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Monday 25 November 2024
Punxsutawney Woman Pleads Guilty to Social Security FraudRead the Press Release
JOHNSTOWN, Pa. – A resident of Punxsutawney, Pennsylvania, pleaded guilty in federal court to a charge of violating federal fraud laws, United States Attorney Eric G. Olshan announced today.
Patty Merlo, 66, pleaded guilty to Count One of the Indictment before United States District Judge Stephanie L. Haines.
In connection with the guilty plea, the Court was advised that, from in and around May 2016 to in and around January 2022, Merlo embezzled and converted for her own use approximately $91,300 in Social Security benefit payments to which she knew she was not entitled.
Judge Haines scheduled sentencing for March 26, 2025. The law provides for a maximum total sentence of up to 10 years in prison, a fine of up to $250,000, or both. Under the federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Maureen Sheehan-Balchon is prosecuting this case on behalf of the government.
The Social Security Administration - Office of the Inspector General conducted the investigation that led to the prosecution of Merlo.
Providence Man Sentenced to Nearly Six Years in Prison for Trafficking FentanylRead the Press Release
PROVIDENCE, RI – A Providence man who was found in possession of nearly half of a kilo of fentanyl that he kept stored inside an apartment he shared with five other individuals, including two babies, has been sentenced to nearly six years in federal prison, announced United States Attorney Zachary A. Cunha
Stanli S. Arias De La Rosa 31, was sentenced today by U.S. District Court Judge Mary S. McElroy to 71 months of incarceration to be followed by three years of federal supervised release. He pleaded guilty on April 30, 2024, to a charge of possession with the intent to distribute fentanyl.
Arias was arrested by members of the Rhode Island DEA Drug Task Force in March 2023, six months after being arrested by the York County Sheriffs’ Office in Nebraska during a traffic stop after discovering approximately 10 kilos of cocaine inside a vehicle that he was driving. Arias failed to return to Nebraska to face those charges after being released following his court arraignment.
According to information presented to the court, in March 2023, a West Warwick Detective who also served a member of the DEA Drug Task Force developed information targeting the location of a high-level drug supplier. On March 10, 2023, authorities conducted a court-authorized search of Arias’ Providence residence and found narcotics strewn about the apartment. Seized were approximately 454.9 grams of fentanyl, 43 grams of cocaine, 14.5 grams of crack cocaine, digital scales, and other items used in the preparation and distribution of narcotics.
Present in the apartment at the time of the search were two mothers and their infants and an adult male.
The case was prosecuted by Assistant United States Attorney Christine D. Lowell.
The matter was investigated by the Rhode Island DEA Drug Task Force and the Smithfield Police Department.
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Probation Check Leads to Discovery of Firearm, Federal Sentence for Lewiston ManRead the Press Release
PORTLAND, Maine: A Lewiston man was sentenced today in U.S. District Court in Portland for illegally possessing a firearm.
U.S. District Judge Nancy Torresen sentenced Bret Binette, 19, to time served followed by three years of supervised release. Binette had been incarcerated since May 9, 2024 and pleaded guilty on August 13, 2024.
According to court records, in May 2024, law enforcement conducted a probation check and interview with Binette at his residence in Lewiston. Prior to the probation check, he was observed operating a vehicle with a passenger in the front seat. A search of the vehicle revealed a Glock model 45, 9 mm pistol. Binette denied owning or possessing the firearm, but the passenger stated that Binette had handed him the weapon as the officers were approaching the vehicle, and he had stashed it under the seat. The investigation revealed that Binette had purchased the firearm in March 2024, and he admitted possessing the Glock in numerous recorded phone calls from Androscoggin County Jail. Binette was precluded from possessing a firearm due to an October 2023 felony conviction for criminal threatening with a dangerous weapon.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case with assistance from the Lewiston Police Department.
Project Safe Neighborhoods: This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results. For more information about Project Safe Childhood, visit https://www.justice.gov/usao-me/psn.
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Plaquemines Parish Man Sentenced for Fentanyl, Heroin and Cocaine Distribution ConspiracyRead the Press Release
NEW ORLEANS, LOUISIANA – CHRISTOPHER GLASS (“GLASS”), age 46, a resident of Plaquemines Parish, Louisiana, was sentenced on November 21, 2024 to time served. The Court’s sentence consists of a 16-month term of imprisonment, with the defendant already having served the past 18 months in federal custody. Upon release from imprisonment, GLASS was sentenced to 3 years of supervised release, and a mandatory $100 special assessment fee, announced U.S. Attorney Duane A. Evans.
GLASS previously pled guilty to conspiracy to distribute, and possess with the intent to distribute, quantities of fentanyl, heroin, and cocaine, in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(C), and 846.
According to court records, Drug Enforcement Administration (DEA) agents started investigating GLASS in June 2020 as a narcotics distributor in the New Orleans area. The investigation involved the use of a court authorized, Title III, wiretap investigation. During the wiretap investigation, agents overheard dozens of recorded telephone calls that revealed GLASS was conspiring with others to distribute cocaine, as well as pills containing heroin and fentanyl.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The Drug Enforcement Administration and the Plaquemines Parish Sheriff’s Office led the investigation. The prosecution was handled by Assistant United States Rachal Cassagne of the Narcotics Unit.
Pittsburg County Resident Pleads Guilty to Federal Firearm ChargeRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Jerry Brandon Pearce, age 55, of Indianola, Oklahoma, entered a guilty plea of one count of possessing an unregistered explosive device.
The Indictment alleged that on September 5, 2023, in the Eastern District of Oklahoma, Pearce knowingly possessed a destructive device not registered to him in the National Firearms Registration and Transfer Record, as required by law.
The charge arose from an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Honorable Jason A. Robertson, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, accepted the plea and ordered the completion of a presentence investigation report. Pearce was remanded into the custody of the United States Marshals Service pending sentencing.
Assistant U.S. Attorneys Richard Lorenz and Jacob R. Parker represented the United States.
Owner of Florida Labor-Staffing Companies Pleads Guilty to Tax Fraud and Money LaunderingRead the Press Release
A Ukrainian national pleaded guilty today to conspiracy to defraud the United States and conspiracy to commit money laundering.
According to court documents and statements made in court, between August 2007 and August 2021, Oleg Oliynyk and others owned and operated a series of labor-staffing companies in South Florida, including Paradise Choice LLC, Paradise Choice Cleaning LLC, Tropical City Services LLC and Tropical City Group LLC. Through these staffing companies, Oliynyk and others facilitated the employment of non-resident aliens in the hospitality industry who were not authorized to work in the United States and helped evade the assessment and collection of federal income and employment taxes. Oliynyk and his codefendants also laundered more than $11 million of proceeds from their scheme.
A sentencing hearing will be set at a later date. Oliynyk faces a maximum penalty of 20 years in prison for the conspiracy to commit money laundering charge and a maximum penalty of five years in prison for the conspiracy to defraud the United States charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Markenzy Lapointe for the Southern District of Florida made the announcement.
Homeland Security Investigations and IRS Criminal Investigation are investigating the case.
Senior Litigation Counsel Sean Beaty and Trial Attorneys Matthew B. Hicks and Wilson R. Stamm of the Tax Division and Assistant U.S. Attorney Christopher Clark for the Southern District of Florida are prosecuting the case.
Orlando Man Indicted for Possessing an Unregistered Machinegun as A Convicted FelonRead the Press Release
Orlando, Florida – United States Attorney Roger B. Handberg announces the return of an indictment charging Timothy Stephens (25, Orlando) with possessing a firearm as a convicted felon and possessing an unregistered machinegun. If convicted of the felon in possession offense, he faces up to 15 years in federal prison. If convicted of possessing an unregistered machinegun, Stephens faces up to 10 years in federal prison.
According to the indictment, on October 17, 2024, Stephens, having previously been convicted of a felony, was found in possession of a Glock Model 30 with a machinegun conversion device installed. As a convicted felon, Stephens is prohibited from possessing a firearm or ammunition under federal law. Additionally, the machinegun was not registered to Stephens in the National Firearms Registration and Transfer Record.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Bureau of Alcohol, Tabacco, Firearms and Explosives and the Orlando Police Department. It will be prosecuted by Assistant United States Attorney Kaley Austin-Aronson.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Ohio Man Indicted in South Carolina for Exploiting and Stalking Minors on Social MediaRead the Press Release
COLUMBIA, S.C. — A federal grand jury has returned a six-count indictment charging Jack Keegan Davis, 21, of Columbus, Ohio, with coercion and enticement of minors, production, distribution, and possession of child pornography*, and cyberstalking.
The indictment alleges that from August 2022 through October 2024, Davis used at least four social media platforms and 130 social media display names to pose as a minor and interact with minors on social media. Davis used those accounts to persuade minor victims to engage in sexual conduct and to produce child sexual abuse material. Davis allegedly received that material, possessed it, and distributed some of that content to other minors, including classmates of one of his victims. He also allegedly used the material to harass and threaten at least one of his minor victims and their family. Although one minor obtained a restraining order, Davis continued to contact the minor and the minor’s family after the no contact order was served on Davis.
Davis also allegedly threatened to kill one minor and the minor’s family, including: “Im going to kill [Victim] and [Victim’s] family,” “[Victim] ur ded,” “Im going to f***ing kill [Victim],” “I am not kidding I am going to kill [Victim] and [Victim’s] family,” “If [Victim] doesn’t answer me I’m going to [Victim’s] house,” and “I won’t stop until you’re dead.” Davis allegedly shared the victim’s home address, said he would be there when the minor’s father was out of town, promised “revenge if it’s the last thing I do,” and wrote, “lol I just want [Victim] to suffer.” Davis is alleged to have minor victims in multiple states, including South Carolina.
FBI agents arrested Davis in the Southern District of Ohio, where he was ordered detained following a contested bond hearing. He was transported by the U.S. Marshals to South Carolina and appeared before United States Magistrate Judge Paige J. Gossett in Columbia, where he was ordered detained pending trial. United States District Judge Joseph F. Anderson will preside over the case.
Davis faces a mandatory minimum of 15 years in prison on the production of child pornography charge and a maximum of life on the coercion and enticement charge. Davis also faces up to a $250,000 fine, restitution, a special assessment of $5,000, supervision by the U.S. Probation Office for a period of up to life following any term of incarceration, and potential sex offender registry requirements.
The case was investigated by the FBI Columbia Field Office, the Kershaw County, South Carolina Sheriff’s Office, the Franklin County, Ohio Sheriff’s Office, and critical assistance was provided by the U.S. Attorney’s Office for the Southern District of Ohio.
U.S. Attorneys Elliott B. Daniels and Ariyana N. Gore are prosecuting the case.
U.S. Attorney Adair F. Boroughs stated that all charges in the indictment are merely accusations and that defendants are presumed innocent unless and until proven guilty.
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NOTE: While the current federal statutes still contain the term “child pornography,” experts in the field now recognize “child sexual abuse material” as the more accurate terminology.
Ocala Tax Preparer Sentenced to Federal Prison for Defrauding Clients and IRSRead the Press Release
Ocala, Florida – United States District Judge Thomas Barber has sentenced Steven Cabrera to three years in federal prison for assisting in preparing false tax documents, submitting false tax documents, and willfully failing to file tax returns. Cabrera entered a guilty plea on August 16, 2024.
According to court documents, Cabrera worked as a tax preparer in the Ocala area. From 2017 to 2019, Cabrera engaged in widespread tax fraud, adding unauthorized and fraudulent deductions and credits to his clients’ tax returns without their knowledge and then embezzling the additional tax return proceeds for his own use. Cabrera also defrauded clients directly by telling them to make out checks to “IRS” and pledging that he would send the funds to the IRS himself. Instead, he deposited those checks into an account he controlled for a fictitious business, “International Resort Services.” Cabrera’s years of fraudulent activity caused total losses of nearly $1 million.
“It’s certainly a bold move to invoke the name of the ‘IRS’ when attempting to defraud not only the government, but people who are putting their trust in you,” said Ron Loecker, Special Agent in Charge of IRS-Criminal Investigation’s Tampa Field Office. “The real ‘IRS’ is always going to show up, investigate, and put a stop to these types of scams. If your return preparer exhibits any of the behaviors shown in this case, please visit IRS.gov and click on the ‘Get your tax record’ button. From there, you can verify the accuracy of the information on your tax record and, if necessary, report any fraudulent or inaccurate information.”
This case was investigated by the Internal Revenue Service - Criminal Investigation. It was prosecuted by Assistant United States Attorney William S. Hamilton.
New Orleans Man Sentenced for Distributing FentanylRead the Press Release
NEW ORLEANS, LOUISIANA –CHARVAN MORRIS (“MORRIS”), age 27, was sentenced on November 21, 2024 by U.S. District Judge Barry W. Ashe to 24 months in prison followed by three years of supervised release, along with a $200 mandatory special assessment fee, after previously pleading guilty to two counts of distributing fentanyl, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C).
According to court documents, in February of 2024, MORRIS made three sales of fentanyl to a confidential informant for the Bureau of Alcohol, Tobacco, Firearms, and Explosives at a motel on Airline Highway. Over the three sales, MORRIS distributed more than nine ounces of fentanyl. MORRIS made one of the sales from the driver’s seat of a vehicle, all while the front seat passenger was armed with an AR-style pistol.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorney David Berman of the Violent Crime Unit is in charge of the prosecution.
Multi-Jurisdictional Law Enforcement Collaborative Dismantles Four Criminal Organizations Operating Throughout Southwestern BaltimoreRead the Press Release
Baltimore, Maryland – Today, the U.S. Attorney’s Office for the District of Maryland joined the Office of the State’s Attorney for Baltimore City (SAO) — and its Major Investigations Unit — the Mayor’s Office, Baltimore Police Department (BPD), U.S. Drug Enforcement Administration (DEA), and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to share details about the largest takedown in Baltimore in decades.
This investigation uncovered four separately operated criminal organizations whose primary enterprise was trafficking narcotics. Ivan Roman and Andre Berry are facing federal charges for firearm-related offenses and possession with the intent to distribute narcotics. The SAO announced charges against 40 individuals for drug trafficking and firearm offenses that occurred throughout southwest Baltimore City. This takedown is part of the City’s Group Violence Reduction Strategy (GVRS). Ongoing violence in these areas was the catalyst for the investigation. While examining violent feuds in these regions, law enforcement uncovered the existence of at least four separate criminal organizations that engaged in the daily street-level distribution of narcotics.
During the course of the nearly year-long investigation, law enforcement employed various investigative methods. This included executing search-and-seizure warrants and recovering approximately 65 firearms of varying calibers, including ghost guns and firearms equipped with rapid-fire trigger activators, which allow the firearms to operate as fully automatic weapons. Additionally, law enforcement recovered body armor, approximately 7.25 kilograms of suspected cocaine, approximately three kilograms of suspected heroin/fentanyl mixture, approximately 110 pounds of suspected cannabis, approximately $373,275.50 — believed to be proceeds from the sale of narcotics — and 15 stolen automobiles.
“Operation Tornado Alley comes on the heels of our newly executed Baltimore Organized Crime Drug Enforcement Task Force (OCDETF) Strike Force memorandum of understanding between the Maryland U.S. Attorney’s Office and our federal, state, and local law enforcement partners,” said U.S. Attorney Erek L. Barron. “This operation proves that we’ve taken the Strike Force to the next level in combating violent crime in the Baltimore region. Violent offenders better beware, we are a force-multiplier for the work of our state and local partners on the ground.”
These four criminal organizations conducted criminal activity in the surrounding areas of the 1700 block of Lemmon Street, 2000 block of W. Pratt Street, 500 block of Millington Avenue, and 2800 block of Edmondson Avenue. The SAO has secured 38 state indictments with 35 defendants, involving four conspiracies.
“The dismantling of multiple criminal organizations and the arrest of numerous individuals accused of committing violence in our city is a significant victory for the people of Baltimore. Simultaneously taking down this many criminal enterprises requires skilled collaboration across various levels of law enforcement, and this achievement underscores the exceptional effectiveness of our prosecutors, agents, investigators, detectives, police officers, and community partners working tirelessly to make our city a safer place,” said State’s Attorney Ivan J. Bates. “Dismantling these operations marks a significant step forward in our mission to protect our communities from the dangers of illegal drugs and violence. We are not only disrupting the flow of dangerous narcotics but also sending a strong message that Baltimore will not tolerate criminal operations that threaten the safety and well-being of our residents. Our office remains committed to fighting crime on all fronts and working with our community to create a safer, healthier Baltimore for all.”
“This takedown is a powerful example of what we can achieve through strong partnerships and focused investigations,” said Police Commissioner Richard Worley. “By removing dangerous individuals, illegal firearms, and drugs from our streets, we are taking significant steps toward making Baltimore a safer city. The hard work and dedication of our officers and partner agencies highlight our shared commitment to the Group Violence Reduction Strategy and working together to reduce violence and protect our communities. We remain relentless in our pursuit of those who bring harm to our neighborhoods.”
“We are battling an unprecedented drug poisoning epidemic that has claimed thousands of American lives. I’m talking about the Opioid/Fentanyl Poisoning Crisis. Together, we are sending a powerful and direct message to drug trafficking organizations, their leaders, and those who enable their illegal and violent activities: We will not tolerate these actions and are committed to relentlessly pursuing justice against them,” said SAC Jarod Forget of the DEA’s Washington Division.
“ATF is proud to collaborate with our state and local partners to investigate these violent criminal organizations. These charges are a critical step forward in holding those who would commit violence in the city of Baltimore accountable. ATF remains dedicated to bringing those who illegally possess and use firearms to justice,” said SAC Toni Crosby, Baltimore Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
“This is what GVRS’s accountability component looks like. Working together, sharing intelligence, collaborating with prosecutors on law enforcement investigations, and leveraging our collective resources to hold those who violate the strategy’s mandate to put down the guns and make the decision to perpetuate harm and violence accountable,” said Mayor Brandon M. Scott. “I want to thank State’s Attorney Bates, US Attorney Barron, Governor Moore, GOCCP, our Federal partners at the ATF and DEA, BPD’s Group Violence Unit, Anne Arundel County Police, Baltimore County Police, and our team at MONSE for doing the investigative and enforcement work necessary to incapacitate violent groups plaguing our communities.”
Law enforcement identified multiple sources supplying fentanyl and cocaine, some of whom were importing large quantities of narcotics from outside of the state. This included approximately 3.4 kilograms of suspected cocaine couriered from New York into Maryland on behalf of the criminal organization operating in and around the 500 block of Millington Avenue. The criminal organization maintained caches of firearms to protect their supply of narcotics and secure their territory.
In March 2024, BPD executed search warrants in the 500 block of Millington Avenue, which resulted in the seizure of five rifles, three handguns, and body armor. A rival organization — operating in and around the 1700 block of Lemmon Street — engaged in drug trafficking, firearm trafficking, and car thefts to finance and further their enterprise. As a result of proactive enforcement during this investigation, law enforcement thwarted numerous violent incidents, including the prevention of an armed robbery and shutting down a violent territorial dispute.
On November 19, 2024, BPD executed 16 search-and-seizure warrants with the assistance of the DEA, the ATF, the Federal Bureau of Investigation (FBI), Maryland State Police (MSP), the Baltimore County Police Department, the Howard County Police Department, the Harford County Police Department, the Baltimore City Fire Department, and the Baltimore City Health Department Animal Control, pertaining to the criminal organizations operating in and around the 2800 block of Edmondson Avenue, the 500 block of Millington Avenue, and the 1700 block of Lemmon Street. In total, law enforcement recovered approximately 525 grams of suspected heroin/fentanyl mixture, approximately 340 grams of suspected cocaine, six firearms varying in caliber, and $9,701, believed to be proceeds from the sale of narcotics.
Defendants have been charged with offenses such as Managing and Participating in a Criminal Organization, Conspiracy to Distribute Narcotics, Firearm Drug Trafficking, Unlawful Sale of a Regulated Firearm, Firearm Possession by a Prohibited Person, Distribution of Fentanyl, and Distribution of Cocaine. Some have also been charged with offenses such as Conspiracy to Commit Murder, Attempted Murder, and Armed Robbery. The investigation is ongoing concerning additional acts of violence committed by members of criminal organizations to further the interests of their enterprise.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations. The specific mission of the Baltimore Strike Force is to identify, disrupt, and dismantle violent drug trafficking, money laundering, and transnational criminal organizations to reduce drug-related and/or gang violence in the Baltimore metropolitan and surrounding areas. The Baltimore Strike Force is comprised of agents and officers from the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Drug Enforcement Administration, the Federal Bureau of Investigation, the Department of Homeland Security, the United States Marshals Service, the United States Secret Service, United States Postal Inspection Service, the Maryland State Police, the Baltimore Police Department, the Baltimore Sheriff’s Office, the Baltimore County Police Department, the Maryland Transportation Authority, and the Maryland Department of Public Safety and Correctional Services.
U.S. Attorney Erek L. Barron commended the DEA, ATF, and FBI for their work in the investigation. Mr. Barron also thanked the Baltimore Police Department, other law enforcement agencies, the Assistant State’s Attorneys with the Office of the Baltimore City State’s Attorney, and Assistant U.S. Attorney Michael C. Hanlon, who is prosecuting the federal case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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Mobile Man Sentenced to 30 Years in Prison for Secretly Recording Children in the BathroomRead the Press Release
MOBILE, AL – Matthew Allyn McDaniel, age 39, was sentenced today to 30 years in prison after entering guilty pleas to two counts of attempting to sexually exploit a minor. McDaniel entered his guilty pleas on August 29, 2024.
According to court documents, in the month of December 2023, law enforcement received a tip from an internet service provider that there was an online storage account associated with an address in Theodore, Alabama, which contained child sexual abuse material (“CSAM”). The email address associated with the account was “[email protected].” On December 12, 2023, law enforcement obtained a state search warrant allowing them to search the account associated with [email protected]. In that account, law enforcement discovered approximately 249 videos of CSAM.
On January 9, 2024, law enforcement obtained a state residential search warrant for the address associated with email address and the online storage account. Present at the address was McDaniel. A cell phone was recovered from under the mattress in McDaniel’s room. McDaniel was interviewed. He admitted that the cell phone found belonged to him, and he admitted hiding it when he heard law enforcement enter the residence. A forensic examination was performed on McDaniel’s cell phone. The examiner discovered evidence that McDaniel had used email addresses pedvid1, pedvid2, pedvid3, etc., up through [email protected]. There were approximately 25 images of CSAM found on the phone. Importantly, there were 7 images that appeared be taken via a hidden camera in a bathroom, in front of a shower. The images show two different minor females drying off and getting dressed. The minors were identified, and were 13 years old at the time of the recording.
At sentencing, Chief United States District Judge Beaverstock imposed a 360-month sentence of incarceration and a 15-year term of supervised release upon his future release. During his term of imprisonment, McDaniel will be subject to sex offender treatment, substance abuse testing and treatment, and mental health treatment. McDaniel will be required to register as a sex offender and is to have no contact with minors. McDaniel was ordered to pay $200 in special assessments and to pay $1,337 in restitution to his victims.
The Federal Bureau of Investigation and the Mobile County Sheriff’s Office Internet Crimes Against Children Unit investigated the case. Assistant U.S. Attorneys Kacey Chappelear and Tandice Blackwood prosecuted the case on behalf of the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit https://www.justice.gov/psc/publications-resources
Missouri Felon Admits $830,000 Fraud, Gun CrimesRead the Press Release
ST. LOUIS – A convicted felon has admitted illegally acquiring dozens of guns and bilking two investors out of a total of $830,000.
Dennis Latour, 41, pleaded guilty November 20 to one count of being a felon in possession of a firearm, one count of conspiracy to purchase one or more firearms for a convicted felon and 13 counts of wire fraud. Jennifer Keegan, 50, pleaded guilty Monday, November 25, in U.S. District Court to one felony count of conspiracy to purchase one or more firearms for a convicted felon.
Keegan admitted that starting at least in February of 2023, she and Latour began purchasing multiple firearms. Keegan filled out the required paperwork, despite knowing that many of the guns would be possessed and/or used by Latour, a convicted felon who is barred from possessing firearms.
On Feb. 24, 2023, Latour tried to buy a Barrett .50-caliber rifle and ammunition from an online firearms retailer but was rejected because of concerns about his criminal history. On March 1, 2023, Keegan and Latour bought a Barrett rifle and another rifle from a retailer in St. Charles, Missouri.
Three days later, Keegan bought two rifles from a St. Charles, Missouri sporting goods store. On March 21, she bought five more guns from a Springfield, Missouri sporting goods store, and the next day she returned and bought a pistol.
On April 4, 2023, Keegan picked up a rifle and two pistols from a Pevely, Missouri gun store after buying them online. Latour was with her and had a pistol. Fifteen days later they returned and purchased a shotgun.
On Sept. 26, 2023, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) performed a court-approved search of the home the couple shared in Des Peres, Missouri. They found 27 firearms in a “vault” room, and two pistols in the couple’s bedroom, their plea agreements say.
Latour also admitted as part of his plea agreement than beginning in June 2022, be hatched a scheme to bilk investors. Latour falsely claimed to have made successful investments in the cannabis industry and told two victims that they could participate by “piggybacking” on his investment. Latour used the money to fund his personal lifestyle and to pay for items such as firearms, vehicles, and jet skis. One victim lost $718,271 and the other lost $112,340, Latour’s plea agreement says.
Latour is scheduled to be sentenced March 12, 2025. Keegan is scheduled to be sentenced March 11.
The felon in possession charge and conspiracy charge each carry a potential sentence of up to 15 years in prison, a $250,000 fine or both prison and a fine. The wire fraud charges carry a potential sentence of up to 20 years in prison, a $250,000 fine or both.
The ATF investigated the case. Assistant U.S. Attorney Jennifer Szczucinski is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Mississippi Man Sentenced to 8.5 Years for Traveling to Wisconsin to Assault 12-Year-Old ChildRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Reginal Wright, 38, Indianola, Mississippi, was sentenced November 22, 2024, by U.S. District Judge William M. Conley to 102 months in prison for traveling across state lines to engage in illicit sexual conduct with a minor. The term of imprisonment will be followed by a 10-year term of supervised release. Wright pleaded guilty to this charge on August 20, 2024.
On November 7, 2023, Wright traveled to Madison and picked up a 12-year-old girl from her foster home. Wright sexually assaulted the girl while in Wisconsin and then later in Tennessee and Florida. Law enforcement was later able to track the girl’s location and eventually recovered her from a Greyhound Bus traveling from Florida to Atlanta.
At sentencing, Judge Conley found that Wright took advantage of a child for his own sexual gratification. Judge Conley also noted the “gaping age difference” between Wright and the child, who Judge Conley described as vulnerable and clearly childlike. Judge Conley said that Wright made a “sordid decision” and caused the child trauma that she may not fully understand until later.
The charge against Wright was the result of an investigation conducted by the Madison Police Department, Federal Bureau of Investigation, Florida Highway Patrol, Wisconsin State Patrol, Medley Florida Police Department, Fort Pierce Florida Police Department, Cocoa Florida Police Department, Lake City Florida Police Department, and the Columbia County Florida Sheriff’s Office. Assistant U.S. Attorney Elizabeth Altman prosecuted this case.
This investigation was a part of Project Safe Childhood (PSC), a nationwide initiative to combat child sexual exploitation and abuse. Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Michigan Man Pleads Guilty to Fentanyl CrimeRead the Press Release
BECKLEY, W.Va. – Jesse Robert Phillips, 40, of Burtchville, Michigan, pleaded guilty today to possession with intent to distribute fentanyl.
According to court documents and statements made in court, Phillips admitted that he possessed approximately 19.8 grams of fentanyl on April 30, 2024, in Beckley that he intended to distribute. Phillips further admitted that he had been selling fentanyl in West Virginia while residing at a Mount Hope residence and used two individuals at the residence to sell fentanyl.
Phillips is scheduled to be sentenced on March 21, 2025, and faces a maximum penalty of 20 years in prison, up to three years of supervised release, and a $1 million fine. Phillips has also agreed to forfeit one firearm and abandon three other firearms that were seized on April 30, 2024.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Beckley/Raleigh County Drug and Violent Crime Unit, which consists of officers from the West Virginia State Police, the Raleigh County Sheriff’s Department, and the Beckley Police Department.
United States Magistrate Judge Omar J. Aboulhosn presided over the hearing. Assistant United States Attorney Alexander A. Redmon is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:24-cr-142.
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- Mexican National Sentenced for Illegally Entering the US After a Prior Removal
Metairie Man Guilty of Federal Drug and Gun OffensesRead the Press Release
NEW ORLEANS, LOUISIANA – United States Attorney Duane A. Evans announced that ROOSEVELT COCKHERAN (“COCKHERAN”) , age 40, formerly a resident of Metairie, Louisiana, pled guilty on November 22, 2024, before United States District Judge Susie Morgan to Conspiracy to Possess with Intent to Distribute and, to Distribute Cocaine, in violation of Title 21, United States Code, Section 846; Unlawful Use of a Communications Facility, to Further a Drug Trafficking Crime, in violation of Title 21, United States Code, Section 843(b); Possession with Intent to Distribute Cocaine, in violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(C); and Felon in Possession of a Firearm, in violation of Title 18, United States Code, Section 922(g)(1). COCKHERAN also admitted that he is a prior drug offender and as such, is subject to enhanced penalties as to the conspiracy charge.
As to Conspiracy to Possess with Intent to Distribute, and Distribute Cocaine, COCKHERAN faces a minimum term of imprisonment of 10 years and up to a maximum of life imprisonment, a fine of up to $8,000,000 and, at least 8 years of supervised release. As to Unlawful Use of a Communications Facility, COCKHERAN faces up to 4 years imprisonment, a fine of up to $250,000 and, up to 1 year of supervised release. As to Possession with Intent to Distribute Cocaine, COCKHERAN faces up to 20 years imprisonment, a fine of up to $1,000,000 and, at least 3 years supervised release. As to being a Felon in Possession of a Firearm, COCKHERAN faces up to 15 years of imprisonment, up to a $250,000 fine and, up to three years of supervised release. Each offense also carries a mandatory special assessment fee of $100.00.
Judge Morgan ordered sentencing to occur on February 25, 2025.
Court documents reflect that COCKHERAN was arrested by Jefferson Parish Sheriff’s Office (JPSO) deputies after they recovered several plastic bags containing cocaine and crack cocaine, a black digital scale, a Black Taurus Model PT 24/7 PRO handgun with a magazine containing 11 live rounds of .45 ammo and his cell phone, from his pick-up truck. Examination of the cell phone by JPSO experts and special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, revealed text messages, photographs and other information documenting his drug trafficking activities.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Jefferson Parish Sheriff’s Office. Assistant United States Attorney Mark A. Miller of the Narcotics Unit is assigned the prosecution.
Mesa Man Sentenced to Eight Years for Attempted Smuggling of Weapons and Drug Trafficking with a FirearmRead the Press Release
TUCSON, Ariz. – Nestor Hernandez-Morales, 27, of Mesa, was sentenced last week by U.S. District Court Judge Angela M. Martinez to 96 months in prison, followed by three years of supervised release. Hernandez-Morales pleaded guilty to Possession with Intent to Distribute Methamphetamine, Possession of a Firearm in Furtherance of Drug Trafficking Activity, and Attempted Smuggling of Firearms to Promote Drug Trafficking Activity on June 18, 2024.
On February 1, 2023, Hernandez-Morales made arrangements with individuals from Mexico to purchase a .50 caliber semi-automatic rifle and a 5.56x45mm caliber belt-fed rifle for $26,000. Hernandez-Morales intended to purchase these particular weapons because these individuals were involved in drug trafficking organizations in Mexico and knew these types of guns were valuable to promote and support their drug trafficking activities. Hernandez-Morales paid $26,000 for the two rifles as part of an undercover sting, and was soon after arrested by federal and local law enforcement. A subsequent search of his residence revealed 6.6 kilograms of a substance that contained methamphetamine. Law enforcement discovered that he also possessed a Beretta handgun that he admitted he used to protect himself while he traveled and to secure the drugs, money, and munitions he stored at his residence. An additional nine firearms were discovered at his residence.
This investigation was a collaborative effort between federal law enforcement agencies and is part of the Organized Crime Drug Enforcement Task Forces (OCDETF) initiative in Southern Arizona that is being led by the Arizona Strike Force located in Tucson. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Homeland Security Investigations, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration and the Arizona Department of Public Safety conducted the investigation in this case. Assistant U.S. Attorney David Petermann, District of Arizona, Tucson, handled the prosecution.
CASE NUMBER: CR-23-00285-TUC-AMM
RELEASE NUMBER: 2024-162_Hernandez-Morales# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.Memphis Man Sentenced to over 26 Years of Imprisonment in Connection with Multiple Hotel RobberiesRead the Press Release
Memphis, TN – Timothy Woodard, 26, was sentenced to 315 months in federal prison for his convictions related to a string of hotel robberies committed in Memphis between October and December of 2022. Reagan Fondren, Acting United States Attorney for the Western District of Tennessee, announced the sentence today.
On October 19, 2022, Woodard entered a hotel and pointed a handgun at a clerk. Woodard demanded money from the cash drawer. After the register was opened, Woodard took approximately $400. Woodard then forced the clerk to open the hotel safe by threatening to kill him if he did not comply. The clerk opened the safe, and Woodard took $300 from it.
On December 19, 2022, Woodard entered a second hotel and waved a semi-automatic handgun at two desk clerks before demanding money from the cash registers. Woodard took approximately $1,500 from the registers.
Approximately two hours later, on the same date, Woodard entered a third hotel with another person. Woodard jumped over the counter, pointed a semi-automatic handgun at the clerk, and demanded money from the register and the clerk’s wallet. Woodard took approximately $800-$1000 from the register and $300-$500 from the clerk.
In December 2023, a grand jury in the Western District of Tennessee returned a six-count indictment charging Woodard with three counts of “robbery affecting commerce” (Hobbs Act Robbery), in violation of 18 U.S.C. § 1951 and three counts of brandishing a firearm during and in relation to a crime of violence, in violation of 18 U.S.C. § 924(c). On May 15, 2024, Woodard pled guilty to all counts.
On November 21, 2024, United States District Court Judge Mark S. Norris sentenced Woodard to 315 months in prison, to be followed by three years of supervised release. There is no parole in the federal system.
This investigation was conducted by the Federal Bureau of Investigation’s Safe Streets Task Force along with the Memphis Police Department.
Acting U.S. Attorney Fondren thanked Assistant United States Attorney Lorraine Craig, who prosecuted this case on the government’s behalf, as well as the law enforcement partners who investigated this case.
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For more information, please contact the Media Relations Team at [email protected]. Follow the U.S. Attorney’s Office on Facebook or on X at @WDTNNews for office news and updates.
Memphis Man Sentenced for Possession of Fentanyl and Multiple FirearmsRead the Press Release
Memphis, TN – A Memphis man has been sentenced to over nine years of imprisonment for possession of over 200 grams of fentanyl and numerous firearms discovered during a search of his residence. Reagan Fondren, Acting United States Attorney for the Western District of Tennessee, announced the sentence today.
According to information presented in court, in May 2023, agents with Homeland Security Investigations (HSI) Memphis and detectives with the Bartlett Police Department began investigating the distribution of large amounts of fentanyl in the Memphis area. During the investigation, law enforcement identified Myshun Jefferson, 21, as a fentanyl distributor and learned that he was distributing narcotics from two Memphis locations. The agents and detectives arranged for at least one controlled purchase at each property.
Based on information obtained from the controlled purchases, search warrants were executed on the two properties. Agents and detectives discovered Jefferson at the residence on Baywood Avenue, along with more than 200 grams of a mixture and substance containing fentanyl and four firearms.
One of those four firearms was a Glock pistol discovered in a sofa near Jefferson when law enforcement officers entered the home. This pistol had an unregistered aftermarket device allowing the firearm to act as a machine gun, also known as a “switch,” installed. Two of the other firearms discovered during the search of the residence were also unlawfully altered: a second Glock pistol, also fitted with an automatic “switch” device, and a JTS 12-gauge illegal short-barrel shotgun.
Jefferson was indicted in September 2023 for possession of fentanyl with intent to distribute and possession of a firearm in furtherance of drug trafficking activity. On September 4, 2024, Jefferson entered a guilty plea on the two-count indictment.
On November 19, 2024, United States District Court Judge Mark S. Norris sentenced Jefferson to 117 months of incarceration with a three-year period of supervised release to follow. There is no parole in the federal system.
“HSI, alongside our law enforcement partners across Tennessee, will continue to pursue those who pose a significant threat to public safety through the illegal possession of firearms and contribute to the opioid crisis,” said Homeland Security Investigations Deputy Special Agent in Charge Colin Jackson. “Today’s sentence reflects the serious nature and consequences of engaging in the illegal possession and distribution of fentanyl, a drug that continues to claim lives and devastate communities.”
This case was investigated by HSI Memphis and the Bartlett Police Department. The United States Customs and Border Patrol Laboratories in Savannah, Georgia assisted in this investigation.
Acting U.S. Attorney Reagan Fondren thanked Assistant United States Attorney Bryce H. Phillips who prosecuted this case, as well as the law enforcement partners who investigated the case.
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For more information, please contact the Media Relations Team at [email protected]. Follow the U.S. Attorney’s Office on Facebook or on X at @WDTNNews for office news and updates.
Massachusetts Man Who Threatened to Kill Members of Jewish Community and Bomb Places of Worship Pleads GuiltyRead the Press Release
BOSTON – A Millis, Mass. man pleaded guilty today in federal court in Boston to threatening to kill members of the Jewish community and bomb Jewish synagogues.
John Reardon, 59, pleaded guilty to one count of obstruction of free exercise of religious beliefs by threat of force, one count of transmitting in interstate commerce a threat to injure a person and one count of stalking using a facility of interstate commerce. U.S. District Court Judge Julia E. Kobick scheduled sentencing for Aug. 14, 2025. In January 2024, Reardon was arrested and charged.
“This defendant’s threats to bomb synagogues and kill Jewish children stoked fear in the hearts of congregants at a time when Jews are already facing a disturbing increase in threats,” said Attorney General Merrick B. Garland. “No person and no community in this country should have to live in fear of hate-fueled violence. The Justice Department is committed to using the full force of our investigative and prosecutorial authorities to root out these threats and ensure that all people are protected in the expression of their faith.”
“John Reardon now stands convicted of inflicting terror on the greater Boston Jewish community by threatening violence against fellow residents of Massachusetts solely because they of their Jewish faith. This insidious, pernicious conduct must be met with the full force of the criminal justice system to make sure victims and potential offenders alike know that hate crimes and acts of antisemitism will never be tolerated,” said United States Attorney Joshua S. Levy.
“When John Reardon threatened to kill members of the Jewish community and bomb places of worship, the FBI and our partners immediately mobilized. After all, you cannot call and threaten people with violent physical harm and not face repercussions” said Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation Boston Division. “People of all races and faiths deserve to feel safe in their communities. With today’s guilty plea, John Reardon is now a convicted felon.”
On the morning of Jan. 25, 2024, Reardon called a synagogue in Attleboro, Mass. and left a voicemail that included threats of violence.
Within 10 minutes of leaving the voicemail at the Congregation Agudas Achim, Reardon called another local Synagogue in Sharon, Mass. and left a voicemail that included threats of violence.
Reardon was arrested by law enforcement after the calls were made. Following his arrest, investigators learned that Reardon had called the Israeli Consulate in Boston 98 times between Oct. 7, 2023 and Jan. 29, 2024. In many of those calls, Reardon made harassing and intimidating statements.
The charge of obstruction of free exercise of religious beliefs by threat of force provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000. The charge of transmitting in interstate commerce a threat to injure a person provides for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000. The charge of stalking using a facility of interstate commerce provides for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
Attorney General Garland, U.S. Attorney Levy and FBI SAC Cohen made the announcement today. The Attleboro and Wrentham Police Departments; Massachusetts State Police; Bristol County District Attorney’s Office; and Bristol County Sheriff’s Office provided valuable assistance in the investigation. Assistant U.S. Attorney Torey B. Cummings of the Human Trafficking & Civil Rights Unit is prosecuting the case.
Massachusetts Man Sentenced to Federal Prison for 15 months for Stealing from a Nonprofit Working to Prevent Veteran SuicidesRead the Press Release
CONCORD – David Duren of Haverhill, Massachusetts was sentenced today in federal court for attempting to steal almost $73,000 from a nonprofit health care provider, U.S. Attorney Jane E. Young announces.
David Duren, a/k/a Dawud Hakiem Duren, 49, was sentenced by U.S. District Court Judge Joseph N. Laplante to 15 months in prison and 3 years of supervised release. On July 1, 2024, Duren pleaded guilty to wire fraud.
“The defendant is a recidivist fraudster who used a sophisticated scheme to steal money intended to help vulnerable veterans,” said U.S. Attorney Young. “He spent the stolen money on items like a cruise, landscaping at his home and OnlyFans.com. His brazen criminal conduct was compounded by the fact that he stole from a program dedicated to preventing veteran suicides. Today’s sentence should be a warning to others that stealing from veterans will not be tolerated and will result in incarceration.”
“Today’s sentencing sends the message that the VA Office of Inspector General will work diligently to hold accountable those who would egregiously steal funds intended to help our most vulnerable veterans in crisis,” said Special Agent in Charge Christopher Algieri with the Department of Veterans Affairs Office of Inspector General’s Northeast Field Office. “The VA OIG thanks the U.S. Attorney’s Office and our law enforcement partners for their excellent work in this case.”
Duren was a program manager for a nonprofit health care provider in Nashua, New Hampshire. He oversaw a program funded by a $750,000 Staff Sergeant Fox Suicide Prevention grant. The grant was awarded by the United States Department of Veterans Affairs to provide treatment and services to veterans at risk of suicide. At Duren’s recommendation, the health care provider hired a “faith-based organization” called “E3 Foundation” to provide services funded by the Staff Sergeant Fox grant. E3 Foundation was in turn purportedly led by a “Dr. Michael Rapp.” However, unbeknownst to the victim, E3 Foundation was a shell company and Dr. Rapp did not exist. Duren was pretending to be “Dr. Michael Rapp” on emails and calls.
Duren was able to fraudulently obtain almost $50,000 in Staff Sergeant Fox program funds and tried to obtain an additional $24,000 before being discovered. He used a website called “Invoice Generator” to create fake invoices. Duren offered to personally hand-deliver payments to E3 Foundation and Dr. Rapp at their regularly scheduled meetings. Duren and E3 Foundation did not provide the services and products that he billed for.
After the fraud was uncovered, Duren took steps to attempt to conceal his wrongdoing. For example, he emailed the victim a document containing notes of a “meeting” between himself and Dr. Rapp dated July 28, 2023, but the metadata proved he created the document a month after that date. Duren also provided the victim a phone number for Dr. Rapp, who replied via email that he was on vacation in Europe. Shortly after, Duren created a voicemail for Dr. Rapp he titled “Rapp vacation.” And, when law enforcement interviewed Duren, he claimed that the stolen money used to pay for his home’s landscaping was justified because he was using the money to “create a space that was conducive” to hosting veterans.
Approximately a decade ago, Duren was convicted of stealing more than $143,000 from the U.S. Department of Defense.
The Department of Veterans Affairs’ Office of the Inspector General and Federal Bureau of Investigation led the investigation. Assistant U.S. Attorney Alexander S. Chen prosecuted the case.
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Massachusetts Man Pleads Guilty for Threatening to Kill Members of Jewish Community and Bomb Places of WorshipRead the Press Release
A Massachusetts man pleaded guilty today in federal court in Boston to threatening to kill members of the Jewish community and bomb Jewish synagogues.
John Reardon, 59, of Millis, pleaded guilty to one count of obstruction of free exercise of religious beliefs by threat of force, one count of transmitting in interstate commerce a threat to injure a person, and one count of stalking using a facility of interstate commerce. In January, Reardon was arrested and charged.
“This defendant’s threats to bomb synagogues and kill Jewish children stoked fear in the hearts of congregants at a time when Jews are already facing a disturbing increase in threats,” said Attorney General Merrick B. Garland. “No person and no community in this country should have to live in fear of hate-fueled violence. The Justice Department is committed to using the full force of our investigative and prosecutorial authorities to root out these threats and ensure that all people are protected in the expression of their faith.”
“John Reardon now stands convicted of inflicting terror on the greater Boston Jewish community by threatening violence against fellow residents of Massachusetts solely because they of their Jewish faith,” said Acting U.S. Attorney Joshua S. Levy for the District of Massachusetts. “This insidious, pernicious conduct must be met with the full force of the criminal justice system to make sure victims and potential offenders alike know that hate crimes and acts of antisemitism will never be tolerated.”
“When John Reardon threatened to kill members of the Jewish community and bomb places of worship, the FBI and our partners immediately mobilized. After all, you cannot call and threaten people with violent physical harm and not face repercussions,” said Special Agent in Charge Jodi Cohen of the FBI Boston Field Office. “People of all races and faiths deserve to feel safe in their communities. With today’s guilty plea, John Reardon is now a convicted felon.”
On the morning of Jan. 25, Reardon called a synagogue in Attleboro, Massachusetts, and left a voicemail that included threats of violence.
Within 10 minutes of leaving the voicemail at the Congregation Agudas Achim, Reardon called another local Synagogue in Sharon, Massachusetts, and left a voicemail that included threats of violence.
Reardon was arrested by law enforcement after the calls were made. Following his arrest, investigators learned that Reardon had called the Israeli Consulate in Boston 98 times between Oct. 7, 2023, and Jan. 29. In many of those calls, Reardon also made statements intended to harass or intimidate.
A sentencing hearing will be scheduled at a later date. For obstruction of free exercise of religious beliefs by threat of force, Reardon faces a maximum penalty of 20 years in prison, three years of supervised release, and a fine of up to $250,000. For transmitting in interstate commerce a threat to injure a person, Reardon faces a maximum penalty of five years in prison, three years of supervised release, and a fine of up to $250,000. For stalking using a facility of interstate commerce, Reardon faces a maximum penalty of five years in prison, three years of supervised release, and a fine of up to $250,000. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI Boston Field Office investigated the case. The Attleboro and Wrentham Police Departments, Massachusetts State Police, Bristol County District Attorney’s Office, and Bristol County Sheriff’s Office provided valuable assistance in the investigation.
Assistant U.S. Attorney Torey B. Cummings for the District of Massachusetts is prosecuting the case.
Marion County Convicted Felon Sentenced to Federal Prison for Illegal Possession of A FirearmRead the Press Release
Ocala, Florida – U.S. District Judge Thomas Barber has sentenced Marcus Cleaver Morgan, Jr. (24, Ocala) to four years in federal prison for possession of a firearm by a convicted felon. Morgan entered a guilty plea on July 25, 2024.
According to court documents, on January 14, 2023, officers from the Ocala Police Department attempted to conduct a traffic stop on a vehicle driven by Morgan. Morgan failed to stop and a high-speed pursuit ensued. The pursuit ended when the vehicle crashed into an embankment. Officers located a backpack near the open driver’s side door where Morgan had been seated. The backpack contained two loaded handguns, approximately 239 grams of marijuana, 33.5 grams of MDPV, and a scale. Testing by the FBI confirmed Morgan’s DNA on the trigger, grip, and slide of one of firearms. Morgan has a previous state felony conviction for carrying a concealed firearm. Therefore, he is prohibited from possessing firearms and ammunition under federal law.
This case was investigated by the Ocala Police Department and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Sarah Janette Swartzberg.
This case is part of the Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence for occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Manokotak man indicted for illegally possessing firearm as a felonRead the Press Release
ANCHORAGE, Alaska – A federal grand jury in Alaska returned an indictment charging a Manokotak man with illegally possessing a firearm as a felon.
According to court documents, on Oct. 6, 2023, Wasillie Chocknok, 54, knowingly possessed a firearm as a felon. In June 2008, Chocknok was convicted of assault in the second degree in Alaska Superior Court in Dillingham, and in March 2022, he was convicted of criminally negligent homicide in Alaska Superior Court in Dillingham. Both were felony convictions.
Chocknok is charged with one count of being a felon in possession of a firearm. The defendant is scheduled for his initial court appearance tomorrow before U.S. Magistrate Judge Kyle F. Reardon of the U.S. District Court for the District of Alaska. If convicted, he faces up to 15 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney S. Lane Tucker for the District of Alaska and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Seattle Field Division Special Agent in Charge Jonathan Blais made the announcement.
The ATF Anchorage Field Office, with assistance from the Alaska State Troopers and Village Public Safety Officers, is investigating the case.
Assistant U.S. Attorney Mac Caille Petursson is prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Man Who Attempted to Enter Church with Rifle Charged with Gun CrimeRead the Press Release
A man who recently attempted to enter a church with a tactical rifle has been charged with a federal firearm crime stemming from a 2022 shooting, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.
Russell Alan Ragsdale, 25, was charged via criminal complaint with possession of a firearm by an unlawful user of a controlled substance. He was arrested on Friday and made his initial appearance before U.S. Magistrate Judge Renée Harris Toliver Monday morning.
According to court documents, Mr. Ragsdale entered a church at 5:05 p.m. on Nov. 2 alongside about 100 parishioners celebrating mass. After attending services, Ragsdale returned to his vehicle and allegedly retrieved a rifle from his trunk. He then closed the three gates to the parking lot. At 5:35 p.m., Mr. Ragsdale allegedly attempted to re-enter the church with his rifle, but could not gain access because the parishioners locked the doors.
During the investigation of the incident at the church, agents learned about a shooting involving Mr. Ragsdale, who was arrested on Feb. 3, 2022 in Seagoville for the felony murder of his roommate. (The murder case was later dismissed.) At the time, Mr. Ragsdale told Seagoville law enforcement that his roommate attacked him and claimed he “shot him many times” in self-defense. Officers recovered three firearms, including a 10mm Glock and an AR-15 rifle, and almost two grams of hallucinogenic mushrooms from the residence. An analysis of Mr. Ragsdale’s phone showed a history of drug use dating back to November 2021, as well as evidence of purchasing and using hallucinogenic mushrooms on Feb. 2, 2022.
A criminal complaint is merely an allegation of criminal conduct, not evidence. Like all defendants, Mr. Ragsdale is presumed innocent until proven guilty in a court of law.
If convicted, he faces up to 15 years in federal prison.
The Federal Bureau of Investigation’s Dallas Field Office and the Dallas Police Department conducted the investigation with the assistance of the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division, the Seagoville Police Department, and the Texas Department of Public Safety, which participated in the murder investigation. Assistant U.S. Attorney Jongwoo Chung is prosecuting the case.
Man Admits Possessing Child Pornography in Retirement HomeRead the Press Release
ST. LOUIS – A man from Webster Groves, Missouri on Monday admitted possessing more than 170,000 images and 11,000 videos containing child sexual abuse material.
Joseph J. Fitzsimmons, 76, pleaded guilty to one felony count of possession of child pornography. In March of 2023, Fitzsimmons moved into an assisted living facility in Webster Groves and was getting help with his internet connection from an employee of the facility. That employee spotted two images containing child sexual abuse material and contacted the Webster Groves Police Department.
A court approved search of Fitzsimmons apartment recovered computers and other electronic devices that were then examined by the St. Louis County Police Department. A total of 170,310 images and 11,410 videos containing child sexual abuse material were found on the devices, as well as 16,780 computer-generated or animated images and 549 videos.
Fitzsimmons is scheduled to be sentenced March 4, 2025. The charge is punishable by up to 20 years in prison, a $250,000 fine, or both prison and a fine.
The Webster Groves Police Department, the St. Louis County Police Department and the FBI investigated the case. Assistant U.S. Attorney Michael Hayes is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Department of Justice Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Madison Man Sentenced to More Than 5 Years for Illegally Possessing a FirearmRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Deonte L. Turner, 32, Madison, Wisconsin, was sentenced today by Chief U.S. District Judge James D. Peterson to 63 months in federal prison for possessing a firearm as a felon. Turner pleaded guilty to this charge on September 4, 2024. The prison term will be followed by 3 years of supervised release.
In September 2023, law enforcement found a loaded Sig Sauer handgun along with an extended magazine containing 21 rounds of ammunition in a backpack in a parked vehicle. Turner initially denied riding in the vehicle or possessing the backpack, but surveillance video showed Turner getting out of the vehicle, and Turner was further connected to the gun through DNA testing. At the time of this offense, Turner was on supervised release following a 2020 federal conviction for illegally possessing a firearm.
At sentencing, Judge Peterson expressed his disappointment that Turner had not used the resources afforded by federal probation to turn his life around and had quickly reoffended by committing a highly similar crime. Judge Peterson also noted the danger Turner’s illegal firearm possession posed to Turner and his family, as well as the community, amplified by the fact that Turner possessed the gun while dealing drugs.
The charge against Turner was the result of an investigation conducted by the Madison Police Department and the ATF Madison Crime Gun Task Force consisting of federal agents from ATF and Task Force Officers (TFOs) from local agencies including the Dane County and Clark County Sheriff’s Offices and the Fitchburg, Madison, Sun Prairie, and La Crosse Police Departments. United States Attorney Timothy M. O’Shea and Assistant U.S. Attorney Megan Stelljes prosecuted this case.
This case has been brought as part of Project Safe Neighborhoods (PSN), the U.S. Justice Department’s program to reduce violent crime. The PSN approach emphasizes coordination between state and federal prosecutors and all levels of law enforcement to address gun crime, especially felons illegally possessing firearms and ammunition and violent and drug crimes that involve the use of firearms.
Madera Pharmacist Sentenced to over 7 Years in Prison for Illegally Trafficking Hundreds of Thousands of Opiate PillsRead the Press Release
FRESNO, Calif. — Ifeanyi Vincent Ntukogu, 49, of Fresno, was sentenced today to seven years and three months in prison for illegally distributing oxycodone and hydrocodone, U.S. Attorney Phillip A. Talbert announced.
Ntukogu was a pharmacist in Madera who dispensed more than 450,000 oxycodone and hydrocodone pills based on fraudulent prescriptions, all in exchange for cash.
“This defendant displayed a blatant disregard for public safety and the law,” U.S. Attorney Talbert said. “It took the effort of agents, investigators, undercover officers, and medical professionals to bring an end to this illicit prescription-writing racket. The U.S. Attorney’s Office will continue our pursuit of those who fuel the opioid epidemic for their own personal benefit.”
“As a licensed pharmacist, Mr. Ntukogu was trusted to dispense medications safely, supporting positive health outcomes. He intentionally exploited his trusted role, dispensing hundreds of thousands of fraudulently prescribed oxycodone and hydrocodone pills, knowing his greed-fueled actions would put opioids in the hands of drug dealers and could cause grave harm to the public. Working closely with our state and federal law enforcement partners, we dismantled this operation and held those who chose profit over public safety accountable,” said Special Agent in Charge Sid Patel, who leads the FBI Sacramento field office.
“Ntukogo thought he could outsmart the system by rejecting red flag prescriptions all while conducting drug deals on the side for cash. His illicit scheme led to the distribution of nearly half a million highly addictive opioids in Tennessee, Texas and beyond; fueling the fire of prescription drug misuse and endangering American lives,” said DEA Special Agent in Charge Bob P. Beris. “This lengthy sentence underscores the serious consequences for medical practitioners who place profits above people. DEA will continue to work with our counterparts to investigate, arrest and prosecute individuals who abuse their positions and threaten public safety.”
According to court records, from December 2014 through November 2018, Ntukogu dispensed more than 450,000 oxycodone and hydrocodone pills based on fraudulent prescriptions delivered to him by his co-conspirators and co-defendants in the case, Kelo White and Donald Pierre. The prescriptions were from more than 10 different physicians whose signatures were forged.
Ntukogu reviewed each prescription and rejected the ones that he believed regulators may deem suspicious. For example, he rejected prescriptions that were supposedly written by certain doctors or that were written for individuals who were having prescriptions filled at other pharmacies because he believed those prescriptions may raise red flags.
Ntukogu dispensed the pills through his New Life Pharmacy in Madera. Upon doing so, he required cash payments from White and Pierre and increased the price that he charged over time. White and Pierre then illegally sold the pills in Tennessee, Texas, and elsewhere.
Ntukogu received hundreds of thousands of dollars for his participation in the scheme. His sentence was also enhanced because he used his special skills as a pharmacist to help commit the crime.
This case was the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the California Department of Health Care Services. Assistant U.S. Attorneys Antonio Pataca and Joseph Barton prosecuted the case.
The case was investigated under the DOJ’s Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. For more information about OCDETF, please visit Justice.gov/OCDETF.
This case was also part of the DOJ’s Operation Synthetic Opioid Surge (SOS), which is a program designed to reduce the supply of deadly synthetic opioids in high impact areas as well as identifying wholesale distribution networks and international and domestic suppliers.
White is scheduled to be sentenced on Feb. 24, 2025. He faces a statutory maximum penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Pierre, the remaining defendant in the case, was previously convicted and sentenced to nine years and four months in prison.
Madera Man Previously Convicted in Washington D.C. for Jan. 6 Capitol Breach Offenses Sentenced in Fresno for Illegally Possessing Firearms and AmmunitionRead the Press Release
FRESNO, Calif. — Benjamin Martin, 46, of Madera, was sentenced today to three years and two months in prison today for illegally possessing several firearms and ammunition, U.S. Attorney Phillip A. Talbert announced today.
Martin was convicted of the firearms charges following a one-day trial in Fresno. According to evidence presented at the trial and other court records, in September 2021, the FBI executed a search warrant at Martin’s residence in Madera and arrested him on charges filed by the United States Attorney’s Office for the District of Columbia for the breach of the United States Capitol that occurred on Jan. 6, 2021. During the search, the FBI found eight firearms, including an AR‑15‑style rifle, multiple high-capacity magazines for the AR-15, and more than 500 rounds of ammunition. Martin was prohibited from possessing these items because of his prior domestic violence conviction, and resulting restraining order, for choking his then girlfriend and dragging her back into the house after she tried to flee.
Shortly after his arrest, Martin was caught on a recorded jail call where he instructed his current fiancée to lie to authorities and tell them that the firearms seized from his residence belonged to her and her father and that he did not know about them. She agreed to do so. Martin received an enhancement to his sentence for this witness tampering.
Martin also recently went to trial in the Capitol breach case in Washington, D.C., where the evidence showed that he held a door to the Capitol open while officers tried to close it. He kept the door open so that other rioters could spray chemical irritants and throw objects at the officers. Martin was convicted on five counts.
This case was the product of an investigation by the FBI. Assistant U.S. Attorneys Joseph Barton, Robert Veneman-Hughes, and Michael Tierney prosecuted the case.
Martin is scheduled to be sentenced in the Capitol breach case in Washington, D.C., on Dec. 20, 2024, by U.S. District Judge Rudolph Contreras. Martin faces additional imprisonment and fines in that case. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The press release for Martin’s conviction in the Capitol breach case can be found here: https://www.justice.gov/usao-dc/pr/california-man-convicted-felony-and-misdemeanor-charges-actions-during-jan-6-capitol.
Lynn Man Pleads Guilty to Multiple Drug Offenses After Selling Drugs to an Undercover OfficerRead the Press Release
BOSTON – A Lynn man pleaded guilty today to drug offenses relating to an ongoing investigation of fentanyl distribution on the North Shore.
Ricardo Bratini-Perez, a/k/a “Rico,” a/k/a “Ricofromthesin,” 29, pleaded guilty to four counts of distribution and possession with intent to distribute fentanyl, fentanyl analog, and methamphetamine, and one count of possession with intent to distribute 400 grams and more of a mixture and substance containing a detectable amount of fentanyl. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for March 17, 2025. A federal grand jury returned an indictment charging Bratini-Perez on Oct. 3, 2024.
Bratini-Perez was on probation following his release from state custody on armed robbery and firearm charges. While on probation, Bratini-Perez sold fentanyl and methamphetamine to an undercover officer on three occasions in March 2024 and April 2024. On April 8, 2024, Bratini-Perez was arrested following a fourth sale to the undercover officer. Following his arrest, investigators executed a search warrant at Bratini-Perez’s residence and recovered over 5,000 grams of counterfeit pills containing fentanyl.
The charge of possession with intent to distribute 500 grams and more of fentanyl provides for a sentence of at least 10 years and up to life in prison, five years and up to life of supervised release and a fine of up to $10,000,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.United States Attorney Joshua S. Levy; Michael J. Krol, Special Agent in Charge of Homeland Security Investigations in New England; Colonel Geoffrey D. Noble, Superintendent of the Massachusetts State Police; and Lynn Police Chief Christopher P. Reddy made the announcement today. Valuable assistance was provided by the Essex County District Attorney's Office. Assistant U.S. Attorney Philip A. Mallard of the Organized Crime and Gang Unit is prosecuting the case.
Lincoln Man Sentenced for Distribution of Fentanyl Resulting in Serious Bodily InjuryRead the Press Release
United States Attorney Susan Lehr announced that Robert Vincent Harris, age 57, of Lincoln, Nebraska, was sentenced on November 25, 2024, in federal court in Lincoln for one count of distribution of fentanyl resulting in serious bodily injury and one count of possession with intent to distribute fentanyl, methamphetamine, cocaine and heroin. Senior United States District Judge John M. Gerrard sentenced Harris to 240 months’ imprisonment on each count to run concurrently (together). There is no parole in the federal system. After Harris’ release from prison, he will begin a 5-year term of supervised release. Harris was convicted on both counts by Judge Gerrard in August of 2024 after a non-jury trial.
The United States presented evidence at trial showing Harris and the victim were at a social gathering on February 14, 2024, and decided to walk to a nearby convenience store to purchase alcoholic beverages. Harris had offered to sell the victim some heroin about a week before this incident. On the way to the convenience store, the victim asked Harris if he still had heroin available. He said he did, and they stopped at his Lincoln apartment, where Harris drew out a line of a powder substance and both he and the victim snorted some of the powder. Harris and the victim then walked to the convenience store where the victim bought some alcohol while Harris waited outside. After purchasing the alcohol, the victim and Harris left the store to return to the social gathering, but the victim passed out. Lincoln Fire & Rescue responded after being called by a clerk at the convenience store and they administered Narcan to the victim. The victim woke up in the ambulance on the way to the hospital and was interviewed by investigators after her release from the hospital.
On February 15, 2024, a search warrant was obtained for Harris’s apartment. During the search, investigators found powder on a mirror and cut off straws matching descriptions given by the victim. Harris ultimately admitted he provided the fentanyl powder to the victim. Harris said after the victim’s overdose, he went home and used the rest of the fentanyl powder. On February 15th, he bought more of what he believed was heroin from his source and said the powder found during the search of his apartment was what remained from that quantity. Harris’s phone contained text messages from February 15th in which he talked about the victim’s overdose the night before and in which he agreed to obtain and sell drugs to a third person on that date.
Testing at the Nebraska State Patrol Crime Lab later showed fentanyl in the victim’s urine sample. Powder seized from Harris’s apartment tested positive for fentanyl, meth, cocaine, and heroin. A medical expert reviewed the case, determined the victim suffered an overdose due to the use of fentanyl, and stated it was likely that the victim would have died or would have suffered serious debilitating injury without the prompt administration of Narcan.
This case was investigated by the Lincoln/Lancaster County Drug Task Force, the Nebraska State Patrol, and Lincoln Fire & Rescue.
Lancaster Man Convicted of Money Laundering and Operating an Unlawful Money Transmission Business for Converting Cash to BitcoinRead the Press Release
BOSTON – A Lancaster, Mass. man was convicted on Nov. 22, 2024 following a five-day jury trial for his involvement in an unlicensed money transmission business that exchanged cash for Bitcoin for an individual who represented to be involved in unlawful trafficking in counterfeit goods.
Alan Joseph,36, was convicted of one count of operating an unlicensed money transmitting business and three counts of money laundering. U.S. District Court Judge Margaret R. Guzman scheduled sentencing for Feb. 24, 2025. Joseph was charged by criminal complaint and arrested in February 2021 and later indicted by a federal grand jury in March 2021.
“Mr. Joseph’s conduct made him a critical cog in criminal enterprises, willingly converting illicit cash into cryptocurrency to help his customers conceal their tracks,” said United States Attorney Joshua S. Levy. “This conviction sends a clear message: those who exploit emerging technologies like cryptocurrency to facilitate illegal activity will be held accountable. Our office, alongside our federal and local partners, will continue to disrupt these schemes and ensure that the integrity of our financial systems is upheld.”
“This conviction proves that Mr. Joseph was more than willing to help criminals conceal their criminal cash flow in an attempt to cover up illegal activity,” said Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. “The FBI and our partners thank the jury for its service and swift verdict.”
“Criminals rely on money laundering operations like the one run by Alan Joseph to obscure their proceeds, helping criminal enterprises evade detection, enhance profit margins and avoid tax liability. HSI’s El Dorado Task Force is committed to working with our partners to follow the money and dismantle money laundering enterprises that facilitate and enable the illicit financial economy,” said Michael J. Krol, Special Agent in Charge of Homeland Security Investigations in New England.
“The guilty verdict of Alan Joseph demonstrates IRS Criminal Investigation’s commitment to the prosecution of all who choose to not only break the law themselves but also those who assist criminals in facilitating their criminal activities,” said Jonathan Wlodyka, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office. “Joseph’s actions allowed criminals to conceal their activity by converting bulk cash into bitcoin, allowing them to easily and covertly integrate their ill-gotten gains into the mainstream financial system. IRS Criminal Investigations continues to work closely with our law enforcement partner to rout out these bad actors that aid others in the furtherance of their crimes.”
“Alan Joseph received money through the U.S. Mail and subsequently laundered it into Bitcoin. This conviction sends a stark warning to anyone who thinks they can illegally use the U.S. Mail for their own gain. The U.S. Postal Inspection Service will continue to remain steadfast in our mission to protect the U.S. Mail and its customers from any illegal activity,” said Ketty Larco Ward, Inspector in Charge of the U.S. Postal Inspection Service in New England.
Between August 2020 and February 2021, Joseph engaged in at least four financial transactions where he converted cash to Bitcoin in connection with what Joseph believed to be trafficking in counterfeit goods, which is illegal under federal law. Bitcoin is a form of virtual currency, or cryptocurrency, that has no physical form and is traded exclusively by electronic means.
Joseph sought to promote and conceal the nature of such illegal activity. For instance, on Oct. 28, 2020, Joseph converted about $25,000 in cash to Bitcoin for the undercover agent. During this meeting, the undercover agent represented to Joseph that the money Joseph was converting was from “rich housewives” who purchased “fake” items. Additionally, Joseph expressed an interest in purchasing counterfeit goods from the undercover agent.
Contrary to federal law and regulations, Joseph never registered his money transmission business with the Department of Treasury, nor did he ever request identification from the undercover agent during the meetings.
The charge of money laundering provides for a sentence of up to 20 years in prison, up to three years of supervised release and a fine of $250,000. The charge of operating an unlicensed money transmitting business provides for a sentence of up to five years in prison, up to three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
U.S. Attorney Levy, FBI SAC Cohen, HSI SAC Krol, Acting IRS-CI SAC Wlodyka and USPIS Inc Larco Ward made the announcement. Assistant U.S. Attorneys John T. Mulcahy and Lindsey E. Weinstein of the Criminal Division prosecuted the case.
Kilo Drug Trafficker Sentenced to 20 YearsRead the Press Release
RALEIGH, N.C. – Christopher Gibson, 41, of Wilmington, was sentenced to 240 months in prison for trafficking more than 30 pounds of methamphetamine in the Wilmington area. He pled guilty on August 13, 2024, to a drug conspiracy involving more than 500 grams of methamphetamine and cocaine.
According to court documents and other information presented in court, on November 18, 2021, the San Diego Airport Police, the Drug Enforcement Administration (DEA) San Diego Field Division, and the San Diego County Integrated Narcotics Task Force received information that an individual was attempting to transport fentanyl from California to North Carolina. That information led agents to Gibson at the airline gate in California. Gibson was in possession of $10,635 and a United States Postal Service (USPS) receipt. Using these postal receipts, USPS agents located a package that Gibson had attempted to send to an address in Wilmington. A search of the package revealed two kilograms of cocaine.
On April 27, 2023, a Wilmington Police Department officer conducted a traffic stop on a vehicle driven by Gibson. As the officer approached Gibson's car, Gibson fled at a high speed, exceeding 80 miles per hour, and failing to stop at a stop sign. He eventually stopped the vehicle in a cul-de-sac. A K-9 officer responded to the scene and alerted law enforcement to the presence of narcotics in the vehicle. A search revealed cash and multiple cell phones. While fleeing, Gibson discarded a bag containing approximately 18 grams of cocaine, 195 bindles of fentanyl, and three grams of methamphetamine.
On October 10 and 20, 2023, law enforcement conducted two controlled purchases of 110 grams of methamphetamine each, from Gibson. On October 24, 2023, another controlled purchase of 193 grams from Gibson occurred.
On October 30, 2023, a Wilmington Police Department officer conducted another traffic stop on a vehicle driven by Gibson. During this stop, a K-9 officer alerted to the presence of narcotics. A search of the vehicle uncovered approximately a gram of fentanyl on the driver's side floorboard. Additionally, a search of Gibson’s person revealed eight baggies containing approximately 10 grams of fentanyl. He was also in possession of multiple cell phones and cash.
Throughout the investigation, law enforcement discovered that from 2020 to 2021, Gibson had multiple kilograms of cocaine shipped from both California and Arizona to Wilmington, where he operated several stash houses. In 2023, it was determined that he imported more than 30 pounds of methamphetamine to various locations in Wilmington for distribution.
Gibson has a previous federal conviction for conspiracy to distribute and possess with intent to distribute more than 500 grams of cocaine and more than 50 grams of cocaine, as well as dihydrocodeinone. He also has prior charges for using, carrying, and possessing a firearm during and in relation to a drug trafficking crime.
This prosecution is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launders, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state and local law enforcement agencies against criminal networks.
Michael F. Easley, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Terrence W. Boyle. The Bureau of Tobacco, Alcohol and Firearms, the Drug Enforcement Administration, the Wilmington Police Department, and the New Hanover County Sheriff’s Office investigated the case and Assistant U.S. Attorney Timothy Severo prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 7:24-CR-00039.
Justice Department Secures Agreement with Trailer Manufacturer to Resolve Immigration-Related Discrimination Claims and Announces a New Resource for Lawful Permanent ResidentsRead the Press Release
The Justice Department announced today that it secured a settlement agreement with Great Dane LLC (Great Dane) resolving the department’s determination that Great Dane’s plant in Wayne, Nebraska, violated the Immigration and Nationality Act (INA).
The department determined that Great Dane discriminated against non-U.S. citizens by asking them for additional and unnecessary documents, or information from those unnecessary documents, to prove their permission to work. The department also announced the release of a new fact sheet to help lawful permanent residents learn about discrimination protections under the INA.
“It is unlawful for employers to add discriminatory barriers in the hiring process because of a worker’s citizenship or immigration status,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department is committed to ensuring that workers enjoy the protections the law provides, including where barriers to employment are discriminatory.”
After opening an investigation based on a complaint from a lawful permanent resident, the department determined that Great Dane asked non-U.S. citizens, including the worker who submitted the complaint, to provide additional and unnecessary documents to prove their permission to work, because of their immigration status. For example, the department determined that even though the worker who filed the initial complaint provided sufficient information and documents to prove his permission to work — his state ID and unrestricted Social Security card — the company nevertheless wanted him to provide additional information from a Permanent Resident Card. The department determined that Great Dane failed to hire non-U.S. citizens who were unable to comply with the company’s unnecessary requests. Finally, the department also determined that Great Dane discriminated against non-U.S. citizens already working for the company by asking them for documents to prove their ongoing permission to work, even though it was unnecessary.
Lawful permanent residents (sometimes referred to as “green card holders”) can use different types of documentation to prove their permission to work. Lawful permanent residents do not have to show a Permanent Resident Card (or “green card”) or prove their immigration status when demonstrating their permission to work. As explained in the department’s new fact sheet, the INA protects lawful permanent residents from discrimination when an employer is verifying their permission to work. Employers cannot limit the valid documentation that a lawful permanent resident may show when verifying their ability to work. The fact sheet also explains how lawful permanent residents can get help if they are being discriminated against.
Under the terms of the settlement, the company will pay $218,000 in civil penalties to the United States and establish a backpay fund of $218,000 to compensate victims of the company’s discriminatory practices, including those whom it failed to hire or who lost work because they could not comply with the company’s discriminatory document demands. The agreement also requires Great Dane to train its personnel on the INA’s anti-discrimination requirements, revise its employment policies and be subject to departmental monitoring and reporting requirements. People who think they may qualify for back pay under the settlement should contact the Civil Rights Division at [email protected].
The Civil Rights Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the antidiscrimination provision of the INA. Among other things, the statute prohibits discrimination based on citizenship status and national origin in hiring, firing or recruitment or referral for a fee; unfair documentary practices; or retaliation and intimidation.
IER’s website has more information on lawful permanent residents’ rights under the INA and how employers can avoid unlawful discrimination when verifying someone’s permission to work. Learn more about IER’s work and how to get assistance through this brief video. Applicants or employees who believe they were discriminated against based on their citizenship, immigration status or national origin in hiring, firing, recruitment or during the employment eligibility verification process (Form I-9 and E-Verify); or subjected to retaliation, may file a charge. The public can also call IER’s free hotline at 1-800-255-7688 for workers or at 1-800-255-8155 for employers (1-800-237-2515, TTY for hearing impaired); sign up for a live webinar or watch an on-demand presentation; email [email protected]; or visit IER’s English and Spanish websites. Sign up for email updates from IER.
Jury Finds Windermere Attorney Guilty of Wire Fraud and Bank FraudRead the Press Release
Orlando, Florida – United States Attorney Roger B. Handberg announces that a federal jury has found Amaris Marie Delapena (50, Windermere) guilty of 15 counts of wire fraud and 22 counts of bank fraud. Delapena faces a maximum penalty of 30 years in federal prison for each count of bank fraud and up to 20 years’ imprisonment for each count of wire fraud. Her sentencing hearing is set for February 19, 2025.
According to evidence and testimony presented during the four-day trial, Delapena used illegal wire transfers and check deposits to embezzle funds during her employment as a paralegal for an Orlando law firm. Her fraud centered on re-routing checks from and to law firm clients and vendors into accounts Delapena controlled and transferring client payments from the law firm’s account to accounts Delapena controlled.
Between the time Delapena committed the offenses and her trial, she earned a law degree and became a licensed attorney in Florida.
This case was investigated by the United States Secret Service. It is being prosecuted by Assistant United States Attorney Adam J. Nate.
Jury Finds Two Men Guilty of Double Murder on the Colville ReservationRead the Press Release
Spokane, Washington – United States Attorney Vanessa R. Waldref announced that a jury returned a verdict today in the trial of Zachary L. Holt, age 24, and Dezmonique D. Tenzsley (a/k/a “Privilege”), age 35. Holt and Tenzsley were found guilty on all seventeen counts presented at trial, including Felony Murder in Indian Country, Attempted Murder of a Federal Officer, Assault of a Federal Officer, Attempted Robbery in Indian Country, Robbery Affecting Commerce, as well as several firearm offenses. Holt also was convicted of First-Degree Murder in Indian Country and Murder Resulting from Discharging a Firearm During a Crime of Violence.
According to court documents and evidence presented at trial, Holt and Tenzsley went on a six-week crime spree that began in September 2022 in Northern Idaho and continued until the Defendants’ arrests in Eastern Washington on October 21, 2022. Over these six weeks, Defendants Holt and Tenzsley committed home invasions as well as a robbery in Northern Idaho, and then took their firearms and much of the stolen property into Eastern Washington, where they shot and killed Gale and Jeremy Neal at about 4:21 p.m. on October 20, 2022, in Keller, Washington. Gale and Jeremy Neal were shot twice inside their trailer during a failed robbery. Eyewitnesses described three armed men wearing masks, who arrived at the trailer in a red sedan. Surveillance video presented at trial showed the red sedan arrive at about 4:19 p.m. and depart two minutes and ten seconds later, at 4:21 p.m., just moments after the murder.
Approximately 30 minutes before the murders, Holt and Tenzsley were driving on a dirt road in the Keller area. Holt, who was speeding, swerved to miss a school bus, causing Holt’s vehicle to roll over into a ditch. Minutes later, Holt’s brother, Curry Pinkham, pulled up to give both Holt and Tenzsley a ride. Just before getting into Pinkham’s car, Holt and Tenzsley moved several firearms – including the murder weapon – and thousands rounds of ammunition out of the crashed car and into the red sedan – a 2007 Toyota Camry.
Testimony at trial established that Holt was upset about wrecking his car and demanded that Pinkham take them to a location where they could get more drugs and find someone to rob. Pinkham agreed to drive Holt to the home of a known drug dealer in the Keller area.
When Holt, Tenzsley, and Pinkham arrived at the residence of the known drug dealer, Holt and Tenzsley put on rubber gloves and masks. Holt, Tenzsley and Pinkham then grabbed firearms out of the red sedan. Rather than go to the main residence, where the purported drug dealer lived, Holt and Tenzsley walked to the back of the property, where Gale Neal’s trailer was located. As Holt and Tenzsley approached, Jeremy Neal came to the door of the trailer. Holt immediately began demanding Neal’s money and property. Moments later, Holt fired two shots, killing Jeremy Neal. Holt then turned to Gale Neal, who leaned back into the couch in fear, and fired two more shots, killing Gale. Throughout, Tenzsley was standing guard, armed with a shotgun and his face covered by a mask.
After the robbery and murder, and while law enforcement was responding to the scene, Tenzsley, Holt, and Pinkham drove towards Nespelem, Washington. As Pinkham was driving the getaway car, Holt fired several additional shots – this time at law enforcement, who was attempting stop the red Camry. During the chase, a Colville Tribal Police Sergeant, who was cross-deputized as a federal officer, was hit in the forearm. Several additional bullets hit the Sergeant’s patrol vehicle. After shooting the first officer, Holt opened fire at a second Colville Tribal Police Officer, who also had attempted to stop the red sedan. Evidence at trial established that Tenzsley reloaded firearm magazines as Holt continued to fire at law enforcement to evade apprehension after murdering the Neals.
When Holt, Tenzsley, and Pinkham later arrived in the Nespelem area, the three men tried to hide the getaway car under a tarp and fled on foot. They also hid their firearms and ammunition throughout the Nespelem area. When Holt and Tenzsley finally were apprehended the next day, Tenzsley gave a false name. Holt got into fist fight with a concerned citizen, who had called the police just prior to Holt’s arrest.
During the investigation into the murders of Jeremy and Gale Neal, Tribal and federal law enforcement identified a series of other crimes that Holt and Tenzsley committed as part of their six-week crime spree and conspiracy. On September 3, 2022, Holt and Tenzsley robbed and severely assaulted a man at gunpoint inside his trailer in Latah County, Idaho. The pair stole ammunition, gun parts, the victim’s car keys, and a safe containing the title to the victim’s camper trailer. As Holt and Tenzsley were fleeing the robbery scene, they exchanged fire with the robbery victim.
Additional evidence established that on October 12, 2022, Holt and Tenzsley, who again were both armed, invaded two homes and assaulted multiple victims on the Nez Perce Indian Reservation in Lapwai, Idaho. The evidence at trial showed that Holt and Tenzsley were again looking for someone to rob when they committed these assaults. During the second home invasion that evening, Holt and Tenzsley shot a dog in the face on the Nez Perce Reservation. Fortunately, the dog survived the gunshot.
In the days immediately after the Lapwai assaults, Holt and Tenzsley traveled to Keller, Washington – leading to the tragic deaths of Gale and Jeremy Neal, as well as the attempted murder of one federal officer and the assault of another. The firearm used in the shooting on the Nez Perce Reservation was the same gun Holt and Tenzsley used during the Neal murders, as well as the attempted murder and assault of the two federal officers.
United States District Judge Thomas O. Rice presided over the trial for Holt and Tenzsley, which began November 18, 2024. Sentencing in this matter is set for February 6, 2025, in Spokane, Washington.
“The victims in this case, Gale and Jeremy Neal, were senselessly and brutally murdered by two men on a violent crime spree. Nothing can ever replace what the Neals’ family and loved ones have lost. My office is deeply committed to promoting public safety on Native American Reservations and addressing the crisis of Missing and Murdered Indigenous People, and this verdict demonstrates that those who commit violence on Tribal lands will be held accountable,” stated U.S. Attorney Waldref. “I am grateful for the attorneys in my office, especially First Assistant United States Attorney Richard Barker and Assistant United States Attorney Michael Ellis who led this significant prosecution, as well as the investigators and agents who worked tirelessly for countless hours to bring justice for the victims in this case.”
“As much as any case I have prosecuted, this one demonstrates the incredible tragedy of the Missing and Murdered Indigenous People Crisis,” stated First Assistant United States Attorney Richard Barker, who led the prosecution team for this case. “Our hearts go out to the Neal Family, whose loved ones were taken away from them far too soon. Unfortunately, violence on our Native American Reservations occurs far too often and has resulted in generational trauma that continues to this day. While the United States absolutely will continue to prosecute these cases and take whatever steps to hold accountable those who perpetrate such terrible violence, we cannot fully address the trauma of so many through prosecution alone. The U.S. Attorney’s Office for the Eastern District of Washington is committed to working with Native American communities to organize listening sessions, outreach events, and doing more to ensure victims and their families are heard. We are so grateful for the many witnesses who came forward in this case to ensure those responsible for Gale and Jeremy Neals’ murders were held accountable. We also cannot understate the exceptional law enforcement response, especially by the officers who put their lives on the line to capture the Neals’ murderers.”
“At the heart of our prosecutions is the stories and lives of the victims of crime,” stated Assistant United States Attorney Michael Ellis. “I am very grateful that we were able to amplify the story of the Neal family and bring justice to those who caused such harm and devastation to the Colville Indian Reservation.”
“These murders were frightening and tragic events that impacted many people in our community. My prayers go out to the family and friends of the deceased, who I know still grieve today. There is now some comfort in knowing that those who committed these acts of violence have been convicted of serious federal felony offenses,” said the Chairman of the Confederated Tribes of the Colville Reservation, Jarred-Michael Erickson. “I want to thank all of the law enforcement officials and agencies who participated in this investigation and in the apprehension of these dangerous criminals, and especially the Colville Tribal Police, who nearly lost one of their own officers when he was shot during this encounter. I also want to thank U.S. Attorney Vanessa Waldref and the prosecutors in the United States Attorney's Office in the Eastern District of Washington for their diligent prosecution of this case. I want to thank the jurors who heard the evidence and returned the verdicts they believed fit the interest of justice. Finally, I want to thank our community on the Reservation, who supported each other and law enforcement as these events unfolded. As dark a chapter as this was for the Colville Reservation, it is heartening to see how many people from different communities and agencies stand together to help each other in a time of crisis.”
“Getting these two violent offenders off the streets makes the communities they terrorized safer.” said Gregory L. Austin, Acting Special Agent in Charge of the FBI’s Seattle field office. “Their crimes ranged from robbery to murder and included shooting at law enforcement in an effort to avoid arrest. Reducing violent crime on our state’s Reservations remains a priority for the FBI and our local, state, and federal partners.”
This case was investigated by the Colville Tribal Police Department, the FBI, the FBI’s Salish Safe Trails Task Force, Latah County Sherif’s Office, Nez Perce Tribal Police Department, Idaho State Patrol, Spokane Tribal Police Department, Kalispel Tribal Police Department, Grant County Sheriff’s Office, Okanogan Sheriff’s Office, Ephrata Police Department, Soap Lake Police Department, U.S. Border Patrol, the ATF, the United States Marshals Service, and the Washington State Patrol. The case was prosecuted by First Assistant United States Attorney Richard R. Barker and Assistant United States Attorney Michael J. Ellis. Echo D. Fatsis, a contract Law Clerk with the United States Attorney’s Office, provided critical support during the trial.
Independence Man Pleads Guilty to Armed Robberies, Illegal Firearm Following Police ChaseRead the Press Release
KANSAS CITY, Mo. – An Independence, Mo., man pleaded guilty in federal court today to committing two armed robberies and illegally possessing a firearm after fleeing from police officers in a pick-up truck.
Duke A. Yates, 36, pleaded guilty before U.S. District Judge Roseann A. Ketchmark to two counts of robbery and one count of possessing a firearm in furtherance of a crime of violence.
Yates robbed a Quik Trip and a Walgreen’s, both in Independence, at gunpoint within 10 minutes of each other at about 2:30 a.m. on Dec. 25, 2023. Yates stole a total of between $500 and $700 in cash and a dozen packs of cigarettes from the stores.
A police officer spotted Yates driving a white Ford F350 pickup truck with a missing headlight, matching the description of the vehicle used in the robberies, traveling eastbound on U.S. 40 Highway near Blue Ridge Cutoff. Yates fled at the presence of the officer, with the lights now blacked out on the vehicle. The officer turned on his lights and sirens and initiated a pursuit that reached speeds over 100 miles per hour.
During the pursuit, the truck failed to stop for posted stop signs and drove over medians. The truck slid onto 23rd Street facing eastbound in the westbound lanes, causing another motorist to drive onto the shoulder to avoid a collision. Yates drove into oncoming traffic and veered at a marked police vehicle that was attempting to deploy stop sticks.
Yates failed to negotiate a turn at 24911 E. Truman Road and went off-road, colliding with a power pole and breaking it at the base. Yates fled on foot and resisted arrest while being taken into custody.
Officers searched the stolen truck and found a Glock 9mm semi-automatic handgun on the driver’s side floorboard.
Under federal statutes, Yates is subject to a mandatory minimum sentence of five years in federal prison without parole, up to a sentence of life in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Brandon Gibson. It was investigated by the Independence, Mo., Police Department.
Project Safe Neighborhoods
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Independence Attorney Pleads Guilty to $857,000 Tax EvasionRead the Press Release
KANSAS CITY, Mo. – An Independence, Mo., attorney pleaded guilty in court today to evading payment of $857,000 in income taxes.
John C. Carnes, 69, pleaded guilty before U.S. District Judge Howard F. Sachs to one count of tax evasion.
By pleading guilty today, Carnes admitted that he willfully attempted to evade paying his personal income taxes for tax years 2012 through 2018. Carnes kept his income in his attorney trust accounts, then withdrew cash from his attorney trust accounts to pay for personal and business expenses. An attorney trust account is a bank account in which a lawyer has a fiduciary duty to hold property of clients or third persons, including prospective clients. It is for funds that are in a lawyer’s possession in connection with representation, separate from the lawyer’s own property.
Carnes had two trust fund accounts. He withdrew $444,527 in cash from one account from 2016 through 2019, and he withdrew $144,364 from the second account from 2013 through 2015. Carnes used the cash to gamble and pay personal expenses.
Carnes deposited $232,000 in fees received for services provided in the sale of the former Rockwood Golf Course property in November 2017 and the Missouri City Power Plant project, and other income, into his attorney trust accounts.
The total tax loss to the IRS for tax years 2012 through 2018, because of Carnes’s tax evasion, totaled $618,949. In addition, relevant conduct consists of unpaid federal income tax for the tax years 1990-1993, 1996-2003, and 2005, totaling $175,590. Relevant conduct also includes the state of Missouri unpaid income taxes, totaling $62,922. The total relevant conduct is $238,513, resulting in a total tax loss of $857,462.
From 2009 to 2020, the IRS continuously engaged in various forms of investigative and enforcement activity regarding Carnes’s outstanding tax liabilities.
Under federal statutes, Carnes is subject to a sentence of up to five years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Rudolph R. Rhodes IV. It was investigated by IRS-Criminal Investigation.
Illinois Man Accused of St. Louis CarjackingRead the Press Release
ST. LOUIS – A man from Venice, Illinois appeared in U.S. District Court in St. Louis Monday to answer an indictment accusing him of a September carjacking in the Tower Grove East neighborhood of St. Louis.
Harry Moore, 20, was indicted November 20 in U.S. District Court in St. Louis on one felony count of carjacking and one felony count of possession and brandishing a firearm in furtherance of a violent crime. He pleaded not guilty Monday.
The indictment accuses Moore of stealing a 2022 Subaru Outback at gunpoint on Sept. 9, 2024. A motion seeking to have Moore held in jail until trial says he was in a stolen Cadillac CTS with two others at the time of the carjacking and ordered the victim to unlock his cellphone and provide the PIN number to his ATM card, which Moore used a short time later to withdraw cash at a gas station. The motion also says Moore was caught on camera later that morning along the western edge of Ballpark Village in downtown St. Louis, sitting on the window frame of the passenger door of the Subaru and firing shots at a man running away.
Charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
The carjacking charge is punishable by up to 15 years in prison, a $250,000 fine, or both prison and a fine. The brandishing charge is punishable by seven years to life in prison.
The St. Louis Metropolitan Police Department, the FBI and the St. Clair County (Illinois) Sheriff’s Department investigated the case. Assistant U.S. Attorney Matthew Martin is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Idaho Falls Man Convicted of Federal Drug Trafficking ChargesRead the Press Release
POCATELLO – A federal jury convicted Jason Lundholm, 36, of Idaho Falls, of conspiracy to distribute methamphetamine and possession of methamphetamine with intent to deliver after a four-day trial, U.S. Attorney Josh Hurwit announced today.
According to court records, on September 26, 2023, officers with the Idaho Falls Police Department conducted a traffic stop on a vehicle in Idaho Falls. Lundholm was seated in the back passenger seat. Officers searched the vehicle and found 227 grams of methamphetamine in a fast-food bag located at Lundholm’s feet. Evidence presented during the trial established that Lundholm conspired with his co-defendants, Jeremy Wheeler, 49, of Idaho Falls, and Breena Jolley, 44, of Pocatello, who were also in the vehicle, to distribute methamphetamine.
The jury found Lundholm guilty of both charges after two hours of deliberation on November 21, 2024. Lundholm is scheduled to be sentenced on February 13, 2025, before Senior U.S. District Judge B. Lynn Winmill. Lundholm faces a maximum penalty of twenty years in federal prison.
Wheeler and Jolley previously pleaded guilty to possession with intent to distribute methamphetamine and are both scheduled for sentencing on December 18, 2024 before Judge Winmill.
U.S. Attorney Hurwit commended the investigation by the Idaho Falls Police Department and the Bonneville County Sheriff’s Office, which led to the charges. Assistant U.S. Attorney Justin Paskett is prosecuting the case.
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Huntington Man Sentenced to Prison for Federal Gun CrimeRead the Press Release
HUNTINGTON, W.Va. – Steven Patrick Crabtree, 35, of Huntington, was sentenced today to six years in prison, to be followed by three years of supervised release, for being a felon in possession of a firearm.
According to court documents and statements made in court, on March 4, 2024, law enforcement officers responded to reports of an individual shooting at others outside of a Buffington Street residence in Huntington. Officers encountered Crabtree, who matched the description of the shooting suspect. Officers recovered a loaded Smith & Wesson model SD9VE 9mm pistol from Crabtree, and later determined that the firearm had been stolen.
Federal law prohibits a person with a prior felony conviction from possessing a firearm or ammunition. Crabtree knew he was prohibited from possessing a firearm because of his prior felony convictions for conspiracy to deliver not less than 10 grams nor more than 100 grams of heroin in Wayne County Circuit Court on May 30, 2018, and attempt to commit a felony in Cabell County Circuit Court on March 21, 2017.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Huntington Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Joseph F. Adams prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 3:24-cr-86.
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Gonzales Man Guilty of Federal Drug and Gun OffensesRead the Press Release
NEW ORLEANS, LOUISIANA – United States Attorney Duane A. Evans announced that JULES GIBSON (“GIBSON”), age 39, formerly a resident of Gonzales, Louisiana, pled guilty on November 21, 2024, before United States District Judge Susie Morgan to Conspiracy to Possess with Intent to Distribute and, to Distribute Cocaine, in violation of Title 21, United States Code, 846; and Felon in Possession of a Firearm, in violation of Title 18, United States Code, Section 922(g)(1). GIBSON admitted that as a prior drug offender, he is subject to enhanced penalties for the conspiracy charge.
As to Conspiracy to Possess with Intent to Distribute, and to Distribute Cocaine, GIBSON faces a minimum term of imprisonment of 10 years up to a maximum of life imprisonment, a fine of up to $8,000,000 and, at least 8 years of supervised release. As to being a Felon in Possession of a Firearm, GIBSON faces up to 15 years imprisonment, up to a $250,000 fine and, up to three years of supervised release. Each offense also carries a mandatory special assessment fee of $100.00.
Sentencing in this matter is set for February 25, 2025.
Court documents court reflect that a co-defendant, who also pled guilty, was arrested by Jefferson Parish Sheriff’s Office (JPSO) deputies after they recovered several plastic bags containing cocaine and crack cocaine, a black digital scale, a Black Taurus Model PT 24/7 PRO handgun with a magazine containing 11 live rounds of .45 ammo and his cell phone, from his pick-up truck. Examination of the co-defendant’s cell phone by the JPSO and special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, uncovered text messages, photographs and other information documenting his drug trafficking activities. Additionally, the cell phone examination identified GIBSON and revealed his own drug related purchases and payments. GIBSON was later arrested by JPSO in possession of a Taurus Model PT140 PRO, .40 caliber pistol.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Jefferson Parish Sheriff’s Office. Assistant United States Attorney Mark A. Miller of the Narcotics Unit is assigned the prosecution.
Georgia Residents Charged with Conspiracy to Commit Money Laundering, Money Laundering, Wire Fraud, and Attempted ExtortionRead the Press Release
Wilmington, Del. – On November 14, 2024, a federal grand jury returned a Superseding Indictment charging nine Georgia residents with conspiracy to commit money laundering and related offenses, U.S. Attorney for the District of Delaware, David C. Weiss, announced today.
Defendant
Charges
Asaad Amir Hasuan, also known as “Dante Frederick,” age 43, of Brunswick, Georgia- One count of conspiracy to commit money laundering
- Eight counts of money laundering
- One count of wire fraud
- One count of attempted Hobbs Act extortion
- One count of conspiracy to commit money laundering
- Three counts of money laundering
- One count of conspiracy to commit money laundering
- One count of conspiracy to commit money laundering
- One count of conspiracy to commit money laundering
- Three counts of money laundering
- One count of conspiracy to commit money laundering
- Two counts of money laundering
- One count of conspiracy to commit money laundering
- One count of conspiracy to commit money laundering
- One count of conspiracy to commit money laundering
According to the Superseding Indictment, from about September 2021 through at least May 2024, while incarcerated in Georgia, Hasuan perpetrated fraud schemes against the family and friends of his fellow inmates. Hasuan induced his victims to transfer money and property for his own personal benefit and for the benefit of others by, among other things, falsely promising to provide legal assistance, physical protection, and investment opportunities. Hasuan ultimately defrauded his victims out of millions of dollars, including one Delaware resident who transferred money and property valued at more than $3.5 million. Hasuan then conspired with a network of money mules to launder the proceeds of his fraud schemes through various financial transactions, including the purchase of real property, mobile homes, and automobiles. The defendants also funneled the fraud proceeds through a car rental company doing business in the name of “One Way Auto.”
U.S. Attorney Weiss stated, “While incarcerated, Mr. Husuan orchestrated an illegal scheme that defrauded victims of millions of dollars. Working with our law enforcement partners, my office will continue to prioritize prosecuting individuals who choose to continue to disregard the rule of law. I commend the FBI for their work in investigating this case.”
The FBI’s Wilmington Resident Agency is investigating this case. Assistant U.S. Attorneys Meredith C. Ruggles and Claudia L. Pare are assigned to prosecute this case.
The U.S Attorney’s Office and the FBI are seeking to identify additional victims of Asaad Amir Hasuan a/k/a “Dante Fredrick.” If you, your family member, or anyone that you know had contact with Hasuan and would like to provide additional information, please contact the FBI at Baltimore Field Office at 410-265-8080.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Delaware. Related court documents and information is located on the website of the District Court for the District of Delaware or on PACER.
Georgia Man Sentenced to Federal Prison for Bank Fraud, Passport Fraud, and Aggravated Identity TheftRead the Press Release
Ocala, Florida – U.S. District Judge Thomas Barber has sentenced Gary Dale Thrasher (56, Georgia) to four years and nine months in federal prison for bank fraud, passport fraud, and aggravated identity theft. As part of his sentence, the court also entered an order of forfeiture for $25,200, the amount representing the proceeds of Thrasher’s fraud offenses. Thrasher entered a guilty on June 27, 2024.
According to court documents, between May and June 2023, Thrasher obtained and used, or attempted to use, fraudulent identification documents, including fraudulent United States passport cards, containing the personal information of others. Thrasher used the fake identification documents to make cash withdrawals from the accounts of the victims at multiple branches of four different federally insured financial institutions in the Middle District of Florida.
“Identity theft is not a victimless crime, and these fraud schemes undermine the trust in our financial systems and damage the lives of innocent people,” said Homeland Security Investigations (HSI) Orlando Assistant Special Agent in Charge David Pezzutti. “HSI, alongside our state and local partners in Florida, are committed to seeking these fraudsters out and holding them accountable for their actions.”
This case was investigated by Homeland Security Investigations, the Ocala Police Department, the Wildwood Police Department, the Leesburg Police Department, and the Charlotte County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Sarah Janette Swartzberg.
Fort Lauderdale Man Pleads Guilty to Conspiring to Defraud Medicare in the Provision of COVID-19 Test KitsRead the Press Release
Jacksonville, Florida – United States Attorney Roger B. Handberg announces that Kevin Karl Wills, Jr. (48, Ft. Lauderdale) today pleaded guilty to conspiring to receive kickbacks in return for the referral of Medicare beneficiaries for the provision of COVID-19 tests and to purchase and sell Medicare beneficiary identification numbers. He faces a maximum penalty of 5 years in prison. A sentencing date has not yet been set.
According to the plea agreement, Wills and a co-conspirator owned and operated a company that engaged marketers who illegally obtained Medicare beneficiary identifying information. They entered into “consulting” agreements with medical service providers whereby they introduced the marketers to the providers, and the marketers agreed to supply the providers with lists of Medicare beneficiaries and their identifying information, including their Medicare beneficiary identication numbers. The providers then shipped COVID-19 tests to the identified beneficiaries and billed Medicare for the tests, then paid both the defendant’s company and the marketers a set dollar amount per beneficiary. However, the providers paid this amount only if a claim submitted on behalf of a beneficiary was reimbursed by Medicare. Such payments were illegal kickbacks under federal law.
The actions of Wills and his co-conspirators caused the submission of approximately 152,00 fraudulent claims to Medicare by several different medical service providers, which resulted in reimbursements from Medicare totaling approximately $14,405,700. Wills received a total of approximately $652,312 in kickbacks, which he agreed to forfeit to the government.
One of the providers who purchased Medicare beneficiary identifying information was SWL Services, a business in Jacksonville, Florida. The owners and operators of SWL Services, Courtney Shauta’ Lewis (31, Jacksonville) and Latania Renee Smith-Washington (50, Jacksonville), pleaded guilty to the conspiracy on March 14, 2024, and are scheduled for sentencing on December 2, 2024. One of the marketers that Wills introduced to SWL Services, Noel Gary Beres (64, Sunny Isles), pleaded guilty to the conspiracy on August 27, 2024, and is scheduled for sentencing on April 22, 2025.
This case was investigated by Health and Human Services–Office of Inspector General and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Arnold B. Corsmeier. The forfeiture is being handled by Assistant United States Attorney Jennifer Harrington.
Former Trading Firm Executive Sentenced to 23 Years for Defrauding Victims in Colorado and WorldwideRead the Press Release
DENVER – The U.S. Attorney’s Office for the District of Colorado announces Bryant Edwin Sewall, 57, formerly of Little Elm, Texas, was sentenced to 23 years in prison after being found guilty by a federal jury in May of 2024 on 14 counts of wire fraud and one count of conspiracy to commit wire fraud. Michael Shawn Stewart, 61, of Scottsdale, Arizona, who was also found guilty on the same counts, will be sentenced at a later date.
Evidence presented at the three-week trial showed that Stewart and Sewall were owners and executives of companies operating on various Caribbean islands under the names Mediatrix Capital and Blue Isle Markets. As part of the scheme Stewart and Sewall provided false and fraudulent information about an algorithm-based foreign currency exchange (“ForEx”) trading program to potential investors and to salespeople they were using to solicit investors. For example, Stewart and Sewall falsely represented that Mediatrix had a history of successful ForEx trading going back to 2013 with no months of losses when, instead, Mediatrix did not exist until 2014 and its trading history included many months of net losses. Mediatrix promised its investors “100% Transparency,” “100% Liquidity” and “World Class Returns.”
Additional evidence at trial showed that after luring investors into the scheme Stewart and Sewall fraudulently induced them to stay by manipulating account statements to show only positive trades while intentionally hiding massive losses that substantially reduced those investors’ accounts. By the end of the scheme, Stewart and Sewall had promised investors over $179 million but had only $9.8 million in their accounts, a gap that they internally referred to as “the hole.” Even as they lost approximately $32 million in trades, Stewart and Sewall rewarded themselves with approximately $28 million in performance fees. They also used their brokerage, Blue Isle, to fraudulently convert investor money into over $45 million in markup fees. They spent the money on real estate, boats, cars, jewelry, and other luxuries. Sewall was ordered to pay approximately $93 million in restitution.
“This is a serious sentence for a serious crime,” said Acting United States Attorney for the District of Colorado Matt Kirsch. “Justice was done for the many people who were victimized Sewall’s outrageous crimes.”
"Mr. Sewall and his co-defendants orchestrated an elaborate foreign currency investment fraud scheme that caused extensive financial harm to unsuspecting victims. He convinced investors by deceiving them with calculated lies about the profit potential and then created an illusion while he used their money for his own personal gain,” said FBI Denver Special Agent In Charge Mark Michalek. “The FBI will continue to investigate and seek justice for individuals who fall victim to financial criminals who cheat and lie.”
A third partner involved with Mediatrix and Blue Isle — Michael Young — previously pleaded guilty to making a false statement to the Securities and Exchange Commission and was sentenced to one year and one day in prison earlier this year.
United States District Court Judge William J. Martinez presided over the sentencing. The Federal Bureau of Investigation’s Denver Field Office conducted the investigation. Assistant United States Attorneys Anna Edgar, Bryan Fields, and former AUSA Pegeen Rhyne handled the prosecution.
Case number: 21-cr-00034-WJM
Former TPS District Chief Learning and Talent Officer Sentenced for Stealing More Than $593kRead the Press Release
TULSA, Okla. – Former District Chief Learning and Talent Officer sentenced today for Conspiracy to Commit Wire Fraud after defrauding Tulsa Public Schools and the Foundation for Tulsa Public Schools, announced U.S. Attorney Clint Johnson.
U.S. District Judge Sara E. Hill sentenced Devin Darel Fletcher, 40, to 30 months imprisonment, followed by three years of supervised release. Further, Judge Hill ordered Fletcher to pay his victims a total $593,492.32 in restitution.
“Fletcher’s embezzlement was methodical and a complete abuse of power from a person in a position of trust,” said U.S. Attorney Clint Johnson. “Simply put, there is no justification for his actions. This money could have funded several teachers' salaries, which would have directly benefited students.”
“The defendant betrayed the trust of the citizens of Tulsa and intentionally stole funds meant for the betterment of students,” said FBI Oklahoma City Special Agent in Charge Doug Goodwater. “The sentence imposed today holds him accountable for his actions and sends a message that abuse of power for personal gain is not acceptable to the American people.”
Fletcher began working for Tulsa Public Schools (TPS) in August 2016, until he resigned as the District’s Chief Learning and Talent Officer in June 2022. While employed, Fletcher was responsible for human resources and educational performance issues throughout TPS. Fletcher was entrusted with limited hiring and firing authority for specific personnel, including consultants, for whom he also had expenditure approval authority.
In October 2023, Fletcher pled guilty to devising a scheme to defraud TPS and the Foundation for Tulsa Public Schools. Fletcher, who holds a master’s degree in professional accounting, skillfully and deceitfully abused his authority. He created and altered fraudulent invoices, purchase orders, and supporting documentation. From August 2018 through March 2022, a co-conspirator received more than $448k in fraudulent payments for fake services. Even with a generous annual salary of $167k, Fletcher stole for himself an additional $137k during that time.
Fletcher was permitted to remain on bond and voluntarily surrender to the U.S. Bureau of Prisons at a later date.
The FBI and Tulsa Police Department conducted the investigation. Assistant U.S. Attorney David D. Whipple prosecuted the case.
Former Cleveland City Council Member Charged with Bribery and FraudRead the Press Release
CLEVELAND – Basheer Jones, 40, of Cleveland, Ohio, has been charged in a two-count information with conspiring to commit wire fraud and honest services fraud for using his role as a public official for personal financial gain by seeking to defraud multiple community stakeholders out of more than $200,000. He previously served as an elected Cleveland city council member representing Ward 7.
According to court documents, from about December 2018 to June 2021, Jones allegedly misrepresented and concealed material facts to induce nonprofit organizations to enter into a variety of arrangements that would benefit Jones and his romantic partner co-conspirator. Under the guise of working on projects to benefit the city of Cleveland and revitalize Ward 7, Jones fraudulently sought and obtained funds from local nonprofits while he concealed his connection to his romantic partner, through whom he benefited from these arrangements.
Jones’s schemes were devised to deceive nonprofit entities into making payments toward projects they thought were for the community’s benefit. Instead, the money ultimately went into bank accounts controlled by Jones’s romantic partner. Jones would then direct her to divert those funds to herself, Jones, and to other associates who were involved.
The information alleges that Jones deceptively advised nonprofits to provide funding to move community projects forward or to hire a purported “consultant,” with the full knowledge that the funds would flow back to himself. For example, Jones recommended that a nonprofit hire a consultant for community outreach. Unbeknownst to the nonprofit, the “consultant” who quickly submitted a proposal and whose business was ultimately contracted, was Jones’s co-conspirator and romantic partner. She submitted the proposal and requested $5,000 per month at Jones’s prompting. The investigation discovered that she did not provide the nonprofit with substantial services in exchange for payments she received.
Jones later defrauded the same nonprofit out of an additional $50,000, again through his romantic partner’s consulting business. Jones claimed that he needed $50,000 to plan a community event, which included buying backpacks for schoolchildren, and falsely promised that the city would reimburse the organization. Instead, after the funds were paid, no event was held, and Jones directed his romantic partner to divide the money amongst herself, Jones, and others associated with the scheme.
Some of the projects Jones pushed included seeking community funding to rehabilitate certain distressed properties while concealing his financial interest in them. In one instance, Jones devised a bribery scheme under which he arranged for co-conspirators, including his romantic partner, to acquire a dilapidated property on Superior Road, and used his position as councilperson to pass ordinances allocating city funds to buy that property from them. Jones arranged for a co-conspirator to buy the property a minimal cost. After asking a nonprofit to purchase and rehabilitate the property, and promising city funding, Jones sponsored an emergency ordinance to fund the nonprofit’s purchase and renovation of the property. When Jones was unable to convince the nonprofit to proceed, he arranged to transfer the property to his romantic partner’s consulting business, with the understanding that she too would share the proceeds of the sale with him. After sponsoring another ordinance to reauthorize city funding for the same project, Jones sought to finalize the nonprofit’s purchase of the property from his partner’s entity for $80,000. Ultimately the scheme failed when the nonprofit decided not to proceed with the purchase.
Jones and his partner did succeed in obtaining funds for the sale of a different property to another nonprofit. He misled them to believe that he was helping them to acquire the property from the original owner. Instead, he was simultaneously arranging for his romantic partner to acquire the property from the original owner in the name of another business entity, and then immediately to resell it to the nonprofit. Jones and his partner arranged to purchase the property for only $1, promising to pay a $40,500 city demolition bill. But without paying that bill or disclosing it, Jones’s partner immediately re-sold the property to the nonprofit for $45,000.
These charges are merely allegations, and the defendant is presumed innocent and entitled to a fair trial. It will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to the case, including the defendant’s prior criminal record, if any, their 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.
This case was investigated by the FBI Cleveland Division, the U.S. Department of Housing and Urban Development Office of the Inspector General, and the IRS – Criminal Investigation.
The case is being prosecuted by Assistant U.S. Attorneys Erica Barnhill and Elliot Morrison for the Northern District of Ohio.
To report fraud, visit justice.gov/action-center/report-crime-or-submit-complaint.
Former Chief Investment Officer of Global Bond Investment Firm Charged with over $600 Million Investment Adviser FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and James E. Dennehy, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging S. KENNETH LEECH II, the former Chief Investment Officer of Western Asset Management Company (“WAMCO”), with securities fraud, investment adviser fraud, commodity trading adviser fraud, commodities fraud, and making false statements. WAMCO is a global fixed-income investment adviser that manages hundreds of billions of dollars on behalf of its clients. Between 2021 and 2023, LEECH defrauded WAMCO’s clients by engaging in a criminal cherry-picking scheme to favor certain clients at the expense of others, assigning over $600 million of gains to favored clients and over $600 million of losses to disfavored clients. LEECH has been summoned to make his initial appearance in the Southern District of New York in connection with the charges by December 6, 2024. The case has been assigned to U.S. District Judge Gregory H. Woods.
U.S. Attorney Damian Williams said: “We allege today that S. Kenneth Leech II—the Chief Investment Officer of a significant manager of pension funds and other long-term investments—used his position to cherry pick trades and prop up his favored but failing accounts at the expense of others. These charges should be a reminder that this Office continues to police all corners of the financial markets and will swiftly hold those accountable who believe that they can cheat and abuse the trust of clients for their own purposes.”
FBI Assistant Director in Charge James E. Dennehy said: “Kenneth Leech, the former CIO of Western Asset Management Company, allegedly violated his fiduciary duty by crafting a preferential treatment scheme to allot more than $600 million in profits and losses to particular clients. Instead of allocating trades appropriately, Leech allegedly allowed favoritism to benefit preferred accounts for their benefit. The FBI will continue to investigate any individual who exploits their trusted position to favorably treat certain clients at the expense of others."
According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]
Between 2021 and October 2023, LEECH committed fraud and abused the trust placed in him by clients of the investment-management company WAMCO. LEECH engaged in a criminal scheme commonly known as “cherry picking” to compensate for losses in his marquee investment strategy by assigning trades that performed well during their first day into client accounts associated with that investment strategy, and assigning trades that performed poorly over their first day into the accounts of other clients, who were not aware that LEECH was causing them losses to favor others. LEECH’s victims included institutional and retail investors who trusted LEECH to manage their savings and pension plans. Over the course of his criminal scheme, LEECH allocated trades with net first-day gains of at least approximately $600 million to his favored strategy and clients, and allocated trades with net first-day losses of at least approximately $600 million to clients to whom he owed an equal fiduciary duty.
LEECH was able to carry out this scheme because, as Chief Investment Officer of WAMCO, LEECH was responsible for making trades on behalf of different portfolios and assigning those trades to the portfolio for which he had traded—a process generally referred to as “allocation.” One set of portfolios for which LEECH traded followed what WAMCO called the “Macro Opportunities” strategy (“Macro Opps”). Another set of portfolios followed what WAMCO called the “Core” and “Core Plus” strategies (together, the “Core Strategies”). LEECH owed a fiduciary duty to any client who invested in portfolios that followed either of these strategies.
Despite that duty, and in violation of it, LEECH engaged in a fraudulent scheme to bolster Macro Opps, which necessarily came at the expense of the Core Strategies, by allocating trades based on their performance between the time he placed the trades and the time he made his allocations. He carried out this scheme by placing trades, waiting to see how those trades performed throughout the day, and then using the first-day performance of his trades to determine where to allocate them—assigning better-performing trades to Macro Opps and worse-performing trades to the Core Strategies. This was contrary to WAMCO’s compliance trainings, which emphasized that LEECH should allocate trades promptly, and against WAMCO’s policies, which prohibited allocating trades on the basis of first-day performance to make up for losses.
Neither LEECH nor WAMCO disclosed to investors that LEECH used first-day performance to decide how to allocate trades, or that LEECH was favoring Macro Opps in his allocations. To the contrary, WAMCO represented to investors that LEECH and others knew where they planned to allocate a trade before making the trade and finalized the allocation promptly after the trade was completed, and LEECH later testified before the U.S. Securities and Exchange Commission (“SEC”) that he knew where he planned to allocate a trade when he placed it. This testimony was false and the reality was far different. LEECH routinely waited hours after making his trades—often until late in the day—to make his allocations, allowing him to observe how his trades had performed before deciding where to allocate them. Between 2021 and October 2023, LEECH used that ability to see how the market moved to support Macro Opps by awarding it better performing trading and hiding worse performing trades in the Core Strategies.
By allocating trades based on first-day performance, LEECH bolstered the overall performance of Macro Opps at the expense of the larger Core Strategies. Each time LEECH assigned a trade with a first-day gain to Macro Opps, or assigned a trade with a first-day loss to the Core Strategies, LEECH improved or protected the daily performance of Macro Opps. When done consistently over time, those daily boosts added up to significantly enhance the performance of Macro Opps. From January 2021 through October 2023, the Treasury futures and options trades that LEECH allocated specifically to Macro Opps had net first day gains of over $600 million. By contrast, during this period, the Treasury futures and options trades that LEECH allocated specifically to the Core Strategies had net first day losses of over $600 million.
LEECH’s bias in favor of Macro Opps was more pronounced the larger the first-day gain or first-day loss. For example, between 2021 and October 2023, there were over 500 Treasury futures or options trades that LEECH chose to allocate specifically to either Macro Opps or the Core Strategies and that had first-day gains over $500,000. LEECH allocated over 90% of those winning trades to Macro Opps and fewer than 10% to the Core Strategies. Conversely, over that same time period, there were over 500 Treasury futures or options trades that LEECH chose to allocate specifically to either Macro Opps or the Core Strategies and that had first-day losses over $500,000. LEECH allocated less than 10% of those losing trades to Macro Opps, while allocating over 90% of them to the Core Strategies.
Similarly, between 2021 and October 2023, there were over 150 Treasury futures or options trades that LEECH chose to allocate specifically to either Macro Opps or the Core Strategies and that had first-day gains over $1,000,000. LEECH allocated over 90% of those winning trades to Macro Opps and less than 10% to the Core Strategies. Over that same time period, there were over 200 Treasury futures or options trades that LEECH chose to allocate specifically to either Macro Opps or the Core Strategies and that had first-day losses over $1,000,000. LEECH allocated less than 5% of those losing trades to Macro Opps, while allocating over 95% to the Core Strategies.
LEECH’s pattern of biased allocation was steady over the period relevant to this Indictment. In each of the 34 months between the beginning of 2021 and October 2023, the U.S. Treasury futures and options trades allocated specifically to Macro Opps had a net first-day gain. By contrast, over that same period, the U.S. Treasury futures and options trades that LEECH allocated specifically to the Core Strategies had net first-day losses in all months except two.
The bias in favor of Macro Opps was not caused by LEECH pursuing a unique trading strategy for Macro Opps. Notably, when LEECH did not exercise discretion to allocate trades between Macro Opps and the Core Strategies, the trades that went to Macro Opps were not characterized by disproportionate first-day gains.
For example, between 2021 and October 2023, LEECH had a standing instruction that trades he made through a certain broker (“Broker-1”) should, by default, be allocated to Macro Opps. As a result, LEECH generally did not exercise discretion to allocate trades through Broker-1 at the end of the day because his trading assistant automatically allocated them to Macro Opps. When Treasury futures and options trades were allocated to Macro Opps without LEECH first observing performance in the market, the bias in favor of Macro Opps disappeared. Over the relevant time period, approximately 55% of the trades LEECH placed through Broker-1 trades had first-day gains, while approximately 45% had first-day losses. These trades produced modest first-day losses, generating an average first-day loss of over $5,000. This is dramatically lower than the average first-day gain of approximately $225,000 that LEECH generated on those trades that he specifically allocated to Macro Opps when he had an opportunity to see market movements before making an allocation decision.
After October 2023, WAMCO removed LEECH from the Core Strategies, so he no longer had the authority to allocate trades to those strategies. As with the Broker-1 trades, when LEECH no longer had discretion to allocate trades to the Core Strategies, the trades LEECH allocated to Macro Opps stopped having a consistent, pronounced bias toward first-day gain.
In all, between 2021 and October 2023, the U.S. Treasury futures and options trades LEECH allocated specifically to Macro Opps had net first-day gains of over $600 million. By contrast, the U.S. Treasury futures and options trades LEECH allocated specifically to the Core Strategies had net first-day losses of over $600 million.
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LEECH, 70, of Pasadena, California, is charged with one count of investment adviser fraud and one count of securities fraud, each of which carries a maximum sentence of 20 years in prison; one count of commodity trading adviser fraud and one count commodities fraud, each of which carries a maximum sentence of 10 years in prison; and one count of making false statements, which carries a maximum sentence of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding work of the FBI. Mr. Williams further thanked the SEC, which today filed a parallel civil action against LEECH.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Thomas S. Burnett and Peter J. Davis 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.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth in this release constitute only allegations, and every fact described should be treated as an allegation.