, Pa., pleaded guilty in federal court to a charge of possession of child pornography, United States Attorney David J. Hickton announced today.
Austin J. Correll, 32, pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, the court was advised that on Jan. 24, 2011, Correll knowingly possessed pictures and videos in individual computer graphic files which were produced using minors engaging in sexually explicit conduct. The computer graphic files were shipped or transported in interstate or foreign commerce.
Judge Gibson scheduled sentencing for June 12, 2013, at 9:30 a.m. The law provides for a total sentence of ten years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Pending sentencing, the court continued Correll on bond.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
Homeland Security Investigations conducted the investigation that led to the prosecution of Correll.
This case was brought as part of Project Safe Childhood. Launched in Feb. 2006, Project Safe Childhood is a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.