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18 January 2013
Houston Real Estate Developer Heads to Federal Prison for Disaster FraudRead the Press Release
HOUSTON – Jon August Holverson, the owner of Bayou City Properties, will be spending nine years in federal prison for conspiring to obtain approximately $1 million in disaster relief funds by fraudulent means, United States Attorney Kenneth Magidson announced today. Holverson, 52, of Bellaire, pleaded guilty in December 2011 to conspiracy to commit fraud in connection with a benefit authorized pursuant to a presidentially declared disaster and a substantive count of fraud.
Holverson had his bond revoked by U.S. District Judge Melinda Harmon in May 2012 following a pre-sentencing hearing that determined he committed obstruction of justice involving a local appraiser and the value of his properties allegedly damaged by Hurricane Ike. Today, Judge Harmon sentenced Holverson to five years imprisonment for conspiracy and nine years imprisonment for the substantive FEMA fraud count, to be served concurrently. He was also fined $30,000. He was further ordered to serve a three-year-term of supervised release following completion of his prison term.
Holverson admitted he conspired with his brother, Jeffrey Holverson, 49, of Tomball, and Timothy Berges, 55, of Pasadena, to commit disaster fraud between Sept. 26, 2008, and Feb. 16, 2011. Jon Holverson filed an application for a Small Business Administration (SBA) commercial disaster loan in the aftermath of Hurricane Ike, requesting more than $1 million. In order to get the SBA to disburse the loan funds, he admitted he submitted more than $850,000 in false invoices and cancelled checks purporting to show payments to his brother’s company, Quality Construction. When he was contacted by representatives of the SBA, Jeffrey Holverson falsely affirmed he had performed the work and been paid the money.
At the hearing today, the court took note that Holverson’s fraud and manipulation continued throughout the pendency of his sentencing in voluminous filings containing receipts and invoices unrelated to the SBA loan in an attempt to artificially lower his sentence. During court proceedings and in filings, it was pointed out that U.S. District Judge Lynn Hughes made similar findings against Holverson. In May 2010, Judge Hughes found that Holverson’s claim against insurance company was brought in bad faith and in a naked grasp for someone else’s money relating to a property he claimed was damaged in Hurricane Ike.
Jeffrey Holverson and Timothy Burges also pleaded guilty to the conspiracy and both were sentenced to three years probation.
The investigation leading to the charges was conducted by special agents of the SBA – Office of Inspector General and Department of Homeland Security – Office of Inspector General. Assistant United States Attorney (AUSA) Ed Gallagher and Former AUSA Andino prosecuted the case.
The United States Attorney's Office for the Southern District of Texas is a member of the Department of Justice's Disaster Fraud Task Force, established to deter, detect and prosecute instances of fraud related to hurricanes and other types of disasters. Comprised of federal, state and local law enforcement investigating agencies, the Task Force combats all types of fraud relating to disasters and their aftermath, with an emphasis on charity fraud, emergency-benefit fraud, identity theft, insurance fraud, and procurement fraud.
Anyone suspecting criminal activity involving disaster assistance programs can make an anonymous report by calling the toll-free fraud hotline, 1-866-720-5721 or contacting the Disaster Fraud Fax at 1-225-334-4707 or the Disaster Fraud e-mail at [email protected], 24 hours a day, seven days a week until further notice. Information can also be sent by surface mail, with as many details as possible, to:
National Center for Disaster Fraud
Baton Rouge, LA 70821-4909Hilliard Couple Plead Guilty in $7 Million Mortgage Fraud SchemeRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Deborah L. Kistner, 50, and her husband, Mark A. Kistner, 52, both of Hilliard, pleaded guilty three days after their trial started on a $7 million mortgage fraud scheme they carried out between June 2006 and July 2010.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI) and other agencies participating in the mortgage fraud task force announced the guilty pleas entered before U.S. District Judge Gregory L. Frost.
Deborah Kistner pleaded guilty to three counts of conspiracy to commit bank fraud, three counts of conspiracy to commit money laundering, and one count of bank fraud. Mark Kistner pleaded guilty to one count of conspiracy to commit money laundering.
Deborah Kistner operated Premiere Title Company in Hilliard. She deceived lenders in connection with the purchases of real estate in Ohio and Florida. Evidence presented during the first three days of the trial showed that she conspired with others to secure inflated loans for real estate and kept the excess proceeds or used them to pay others involved in the conspiracy. Deborah Kistner intentionally failed to provide lenders with critical purchase contract language and accurate settlement statements.
Deborah and Mark Kistner also schemed to defraud lenders and launder the money they received through simultaneous “short sale” closings where the lenders would agree to absorb losses on existing mortgage loans while Deborah Kistner actually sold those properties on the same day for a profit and laundered the profits through bank accounts controlled by Mark Kistner. The government was prepared to show that they secured as much as $7 million in fraudulent loans through their schemes.
Deborah Kistner faces a maximum penalty of up to 30 years in prison and a fine of $1 million on each of the three counts of conspiracy to commit bank fraud, and the one count of bank fraud; and up to ten years in prison and a fine of $250,000 on the three counts of conspiracy to commit money laundering. Mark Kistner faces a maximum penalty of up to ten years in prison and a fine of $250,000 on the one count of conspiracy to commit money laundering. Lenders suffered losses of at least $3.3 million. The plea agreements they signed include forfeiture of investment accounts and restitution to victims.
They were released on bond pending sentencing. Judge Frost will schedule a date for sentencing.
Stewart commended the cooperative investigation of this case by IRS and FBI agents, and Assistant U.S. Attorney’s Laura Fulton and Dan Brown, who are prosecuting the case.
Granite City Man Sentenced for Production of Child PornographyRead the Press Release
Jason E. Starko, 36, Granite City, IL, was sentenced on January 18, 2013, to a total of 360 months in prison on a two-count indictment charging him, in both counts, with Production of Child Pornography, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Starko’s term of imprisonment consists of 360 months on each count, to run concurrently. Starko was also ordered to serve a 20 year term of supervised release on both counts, also to run concurrently, fined $1250, and ordered to pay a $200 special assessment. Starko pled guilty to the offenses on August 8, 2012, and had been detained (held without bond) since his arraignment on December 23, 2011.
“The case was brought with the cooperation of the Madison County State’s Attorney’s Office. Our office, along with the Madison County State’s Attorney’s Office, is very happy with the result. The cooperative effort between the two offices, which resulted in this prosecution and sentence, has removed Mr. Starko from our district for a very long time and protected our children from a sexual predator.” said United States Attorney Wigginton.
Horrific facts revealed in the court proceedings were that the violations occurred between August 7 and August 12, 2011, when Starko resided with a friend, L.R., and her two minor children, in Granite City. On August 12, 2011, L.R. reported to the Granite City Police Department that her two minor children, ages 5 and 7, had disclosed sexual abuse by Starko. For that, Starko is currently charged in Madison County with two counts of Aggravated Criminal Sexual Abuse. Of course, a charge is not proof of guilt. Starko is presumed innocent of the charge until proven guilty beyond a reasonable doubt.
The federal charges came about when, after Starko was arrested, an individual found a digital camera that Starko had left in his/her house. This individual viewed the contents of the camera and saw sexually explicit videos involving minors. This individual turned over the digital camera to the Granite City Police Department. During a forensic review of the digital camera, officers recovered two pornographic videos involving L.R.’s 5 year old minor child. These videos depict the minor child’s nude genital area. In one of the videos, Starko’s hand is seen touching the minor child’s genitals in order to get a closer view of the child’s nude genital area. Both videos appeared to have been taken with a hidden camera.
Evidence introduced at the sentencing hearing showed that inappropriate pictures were taken of the two girls while at a lighted water fountain in St. Louis, Missouri. Numerous photographs were of the children in sexually provocative poses.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
The case was investigated by the Granite City Police Department. The case was assigned to Assistant United States Attorney Angela Scott.
Gang Member Felon Sentenced to Serve 63 Months in Federal Prison for Possession of FirearmRead the Press Release
PORTLAND, Ore. - Timothy Gaines 20, of Portland, Oregon, was sentenced yesterday by U. S. District Judge Michael Simon to 63 months in prison, to be followed by a three-year term of supervised release, for felon in possession of a firearm. This sentence represents the high-end of the sentencing range (51-63 months).
On July 18, 2011, at approximately 8:30 p.m., Portland Police Bureau (PPB) officers responded to multiple reports of shots fired in Northeast Portland near Unthank Park. Dispatch broadcasted reports of six gunshots and suspects on foot near the park. Responding officers contacted a group of young men, including Gaines, who were walking away from the area. Gaines broke from the group and sprinted through Unthank Park while holding his waistband with one hand. Officers observed him make a throwing motion towards the park's bathroom roof, and soon thereafter, officers recovered a loaded firearm from the bathroom gutter. Officers arrested Gaines, and during a search of his person, they recovered two mismatched black knit gloves, recognized by Gang Enforcement Team officers as "shooter gloves."
On August 23, 2011, after a three-day jury trial, defendant was convicted of felon in possession of a firearm. Defendant is a member of the Unthank Park Hustlers, and he has a prior felony conviction for unlawful use of a weapon from 2010. He committed the instant offense just one month after his release from a 15-month prison sentence on his prior conviction. "The danger presented by gang members with loaded firearms cannot be overstated - it is a recipe for homicide, especially in this community where the number of violent gang incidents is surging upwards," said U.S. Attorney Amanda Marshall. "This sentence helps us send the right message to the gang community - gun violence will be prosecuted to the fullest extent possible."
This case was investigated by the Portland Police Bureau (PPB) and the Bureau of Alcohol, Tobacco, and Firearms (ATF). The case was prosecuted by Assistant U. S. Attorneys Leah K. Bolstad and Pam Holsinger.
Freedom Man Sentenced for Defrauding His EmployerRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Nicholas Polcz, 35, of Freedom, N.Y., who was convicted of mail fraud, was sentenced to one year in prison and ordered to pay $28,419.44 in restitution by Chief U.S. District Court Judge William M. Skretny.
Assistant U.S. Attorney Michael DiGiacomo, who handled the case, stated that in 2010, Polcz was employed as the director of operations for Ziphany Company. The defendant's responsibilities included overseeing the internal computer operations and wireless service provider. Sometime in April 2010, Polcz created his own company, EXUO Communications, a shell company with no employees. After creating EXUO, the defendant advised management at Ziphany that he changed Ziphany's wireless communications provider to EXUO Communications. At no time did Polcz advise anyone from Ziphany that EXUO was his company.
Since EXUO communications was a shell company with no ability to provide wireless service, the defendant continued to have the original service provider provide wireless communications for Ziphany. In order to hide his scheme, Polcz advised representatives from the wireless provider to send all invoices to his company as EXUO was now taking over the billing and communications for Ziphany. After receiving the invoices, the defendant would then create a false, fraudulent and inflated EXUO invoice and send it along to Ziphany. After receiving payment on the inflated invoice from Ziphany, Polcz would pay the wireless service provider and keep the remainder for himself. As a result of the scheme, Ziphany was defrauded out of over $28,000.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigations, under the direction of Special Agent in Charge Christopher M. Piehota.
Four Defendants Sentenced to Federal Prison, One Awaiting Trial for Allegedly Shipping Cocaine Through the U.S. MailRead the Press Release
PROVIDENCE, R.I. – Four defendants have been sentenced to federal prison and a fifth is awaiting trial in federal court on drug trafficking charges, for allegedly shipping packages containing substantial quantities of cocaine through the U.S. Postal Service, announced United States Attorney Peter F. Neronha and Kevin M. Niland, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division.
Numerous packages which allegedly contained a total of nearly 14 kilos of cocaine and were addressed to Rhode Island residences were identified and tracked by U.S. Postal Inspectors. The majority of packages were allegedly shipped to Rhode Island from Puerto Rico. Some of the packages were allegedly shipped from California.
Controlled deliveries by U.S. Postal Inspectors, with the assistance of the Rhode Island State Police High Intensity Drug Trafficking Area (HIDTA) Task Force, resulted in the arrest of five individuals, four of whom have pleaded guilty to federal drug trafficking charges and have been sentenced to federal prison. A fifth defendant is awaiting trial. All of the defendants allegedly operated independent of one another. Several other shipments of illegal narcotics through the U.S. Mail remain under investigation by U.S. Postal Inspectors.
United States Attorney Peter F. Neronha commented, “The distribution of illegal narcotics through the mail is an ongoing and dangerous problem. This Office is committed to working with the Postal Service and other law enforcement partners to deal aggressively with this threat to the health and safety of all Rhode Island residents.
Kevin M. Niland, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division said, “The Postal Service is in the business of moving the mail and has no interest in being the unwitting accomplice to anyone using the U.S. Mail to distribute illegal drugs. Postal Inspectors work diligently to rid the mail of illicit drugs by maintaining an aggressive drug parcel detection program and seeking prosecution of mailers and recipients of illegal drugs to the fullest extent of the law.”
On March 16, 2012, U.S. Postal Inspectors, assisted by members of the HIDTA Task Force, arrested Alexi Ruiz, 44, of Providence, shortly after he accepted a controlled delivery of a package containing approximately two kilos of cocaine. The package had been shipped through the U.S. Postal Service from Puerto Rico to a Providence residence. Ruiz pled guilty in federal court on July 25, 2012, to a two-count indictment charging him with conspiracy to possess with the intent to distribute 500 grams or more of cocaine and possession with the intent to distribute 500 grams or more of cocaine. Ruiz was sentenced by U.S. District Court Chief Judge Mary M. Lisi on November 1, 2012, to 84 months in federal prison to be followed by 5 years of supervised release.
On March 30, 2012, U.S. Postal Inspectors, assisted by members of the HIDTA Task Force, arrested Luis M. Camilo, 39, of Providence, shortly after he accepted a controlled delivery of a package containing approximately one kilo of cocaine. The package had been shipped from Puerto Rico through the U.S. Postal Service. Camilo pled guilty in federal court on May 23, 2012, to conspiracy to possess with the intent to distribute 500 grams or more of cocaine. Camilo was sentenced on September 6, 2012, by U.S. District Court Chief Judge Mary M. Lisi to 60 months in federal prison to be followed by 5 years of supervised release.
On April 26, 2012, Jorge Antonio Falcon-Ortiz, 40, of Providence, was arrested by U.S. Postal Inspectors, with the assistance of the HIDTA Task Force, after they intercepted the second of three packages containing substantial quantities of cocaine shipped between February 2012 and April 2012 from Puerto Rico. On August 10, 2012, Falcon-Ortiz pled guilty to a two-count indictment charging him with conspiracy to possess with the intent to distribute 500 grams or more of cocaine and attempt to possess with the intent to distribute 500 grams or more of cocaine. Falcon-Ortiz was sentenced by U.S. District Court Chief Judge Mary M. Lisi on November 1, 2012, to 78 months in federal prison to be followed by 4 years of supervised release.
Jamal L. Boleman, 33, of Providence, was sentenced yesterday by U.S. District Court Chief Judge Mary M. Lisi to 84 months in federal prison to be followed by 3 years of supervised release. He was arrested on June 25, 2012, on a federal warrant on drug trafficking charges contained in a sealed federal indictment returned by a grand jury in May 2011. The charges stem from an investigation by U.S. Postal Inspectors into the delivery of at least two packages containing cocaine shipped in April 2011 from California to Pawtucket.
On August 30, 2012, Michael C. Capurso, 34, of Newport, R.I., and Worcester, Mass., was arrested by U.S. Postal Inspectors, with the assistance of the HIDTA Task Force, shortly after the controlled delivery of a package which allegedly contained approximately 2.5 kilos of cocaine to Capurso’s Newport residence. The package was allegedly shipped through the U.S. Postal Service from Puerto Rico.
Capurso is awaiting trial on a federal indictment which charges him with one count of conspiracy to distribute and to possess with the intent to distribute cocaine, and one count of possession with intent to distribute cocaine. Capurso has pled not guilty to the charges.
An indictmentis merely an allegation 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.
Alexi Ruiz, Luis M. Camilo, Jorge Antonio Falcon-Ortiz and Jamal L. Boleman were prosecuted by Assistant U.S. Attorneys Sandra R. Hebert and William J. Ferland. Michael C. Capurso is being prosecuted by Assistant U.S. Attorney Gerard B. Sullivan.
Contact: 401-709-5357
[email protected]Fort Worth Man Sentenced to 10 Years in Federal Prison OnFederal Firearms ConvictionsRead the Press Release
FORT WORTH, Texas —Booker Bernard Preston, 38, of Fort Worth, Texas, was sentenced this morning by U.S. District Judge John McBryde to a total of 10 years in federal prison, following his conviction at trial in September 2012 on one count of selling a firearm to a convicted felon and one count of possessing an unregistered sawed-off shotgun. As part of the sentencing hearing, Judge McBryde found that Preston committed perjury during his trial. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
During trial, the government presented evidence that in August 2010, special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) received information from a confidential informant that an individual, later identified as Preston, was selling a large amount of handguns and rifles, and that he was known to take and fill orders for firearms and not require any paperwork to purchase the firearms.
In an undercover operation on November 15, 2010, Preston sold a Bryco, Model 48, .380 caliber semiautomatic pistol to a convicted felon. On November 19, 2010, a federal search warrant was executed at Preston’s residence, during which 24 firearms were seized, including a sawed-off shotgun, which Preston stated he had made the previous week.
The case was investigated by ATF and prosecuted by Assistant U.S. Attorney John P. Bradford.
Former Owner of Rest Assure Home Medical Equipment Sentenced in Federal Court on Health Care Fraud ChargesRead the Press Release
Defendant Ordered to Pay $175,923.93
LAFAYETTE, La.: United States Attorney Stephanie A. Finley announced today that the former owner of Rest Assure Home Medical Equipment, located in Rayne, La., was sentenced to five years probation and was ordered to pay $175,923.93 in restitution for health care fraud related to Medicare reimbursements. The sentence was handed down yesterday in federal court in Lafayette by U.S. District Judge Elizabeth E. Foote.
Dorothy Cole, age 60, of Rayne, La., was charged by Bill of Information on June 20, 2012, with five counts of health care fraud. According to court documents filed at Cole’s guilty plea on September 18, 2012, she was the owner and president of Rest Assure Home Medical Equipment. Rest Assure Home Medical Equipment provided durable medical equipment, such as power wheelchairs and scooters to Medicare beneficiaries. Beginning in August of 2007 and continuing through April of 2009, Cole billed Medicare for a more expensive type of wheelchair but provided her customers with cheaper scooters that were not reimbursable by Medicare and less expensive wheelchairs that were reimbursed by Medicare at a lower rate.
During the guilty plea hearing, Cole acknowledged that she submitted false claims to Medicare and obtained $175,923.93 in Medicare reimbursements to which she was not entitled.
U.S. Attorney Finley stated: “Dorothy Cole violated the law when she collected money from Medicare under false pretenses. Medicare is designed to help Americans, age 65 and older, and younger people, with disabilities. This type of fraud undermines the system and hurts those who are in need of its benefits. Medicare fraud results in the losses of millions of dollars every year. Our office is dedicated to prosecuting those who engage in this type of fraud.”
The case was investigated by the Department of Health & Human Services, Office of Inspector General, and the FBI-Lafayette Resident Agency, and is being prosecuted by Assistant U.S. Attorney Kelly P. Uebinger.
Former Minister Pleads Guilty in North Carolina to Engaging<br /> in Illicit Sexual Conduct in HaitiRead the Press Release
WASHINGTON – A former minister pleaded guilty today in North Carolina to engaging in illicit sexual conduct in Haiti, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Western District of North Carolina Anne M. Tompkins and Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas.
Larry Michael Bollinger, 67, of Gastonia, N.C., pleaded guilty before U.S. District Judge David S. Cayer in the Western District of North Carolina to two counts of engaging in illicit sexual conduct in a foreign place. Bollinger was charged in an indictment filed on May 15, 2012.
According to filed court documents and court proceedings, Bollinger was a former Lutheran minister who performed missionary work in Haiti. Court records show that Bollinger regularly travelled to Haiti and served as the Haiti director for a Lutheran charity. Bollinger admitted that from about August 2009 to October 2009, he sexually molested four Haitian females, between the ages of 11 and 16. According to court records, one of the victims said that Bollinger offered to give her food and money in exchange for sexual acts.
Bollinger has been in federal custody since he was charged in May 2012. Each count of engaging in illicit sexual conduct in a foreign place carries a maximum penalty of 30 years in prison and a $250,000 fine. A sentencing date for Bollinger has not been set yet.
The case is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Trial Attorney Michael W. Grant of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). The investigation was conducted by ICE-HSI.
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 U.S. Attorneys’ offices and 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.
Former Minister Pleads Guilty in North Carolina to Engaging in Illict Sexual Conduct in HaitiRead the Press Release
CHARLOTTE, N.C. – A former minister pleaded guilty today in North Carolina to engaging in illicit sexual conduct in Haiti, announced Assistant Attorney General Lanny A. Breuer, U.S. Attorney for the Western District of North Carolina Anne M. Tompkins and Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas.
Larry Michael Bollinger, 67, of Gastonia, N.C., pleaded guilty before U.S. District Judge David S. Cayer in the Western District of North Carolina to two counts of engaging in illicit sexual conduct in a foreign place. Bollinger was charged in an indictment filed on May 15, 2012.
According to filed court documents and court proceedings, Bollinger was a former Lutheran minister who performed missionary work in Haiti. Court records show that Bollinger regularly travelled to Haiti and served as the Haiti director for a Lutheran charity. Bollinger admitted that from about August 2009 to October 2009, he sexually molested four Haitian females, between the ages of 11 and 16. According to court records, one of the victims said that Bollinger offered to give her food and money in exchange for sexual acts.
Bollinger has been in federal custody since he was charged in May 2012. Each count of engaging in illicit sexual conduct in a foreign place carries a maximum penalty of 30 years in prison and a $250,000 fine. A sentencing date for Bollinger has not been set yet.
The case is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Trial Attorney Michael W. Grant of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). The investigation was conducted by ICE-HSI.
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 U.S. 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.
Former Manager of Beauregard Ranch & Tractor Supply Sentenced in Federal Court for Wire Fraud ChargesRead the Press Release
LAFAYETTE, La.: United States Attorney Stephanie A. Finley announced today that the former manager for Beauregard Ranch & Tractor Supply, located in DeRidder, La., was sentenced yesterday in federal court in Lafayette by U.S. District Judge Elizabeth E. Foote, to five years probation. Arnold Russell Williams, 53, of Singer, La., was also ordered to pay restitution in the amount of $135,228.84. The sentence was handed down as a result of Williams pleading guilty on September 13, 2012, to wire fraud charges related to his embezzlement of funds associated with customer accounts.
Williams, along with his wife, Janet L. Williams, was charged in February of 2006, with conspiracy to commit wire fraud and aggravated identity theft. As manager of Beauregard Ranch & Tractor Supply (BRATS) during August 2, 2000 through January 8, 2001, Arnold Williams, along with the assistance of his wife, Janet, used customer account information to submit false electronic account information and invoices to Farm Plan Credit Financial (The Plan). Some of the BRATS customers used Farm Plan Credit accounts, which were provided by Farm Plan Credit Financial, as a means to make credit purchases for John Deere equipment. After Arnold Williams submitted the false information, The Plan would then reimburse BRATS directly by electronically wiring funds into the BRATS’ bank account for false credit charges that were submitted. When the customers received their billing statements, they contacted BRATS and were informed by Arnold Williams that they had been billed by mistake due to a computer error. BRATS customers told investigators that they did not order any of the items for which they were billed, did not ask for quotes or prices for any of the items, and did not receive any items for which their accounts were billed.
The case was investigated by the FBI-Lake Charles Resident Agency and prosecuted by U.S. Attorney Stephanie A. Finley.
Former Chicago Man Sentenced to 12 Years in Prison for $8 Million Investment Fraud and $1.5 Million Tax FraudRead the Press Release
CHICAGO — A former Chicago man was taken into custody after he was sentenced today to 12 years in federal prison for an investment and tax fraud scheme in which he swindled 57 investors, some of whom he had purported to befriend, of just under $8 million and failed to pay nearly $1.5 million in federal income taxes. The defendant, RANDY M. CHO, falsely caused investors to believe they were buying discounted shares of stock in well-known companies. He then misused a significant portion of the $9.6 million he raised from investors for his own personal benefit, while using approximately $1.68 million he fraudulently obtained from new investors to make Ponzi-type payments to previous investors. Cho pleaded guilty to wire fraud and tax fraud last August, resolving an indictment that was returned in December 2010 in U.S. District Court.
Cho, 41, of Seattle, and formerly of Chicago and Newton, Mass., was ordered to pay $7,995,707 in restitution to investors, and $1,496,339 to the Internal Revenue Service by U.S. District Judge James Zagel, who ordered Cho to begin serving his sentence immediately. Cho was also placed on three years of supervised release following his sentence.
In imposing sentence, Judge Zagel noted the unlikelihood that victims will receive any restitution. The judge heard from two investors, and received letters from numerous others, who said that Cho’s crimes had irreparably damaged their lives and retirement security. Cho used the misappropriated funds for himself and his business by making payments for his home and furnishings, automobiles, and jewelry, among other things. He never invested in any shares of stock on behalf of any of his investors.
The sentence was announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois; Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Thomas Jankowski, Acting Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.
“There was no good reason for this fraud, and the defendant, who was skilled in the world of finances, could have gotten a legitimate job,” the government argued at sentencing. “The defendant caused enormous pain and suffering to many of the victims. Cho took life savings, retirement funds, business funds, and other money that victims could not afford to lose.”
Cho held himself out as a self-employed securities trader, who, from approximately 2001 to 2009, falsely represented that he would purchase at least $9.6 million in shares of stock in well-known companies for U.S. and foreign investors, including some in the Chicago area. Cho claimed to have access to sell stock in these companies, which he offered as part of a “friends and family” investment pool, often in anticipation of purported initial public offerings. Cho misrepresented that he had a special relationship with Goldman Sachs and was able to purchase discounted shares, and further misrepresented the timing or existence of public offerings, the potential profitability and safety of investments, and the use of the funds obtained from investors.
At various times, Cho falsely told investors that he could purchase specially-discounted shares of companies, including AOL/Time Warner, Inc., Google, Inc., Rosetta Stone, Inc., and Facebook, Inc., prior to their initial public offerings. For example, Cho falsely lulled an investor into believing that the victim had made a $1 million profit by investing in shares of Google stock when no such investment or profit existed.
During the investment fraud scheme, Cho failed to report approximately $4.8 million of additional income between 2004 and 2007, resulting in an underpayment of just under $1.5 million in federal income taxes.
The government was represented by Assistant U.S. Attorney Jacqueline Stern. The U.S. Securities and Exchange Commission, which brought a civil enforcement lawsuit against Cho, assisted in the investigation.
The Financial Fraud Enforcement 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. For more information on the task force, visit: www.StopFraud.gov.
Former Bank Teller ConvictedRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that on January 16, 2013, a federal jury in Albany, Georgia, convicted defendant Victoria Metz, a former bank teller and a resident of Albany, Georgia, of 16 felony offenses. After a two day trial, the jury convicted defendant Metz of ten (10) counts of Embezzlement of Government Property in violation of Title 18 United States Code, Sections 641 & 2 and six (6) counts of Aggravated Identity Theft in violation of Title 18 United States Code, Sections 1028A and 2. Metz was acquitted of four (4) counts of Aggravated Identity Theft (Counts 13, 14, 15 and 17). United States District Court Judge W. Louis Sands presided over the trial.
The government’s evidence at trial showed that Metz, a former teller at Colony Bank in Leesburg, Georgia, knowingly cashed 23 stolen United States Treasury checks, all IRS refund checks of tax payers which bore the forged endorsements of the payees. Metz received the checks from a third party. On three occasions, Metz received $600 to $1,000 from the third party for her actions. Ms. Metz will be sentenced in approximately two months at a date scheduled by the Court.
“We take financial crimes and identity theft seriously, and will pursue individuals who attempt to profit from these schemes with the full resources of this office, said U.S. Attorney Moore.”
The case was investigated by the United States Secret Service andAssistant United States Attorney Jim Crane handled the prosecution.
For additional information, please contact Sue McKinney at the U.S. Attorney’s Office, at 478-621-2602.
Felon Sentenced to 235 Months in Prison for Firearm PossessionRead the Press Release
Janurary 18, 2013Memphis, TN – Keith Keglar, 36, of Memphis, TN was sentenced today to 235 months in prison by U.S. District Judge Samuel H. Mays for being a felon in possession of a firearm, announced U.S. Attorney Edward L. Stanton III.
# # # #
Keglar was convicted by a jury on July 11, 2012 of one count of possession of a firearm by a convicted felon. On April 1, 2011, officers with the Memphis Police Department’s Organized Crime Unit observed Kegler riding a red bicycle in the middle of Breedlove Street. A motorist following Kegler sounded their horn as a warning, and he responded by raising his shirt and displaying a .38 caliber RG Industries revolver. Kegler was apprehended by officers behind a nearby vacant home at 1026 Lewis Street. Officers recovered the firearm on the ground in the backyard.
This investigation was conducted by the Memphis Police Department and by the Project Safe Neighborhoods initiative, which is made up of officers from the Memphis Police Department (MPD), the Shelby County Sheriff’s Department (SCSD), and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Assistant U.S. Attorney Jennifer Lawrence Webber and Special Assistant U.S. Attorney Dean DeCandia represented the government.
Federal Grand Jury Indicts 20 in Marijuana Trafficking ConspiracyRead the Press Release
Two Defendants Also Charged in Money Laundering Conspiracy
DALLAS — A federal indictment, returned by a grand jury in Dallas last month, charging 20 Dallas-Fort Worth area residents with conspiracy to possess with the intent to distribute 100 kilograms or more of marijuana, has been unsealed. More than half of the defendants are in custody, following an operation this week conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Internal Revenue Service Criminal Investigation (IRS-CI); the Dallas High Intensity Drug Trafficking Areas (HIDTA); the Desoto, Dallas, Balch Springs, Arlington and Midlothian Police Departments; Dallas County Sheriff’s Office, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); and the Dallas County District Attorney’s Office. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
During the course of the Organized Crime Drug Enforcement Task Force (OCDETF) operation, law enforcement executed federal and state search warrants that resulted in the seizure of approximately 25 pounds of hydroponic marijuana, more than 600 marijuana plants, 10 vehicles and five firearms.
The indictment charges the below-named defendants in the drug conspiracy:
- Sylvespa Eugene Adams, aka “Sylvesta Adams,” “Pa,” and “Paw,” 31
- Alma Diane Smith, aka “Diane Williams,” 30
- Michael Wayne-Cortez Ayers, aka “Big Mike,” 33
- Isaac Demon Mathis, aka “Ike” “Issac Damone Mathis,” 30
- David Laploise Jones, aka “Nino,” 31
- Kory Lamonte Crayton, aka “Mokmu Tave” and “Coon,” 39
- Taurus Kion Silmom, aka “T.K.,” 30
- Nathan Dewayne Brown, 21
- Connell Heads, 50
- Marvin Jamel Fantroy, aka “Seven,” 32
- Lamondrius Denard Kidd, 28
- Modrick Jamal Spencer, 28
- Waymon Madison, 39
- Edward Lee Witherspoon, 50
- Robin James Criss, aka “June Bug,” 30
- Andre Demacus Reid, aka “Black,” 27
- Rachael O’Neal, 20
- Natasha Brown, 34
- Jovanna Renee Bonner, 19
- Precious Starr Lecreas Gowans, 30
Defendants Sylvespa Eugene Adams and Alma Diane Smith are also charged with one count of conspiracy to commit money laundering. The indictment alleges that since January 2010, Adams and Smith conspired together, and with others, to conduct financial transactions involving the proceeds of their crime that were designed to conceal and disguise the nature, location, source or ownership of the proceeds. The indictment alleges that they stored and concealed drug proceeds, caused cash to be transported as payment for drugs, disposed of proceeds derived from the distribution and sale of narcotics by purchasing assets to conceal and disguise the nature and source of the proceeds, structured deposits of U.S. currency and used a business front to create the appearance of a legitimate of source of funds to hide the true nature and source of the funds.
A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the conspiracy to possess with the intent to distribute marijuana count carries a statutory sentence of at least five years and up to 40 years in federal prison and a $5,000,000 fine. The conspiracy to commit money laundering count, upon conviction, carries a maximum penalty of 20 years in federal prison and a $500,000 fine.
In addition, the indictment includes a forfeiture allegation, which would require convicted defendants to forfeit the proceeds of their criminal activity. It would also require some of the defendants, upon conviction, to forfeit numerous vehicles, including a Mercedes, Porsche and Bentley, as well as numerous pieces of real estate.
Assistant U.S. Attorney Phelesa Guy is in charge of the prosecution.
Federal Employee & Former New York City Corrections Captain Barred from Promoting Alleged Tax Fraud SchemeRead the Press Release
A federal court has permanently barred Nafeesah H. Hines and Rodney N. Chestnut from promoting an alleged tax fraud scheme, as well as preparing tax returns for anyone other than themselves, the Justice Department announced today. The civil injunction orders, to which Hines and Chestnut consented without admitting the allegations against them, were entered by Judge Kiyo Matsumoto of the U.S. District Court for the Eastern District of New York.
According to the government complaint in the case, Hines and Chestnut promoted and personally participated in a scheme based on the frivolous “redemption” theory, which promoters falsely claim allows taxpayers to obtain funds from supposed secret Treasury accounts. The government alleged that Hines and Chestnut used Internal Revenue Service (IRS) forms, including Forms 1099-OID and 1099-A, to report large amounts of fictitious income tax withholding to claim large tax refunds on customer tax returns prepared by Chestnut or prepared by the customers with Chestnut’s help.
Chestnut, the government alleges, is a former captain with the New York City Corrections Department and promoted the scheme to former co-workers. Hines, who the complaint alleges is a U.S. Food and Drug Administration employee, prepared or filed false 1099 forms with the IRS, both for Chestnut’s customers as well as for other people, according to the lawsuit. The complaint alleges that Hines prepared or filed more than 3,000 fraudulent IRS forms that falsely reported over $54 million of purportedly withheld income taxes.
Claiming bogus tax refunds based on false 1099 Forms is one of the IRS’s “Dirty Dozen” tax scams . In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website .
Related Materials:
United States v. Nafeesah H. Hines, et al.
Chestnut Injunction
Hines InjunctionFederal Court Permanently Bars Virginia Company’s Promotion of Tool Reimbursement and Tool Rental SchemesRead the Press Release
The Justice Department announced today that a federal court has permanently barred Cash Management Systems, a Virginia corporation, from promoting two tax schemes that allegedly involve disguising wages as tool-reimbursement or tool-rental payments. Also subject to the civil injunction order were Cash Mangement’s marketing arm, Xell Enterprises, incorporated in Kansas; its principals, Bruce Lemay and Richard Herson Mills; and Allen Davison, of Overland Park, Kan. According to the government complaint, Davison provided legal opinion letters regarding the schemes and served on Cash Management’s board of directors.
Judge Eric F. Melgren of the U.S. District Court for the District of Kansas entered the permanent injunction, which the defendants consented to without admitting to the allegations against them. Davison was enjoined from promoting other tax schemes in 2010.
The complaint alleges that defendants promoted and implemented two fraudulent tax schemes to employers and employees in the automotive, construction and trucking industries across the United States. In the first, employers allegedly re-characterize a portion of employees’ wages as purported reimbursements for tools in order to evade federal income and employment taxes. The second plan allegedly involves re-characterizing a portion of wages as purported tool rental payments. The suit alleges that both plans are specifically designed and promoted as ways to reduce reported income and employment taxes.
The government asserts in its complaint that from 2004 through 2010 the schemes cost the U.S. Treasury an estimated $17 million.
In the past decade the Justice Department has obtained injunctions against hundreds of tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website .
Related Materials:
United States v. Cash Management Systems, Inc., et al.
Complaint for Permanent Injunction and Other Relief
Amended Stipulated Order for Permanent InjunctionEx-Navy Man Who Served at Goodfellow Air Force Base Sentenced to More Than 10 Years in Federal Prison on Federal Child Pornography ConvictionRead the Press Release
LUBBOCK, Texas — Derrick M. Mendez, 22, who pleaded guilty in October 2012 to one count of receiving child pornography, was sentenced today by U.S. District Judge Sam R. Cummings to 121 months in federal prison, to be followed by a 10-year term of supervised release. Mendez, a former member of the U.S. Navy, was arrested earlier this summer in Hawaii, where he was stationed. In October 2011, at the time of the offense, he was stationed at Goodfellow Air Force Base in San Angelo, Texas. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, while living in San Angelo, Mendez installed peer-to-peer file-sharing software on his home computer, and then used the program to download and view numerous images and videos of child pornography. In the course of his searches, Mendez used search terms intended to locate material depicting minors engaging in sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc For more information about internet safety education, please visit http://www.justice.gov/psc and click on the tab "resources."
The investigation was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Air Force Office of Special Investigations.
Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, was in charge of the prosecution.
Eugene Thomas Crawford, Jr., Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on January 18, 2013, before Chief U.S. District Judge Richard F. Cebull, EUGENE THOMAS CRAWFORD, a 46-year-old resident of Glendive, appeared for sentencing. CRAWFORD was sentenced to a term of:
Prison: 180 months
Special Assessment: $100
Supervised Release: life
CRAWFORD was sentenced in connection with his guilty plea to receipt of child pornography.
In an Offer of Proof filed by Assistant U.S. Attorney Marcia K. Hurd, the government stated it would have proved at trial the following:
In 2010, a computer, later found to belong to CRAWFORD, was found to have child pornography images and videos available via peer-to-peer file sharing programs. A search warrant was issued for CRAWFORD's residence in Glendive in January 2011, and various items of computer equipment was seized. When questioned, CRAWFORD admitted that he used the peer-to-peer file sharing program Limewire to receive and possess videos and images of child pornography.
A subsequent forensic examination revealed hundreds of images and movies of child pornography that CRAWFORD had received via the Internet during 2009 and continuing until the equipment was seized. CRAWFORD possessed images and movies of children clearly prepubescent and children engaged in sadistic or masochistic abuse or other depictions of violence. CRAWFORD had thousands of images and 125 videos of child pornography.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that CRAWFORD will likely serve all of the time imposed by the court. In the federal system, CRAWFORD does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Montana Division of Criminal Investigation and the Internet Crimes Against Children (ICAC) Task Force.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab "resources."
Environment and Natural Resources Division Issues<br /> 2012 Accomplishments ReportRead the Press Release
Assistant Attorney General Ignacia S. Moreno announced today the publication of the Environment and Natural Resources Division’s (ENRD) Fiscal Year 2012 Accomplishments Report. The full report, which details the division’s work across the nation during FY2012, is posted at www.justice.gov/enrd/Current_topics.html.
Outstanding Enforcement Results
Through its civil and criminal environmental enforcement actions, ENRD achieved dramatic reductions in emissions and discharges of harmful pollutants to America’s air, water and land. In 2012, the division secured more than $397 million in civil and stipulated penalties, cost recoveries, natural resource damages and other civil monetary relief, including almost $133 million recovered for the Superfund. The division obtained over $6.9 billion in corrective measures through court orders and settlements and concluded 47 criminal cases against 83 defendants, resulting in nearly 21 years in confinement and over $38 million in criminal fines, restitution, community service funds and special assessments. These outstanding results continue the division’s success in obtaining record-setting results over the past four years. During this time, the division has also advanced environmental justice, incorporating this important priority in a meaningful and enduring way into the work of the division.
“The extraordinary work reflected in this report is due to the dedication, expertise and professionalism of the division staff,” said Assistant Attorney General Moreno. “I am extremely proud of our achievements over the past year. They have resulted in immeasurable benefits for human health and the environment for all of the American people, who should all enjoy the benefits of a fair and even-handed application of environmental and natural resources laws. Together with our colleagues at client agencies and state, local and tribal governments, the Department of Justice will continue to vigorously enforce the federal civil and criminal environmental and natural resources laws that protect our air, land and water from pollution and that preserve our natural resources for the use and enjoyment of generations to come.”
Holding Those Responsible for the Deepwater Horizon Oil Spill Accountable
ENRD’s top civil and criminal enforcement priority is to bring to justice those responsible for the April 20, 2010 Deepwater Horizon explosion, fire and oil spill. Under a consent decree lodged on Jan. 3, 2013, Transocean pleaded guilty to violating the Clean Water Act and agreed to pay $1.4 billion in civil and criminal fines and penalties, including a record-setting $1 billion to resolve Clean Water Act civil claims. On Feb. 17, 2012, the Department of Justice announced an agreement with MOEX, which will pay $70 million in civil penalties to resolve alleged violations of the Clean Water Act and will spend at least $20 million to facilitate land acquisition projects in several Gulf States that will preserve and protect in perpetuity habitat and resources important to water quality.
Landmark Decisions Reducing Greenhouse Gases
ENRD’s responsibilities include defending lawsuits brought against the federal government challenging agency actions and programs. In a landmark example of its defensive work, the division, with agency counsel, successfully defended rulemakings under the Clean Air Act that reduce the emission of greenhouse gases that contribute to global warming. In June 2012, in one of the most significant environmental regulatory decisions of the past decade, a unanimous panel of the D.C. Circuit in Coalition for Responsible Regulation v. EPA upheld EPA’s greenhouse gas-related regulatory actions against all challenges.
Successfully Defending the Country’s Energy AgendaThe Obama Administration’s energy policy includes the responsible development of additional fossil fuels and renewable energy sources. In 2012, the division successfully defended challenges to permits and rights-of-way put in place to promote the development of renewable energy projects on western public lands. ENRD is defending more than 20 cases involving solar, wind and transmission projects located in California, Oregon, Tennessee, Delaware, Massachusetts and Vermont, and has successfully defeated motions for injunctive relief in California, Tennessee and Delaware to allow responsible energy development to proceed consistent with the permitting requirements of the issuing agencies.
Promoting National Security and Military PreparednessIncreasingly, the division is responsible for defending agency actions that support the national security of the United States. For example, in fiscal year 2012, the division successfully defended against challenges to critical Department of Defense training programs that ensure military preparedness, various agency projects to secure the nation’s borders and waters, and U.S. development of all forms of domestic energy to reduce our dependence on foreign oil.
Historic Results Protecting Tribal Rights and Resources and Addressing Tribal Claims
In 2012, the division achieved historic results for Indian tribes and resolved decades-long and costly litigation over tribal claims regarding the government’s management of trust funds and trust resources. In the past year, the United States settled cases with 62 tribes, agreeing to pay about $1.25 billion in total to resolve the tribes’ claims. The division will continue, through its cases, to vigilantly protect tribal sovereignty, safeguard tribal lands and resources, and honor tribal treaty rights.
One of the Best Places to Work in the Federal Government
At the same time that the division has achieved outstanding results in its cases, in each of the last three years, the Partnership for the Public Service (PPS) has ranked ENRD as one of the “Best Places to Work in the Federal Government.” ENRD’s overall ranking has been in the top five for each of the past three years, including two #1 rankings. The division has also continued to make great strides in promoting diversity and a better quality of life for all its employees.
Enumclaw Financial Advisor Sentenced to Prison for Stealing Millions from ClientsRead the Press Release
An Enumclaw financial advisor whose crimes were uncovered when he tried to collect a half million dollar death benefit on a client who was still living, was sentenced today to seven years in prison, three years of supervised release, and restitution in the amount of $5,705,023.24, announced U.S. Attorney Jenny A. Durkan. AARON TRAVIS BEAIRD, 39, was arrested in July 2012, after he faked his suicide, traveled to Scotland for a week, and then returned to Sea-Tac airport where he was taken into federal custody for investigation of mail fraud and wire fraud. BEAIRD pleaded guilty in August 2012. At sentencing U.S. District Judge Ricardo S. Martinez said, “By stealing the money you took from the victims, you stole their hopes and dreams, but most importantly, you stole their trust.”
“These crimes were a betrayal of trust,” said U.S. Attorney Durkan. “Mr. Beaird’s friends, relatives and members of his church thought he was safeguarding their families’ future. Instead, he used their money to live well, turning their dreams into nightmares.”
According to records filed in the case, for about ten years BEAIRD held himself out as a financial advisor to friends and family and members of his church, the Church of Jesus Christ of Latter-Day Saints. BEAIRD was trusted as a leader of the church. But instead of investing conservatively in annuities and life insurance products, BEAIRD engaged in a scheme to defraud investors by falsely representing those annuity products and life insurance policies and in some cases appropriating annuity payments and policy premiums directly to his personal use. BEAIRD created false account statements that he provided to his clients making them believe their funds were safely invested and would be available when they needed them.
In the fall of 2011, BEAIRD took $500,000 from a client’s investment account without authorization, and used some of it to purchase a life insurance policy on the client. In June 2012 BEAIRD filed to receive a death benefit on the policy even though the insured was still living. The insurance company confronted BEAIRD and he disappeared from Enumclaw. Shortly after his disappearance, his car was found near Deception Pass on Whidbey Island with a suicide note inside. He had also mailed letters to several clients, confessing his fraud and advising them of his intent to take his own life. Further investigation revealed BEAIRD had taken a taxi to Sea-Tac and flown to Scotland. He returned a week later and was arrested. The loss amount of his scheme is estimated at $5.7 million.
Victim statements in the case describe how BEAIRD’s theft has robbed people of not only their life’s savings, but their trust in others. Some write about having to live in a travel trailer because they have no funds to finish building their home or have no money for their retirement or children’s education. “The sense of betrayal and distrust fostered by Mr. Beaird’s actions cannot be ignored. This pervasive reality is matched by the deep financial losses incurred with little regard for what those losses meant to the victims. In most instances, each victim’s financial well-being has been irreparably damaged. Life savings were wiped out. For some, the hope of a secure retirement has been replaced with despair and uncertainty, with little time to replace stolen funds. Taken together, the emotional and financial damages inflicted by Mr. Beaird through his fraudulent scheme are overwhelming,’ prosecutors wrote in their sentencing memo.
The case was investigated by the Federal Bureau of Investigation with assistance from the Washington State Office of the Insurance Commissioner and the City of Enumclaw Police Department.
The case was prosecuted by Assistant United States Attorney Jim Oesterle.
East St. Louis Man Sentenced for Firearm OffenseRead the Press Release
An East St. Louis man, Charles L. Thomas, 25, was sentenced today in United States District Court, East St. Louis, for Unlawful Possession of a Firearm by a Previously Convicted Felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced. Thomas was sentenced to 18 months in prison, ordered to pay a $100 special assessment and to serve a term of 2 years of supervised release following imprisonment. There is no parole in the federal system.
Court documents establish that on February 21, 2012, in St Clair County, an East St. Louis Police Officer initiated a traffic stop on a vehicle driven by Charles L. Thomas. During the traffic stop, the officer observed a black handgun in the split of the front bench seat. The firearm was determined to be a Hi Point, Model C9, 9mm semi-automatic pistol which contained 8 live rounds of 9 mm ammunition. Thomas agreed to an interview with law enforcement at which time he admitted that he was in possession of the firearm. Thomas stated that he had the gun for protection because one week prior he had been in an altercation with some individuals at a convenience store and that he and his friends intended to go back to that same convenience store on that night.
Court documents further establish that prior to February 21, 2012, Thomas had been convicted of a crime that was punishable by a term of imprisonment of more than one year.
The investigation was conducted by the WAVE Task Force. The WAVE Task Force focuses its efforts on combating violent crime in East St. Louis, Washington Park, and surrounding communities.
The case was prosecuted by Assistant United States Attorney Ali Summers.
Duson Woman Sentenced to Two Years in Prison for Social Security FraudRead the Press Release
Defendant Ordered to Pay $269,282.00 in Restitution
LAFAYETTE, La.: United States Attorney Stephanie A. Finley announced today that Hazel A. Broussard, 52, of Duson, La., was sentenced this week to two years in prison followed by three years of supervised release for mail fraud. U.S. District Judge Richard T. Haik also ordered the defendant to pay $269,282 in restitution to the United States.
Broussard entered a plea of guilty on July 18, 2012, to one count of mail fraud. According to documents filed with the court, Broussard received Social Security Administration (SSA) benefits over a 27 year period to which she was not entitled. The SSA benefits were intended for her uncle, whom she lived with in Lafayette during the last few weeks of his life. After her uncle’s death, Broussard failed to inform the SSA, causing the SSA to keep sending the checks. As a result of her scheme, Broussard fraudulently obtained $269,282 from the SSA.
United States Attorney Finley stated, “Abuse of Social Security disability benefits hurts those who are truly in need of assistance because they are injured or are no longer able to work. This type of fraud is unacceptable, and the U.S. Attorney’s Office, along with the Office of Inspector General, is committed to aggressively pursuing criminals who steal from the Social Security Administration.”
The case was investigated by Special Agent Dirk Bergeron of the Office of Inspector General, Social Security Administration, Baton Rouge Resident Agency, and was prosecuted by Assistant United States Attorney Joseph T. Mickel.
Drug Trafficker who Tried to Hide Behind ‘Medical Marijuana Shield’ Sentenced to PrisonRead the Press Release
The owner of a medical marijuana dispensary that billed itself as a ‘cooperative’ when it really was just a for profit drug dealing enterprise, was sentenced today to six years in prison and four years of supervised release for conspiracy to distribute marijuana and conspiracy to commit money laundering. CRAIG DOUGLAS DIEFFENBACH, 61, an owner of Seattle Cannabis Cooperative with locations in the Rainier Valley and Greenwood, pleaded guilty in August 2012. His co-defendant, and co-owner, Jing Jing Mo, 31, will be sentenced next month. At today’s sentencing Chief U.S. District Judge Marsha J. Pechman said she rejected the suggestion that he did this to help people, rather she said he saw selling marijuana as a business opportunity.
“We have made clear that truly sick people and their caregivers will not be targets of our enforcement efforts. This defendant was neither,” said U.S. Attorney Jenny A. Durkan. “A green cross in the front window does not grant a license to sell pounds of drugs out the back door.”
According to records filed in the case, DIEFFENBACH admits operating the marijuana stores for profit, selling pound quantities of marijuana to people who presented no medical authorization card. In her plea agreement, Mo admitted offering to sell 25 pounds of marijuana for distribution across the country. The couple also admitted laundering funds from the sale of marijuana to pay to modify homes for marijuana production. The pair were tied in to other drug traffickers including one distributing substantial amounts of ecstacy."Marijuana traffickers continue to have a stranglehold on this state,” said Drug Enforcement Administration Special Agent in Charge Matthew G. Barnes. "DEA will continue to do what it can to loosen their grip.”
The case was investigated by the Drug Enforcement Administration and was prosecuted by Assistant United States Attorney Vince Lombardi.
District Woman Sentenced to 17 Years in Prison in August 2011 Murder of Boyfriend-Stabbing Followed Argument at Wedding Reception-Read the Press Release
WASHINGTON– Dominique Bassil, 26, of Washington, D.C., was sentenced today to 17 years of incarceration on a charge of second-degree murder while armed in the stabbing and killing of her boyfriend, U.S. Attorney Ronald C. Machen Jr. announced.
Bassil was found guilty of the charge in November 2012 by a jury in the Superior Court of the District of Columbia. She was sentenced by the Honorable Robert E. Morin. Upon completion of her prison term, Bassil will be placed on five years of supervised release.
According to evidence at trial, on Aug. 12, 2011, Bassil and her boyfriend, Vance Harris II, 28, attended an evening wedding and reception in Mitchellville, Md. During the evening, Bassil complained that Mr. Harris, a member of the wedding party, was not spending enough time with her. At the end of the reception, a witness observed Bassil berate Mr. Harris and push him in his face as he talked to others. Another witness observed Bassil strike Mr. Harris as the witness suggested to him that he get a hotel room instead of going home with the defendant.
After Bassil and Mr. Harris left the reception, police officers in Capitol Heights, Md. encountered them on the side of a road. Bassil complained that she was tired of arguing, fussing, and fighting with Mr. Harris. Police observed that Mr. Harris’s tuxedo had been torn. Bassil, however, had no injuries and her clothes were intact. Police permitted the two to travel home after neither complained of an assault.
On Aug. 13, 2011, just before 2:30 a.m., Bassil and Mr. Harris returned to Bassil’s apartment in the 3900 block of 13th Street SE. About 20 minutes later, surveillance footage depicted Bassil exiting her building wearing only a pink night cap and panties while armed with a knife. The footage also captured her disposing of the knife in a trash can before going to the security guard booth to report that she stabbed her boyfriend because he was beating her.
Seconds after Bassil had exited the building, surveillance footage captured Mr. Harris briefly exiting the front door of the building holding a stab wound to his arm that was dripping blood. Mr. Harris returned to the apartment on the third floor of the building, only to discover that he was locked out. After knocking on a neighbor’s door for help, Mr. Harris fell unconscious in the hallway, where he eventually died from his injuries. A medical examiner found that Mr. Harris had a stab wound to the abdomen that penetrated the liver and two stab wounds to the right arm that partially severed an artery.
Upon the defendant’s arrest, in a statement to police, she alleged that Mr. Harris had pulled her hair, pushed her to the ground, and dragged her. The police investigation revealed that Bassil had no visible injuries, although she complained of back pain. According to medical personnel, no tenderness was found in the area where she complained of pain.
In announcing the sentence, U.S. Attorney Machen praised the work of the detectives, officers and others who investigated the case for the Metropolitan Police Department. He also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Investigator Nelson Rhone, Jr.; Litigation Technology Specialists Anisha Bhatia, Joshua Ellen, William Henderson, Paul Howell, and Kimberly Smith; Victim Witness Advocate Marcia Rinker, Victim Witness Specialist David Foster, Paralegal Specialists Kelly Blakeney and Kwasi Fields; Intern Jason Amirhadji, and Assistant U.S. Attorneys Charles Cobb, who investigated the case, and Michelle D. Jackson, who prosecuted the case.
13-015District Man Sentenced to 19-Year Prison Term for Sexually Assaulting Woman During Burglary of Store-DNA Database Helped Link Defendant to the Crime-Read the Press Release
WASHINGTON – Darius Smith, 21, of Washington, D.C., was sentenced today to 19 years in prison for sexually assaulting a woman during a burglary at a store in Northeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Smith pled guilty in October 2012, in the Superior Court of the District of Columbia, to one count of first-degree sexual abuse. He was sentenced by the Honorable Robert E. Morin. Following his prison term, Smith will be placed on five years of supervised release and he will be required to register as a sex offender for the remainder of his life.
During the plea proceedings, Smith admitted that late in the evening on Oct. 8, 2010, he and three other people broke into a variety store in the 1300 block of Kenilworth Avenue NE. The victim, an employee who had just finished taking inventory, was still inside the closed store. The assailants demanded money and threatened the victim. After they had looted the store, all four left. Smith, however, returned within minutes and sexually assaulted the victim.
The victim was rushed to Washington Hospital Center, and a sexual assault examination was conducted. Swabs taken from the victim during the examination were sent to the Metropolitan Police Department (MPD) Crime Laboratory for DNA testing. A male DNA profile found on the swabs was entered into the Combined DNA Index System (CODIS), a web of state and national databases containing DNA profiles from convicted offenders and crime scenes that is used as an investigative tool. Smith was identified as a suspect through a CODIS search and DNA “cold hit.” His DNA profile had been loaded into the CODIS database following his 2010 conviction for attempted second-degree burglary, also committed in Northeast Washington.
In announcing the sentence, U.S. Attorney Machen acknowledged the work of the MPD, especially the detective who led the investigation of the case. U.S. Attorney Machen also praised the efforts of those who worked on the case for the U.S. Attorney’s Office, including Paralegal Specialists D’Yvonne Key and Jason Manuel and Legal Assistant Tanisha Nelson. Finally, he commended the work of Assistant U.S. Attorneys Heide L. Herrmann and Amy H. Zubrensky, who investigated and prosecuted the case.
13-016District Man Found Guilty of Manslaughter While Armed and Other Charges in Stabbing in Southeast Washington-Attack Followed Argument About the Victim's Dog-Read the Press Release
WASHINGTON – Ellsworth Colbert, 57, was found guilty by a jury today of manslaughter while armed and other charges stemming from a slaying in Southeast Washington during an argument over the victim’s dog, U.S. Attorney Ronald C. Machen Jr. announced.
Colbert, of Washington, D.C., also was found guilty of assault with a dangerous weapon and carrying a dangerous weapon. The verdict followed a trial in the Superior Court of the District of Columbia. The Honorable Herbert B. Dixon, Jr. scheduled sentencing for March 19, 2013. Colbert faces a maximum sentence of 45 years for the crimes.
According to the evidence at trial, Colbert and the victim, Robert L. Wright, 37, became embroiled in an argument on the morning of March 4, 2012, in front of Colbert’s house in the 3500 block of Pope Street SE, in the Penn-Branch neighborhood. The trouble began after Mr. Wright and a friend walked their dog on Colbert’s property. Colbert became enraged and brandished a knife and a walking stick.
The altercation moved up the street to the house where the dog was kept, located in the 3600 block of Highwood Drive. During the course of the argument, Colbert lunged at Mr. Wright and cut him in the neck with his knife. Mr. Wright then retrieved a nearby shovel, and the two continued their altercation in the middle of the street. During the course of the fracas, Colbert tackled Mr. Wright to the pavement, causing him to lose possession of the shovel. Colbert then stabbed Mr. Wright in the back, chest and abdomen resulting in his death.
In announcing today’s verdict, U.S. Attorney Machen commended those who worked on the case for the Metropolitan Police Department (MPD), including detectives, mobile crime technicians, and others. He acknowledged the efforts of those who worked on the case for the U.S. Attorney’s Office, including Paralegal Specialists Fern Rhedrick, San Lane, Phil Aronson, Kwasi Fields and Sharon Newman, Litigation Support Services Specialists Ron Royal and Josh Ellen, and Victim Advocate Tamara Ince.
Finally, U.S. Attorney Machen commended the work of Assistant U.S. Attorneys Robert J. Feitel and Edward A. O’Connell, who prosecuted the case at trial.
13-017Disability Doctor Peter J. Ajemian Pleads Guilty in Manhattan Federal Court for His Role in LIRR Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that PETER J. AJEMIAN, a Board-certified orthopedist, pled guilty to charges related to the alleged massive fraud scheme in which Long Island Railroad (“LIRR”) workers claimed to be disabled upon early retirement so that they could receive disability benefits to which they were not entitled. As described in the Complaint, between the late 1990s and 2008, AJEMIAN recommended that at least 734 retiring LIRR employees receive disability benefits, and was responsible for treating nearly half of all LIRR employees who retired and received disability benefits in one four-year period. AJEMIAN pled guilty before U.S. District Judge Victor Marrero. Three additional LIRR retirees, KARL BRITTEL, GREGORY BIANCHINI, and BRIAN DELGIORNO, also pled guilty to charges related to their participation in the LIRR fraud scheme this week. BRITTEL pled guilty before Judge Marrero today; BIANCHINI pled guilty before U.S. Magistrate Judge Kevin Nathaniel Fox on January 16, 2013; and DELGIORNO pled guilty before Judge Fox on January 17, 2013. Of the 32 defendants charged, 21 have now pled guilty.
Manhattan U.S. Attorney Preet Bharara stated: “Dr. Ajemian used his medical license to facilitate a massive fraud at the LIRR. By running the functional equivalent of a 'disability mill' and fraudulently qualifying hundreds of LIRR patients for undeserved disability benefits, Dr. Ajemian enriched himself and debased his degree. Twenty-one defendants have now pled guilty for their roles in this breathtaking and brazen fraud that cost the Railroad Retirement Board untold millions of dollars.”
According to the Complaint, the Superseding Indictments, the Superseding Informations, and statements made in other public filings and in court:
The LIRR Disability Fraud Scheme
The Railroad Retirement Board (“RRB”) is an independent U.S. agency that administers benefit programs, including disability benefits, for the nation’s railroad workers and their families. A unique LIRR contract allowed employees to retire at the relatively young age of 50 – the age of eligibility has since changed to 55 – if they had been employed by the LIRR for at least 20 years. Eligible employees are entitled to receive an LIRR pension, which is a portion of the full retirement payment for which they are eligible at 65. In addition, at full retirement age (between age 60 and age 65 depending on years of service), they are eligible to receive an RRB retirement pension. For LIRR workers who retired at 50 with only an LIRR pension, they would receive less than their prior salary and substantially lower pension payments than those to which they would be entitled at full retirement age. However, LIRR employees who retired and claimed disability could receive a disability payment from the RRB on top of their LIRR pension, regardless of age. A retiree’s LIRR pension, in combination with RRB disability payments, can be roughly equivalent to the base salary earned during his or her career.
Hundreds of LIRR employees have allegedly exploited the overlap between the LIRR pension and the RRB disability program by pre-planning the date on which they would falsely declare themselves disabled so that it would coincide with their projected retirement date. These false statements, made under oath in disability applications, allowed LIRR employees to retire as early as age 50 with an LIRR pension, supplemented by the fraudulently obtained RRB disability annuity. From 1995 through 2011, more than 75% of LIRR employees stopped working and began receiving RRB disability benefits, whereas during this same period, only 25% of retiring Metro-North employees stopped working and began receiving RRB disability benefits.
PETER J. AJEMIAN is a Board-certified orthopedist who was instrumental in helping LIRR retirees receive disability benefits to which they were not entitled. As set forth in the Complaint, between the late 1990s and 2008, AJEMIAN declared over 94% of the LIRR employees he saw as patients disabled. As part of the massive fraud scheme, AJEMIAN prepared fraudulent medical narratives for LIRR retirees well before the employees’ planned retirement dates so that the narratives could be submitted to the RRB upon retirement. These medical narratives were completely fabricated or grossly exaggerated so that AJEMIAN could recommend a set of restrictions that, if legitimate, would render it impossible for the LIRR employees to continue performing their jobs. Many of the purportedly “objective” findings from the tests he conducted showed nothing more than normal degenerative changes one would expect to see in patients within the relevant age bracket.
AJEMIAN received approximately $800 to $1,200, often in cash, for these fraudulent assessments and narratives, as well as millions of dollars in health insurance payments for unnecessary medical treatments and fees for preparing fraudulent medical support for the claimed disabilities. Of approximately 453 LIRR annuitants studied, AJEMIAN received approximately $2.5 million in related payments from patients and insurance companies. In turn, those patients received over $90 million in RRB disability benefit payments.
As alleged in the Complaint, between 1998 and 2008, AJEMIAN recommended that at least 734 LIRR employees receive these disability benefits. During one four-year period, August 2004 through August 2008, AJEMIAN was the treating physician for nearly half of all LIRR retirees younger than 65 years old who filed for RRB disability benefits.
AJEMIAN, 63, of Oyster Bay Cove, New York pled guilty to one count of conspiracy to commit mail fraud, wire fraud, and health care fraud, as well as one count of health care fraud, and faces a maximum of 30 years in prison. He has also agreed to forfeit $116.5 million and pay $116.5 million in restitution. He will be sentenced by Judge Marrero on May 24, 2013, at 2:00 p.m.
BRITTEL, 62, of Atlantic City, New Jersey, pled guilty to conspiracy to commit mail fraud, wire fraud and health care fraud; conspiracy to defraud the United States; health care fraud; mail fraud; wire fraud; and perjury, and he faces a maximum of 80 years in prison. BIANCHINI, 59, of Key Largo, Florida, pled guilty to conspiracy to commit mail fraud, wire fraud and health care fraud; conspiracy to defraud the United States; health care fraud; mail fraud; and wire fraud, and he faces a maximum of 75 years in prison. DELGIORNO, 54, of Howard Beach, New York, pled guilty to conspiracy to commit mail fraud, wire fraud and health care fraud; conspiracy to defraud the United States; false claims; health care fraud; mail fraud; wire fraud; and perjury, and he faces a maximum of 85 years in prison. They will be sentenced by Judge Marrero on July 19, May 16, and May 17, 2013, respectively.
Thirty-two people have been charged in connection with the LIRR disability fraud scheme, 21 of whom have now pled guilty. The charges against the remaining defendants are merely allegations and they are all presumed innocent unless and until proven guilty.
Mr. Bharara praised the RRB-OIG, the FBI, and the MTA-OIG for their outstanding work in the investigation, which he noted is ongoing. He also acknowledged the previous investigation conducted by the New York State Attorney General’s Office into these pension fraud issues.
The Office’s Complex Frauds Unit is handling the case. Assistant U.S. Attorneys Justin Weddle, Daniel Tehrani, Nicole Friedlander, and Danya Perry are in charge of the prosecution.
U.S. v. Ajemian, et al. S1 Indictment
U.S. v. Ajemian, et al. S9 IndictmentDetroit Man Sentenced to 57 Months for Using Counterfeit Credit Cards at Northern Kentucky Retail StoresRead the Press Release
COVINGTON, KY - A Michigan man was sentenced today to 57 months in federal prison for using other people’s credit card information to make purchases at retail stores in Campbell, Kenton and Boone Counties.
U.S. District Judge David L. Bunning sentenced 34-year-old Tyhkan S. Brunson for the use of unauthorized credit cards and aggravated identity theft. Judge Bunning also ordered Brunson and his co-defendants to jointly pay $5,478.76 in restitution.
Court documents state that in May of 2012, Brunson and three co-defendants possessed counterfeit credit cards bearing legitimate card numbers. In one day’s time they drove from Michigan to Kentucky and used the fraudulent cards to purchase thousands of dollars in gift cards and other merchandise from Home Depot, Meijer and Wal-Mart.
According to Brunson’s plea agreement, 32 people had their identities stolen and three banks lost money.
When Cold Spring Police in Campbell County conducted a vehicle stop of the defendants, officers located 26 counterfeit credit cards. They also found a co-defendant trying to destroy merchandise receipts by chewing them.
Brunson’s co-defendants previously received the following prison sentences: John Cotton, 44 months; Adam Sanford, 24 months, and Brittany Bell, 42 months.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Mark A. Porter, Special Agent in Charge, U.S. Secret Service jointly announced the pleas.
The investigation preceding the indictment was conducted by the U.S. Secret Service. The indictment was presented to the grand jury by Assistant U.S. Attorney Laura K. Voorhees.
Dallas Criminal Defense Lawyer Pleads Guilty in Federal Court to Money LaunderingRead the Press Release
Defendant Knowingly Laundered Tens of Thousands of Dollars in Supposed Drug Trafficking Proceeds
DALLAS --- Patrick Robert Simon, 34, of Dallas, pleaded guilty on Wednesday before U.S. District Judge Jorge Solis to a criminal Information charging one count of money laundering, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Simon, a criminal defense lawyer, faces a maximum penalty of 20 years in federal prison and a $500,000 fine. His sentencing hearing has been set for May 1, 2013.
According to documents filed in the case, in Fall 2009, Simon met with a confidential informant (CI) to discuss the CI’s desire to put aside proceeds from his drug trafficking activities for his family’s use during his upcoming imprisonment for that drug trafficking. Simon discussed a few ways that he could create an apparently legitimate income stream for the CI’s family, and the fees that he would charge for doing it.
After numerous meetings and continued negotiations, on March 16, 2012, the CI met with Simon at Simon’s law office to transfer the cash. Simon explained the scheme. Simon stated that the CI was going to hire Simon’s firm to handle the appeal of his drug trafficking conviction. Simon stated that he would use his attorney trust fund to write a check every month to the CI’s designee. Simon explained that because it was a legal transaction, he would not have to report it. The three of them agreed that the checks would be written for $7,500, unless a different amount was specified later. The CI gave $110,000 cash to Simon. Simon had a money counter on hand for the purpose of counting the cash. Simon accepted the cash and attempted to use the money counter, but the machine malfunctioned and Simon counted the cash by hand.
During the time that Simon was counting the cash, the three repeatedly discussed the CI’s participation in the drug trade and that the money being counted was from his drug trafficking activities. Simon also instructed the CI on a code to use in all future communications to discuss the scheme. For example, Simon instructed them that if they needed Simon to increase the amount of the monthly check, they were to call Simon and tell him that a specified college football team was playing well, and Simon would increase the monthly check by $1,000 (to $8,500). Similarly, if they wanted to decrease the amount of the monthly check, they were to call Simon and tell him that a specified professional football team was playing poorly, and Simon would decrease the monthly check by $1,000 (to $6,500). Since the cash delivery, and in execution of the money laundering scheme, Simon paid the CI’s designee on a monthly basis.
The case is being investigated by Internal Revenue Service Criminal Investigation. Deputy Criminal Chief Assistant U.S. Attorney Jay Dewald is in charge of the prosecution.
Clarksville Man Pleads Guilty to Filing False Tax ReturnsRead the Press Release
James Robert Sanford, 53, of Clarksville, Tenn., pleaded guilty on January 14, 2013, to filing a false claim for a federal income tax refund, and to aiding and abetting in the filing of a false claim for a federal income tax refund, announced Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee.
On November 30, 2011, Sanford was indicted by a federal grand jury in Nashville and charged with six counts of filing false tax returns. According to the indictment, Sanford prepared and filed 2006 and 2007 federal income tax returns for himself and his spouse, knowing that the returns were false, fictitious, and fraudulent. These returns claimed refunds of $5,774.00 and $4,276.00, respectively.
The indictment also alleged that Sanford prepared and filed false income tax returns for other individuals for calendar year 2006. These returns claimed refunds ranging from $3,490.00 to $7,128.00 and Sanford knew these returns were fraudulent as well.
Sanford will be sentenced before Chief Judge William J. Haynes, Jr. on April 8, 2013, and faces a maximum penalty of five years in prison and a $250,000 fine on each count.
This investigation was conducted by IRS-Criminal Investigation. Assistant U.S. Attorney Darryl Stewart represented the government.Career Criminal Sentenced for Possessing .38-caliber RevolverRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 25-year-old career criminal was sentenced for possessing a .38-caliber revolver. United States District Court Judge Ann D. Montgomery sentenced Lewis Pate, no known address, to 200 months in prison on one count of possession of a firearm by a career criminal. Pate was indicted on May 8, 2012, and was convicted on August 15, 2012.
The evidence presented at trial proved that on March 20, 2012, St. Paul police were called to the 980 block of Reaney Avenue at approximately 2:30 p.m., following a report of shots fired. Witnesses claimed three men had exchanged gunfire in a nearby alley. A police canine tracked the scent of one of the reported suspects to a house in the 970 block of Margaret Avenue. There, police found Pate inside. During the execution of a search warrant at the house, police also found a six-shot revolver with four live rounds. It was in the bathroom clothes hamper, wrapped in a towel.
Because he is a felon, Pate is prohibited under federal law from possessing a firearm at any time. His prior Ramsey County convictions include auto theft and fleeing a police officer in a motor vehicle (2007) and auto theft and fleeing a police officer in a motor vehicle (2008). Pate was also convicted in Hennepin County for third-degree burglary in 2008 and Dakota County for aggravated robbery in 2010.
Since those offenses constitute crimes of violence, Pate was subject to the federal Armed Career Criminal Act. That act mandates a minimum of 15 years in prison for anyone convicted in federal court of being a felon in possession of a firearm if that person also has at least three prior state or federal convictions for crimes of violence or serious drug crimes.
This case was the result of an investigation by the St. Paul Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant U.S. Attorney Jeffrey S. Paulsen.CBP Officer Sentenced for Concealing Fugitive from Law EnforcementRead the Press Release
United States Attorney Laura E. Duffy announced that former Customs and Border Protection Officer Thomas P. Silva was sentenced today by United States District Judge Anthony J. Battaglia to serve eight months in custody after Silva pled guilty to concealing a person from arrest, in violation of Title 18, United States Code, Section 1071, and wire fraud, in violation of Title 18, United States Code, Section 1343. As part of the sentence, Judge Battaglia ordered Silva to forfeit over $16,000 in illegal proceeds from his criminal activity and pay $8, 129.37 in restitution to Farmers Insurance, the victim of his wire fraud scheme.
Silva previously admitted to concealing a wanted fugitive from arrest while on duty at the San Ysidro Port-of-Entry. In particular, Silva admitted allowing the fugitive to enter the United States from Mexico without inspection - despite verifying the fugitive's status using CBP's computer systems. Silva 2 further assisted the fugitive by purposefully entering inaccurate information related to the fugitive's car in CBP's computer system in an effort to help the fugitive elude arrest.
Silva also admitted in his plea agreement to engaging in a separate scheme to defraud Farmers Insurance of over $7,000 by falsely reporting that his Nissan Titan pickup truck had been stolen from a local San Diego community. Silva admitted, however, that he had in fact taken the truck to Mexico prior to reporting it stolen in furtherance of his fraudulent scheme. Thereafter, Silva filed the false claim with Farmers Insurance, which the insurance company then paid based on his misrepresentations.
In handing down the judgment, Judge Battaglia told Silva that his conduct was "an abomination" and that he had "brought shame" to the United States by carrying out these criminal activities while working as a CBP officer.
United States Attorney Duffy praised the members of the Border Corruption Task Force, a federal task force comprised of law enforcement officials from the Federal Bureau of Investigation, CBP-Internal Affairs, CBP-Field Operations, the Transportation Security Administration, and the Drug Enforcement Administration for their outstanding work to uncover Silva's criminal activity. Duffy added that her Office had a "zero tolerance" policy for government employees who thought they were above the laws that they were sworn to enforce.
DEFENDANT Criminal Case No. 12CR4050-AJB Thomas P. Silva SUMMARY OF CHARGES Count 1: Title 18, United States Code, Section 1343 B Wire Fraud
Count 2: Title 18, United States Code, Section 1071 B Concealing Person From Arrest INVESTIGATING AGENCIESFederal Bureau of Investigation
Transportation Security Administration
Customs and Border Protection
Drug Enforcement Administration*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
C. Ray Nagin, Former New Orleans Mayor, Indicted on Federal Bribery, Honest Services Wire Fraud, Money Laundering, Conspiracy, and Tax ChargesRead the Press Release
C. RAY NAGIN, 56, a resident of Frisco, Texas and formerly the Mayor of New Orleans, was charged in a 21-count indictment with bribery, honest service wire fraud, money laundering and conspiracy, and filing false tax returns, announced U.S. Attorney Dana J. Boente, FBI Special Agent-in-Charge Michael Anderson, and IRS Criminal Investigation Special Agent-in-Charge James Lee.
According to today’s federal grand jury indictment, between December 2004 and the present, NAGIN and several others participated in a conspiracy to commit bribery and honest services wire fraud. The indictment alleges that NAGIN, in his role as chief executive, devised a scheme to defraud the City of New Orleans and its citizens of his honest services through bribery and a kickback scheme, whereby NAGIN used his public office and official capacity to provide favorable treatment, including awarding contracts, that benefitted business and financial interest of individuals providing him with bribes and kickbacks in the form of checks, cash, granite inventory, wire transfers, personal services, and free travel. The indictment charges NAGIN with accepting numerous bribes and payoffs from consultants and contractors, money laundering conspiracy, and filing false tax returns for the years 2005 to 2008.
“This office will continue its history of investigating and prosecuting public corruption” said Dana J. Boente, U.S. Attorney for the Eastern District of Louisiana. “This is an important part of the office’s mission to serve the citizens of the Eastern District of Louisiana and make certain they have honest public officials.”
“This indictment should serve as a reminder to current and former public officials that, in the interest of full accountability, the FBI pursues corruption even after an official leaves office,” said Michael Anderson, Special Agent in Charge of the FBI’s New Orleans Field Office.“IRS will continue to do our part to hold the elected officials of New Orleans accountable for their actions,” stated Damon Rowe, IRS-CI Acting Special Agent-in-Charge. “No one is excused from obeying the laws of this country.”
According to the indictment, in January 2005, NAGIN created Stone Age LLC, a granite company based in New Orleans.
The indictment alleges, among other things, that NAGIN accepted approximately $72,250 in bribes from Rodney Williams and his company, Three Fold Consultants, LLC. The indictment also alleges NAGIN accepted bribes from Frank Fradella, including $50,000, granite inventory, and nine payoffs in the form of wire transfers from Fradella totaling $112,500. In some cases, money was deposited into NAGIN’s Stone Age corporate account, or free granite inventory was provided to Stone Age.
If convicted of conspiring with others to commit bribery and honest services wire fraud (Count 1), NAGIN faces statutory penalties of up to five years in prison, a $250,000 fine and three years of supervised release. If convicted of accepting a bribes (Count 2-7), NAGIN faces statutory penalties of up to 10 years in prison, a $250,000 fine and three years of supervised release on each count. If convicted of accepting payoffs that caused interstate wire communications to occur between Louisiana and other states (Counts 8-16), NAGIN faces statutory penalties of up to 20 years in prison, a $250,000 fine and three years of supervised release on each count. If convicted of conspiring to commit money laundering (Count 17), NAGIN faces statutory penalties of up to 10 years in prison, a $250,000 fine and three years of supervised release. If convicted of filing false tax returns for years 2005 through 2008 (Counts 18-21), NAGIN faces statutory penalties of up to three years in prison, a $100,000 fine and three years of supervised release on each count.
The indictment also contains Notices of Forfeiture which puts the defendant on notice that the Government intends on forfeiting any and all property and profits concerned with and/or derived from any illegal activity referenced in the indictment.
U. S. Attorney Boente reiterated that today’s indictment describes allegations and that the guilt of the defendant must be proven beyond a reasonable doubt.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division and the New Orleans Office of Inspector General. U. S. Attorney Boente would also like to acknowledge the assistance provided by the New Orleans Inspector General’s Office and the Metropolitan Crime Commission. The case is being prosecuted by Assistant U. S. Attorneys Matthew M. Coman and Richard R. Pickens, II.
(Download Indictment )
Buffalo Man Sentenced in Firearm Possession CaseRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Jimmy Lee Barner, 30, Buffalo, N.Y., who was convicted after a jury trial of being a felon in possession of firearm and ammunition, was sentenced a 100 months in prison by U.S. District Judge Bill Wilson.
Assistant U.S. Attorneys Joseph M. Tripi and John M. Alsup, who handled the prosecution of the case, stated that during a search of Barner’s Amherst Street apartment in January of 2008, New York State Parole Officers and Special Agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives found that the defendant was in possession of a firearms and ammunition. At the time, Barner was on parole for a previous felony state conviction.
The sentencing is the culmination of an investigation on the part of the New York State Department of Corrections and Community Supervision, under the direction of Commissioner Brian Fischer and the Bureau of Alcohol, Tobacco, Firearms and Explosives under the direction of Resident Agent in Charge Frank Christiano.
Boston Man Sentenced for Unarmed Bank RobberyRead the Press Release
BOSTON – A Boston man was sentenced today for robbing Bank of America.
Francis X. Morgan, 51, was sentenced by Chief U.S. District Judge Patti B. Saris to 12.5 years in prison, to be followed by three years of supervised release, and payment of $3,334 in restitution. In October 2012, Morgan pleaded guilty to unarmed bank robbery.On Jan. 9, 2012, Morgan walked into the Bank of America branch on Tremont Street in Boston, handed the teller a note claiming to have a bomb, and demanded money. Terrified, the teller handed him more than $5,500 in cash. Morgan, who did not wear a mask, was on supervised release for a previous bank robbery conviction and his probation officer later recognized him from photographs that were captured by the bank’s surveillance system. Morgan was eventually apprehended in Kansas after local police officers escorted him off a train bound for California. After he was arrested, Morgan made incriminating statements about the robbery and police seized from him more than $2,000 of the stolen cash.
United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Eric P. Christofferson of Ortiz’s Major Crimes Unit.
Birmingham Tax-Preparer Convicted for Aiding Filing of False Tax ReturnsRead the Press Release
BIRMINGHAM -- A federal jury on Thursday convicted a Birmingham tax-preparer for aiding and abetting the filing of false income tax returns, announced U.S. Attorney Joyce White Vance and IRS Criminal Investigation Division Acting Special Agent in Charge Veronica Hyman-Pillot.
The jury convicted SALLY ELIZABETH WYNN, 64, on three counts of aiding and abetting the filing of a false return following a three-day trial before U.S. District Judge R. David Proctor. Wynn was a 30-year professional tax-preparer and owner of Centerpoint Financial Services.
“While most preparers provide excellent service to their clients, a few dishonest return preparers file false tax returns and give the client a false sense of security,” Hyman-Pillot said. “IRS does not endorse or recommend tax preparers, but we do offer guidelines to help the public choose a reliable tax professional. These guidelines are available on the IRS website,” she said. “Taxpayers should choose carefully when hiring a tax preparer. As the old saying goes, ‘If it sounds too good to be true, it probably is.’”
According to evidence at trial, Wynn helped one of her clients hide income from the Internal Revenue Service for the 2005, 2006, and 2007 tax years. The evidence showed that Wynn provided tax-preparation and bookkeeping services to Gonzalez Construction Incorporated and its owner, Jose Gonzalez. As a result, Wynn knew that Gonzalez received at least $340,000 in personal income during each of the years in question. Nevertheless, she prepared tax returns for him that claimed between $55,000 and $66,000 in total income during each of the three years.
Gonzalez still faces criminal charges for his role in these crimes.
Wynn is scheduled for sentencing May 8.
Wynn could face a maximum sentence of three years in prison on each of the three counts of aiding and abetting the filing of a false tax return.
The IRS investigated the case. Assistant U.S. Attorneys Melissa K. Atwood and Robin B. Mark prosecuted the case.
Bay Area Nurse Sentenced to 27 Months in Prison for Misuse of A Social Security Number, Bank Fraud and Tax EvasionRead the Press Release
SAN FRANCISCO – Crystal Ann Poole was sentenced to 27 months in prison today for tax evasion, bank fraud and Social Security fraud, United States Attorney Melinda Haag, Assistant Attorney General of the Justice Department’s Tax Division Kathryn Keneally, and IRS Special Agent in Charge Jose M. Martinez announced. U.S. District Judge Susan Illston ordered Poole to serve three years supervised release following her prison term and to pay $476,444.08 in restitution -- $400,197 to the IRS for the tax loss, $43,822.90 to the Community Bank of Mississippi for the loss associated with the bank fraud, and $32,424.18 to Wells Fargo for the loss associated with Poole’s misuse of a Social Security number.
Poole pled guilty to tax evasion, bank fraud and Social Security fraud on Sept. 10, 2012. According to court documents, Poole evaded taxes on more than $1.27 million in income that she earned from 1994 through the present as a registered nurse. During her career as a nurse, Poole failed to file returns with the IRS, failed to pay her taxes, used the Social Security number of another individual to hide income and assets, and filed false documents with her employers to stop them from withholding taxes from her wages.
According to the plea agreement, Poole committed bank fraud in 2006 when she applied for a loan of $335,000 from the Community Bank of Mississippi to buy a home in Florence, Miss. In her loan application, Poole misrepresented her financial circumstances by omitting debts and supplying a false Social Security number to conceal a then-pending bankruptcy and at least $150,000 in outstanding debts under her true Social Security number. Poole also submitted a falsified Form W-2, Wage and Tax Statement, that purported to be from her employer. This fraudulent document overstated her income and again listed a false Social Security number. Based on her fraudulent loan application, the bank approved the loan. Poole ultimately stopped making payments on the loan, resulting in foreclosure and a loss to the bank of $43,822.90.
According to the plea agreement, in 2007 Poole committed Social Security fraud when she used the Social Security number of an Alabama schoolteacher to obtain a $30,158.63 loan to purchase a Lexus. Poole ultimately stopped making payments on the car loan, resulting in a loss to Wells Fargo of $32,424.18. Poole purchased the schoolteacher’s Social Security number before 2003, when she was living in Georgia. Since then, Poole has used the schoolteacher’s Social Security number to open and maintain bank accounts, hold property, and purchase assets. In using the schoolteacher’s Social Security number, Poole intended to conceal the nature, extent, and location of her assets from the IRS.
Brian Bailey and Katherine Wong, Trial Attorneys with the United States Department of Justice, Tax Division, prosecuted the case. The case was investigated by the Internal Revenue Service, Criminal Investigation.
(Poole Indictment )
Baltimore Police Officer Indicted on Gun and Drug Conspiracy ChargesRead the Press Release
Baltimore, Maryland - A federal grand jury has indicted Baltimore Police officer Kendell Richburg, age 36, of Baltimore, on gun and drug conspiracy charges. The indictment was returned on January 17, 2013, and unsealed today.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Commissioner Anthony W. Batts of the Baltimore Police Department.
“Corrupt police officers insult the many honorable officers who serve with integrity,” said U.S. Attorney Rod J. Rosenstein. “Any officers who may be tempted to abuse their authority should be on notice that we have the power and obligation to hold them accountable.”
“Today's criminal charges, the result of an investigation by Baltimore Police Internal Affairs Investigators and the FBI, are deeply disturbing and represent an egregious violation of the sacred trust citizens place in police officers,” said Baltimore Police Commissioner Anthony W. Batts. “This joint investigation underscores the BPDs unwavering commitment to accountability. Our promise to the people of Baltimore is that we will continue to work diligently to ensure every member of this Baltimore Police Department deserves the respect and trust of our community.”
The three count indictment alleges that from June 2011, through October 2012, Richburg was part of a conspiracy to distribute and possess with intent to distribute heroin, cocaine, crack cocaine and marijuana. Further, Richburg is charged with conspiring to and possessing firearms in furtherance of drug trafficking, including a .380 semi-automatic handgun and .40 caliber semi-automatic handgun.
Richburg faces a maximum sentence of 20 years in prison for the drug conspiracy, 10 years in prison for the firearms conspiracy count; and a minimum mandatory sentence of five years in prison and a maximum of life in prison for use of firearms in relation to a drug trafficking crime. An initial appearance was held today at 1:45 p.m. in U.S. District Court in Baltimore, before U.S. Magistrate Judge Timothy J. Sullivan. Richburg is detained pending a detention hearing scheduled for January 22, 2013, at 9:30 a.m.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the FBI and Baltimore Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys A. David Copperthite and Tonya N. Kelly, who are prosecuting the case.
Baltimore Heroin Supplier Exiled to 10 Years in PrisonRead the Press Release
Baltimore, Maryland - U.S. District Judge Ellen L. Hollander sentenced Daniel Blue, age 30, of Baltimore, Maryland, today to 10 years in prison followed by eight years of supervised release for conspiracy to possess and possession with intent to distribute heroin. Blue was convicted of those charges by a federal jury on June 22, 2012.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Robert Brisolari of the Drug Enforcement Administration - Washington Field Division; Baltimore City State’s Attorney Gregg L. Bernstein; and Commissioner Anthony W. Batts of the Baltimore Police Department.
According to evidence presented at Blue’s three day trial, on June 29, 2011, Baltimore City Police Department (BPD) detectives were conducting a narcotics investigation in the 700 block of N. Curley Street in Baltimore City, after receiving information that Keith Townsend, who lived in that block, was selling narcotics. Detectives arranged for a confidential source to purchase 50 grams of heroin from Townsend. Townsend contacted the source and informed him that he would be ready to sell the narcotics in fifteen minutes. A short time later, detectives saw Townsend leave his residence and walk towards the corner of E. Madison and N. Curley Street, where Daniel Blue handed Townsend a brown object, which Townsend placed in his left front pants pocket. Townsend was arrested as he returned to his residence. Officers recovered a plastic bag with a piece of bread from Townsend’s left front pants pocket. Inside of the bread was approximately 50 grams of heroin in a plastic bag.
The entire transaction between Blue and Townsend was witnessed by BPD detectives and was also captured on video by a Baltimore City Police pole camera.
On July 13, 2011, BPD detectives executed a search warrant for a residence in Nottingham, Maryland, associated with Blue,. During the search, law enforcement officers recovered over 100 grams of heroin. Blue was subsequently arrested. At the time of his arrest, Blue was on supervised release from a 2007 federal drug conviction.
Co-defendant Keith Townsend, age 50, of Baltimore, pleaded guilty to possession with intent to distribute heroin and was sentenced to 37 months in prison.
United States Attorney Rod J. Rosenstein commended the DEA, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in this investigation. Mr. Rosenstein thanked Assistant United States Attorneys John W. Sippel, Jr. And Clinton J. Fuchs, who prosecuted the case.
Athens Man Sentenced to 25 Years in Prison for Producing Child PornographyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Jason L. Hutchinson, 42, of Athens, Ohio was sentenced in U.S. District Court to 300 months in prison and will be under court supervision for the rest of his life for using a webcam to create a video of himself engaged in various sex acts with a 13-year old and distributing the video out of state.
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 sentence handed down today by U.S. District Judge Algenon L. Marbley.
“Recordings of child abuse are used as currency by those who exploit children,” U.S. Attorney Stewart said. “Law enforcement coordination between federal, state and local agencies is the only way to curtail such exploitation.”
Hutchinson pleaded guilty on August 24, 2012 to one count of using a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct.
Hutchinson created the video at his residence in November 2010 then sent that video and another similar video to an individual in the greater Boston, Massachusetts area. Law enforcement officers in the Boston area discovered the video and alerted law enforcement officials in Ohio. Supported by deputies from the Athens County Sheriff’s Office, FBI agents executed a search warrant and arrested Hutchinson on a criminal complaint on March 16, 2012. He has been in custody since his arrest.
Hutchinson also admitted to sexually abusing another young boy in Athens County several years ago and discussing that abuse with the individual, a sex offender in Massachusetts, to whom he sent the videos. Judge Marbley cited the prior abuse as one of the bases for the sentence. Judge Marbley also ordered Hutchinson to be placed under court supervision for the rest of his life after he serves his time in prison. Hutchinson must register as a sex offender anywhere he lives, works or goes to school.
Stewart commended the investigation by the FBI and Assistant U.S. Attorney Heather Hill, who prosecuted the case.
Albuquerque Man Pleads Guilty to Armed Robbery Spree - Defendant Admits Robbing Albuquerque Businesses in Two-Week PeriodRead the Press Release
Defendant Admits Robbing Four Albuquerque Businesses in Two-Week Period
ALBUQUERQUE – This morning, Oscar Marquez, 22, of Albuquerque, N.M., pled guilty to four counts of Hobbs Act robbery and one count of using a firearm during a crime of violence, and admitted robbing four Albuquerque-area businesses at gunpoint during a two-week period. Marquez’s guilty plea was announced by U.S. Attorney Kenneth J. Gonzales and Special Agent in Charge Carol K.O. Lee of the Albuquerque Division of the FBI.
Marquez was charged in an eight-count indictment with four counts of violating the Hobbs Act by interfering with a business involved in interstate commerce by robbery, and four counts of using a firearm during and in furtherance of a crime of violence. The indictment, which was filed in Oct. 2012, also charged co-defendant, Rebecca Aguilar, 25, of Albuquerque, with aiding and abetting one of the robberies.
The indictment charged Marquez with robbing the following four Albuquerque-area businesses: the Captain D’s Restaurant on May 28, 2012 (Count 1); a Cricket Wireless Store on May 29, 2012 (Count 3); a King Wireless Store on June 7, 2012 (Count 5); and another Cricket Wireless Store on June 9, 2012 (Count 7). Counts 2, 4, 6 and 8 charged Marquez with using a firearm during each of the four robberies. According to the indictment, Marquez discharged his firearm during the May 29, 2012 and June 9, 2012 robberies, and Aguilar allegedly participated in the May 9, 2012 robbery.
During today’s proceedings, Marquez entered guilty pleas to Counts 3, 5, 6 and 7 of the indictment, and admitted robbing store clerks at three businesses at gunpoint between May 29 and June 9, 2012. Marquez also pled guilty to an information charging him with the armed robbery of a store clerk at an Albuquerque-area Game Stop on June 10, 2012.
Marquez has been in federal custody since Oct. 17, 2012, and remains detained pending his sentencing hearing, which has yet to be scheduled. Under the terms of his plea agreement, Marquez will be sentenced to 20 years in prison, and Counts 1, 2, 4 and 8 of the indictment will be dismissed after he is sentenced.
Aguilar, who was arrested on Oct. 15, 2012, has entered a not guilty plea to Count 7 of the indictment, the sole charge against her. The charge against Aguilar is only an accusation and she is presumed innocent unless proven guilty beyond a reasonable doubt. Aguilar is detained pending trial, which has not been scheduled.
This case was brought as part of a law enforcement initiative launched in July 2012, by the FBI’s Violent Crimes and Major Offender Squad and the Albuquerque Police Department’s Armed Robbery Unit that targets suspects implicated in commercial armed robberies. The new initiative is part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this anti-violence initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
The case was investigated by the Albuquerque office of the FBI and the Albuquerque Police Department, with assistance from the District Attorney’s Office for the Second Judicial District of the State of New Mexico, and is being prosecuted by Assistant U.S. Attorney Jon K. Stanford.
Alabama Residents Indicted on Stolen Identity Refund Fraud ConspiracyRead the Press Release
Montgomery, Alabama - Mary and Christian Young and Octavious Reeves were indicted by a federal grand jury in the Middle District of Alabama on a variety of charges stemming from an identity theft and tax fraud conspiracy, announced George L. Beck, Jr., U.S. Attorney for the Middle District of Alabama and the Internal Revenue Service (IRS). The alleged conspirators were charged in a 31-count indictment that was returned on December 18, 2012, and unsealed today.
Mary and Christian Young and Octavious Reeves, all of Elmore County, Ala., were charged with conspiring to defraud the United States, along with access device fraud and aggravated identity theft. Mary Young was also charged with several counts of wire fraud. According to the indictment, the defendants’ conspiracy lasted from January 2012 through June 2012 and involved using stolen identities to file tax returns claiming fraudulent refunds.
The indictment further alleges that Mary Young obtained the names and Social Security numbers of individuals that were then used to electronically file false tax returns. Mary Young would direct the false tax refunds to bank accounts linked to prepaid debit cards. Mary and Christian Young and Octavious Reeves would then use the prepaid debit cards to withdraw cash or pay for personal items.
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Mary Young faces face a maximum potential sentence of 328 years in prison, Christian Young faces a maximum of 27 years in prison, and Octavious Reeves faces a maximum of 78 years in prison.
IRS-Criminal Investigation agents investigated this case, and Justice Department Tax Division trial attorneys Charles M. Edgar Jr. and Michael Boteler are prosecuting the case.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Akron Man Indicted on Charges of Child PornographyRead the Press Release
BUFFALO, N.Y.– U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned an indictment charging Michael A. Taschetta, 54, of Akron, N.Y., with possession of child pornography. The charge carries a maximum penalty of 10 years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that according to the indictment, the defendant downloaded images of child pornography from the internet utilizing a peer-to-peer software application.
The indictment is the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero, Special Agent in Charge.
The fact that the defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
7th Person Convicted in Conspiracy to Transport CocaineRead the Press Release
LAREDO, Texas – Juan Ramon Ibarra Jr., 30, of Laredo, has been convicted for his role in a conspiracy to transport five kilograms or more of cocaine and international money laundering, United States Attorney Kenneth Magidson announced today.
Ibarra was named in a sealed indictment returned by a grand jury on Aug. 28, 2012, which alleged a drug trafficking organization had transported more than five kilograms of cocaine since 2008. The organization transported cocaine from Nuevo Laredo, Mexico, to Houston and Miami, Fla., on a regular basis. With the guilty plea today, all seven individuals named in the indictment have now been convicted.
In his plea, Ibarra admitted he participated in the transportation of cocaine to Miami since 2004. He and his father, Juan Ramon Ibarra Sr. coordinated with Rene Cardenas and other co-conspirators to transport the drugs in aftermarket compartments installed in the rear wheel axles of tractor-trailers. Once the cocaine was delivered to Miami, the compartment was loaded with large amounts of United States currency destined for Nuevo Laredo. One such load was intercepted in March 2010 when agents recovered approximately $422,000 in the compartment with a drug ledger.
In 2010, Ibarra Sr. pleaded guilty to his role in the drug conspiracy and was sentenced by U.S. District Judge Micaela Alvarez to 130 months in federal prison. Following Ibarra Sr.’s arrest, Ibarra Jr. assumed the role of his father and continued the transportation of cocaine for the drug trafficking organization.
Ibarra Jr. faces a mandatory minimum sentence of 10 years and up to life in prison and a $10 million fine for the drug conspiracy as well as a maximum of 20 years and a substantial fine for the conspiracy to commit international money laundering. The United States is also seeking a money judgment in the amount of $2,408,204. U.S. District Judge Marina Garcia Marmolejo, who accepted the plea today, has set sentencing forApril 30, 2013.
The case is the result of a two-year Organized Crime Drug Enforcement Task Force Investigation dubbed Silver Fox Hunt led by the Drug Enforcement Administration with the assistance of Homeland Security Investigations. Assistant United States Attorneys James Hepburn and Elizabeth Rabe are handling the case.
7 Individuals Indicted for Violations of the Racketeer Influenced and Corrupt Organizations Act (RICO Act)Read the Press Release
SAN JUAN, PR – Today, a federal grand jury charged seven (7) individuals for RICO Act conspiracy as a result of an investigation by US Postal Inspection Service (USPIS), Federal Bureau of Investigation (FBI), Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), Puerto Rico Police Department (PRPD), and the Puerto Rico Department of Justice, announced today United States Attorney Rosa Emilia Rodríguez-Vélez. The defendants are charged in a ten-count second superseding indictment with: violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), conspiracy to possess with intent to distribute controlled substances, committing Violent Crimes in Aid of Racketeering Activity, use of a firearm in relation to a crime of violence, drive-by shooting, and possession of a machine gun.
On August 15, 2012, the defendants were originally charged on a six (6) count indictment with, conspiracy to possess with intent to distribute controlled substances, use of firearms in furtherance of crimes of violence, and possession of machine guns, and other related offenses.
As part of the manner and means of the conspiracy to commit violations to the RICO Act, the defendants and co-conspirators purchased kilogram quantities of marihuana in the Continental United States and then shipped the marihuana to Puerto Rico using the U.S. Mail, to be distributed by members of the criminal organization. It is further alleged that the defendants and co-conspirators used the profits from the marihuana sales to purchase weapons, ammunition and other materials in order to commit violent acts against rival drug trafficking organizations.
The second superseding indictment includes allegations of five (5) murders and two (2) attempted murders, all committed by members of this organization. These acts are as follows:
- On or about February 16, 2010, in Arecibo, Puerto Rico, defendants [1] José Babilonia-Torres, aka “Bochi;” [4] Victor Real-Alomar, aka “Tostón;” and [5] José Gonzàlez-Bernard, aka “el Mudo,” aka “Tio,” shot and killed Frankie Rodríguez-Ornedo, aka “Periquito.”
- On or about August 18, 2010, in Vega Alta, Puerto Rico, defendant [5] Gonzàlez-Bernard shot and killed Luis Rodríguez-Rodríguez, aka “Gaby.”
- In or about 2010, in Puerto Rico, defendants [1] Babilonia-Torres and [5] Gonzàlez-Bernard shot and attempted to kill José Cintron-Otero, aka “Checko.”
- On or about March 18, 2011, in Dorado, Puerto Rico, defendants [2] Irving Melecio-Ramírez, aka “Gordo;” [3] Xavier Melecio Ramírez, aka “Xavo;” [4] Victor Real-Alomar, aka “Tostón;” [5] Gonzàlez-Bernard; [6] Félix A. Hernàndez-Burgos, aka “Bonito Pelo” or “Anthony” and [7] Alexis Hernàndez-Burgos, aka “Chucho” or “Chicho,” shot and killed Rolando Torres-Crespo, aka “Nandy” and Dimaries Broco-Irizarry. Dimaries Broco-Irizarry was an attorney and was an innocent victim of the drive-by shooting committed by the defendants on the highway near Dorado, Puerto Rico.
- On or about June 7, 2011, in Puerto Rico, defendant [5] Gonzàlez-Bernard, aiding and abetting others, killed José Espinal-Lorenzo, aka “Chelo.”
- On or about June 28, 2011, in Manatí, Puerto Rico, defendant [1] Babilonia-Torres, shot and attempted to kill Jonathan Ortiz-Salgado, aka “Cochinola.”
Six of the defendants involved in the murders and attempted murders are eligible for the death penalty. The remainder of the defendants who are part of the conspiracy and participated in its criminal acts include: Pablo Echevarría-Rodríguez; José Acevedo-Vélez, aka “Chapo;” Brian Osoria-Padilla; Orlando Félix-Negrón, aka “Orly,” Nelson Alonso-Galarza; and Pedro Javier Hernàndez-Sosa.
The case is being prosecuted by Assistant United States Attorney Justin Martin from the Organized Crime and Racketeering Section.
The defendants who are not eligible for the death penalty are facing up to 40 years or life in prison. Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
10th Street Member Pleads Guilty to Rico ConspiracyRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Hector Rodriguez, 24, of Buffalo, N.Y., pleaded guilty before U.S. District Judge Richard J. Arcara to Racketeering Influenced Corrupt Organizations (RICO) Conspiracy. The charge carries a maximum penalty of 20 years in prison, a fine of $250,000 or both.
Assistant U.S. Attorney Joseph M. Tripi, who is handling the case, stated that the defendant was a member of the 10th Street Gang and admitted to drug dealing and firearms possession as a part of his participation in the gang. As a part of his activities on behalf of the 10th Street Gang, on May 22, 2006, Rodriguez learned that rival drug dealers were making what he believed to be a substantial amount of money selling crack cocaine in the turf controlled by the 10th Street Gang. As a result, the defendant dressed in old and dirty clothes, pretended to be a crack cocaine user, and purchased crack cocaine from the rival drug dealers who were selling in the 10th Street Gang's turf. Following the purchase, Rodriguez returned to a 10th Street Gang drug house where he told fellow gang members that he did not see any guns in the possession of the rival drug dealers located inside the house. Armed 10th Street gang members then went to the location and shot the rival drug dealers using an AK-47 in order to force the rival drug dealers out of the neighborhood.
The defendant was indicted along with 34 other 10th Street Gang members or associates. He is the 18th defendant to be convicted.
The plea is the culmination of an investigation on the part of Investigators of the New York State Police under the direction of Major Christopher Cummings, the Buffalo Police Department under the direction of Commission Daniel Derenda, and Special Agents of the Federal Bureau of Investigation under the direction of Special Agent in Charge Christopher M. Piehota.
Sentencing is scheduled for May 9, 2013 at 12:30 p.m. before Judge Arcara.
17 January 2013
Youngstown Man Indicted on Seven Counts of Health Care FraudRead the Press Release
A federal indictment was filed charging Rolando Sepulveda with seven counts of health care fraud in connection with the operation of his ambulette company, Med Transportation, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Ohio Attorney General Mike DeWine.
Sepulveda, age 51, operated his business out of the Youngstown area and is currently believed to be residing in Puerto Rico. He defrauded the state of approximately $406,000 from August 2008 to August 2011, according to the indictment.
"This money should have gone to help those who were sick and truly needed transportation,” Dettelbach said.
“That is a huge amount of money that could have been spent on patients who legitimately needed help,” said Ohio Attorney General Mike DeWine. “Instead, this man took that money for himself."
Ambulette services contract with the Ohio Medicaid program to transport patients in vehicles known as ambulettes. An ambulette is a specially equipped van designed for wheelchair passengers. Medicaid pays ambulette operators for driving Medicaid patients to and from Medicaid-covered appointments, so long as: (1) the patient rides in a wheelchair; (2) a medical doctor certifies the need for the wheelchair and ambulette; and (3) the ambulette itself otherwise meets safety specifications.
The defendant is charged with scheming to defraud Medicaid of approximately $406,000.00 by charging Medicaid for rides of patients who did not use or need wheelchairs and for billing Medicaid for ambulette attendants, when no such attendants were used by Med Transportation.
If convicted, the defendant’s sentence will be determined by the court after review of the federal sentencing guidelines and factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offenses and the characteristics of the violations.
The indictment is the result of an investigation by Ohio Attorney General Mike DeWine’s Medicaid Fraud Control Unit and the Office of the Inspector General, United States Department of Health and Human Services. The case is being prosecuted by Assistant U.S. Attorney Chelsea S. Rice and Special Assistant U.S. Attorney Constance Nearhood, an Assistant Attorney General for the State of Ohio.
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.
West Plains Man Pleads Guilty to Receiving Child Porn over the InternetRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a West Plains, Mo., man pleaded guilty in federal court today to receiving child pornography over the Internet and possessing child pornography.
Scott Allen Johnson, 26, of West Plains, pleaded guilty before U.S. Magistrate Judge David P. Rush to the charges contained in an Aug. 29, 2012 federal indictment.
An officer with the Southwest Missouri Cyber Crimes Task Force identified Johnson’s computer as sharing images of child pornography on a peer-to-peer file-sharing network on Dec. 30, 2011. The officer connected with Johnson’s computer on the network again on Jan. 9, 2012 and was able to determine that he had 322 files available for sharing, of which 139 were identified as known files depicting child sexual abuse. Officers executed a search warrant at Johnson’s residence on Feb. 9, 2012 and seized a laptop computer, four computer towers and 42 optical media disks.
Investigators found approximately 219 images and 46 movie files of child pornography on the laptop computer. The ages of the child victims ranged from 2 to 12, and the images depicted scenes of sexual intercourse, oral sex, anal sex, child bondage, bestiality and nudity.
Under federal statutes, Johnson is subject to a mandatory minimum sentence of five years in federal prison without parole, up to a sentence of 30 years in federal prison without parole, plus a fine up to $500,000. Johnson must also forfeit the computer used to distribute and possess child pornography. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Randall D. Eggert. It was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Southwest Missouri Cyber Crimes Task Force (SWMCCTF), the Cassville, Mo., Police Department and the Howell County, Mo., Sheriff’s Department.
Wayne Medical Center to Pay $883,000to Settle False Claims Act AllegationsRead the Press Release
Wayne Medical Center, located in Waynesboro, Tenn., has agreed to pay the United States $883,451.40 to settle False Claims Act allegations, announced Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee.
Wayne Medical Center submitted a voluntary self-disclosure to the U.S. Attorney’s Office and to the Office of Inspector General for the Department of Health and Human Services. The self-disclosure, discovered by the hospital’s compliance program, prompted an investigation into the hospital’s billing for ambulance transport as part of its emergency medical services.
Based upon an audit of billings conducted by Wayne Medical Center, the United States alleged that Wayne Medical Center submitted certain claims and received payment for: (1) ambulance services that were not medically necessary or for which medical necessity was not documented; (2) ambulance services for which a Physician Certification Statement was not obtained; (3) ambulance services that were assigned an incorrect transport level; (4) ambulance services for which the requisite signatures were not obtained; and (5) ambulance services that were billed with incorrect mileage units. The time period covered by the settlement agreement spans January 1, 2004, through December 31, 2009.
“Today’s announced settlement is another example of the benefit to providers of self-reporting billing issues directly to the United States Attorney’s Office,” said U.S. Attorney Jerry E. Martin. “Wayne Medical Center avoided the costs associated with a protracted investigation and the risks of potential fines under the False Claims Act. By doing the right thing and coming forward, they were treated fairly and were able to quickly and efficiently put this matter behind them.”
"This case is an excellent example of collaboration between the health care community and the law enforcement community coming together to serve the American taxpayer," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "When this hospital realized it had received inappropriate Medicare payments, it brought the matter to the attention of the U.S. Attorney's Office and refunded the money to the Medicare Trust Fund. We certainly hope that other health care providers will do the same when they realize they have been overpaid."
The United States encourages all health care providers to self-disclose any known violations that have resulted in the submission of improper claims to federal health care programs.
This case was investigated by the Department of Health and Human Services - Office of Inspector General and the U.S. Attorney’s Office for the Middle District of Tennessee. Assistant U.S. Attorney Mark H. Wildasin represented the United States.