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4 January 2013
Brooklyn, N.Y., Man Sentenced to Federal Prison for Trafficking Cocaine & MarijuanaRead the Press Release
PROVIDENCE, R.I. – Charles Fermin, 29, of Brooklyn, N.Y., was sentenced today in U.S. District Court in Providence, R.I., to 41 months in federal prison, having been convicted by a federal court jury in Rhode Island in September 2012 of trafficking cocaine and marijuana, announced United States Attorney Peter F. Neronha and Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police.
U.S. District Court Judge William E. Smith also ordered Fermin to serve 3 years of supervised release upon completion of his prison term. Fermin was arrested by members of the Rhode Island State Police High Intensity Drug Trafficking Area (HIDTA) Task Force on January 6, 2012.
At trial, the government presented evidence to a jury that at the time of his arrest by members of the HIDTA Task Force, Fermin was in possession of a suitcase containing a loaded .357 Magnum revolver, 33 pounds of marijuana, more than an ounce of cocaine, and drug trafficking paraphernalia.
The jury heard evidence that during an ongoing investigation into suspected illegal drug activity, HIDTA Task Force agents watched as Fermin carted the suitcase around several Providence streets, pausing at one point to make a cell phone call. When approached, the defendant told arresting officers that he had found the suitcase after it had been tossed over a nearby fence by an unknown person, and that he was unaware of its contents.
The jury convicted Fermin of cocaine and marijuana trafficking, but acquitted him of a firearms charge.
The case was prosecuted by Assistant U.S. Attorney Sandra R. Hebert.
The Rhode Island State Police High Intensity Drug Trafficking Area Task Force is comprised of members of law enforcement from the Rhode Island State Police, ATF, DEA, ICE-HSI, R.I. National Guard, and the Johnston, Pawtucket, Providence and Smithfield Police Departments.Contact: 401-709-5357
[email protected]Antonio Clifton Earns 292 Month Sentence for Possession of Drugs and GunsRead the Press Release
Memphis, TN – Antonio Clifton, 38, of Memphis, TN, was sentenced yesterday to 292 months in federal prison for firearms possession, possession of cocaine, and possession of crack cocaine, announced U.S. Attorney Edward L. Stanton III.
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Chief U.S. District Judge Jon P. McCalla ordered Clifton to serve 120 months for violating 18 U.S.C. § 922(g), being a felon in possession of firearms; 120 months for violating 21 U.S.C. 841(a)(1), possession of cocaine with intent to distribute; and 292 months for violating 21 U.S.C. 841(a)(1), possession of crack cocaine with intent to distribute. The sentences will be served concurrently.
According to information presented in court and cited by the judge, on March 3, 2008, members of the Memphis Police Department’s Organized Crime Unit executed a search warrant at 2307 Hubbard in Memphis. When officers knocked and announced their presence, Antonio Clifton ran out of the rear of the residence with a sack of money, jumped over a fence and attempted to escape through a residential neighborhood. Clifton was ultimately apprehended and brought back to the residence, where officers located boxes of plastic baggies, a vacuum sealer, breathing masks with cocaine residue, and digital scales with cocaine residue. The officers also found over 180 grams of powder cocaine and 390 grams of crack cocaine, the majority of which was buried in the back yard, more than $18,400 in cash, and three loaded semi-automatic handguns.
At the time of these events, Clifton was on federal supervised release from a prior federal gun charge. Clifton previously entered a plea of guilty to his supervised release violation petition and received a twenty-four month sentence. The twenty-four year and four months sentence he received yesterday will be served consecutive to the sentence for the supervised release violation, for a total period of incarceration of twenty-six years and four months.
In addition to the prison sentence, the court also ordered Clifton to serve five years of supervised release and to pay a $300.00 special assessment.
This investigation was conducted by the Drug Enforcement Administration Task Force 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 represented the government.24 Year Old Woman of Bland, Virginia, Was Sentenced to 240 Months of Imprisonment on Federal Charges Relating to the Production of Child PornographyRead the Press Release
United States Attorney Christopher Crofts announced that on Friday, January 4th 2013, Jessica Shockley, age 24, of Bland, Virginia, was sentenced by United States District Court Judge Alan Johnson to 240 months of imprisonment on federal charges relating to the production of child pornography. Shockley must pay a $1,000 fine and a $100 special assessment and will also be placed on lifetime probation upon her release
Shockley’s sentencing is the culmination of an investigative effort that involved agents from the Wyoming Department of Probation and Parole, Rock Springs Police Department detectives, Special Agents with Immigration and Customs Enforcement – Homeland Security Investigations (ICE-HIS), Wyoming DCI and Virginia authorities. The federal complaint filed in the U.S. District Court for Wyoming, alleged that Shockley engaged in sexual activity with a 3 month old child, took photographs of the sexual activity, and sent the images to an individual in Rock Springs, Wyoming.
“I am personally grateful to all of those involved in the investigation and prosecution of this most difficult case” said US Attorney Crofts. “It is vitally important that we aggressively prosecute these cases so that our children may remain safe and enjoy a healthy and happy childhood”.
“Anyone who produces child pornography begins the cycle of sexual abuse for children around the world,” said Kumar C. Kibble, special agent in charge of HSI Denver. “This significant prison sentence handed down to a 24-year-old mother of two demonstrates the severity of her admitted actions in producing child pornography, and how serious the law considers this crime. This is why Homeland Security Investigations has such an active program for targeting predators and rescuing their victims.”
3 January 2013
Wetumpka Woman Indicted for Stealing over $750,000 from MedicaidRead the Press Release
Montgomery, Alabama - Lashawn Denise Anthony, 41, of Wetumpka was arraigned today on charges that she stole over $750,000 from Alabama Medicaid, announced George L. Beck, U.S. Attorney for the Middle District of Alabama.
The 10-count indictment filed in U.S. District Court charges Anthony with committing health care fraud through her business, Youth Enhancement and Family Services, Inc. Youth Enhancement and Family Services, Inc. is a non-profit corporation which provides psychotherapy services to students and families as part of the Medicaid Program in Alabama. The specific program was designed to provide counseling services to children with behavioral problems as well as to give their families living skills training.
Specifically, Anthony committed health care fraud by falsely billing claims as if a psychologist with a doctoral degree had actually provided services, when, in fact, the therapist who performed the service had only a master’s degree. Thus, Anthony made more money from Medicaid than she was legally owed. In July 2010, Alabama Medicaid sent out billing instructions that explained how to bill Medicaid for the services rendered by a person with a doctoral degree and how to bill Medicaid for services provided by a person with only a master’s degree. After receiving these instructions, Anthony falsely billed Medicaid, thereby getting more money from Medicaid than she was legally due. By submitting these false bills to Medicaid, Anthony made false statements to the Medicaid Program.
“The Medicaid Program is in place to provide health care for needy families,” Beck said. “Anyone who fraudulently bills Medicaid, drives up the cost of Medicaid. This limits the ability of the Alabama Medicaid Agency to provide medical care to those in need. This office will continue to investigate and prosecute health care fraud aggressively and thoroughly. I want to especially thank the Benefits Integrity Division of Alabama Medicaid for their discovering this scheme. This joint investigation shows the importance of law enforcement cooperation among federal and state authorities,” stated Beck.
Each count of the health care fraud scheme carries a maximum punishment of 10 years in prison and a $250,000.00 fine, while each of the false statement counts carries a maximum punishment of five years in prison and a $250,000.00 fine.
An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. Assistant U.S. Attorneys Bob Anderson and Denise Simpson are prosecuting the case, which is set for trial in April.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617W&t Offshore, Inc. Pleads Guilty and Is Sentenced for Violations of Clean Water Act Related to Offshore Production in Gulf of MexicoRead the Press Release
W&T OFFSHORE, INC., a publicly traded company with offices in Houston, Texas and New Orleans, Louisiana was sentenced today to pay a total monetary penalty of $1,000,000 by United States District Court Judge Eldon E. Fallon after pleading guilty to one felony count of violating Title 33, United States Code, Section 1319(c)(4) for tampering with, falsifying or rendering inaccurate a monitoring method required to be maintained under the Clean Water Act, and one misdemeanor count of violating Title 33, United States Code, Section 1319(c)(1)(a) for the negligent discharge of oil into the waters of the United States, announced U.S. Attorney Dana J. Boente.
According to the court documents the charges stem from conduct on W&T OFFSHORE, INC.’s, EW 910 Platform, a manned, offshore facility designed for the production of oil and gas located in the Gulf of Mexico. From at least January 1, 2009, and continuing to present, W&T OFFSHORE, INC., operated EW 910 Platform and was required to conduct its production operations on EW 910 Platform in accordance with a National Pollutant Discharge Elimination System (NPDES) permit which imposed limitations upon the type and amount of pollutants that W&T OFFSHORE, INC., was legally allowed to discharge into the Gulf of Mexico. As required by the NPDES Permit, W&T OFFSHORE, INC., collected and submitted monthly samples of its produced water discharged from EW 910 Platform into the Gulf of Mexico to a laboratory for testing to determine whether the quantity of oil and grease contained in the produced water did not exceed a daily maximum of 42mg/l and a monthly average of 29 mg/l as required by its Permit.
However, on at least six occasions from on or about January 1, 2009, through on or about December 31, 2009, employees of a contractor working for W&T OFFSHORE, INC., on EW 910 Platform ran the produced water samples collected through coffee filters before submitting the samples to the laboratory for testing. Running the produced water samples through coffee filters before it went into the sample jars resulted in the samples not being representative of actual produced water discharge conditions. The employees of the contractor working for W&T OFFSHORE, INC., who tampered with the testing believed that running the produced water samples through the coffee filters would ensure that the samples did not fail the laboratory tests, and thus, W&T OFFSHORE, INC., would not incur additional laboratory costs and regulatory scrutiny.
Court documents also reveal that on or about November 22, 2009, a process upset on the EW 910 Platform resulted in the release of oil from the facility’s flare boom that coated sections of the open grating on the platform and production equipment. Visible oil staining remained on the platform after a professional cleaning company worked for three days to clean the platform. On or about November 27, 2009, Bureau of Safety and Environmental Enforcement (BSEE) inspectors arrived at EW 910 Platform and observed oil on the platform and a light, visible sheen on the water around the platform due to ongoing cleaning efforts. W&T OFFSHORE, INC., had not reported the sheen to the Coast Guard National Response Center at the time the BSEE inspector arrived despite the visible sheen on the water.
W&T OFFSHORE, INC., was sentenced to pay a total monetary penalty of $1,000,000 with $700,000 designated as fines and $300,000 designated as community service payments. W&T OFFSHORE, INC., was placed on a three year term of probation during which the company is required to have the majority of its 107 offshore facilities audited pursuant to the Safety and Environmental Management Systems (“SEMS”) audit as described in Title 30, C.F.R. Part 250. According to the Environmental Compliance Plan, by the end of the last year of probation, 75% of W&T OFFSHORE, INC.’s, Gulf of Mexico facilities will have been audited.
"We appreciate the efforts of the Department of Justice in reaching this agreement," said
Bureau of Safety and Environmental Enforcement (BSEE) Director James A. Watson. "We are committed to holding companies accountable for operating in a safe and environmentally responsible manner, and we will continue to work closely with DOJ to enforce the laws and regulations governing offshore energy exploration, development and production activities."Mary Kendall, Deputy Inspector General of the Department of Interior, Office of
Inspector General said, "This settlement, the result of collaboration and cooperation between the OIG, DOJ, EPA and BSEE, should send a clear message to deter companies from engaging in fraudulent and noncompliant activities."“One of EPA’s primary missions is to ensure that federal laws protecting human health and the environment are enforced fairly and effectively. To do that, we must receive accurate and honest tests and measurements,” said Ivan Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Louisiana. “Violators who submit false information and illegally discharge pollutants undermine our efforts to protect the public and the environment. These illegal actions cannot and will not be tolerated.”
This case was referred by the Houma District of the Bureau of Safety and Environmental Enforcement, investigated by the U.S. Department of Interior-OIG and U.S. Environmental Protection Agency-CID. The case was prosecuted by Emily K. Greenfield and Dorothy Manning Taylor.
(Download Joint Factual Statement )
US Attorney’s Office Collects over Six Million in Fiscal Year 2012Read the Press Release
US Attorney Brendan V. Johnson announced that the US Attorney’s Office in South Dakota collected over $6.3 million in Fiscal Year (FY) 2012 from civil and criminal actions. That amount reflects an increase of more than $2 million over FY 2011 collections.
Of the $6.3 million, over $5.8 million was recovered through criminal fines, restitution, and other assessments and penalties. Civil recoveries accounted for the other $503,289.
Nationwide, the U.S. Attorneys’ offices collected $13.1 billion in criminal and civil actions during FY 2012, more than doubling the $6.5 billion collected in FY 2011. The $13.1 billion represents more than six times the appropriated budget of the combined 94 offices for FY 2012.
“These collections become increasingly important in these times of fiscal uncertainty,” said Johnson. “I am grateful to our dedicated team of professionals who work tirelessly in their efforts to recover money for victims of federal crime and to safeguard the American public’s money.”
The majority of the money collected by the US Attorney’s Office is returned directly to the United States Treasury. However, restitution collected in criminal cases goes directly to compensate victims for their losses. Criminal fines and felony assessments are paid into the Department of Justice’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
U.S. Army Major Pleads Guilty in South Carolina to Defrauding U.S. GovernmentRead the Press Release
WASHINGTON – A U.S. Army Major has pleaded guilty today to accepting thousands of dollars in gratuities from contractors while he was a U.S. Army captain deployed to Iraq, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the District of South Carolina William N. Nettles.
Ulysses S. Hicks, 40, of Sumter, S.C., pleaded guilty before U.S. District Chief Judge Margaret B. Seymour in the District of South Carolina to a criminal information charging him with one count of conspiracy to accept illegal gratuities.
According to court documents, Hicks was a captain in the U.S. Army, who was deployed to Forward Operating Base (FOB) Hammer in Iraq as a pay agent for field ordering officer (FOO) funds. FOO funds are used to purchase miscellaneous items and supplies such as paint, lumber and plywood from local vendors. It is a violation of federal law for pay agents to accept gratuities from contractors dependent upon them for contracts.
From about March 2007 through October 2008, Hicks, along with co-conspirator former U.S. Army Master Sergeant Julio Soto Jr., was involved with the construction of a government building at FOB Hammer by local Iraqi contractors. According to court documents, Hicks and Soto unlawfully sought, received and accepted illegal gratuities for helping Iraqi contractors gain U.S. government contracts. After accepting the illegal gratuities, Hicks and Soto purchased U.S. Postal money orders with the illegal proceeds and mailed them back to the United States.
At sentencing, Hicks faces a maximum penalty of five years in prison, a fine of $250,000 and up to three years of supervised release. As part of his plea agreement, Hicks agreed to pay $65,409 plus interest in restitution to the United States.
Soto pleaded guilty on Aug. 29, 2012, before U.S. District Chief Judge Seymour to a criminal information charging him with one count of conspiracy to accept illegal gratuities. On Dec. 7, 2012, Soto was sentenced to serve five years of probation and ordered to pay $62,542 in restitution.
This case is being prosecuted by Special Trial Attorney Mark Grider of the Criminal Division’s Fraud Section, on detail from the Special Inspector General for Iraq Reconstruction (SIGIR), and by Assistant U.S. Attorney Winston Holliday, Deputy Chief of the General Crimes Section of the U.S. Attorney’s Office for the District of South Carolina. The case was investigated by SIGIR, the Defense Criminal Investigative Service and the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command.
Two Essex County, N.J., Men Charged in Connection with Stealing Three Cars in One DayRead the Press Release
NEWARK, N.J. – Two Essex County, N.J., men appeared in Newark federal court today in connection with charges arising out of three carjackings that occurred on the same day in March 2012 in Essex and Hudson counties, U.S. Attorney Paul J. Fishman announced.
Louis Holmes, 24, of Newark, is charged in a five-count Complaint with one count of conspiracy to commit carjacking; three counts of theft of a motor vehicle by force, violence, and intimidation; and one count of use of a firearm in furtherance of a crime of violence. Rosendo Perez, 24, of Irvington, is charged in the same Complaint with one count of conspiracy to commit carjacking; one count of theft of a motor vehicle by force, violence, and intimidation; and one count of use of a firearm in furtherance of a crime of violence.
Both were already in state custody when they were charged by Complaint on Dec. 20, 2012. They both made their initial appearances before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court today.
According to the criminal Complaint:On the afternoon of March 27, 2012, Holmes and Perez approached two individuals who were sitting in a parked 2009 Acura TL in the area of South 17th Street in Newark. Holmes pointed a firearm at the victims, and both Holmes and Perez ordered the victims out of the car. Holmes and Perez then fled the area in the carjacked vehicle.
That night, Holmes accosted an individual who was approaching a parked 2010 Nissan Maxima, in which another individual was sitting. The car was parked in a McDonald’s parking lot on Communipaw Avenue in Jersey City. Holmes pointed a firearm at the victims, demanded the car keys, and ordered one victim out of the car. Holmes then fled the area in the carjacked vehicle.
One hour later, Holmes approached an individual who was standing near a 2008 Nissan Altima in the area of Mt. Pleasant Avenue in Newark. Holmes pointed a firearm at the victim and demanded the car keys. Holmes then fled the area in the carjacked vehicle.
Trio from Northeast Ohio Indicted for $1.4 Million Fraud ConspiracyRead the Press Release
Three people from the Greater Cleveland area were indicted for their roles in a $1.4 million fraud conspiracy involving property in North Carolina, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office and Darryl Williams, Special Agent in Charge, IRS-Criminal Investigation, Cincinnati Field Office.
Camille M. Harris, 42, of Cleveland, Kenneth T. Embry, 56, of Lyndhurst, and Deon D. Levy, 43, of Bedford, are all charged with three counts each: conspiracy to commit wire fraud, wire fraud and conspiracy to commit money laundering.
All three were arrested this morning.
All three were also affiliated with a general contracting company known as Ameribuild Management Company (AMC) in Cleveland: Harris was president, Embry was chief financial officer and Levy was director of operations from May 2007 through February 2008, according to the indictment.
Together, the trio conspired to enrich themselves by making false representations on a mortgage-loan application and other documents related to the North Carolina property and using fictitious invoices as a means to extract money, according to the indictment.
Around November 2007, Levy had been working with a realtor to find a property around Charlotte, N.C. Embry sent Levy bank statements for Harris’ personal account that falsely stated her bi-weekly salary payments were $31,260. Embry also emailed Harris’ personal tax returns and AMC’s corporate tax returns, both of which contained misrepresentations about the financial condition of Harris and AMC, according to the indictment.
On Dec. 21, 2007, Embry sent an invoice to a North Carolina escrow agent for $340,000 from an Ohio business called Wolfco, Inc. The invoice requested payment for work done on the North Carolina property, when in fact no work had been done, according to the indictment.
Embry again sent false bank statements and balance sheets that misstated the financial conditions of Harris and AMC, according to the indictment.
On Dec. 28, 2007, Harris executed and submitted a loan application for the North Carolina property to Fairway Independence Mortgage Corp. that contained several false statements, including claims that she had a monthly income of $62,520, she had more than $1.2 million in two bank accounts and that she owned property on East 141st Street in Cleveland with a market value of $80,000, according to the indictment.
That day, Harris and Embry caused the sale and closing on the North Carolina property with a disbursement check from Fairway of $1,393,873. That included $340,000 that was distributed to Wolfco, Inc. Five days later, Embry opened a bank account in the name of Wolfco, Inc. d/b/a Kenneth Embry, according to the indictment.
On Jan. 7, 2008, Harris and Embry caused the escrow agent to transfer $340,000 to Wolfco’s account. Later that day, Embry drafted a check in the amount of $181,000 made out to “cash.” He then transferred $150,000 from his Wolfco account to the AMC account controlled by Harris, according to the indictment.
Two days after that, Harris drafted a check in the amount of $80,000 from the AMC account payable to herself and deposited it into her personal account.
Harris and Embry caused a loss of approximately $599,388 to Fairway and Amtrust Bank, as the purchaser of the North Carolina property’s mortgage from Fairway, according to the indictment.
This case is being prosecuted by Assistant United States Attorney Robert J. Patton following an investigation by Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigations.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.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.
Transocean Agrees to Plead Guilty to Environmental Crime and Enter Civil Settlement to Resolve U.S. Clean Water Act<br /> Penalty Claims from Deepwater Horizon IncidentRead the Press Release
WASHINGTON – Transocean Deepwater Inc. has agreed to plead guilty to violating the Clean Water Act (CWA) and to pay a total of $1.4 billion in civil and criminal fines and penalties, for its conduct in relation to the Deepwater Horizon disaster, the Department of Justice announced today. The criminal information and a proposed partial civil consent decree to resolve the U.S. government’s civil penalty claims against Transocean Deepwater Inc. and related entities were filed today in U.S. District Court in the Eastern District of Louisiana.
Transocean Deepwater Inc. has signed a cooperation and guilty plea agreement with the government, also filed today, admitting its criminal conduct. As part of the plea agreement, Transocean Deepwater Inc. has agreed, subject to the court’s approval, to pay $400 million in criminal fines and penalties and to continue its on-going cooperation in the government’s criminal investigation. In addition, pursuant to the terms of a proposed partial civil consent decree also lodged with the court today, Transocean Ocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., Transocean Deepwater Inc. and Triton Asset Leasing GMBH have agreed to pay an additional $1 billion to resolve federal Clean Water Act civil penalty claims for the massive, three-month-long oil spill at the Macondo Well and the Transocean drilling rig Deepwater Horizon. Under the civil settlement, the Transocean defendants also must implement court-enforceable measures to improve the operational safety and emergency response capabilities at all their drilling rigs working in waters of the United States.
“This resolution of criminal allegations and civil claims against Transocean brings us one significant step closer to justice for the human, environmental and economic devastation wrought by the Deepwater Horizon disaster,” said Attorney General Eric Holder. “This agreement holds Transocean criminally accountable for its conduct and provides nearly a billion dollars in criminal and civil penalties for the benefit of the Gulf states. I am particularly grateful today to the many Justice Department personnel and federal investigative agency partners for the hard work that led to today’s resolution and their continuing pursuit of justice for the people of the Gulf.”
“Today’s announced settlement will aid the Gulf region’s recovery from the Deepwater Horizon oil spill and require Transocean to take important steps that will help guard against such incidents happening in the future,” said Acting Associate Attorney General Tony West. “This resolution is the culmination of the tremendous efforts of many attorneys and staff in the Justice Department’s Criminal, Civil and Environment and Natural Resources Divisions – dedicated public servants whose hard work continues on behalf of the American people.”
“Transocean’s rig crew accepted the direction of BP well site leaders to proceed in the face of clear danger signs — at a tragic cost to many of them,” said Lanny A. Breuer, Assistant Attorney General for the Justice Department’s Criminal Division. “Transocean’s agreement to plead guilty to a federal crime, and to pay a total of $1.4 billion in criminal and civil penalties, appropriately reflects its role in the Deepwater Horizon disaster.”
“The development and exploration of a domestic source of energy is vitally important, and it can and must be done in a responsible and sound manner. This unprecedented settlement under the Clean Water Act demonstrates that companies will be held fully accountable for their conduct and share responsibility for compliance with the laws that protect the public and the environment from harm,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. “This settlement will provide immediate relief and benefits to the people of the five Gulf states, and requires Transocean to implement significant safety measures, as well as stringent auditing and monitoring to reduce the risk of any future disasters.”
“Today’s settlement and plea agreement is an important step toward holding Transocean and those responsible for the Deepwater Horizon disaster accountable,” said Cynthia Giles, Assistant Administrator for the U.S. Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance. “EPA will continue to work with DOJ and its federal partners to vigorously pursue the government’s claims against all responsible parties and ensure that we are taking every possible step to restore and protect the Gulf Coast ecosystem.”
According to court documents, on April 20, 2010, while stationed at the Macondo well site in the Gulf of Mexico, the Deepwater Horizon rig experienced an uncontrolled blowout and related explosions and fire, which resulted in the deaths of 11 rig workers and the largest oil spill in U.S. history. In agreeing to plead guilty, Transocean Deepwater Inc. has admitted that members of its crew onboard the Deepwater Horizon, acting at the direction of BP’s “Well Site Leaders” or “company men,” were negligent in failing fully to investigate clear indications that the Macondo well was not secure and that oil and gas were flowing into the well.
The criminal resolution is structured to directly benefit the Gulf region. Under the order presented to the court, $150 million of the $400 million criminal recovery is dedicated to acquiring, restoring, preserving and conserving – in consultation with appropriate state and other resource managers – the marine and coastal environments, ecosystems and bird and wildlife habitat in the Gulf of Mexico and bordering states harmed by the Deepwater Horizon oil spill. This portion of the criminal recovery will also be directed to significant barrier island restoration and/or river diversion off the coast of Louisiana to further benefit and improve coastal wetlands affected by the oil spill. An additional $150 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.
The civil settlement secures $1 billion in civil penalties for violations of the CWA, a record amount that significantly exceeds last year’s $70 million civil penalty paid by MOEX Offshore 2007 LLC, a 10 percent partner with BP in the Macondo well venture. The unprecedented $1 billion civil penalty is subject to the Resources and Ecosystems Sustainability, Tourist Opportunities and Revived Economies of the Gulf Coast States Act of 2012 (Restore Act), which provides that 80 percent of the penalty will be to be used to fund projects in and for the Gulf states for the environmental and economic benefit of the region. This civil resolution reserves claims for natural resource damages and clean-up costs.
Under the civil settlement, the Transocean defendants must also observe various court-enforceable strictures in its drilling operations, aimed at reducing the chances of another blowout and discharge of oil and at improving emergency response capabilities. Examples of these requirements include certifications of maintenance and repair of blowout preventers before each new drilling job, consideration of process safety risks, and personnel training related to oil spills and responses to other emergencies. These measures apply to all rigs operated or owned by the Transocean defendants in all U.S. waters and will be in place for at least five years.
The guilty plea agreement and criminal charge announced today are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into matters related to the April 2010 Gulf oil spill. The Deepwater Horizon Task Force, based in New Orleans, is supervised by Assistant Attorney General Breuer and led by Deputy Assistant Attorney General John D. Buretta, who serves as the director of the task force. The task force includes prosecutors from the Criminal Division and the Environment and Natural Resources Division of the Department of Justice; the U.S. Attorney’s Office for the Eastern District of Louisiana, as well as other U.S. Attorneys’ Offices; and investigating agents from the FBI, EPA, Department of the Interior, National Oceanic and Atmospheric Administration Office of Law Enforcement, U.S. Coast Guard, U.S. Fish and Wildlife Service and the Louisiana Department of Environmental Quality.
The civil resolution announced today is part of the ongoing litigation against defendants BP Exploration and Production Inc., the Transocean defendants, and Anadarko Petroleum Corporation (among others) for civil penalties, injunctive relief, and a declaration of unlimited liability for removal costs and damages under the Oil Pollution Act. The civil enforcement effort is supervised by Assistant Attorney General Moreno for the Environment and Natural Resources Division and Deputy Assistant Attorney General Brian Hauck of the Civil Division. Numerous federal agencies have contributed immeasurably to these enforcement and settlement efforts, including the EPA, the U.S. Coast Guard, the National Oceanic and Atmospheric Administration, the Department of the Interior and the Department of Agriculture.
The criminal case against Transocean is being prosecuted by Deepwater Horizon Task Force Deputy Directors Derek A. Cohen and Avi Gesser, and task force prosecutors Richard R. Pickens II, Scott M. Cullen, Colin Black and Rohan Virginkar. Numerous Environment Division and Civil Division lawyers are pursuing the civil enforcement action, led by Steve O’Rourke and R. Michael Underhill.
An information is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The proposed civil settlement is subject to a public comment period and final court approval. Information on submitting comment will be available at www.justice.gov/enrd/Consent_Decrees.html.
Related Material:
- Transocean Information
- Transocean Notice of Lodging
- Transocean Consent Decree
- Transocean Plea Agreement
The Department recognizes that parts of these documents may not be in an accessible format. If you have a disability and the format of any material on the site interferes with your ability to access some information, please contact [email protected].
Three Parkersburg Residents Plead Guilty to Federal Drug ChargesRead the Press Release
Defendants admit to their roles in a Parkersburg crack cocaine distribution conspiracy
CHARLESTON, W.Va. – U.S. Attorney Booth Goodwin today announced that three Parkersburg residents pleaded guilty in connection with an illegal crack cocaine distribution conspiracy in Parkersburg, W.Va. Brandon Mykel Perdew, 21, Samuel Shae White, 25 and Sarah Nichole Miller, 21, each pleaded guilty to conspiracy to distribute 28 grams or more of crack cocaine.
Perdew and Miller admitted that no later than the summer of 2011 until April 2012, they were involved in distributing crack cocaine in and around Wood County, W.Va. Perdew obtained the crack cocaine from Columbus, Ohio. Perdew and Miller admitted that during the scheme, they made trips to Columbus to obtain the illegal drugs where they distributed it in and around Parkersburg or provided it to other sellers including Samuel White to distribute in and around Parkersburg. White admitted joining the conspiracy in January 2012.
On January 20, 2012, the Parkersburg Narcotics and Violent Crimes Task Force used a confidential informant to purchase 1.09 grams of crack cocaine from Perdew. On March 13, 2012, the Task Force used an informant to purchase 1.13 grams of crack cocaine from White. On April 16, 2012, law enforcement agents also used an informant to purchase a quantity of crack cocaine from Perdew. Each of the drug transactions occurred at 1330 Staunton Avenue in Parkersburg.
The defendants admitted that the Staunton Avenue residence was rented by Miller in November 2011 and used for storing and selling crack cocaine during the conspiracy.
Miller admitted that on March 8, 2012, she drove White to a residence located on Hill Street in Parkersburg where White sold approximately 1.77 grams of crack to an informant working with law enforcement agents. On April 18, 2012, law enforcement officers observed Miller drive away from the Staunton Avenue residence in a 2003 Volkswagen Passat. Officers executed a search warrant on the vehicle and seized approximately 59.4 grams of crack cocaine, two sets of digital scales, and a .40 caliber semiautomatic pistol that contained a loaded magazine with 12 rounds of ammunition.
Also on April 18, 2012, members of the Parkersburg Narcotics and Violent Crimes Task Force executed a search warrant at the 113 Staunton Avenue residence and seized several items including a stolen M&P 15-22, .22 caliber semiautomatic rifle and a G&P WASR semiautomatic rifle. Agents arrested Perdew and White at the time the search warrant was executed. Perdew admitted that he had a key to the Staunton Avenue residence on his person and $1,005 in cash.
Perdew, White and Miller each face a mandatory minimum of five years and up to 40 years in prison and a $5 million fine when they are sentenced on April 11, 2013 by United States District Judge Thomas E. Johnston.
This case was investigated by the Parkersburg Narcotics and Violent Crimes Task Force. Assistant United States Attorney Joshua Hanks is in charge of the prosecutions.
Three Individuals Sentenced in Connection to Trevor Cook Ponzi SchemeRead the Press Release
MINNEAPOLIS— Earlier today in federal court, United States District Court Chief Judge Michael J. Davis sentenced three individuals in connection to the multi-million-dollar Ponzi scheme orchestrated by Trevor Cook.
Jason Bo-Alan Beckman, age 43, of Plymouth, was sentenced to 360 months in federal prison, on 17 counts of wire and mail fraud, two counts of conspiracy to commit mail and wire fraud, four counts of money laundering, two counts of filing a false tax return, and one count of tax evasion. Because the federal criminal justice system does not have parole, Beckman will spend virtually his entire sentence behind bars. He and the other co-defendants sentenced today were also solely and jointly ordered to pay $155,359,411.77 in restitution to the victims of their fraud scheme.
Gerald Joseph Durand, age 61, of Faribault, was sentenced to 240 months on 12 counts of wire and mail fraud, one count of conspiracy to commit mail and wire fraud, and two counts of money laundering, two counts of concealing a material fact from the United States, and three counts of filing a false tax return.
Christopher Pettengill, age 56, also of Plymouth, was sentenced to 90 months in federal prison on one count of securities fraud, one count of conspiracy to commit wire fraud, and one count of money laundering.
The sentencing of Patrick Kiley, age 74, was rescheduled for January 18, 2013, after he requested and received a continuance following the appointment of a new lawyer. Kiley will be sentenced on 12 counts of wire and mail fraud, one count of conspiracy to commit mail and wire fraud, and two counts of money laundering.
Beckman, Durand and Kiley were charged in a second superseding indictment on February 22, 2012, and were convicted on June 12, 2012, after a near-two-month trial. Pettengill was charged on June 13, 2011, and pleaded guilty on June 21, 2011.
In sentencing Beckman, Judge Davis called him a central figure in the fraud scheme, adding that the harm he caused was worse than using a gun because he “used the English language to violate so many.” Beckman and his co-conspirators defrauded more than 725 people during the course of their fraud scheme.
Following the sentencings, U.S. Attorney B. Todd Jones said, “We are very pleased with today’s sentences. These are the types of cases this office will vigorously pursue—cases where defendants prey on vulnerable populations, such as the elderly, or use special relationships, like those established through faith communities, to commit financial fraud that devastates thousands of people, crushing their dreams of retirement or college for their children.”
Kelly R. Jackson, Special Agent in Charge of the Internal Revenue Service-Criminal Investigations’ St. Paul Field Office, added, “IRS-Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes and will continue to vigorously pursue those individuals who victimize their investors and violate the public trust. Today’s sentencings demonstrate the government’s determination to restore and ensure that trust.”
The evidence presented at trial proved that between 2005 and November of 2009, the defendants, along with Cook, defrauded investors by soliciting them to invest money in a foreign currency trading program that they alleged would earn a double-digit rate of return, typically between 10.5 and 12 percent annually, with little or no risk. They also claimed investor assets would be held in a segregated account and could be withdrawn at any time. Those representations were false.
The defendants and Cook made the investment offers through entities known as Universal Brokerage Services or bearing the acronym “UBS.” (The UBS entities had no legitimate affiliation to the global provider of financial services UBS, AG.) Cook operated the currency program through various foreign currency trading firms, including but not limited to one in Chicago and another in Switzerland.
To induce investors, the defendants and Cook, directly or through others, made false representations regarding the performance, safety, and liquidity of the currency program. They also omitted material information concerning their own backgrounds and qualifications as well as the backgrounds and qualifications of those working for them.
Once investments were made, some investors received UBS account statements that indicated that the currency program was performing as promised, while others received checks for “returns on their investments.” Both the statements and checks, however, were actually produced by the co-conspirators, the purpose being to lull investors or encourage them to make additional investments. At the same time, most investors received nothing from the true custodians of their funds.
Although some investment funds were invested in foreign currency trading, most of that trading was high risk in nature, often resulting in significant losses, none of which was disclosed to investors. Moreover, the co-conspirators concealed that the currency trading firm in Switzerland was in dire financial condition and, instead, continued to solicit investor assets to be sent to that trading firm. Co-conspirators also concealed from investors their own concerns about Cook’s operation of the currency program and alleged illegalities relative to the currency program.
In 2007, when UBS, AG, filed a trademark infringement lawsuit against Cook, Durand, Kiley, and others, the defendants began operating their scheme under other names, including but not limited to those identified by the terms “Oxford” and “Universal Brokerage FX.” They then continued to solicit investors for the currency program, utilizing telemarketing, media spots, and seminars in which they repeated the false representations noted above. Kiley, a Christian radio host, solicited investors for the scam through his radio talk show, which was carried on more than 200 stations across the country. On those programs, he regularly warned listeners to avoid financial ruin by giving their life savings to his company for investment.
Between 2005 and July 2009, the defendants, the defendants, Cook, and others secured approximately $194 million in investments for the currency program. Of that amount, only about $109 million was actually sent to currency trading firms. About $52 million was paid to investors in the form of lulling payments, and approximately $30 million was diverted to fund the business and personal expenses of the defendants, Cook, and others.
While Beckman was soliciting investors for the currency program, he also was attempting to purchase a minority ownership interest in the Minnesota Wild hockey team. He made misrepresentations to the National Hockey League that investments in certain trading accounts were his alone. He also claimed an extraordinary amount of assets under management and lied about the management of his grandfather’s estate and other acts reflecting dishonesty.
Moreover, Beckman filed false individual income tax returns for tax years 2007 and 2009 and failed to file a tax return for 2008. For that year, Beckman and his wife owed more than $1.3 million in federal income taxes. In addition, he caused two life insurance policies of an investor to be sold and stole millions of dollars in proceeds in order to prop up currency trading accounts held in his name.
For his part, Durand concealed more than $20,000 from the court-appointed receiver, who was searching for assets of the currency program fraud. Durand had another individual exchange the Swiss francs for U.S. currency, thereby concealing from law enforcement that he was in truth the source of the funds. Furthermore, Durand filed false individual income tax returns for tax years 2006 through 2008.In his plea agreement, Pettengill admitted that from February through September of 2008, he concealed material information from investors concerning the foreign currency program sold by Pettengill, Cook, and others known as the Oxford Entities Currency Program. He also conducted numerous wire transfers during the course of the conspiracy and made a personal credit card payment of $11,369.19 with funds derived from proceeds of the fraud scheme.
In August of 2010, Cook was sentenced to 300 months in federal prison for his role in the scam. On July 18, 2011, Jon Jason Greco pleaded guilty to two counts of making false statements to federal agents, specifically lying about assets he had concealed relative to this scam. He was sentenced to ten months in prison for his crimes.
This case was the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigations, with cooperation from the Securities and Exchange Commission and the Commodities Futures Trading Commission. It was prosecuted by Assistant U.S. Attorneys Tracy L. Perzel and David J. MacLaughlin.
Proceeds from the Cook fraud scheme are the subject of an ongoing investigation and recovery efforts led by R.J. Zayed, of the law firm Carlson, Caspers, Vandenburg, and Lindquist. Zayed was appointed Receiver by Judge Davis.
This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort in investigating and prosecuting financial crimes. It 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, will 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.Tamaral Guzman Convicted of Failure to Appear in Connection with Fleeing from Ongoing Drug and Financial Crimes TrialRead the Press Release
KNOXVILLE, Tenn. - Tamral Guzman, 42, of Blount County, Tenn., pleaded guilty on Jan. 3, 2013, in U.S. District Court for the Eastern District of Tennessee at Knoxville, to failure to appear. Sentencing has been set for 10:00 a.m., Mar. 20, 2013, before the Honorable Thomas A. Varlan, U.S. District Judge.
According documents on file with the U.S. District Court, Guzman was charged in a 57-count indictment for which she was on trial beginning on Sept. 24, 2012. She attended trial every day until Oct. 2, 2012, when she failed to appear. A warrant for Guzman’s arrest was issued by the District Court. The trial proceeded and she was convicted of all 57 counts on Oct. 4, 2012.
On Oct. 30, 2012, a vehicle believed to be driven by Guzman was located in Florida. Surveillance was set up on the vehicle and as a result Guzman was identified and arrested. Guzman admitted to living in a local hotel, paying for expenses with cash, and working in a local restaurant under an assumed name with her boyfriend and co-defendant Brian Paul Hatcher.
On Nov. 6, 2012, a three-count indictment, which included these charges, was returned against Hatcher and Guzman by a federal grand jury. Hatcher pleaded guilty on Dec. 20, 2012, and faces a maximum term of 10 years in prison for accessory after the fact and a maximum term of 20 years in prison for retaliating against a witness.
This indictment was the result of an ongoing investigation by the U.S. Marshal Service. Jennifer Kolman Assistant U.S. Attorney represented the United States at trial.
“This conviction is notice to all that running from the custody of the U.S. Marshals is an additional offense which we will prosecute. The federal judicial system must be respected. I extend my sincere praise for the work of the Internal Revenue Service, Drug Enforcement Administration, Blount County Drug Task Force and the U.S. Marshals Service for their diligent and successful work that resulted in these convictions,” said U. S. Attorney Bill Killian. “We are also very appreciative of the work of Assistant U.S. Attorney Jennifer Kolman for her prosecution of these cases,” he added.
Swiss Bank Pleads Guilty in Manhattan Federal Court to Conspiracy to Evade TaxesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Kathryn Keneally, the Assistant Attorney General for the Tax Division of the Department of Justice, and Richard Weber, the Chief of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the guilty plea of WEGELIN & CO. (“WEGELIN”), a Swiss private bank, for conspiring with U.S. taxpayers and others to hide more than $1.2 billion in secret Swiss bank accounts and the income generated in these accounts from the Internal Revenue Service (the “IRS”). One of the managing partners of WEGELIN, Otto Bruderer, appeared on behalf of the bank to enter the guilty plea before U.S. District Judge Jed S. Rakoff. This case represents the first time that a foreign bank has been indicted for facilitating tax evasion by U.S. taxpayers and the first guilty plea by a foreign bank to tax charges.
As part of its guilty plea, WEGELIN agreed to pay approximately $20 million in restitution to the IRS and to pay a $22.05 million fine. In addition, WEGELIN agreed to the civil forfeiture of an additional $15.8 million, representing the gross fees earned by the bank on the undeclared accounts of U.S. taxpayers. Together with the April 2012 forfeiture of over $16.2 million from WEGELIN’s correspondent bank account, this amounts to a total recovery to the United States of approximately $74 million.
Manhattan U.S. Attorney Preet Bharara said: “There is no excuse for wealthy Americans flouting their responsibilities as citizens of this great country to pay their taxes, and there is no excuse for foreign financial institutions helping them to do so. Wegelin became a haven for U.S. taxpayers seeking to circumvent the tax code by hiding their money in secret off-shore accounts, and the bank willfully and aggressively jumped in to fill a void that was left when other Swiss banks abandoned the practice due to pressure from U.S. law enforcement. Today’s guilty plea is a watershed moment in our efforts to hold to account both the individuals and the banks – wherever they may be in the world – who are engaging in unlawful conduct that deprives the U.S. Treasury of billions of dollars of tax revenue. We will continue our efforts until this practice is eliminated in its entirety.”
Assistant Attorney General Keneally said: “Today, Wegelin was held responsible for unlawfully helping U.S. taxpayers who had fled from UBS and other banks hide their income and assets from the IRS. As I have said, it is a high priority of the Department of Justice to find those who continue to shirk their tax obligations, as well as those who would profit by helping them do so. The best deal now for these folks is to come in and “get right” with the I.R.S., before either the I.R.S. or the Justice Department finds them.”
IRS-CI Chief Richard Weber said: “Today, we witnessed another historic event in the enforcement of offshore tax evasion and foreign banks. Wegelin & Co., Switzerland’s oldest bank, pleaded guilty to tax charges. Banks who facilitate tax evasion face serious consequences, including criminal charges, steep fines and restitution. IRS-CI continues to be vigilant in the investigation of offshore tax evasion.”
According to the Superseding Indictment, the February 2012 civil forfeiture Complaint filed against the funds in WEGELIN’s correspondent bank account, and statements made during WEGELIN’s guilty plea today:
Founded in 1741, WEGELIN is Switzerland’s oldest bank. It provided private banking, asset management, and other services to clients around the world, including U.S. taxpayers living in the Southern District of New York. WEGELIN had no branches outside Switzerland, but it directly accessed the U.S. banking system through a correspondent bank account that it held at UBS AG (“UBS”) in Stamford, Connecticut. As of December 2010, WEGELIN had approximately $25 billion in assets under management.
From 2002 through 2011, WEGELIN conspired with various U.S. taxpayers and others, to hide from the IRS the existence of bank accounts held at WEGELIN, and the income generated in those secret accounts. WEGELIN carried out this scheme through among others, client advisers Michael Berlinka (“Berlinka”), Urs Frei (“Frei”), and Roger Keller (“Keller”), who began working at WEGELIN in 2008, 2006, and 2007, respectively.
In 2008 and 2009, WEGELIN opened and serviced dozens of new undeclared accounts for U.S. taxpayers in an effort to capture clients lost by UBS in the wake of widespread news reports that UBS was being investigated by U.S. authorities for helping U.S. taxpayers evade taxes and hide assets in Swiss bank accounts. By mid-2008, UBS had stopped servicing undeclared accounts for U.S. taxpayers.
In the wake of the U.S. investigation of UBS, members of WEGELIN’s senior management decided to take steps to capture the illegal business that UBS had exited. To capitalize on the business opportunity this presented and to increase its assets under management, and the fees earned from managing those assets, WEGELIN employees told various U.S. taxpayer-clients that their undeclared accounts would not be disclosed to the United States authorities because the bank had a long tradition of secrecy. They also persuaded U.S. taxpayer-clients to transfer assets from UBS to WEGELIN by emphasizing that, unlike UBS, WEGELIN did not have offices outside of Switzerland and was therefore less vulnerable to United States law enforcement pressure. Members of WEGELIN’s senior management approved efforts to capture the clients who were leaving UBS and also participated in some meetings with U.S. taxpayer-clients who were fleeing UBS.
In February 2009, UBS entered into a deferred prosecution agreement with the Department of Justice on charges of conspiring to defraud the United States by impeding the IRS. As part of the deferred prosecution agreement, UBS paid $780 million in fines, penalties, interest, and restitution.
To further the goals of the conspiracy from 2002 through 2011, WEGELIN took steps that included the following:
- Opening and servicing undeclared accounts for U.S. taxpayer-clients in the names of sham corporations and foundations formed under the laws of Liechtenstein, Panama, Hong Kong, and other jurisdictions for the purpose of concealing some clients’ identities from the IRS;
- Accepting documents that falsely declared that the sham entities were the beneficial owners of certain accounts, when in fact the accounts were beneficially owned by U.S. taxpayers, and making them part of WEGELIN’s client files;
- Permitting certain U.S. taxpayer-clients to open and maintain undeclared accounts at WEGELIN using code names and numbers to minimize references to the actual names of the U.S. taxpayers on Swiss bank documents;
- Ensuring that account statements and other mail for U.S. taxpayer-clients were not mailed to them in the United States;
- Communicating with some U.S. taxpayer-clients using their personal email accounts to reduce the risk of detection by law enforcement; and
- Issuing checks drawn on, and executing wire transfers through, its U.S. correspondent bank account for the benefit of U.S. taxpayers with undeclared accounts at WEGELIN and at least two other Swiss banks. In so doing, WEGELIN sometimes separated the transactions into batches of checks or multiple wire transfers in amounts that were less than $10,000 to reduce the risk that the IRS would detect the undeclared accounts.
U.S. taxpayers are required to report the existence of any foreign bank account on their federal income tax returns if it holds more than $10,000 at any time during a given year, as well as any income it earns.
By 2010, the collective maximum value of the assets in undeclared accounts beneficially owned by U.S. taxpayer-clients of WEGELIN was more than $1.2 billion, with many accounts holding more than $10,000 in any one year.
The April 2012 forfeiture of approximately $16.2 million from WEGELIN’s correspondent bank account was the result of a civil forfeiture Complaint filed in February 2012. As alleged in the Complaint, WEGELIN used its correspondent bank account at UBS to help U.S. taxpayers with undeclared accounts repatriate money that they had hidden at WEGELIN. This was often done in a manner designed to evade detection by U.S. authorities. For example, U.S. taxpayers routinely asked WEGELIN to issue and send them checks, which were drawn on WEGELIN’S correspondent bank account, and that represented funds held in their secret accounts at the bank. Further, WEGELIN permitted at least two other Swiss banks to issue checks drawn on its correspondent bank account for the benefit of U.S. taxpayers holding undeclared accounts at these other banks. The sheer volume of transactions in WEGELIN’s correspondent bank account served to conceal the repatriation of money from U.S. taxpayers’ undeclared accounts at WEGELIN and the other banks. On April 24, 2012, U.S. District Judge Laura Taylor Swain entered an order forfeiting over $16.2 million seized from the U.S. correspondent account of WEGELIN. As part of its plea agreement, WEGELIN agreed not to contest the April 2012 forfeiture.
By entering its guilty plea in this case, WEGELIN waived any objections to service of the summons and the Superseding Indictment in this case and agreed, as part of its plea agreement, not to contest service of process in this case in the future.
In entering the guilty plea on WEGELIN’s behalf, Bruderer admitted, among other things, that “[f]rom about 2002 through about 2010, Wegelin agreed with certain U.S. taxpayers to evade the U.S. tax obligations of these U.S. taxpayer clients, who, among other things, filed false tax returns with the IRS.” Bruderer also admitted that “[i]n furtherance of its agreement to assist U.S. taxpayers to commit tax evasion in the United States, Wegelin, among other things, opened and maintained accounts at Wegelin in Switzerland for U.S. taxpayers who did not complete W-9 tax disclosure forms.” A W-9 is an IRS form used through which U.S. taxpayers can identify themselves as such to a bank, thereby causing the bank to report income generated in the U.S. taxpayers’ account to the IRS.
Bruderer further admitted that “Wegelin knew that certain U.S. taxpayers were maintaining non-W-9 accounts at Wegelin in order to evade their U.S. tax obligations, in violation of U.S. law, and Wegelin knew of the high probability that other U.S. taxpayers who held non-W-9 accounts at Wegelin also did so for the same unlawful purpose.” Bruderer also admitted that “Wegelin intentionally opened and maintained non W-9 accounts for [certain U.S.] taxpayers with the knowledge that, by doing so, Wegelin was assisting these taxpayers in violating their legal duties” and that “Wegelin was aware that this conduct was wrong.”
WEGELIN is headquartered in St. Gallen, Switzerland, and, in addition to the payment of restitution, faces a fine of up to approximately $40,000,000, representing twice the gross pecuniary loss to the IRS.
Berlinka, 42, Frei, 52, and Keller, 48 – who all reside in Switzerland – were charged in the Indictment in January 2012 and the Superseding Indictment in February 2012. They each face a maximum term of five years in prison, a maximum term of three years of supervised release, and a fine of the greatest of $250,000, or twice the gross pecuniary gain derived from the offense or twice the gross pecuniary loss to the victims. Berlinka, Frei, and Keller have not been arrested.
WEGELIN is scheduled to be sentenced by Judge Rakoff on March 4, 2013, at 4:00 p.m.
Mr. Bharara praised the outstanding efforts of IRS-CI in the investigation. He also thanked the U.S. Department of Justice’s Tax Division and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Miami Foreign Corruption Investigations Group for their significant assistance in the investigation.
This criminal case is being handled by the Office’s Complex Frauds Unit and the civil forfeiture proceedings are being handled by the Office’s Asset Forfeiture Unit. Assistant U.S. Attorneys David B. Massey, Daniel W. Levy, and Jason H. Cowley are in charge of the prosecution and civil forfeiture proceedings.
The charges and allegations contained in the Indictment and Superseding Indictment as against the remaining defendants – Berlinka, Frei, and Keller – are merely accusations, and those defendants are presumed innocent unless and until proven guilty.
U.S. v. Wegelin & Co. S1 Indictment
St. Louis Man Sentenced to 35 Years for Armed Bank Robbery in which Security Guard was KilledRead the Press Release
KANSAS CITY, Mo. – David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced that a St. Louis, Mo., man was sentenced in federal court today for his role in the murder of 70-year-old security guard Dwight Mayhugh, Sr., during an armed bank robbery in 2006.
Thirplus Moose, 25, of St. Louis, was sentenced by U.S. District Judge Gary A. Fenner to 35 years in federal prison without parole.
On Nov. 1, 2012 Moose pleaded guilty to participating in a conspiracy to commit bank robbery, armed bank robbery with forcible restraint and discharging a firearm during a crime of violence resulting in death. Moose admitted that he participated in a conspiracy to commit armed bank robbery in connection with two robbery attempts at United Missouri Bank, 7901 Wornall Road in Kansas City, in February 2006. During the second robbery attempt at the bank on Feb. 24, 2006 security guard Dwight W. Mayhugh, Sr., was fatally shot.
Co-defendant Iralee E. French, Jr., 25, of Kansas City, was sentenced on June 26, 2012 to 87 years in federal prison without parole. On July 22, 2011, French was convicted of his role in the conspiracy to commit armed bank robbery.
French and Moose used a shotgun to rob United Missouri Bank on Feb. 9, 2006. During that robbery, they confronted a bank teller in an underground parking garage as she was about to enter the bank at approximately 6:40 a.m. French pointed a shotgun at the teller, who was forced to give the robbers $8,263 from her teller station. After returning to the parking garage, the teller was ordered at gunpoint to get into the trunk of her vehicle, which she repeatedly refused to do. When she began screaming and crying, the robbers left the bank with the teller's vehicle, which was recovered the next day after being abandoned by the robbers.
French and Moose returned to the bank on Feb. 24, 2006. Using a shotgun, the robbers confronted Mayhugh when he drove into the same underground parking garage. French shot Mayhugh in the right shoulder and neck from approximately 10 feet away through the driver's side window of his vehicle. The robbers then forced Mayhugh out of his vehicle and into the bank. They demanded access to money, but Mayhugh responded that he did not have access to bank money. The robbers then stole Mayhugh's 2002 Geo Tracker and drove it away from the parking lot. The vehicle was recovered later the same day.
Mayhugh, bleeding from severe chest and neck wounds, walked to the convenience store across the street from the bank and told the store clerk he had been shot. The clerk immediately called 911 for an ambulance. Another store clerk, seeing Mayhugh's blood-soaked shirt and wounds in the neck and throat area, got a chair for him to sit on. The clerks placed towels over the wounds until paramedics arrived at the store. Mayhugh was transported to a hospital for treatment, but died the next day.
Law enforcement officers were unable to develop substantial leads or investigative progress in the bank robberies throughout the remainder of 2006, 2007 and most of 2008. On Aug. 12-13, 2008, law enforcement officers conducted a large scale re-canvas of the area around 23rd Street and Oakley in Kansas City. Nearly 500 houses were targeted to be canvassed in this operation. As a result of the publicity related to this re-canvas, a Yellow Cab taxi driver came forward and provided information related to the investigation. The taxi driver told investigators that, on the morning of the bank robbery, he picked up two men in the area of 5609 E. 23rd (the same area where the stolen vehicles were recovered) and drove them to the area of 79th Street and Brookside (a block east of United Missouri Bank), where he dropped them off.
Law enforcement investigators connected the telephone number that was used to call the taxi company with the telephone number provided by Moose, who had been contacted during the original canvas of the 23rd Street area on the day of the fatal bank robbery attempt.
This case was prosecuted by Acting U.S. Attorney David M. Ketchmark. It was investigated by the FBI, the Kansas City, Mo., Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshal's Service, the U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations and the U.S. Postal Inspection Service.
Spring Couple Handed Sentences for Hurricane Ike FraudRead the Press Release
HOUSTON – A local husband and wife have been sentenced to federal prison following their two convictions for defrauding the Federal Emergency Management Agency in relation to disaster assistance following Hurricane Ike, United States Attorney Kenneth Magidson announced today. LaCarsha, 40, and Andrew Goodman, 41, entered pleas of guilty on April 10 and May 17, 2012, respectively.
Today, U.S. District Judge Nancy Atlas, who accepted the guilty pleas for theft of government property and fraud In connection with major disasters, sentenced LaCarsha Goodman to a term of 27 months in prison. Andrew Goodman received a 24-month sentence on Sept. 7, 2012. Both were also ordered to pay $23,014 in restitution and serve two years of supervised release upon completion of their prison terms.
The evidence showed Goodmans perpetrated an ongoing series of frauds against the government, reporting false addresses and damage to their home in connection with Hurricane Ike. The Goodmans reported multiple home addresses as their primary residence in order to receive these benefits. In each instance, the Goodmans falsely indicated that their primary residences were damaged by Hurricane Ike and that access into their homes was restricted. As a result of their claims, the Goodmans received $23,014 in disaster relief funds from FEMA.
The case was initiated after the Department of Homeland Security, Office of Inspector General received an allegation from U.S. Housing and Urban Development, Office of Inspector General alleging the Goodmans may have defrauded FEMA by submitting a false claim for disaster assistance following Hurricane Ike, which made landfall on Sept. 13, 2008.
A review of FEMA's National Emergency Management System revealed that between Sept. 18, 2008, and Oct. 21, 2008, Andre and LaCarsha Goodman submitted two separate claims for disaster assistance. LaCarsha used two distinct Social Security numbers and, along with Andre, claimed two different addresses on the 14500 block of Vantage Parkway as their primary residence in Houston. In each of the claims, the Goodmans indicated that their primary residence was damaged by Hurricane Ike and that access to their home was restricted. On the basis of one of the claims, FEMA awarded the Goodmans a total of $23,014 in disaster related assistance payments. The investigation revealed the Goodmans did not live, own or rent one of the residences they claimed with FEMA to be their primary residence.
Previously released on bond, LaCarsha was permitted to voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future, while Andre was ordered into custody following his sentencing hearing.
The case was prosecuted by Assistant United States Attorney Suzanne Elmilady.
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 70821-4909Smith County Man Guilty of Stealing Government PropertyRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 33-year-old Tyler, Texas man has pleaded guilty to stealing government property in the Eastern District of Texas, announced U.S. Attorney John M. Bales.
Raymond Kyle Welsh pleaded guilty to an Information charging him with theft of government property today before U.S. Magistrate Judge Judith K. Guthrie.
According to information presented in court, from January 2003 to September 2010, Welsh concealed and failed to disclose his financial resources and income in order to receive Social Security and Medicaid benefits. Welsh stole approximately $26,588.00 from the Social Security Administration in the form of Social Security Supplemental Income (SSI) payments and $213,981.19 from the Department of Health and Human Services in the form of Medicaid benefits. Welsh admitted that he knew he was not entitled to the benefits and that they belonged to the United States government.
Welsh faces up to 10 years in federal prison, restitution of $240,569.19 and forfeiture of $26,588.00 at sentencing. A sentencing date has not been set.
This case is being investigated by the Social Security Administration and prosecuted by Assistant U.S. Attorney Mary Ann Cozby.
Several Retailers Agree to Resolve Allegations Concerning the Unlawful Advertising and Selling of Rayon Products as Being Made from BambooRead the Press Release
Amazon.com; Leon Max Inc., d/b/a Max Studio; Macy’s Inc.; and Sears, Roebuck and Co., Kmart Corporation and Kmart.com (collectively, Sears) have agreed to settle civil lawsuits concerning alleged violations of the Textile Fiber Product Identification Act and the Federal Trade Commission (FTC) Act, the Justice Department announced today.
The complaints, which were filed today in federal court along with proposed stipulated orders to settle the matters, allege that these retailers violated the Textile Act and the FTC Act by advertising and labeling textile products that were made from rayon as being made from “bamboo.” The cases were referred to the Justice Department by the FTC, which investigates violations of the Textile Act and FTC Act.
Under the terms of the proposed stipulated orders agreed to by the companies, the companies will take steps to prevent future violations, including distributing the orders to employee managers with responsibility for marketing or sale of textile products, keeping accounting and other records necessary to demonstrate compliance with the order, and reporting relevant data to the FTC. In addition, each company has agreed to make a monetary payment to the government as follows: Amazon ($455,000); Max Studio ($80,000); Macy’s ($250,000); and Sears ($475,000).
Under the Textile Act and Rules, a product’s label and advertising must accurately describe the type of fiber used to make the product. Unless a product is made directly with bamboo fiber, it cannot be labeled and advertised as “bamboo.” The complaints allege that these retailers advertised and sold products that were really made from a manufactured fiber, rayon, as being made from bamboo, widely understood to be a renewable resource.
According to the complaints, the manufacturing process for rayon requires the use of hazardous chemicals such as sodium hydroxide. The complaints further note that this manufacturing process emits hazardous air pollutants, including carbon disulfide, carbonyl sulfide, ethylene oxide, methanol, methyl chloride, propylene oxide and toluene.
“Consumers pay a premium for products labeled and advertised as being made from bamboo because they believe that the product is made from a renewable resource and is good for the environment,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division. “Consumers expect that they will get what they pay for; here, they didn’t.”
The cases, United States v. Amazon.com, Inc.; United States v. Leon Max, Inc., d/b/a Max Studio; United States v. Macy’s, Inc.; and United States v. Sears, Roebuck and Co. et al. were filed in the District Court for the District of Columbia.
Principal Deputy Assistant Attorney General Delery thanked the FTC for referring this matter to the department. The Consumer Protection Branch of the Justice Department’s Civil Division brought the cases on behalf of the United States.
Sentences for January 02, 2013Read the Press Release
Gregory Kern, 32, of Powell, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on January 2, 2013, for being a felon in possession of a firearm. Kern was arrested in Powell. He received 60 months of imprisonment, to be followed by three years of supervised release and was ordered to pay a $100.00 special assessment and a $250.00 fine. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Rupert Man Sentenced for Selling MethRead the Press Release
POCATELLO – Francisco A. Juarez, 27, of Rupert, Idaho, was sentenced today in United States District Court for possession with intent to distribute in excess of five grams of actual methamphetamine, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill sentenced Juarez to 66 months in prison followed by four years of supervised release. Juarez was indicted by a federal grand jury on April 24, 2012, on one count of possession with intent to distribute a controlled substance – five grams or more of actual methamphetamine. He pleaded guilty to the charge on August 29, 2012.
According to the plea agreement, on April 23, 2011, Juarez arranged to deliver methamphetamine to another individual. On August 26, 2011, he delivered in excess of five grams of actual methamphetamine to the person at a restaurant in Heyburn, Idaho.
The case was investigated by the Idaho State Police.
Romanian Charged with Internet Car Sale ScamRead the Press Release
Nikolae Savva, 36, of Oradea, Romania, was charged on September 3, 2013 by Information with conspiracy to commit wire fraud and possession of a fraudulent passport, announced United States Attorney Zane David Memeger. Savva conspired with others to defraud persons who sought to purchase used vehicles on the internet. Savva used false passports supplied by other conspirators to open bank accounts in the United States for the purpose of receiving funds obtained by fraud from the prospective buyers. These buyers would wire money to the bank accounts opened by Savva and Savva would immediately withdraw the funds and then wire most of the money to conspirators outside the United States. The buyer was not able to recover the funds she sent after she discovered that the offer to sell the vehicle was fraudulent.
If convicted the defendant faces a maximum possible sentence of 30 years imprisonment; 3 years supervised release; $500,000 fine; restitution, forfeiture and a $200 special assessment
The case was investigated by Federal Bureau of Investigation and United States Customs and Border Protection, and is being prosecuted by Assistant United States Attorney Albert S. Glenn.
Click here to view the indictment
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525Rockford, Illinois Woman Admits to Embezzling Almost $200,000 from Local Labor UnionRead the Press Release
ROCKFORD — A Rockford, Ill. woman pleaded guilty today in federal court before U.S. District Judge Frederick J. Kapala to having embezzled almost $200,000 from a local labor union. GRACE RATHKE, 57, Rockford, pleaded guilty to embezzling monies and funds belonging to Local 32 of the Laborers International Union of North America.
Rathke had been indicted on August 2, 2011, and charged with embezzling approximately $200,000 from Local 32. According to the written plea agreement, Rathke admitted that beginning in November of 2004 and continuing until March 2009, she had embezzled over $190,000 from Local 32, including $1,352 on September 25, 2006. In her plea agreement, Rathke admitted that she had been the office manager of Local 32. Members and apprentices of Local 32 had paid their dues and initiation fees to Local 32. As the office manager, Rathke was to enter the amounts received in the records of Local 32 and deposit the funds in the bank account of Local 32. In November of 2004, she began to secretly embezzle dues and fees from Local 32 and to use those monies for her own purposes. In so doing, Rathke failed to credit union members and apprentices with paying their dues and fees.
The guilty plea was announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and James Vanderberg, Special Agent-In-Charge of the Chicago office of the United States Department of Labor, Office of Inspector General, Office of Fraud and Labor Racketeering Investigations, and Mary Kebisek, District Director of the Chicago office of the United States Department of Labor – Office of Labor-Management Standards.
Sentencing has been set for April 9, 2013, at 2:30 p.m. before Judge Kapala. Rathke faces a maximum sentence of 5 years in prison to be followed by up to 3 years on supervised release. Rathke may also be sentenced to pay a fine of up to $250,000 and must be sentenced to pay restitution of over $190,000 to Local 32.
The government has been represented by Assistants U.S. Attorney John G. McKenzie and Monica V. Mallory.
Plea Agreement
Postal Service Employee Charged with TheftRead the Press Release
PHILADELPHIA - Venus Jenkins, 40, of Philadelphia, Pennsylvania, a U.S. Postal Service employee, was charged today by Information with one count of theft of Government funds, announced United States Attorney Zane David Memeger. The information alleges that from on or about June 2, 2010 to on or about December 7, 2011, Venus Jenkins implemented a scheme to steal funds from the United States Postal Service by using her position as a Sales and Service Associate to transact over 200 fictitious and fraudulent refunds, resulting in total losses to the government of approximately $17,011.24.
If convicted the defendants each face a maximum possible sentence of ten years incarceration, a $250,000.00 fine, and three years supervised release.
The case was investigated by the United States Postal Service Office of the Inspector General and is being prosecuted by Special Assistant United States Attorney Thomas Moshang III.
Click here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525Portsmouth Man, Leader of Internet Group 'IMAGiNE,' Sentenced to 60 Months in Prison for Criminal Copyright ConspiracyRead the Press Release
NORFOLK, Va. – The leader of the Internet piracy group “IMAGiNE” was sentenced today to serve 60 months in prison, announced U.S. Attorney for the Eastern District of Virginia Neil H. MacBride; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; and Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) in Washington, D.C.
Jeramiah B. Perkins, 40, of Portsmouth, Va., was sentenced by U.S. District Judge Arenda L. Wright Allen in the Eastern District of Virginia. In addition to his prison term, Perkins was sentenced to serve three years of supervised release and ordered to pay $15,000 in restitution. Perkins pleaded guilty to one count of conspiracy to commit criminal copyright infringement on Aug. 29, 2012.
Perkins was indicted along with three other defendants on April 18, 2012, for their roles in the IMAGiNE Group, an organized online piracy ring that sought to become the premier group to first release Internet copies of movies only showing in theaters.
According to court documents, Perkins directed and participated in using receivers and recording devices in movie theaters to secretly capture the audio sound tracks of copyrighted movies and then synchronized the audio files with illegally recorded video files to create completed movie files suitable for sharing over the Internet among members of the IMAGiNE Group and others.
Perkins admitted he took the lead in renting computer servers in France and elsewhere for use by the IMAGiNE Group. He also admitted he registered domain names for use by the IMAGiNE Group, and opened e-mail and PayPal accounts to receive donations and payments from persons downloading or buying IMAGiNE Group releases of pirated copies of motion pictures and other copyrighted works.
According to testimony by a representative of the Motion Picture Association of America, the IMAGiNE Group constituted the most prolific motion picture piracy release group operating on the Internet from September 2009 through September 2011.
Co-defendants Sean M. Lovelady, Willie O. Lambert and Gregory A. Cherwonik each pleaded guilty to one count of conspiracy to commit criminal copyright infringement on May 9, June 22 and July 11, 2012, respectively. Lambert and Lovelady were sentenced on Nov. 2, 2012, to 30 months and 23 months in prison, respectively. Cherwonik was sentenced on Nov. 29, 2012, to 40 months in prison. A fifth co-defendant, Javier E. Ferrer, was charged in an information on Sept. 13, 2012, for his role in the IMAGiNE Group, and he pleaded guilty to one count of conspiracy to commit criminal copyright infringement on Nov. 29, 2012. Ferrer is scheduled to be sentenced on March 14, 2013.
The investigation of the case and the arrests were conducted by agents with HSI. Assistant U.S. Attorney Robert J. Krask of the Eastern District of Virginia and Senior Counsel John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are prosecuting the case. Significant assistance was provided by the CCIPS Cyber Crime Lab and the Criminal Division’s Office of International Affairs.
This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/iptf.
This investigation was supported by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington. The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and our war fighters.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Port Arthur Man Sentenced in Kidnapping and Carjacking SchemeRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A 33-year-old Port Arthur, Texas man has been sentenced to federal prison in a carjacking case as a result of Operation Time Machine in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Luan Van Nguyen, aka, Kevin Nguyen, was found guilty by a jury on Aug. 2, 2012, of carjacking, conspiracy to commit carjacking, and possession of a firearm in furtherance of a violent crime. Nguyen was sentenced to 330 months in federal prison today by U.S. District Judge Thad Heartfield.
According to information presented in court, from July 16, 2010 to Aug. 6, 2010, Nguyen conspired with two fellow Port Arthur men, Patrick Allen Chaney and Rigoberto Gaytan Valenzia, to kidnap a 24-year-old Port Arthur man and hold him for ransom. Chaney and Valenzia had both previously performed construction work for Nguyen, who was a construction contractor. Nguyen approached Chaney and Valenzia and asked them to help kidnap the victim and promised to share a portion of the ransom proceeds, which was to be paid by the victim's family. Prior to the kidnapping, Chaney, Valenzia, and Nguyen traveled together on one or more occasions to conduct surveillance on the victim and the victim's family. Nguyen was a friend of the victim’s family and knew that the victim had a job doing computer repair work. Nguyen’s plan was to lure the victim to an vacant house in Port Arthur by having Chaney make a fictitious service call for computer repair. On Aug. 5, 2010, at approximately 6:30 p.m., Chaney, using the alias "Gary Underwood," called the victim on his cell phone and asked the victim to fix a computer.
On Aug. 6, 2010, from approximately 1:00 p.m. to 3:00 p.m., Chaney, using the same alias, "Gary Underwood," made multiple phone calls to the victim's cell phone and the victim’s employer, specifically requesting that the victim be sent to do the computer repair. Chaney instructed the victim to meet him at 3748 Proctor Street in Port Arthur, in order to pick up the computer. At approximately 3:00 p.m., Chaney met the victim at 3748 Proctor Street and was able to lure him into the house. Upon entering the house, Valenzia confronted the victim with a short-barreled shotgun and told the victim to lay face down on the floor and not to move or else he would shoot the victim. Chaney proceeded to blind-fold the victim and bound the victim's hands with duct tape. Valenzia and Chaney then put the victim into Valenzia’s van, bound his feet with duct tape, and then removed the victim’s car keys and cell phone. Chaney took the victim's car which was parked in the driveway. Nguyen drove up to the residence and instructed Chaney to follow Nguyen in the victim's vehicle while Valenzia transported the victim. Chaney and Nguyen then abandoned the victim’s vehicle behind a business on 8th Street and 9th Avenue in order to conceal the location of the kidnaping from law enforcement.
Valenzia took a large knife and placed it against the victim's neck and leg, and told the victim that he would cut him if he moved. Valenzia left the residence in his van with the victim still bound in the back and planned to take the victim back to his apartment. While in route, the victim was able to maneuver to the front of the vehicle and lodge himself against Valenzia and the inside wall of the van. Valenzia choked the victim with his hands in order to try and regain control over him. After a brief struggle, Valenzia stopped the vehicle and opened the driver's side door in order to free himself. Once the door was opened, the victim fell out of the vehicle, managed to free one of his legs, and was able to run to a nearby business for help. A passing motorist observed the victim escaping from the vehicle and called Port Arthur Police. Valenzia left the scene and then called Nguyen on his cell phone and informed him that the victim had escaped. Valenzia attempted to flee in the van, but was later apprehended by Port Arthur Police officers. Port Arthur Police recovered the shotgun used in the kidnapping and carjacking. Chaney voluntarily surrendered to Port Arthur Police on Aug. 13, 2010. A federal grand jury returned an indictment on Sep. 8, 2010, charging Valenzia, Nguyen, and Chaney with federal violations.
The evidence at trial showed that Nguyen fled Port Arthur on Aug. 16, 2010 after he learned federal investigators were investigating him for his role in the kidnaping and carjacking. He was at large for over a year, and was eventually arrested in Houston, Texas on Dec. 14, 2011.
Phone records showed that Nguyen repeatedly called Chaney and Valenzia on the day of the kidnaping and carjacking, and instructed them on how to carry out the crime.
This case was prosecuted as part of Project Safe Neighborhoods' Operation Time Machine program in partnership with the Jefferson County District Attorney’s Office. Operation Time Machine is aimed at reducing gun and gang violence, deterring illegal possession of guns, ammunition and body armor, and improving the safety of residents in Port Arthur, Texas. Participants in the initiative include community members and organizations as well as federal, state and local law enforcement agencies.
Chaney pleaded guilty to carjacking and was sentenced on Aug. 9, 2011, to 97 months in federal prison. Valenzia pleaded guilty to carjacking and was sentenced on Apr. 20, 2011 to 116 months in federal prison. Chaney and Valenzia were also convicted of state charges for aggravated kidnapping and were both sentenced to 5 years in the Texas Department of Corrections. During sentencing, Judge Heartfield referred to Nguyen as the “puppeteer” and his co-defendants as the “puppets” in this scheme.
This case was investigated by the Port Arthur Police Department and the ATF and prosecuted by Assistant U.S. Attorney Baylor Wortham and Assistant U.S. Attorney John Ross.
Philadelphia Woman Charged with Social Security FraudRead the Press Release
Crystal Anderson, 45, of Philadelphia, Pennsylvania was charged today by Information with one count of theft of government funds and three counts of social security fraud, announced United States Attorney Zane David Memeger. The information alleges that from in or about January 1996 through in or about November 2011, Crystal Anderson implemented a scheme to defraud the SSA by receiving disability insurance benefits and supplemental security income benefits while concealing that she was working and earning income and receiving dual benefits from SSA, for a period of almost 16 years, using a different name and social security number, resulting in losses to the government of approximately $105,108.32. In furtherance of her scheme, Ms. Anderson allegedly provided a fraudulently obtained social security number in order to obtain a false photographic identification card.
If convicted the defendant faces a maximum possible sentence of 25 years imprisonment, a three year period of supervised release, a $1,000,000.00 fine, and a $400.00 special assessment. Full restitution of as much as $105,108.32 may be ordered.
The case was investigated by the Social Security Administration Office of the Inspector General and is being prosecuted by Special Assistant United States Attorney Thomas Moshang III.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525Pella Woman Pleads Guilty to Mail FraudRead the Press Release
DES MOINES, IA – Beverly Joan DeRonde, age 61, of Pella, Iowa, pleaded guilty to one count of mail fraud in a proceeding before United States Magistrate Judge Ross A. Walters, announced United States Attorney Nicholas A. Klinefeldt. Sentencing has been scheduled for April 5, 2013, at the United States Courthouse in Des Moines before Chief Judge James E. Gritzner.
DeRonde was charged with multiple counts of mail fraud in an indictment filed on August 28, 2012. The indictment alleged that DeRonde obtained approximately $731,950 as a result of these offenses.
In a written plea agreement filed on January 4, 2013, DeRonde admitted that she engaged in a scheme to defraud multiple individuals and obtain money by false pretenses over a seven-year period, from January 2003 through June 2010. DeRonde would ask various friends, relatives, and acquaintances to loan her money, supposedly for surprise birthday or anniversary presents for her husband or to purchase equipment for a boat repair shop. She promised large amounts of interest and often would write a check at the time of the purported loan, instructing the individual loaning the money not to negotiate the check until a later date.
DeRonde admitted that she did not use the loan proceeds as represented but, instead, used the money to purchase antiques, jewelry, Rolex watches, and other consumer items. She also used loan proceeds to repay loans she previously had obtained from other individuals. She admitted to using the United States mails to send letter to various individuals with excuses why she was unable to repay the loans, promising a new date by which she would have the money, and often instructing the individuals to keep the loans a secret from her husband.
DeRonde faces a maximum penalty of up to 20 years in prison, a maximum fine of $250,000, or both a fine and imprisonment. Additionally, under the plea agreement, DeRonde has agreed that the sentencing judge should impose an order of restitution for all relevant conduct and to the forfeiture of certain property found at her residence and a storage unit, which was purchased with the proceeds of the mail fraud. DeRonde remains released, under the supervision of the United States Probation Office, pending imposition of sentence.
This case was investigated by the United States Postal Inspection Service, and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
(Download Press Release )
Pearl River Man Charged with Illegal Distribution of Oxymorphone Causing the Overdose Death of 21-Year Old ManRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Brian Crowell, the Special Agent-in-Charge of the New York Field Division of the U.S. Drug Enforcement Administration (“DEA”), George Longworth, the Commissioner of Westchester County Department of Public Safety, Thomas Zugibe, the Rockland County District Attorney, and Kevin Nulty, the Chief of the Orangetown Police Department, announced the arrest this morning of CRAIG OLEKSOWICZ for illegally distributing oxymorphone, a Schedule II controlled substance, the use of which caused the October 2011 death of another individual, a 21-year-old man in Pearl River, New York. OLEKSOWICZ was additionally charged with illegally distributing codeine, methadone, and Valium pills. OLEKSOWICZ was presented today before U.S. Magistrate Judge George A. Yanthis in White Plains federal court.
U.S. Attorney Preet Bharara stated: “As has been reported, prescription drug trafficking and abuse is an exploding epidemic, claiming the lives of almost 15,000 people a year, more than illegal street drugs like heroin and cocaine combined. As alleged, the defendant was essentially an outlaw pharmacy, and worse, a lethal one. The illegal dealers of prescription drugs will not get any easier treatment from this Office simply because what they are selling can be legally used when properly prescribed. We will not relent in combating this new drug scourge. We commend the teamwork and professionalism of our federal and local partners that led to this arrest.”
DEA Special Agent-in-Charge Brian Crowell stated: “There is zero difference between the local street drug dealer selling heroin to that of a person selling illegally obtained prescription pain medication. Some of these diverted pills, like Opana, are known on the streets as ‘Stop Signs’, due to its shape. The misuse of this and other diverted pain medicine can cause people to become addicts leading to tragic overdoses. Diverted pain pills, not prescribed for the right reasons nor by the right doctor, and sold to people on the street, are the leading cause of overdoses and deaths in our region. Many continue to believe the illegal distribution of pain medications is harmless, this charge and arrest should make clear there is no difference between selling pain medication not prescribed by a doctor and supplying heroin.”
Westchester County Department of Public Safety Commissioner George Longworth stated: “This investigation is another example of the tremendous collaboration that exists among federal, county and local law enforcement agencies in the Hudson Valley. The Department of Public Safety is committed to continuing to work with all our law enforcement partners to combat narcotics trafficking in our communities.”
Rockland County District Attorney Thomas Zugibe stated: “This defendant is accused of trafficking in drugs which are extremely potent and sometimes deadly. Rockland County has seen a huge rise in the use and abuse of prescription painkillers, such as Opana. In fact, the White House Office on National Drug Policy says prescription drug abuse is the nation's fastest-growing drug problem, responsible for the deaths of more Americans than heroin and cocaine combined. My thanks to the members of the Rockland County Drug Task Force, the Orangetown Police Department Detective Bureau and the DEA's Diversionary Unit for partnering in this investigation. All levels of law enforcement must continue working together to battle our growing pill epidemic.”
Orangetown Police Department Chief Kevin Nulty stated: “It was sad for me to see a young man from my own neighborhood in Orangetown die as a result of being illegally sold a prescription narcotic substance. The death was very real to me. I greatly commend the work of the investigators from my department and the US Drug Enforcement Administration who worked very hard in identifying the parties responsible for the drug sale of that caused this death. I am very pleased that this case has been brought to a successful closure. Stopping the epidemic of the sale of and illicit use of prescription drugs is a new challenge for law enforcement agencies across the United States. We will continue to work with our local, state and federal partners in our public education, prevention and enforcement efforts.”
According to the Indictment, which was unsealed today in White Plains federal court, and other public documents:
Between at least February 2011 and October 2011, OLEKSOWICZ, 37, of Pearl River, New York, and others regularly distributed OLEKSOWICZ’s prescription oxymorphone pills for profit. Oxymorphone is a powerful painkiller with a high potential for addiction and abuse, and its improper use may be fatal. In October 2011, the use of oxymorphone pills supplied by OLEKSOWICZ caused the overdose death of a young man residing in Pearl River, New York. Following that death, OLEKSOWICZ continued his illegal distribution of pills, selling codeine, methadone, and Valium pills on at least three separate occasions in February 2012.
If convicted, OLEKSOWICZ faces a mandatory minimum penalty of 20 years in prison, a maximum penalty of life in prison, and a maximum fine of $1 million or twice the gain or loss resulting from the crime.
Mr. Bharara praised the investigative efforts of the DEA, the Westchester County Department of Public Safety, the Rockland County Drug Task Force, and the Orangetown Police Department. He also thanked the Rockland County District Attorney’s Office for its assistance in the case.
The case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Christopher J. DiMase and Abigail S. Kurland are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Craig Oleksowicz Indictment
Owner of Tacoma Western Clothing Store Sentenced to Ten Years in Prison for Heroin Distribution ConspiracyRead the Press Release
A Puyallup man who owns a western wear store in Tacoma was sentenced yesterday to ten years in prison for conspiracy to distribute heroin, announced U.S. Attorney Jenny A. Durkan. MARCOS ARAUJO URRIETA, 47, was arrested on September 17, 2011, following an investigation of heroin trafficking in the Tacoma area. ARAUJO URRIETA pleaded guilty in September 2012. U.S. District Judge Benjamin H. Settle imposed the mandatory minimum ten year sentence in the case.
According to records filed in the case, ARAUJO URRIETA owned Zapateria Tarascos located at 924 E. 72nd Street in Tacoma. The store sold western clothing including boots and other merchandise. Law enforcement served a search warrant at a stash house in Tacoma on September 17, 2011. At the house was a co-conspirator who had been sent by ARAUJO URRIETA to pick up six to eight kilos of heroin for him to distribute from his store. Law enforcement officers then searched the store and found about four pounds of heroin and $250,000 in cash. ARAUJO URRIETA admitted the cash was from drug sales as well as the sales of some store merchandise.
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. The case was investigated by the Lakewood Police Department as the lead agency, and supported by the Pierce County Sheriff’s Office, and other member agencies of the Tahoma Narcotic Enforcement Team (TNET). The Drug Enforcement Administration (DEA) Tacoma Resident Office also participated in the investigation.
The case was prosecuted by Assistant United States Attorneys Matthew Thomas, Marc Perez, and Jeffrey Backhus.
Owner of Detroit Adult Day Care Centers Pleads Guilty in Connection with Medicare Psychotherapy Fraud SchemeRead the Press Release
WASHINGTON – The owner of several Detroit-area adult day care centers pleaded guilty today for her role in a $13.2 million psychotherapy fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Chicago Regional Office.
Beth Jenkins, 48, of Farmington Hills, Mich., pleaded guilty to one count of conspiracy to commit health care fraud and five counts of health care fraud, before U.S. District Judge Stephen J. Murphy III in the Eastern District of Michigan.
Jenkins admitted that she and others conspired to defraud Medicare through Quality Recreation & Rehabilitation LLC (QRR) and Procare Rehabilitation Inc., two adult day care centers she owned and operated with alleged co-conspirators. According to court documents, Jenkins and her alleged co-conspirators owned and operated several Detroit-area adult foster care homes (AFCs) that housed severely mentally-disabled Medicare recipients. Court documents allege that Medicare beneficiaries living at AFCs, some of which were owned and operated by Jenkins and her alleged co-conspirators, were transported to QRR and Procare by Jenkins and others. According to court documents, Jenkins and her alleged co-conspirators used the AFC residents’ Medicare information to bill Medicare for group and individual psychotherapy that was never provided.
From 2004 through 2011, Jenkins and her alleged co-conspirators submitted more than 185,000 claims to Medicare totaling more than $13.2 million for group and individual psychotherapy that was not provided. According to court documents, Medicare paid $4,777,792 on these claims.
At sentencing, scheduled for April 19, 2013, Jenkins faces a maximum penalty of 60 years in prison and a $1,500,000 fine.
Jenkins’s co-defendants, Dr. Alphonso Berry and Marcus Jenkins, Beth Jenkins’s husband, are scheduled for trial on Jan. 8, 2013. They are presumed innocent until proven guilty at trial.
This case is being prosecuted by William G. Kanellis and Tarek Helou of the Criminal Division’s Fraud Section. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Ocean City Shop Owner Pleads Guilty to Selling Counterfeit MerchandiseRead the Press Release
Baltimore, Maryland – Liang Lin, age 34, a resident of Delaware, who owned and operated two shops on the boardwalk in Ocean City, Maryland, pleaded guilty today to trafficking in counterfeit goods.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Colonel Marcus L. Brown, Superintendent of the Maryland State Police; and Acting Chief Kevin Kirstein of the Ocean City Police Department.
“Entrepreneurs are free to sell cheap clothing, shoes, handbags, perfume and other consumer items,” said U.S. Attorney Rod J. Rosenstein. “but they cannot use someone else’s trademark.”
“Counterfeit goods traffickers like Lin are looking to gain profit but in reality are committing a crime that results in American jobs lost, American business profits stolen and American consumers receiving substandard products,” said William Winter, Special Agent in Charge of HSI Baltimore. “Consumers now pay more for legitimate products to make up for the money being lost to counterfeits. HSI enforcement operations into Intellectual property theft protect not only the companies who have copyrighted products, but the consumers who believe they are legitimately buying those copyrighted products.”
According to his plea agreement, Lin owned and operated two stores in Ocean City, Maryland: Hot Topik, at 401 South Atlantic Avenue, and Everything $5.99 and Up (Hot Topik), at 806 South Atlantic Avenue #8, as well as operating stores in Delaware. Lin admitted that from at least June 2010 through at least September 2011, he sold, and attempted to sell counterfeit merchandise, including purses, handbags, shirts, jewelry perfume, hats, and shoes that bore trademarks such as Michael Kors, Nike, Monster, Coach, Gucci, Versace, Vera Wang, Louis Vuitton and Channel.
During the summer of 2011, undercover investigators observed large quantities of counterfeit merchandise in Lin’s stores in Ocean City, and several undercover buys of counterfeit merchandise were made, including the purchase of a counterfeit Coach purse.
On the morning of August 17, 2011, federal search warrants were executed at both of Lin’s stores in Ocean City and approximately 8,000 items of counterfeit merchandise were seized. Two days after the execution of the federal search warrant, an investigator again saw counterfeit merchandise for sale at Everything $5.99 and Up (Hot Topik), including merchandise of the same type seized during the search. On September 1, 2011, an investigator made an undercover buy of a counterfeit Coach purse at Everything $5.99 and Up (Hot Topik).
On January 30, 2012, Lin was stopped re-entering the United States after a one-day trip to Canada and declared that the only thing he purchased in Canada was liquor from a duty free shop. A border search of his vehicle recovered approximately 869 pieces of counterfeit jewelry bearing trademarks such as Chanel.
It is estimated by the manufacturers whose goods were counterfeited that the lost retail value (or the retail value of the infringed items) of the goods seized and sold is estimated to be between $200,000 and $400,000. The estimated retail value of the counterfeit merchandise, based on what Lin was selling the infringing counterfeit items for, is $153,585.
Lin faces a maximum sentence of 10 years in prison and a fine of $2 million. U.S. District Judge William D. Quarles, Jr. has scheduled sentencing for March 27, 2013 at 9:30 a.m.
Today’s law enforcement action is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to http://www.justice.gov/dag/iptaskforce/.
United States Attorney Rod J. Rosenstein praised HSI Ocean City, the Maryland State Police and Ocean City Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Justin Herring, who is prosecuting the case.
New Jersey Man Charged with Bank FraudRead the Press Release
Ron Credle, 48, of East Orange, New Jersey, was charged today by Information with one count of bank fraud and one count of aggravated identity theft, announced United States Attorney Zane David Memeger.
Credle faces a maximum sentence of 32 years imprisonment and a mandatory minimum of at least two years in prison. He also faces a $1.25 million fine and a $200 special assessment.
The case was investigated by the United States Secret Service and is being prosecuted by Assistant United States Attorney Michael S. Lowe.
Click here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525New Haven Heroin Dealer Sentenced to More Than Five Years in Federal PrisonRead the Press Release
January 3, 2013David B. Fein, United States Attorney for the District of Connecticut, today announced that FRANK CARR, also known as “FL,” 45, of New Haven, was sentenced yesterday by Chief United States District Judge Alvin W. Thompson in Hartford to 63 months of imprisonment, followed by five years of supervised release, for distributing heroin.
According to court documents and statements made in court, on November 20, November 28, and December 22, 2011, CARR sold heroin to an individual working with law enforcement.
CARR was arrested on February 24, 2012. At the time of his arrest, he possessed approximately 67 grams of heroin packaged for street-level distribution.
On July 2, 2012, CARR pleaded guilty to one count of possession with intent to distribute and distribution of heroin.
CARR has been detained since his arrest.
This matter was investigated by the Drug Enforcement Administration, with assistance provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the New Haven Police Department. The case was prosecuted by Assistant United States Attorney Marc H. Silverman.
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(203) 821-3722 [email protected]Munoz Sentenced to 41 Months in Federal Prison After Pleading Guilty to Wire Fraud, Money Laundering in Connection with Property Fraud Scheme Near Park CityRead the Press Release
SALT LAKE CITY – Mauricio R. Munoz, age 49, of Sandy, who pleaded guilty to wire fraud and money laundering in connection with a construction fraud scheme involving five lots in the Promontory Point development located near Park City, will serve 41 months in federal prison. U.S. District Judge Ted Stewart imposed the sentence Wednesday in federal court in Salt Lake City.
Two other defendants in the case, Daniel Alfonso Blanco, age 41, of West Jordan, and Michael Russell Held, age 48, of Pullman, Washington, were each sentenced to 30 months in federal prison. Each defendant was ordered to pay $2,944,760.46 in restitution in connection with other co-defendants and Blanco and Munoz were ordered to forfeit $2,944,760.46 in currency. Held, who Judge Stewart found to be a minimal participant in the scheme, was not included in the forfeiture judgment. Munoz, Blanco, and Held, who will surrender to begin their prison sentences on Feb. 18, 2013, will be on supervised release for 36 months when they complete their prison sentence.
Justin Hatton, age 40, of Salt Lake City, who was charged in a separate indictment in connection with the scheme, has pleaded guilty to bank fraud, money laundering, and filing a false tax return. He is scheduled to be sentenced Friday at 2 p.m. by U.S. District Judge Tena Campbell.
The cases were investigated by special agents of the FBI and IRS Criminal Investigation.
According to documents filed in court, the defendants joined with Hatton in 2007 in falsifying paperwork and making misrepresentations to persuade a father and son living in Park City to lend a substantial portion of their personal savings to place five high-dollar lots ($645,900-$919,000 each) under contract. The defendants misrepresented to the victims that the lots had values of between $1.25 million and more than $1.8 million.
These misrepresentations convinced the victims that they were safe in making bridge loans of $4,414,389 at financial market rates with the understanding that the buyers had paid large down-payments and that the properties, which served as security for the loans, were worth approximately twice what they were lending. Munoz and Hatton asserted that the bridge loans would soon be replaced by a series of construction loans and later, long-term financing. The victims were promised that the construction loans would repay the bridge loans and end their involvement within less than two months.
At the end of the day, court records show, the victims learned that their funds were secured by lots worth less than half the loan. The construction financing that purportedly would pay them off was briefly pursued but not obtained. Hatton, Munoz, and Blanco channeled hundreds of thousands of dollars from the deals. Approximately $600,000 was laundered through the bank account of Munoz’ mother and divided between Hatton and Munoz. Held, who forged false contracts and documents, appears to have received no more than $300 related to the transactions. A witness reported that Blanco was paid $10,000 for creating essentially double closing documents – one set that reflected the true closing of the loans and diversion of excess loan proceeds to the co-conspirators and another set reflecting a false closing to make the bridge lenders feel comfortable that their loan proceeds had been applied as promised.
The bridge loans were not repaid and the victims suffered substantial losses on each transaction.
Missouri Man Charged with Distributing Heroin in Saline CountyRead the Press Release
Bryan L. Cayce, 45, of O’Fallon, Missouri, appeared for arraignment today in United States District Court in Benton on charges that he illegally distributed heroin, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois. The indictment charging Cayce was returned by a Federal Grand Jury on November 6, 2012, and alleged that the distribution occurred on September 18, 2012, in Saline County.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
If convicted, Cayce faces up to 20 years imprisonment, a $1 million fine, and a term of 3 years to life on supervised release to follow his incarceration.
Cayce will next appear in United States District Court in Benton on Friday, January 4th at 11:30 a.m. for a hearing on a motion that he be held without bond. Cayce was remanded to the custody of the United States Marshal to await that hearing.
The case was investigated by the Carmi office of the Southern Illinois Drug Task Force.
The case is being prosecuted by Assistant United States Attorney James M. Cutchin.
Mississippi Man Pleads Guilty for Conspiring to Commit Hate Crimes Against African-Americans in Jackson, MississippiRead the Press Release
Joseph Dominick, 21, from Brandon, Miss., pleaded guilty today in U.S. District Court in Jackson, Miss., to one count of conspiracy to commit federal hate crimes in connection with his role in the assault of African-Americans in Jackson. Defendants Deryl Paul Dedmon, 20; John Aaron Rice, 19; Dylan Wade Butler, 21; William Kirk Montgomery, 23; and Jonathan Kyle Gaskamp, 20, all from Brandon have previously entered guilty pleas in connection with their roles in these offenses. The conspiracy culminated in the death of James Craig Anderson, who was assaulted and killed on June 26, 2011.
The investigation conducted by the FBI revealed that, beginning in the spring of 2011, Dominick and others conspired with one another to harass and assault African-Americans in and around Jackson. On numerous occasions, the co-conspirators used dangerous weapons, including beer bottles, sling shots and motor vehicles to cause, and attempt to cause, bodily injury to African-Americans. They would specifically target African-Americans they believed to be homeless or under the influence of alcohol because they believed that such individuals would be less likely to report an assault. The co-conspirators would often boast about these racially motivated assaults.
On an occasion predating the death of Mr. Anderson, Dominick, Montgomery, Butler and others known to the government traveled to Jackson in Dominick’s truck for the purpose of finding and assaulting vulnerable African-Americans. The co-conspirators threw multiple glass beer bottles at African-American pedestrians. Dominick and his co-conspirators also purchased a sling shot and metal ball bearings to shoot at African-Americans, and then took turns shooting the sling shot at multiple African-Americans they encountered.
On June 25, 2011, Dominick and others attended a party/bonfire in Puckett, Miss., to celebrate Dominick’s birthday. During the party, Dominick and others, talked about going to Jackson to harass and assault African-Americans. By the early morning hours of June 26, 2011, Montgomery, Dedmon, Rice, Butler and three other co-conspirators known to the government agreed to carry out their plan to find, harass and assault African-Americans. Dominick did not go to Jackson on June 26, 2011. That evening culminated in Dedmon deliberately using his Ford F250 truck to run over Mr. Anderson, causing injuries which resulted in Mr. Anderson’s death.
“We hope that today’s guilty plea provides further assurance to the victim’s family and to the community that the Department of Justice will leave no stone unturned to find those responsible for these senseless racially motivated attacks,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Our investigation is ongoing, and we will continue to pursue those who participated in this violent conspiracy, which culminated in the tragic death of James Craig Anderson.”
“The acts carried out by Dominick and his co-conspirators against African-Americans are absolutely reprehensible. Bringing these individuals to justice is a top priority of this office and we will continue to assist the Department of Justice Civil Rights Division in this investigation,” said U.S. Attorney Gregory K. Davis.
Daniel McMullen, Special Agent in Charge of the FBI’s Jackson Field Office, said, “The FBI continues to investigate the hate fueled assaults on African-Americans in and around Jackson, Mississippi, which include the attack on and resulting death of James Anderson on June 26, 2011. This behavior, which seeks to deprive others of their civil rights based on the color of their skin, cannot be tolerated.”
These guilty pleas were the result of a cooperative effort between the U.S. Attorney’s Office for the Southern District of Mississippi, the United States Department of Justice’s Civil Rights Division, and the Hinds County District Attorney’s Office. This case was investigated by the Jackson Division of the FBI and the Jackson Police Department. It is being prosecuted by Trial Attorney Sheldon L. Beer and Deputy Chief Paige M. Fitzgerald of the Civil Rights Division and Assistant U.S. Attorney Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi.
Members of the Philadelphia La Cosa Nostra Family Found Guilty of Racketeering and Other ChargesRead the Press Release
PHILADELPHIA - A federal court jury today returned guilty verdicts against Joseph Massimino, Damion Canalichio, and Gary Battaglini for conspiring to participate in the affairs of the Philadelphia La Cosa Nostra (LCN) Family through a pattern of racketeering activity and through the collection of unlawful debts. The jury also returned guilty verdicts against co-defendant Anthony Staino, Jr. for conspiracy to make extortionate extensions of credit and conspiracy to collect extensions of credit by extortionate means. Trial lasted 43 days. Five co-defendants charged in the case pleaded guilty prior to trial while three additional co-defendants are still awaiting trial. U.S. District Court Judge Eduardo C. Robreno scheduled sentencing hearings for May 21, 2013 and scheduled bail hearings for February 6, 2013. Each charge of racketeering conspiracy carries a maximum penalty of 20 years in prison.
The jury was undecided ("hung") on several counts pertaining to defendants Joseph Ligambi, George Borgesi, and Joseph Massimino. Judge Robreno declared a mistrial on those counts. The jury found defendants Ligambi, Staino, Brogesi, Canalichio, and Battaglini not guilty of several substantive counts; Joseph Licata was found not guilty.In addition to prison terms, the defendants each face possible fines of up to $250,000 for each count.
The case is being investigated by the FBI, the Internal Revenue Service Criminal Investigation Division, the Pennsylvania State Police, the New Jersey State Police, the Philadelphia Police Department, and the U.S. Department of Labor’s Office of Inspector General Office of Labor Racketeering and Fraud Investigations, and Employee Benefits Security Administration. Additional assistance was provided by the New Jersey Department of Corrections. Valuable prosecutorial assistance was provided by the Pennsylvania Office of the Attorney General.
The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section, and Assistant U.S. Attorneys Frank A. Labor III and Suzanne B. Ercole.
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PATTY HARTMAN, Media Contact, 215-861-8525Massachusetts Man Sentenced to 24 Months in Federal Prison on Money Laundering, Gambling and Tax ViolationsRead the Press Release
CONCORD – John Giannelli, Sr., 66, of Danvers, Massachusetts, was sentenced to 24 months in federal prison today after pleading guilty on September 27, 2012 in the United States District Court for the District of New Hampshire to one count of money laundering, one count of operating an illegal gambling business, and five counts of impeding the administration of the Internal Revenue laws, announced United States Attorney John P. Kacavas.
Giannelli operated a computer based sports betting business while he resided in Peabody, Massachusetts and then Kingston, New Hampshire. Giannelli controlled access, through the use of user identifications and passwords, to a gambling site and granted access to that site to dozens of agents. Approximately 300 customers making sports related wagers were able to gain access to the site through the agents and Giannelli was able to monitor the overall betting activity. A forensic analysis of betting records obtained from computers seized at Giannelli’s residence in March 2012 established that the operation generated gross profits of approximately $188,000 over a twelve week period.
The money laundering charges arose from a scheme in which Giannelli was listed as an employee on a former sports betting customer’s business. Giannelli provided the business with cash proceeds generated by the gambling business and, in return, the business issued paychecks to Giannelli, thus making it appear that Giannelli’s income was legitimate. The business also caused to be generated false W-2 forms that Giannelli used to support tax returns filed with the IRS. Between 2003 and 2007, Giannelli laundered approximately $452,000 in proceeds through the scheme. The District Court ordered a money judgment forfeiture in the amount of $452,000.
The investigation was conducted by the Federal Bureau of Investigation and the Internal Revenue Service.
Manhattan U.S. Attorney Announces Arrest of Business Owner for Failing to Pay More Than $250,000 in Payroll TaxesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Toni Weirauch, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the indictment of TREVOR WHITTINGHAM, an owner of parking lots in Manhattan, for a scheme in which he allegedly failed to pay more than $245,000 in payroll taxes to the IRS. WHITTINGHAM was arrested this morning at his residence in Fort Lee, New Jersey, in connection with today’s charges and will be presented and arraigned before U.S. District Judge Richard J. Sullivan at 3:30 p.m. this afternoon.
According to the allegations contained in the Indictment unsealed today in Manhattan federal court:
WHITTINGHAM owned and controlled two companies, EZ Going Park Here and We Have Cars II, through which he operated parking lots in Harlem and other parts of upper Manhattan, New York. WHITTINGHAM was responsible for collecting, accounting for and paying payroll taxes on behalf of both of these companies. From December 2006 through June 2009, WHITTINGHAM caused EZ Going Park Here and We Have Cars II to deduct and collect payroll taxes from its employees. The majority of those payroll taxes, however, were not paid over to the IRS as required. Instead, WHITTINGHAM used the corporate funds of EZ Going Park Here and We Have Cars II to pay for various personal items and otherwise finance a lavish lifestyle. As a result, from 2005 through 2009 EZ Going Park Here and We Have Cars II accumulated approximately $251,265 in unpaid payroll tax liabilities.
WHITTINGHAM, 63, is charged with 13 counts of failing to pay over payroll taxes to the IRS. He faces a maximum sentence on each count of five years in prison, or a total of 65 years in prison on all counts.
Mr. Bharara praised the efforts of IRS-CI in the investigation. He also thanked the U.S. Department of Justice’s Tax Division for their significant assistance in the investigation.
This case is being handled by the Office’s Complex Frauds Unit. Special Assistant U.S. Attorney Andrew Young is in charge of the prosecution.
The charges and allegations contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Trevor Whittingham Indictment
Man Sentenced for Sexual Abuse of A MinorRead the Press Release
United States Attorney Christopher A. Crofts announced today that on January 2, 2013, Aaron David Mbonu, a 36-year-old Citizen of the Federal Republic of Nigeria, appeared in Federal District Court for sentencing before Chief Federal District Court Judge Nancy D. Freudenthal on a single count of sexual abuse of a minor. The charge carried a maximum penalty of 15 years imprisonment; a $250,000.00 fine; supervised release of not less than three (3) years; restitution; and a $100.00 special assessment. Mbonu received 51 months of imprisonment, to be followed by ten years of supervised release and was ordered to pay a $100.00 special assessment and a $400.00 fine. The charge stemmed from an offense which occurred between March 6, 2012 and March 16, 2012, on the Wind River Indian Reservation and involved a victim who was at least twelve (12) years of age but had not yet attained the age of sixteen (16) years, and was at least four (4) years younger than the Defendant. The case was investigated by the Federal Bureau of Investigation.
Man Admits Committing Several Violent, Takeover-Style, Armed Bank RobberiesRead the Press Release
Co-Conspirator Also Murdered a Brinks Security Guard
DALLAS — Jesus Sandoval, 50, appeared in federal court this morning and pleaded guilty, before U.S. District Judge Barbara M. G. Lynn, to his role in three violent, takeover-style, armed bank robberies that he and co-conspirator Enrique Lopez, 28, committed in 2009, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Specifically, Sandoval pleaded guilty to one count of conspiracy to commit bank robbery and two counts of using, carrying, and brandishing a firearm during and in relation to, and possessing a firearm in furtherance of a crime of violence. The conspiracy count carries a maximum penalty of five years in federal prison and each of the firearm counts carry a maximum penalty of life in prison. Each count also carries a maximum potential fine of $250,000. Sentencing is set for May 10, 2013, at 1:30 p.m., before Judge Lynn.
Sandoval and Lopez, were arrested, by officers with the Balch Springs Police Department, as they fled the scene after committing the armed robbery of the Chase Bank on Lake June Road in Balch Springs, Texas, on October 3, 2009.
Lopez was sentenced in October 2012 to two life sentences plus 85 years in federal prison for murdering a Brinks Security Guard and committing five violent, takeover-style, armed bank robberies.
Factual resumes filed in the case detail the robberies. On February 13, 2009, Lopez and Sandoval, armed with firearms, robbed a Loomis security guard as he replenished cash in an automatic teller machine (ATM) located at the Bank of America on Camp Wisdom Road in Dallas. Lopez grabbed the guard from behind, put a pistol to his neck, threatened to kill him and demanded money. The two took the guard’s service weapon and money bags, and Lopez fired at the Loomis driver.
On August 1, 2009, Lopez and Sandoval, each armed with a firearm, robbed the Wachovia Bank located at 39703 Lyndon B. Johnson Freeway, in Dallas, threatening bank employees with death during the course of the robbery. After taking the cash, they fled in a vehicle fitted with stolen license plates.
On the morning of October 3, 2009, Sandoval and his accomplice, Lopez, each armed with a loaded pistol, entered the Chase Bank located at 12329 Lake June Road in Balch Springs. The bank was celebrating its grand opening and more than 40 people were in the bank. Lopez and Sandoval, with their pistols, threatened the lives of the people inside the bank and claimed they had a bomb in the backpack that would detonate if anyone notified the police. Following a high-speed chase, Lopez and Sandoval were arrested. Police recovered the loaded pistols, the bank’s money and the backpack from the car, which, while it did not contain a bomb, contained two boxes of ammunition.
The case was investigated by the FBI, the Dallas Police Department and the Balch Springs Police Department. Assistant U.S. Attorneys Brandon McCarthy and Jerri Sims prosecuted.
Leader of Nevada – Alaska Oxycodone Ring Sentenced to 15 Years in Prison and Ordered to Forfeit over $1.2 MillionRead the Press Release
Las Vegas, Nev. – A Las Vegas man who operated an illegal drug trafficking organization that transported prescription drugs from Las Vegas to Anchorage, Homer, Kenai, Soldotna and Wasilla, Alaska, and laundered over $1 million through bank accounts in Las Vegas, was sentenced today to 15 years in prison for his guilty pleas to conspiracy, drug and money laundering charges, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Nicholas Ghafouria, 28, was sentenced by Senior U.S. District Judge Roger L. Hunt. In addition to the prison time, Ghafouria was also ordered to forfeit over $1.2 million in cash and property, and must serve three years of supervised release following his release from prison. Ghafouria pleaded guilty on Oct. 1, 2012, and was the last of the 27 defendants charged in the scheme to be sentenced, most of whom were sentenced to prison. Nineteen of those defendants were from Alaska and eight were from Las Vegas.
“Over the last several years, we have been working with state and local law enforcement and health care providers to attack the growing prescription drug abuse problem in Nevada,” said U.S. Attorney Bogden. “Since January 2010, over 100 individuals, including four doctors and a pharmacist, have been charged in Nevada with unlawfully distributing highly addictive prescription painkillers.”
Between May 2009 and October 2010, Ghafouria organized and led a group of individuals who distributed over 4,000 oxycodone pills in Alaska and laundered at least $1.2 million in cash proceeds from the unlawful distribution of the drugs. Ghafouria and his co-conspirators used various ways to get the drugs to Alaska, including sending them in packages and transporting them on airplane flights. Ghafouria sold the pills for approximately $65 each in Alaska. Co-conspirators in Alaska either provided money directly to couriers who delivered it to Ghafouria in Las Vegas, or they deposited money into bank accounts in Alaska which was withdrawn in Las Vegas by individuals under Ghafouria’s direction.
The cases were investigated by IRS Criminal Investigation in Las Vegas, the FBI in Las Vegas and Anchorage, DEA in Las Vegas and Anchorage, Bureau of Alcohol, Tobacco, Firearms, and Explosives in Anchorage, Department of Homeland Security in Anchorage, Las Vegas OCDETF, Las Vegas Metropolitan Police Department, United States Attorney’s Office, District of Alaska, Alaska Bureau of Alcohol and Drug Enforcement, Alaska State Troopers (Soldotna SERT, Soldotna ABI, Anchor Point Troopers), Alaska Wildlife Troopers, Kenai Police Department, Anchorage, Kenai and Mat-Su Judicial Services, Kenai District Attorney’s Office, Soldotna Police Department, Kenai Adult Probation, Alaska Department of Corrections, United States Fish and Wildlife Service, and Alaska National Guard. The cases were prosecuted by Assistant United States Attorneys Patrick Walsh and Kishan Nair.
Leader of Internet Piracy Group “IMAGiNE” Sentenced in Virginia to 60 Months in Prison for Criminal Copyright ConspiracyRead the Press Release
WASHINGTON – The leader of the Internet piracy group “IMAGiNE” was sentenced today to serve 60 months in prison, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in Washington, D.C.
Jeramiah B. Perkins, 40, of Portsmouth, Va., was sentenced by U.S. District Judge Arenda L. Wright Allen in the Eastern District of Virginia. In addition to his prison term, Perkins was sentenced to serve three years of supervised release and ordered to pay $15,000 in restitution. On Aug. 29, 2012, Perkins pleaded guilty to one count of conspiracy to commit criminal copyright infringement.
Perkins was indicted along with three other defendants on April 18, 2012, for their roles in the IMAGiNE Group, an organized online piracy ring that sought to become the premier group to first release Internet copies of movies only showing in theaters.
According to court documents, Perkins directed and participated in using receivers and recording devices in movie theaters to secretly capture the audio sound tracks of copyrighted movies and then synchronized the audio files with illegally recorded video files to create completed movie files suitable for sharing over the Internet among members of the IMAGiNE Group and others.
Perkins admitted he took the lead in renting computer servers in France and elsewhere for use by the IMAGiNE Group. He also admitted he registered domain names for use by the IMAGiNE Group, and opened e-mail and PayPal accounts to receive donations and payments from persons downloading or buying IMAGiNE Group releases of pirated copies of motion pictures and other copyrighted works.
According to testimony by a representative of the Motion Picture Association of America, the IMAGiNE Group constituted the most prolific motion picture piracy release group operating on the Internet from September 2009 through September 2011.
Co-defendants Sean M. Lovelady, Willie O. Lambert and Gregory A. Cherwonik each pleaded guilty to one count of conspiracy to commit criminal copyright infringement on May 9, June 22 and July 11, 2012, respectively. Lambert and Lovelady were sentenced on Nov. 2, 2012, to 30 months and 23 months in prison, respectively. Cherwonik was sentenced on Nov. 29, 2012, to 40 months in prison. A fifth co-defendant, Javier E. Ferrer, was charged in an information on Sept. 13, 2012, for his role in the IMAGiNE Group, and he pleaded guilty to one count of conspiracy to commit criminal copyright infringement on Nov. 29, 2012. Ferrer is scheduled to be sentenced on March 14, 2013.
The investigation of the case and the arrests were conducted by agents with HSI. Assistant U.S. Attorney Robert J. Krask of the Eastern District of Virginia and Senior Counsel John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are prosecuting the case. Significant assistance was provided by the CCIPS Cyber Crime Lab and the Criminal Division’s Office of International Affairs.
This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce.
This investigation was supported by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington. The IPR Center is one of the U.S. government's key weapons in the fight against counterfeiting and piracy. Working in close coordination with the Department of Justice’s IP Task Force, the IPR Center uses the expertise of its 21-member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and our war fighters.
Leader of Multi-Million Dollar Real Estate Fraud Scheme Pleads Guilty to Fraud and Money LaunderingRead the Press Release
Defrauded Investors in Multiple States and Abroad; Defendant Faces
Up to 25 Years in PrisonTRENTON, N.J. – An Ocean County, N.J., man today admitted that he ran a real estate investment fraud scheme that caused $200 million in losses and then laundered the proceeds of the scheme, U.S. Attorney Paul J. Fishman announced.
Eliyahu Weinstein, a/k/a “Eli Weinstein,” a/k/a “Edward Weinstein,” a/k/a “Eddie Weinstein,” 37, of Lakewood, N.J., pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to two counts of the Indictment pending against him: one count of conspiracy to commit wire fraud, and one count of money laundering. Weinstein’s trial on these charges was scheduled to start Jan. 7, 2013. Weinstein’s co-defendant, Vladimir Siforov, is charged in the Indictment with three counts of wire fraud and remains a fugitive.Under the terms of the plea agreement, which Judge Pisano accepted today, Weinstein may be sentenced to up to 25 years in prison and up to three years of supervised release. He must also provide a full accounting of all monies paid to him during the period covered by the Indictment. Weinstein has also agreed to forfeit $2 million in seized property and pay restitution to the victims of his offenses. Sentencing is scheduled for April 2, 2013.
“Weinstein shamelessly exploited investors’ trust, using doctored documents for properties he didn’t own – including in a town that doesn’t exist – and continued to commit crimes while out on bail,” U.S. Attorney Fishman said. “With false promises of sound investments and charitable donations, he stole $200 million, spending freely on fancy cars, jewelry and gambling trips. And in using victims’ money to collect Judaica, Weinstein robbed from his own community’s present to stockpile artifacts of its past.”FBI Acting Special Agent in Charge David Velazquez said: “Mr. Weinstein came to the wrong conclusion when he assumed he would never be held accountable for his criminal activity. His greed got the best of him and he will pay a heavy price before the law for the frauds he committed.”
According to documents filed in this case and statements made in court:From June 2004 through August 2011, Weinstein orchestrated – with the help of Siforov and others – a real estate investment fraud scheme, headquartered in Lakewood, that has resulted in multi-million dollar losses to victim investors.
To induce victims to invest, Weinstein and others made various types of materially false and misleading statements and omissions. Weinstein and others told victims that Weinstein’s inside access to certain real estate opportunities allowed him to buy a particular piece of property at a below-market price. Weinstein and others also told victims that their money would be used to purchase a specific property, and the property would be quickly resold – or “flipped” – to a third-party purchaser that Weinstein had lined up. Victims were also told that the victims’ money would be held in escrow until the closing of a purported real estate transaction.
Weinstein bolstered his lies by creating, and causing to be created, various types of fraudulent documents, including “show checks,” which Weinstein led victims to believe represented Weinstein’s investments in specific transactions, but which in fact were never deposited; forged checks, which had actually been negotiated for small amounts, but which Weinstein altered so as to appear worth millions of dollars; and various kinds of phony legal documents, including mortgages, and deeds.Weinstein and others initially targeted victims from the Orthodox Jewish community to which Weinstein belonged, exploiting his standing in, and knowledge of, the customs and practices of this community to further the scheme. This type of illegal activity is commonly referred to as “affinity fraud,” and refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups. The perpetrators of affinity fraud scams frequently are, or pretend to be, members of the group, and they exploit the trust and friendship that exist in groups of people who have something in common.
Weinstein abused the Orthodox community’s practice of engaging in transactions based on trust, and without paperwork, to obtain money from his victims without substantial written records. He would then falsely represent that specific real estate transactions existed, that the victims’ monies were used to fund those transactions, or that the victims’ profits from those transactions were being “rolled” into new investments. Weinstein also used a portion of the fraud’s proceeds to fund “charitable and religious contributions,” which he used to elevate his reputation within the Orthodox Jewish community.By 2010, Weinstein had tarnished his reputation in the Orthodox Jewish community due to the massive losses caused by his fraud scheme and found it difficult to obtain more money to further the scheme from within the Orthodox Jewish community. In April 2010, Weinstein and others began soliciting victims from outside of the Orthodox Jewish community, whom they defrauded out of additional millions of dollars.
Weinstein also used millions of dollars fraudulently obtained from his victims to fund his own lavish spending, including millions of dollars worth of antique Judaica and other artwork; a multi-million dollar collection of jewelry and watches; gambling in Las Vegas and elsewhere; and Weinstein’s personal expenses, including millions of dollars in credit card bills, millions of dollars in legal bills, and luxury car-lease payments.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, for the investigation leading to today’s guilty plea. He also credited agents of the IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, for their important contributions to the investigation.
The government is represented by Assistant U.S. Attorneys Zach Intrater and Gurbir S. Grewal of the U.S. Attorney’s Office Economic Crimes Unit and by Rachael A. Honig, Deputy Chief of the Office’s Criminal Division.The charges and allegations against Siforov are merely accusations, and he is considered innocent unless and until proven guilty.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crime.
13-004
Defense counsel: Robert J. Cleary Esq., New York
Weinstein, Eliyahu Indictment
Lansdale Man Charged in Multi-Million Dollar Mortgage Fraud SchemeRead the Press Release
PHILADELPHIA - Willie G. Manley, Jr., 62, of Lansdale, Pennsylvania, was charged yesterday, by Information, with one count of conspiracy to commit loan and wire fraud, three counts of loan fraud, one count of making a false statement in connection with a Federal Housing Administration Loan, two counts of wire fraud, and aiding and abetting, announced United States Attorney Zane David Memeger.
The information alleges a massive mortgage fraud conspiracy the operated between May 2004 and February 2009, primarily in the West Philadelphia section of the city of Philadelphia. Manley, an accountant, is alleged to have created false income documents, such as W-2 forms, paystubs, and Form 1040 income tax returns that were submitted to lenders to help induce the lenders into issuing mortgages for the properties. The information alleges that other co-conspirators included an appraiser who issued grossly inflated appraisals, a title agent who created false title insurance policies, contractors who submitted false receipts to show home repairs that had never been done, and numerous straw buyers whose names and identities were used to purchase the properties. The information alleges that a Philadelphia-based property settlement company - “KREW Settlement Services” - was at the center of the conspiracy. The information alleges that all told, the mortgage fraud scheme involved more than 100 properties and over $20 million in loan proceeds, with most of the mortgages being unpaid and the properties falling into foreclosure.
If convicted, the defendant faces a maximum possible sentence 137 years in prison, five years supervised release, restitution of up to $13.7 million, a fine of up to $4 million and a $700 special assessment.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the Department of Housing and Urban Development’s Office of Inspector General. It is being prosecuted by Assistant United States Attorney Michael S. Lowe.
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PATTY HARTMAN, Media Contact, 215-861-8525Kevin Alexander Santamaria-oviedo Sentenced for Unlawful Transfer of Identification Documents and Possession of Document-making ImplementsRead the Press Release
KEVIN ALEXANDER SANTAMARIA-OVIEDO, age 22, a citizen of El Salvador, was sentenced today in federal court by U. S. District Judge Jane Triche Milazzo to twenty-one (21) months imprisonment, announced U. S. Attorney Dana Boente. In addition to the term of imprisonment, Judge Milazzo ordered that SANTAMARIA be placed on three years of supervised release following the term of imprisonment, during which time the defendant will be under federal supervision and risks an additional term of imprisonment should he violate any terms of his supervised release.
According to court documents, on September 27, 2012, SANTAMARIA pled guilty to knowingly transferring a fraudulent Social Security card and a fraudulent Permanent Resident Card (also known as a “green card”) on April 4, 2012, knowing that such documents were produced without lawful authority, and the false identification documents appear to have been issued by or under the authority of the United States. SANTAMARIA also pled guilty to possession of document-making implements, specifically a card printer, with intent that the document-making implements would be used to produce false identification documents. SANTAMARIA illegally entered the United States. SANTAMARIA’s wife, JENNIFER MARILYN HERRERA, was sentenced to a two-year term of probation on December 20, 2012 for her role in the scheme.
The case was investigated by the U. S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations. The case was prosecuted by Special Assistant U. S. Attorney Robert Weir.Kansas City Man Charged with Nine Robberies in Less Than Two WeeksRead the Press Release
KANSAS CITY, KAN. – A Kansas City, Kan., was charged today with committing robberies at nine stores in less than two weeks, U.S. Attorney Barry Grissom said Thursday.
Llewellyn Richard, 44, Kansas City, Kan., was charged in U.S. District Court in Kansas City, Kan., with nine counts of robbery.
Court records identified the robberies as:
– Boost Mobile, 3726 State Avenue, Kansas City, Kan., Dec. 21, 2012.
– Dollar General, 2272 Quindaro, Kansas City, Kan., Dec. 25, 2012.
– Family Dollar, 1251 Central Avenue, Kansas City, Kan., Dec. 25, 2012.
– Quick Service gas station, 7959 State Avenue, Kansas City, Kan., Dec. 25, 2012.
– Boost Mobile, 7640 State Avenue, Kansas City, Kan., Dec. 26, 2012.
– Cricket store, 4635 Shawnee Drive, Kansas City, Kan., Dec. 27, 2012.
– Sally’s Beauty Supply, 5020 Roe Boulevard, Roeland Park, Kan., Dec. 28, 2012.
– Dollar General, 2801 S. 47th Street, Kansas City, Kan., Dec. 28, 2012.
– Family Dollar, 3129 State Avenue, Kansas City, Kan., Dec. 30, 2012.
According to a criminal complaint and affidavit, the first robbery at the Boost Mobile store occurred at about 1:14 p.m. Dec. 21 when Richard walked behind the counter, grabbed a clerk around the waist and demanded money. He gestured to her as if he had a gun in his jacket pocket. He fled the store with the money.In the second robbery at the Dollar General Store on Dec. 24, he walked behind the counter and pushed the clerk. The clerk stated she felt what she believed to be a gun that the robber shoved into her back. She said he threatened her, saying “Don’t look at me! Don’t turn around!”
On Jan. 1, 2013, officers of the Kansas City, Kan., Police Department stopped a 1997 red GMC pickup. The driver pulled over and then drove away when the officers approached the truck. A pursuit ended when the truck crashed and Richard was arrested.
If convicted, he faces a maximum penalty of 20 years in federal prison and a fine up to $250,000 on each count.
The Kansas City, Kan., Police Department investigated. Assistant U.S. Attorney Terra Morehead is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
KC Man Pleads Guilty to Northland Bank RobberyRead the Press Release
KANSAS CITY, Mo. - David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced today that a Kansas City, Mo., man pleaded guilty in federal court today to robbing the Bank of America.
Edward L. Green, 24, of Kansas City, pleaded guilty before U.S. District Judge Beth Phillips to the charge contained in an Aug. 7, 2012, federal indictment.
Co-defendants Robert Lowe, 27, and Rolando Winters, 25, also of Kansas City, have also pleaded guilty to their roles in the bank robbery and await sentencing.
Green admitted today that he drove the getaway car for the July 19, 2012, robbery in which they stole $5,863 from the Bank of America at 661 N.W. 55th Terr., Kansas City. Lowe and Winters entered the bank in order to rob it while Green positioned the vehicle to pick them up after the robbery.
Upon entering the bank, Winters announced that “This is a robbery” and demanded money from a teller. Winters told the teller that her life depended on it and to move quicker. Winters kept his hand in his waistband and the teller feared that he may have a gun. Lowe took money from another teller while Winters took money from the first teller. Lowe and Winters then fled from the bank.
According to court documents, law enforcement officers had been conducting surveillance on Green, Lowe and Winters as the men were apparently casing several banks in North Kansas City, Mo., and in Kansas City-North. When Lowe and Winters ran out of the bank, law enforcement officers ordered them to stop. Green was arrested without incident but Lowe and Winters continued to run around the apartment complex. They ran into an undercover law enforcement truck around the corner of a building and were taken into custody. Winters was transported to North Kansas City Hospital for treatment of injuries he received from running into the vehicle.
Under federal statutes, each of the defendants is subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Bruce Clark. It was investigated by the FBI.Justice Department Reaches Settlement with Law Firm over Discrimination Against Deaf IndividualsRead the Press Release
The Justice Department today announced a settlement agreement with Peroutka and Peroutka P.A., a debt collection law firm based in Pasadena, Md., to resolve allegations that the law firm violated the Americans with Disabilities Act (ADA) by discriminating against people who are deaf.
The settlement agreement resolves two complaints alleging that Peroutka discriminated against deaf individuals by refusing to accept Video Relay Service calls, which were necessary for the complainants to communicate by phone with Peroutka employees. According to the complaint, Peroutka employees also hung up on one complainant and informed the other complainant that Peroutka could not assist her and that she had to call back at a specific time when a manager was present.
“People with disabilities cannot be denied services simply because they use alternative ways to communicate,” said Assistant Attorney General Thomas E. Perez. “The ADA does not tolerate this type of discrimination and neither does the Justice Department.”
Under the settlement, Peroutka is required to pay $30,000 in compensation to the complainants, to revise its policies and procedures to ensure that the office accepts Video Relay Service calls and treats people with disabilities equally, and to train its employees on the ADA’s obligations.
Title III of the ADA prohibits discrimination against people with disabilities at places of public accommodation, including law firms. Among other things, Title III requires public accommodations to afford people with disabilities full and equal enjoyment of their goods, services, and facilities. The ADA also requires public accommodations to make reasonable modifications to their policies, practices, and procedures when necessary to afford equal access to people with disabilities, unless doing so would fundamentally alter the goods or services provided.
Those interested in learning more about this settlement or an entity’s obligations under the ADA may call the Justice Department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access its ADA website at www.ada.gov . Additionally, ADA complaints may be filed by email to [email protected] .
Judge Sentences French Citizen for Airplane IncidentRead the Press Release
PHILADELPHIA - Philippe Jeannard, 61, of La Rochelle, France, was sentenced today to time served for one count of fraud in connection with an identification document. Jeannard has been in federal custody since March 21, 2013. He was arrested after he boarded a commercial airplane, on March 20, 2013, at Philadelphia International Airport, using a fraudulent Air France identification card of a former Air France employee and gained access to the plane’s cockpit.
U.S. District Court Judge Gene E.K. Pratter also ordered Jeannard to pay $4,875 in reimbursement for counsel’s fees that she found he had the ability to pay. He was also ordered to pay a $100 special assessment. Jeannard will be deported and will not be permitted back into the United States without written permission from the Secretary of the Department of Homeland Security.
The case was investigated by the Immigration and Customs Enforcement Homeland Security Investigations, the FBI, and the Philadelphia Police Department. It was prosecuted by Assistant United States Attorney K.T. Newton.
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