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29 August 2024
Attempted sex trafficking of minor girl, violation of a release condition send Billings man to prison for more than 23 yearsRead the Press Release
BILLINGS — A Billings man who admitted to a sex trafficking crime after he was accused of offering to provide a minor girl alcohol in exchange for sex and to violating a release condition in a separate case was sentenced today to a total of 23 years and 10 months in prison, to be followed by a lifetime of supervised release, U.S. Attorney Jesse Laslovich said.
The defendant, Joshua Allen Morgan, 40, pleaded guilty in May to attempted sex trafficking of a minor. In a separate case, Morgan also admitted to violating a condition of supervised release for a separate 2012 conviction for receipt of child pornography.
U.S. District Judge Susan P. Watters presided. The court sentenced Morgan to 21 years and 10 months in prison for the attempted sex trafficking conviction and to a consecutive two years in prison for violating a release condition in the child pornography case.
In the case involving attempted sex trafficking of a minor, the government alleged in court documents that in March 2023, law enforcement was conducting an undercover online investigation in the Billings area targeting individuals with a sexual interest in children. Morgan responded to and agreed to meet a person he believed to be a 12-year-old girl. Morgan was arrested and law enforcement served a search warrant on his phone. Law enforcement found Facebook communications between Morgan and a juvenile girl, identified as Jane Doe. In an interview with law enforcement, Doe disclosed that she had met Morgan when she was 15 or 16 after he began sending her messages on Facebook. Morgan provided Doe with alcohol, and they spent time together. During this period, Moran sexually assaulted Doe at his residence. In March 2023, Morgan and Doe began corresponding again and discussions involved Morgan providing Doe with alcohol in exchange for sexual conduct. Doe informed Morgan she was a juvenile, and Morgan instructed her not to disclose their relationship to anyone. Doe and Morgan did meet, but Doe left prior to engaging in sexual conduct with Morgan.
At the same time Morgan was attempting to traffic Jane Doe, he also was attempting to groom other minor girls. He asked two girls to travel to Laurel with him one night and purchased alcohol for them. On another occasion, Morgan informed one of those girls that he could provide her with methamphetamine. Morgan made a habit of informing these children that he did not want to know their age. The girls were 15 and 16 years old.
The U.S. Attorney’s Office prosecuted the case. The FBI and Montana Division of Criminal Investigation conducted the investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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As Kids Return to School, U.S. Attorney Releases New Public Service Announcement Warning About Child Predators on InternetRead the Press Release
Jackson, Miss. – As kids return to school, the U.S. Attorney’s Office for the Southern District of Mississippi launched an on-line video public service announcement (PSA) designed to raise awareness about the increasing number of child predators seeking to exploit children on the internet.
The PSA video, which is available on-line, features United States Attorney Todd Gee and provides information about the importance of being aware of your child’s use of digital technologies, ways child predators are using technology to exploit children, and how to report child exploitation. The PSA highlights the risk of child predators using digital technology to engage in “sextortion,” a type of blackmail used by predators over the internet to acquire sexual content from a child. That person may use deceit, coercion, or another method to obtain a nude or sexual image of the child before blackmailing them for money or more content.
As discussed in the PSA, in the Southern District of Mississippi, the U.S. Attorney’s office is fortunate to work with the Internet Crimes Against Children Task force, a coalition of federal, state and local law enforcement agencies who specialize in hunting down these child predators.
“Back to school season is a great time to remind parents to be aware of the ways your children are connected to the internet—from cell phones to gaming systems and social media—and how child predators can use these digital technologies to exploit children,” said U.S. Attorney Gee. “I encourage parents to watch this PSA, be aware of the risks of digital technology, and report any potential sextortion or other forms of child exploitation.”
If you believe your child has been a victim of sextortion or other forms of child exploitation, preserve the evidence, take screenshots, write down names, usernames, and phone numbers, and report the information to your local FBI field office or online at https://tips.fbi.gov/home.
For additional information, please visit the National Center for Missing and Exploited Children website at https://www.missingkids.org.
The U.S. Attorney’s PSA can be found here: Internet Safety PSA and on the U.S. Attorney’s Office’s X and Facebook pages.
Arizona Man Pleads Guilty to COVID-19 Relief Fraud and Filing a False Claim with the IRSRead the Press Release
An Arizona man pleaded guilty yesterday to wire fraud and filing a false refund claim with the IRS.
According to court documents and statements made in court, in 2020 and 2021, Roy L. Layne submitted false applications on behalf of several bogus businesses to the U.S. Small Business Administration (SBA) for loans from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, two federal programs created to provide financial assistance to Americans suffering economic harm as a result of the COVID-19 pandemic. In those applications, Layne claimed that the businesses had dozens of employees and earned hundreds of thousands in gross receipts. To support his false claims and to create the appearance of genuine business activity, Layne created false business and employment tax forms that he filed with the IRS and submitted to the SBA. In total, Layne requested and received over $300,000 in loans to which he was not entitled.
In addition, in 2022, Layne filed false returns with the IRS that sought nearly $7.5 million in refunds, of which the IRS paid approximately $550,000.
Layne is scheduled to be sentenced on Feb. 3, 2025. He faces a maximum penalty of 30 years in prison for each wire fraud charge and five years for the false claim charge. He also faces a period of supervised release, restitution and monetary penalties. 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 Gary M. Restaino for the District of Arizona made the announcement.
IRS Criminal Investigations and the FBI are investigating the case.
Trial Attorney Matthew R. Hoffman of the Justice Department’s Tax Division and Assistant U.S. Attorney Mary Sue Feldmeier for the District of Arizona are prosecuting the case.
Amsterdam Man Sentenced to Nearly 8 Years for Distributing Crack Cocaine, Money Laundering and Possessing a Firearm in Furtherance of Drug TraffickingRead the Press Release
ALBANY, NEW YORK – Angelo Dalmau, age 54, of Amsterdam, New York, was sentenced today to 93 months in prison, to be followed by a 3-year term of supervised release, for drug, money laundering, and firearm offenses.
United States Attorney Carla B. Freedman; Frank A. Tarentino III, Special Agent in Charge of the U.S. Drug Enforcement Administration (DEA), New York Division; and Thomas Fattorusso, Executive Special Agent in Charge of the Internal Revenue Service-Criminal Investigation (IRS-CI), New York Field Office, made the announcement.
As part of his guilty plea, Dalmau admitted to selling cocaine base (a/k/a crack cocaine) to another person on five occasions between September 2021 and March 2022; the total amount sold was approximately 250 grams. Dalmau further admitted to delivering $149,500 in drug money to another individual in January 2022 for the purpose of laundering those funds. When investigators searched Dalmau’s residence pursuant to a warrant on April 14, 2022, they recovered approximately 100 grams of crack cocaine, drug paraphernalia, $191,843 in cash, and a pistol loaded with ammunition. Dalmau was arrested on that date has remained in custody since that time.
The DEA, IRS and Amsterdam Police Department investigated the case. Assistant U.S. Attorney Dustin Segovia and former Assistant U.S. Attorney Emmet O’Hanlon prosecuted the case.
21 Suspected El Paso Gang Affiliates Arrested for Alleged Drug Trafficking, Firearm OffensesRead the Press Release
EL PASO, Texas – 21 individuals suspected of being affiliated with the Chuco Tango street gang were arrested Thursday in and around El Paso on criminal charges related to their alleged involvement in trafficking of fentanyl, cocaine and methamphetamine, and/or the unlawful possession of firearms.
The following defendants were indicted in federal court for various charges that include conspiracy to possess a controlled substance with intent to distribute, possession of a controlled substance with intent to distribute, and possession of a firearm by a felon.
- Clarissa Inez Santana
- Daniel Baeza aka “Racoon”
- Hector Chamorro
- Angel Renee Corral aka “Happy”
- Antonio “Omar” Gamboa
- Robert Gurrola aka “Bobby Barker” aka “Bobby Baker”
- Ricardo Moreno
- Andrew Solorio aka “Tokes”
- Adam Vazquez
- Brandon Garcia
- Jacqueline Perez
- Aileen Gonzalez
- Byanka Sambrano
- Thomas Payan
- Steven Kuehn
- Cassandra Page Silva
- Tanya Campechano
- Alejandro Morrill
- Zoilo Romero
- Alexander Rangel
- Zulema Marin
A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Four fugitives remain at-large following Thursday’s operation: Carlos Flores, Jessica Rodarte, Jonathan Blanco and Adriel Belmont. Tips can be submitted to the DEA by calling (915) 832-6000 or visiting their website https://www.dea.gov/submit-tip or to the FBI at (915) 832-5000.
U.S. Attorney Jaime Esparza for the Western District of Texas, Acting Special Agent in Charge Britton Boyd for FBI El Paso Division, and Special Agent in Charge Towanda Thorne-James for the Drug Enforcement Administration El Paso Division made the announcement.
The FBI and DEA are investigating the case with valuable support from the Bureau of Alcohol, Tobacco, Firearms and Explosives, Homeland Security Investigations, Customs and Border Protection, Border Patrol, the Texas Department of Public Safety, the El Paso Police Department, the El Paso Sheriff’s Office, the Socorro Police Department, the Horizon Police Department, the El Paso Constables, and the Ysleta Del Sur Pueblo Tigua Police Department.
Assistant U.S. Attorney John Johnston 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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28 August 2024
Wilmington Resident Sentenced for Possession of Firearms After Threats in Alamance CountyRead the Press Release
GREENSBORO – A North Carolina man was sentenced today to 3-1/2 years in prison, after pleading guilty to one count of felon in possession of a firearm, announced United States Attorney Sandra J. Hairston of the Middle District of North Carolina (MDNC).
CHRISTOPHER MICHAEL CAULDER, age 30, of Wilmington, North Carolina, was sentenced to a 42-month term of imprisonment by the Honorable Thomas D. Schroeder, United States District Judge in the United States District Court for the MDNC. He pleaded guilty on April 2, 2024, to felon in possession of a firearm, a violation of Title 18, United States Code, Section 922(g)(1).
According to court records, on November 7, 2022, Deputies with the Alamance County Sheriff’s Office responded to a 911 call that Christopher Michael CAULDER was making suicidal and homicidal threats. When Deputies responded to the scene and spoke with CAULDER’s mother, they learned that CAULDER had a safe in the basement which contained multiple firearms and a large amount of ammunition, which he brought there from his residence in Wilmington, NC. A search warrant was applied for and granted by a state magistrate. During execution of the search warrant, investigators recovered 23 firearms, several thousand rounds of various calibers of ammunition, hundreds of magazines (some still in boxes with CAULDER’s name on the shipping labels), body armor, firearm accessories, and multiple incomplete firearm receivers (aka ghost guns). Three of the rifles recovered had barrels shorter than 16 inches. One of the rifles appeared to have a hole drilled for the installation of a fully automatic trigger system. While being interviewed, CAULDER made statements indicating he was attempting to make a machine gun.
At the time of these offenses, CAULDER had been previously convicted of Discharging a Weapon into Occupied Property (Alamance County, 2019) and was sentenced to a term of imprisonment exceeding one year. Thus, at the time of the instant offense, CAULDER was legally barred from possessing a firearm due to his status as a felon.
The case was investigated by the Bureau of Alcohol, Firearms, Tobacco, and Explosives and the Alamance County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Tracy M. Williams-Durham.
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Westwego Woman Guilty of Theft of Government FundsRead the Press Release
NEW ORLEANS – United States Attorney Duane A. Evans announced that PENELOPE PASSERO (“PASSERO”), age 50, of Westwego, Louisiana, pled guilty on August 27, 2024 to Theft of Government Funds, in violation of Title 18, United States Code, Section 641. PASSERO faces up to ten (10) years imprisonment, and/or a fine of $250,000, or the greater of twice the gross gain to the defendant or twice the gross loss to any person under Title 18, United States Code, Section 3571, up to three years of supervised release and, a mandatory $100 special assessment fee.
According to court documents, from February 2016 to December 2020, PASSERO knowingly accessed and converted approximately $59,320.97 in Social Security Administration and Coronavirus Aid, Relief, and Economic Security Act (“CARES ACT”) funds.
Sentencing is scheduled for December 3, 2024 before United States District Judge Wendy B. Vitter.
On May 17, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources, and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of fraud related to COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The U.S. Attorney’s Office would also like to acknowledge the assistance of the Social Security Administration, Office of the Inspector General, with this matter. The prosecution of this case is being handled by Assistant U.S. Attorney Brian M. Klebba, Chief of the Financial Crimes Unit.
Waterloo Man Sentenced to Federal Prison for Possessing a Gun and DrugsRead the Press Release
A felon who possessed a firearm and drugs was sentenced today to five years in federal prison.
Carlos Danacio Traywick, age 51, from Waterloo, Iowa, received the prison term after a February 27, 2024 guilty plea to one count of possession of a firearm by a felon and one count of possession with intent to distribute a controlled substance.
Evidence at the plea and sentencing hearings showed that deputies stopped a car that Traywick was driving in Waterloo on July 16, 2022. During the traffic stop, Traywick removed methamphetamine and marijuana from his pockets. Traywick attempted to run from officers, but he was apprehended after a brief foot chase. In the car that Traywick was driving, deputies located a loaded firearm and cocaine.
Traywick was sentenced in Cedar Rapids by United States District Court Judge Leonard T. Strand. Traywick was sentenced to 60 months’ imprisonment. He must also serve a four-year term of supervised release after the prison term. There is no parole in the federal system.
Traywick is being held in the United States Marshal’s custody until he can be transported to a federal prison.
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 prosecuted by Assistant United States Attorney Adam J. Vander Stoep and was investigated by the Black Hawk County Sheriff’s Office, Waterloo Police Department, Iowa Division of Criminal Investigation, Federal Bureau of Investigation, and Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 23-CR-2023.
Follow us on Twitter @USAO_NDIA.
United States Files Complaint Against Logger and Logging Company for Timber Trespass on Monongahela National ForestRead the Press Release
WHEELING, WEST VIRGINIA – The United States Attorney’s Office has filed a civil lawsuit against a Randolph County logger and logging company for trespassing and cutting down approximately 10 acres of timber on the Monongahela National Forest near Slaty Fork.
According to the complaint, John R. Fox and Fox Logging, LLC, of Valley Bend, West Virginia, submitted paperwork to timber 319 acres of private property that borders the Monongahela National Forest in Pocahontas County. Fox allegedly began logging in 2015 and continued until at least 2019. During that time, the logging operation is alleged to have encroached on nearly 10 acres of the Forest, resulting in timbering of more than 45,500 cubic feet of mature hardwood and pine saw timber valued at nearly $28,000. Fox was also accused of damaging and taking timber from an adjacent private property.
Under West Virginia state law, the government is seeking $80,189.04 in monetary damages from Fox and Fox Logging, LLC, as well as compensatory and punitive damages. Trial is scheduled to begin on October 20, 2025, at the United States Courthouse in Elkins, WV.
Assistant U.S. Attorney Maximillian Nogay filed the complaint on behalf of the government.
The U.S. Department of Agriculture Forest Service investigated.
United States Attorney Chris Kavanaugh Announces Departure at Year’s EndRead the Press Release
CHARLOTTESVILLE, Va. – United States Attorney Chris Kavanaugh released the following statement:
"Today, I am announcing my plans to resign from my position as United States Attorney for the Western District of Virginia effective at year’s end, following the commencement of my wife Jasmine Hyejung Yoon’s service as a United States District Court Judge this September. During this brief period of overlap, any cases in which the United States is a party, including all criminal matters, will be assigned to the other judges within the Western District of Virginia in accordance with the Court’s standing order for assignment of cases.
Serving as United States Attorney has been the highlight of my professional life. I am grateful to President Biden, Attorney General Merrick Garland, Deputy Attorney General Lisa Monaco, and Senators Warner and Kaine for the opportunity to serve as the chief federal law enforcement official for the Western District of Virginia, and to lead an Office full of public servants dedicated to the rule of law and the pursuit of justice."
As the United States Attorney since October 2021, Kavanaugh has supervised the investigation and prosecution of all federal crimes and the litigation of all civil matters in which the United States has an interest within the Western District of Virginia, which comprises 52 counties and 17 independent cities in Virginia.
In addition to being United States Attorney, Kavanaugh also serves on the Attorney General’s Advisory Committee (AGAC), chair of the AGAC’s National Security Subcommittee, co-chair of the Domestic Terrorism Executive Committee, and as a member of the Corporate Crime Enforcement Policy Working Group. Prior to becoming United States Attorney, Kavanaugh was Senior Counsel to the Deputy Attorney General and served as an Assistant United States Attorney for 14 years in both Charlottesville, Virginia and Washington, D.C.
U.S. Attorney's Office Presents to Treatment Providers on Combating Discrimination Against Individuals with Opioid Use Disorder in Recovery or TreatmentRead the Press Release
ASHEVILLE, N.C. – The U.S. Attorney’s Office for the Western District of North Carolina partnered with the U.S. Attorney’s Office for the Eastern and Middle Districts of North Carolina and the Mountain Area Health Education Center (MAHEC) in Asheville, to provide an informational session on The Americans with Disabilities Act and the Opioid Crisis: Combating Discrimination Against People In Treatment and Recovery from Opioid Use Disorder, announced Dena J. King, U.S. Attorney for the Western District of North Carolina.
The presentation was a component of a four-part series sponsored by MAHEC. The first module presented today by the Civil Rights Coordinators of each U.S. Attorney’s Office focused on an overview of the Americans with Disabilities Act (ADA) and its applicability to individuals in treatment to address Opioid Use Disorder (OUD). The presentation also encompassed a review of complaints and outcomes of prior investigations that alleged discrimination against individuals in treatment for OUD or with a history of past drug use.
The presentation aimed to ensure that skilled nursing facilities, rehabilitation centers, hospitals, and other medical establishments do not discriminate on the basis of disability, as such establishments are places of public accommodation under the ADA. Persons in need of care and services at skilled nursing facilities, outpatient rehabilitation facilities, hospitals, and medical offices cannot be denied access to these services because they are in treatment for OUD or had a history of past drug use. Under the ADA, no individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of a place of public accommodation. Persons in recovery for substance use disorder are individuals with a disability within the meaning of ADA and its accompanying regulations, and thus are covered by the ADA’s protections.
“As chief law enforcement officer in the Western District and Chair of the U.S. Attorney General’s Subcommittee on Civil Rights, I am committed to enforcing the ADA and all civil rights statutes,” said U.S. Attorney King. “As we work to combat the spread of illegal drugs in our communities, we must also support those seeking to rebuild their lives through treatment at licensed medical facilities. Ensuring that individuals are receiving the proper care they need to overcome substance use disorder without experiencing discrimination is a matter of critical importance for all of us.”
Individuals who believe they have been victims of discrimination may file an ADA complaint online at https://www.ada.gov/file-a-complaint/. Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free information line at 800-514-0301 (voice) or 1-833-610-1264 (TTY).
MAHEC was established 50 years ago, and is a leader in healthcare, education, and innovation. Headquartered on a 14-acre campus in Asheville, with family medicine, ob/gyn, internal medicine, psychiatry, and dentistry offices in various locations across its 16-county Western N.C. service area, MAHEC is the largest of nine Area Health Education Centers in the state and home to branch campuses of UNC schools of medicine, pharmacy, dentistry, and public health. Among MAHEC’s focus areas is recruiting, training, and retaining the workforce needed to create a healthy North Carolina, with particular emphasis on primary care in rural communities and for those with less access to resources. A Federally Qualified Health Center (FQHC) Look-Alike, MAHEC is one of the largest nonprofit employers in the mountain region with a staff of more than 1,000. For more information, visit mahec.net.
Two Individuals Charged in Multi-Million Dollar Scheme to Defraud Rideshare Customers, Drivers and OthersRead the Press Release
Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Eliahou Paldiel and Carlos Arturo Suarez Palacios (Suarez) with wire fraud and money laundering conspiracies relating to a wide-ranging scheme in which the defendants sold hacked smartphones and fraudulent applications to more than 800 rideshare drivers (Driver Co-conspirators). The applications enabled the Driver Co-conspirators to “spoof” GPS locations to fraudulently obtain “surge” fees and to otherwise manipulate legitimate rideshare applications to enrich themselves to the detriment of riders, law-abiding drivers and rideshare companies. If convicted, the defendants face up to 20 years in prison on each of the two counts.
This morning, Paldiel was arrested in Brooklyn and Suarez was arrested in Brick Township, New Jersey. The defendants will be arraigned later this afternoon before United States Magistrate Judge Marcia M. Henry.
Breon Peace, United States Attorney for the Eastern District of New York, and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrests and charges.
“As alleged, the defendants sought to enrich themselves by corrupting the rideshare market at the expense of unsuspecting passengers and hardworking drivers who play by the rules,” stated United States Attorney Peace. “My Office remains steadfast in ensuring that, no matter how complex the scheme, individuals who violate the law will be caught and held accountable. The defendants learned an important lesson in these charges: there is no such thing as a free ride.”
“Eliahou Paldiel and Carlos Suarez allegedly developed a rideshare application that fraudulently manipulated a driver’s GPS location to obtain unlawful surge fare pricing, defrauding customers and legitimate drivers. For almost six years, this alleged conspiracy offered an unfair financial advantage to more than 800 participants and disrupted the integrity of nationwide rideshare services, earning the participants more than $40 million. The FBI will continue to dismantle all fraudulent schemes, even as criminals attempt to create innovative scams for selfish gains,” stated FBI Acting Assistant Director in Charge Curtis.
Rideshare Company-1 is a multinational company headquartered in the United States that provides ridesharing services. It operates primarily through its smartphone application (the Rideshare Company-1 Application), connecting users with drivers for on-demand transportation and delivery services.
As alleged in the indictment and other court filings, between November 2018 and August 2024, Paldiel and Suarez engaged in a scheme to defraud Rideshare Company-1’s users and drivers by causing passengers to collectively pay millions of dollars in fraudulent “surge” fees to hundreds of participating Driver Co-conspirators, and depriving legitimate rideshare drivers of their true share of “surge” fares and the most lucrative trips. In addition, the fraudulent devices and applications sold by the defendants for profit enabled the Driver Co-conspirators to cherry-pick high-fare rides by obtaining proprietary information and to “queue” in areas where they were not physically present.
The defendants allegedly sold scheme applications to Driver Co-conspirators on manipulated—also known as “jailbroken” or “rooted”—cellular devices (the Scheme Devices). A jailbroken or rooted cellular device has had its operating system security restrictions modified or removed, thereby allowing the installation of software, including applications, that the device manufacturer had not made available for the device. Driver Co-conspirators utilized the Rideshare Company-1 Application on their Scheme Devices.
Fake GPS “Spoofing” App
Fake GPS was a GPS spoofing application developed by the defendants and others. Fake GPS enabled Driver Co-conspirators to manipulate or “spoof” their locations within the Rideshare Company-1 Application and make it appear as if they were located in an area with surging fares when, in fact, they were not.Screwber App
Screwber is an application developed by the defendants and others that provided Driver Co-conspirators with information about prospective Rideshare Company-1 rides that was not otherwise available to Rideshare Company-1 drivers prior to accepting such rides. For example, Screwber enabled Driver Co-conspirators to obtain prospective riders’ destinations and approximate fares for prospective trips, thereby allowing Driver Co-conspirators to accept or decline the prospective rides based on information to which they were otherwise not entitled and, in turn, cherry-pick only the most profitable and lucrative rides offered to them through the Rideshare Company-1 Application.Rideshare Application
The defendants caused outdated versions of the Rideshare Company-1 Application to be downloaded onto the Scheme Devices provided to Driver Co-conspirators. By installing outdated versions of the Rideshare Company-1 Application, the defendants ensured that the Fake GPS and Screwber applications were not detected by security features implemented in newer versions of the Rideshare Company-1 Application.As part of the scheme, the defendants sent Driver Co-conspirators information about how to avoid detection, such as the following: “Using 2 iphones with FakeGPS is very very risky. If you need FakeGPS for airport I recommend doing it one time a day. Do it when you wake up in the morning before you go to the airport.” The defendants also spoke with one another about their strategy to profit from the Driver Co-conspirators. For example, on or about November 2, 2018, Suarez wrote to Paldiel, “You know Screwber is like drugs .. once you get into it you’ll get withdrawals when you can’t get your fix.” In another message, Paldiel wrote to Suarez regarding the Driver Co-conspirators, “I get them hooked on the software, even a drug deal[er] throws in a few extra grams of weed in the beginning.”
During the course of the scheme, the Driver Co-conspirators, using the defendants’ fraudulent devices and applications, allegedly earned over approximately $40 million from rideshare customers. The defendants received more than $1.5 million from Driver Co-conspirators through one peer-to-peer payment service alone.
If you have information related to this case, please contact FBI at [email protected]
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face up to 20 years in prison on each of the two counts.
In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC). As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including wire fraud and money laundering conspiracies—the crimes that the defendants committed in this case.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Matthew R. Galeotti, Dana Rehnquist and Elias Laris are in charge of the prosecution, with assistance from Paralegal Specialist Madison Bates.
The Defendants: ELIAHOU PALDIEL
Age: 52
Queens, New YorkCARLOS ARTURO SUAREZ PALACIOS
Age: 54
Brick Township, New JerseyE.D.N.Y. Docket No. 24-CR-329 (MMH) (ARR)
Two Indicted for Trafficking Methamphetamine, Fentanyl in the Rochester AreaRead the Press Release
MINNEAPOLIS – Two individuals have been indicted on drug trafficking conspiracy and firearm charges, announced U.S. Attorney Andrew M. Luger.
According to court documents, between June 1, 2024, and July 21, 2024, Donald Ray Sanderson, 41, and Lindsey Wade Stolpa, 29, knowingly and intentionally conspired with each other to distribute methamphetamine and fentanyl in the Rochester area. The defendants were allegedly found in possession of more than 14 kilograms of methamphetamine and over 200 fentanyl pills after Sanderson led law enforcement on a high-speed chase that led to a several-hour standoff on Interstate 35 in Faribault. Multiple agencies were involved in the standoff and Sanderson’s arrest.
In additional, on July 21, 2024, Sanderson was allegedly found to be in possession of a Taurus 9mm semiautomatic pistol. As alleged, he possessed the Taurus pistol in furtherance of his methamphetamine trafficking crimes.
Sanderson has multiple prior felony convictions including, but not limited to, making terroristic threats and is therefore prohibited under federal law from possessing firearms or ammunition at any time.
The indictment charges Sanderson and Stolpa each with conspiracy to distribute methamphetamine and fentanyl and a separate count of possession with intent to distribute methamphetamine and fentanyl. Sanderson is also charged with one count of possession of a firearm as a felon, one count of possession with intent to distribute methamphetamine, and one count of possession of a firearm in furtherance of a drug trafficking crime. They were previously charged by federal criminal complaint on July 23, 2024.
This case is the result of an investigation conducted by the Drug Enforcement Administration, the Southeast Minnesota Violent Crimes Enforcement Task Force, the Minnesota Bureau of Criminal Apprehension, the Minnesota State Patrol, the Rice County Sheriff’s Office, the Olmsted County Sheriff’s Office, the Steele County Sheriff’s Office, the Dakota County Sheriff’s Office, the South Central Drug Investigative Unit, the Faribault Police Department, the Apple Valley Police Department, the Rochester Police Department, the Lakeville Police Department, the Farmington Police Department, the South Saint Paul Police Department, the Inver Grove Heights Police Department, the Northfield Police Department, the Hastings Police Department, and the Mendota Heights Police Department.
Assistant U.S. Attorney Allen A. Slaughter is prosecuting the case.
An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Two Indicted for Trafficking Methamphetamine, Fentanyl in the Rochester AreaRead the Press Release
MINNEAPOLIS – Two individuals have been indicted on drug trafficking conspiracy and firearm charges, announced U.S. Attorney Andrew M. Luger.
According to court documents, between June 1, 2024, and July 21, 2024, Donald Ray Sanderson, 41, and Lindsey Wade Stolpa, 29, knowingly and intentionally conspired with each other to distribute methamphetamine and fentanyl in the Rochester area. The defendants were allegedly found in possession of more than 14 kilograms of methamphetamine and over 200 fentanyl pills after Sanderson led law enforcement on a high-speed chase that led to a several-hour standoff on Interstate 35 in Faribault. Multiple agencies were involved in the standoff and Sanderson’s arrest.
In additional, on July 21, 2024, Sanderson was allegedly found to be in possession of a Taurus 9mm semiautomatic pistol. As alleged, he possessed the Taurus pistol in furtherance of his methamphetamine trafficking crimes.
Sanderson has multiple prior felony convictions including, but not limited to, making terroristic threats and is therefore prohibited under federal law from possessing firearms or ammunition at any time.
The indictment charges Sanderson and Stolpa each with conspiracy to distribute methamphetamine and fentanyl and a separate count of possession with intent to distribute methamphetamine and fentanyl. Sanderson is also charged with one count of possession of a firearm as a felon, one count of possession with intent to distribute methamphetamine, and one count of possession of a firearm in furtherance of a drug trafficking crime. They were previously charged by federal criminal complaint on July 23, 2024.
This case is the result of an investigation conducted by the Drug Enforcement Administration, the Southeast Minnesota Violent Crimes Enforcement Task Force, the Minnesota Bureau of Criminal Apprehension, the Minnesota State Patrol, the Rice County Sheriff’s Office, the Olmsted County Sheriff’s Office, the Steele County Sheriff’s Office, the Dakota County Sheriff’s Office, the South Central Drug Investigative Unit, the Faribault Police Department, the Apple Valley Police Department, the Rochester Police Department, the Lakeville Police Department, the Farmington Police Department, the South Saint Paul Police Department, the Inver Grove Heights Police Department, the Northfield Police Department, the Hastings Police Department, and the Mendota Heights Police Department.
Assistant U.S. Attorney Allen A. Slaughter is prosecuting the case.
An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Two Indian Men Indicted for Delivering over 400 Kilograms of Cocaine and 30 Kilograms of MethamphetamineRead the Press Release
BOSTON – Two Indian nationals were indicted by a federal grand jury in Boston yesterday in connection with the distribution of cocaine and methamphetamine.
Simranjit Singh, 28, and Gusimrat Singh, 19, of Fresno, Calif. were each charged with one count of conspiracy to distribute and to possess with intent to distribute five kilograms or more of cocaine and 500 grams or more of methamphetamine, and one count of distribution of and possession with intent to distribute five kilograms or more of cocaine and 500 grams or more of methamphetamine. Both men were arrested on July 29, 2024 and have remained in federal custody since their arrests.
According to the charging documents, investigators became aware of a California-based drug-trafficking organization (“DTO”) interested in transporting methamphetamine and other drugs to Boston. A member of the DTO agreed to sell 65 pounds (approximately 30 kilograms) of methamphetamine to undercover agents. On July 29, 2024, at approximately 10:15 p.m., a white tractor trailer arrived at a planned Andover address to deliver methamphetamine to the undercover agents. The driver and passenger of that tractor trailer, later identified as Gusimrat Singh and Simranjit Singh, allegedly handed off 65 pounds of suspected methamphetamine to the undercover agents. The men were immediately taken into custody.
According to court documents, while searching the cab of the tractor trailer, over 400 kilogram bricks of suspected cocaine was discovered, worth more than $10.5 million.
The charges provide for a mandatory minimum of 10 years and up to life in prison, at least 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.
Acting United States Attorney Joshua S. Levy and Michael J. Krol, Special Agent in Charge, Homeland Security Investigations, in New England made the announcement today. Valuable assistance was provided by U.S. Customs and Border Protection, U.S. Drug Enforcement Administration, Andover Police Department, Milton Police Department and the Massachusetts State Police. Assistant U.S. Attorney Steve Hassink of the Narcotics & Money Laundering Unit is prosecuting the case.This investigation is part of an Organized Crime Drug Enforcement Task Forces 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 details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Two Foreign Nationals Charged in Swatting Conspiracy Targeting Lawmakers, Private Victims, Houses of Worship, and BusinessesRead the Press Release
WASHINGTON – Two foreign nationals are charged by indictment, unsealed today, with being part of a years-long conspiracy to perpetrate “swatting” attacks and bomb threats against U.S. victims that included senior government officials. Thomasz Szabo, 26, of Romania, and Nemanja Radovanovic, 21, of Serbia, are each charged with one count of conspiracy, 29 counts of threats and false information regarding explosives, and four counts of transmitting threats in interstate and foreign commerce.
The charges were announced today by U.S. Attorney Matthew M. Graves, U.S. Secret Service Special Agent in Charge Matt McCool of the Washington Field Office, FBI Assistant Director in Charge David Sundberg of the Washington Field Office, U.S. Capitol Police Chief J. Thomas Manger, and FBI Special Agent in Charge Alvin M. Winston, Sr., of the Minneapolis Field Office.
According to the indictment, Szabo, Radovanovic, and others, were part of a conspiracy that began no later than December of 2020 and continued through January of 2024. The conspirators obtained personal identifying information, including home addresses, for their intended victims, and then carried out “swatting” attacks by falsely reporting emergencies for the purpose of provoking a police response at the victim’s home.
Szabo was allegedly the organizer and moderator of chat groups where the conspirators communicated with one another. They used monikers to communicate including, for Szabo, “Jonah,” “Jonah Goldberg,” “Plank,” “Rambler,” “War Lord,” “Shovel,” “Cypher,” “Kollectivist,” “Mortenberg Shekelstorms,” and “NotThuggin2”; and for Radovanovic, “XBD31,” “XDR,” “Angus,” “Thuggin,” “Thug Hunter,” “NotThuggin,” “DCL,” and “AOD.”
The indictment alleges that, in furtherance of the conspiracy, the defendants committed swatting attempts against 40 private victims and 61 official victims, including members of Congress, cabinet-level executive branch officials, senior official of federal law enforcement agencies, and state officials. The indictment also alleges that the defendants committed bomb threats against four victim businesses, four victim religious institutions, and one victim university.
“Swatting is not a victimless prank—it endangers real people, wastes precious police resources, and inflicts significant emotional trauma,” said U.S. Attorney Graves. “We will use every tool at our disposal to find the perpetrators and hold them accountable, no matter where they might be.”
“I am proud of the extraordinary investigative work done by Secret Service agents at the Washington Field Office in this case,” said Special Agent in Charge McCool. “The perpetrators of these crimes left a trail of victims across the United States, abusing critical law enforcement resources to terrorize elected officials, public figures, and private citizens. We will never waver in our commitment to bring individuals like this to justice.”
“Today’s charges demonstrate how seriously the FBI takes the crime of swatting, which can prevent law enforcement resources from getting to people who actually need them, as well as put lives in danger,” said Assistant Director in Charge Sundberg. “The FBI and our law enforcement partners will continue to pursue and bring to justice those who commit this dangerous crime, no matter where they reside.”
This case is being investigated by the U.S. Secret Service Washington Field Office and Criminal Investigative Division, the FBI’s Washington Field Office and Minneapolis Field Office, and the U.S. Capitol Police. Assistance was provided by the U.S. Secret Service’s Bucharest Resident Office, Miami Field Office, Syracuse Resident Office, Springfield Resident Office, the FBI’s Legat Office in Bucharest and the U.S. Attorney’s Offices for the Western District of Washington, the District of South Dakota, the Middle District of Florida, the Southern District of Florida, the Southern District of Illinois, and the Northern District of New York.
The case is being prosecuted by Assistant U.S. Attorney Conor Mulroe.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Tulsa Woman Sentenced to 292 Months for Fentanyl and Methamphetamine Drug ConspiracyRead the Press Release
TULSA, Okla. – Today, U.S. District Judge John D. Russell sentenced Shelly Annette McElroy, 53, for Drug Conspiracy. Judge Russell ordered McElroy to 292 months imprisonment, followed by five years of supervised release.
According to court documents, in October 2023, Tulsa Police officers conducted a routine traffic stop due to an expired tag. McElroy was driving the vehicle without a valid driver’s license and insurance. During the traffic stop, officers observed a large box containing small baggies of white crystal substance. While officers conducted their investigation, McElroy sped off. After a short pursuit, McElroy was detained. Officers found drug paraphernalia and discovered that McElroy had thrown the box out of the vehicle during the pursuit.
It was later determined that McElroy had more than 110 grams of fentanyl and more than 2,760 grams of methamphetamine. McElroy will remain in custody pending transfer to the U.S. Bureau of Prisons.
McElroy’s cousin and co-defendant, Gary Don McElroy was in the vehicle during the traffic stop and was also arrested after the pursuit. He pled guilty and is scheduled to be sentenced at a later date.
Drug Enforcement Administration and the Tulsa Police Department investigated the case. Assistant U.S. Attorneys Adam McConney and Niko Boulieris prosecuted the case.
Three Owners of Notorious Prostitution Website Backpage SentencedRead the Press Release
A federal judge in Phoenix today sentenced the three owners of Backpage, a prostitution website, for offenses arising from their promotion of and associated money laundering.
Michael Lacey, 76, of Paradise Valley, Arizona, was sentenced to five years in prison and three years of supervised release; Scott Spear, 73, of Phoenix, was sentenced to 10 years in prison and three years of supervised release; and John “Jed” Brunst, 72, of Phoenix, was sentenced to 10 years in prison and three years of supervised release. The Court also ordered that all defendants turn themselves in to the U.S. Marshals Service by noon on Sept. 11.
“The defendants and their conspirators obtained more than $500 million from operating an online forum that facilitated the sexual exploitation of countless victims,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “The defendants thought they could hide their illicit proceeds by laundering the funds through shell companies in foreign countries. But they were wrong. Their sentences should serve as a stark reminder that the Criminal Division and its law enforcement partners are committed to protecting victims and following the money to unmask those who exploit human beings for financial gain.”
“These convictions hold accountable three C-Suite executives who controlled an enterprise and its illicit profits,” said U.S. Attorney Gary Restaino for the District of Arizona. “The courage of the victims of Backpage’s criminal activities is vindicated by the sentences imposed by the Court, to include the loss of liberty for each defendant as well as the additional large fine imposed on defendant Lacey, which will inure to the benefit of the Crime Victims Fund and crime victims everywhere.”
According to court documents and evidence presented at trial, Lacey, Spear, and Brunst owned Backpage. From September 2010 through its seizure by the United States in April 2018, Backpage was the internet’s leading forum for prostitution ads. Evidence at trial showed that the conspirators knowingly promoted prostitution via various marketing strategies. For example, the conspirators engaged in a reciprocal link program with an independent web forum that permitted “johns” to post reviews of prostitution acts with specific women. Additionally, the conspirators used an automated filter and human moderators to remove terms known to indicate sex-for-money, while still allowing the ads to be posted. Through this attempt to sanitize the ads, the conspirators sought “plausible deniability” for what the conspirators knew to be ads promoting prostitution. Over the life of the conspiracy, the conspirators earned more than $500 million. In an effort to preserve the money earned, Lacey, Spear, and Brunst laundered the money through numerous shell companies they created in multiple foreign countries.
In November 2023, a federal jury in Phoenix convicted Lacey of one count of international concealment money laundering; Spear of conspiracy to violate the Travel Act, 17 counts of violating the Travel Act, money laundering conspiracy, and 10 counts of concealment money laundering; and Brunst of conspiracy to violate the Travel Act, money laundering conspiracy, 10 counts of concealment money laundering, and five counts of international promotional money laundering.
Today’s sentences follow prior convictions of Backpage leadership and corporate entities:
- In April 2018, Carl Ferrer, 57, of Frisco, Texas, who was Backpage’s co-founder and CEO, pleaded guilty to conspiracy to facilitate prostitution using a facility in interstate or foreign commerce and to engage in money laundering.
- In August 2018, Dan Hyer, 54, of Dallas, who was Backpage’s Sales & Marketing Director, pleaded guilty to conspiracy to facilitate prostitution using a facility in interstate or foreign commerce.
- In April 2018, several Backpage-related corporate entities, including Backpage LLC, pleaded guilty to conspiracy to engage in money laundering.
Co-conspirator James Larkin, 73, died on July 31, 2023, before trial began.
Principal Deputy Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Gary M. Restaino for the District of Arizona, Special Agent in Charge Carissa Messick of the IRS Criminal Investigation (CI) Phoenix Field Office, Acting Assistant Director Jodi Cohen of the FBI’s Criminal Investigative Division, Special Agent in Charge Jose A. Perez of the FBI Phoenix Division, and Acting Inspector in Charge Matthew Shields of the U.S. Postal Inspection Service (USPIS) Los Angeles Division made the announcement.
Assistant U.S. Attorneys Kevin Rapp, Margaret Perlmeter, and Peter Kozinets for the District of Arizona and Trial Attorney Austin M. Berry of the Criminal Division’s Child Exploitation and Obscenity Section are prosecuting the case, with significant assistance from the U.S. Attorney’s Office for the Central District of California, Office of the California Attorney General, and Office of the Texas Attorney General. Assistant U.S. Attorney Joseph Bozdech for the District of Arizona is handling the asset forfeiture aspects of the case.
Three Men Indicted in Marion County for Attempted Enticement of A MinorRead the Press Release
Ocala, Florida – United States Attorney Roger B. Handberg announces the return of three indictments separately charging Devin Joseph Rivera (24, Ocala), Rickey Lee Miller, Jr. (45, Ocala), and Obdy Mencia Guerrero (40, Honduras) with attempted enticement of a minor to engage in sexual activity. Mencia Guerrero has been charged with illegal reentry into the United States by a previously deported alien. If convicted of the enticement offense, Rivera, Miller, and Mencia Guerrero each face a minimum mandatory sentence of 10 years, up to life, in federal prison. Mencia Guerrero also faces up to an additional 2 years’ imprisonment for the illegal re-entry offense. All three individuals are currently detained pending the resolution of their criminal cases.
Devin Joseph Rivera
According to court records, on July 26, 2024, a special agent with Homeland Security Investigations posed undercover (UC) as a 13-year-old girl on an online social media platform. Rivera contacted the undercover agent’s account. The conversation between Rivera and the UC spanned three different online messaging platforms. Rivera engaged in a sexually explicit conversation with the UC, whom Rivera believed was a 13-year-old girl. Rivera and the UC agreed to meet at a predetermined location in Marion County to have sex. When Rivera arrived at that location, he was arrested by law enforcement. A search of Rivera’s person revealed an opened condom and a cellphone. The cellphone was confirmed to be the same one used to communicate with the undercover detective.
Rickey Lee Miller, Jr.
According to court records, on July 27, 2024, a detective from the Marion County Sheriff’s Office (MCSO) posed as a 15-year-old girl on an online messaging platform. Miller contacted the undercover detective’s account and asked if she wanted to “hang out.” Miller then engaged in a sexually explicit conversation with the detective. During the conversation, Miller asked the detective if she would be interested in having “some fun” with himself and a friend. Miller asked the detective to lie to his friend, stating, “and one more thing will you tell my friend your 18 I really don’t want her to know your real age.” Ultimately, Miller and his friend arrived at a predetermined location to meet with the minor. Miller was arrested by law enforcement. The cellphone in Miller’s vehicle was confirmed to be the same one used to communicate with the undercover detective.
Obdy Mencia Guerrero
According to court documents, on July 27, 2024, Mencia Guerrero contacted an undercover MCSO deputy who was posing as a 14-year-old girl. After acknowledging the undercover deputy’s age, Mencia Guerrero told her they could have sex. Mencia Guerrero and the deputy arranged to meet at a location in Marion County. Upon his arrival at the location, Mencia Guerrero was arrested. Mencia Guerrero is a citizen of Honduras. He was previously deported from the United States on four occasions—January 16, 2003, April 11, 2011, August 8, 2011, and June 2, 2014. He never had obtained permission to lawfully re-enter the United States.
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.
These cases were investigated by the Marion County Sheriff’s Office, the Ocala Police Department, the Florida Department of Law Enforcement, the Chiefland Police Department, and Homeland Security Investigations. They are being prosecuted by Assistant United States Attorney Sarah Janette Swartzberg.
These cases were 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 Attorney’s 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.justice.gov/psc.
Three Individuals Sentenced to Federal Prison for Trafficking Methamphetamine Through the Orlando AirportRead the Press Release
Orlando, Florida – U.S. District Judge Paul G. Byron has sentenced three individuals for their roles in a multi-kilogram methamphetamine trafficking conspiracy. Each of the individuals charged in the case previously pleaded guilty to conspiracy to possess with intent to distribute methamphetamine. They were sentenced as follows:
Name
Sentencing Date
Sentence Imposed
Jevonn Clayton (48)
8/28/24
13 years, 2 months
Richardson Sid (41)
7/16/24
6 years, 6 months
Venus Lott (46)
7/22/24
5 years
According to court documents, on August 11, 2022, Clayton agreed to transport suitcases containing methamphetamine from Los Angeles to Orlando on behalf of a drug trafficker. Shortly thereafter, Clayton and the drug trafficker recruited Lott and Sid to travel to California to assist in transporting the suitcases.
On August 16, 2022, Clayton, Lott, and Sid departed Los Angeles for Orlando, with five suitcases packed with large amounts of methamphetamine. Agents with the Drug Enforcement Administration and the Metropolitan Bureau of Investigation were investigating inbound flights at the Orlando airport. The agents located and searched the suitcases belonging to Clayton, Lott, and Sid and recovered several vacuum-sealed bags that contained more than 35 kilograms of methamphetamine.
This case was investigated by the Drug Enforcement Administration, with valuable assistance from the Metropolitan Bureau of Investigation. It was prosecuted by Assistant United States Attorney Noah P. Dorman.
Three Honolulu Men Charged with Armed Robbery of the 944 Game RoomRead the Press Release
HONOLULU – Rogelio Tadeo-Burrows, age 24, B.J. Bakol, age 19, and Joseph Konno III, age 19, all of Honolulu, Oahu, made their initial appearance yesterday in United States District Court before United States Magistrate Judge Kenneth J. Mansfield, following their arrests pursuant to a criminal complaint for robbing the “944” game room in Honolulu on August 22, 2024.
United States Attorney Clare E. Connors, Chief Joe Logan of the Honolulu Police Department (HPD), and Special Agent in Charge Lucia Cabral-Dearmas of Homeland Security Investigations (HSI) made the announcement.
According to a criminal complaint, on August 22, 2024, Tadeo-Burrows, Bakol, and Konno entered the game room on Kawaiahao Street and robbed the employees and patrons at gunpoint. HPD Officers responded to a 911 call and upon arriving at the scene, arrested Konno as he exited the game room wearing a mask. HPD Officers arrested Tadeo-Burrows and Bakol after locating them in a bathroom inside the game room, along with two loaded firearms, a large amount of U.S. currency, and two masks.
If indicted and convicted of the charges in the criminal complaint, the defendants would face up to twenty years in prison for the robbery charge and a consecutive mandatory minimum sentence of seven years in prison for the firearm charge. The charges and information contained in the criminal complaint are merely accusations, and the defendants are presumed innocent unless and until indicted and proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by HPD and HSI and being prosecuted by Assistant U.S. Attorneys Sara Ayabe and Barbara Eucker.
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 gun violence and other violent crime, 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 Neighborhoods, please visit Justice.gov/PSN.
Texas Men Indicted for Stealing from ATMs at Springfield, Ozark BanksRead the Press Release
SPRINGFIELD, Mo. – A third Texas man was indicted by a federal grand jury today for his role in bank burglary and bank theft conspiracies following thefts from two automated teller machines (ATMs) at Ozark, Mo., and Springfield, Mo., banks.
Nigel Dwane Luchin, 27, and Leo Smith, 21, both of Houston, Texas, and Christopher E. Merchant, 24, of Beaumont, Texas, were charged in a six-count indictment returned today by a federal grand jury in Springfield, Mo. Luchin was originally charged in a Dec. 19, 2023, indictment and Smith was charged in a Jan. 23, 2024, superseding indictment. Merchant was added as a defendant in today’s second superseding indictment.
The federal indictment alleges that Luchin, Smith, and Merchant participated in a conspiracy to commit bank burglary and a conspiracy to commit bank theft from Oct. 3 to Nov. 8, 2023.
According to the indictment, Smith stole a heavy-duty Dodge Ram truck from a parking lot in Springfield on Oct. 20, 2023. Smith drove the truck to Wood & Huston Bank in Springfield, the indictment says, where the truck was used on the same day to break open and steal money from the ATM.
In addition to the two conspiracies, Smith is charged with one count of bank burglary and one count of bank theft in relation to Wood & Huston Bank.
On Oct. 29 or 30, 2023, Smith allegedly assisted in the theft of a heavy-duty Ford F-250 truck from a parking lot in Nixa, Mo. On Oct. 29, 2023, the indictment says, Luchin and/or Merchant purchased a tow chain. The truck and chain allegedly were used by Luchin, Smith and Merchant to break open and steal money from the ATM at Southern Bank in Ozark, Mo., on Oct. 30, 2023.
In addition to the two conspiracies, Luchin, Smith, and Merchant are charged together in one count of bank burglary and one count of bank theft in relation to Southern Bank.
According to an affidavit filed in support of a criminal complaint that was filed on Nov. 6, 2023, conspirators used a chain and two large hooks to dismantle the door to the ATM at Southern Bank by attaching the chains to the ATM and pulling the chain and hooks with the stolen Ford F-250. They stole $30,700 from the ATM and left the bank, abandoning the pickup truck a short distance away.
Investigators reviewed surveillance videos from businesses in the area where the Ford F-250 was stolen. The videos allegedly showed conspirators arriving at the area in two vehicles – a Chrysler Voyager minivan and a Toyota Highlander – and leaving the area with the stolen pickup. Both the Voyager and the Highlander were identified on a license plate reader and traced to two car rental agencies in Houston. Later the same day, a license plate reader in Houston captured both of those vehicles traveling in the same direction.
Ozark police officers searched the stolen pickup truck, the affidavit says, and found Luchin’s Texas identification card on the driver’s seat.
The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Stephanie L. Wan. It was investigated by the FBI, the Ozark, Mo., Police Department, and the Springfield, Mo., Police Department.
Texas Man Sentenced to 72 Months for Conspiring with Michael Mann to Defraud LendersRead the Press Release
ALBANY, NEW YORK – Derek R. Schwartz, age 55, of Coppell, Texas, was sentenced today to 72 months in prison for conspiring with former ValueWise CEO Michael T. Mann to defraud companies that loaned millions of dollars to ValueWise subsidiaries.
United States Attorney Carla B. Freedman and Craig L. Tremaroli, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI), made the announcement.
Schwartz pled guilty in September 2023 to one count of conspiring to commit wire fraud and four counts of wire fraud. He admitted to helping Mann fraudulently obtain millions of dollars in loans from financing companies.
Mann obtained millions of dollars in loans from two financing companies, located in New York and Colorado, by falsifying his companies’ receivables. Mann falsely told the financing companies that Minnesota-based UnitedHealth Group Incorporated (“UHG”) and its subsidiary OptumInsight Inc. (“Optum”), owed millions of dollars to his Clifton Park-based companies. Mann routinely created fake invoices reflecting the fictitious debt and assigned them to the financing companies as collateral for loans.
Schwartz was a high-level executive at Optum, and then began working for ValueWise in October 2013. Until about August 2016, he operated TrueHR, LLC, a ValueWise subsidiary based in Dallas, Texas.
Schwartz admitted that in October 2013, he and Mann asked Luke Steiner, a UHG/Optum employee whom Schwartz used to supervise, to represent to the financing companies that the fake invoices created by Mann were valid and payable by Optum. With Schwartz’s encouragement, Steiner regularly made these false verifications for six years, ending in August 2019.
Schwartz also admitted he took these other actions in furtherance of the fraudulent scheme:
- In 2014 and 2015, he asked two other UHG/Optum employees to verify false invoices that Mann submitted to one of the financing companies, identified in court papers as “Financing Company-1.” He instructed these employees to respond to Financing Company-1’s inquiries in the same manner as Steiner.
- From 2014 through 2018, Schwartz lied directly to one of Mann’s lenders, “Financing Company-2.” Mann falsely represented to Financing Company-2 that one of his companies, Weitz & Associates, needed loans in order to pay its vendors. As part of its due diligence process, Financing Company-2 verified, with Weitz’ purported vendors, that they were receiving payments from Weitz. One such purported vendor was TrueHR, a ValueWise company operated by Schwartz. In fact, TrueHR was not a Weitz vendor, and Schwartz regularly lied to Financing Company-2 about TrueHR receiving payments from Weitz – and continued to do so even after TrueHR ceased to exist as a company.
Senior United States District Judge Lawrence E. Kahn also ordered Schwartz to serve 3 years of post-imprisonment supervised release and to pay a total of $12,968,505.20 in restitution to Financing Company-1 and Financing Company-2; Judge Kahn ordered Schwartz to pay $2,000 in restitution per month, including while incarcerated. In addition, Schwartz has already made a $1 million restitution payment to the Court for distribution to his victims.
Mann, formerly of Saratoga County, New York, pled guilty to various crimes in connection with his fraudulent scheme, and was sentenced in August 2021 to 144 months in prison. Steiner pled guilty in February 2020 to conspiring with Mann and was sentenced to probation.
The FBI investigated this case, and Assistant U.S. Attorneys Michael Barnett and Cyrus P.W. Rieck prosecuted this case.
Springfield Business Owner Indicted for Illegal FirearmsRead the Press Release
SPRINGFIELD, Mo. – A Springfield, Mo., business owner was indicted by a federal grand jury today for illegally possessing eight firearms and for lying about his criminal record when he purchased two of those firearms.
Marco Lorimer Denis, 49, was charged in a three-count indictment returned by a federal grand jury in Springfield. Today’s indictment replaces a federal criminal complaint that was filed against Denis on July 26, 2024, and includes two additional charges related to firearms purchases.
Denis is the owner of Springfield Property LLC, a company providing retail and commercial rental space, including at Plaza Towers in Springfield.
Today’s indictment alleges that Denis was in possession of a Standard Manufacturing shotgun, a Maverick by Mossberg shotgun, a Ruger pistol, a Smith & Wesson pistol, a Canik pistol, a Sig Sauer pistol, a Bersa pistol, and a Charter Arms revolver between Dec. 17, 2020, and July 16, 2024. Under federal law, it is illegal for anyone who has been convicted of a misdemeanor crime of domestic violence to be in possession of a firearm. Denis has a prior misdemeanor conviction for domestic assault committed against a person with whom he shared a child in common.
Denis is also charged with two counts of making a false statement to a licensed firearms dealer in connection with the acquisition of the Canik pistol on Dec. 10, 2020, and the Sig Sauer pistol on Jan. 14, 2021. In each instance, the indictment says, Denis reported that he had never been convicted of a misdemeanor crime of domestic violence, which he knew to be false.
This case is being prosecuted by Assistant U.S. Attorney Stephanie L. Wan. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Springfield, 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.
Spokane Resident Sentenced for Fraudulently Obtaining More than $360,000 in COVID- 19 Relief FundingRead the Press Release
Spokane, Washington - Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington, announced that Marisa Beck, age 41, of Spokane, was sentenced for fraudulently obtaining more than $360,000 in COVID-19 relief funding intended for endangered small businesses and employees at risk of losing their jobs. Chief United States District Judge Stanley A. Bastian imposed a sentence of 12 months imprisonment to be followed by 3 years of supervised release, as well as restitution of $402,020.32, representing the total loss to the public as a result of the fraud.
On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act provided a number of programs through which eligible small businesses could request and obtain relief funding intended to mitigate the economic impacts of the pandemic for small and local businesses. One such program, the Paycheck Protection Program (PPP), provided forgivable loans to eligible small businesses to retain jobs and maintain payroll during the pandemic. Another program, the Economic Injury Disaster Loan (EIDL) program, provided low-interest bridge funding for small businesses placed at risk during the pandemic.
According to court documents and information presented at trial and the sentencing hearing, Ms. Beck admitted to fraudulently obtaining $368,829 in PPP and EIDL funding for three purported businesses: Cyra Solar LLC, Beck N’ Call Landscape, LLC, and Value in People Consulting, LLC. Ms. Beck admitted that these entities were not eligible for CARES Act funding because Beck N’ Call Landscape and Cyra Solar were not active businesses as of February 2020, and because she submitted false and fraudulent payroll, revenue, and other information associated with the three purported businesses in order to fraudulently obtain CARES Act funding.
“Many small businesses struggled during the COVID-19 shutdowns and were eligible for pandemic relief funds to keep their doors open and to ensure that their employees could keep their jobs. Fraudulent schemes diverted critical money set aside to help those businesses and instead were used to enrich individuals such as Ms. Beck,” stated U.S. Attorney Waldref. “I’m grateful for the investigators and prosecutors of our COVID Fraud Strike Force. Their teamwork and focus on uncovering fraud strengthens our community and protects small and local businesses.”
“Today’s sentencing underscores the VA Office of Inspector General’s commitment to rooting out fraudsters and safeguarding taxpayer funds,” said Special Agent in Charge Dimitriana Nikolov with the Department of Veterans Affairs Office of Inspector General’s Northwest Field Office. “The VA OIG will continue to work with our law enforcement partners as part of the COVID-19 Strike Force to investigate fraud against relief programs intended to support bona fide recipients.”
“Profiteering off federal government relief programs intended to support American small businesses is inexcusable,” said SBA OIG’s Western Region Special Agent in Charge Weston King. “This sentencing is further evidence that greed has no place in SBA programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and commitment to seeing justice served.”
The case was investigated by the Eastern Washington COVID Fraud Strike Force, and in particular by the U.S. Department of Veterans Affairs Office of Inspector General, Spokane Resident Office, with investigative assistance and support from the Federal Bureau of Investigation, Spokane Resident Agency, the Small Business Administration Office of Inspector General, Western Regional Office, and the Internal Revenue Service, Criminal Investigative Division, Seattle Field Office. Assistant United States Attorney Dan Fruchter prosecuted this case on behalf of the United States.
South Bend Man Sentenced to 70 Months in PrisonRead the Press Release
SOUTH BEND – Dorian Baker, 57 years old, of South Bend, Indiana, was sentenced by United States District Court Judge Cristal C. Brisco after pleading guilty to being a convicted felon in possession of a firearm, announced United States Attorney Clifford D. Johnson.
Baker was sentenced to 70 months in prison followed by 2 years of supervised release.
According to documents in the case, in February 2024, investigators recovered six firearms, large capacity magazines, over 40 grams of marijuana, and a digital scale from Baker’s bedroom. Baker has prior felony convictions, including a federal conviction for using a firearm during a drug trafficking offense. Any one of these felonies make it unlawful for him to possess the firearms in this case.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives with assistance from the South Bend Police Department. The case was prosecuted by Assistant United States Attorney Hannah T. Jones.
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.
Sisters Plead Guilty to Federal Drug CrimeRead the Press Release
CHARLESTON, W.Va. – Dawn Marie Bennett, 42, of Las Vegas, Nevada, and April Lynn McNeill, 44, of Parkersburg, West Virginia, each pleaded guilty today to aiding and abetting the use of a communication facility to facilitate drug trafficking.
According to court documents and statements made in court, on or about January 24, 2023, Bennett arranged with McNeill, her sister, to send her a package through the United States Mail containing approximately 334 pills containing either oxycodone or hydrocodone. Law enforcement officers intercepted the package before it arrived at McNeill’s residence. Officers delivered the package to McNeill’s residence and detained her when she accepted delivery of the package.
Bennett and McNeill admitted to the arrangement and also admitted to arranging the shipment of approximately 487 pills containing either oxycodone or hydrocodone from Bennett to McNeill on or about January 19, 2024. Law enforcement intercepted that package, and it never arrived at McNeill’s residence. Bennett and McNeill admitted that McNeill intended to sell pills from both shipments to people in the Parkersburg area.
McNeill and Bennett are scheduled to be sentenced on December 12, 12, 2024, and each faces a maximum penalty of four years in prison, up to one year of supervised release, and a $250,000 fine.
United States Attorney Will Thompson made the announcement and commended the investigative work of the U.S. Postal Inspection Service, the Drug Enforcement Administration (DEA) and the Parkersburg Violent Crime and Narcotics Task Force.
United States District Judge Irene C. Berger presided over the hearings. Assistant United States Attorney Jeremy B. Wolfe 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 Nos. 2:24-cr-130 (McNeill) and 2:24-cr-131 (Bennett).
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Seven-Time Convicted Felon Found Guilty Following Federal Jury TrialRead the Press Release
Jacksonville, Florida – United States Attorney Roger B. Handberg announces that a federal jury has found Anthony Tyrone Mackey (41, Jacksonville) guilty of being a felon in possession of a firearm. Mackey faces a maximum penalty of 15 years in federal prison. A sentencing date has not yet been scheduled.
According to the indictment and evidence presented at trial, on March 29, 2023, officers with the Jacksonville Sheriff’s Office stopped Mackey for a traffic infraction near the 5800 block of University Boulevard in Jacksonville. At the time, Mackey was the sole occupant of the vehicle. During a subsequent search of the vehicle, officers located a 12-gauge shotgun on the back passenger-side floorboard and a .25 caliber pistol in a backpack on the back passenger seat. DNA analysis later showed that Mackey’s DNA was found on the shotgun and the shotgun’s magazine. Mackey was barred from possessing firearms because he had been previously convicted of seven felonies, including possession of a short-barreled shotgun, possession of a firearm by a convicted felon, aggravated assault, and aggravated fleeing or attempted to elude a law enforcement officer.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Jacksonville Sheriff’s Office. It was prosecuted by Assistant United States Attorneys John Cannizzaro and Brenna Falzetta.
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.
Secret North Carolina Fentanyl Lab Gets Armed Trafficker 27 YearsRead the Press Release
WILMINGTON, N.C. – Quavion Maurice Pickett, a/k/a “Q,” a 30-year-old resident of Rock Hill, South Carolina has been sentenced to 324 months in federal prison followed by five years of supervised release, and a forfeiture of over $72,000, for trafficking fentanyl pills in the Fayetteville area which he manufactured in a makeshift lab in a laundry room. Pickett pled guilty on April 24, 2024.
“Counterfeit pills made with deadly fentanyl in filthy makeshift labs are turning up everywhere. This trafficker was caught with three kilos of fentanyl, a high-capacity pill press, cash, and tens of thousands of counterfeit oxycodone pills,” said U.S. Attorney Michael Easley. “These pills are made with zero quality-control, with narcotics being mixed in plastic bins and store-bought blenders by reckless, money-hungry narcotics dealers who care only about money and care nothing for human life. Never, ever, take a pill bought on the street or online that isn’t prescribed by a real doctor. You are gambling with your life.”
“The Fayetteville Police Department continues to work collaboratively with our local, state, and federal law enforcement partners, we continue to aggressively combat narcotic trafficking affecting our community,” said Kemberle Braden, Fayetteville Chief of Police.
According to the court documents and other information presented in court, in April 2022, officers with the Fayetteville Police Department became aware of the drug distribution activities of Pickett through information provided by a confidential informant. Ultimately, law enforcement conducted surveillance on Pickett’s residence in Fayetteville and observed what appeared to be drug transactions conducted by Pickett on multiple occasions. Law enforcement searched a residence where Pickett was living. While executing the search warrant, law enforcement discovered a counterfeit pill making operation in the laundry room of the residence complete with a pill press, large plastic tote containers covered in light blue powder residue, multiple digital scales, multiple knotted plastic baggies containing pressed tablets, plastic baggies, a blender covered in powder residue, various full and empty bags containing different colored cutting agents, a money counter covered in powder residue, various metal hand tools, a funnel, pill press die molds, loose blue tablets, and a baggie containing yellow, white, and blue tablets.
In Pickett’s bedroom law enforcement located and seized baggies containing 157 pressed pills, over $70,000 in cash in a shoe box, a loaded .45 caliber handgun, and a jar and baggie containing an unspecified amount of marijuana. Additionally, officers recovered an additional $1,760 in cash on Pickett. The amount of fentanyl seized from the residence totaled 3.1 kilos of fentanyl. The fentanyl pills seized had pressed markings of “A215,” designed to appear to be oxycodone hydrochloride 30 milligram pills.
Following his arrest by state officials, investigators received reliable information that he had purchased the pill press used in this operation about eight months prior to his arrest and was responsible for purchasing multiple kilograms of fentanyl used for making these pills.
Pickett was subsequently indicted by the Eastern District of North Carolina after which federal arrest warrants were issued for Pickett’s arrest. Law enforcement arrested Pickett on October 26, 2022, in South Carolina where he was residing at the time. During the arrest law enforcement located and seized a duffle bag with 11 baggies containing a total of 19,016 pressed fentanyl pills inside, as well as two baggies of fentanyl powder weighing approximately 294.85 grams, a sifter, a grinding bowl, three plastic containers with powder residue, and drug packaging materials. A digital scale, marijuana, two cellphones, and $5,525 in cash were also seized.
Between September 30, 2021, until October 26, 2022, Pickett was found to be responsible for possession with intent to distribute 8,706.98 grams of fentanyl and 10.50 grams of marijuana. Pickett also maintained a premises for the purpose of manufacturing and distributing a controlled substance, as well as possessing a firearm in furtherance of his drug trafficking activities. Furthermore, based upon Pickett’s imprinting the pills with specific numbers associated with prescription pills for distribution, as well as text messages seized from Pickett’s cellphone the Court found that Pickett knowingly misrepresented a substance containing fentanyl as something other than fentanyl.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina, made the announcement after sentencing by Chief District Judge Richard E. Myers II. The Fayetteville Police Department and the Federal Bureau of Investigation investigated the case and Assistant U.S. Attorney Jennifer C. Nucci 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 number 5:22-CR-00259-M-RJ.
Seattle area resident indicted for laundering millions of dollars – alleged proceeds of wire fraud schemeRead the Press Release
Seattle – A 46-year-old resident of Newcastle, Washington was indicted today by a federal grand jury for conspiracy to commit money laundering, and nine counts of money laundering either by concealment or by spending, announced U.S. Attorney Tessa M. Gorman. Geoffrey K. Auyeung was arrested on a criminal complaint August 12, 2024, and is scheduled to be arraigned on the indictment on September 5, 2024.
According to records filed in the case, investigators with Homeland Security Investigations (HSI) have traced $64 million in funds coming into some 74 different bank accounts controlled by Auyeung. Many of the accounts are in the names of business entities that offered purported investments related to oil and gas. These entities include: Sea Forest International LLC.; Apex Oil and Gas Trading LLC.; Navigator Energy Logistics LLC.; Terminal Energy International Escrow Service LLC.; Energo Horizons Logistics (EA) LLC.; Legacy Energy Logistics Transport Group LLC.; and Green Tree Gateway LLC.
From at least August 2022 through August 2024, the co-schemers convinced victims to send money to what was represented as escrow accounts to purchase oil tank storage in either Rotterdam, Netherlands, or Houston. The schemers indicated that the investors could make significant profits by renting the oil tank storage they obtained to others. However, once the funds came into accounts controlled by Auyeung, the money was quickly moved into other accounts, moved offshore, or was used for the purchase of cryptocurrencies, including Bitcoin, Tether, USD Coin, and Ethereum, via cryptocurrency exchanges such as Gemini, BitStamp, and Coinbase. Much of the cryptocurrency was further transferred to accounts at the cryptocurrency exchange Binance. Victims were not sent any further information on their investment and Auyeung and others simply stopped responding.
The indictment calls for the forfeiture of some $2.3 million seized from Auyeung’s bank accounts. Millions more of the wire fraud proceeds that were converted to cryptocurrencies are frozen and pending seizure. HSI has confirmed 22 victims with a combined loss of $7.7 million. However, law enforcement believes many more victims may come forward.
Conspiracy to commit money laundering, and individual counts of money laundering concealment are punishable by up to 20 years in prison. Money laundering – spending, is punishable by up to 10 years in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by HSI.
The case is being prosecuted by Assistant United States Attorneys Jehiel Baer and Yunah Chung.
auyeung_indictment.pdfSan Francisco Tow Company Operator Charged in Second Insurance Fraud CaseRead the Press Release
SAN FRANCISCO – Jose Vicente Badillo, Kirill Afanasyev, Jason Naraja, and Jaime Respicio have been charged in an indictment with various crimes related to two schemes to defraud auto insurance companies, announced United States Attorney Ismail J. Ramsey; FBI Special Agent in Charge Robert K. Tripp; and IRS Criminal Investigation (IRS-CI) Acting Special Agent in Charge Michael Mosley of the Oakland Field Office. The case has been assigned to the Hon. James Donato, United States District Judge.
According to an indictment returned by a federal grand jury on August 20, 2024, Afanasyev, 36, Badillo, 28, both of San Francisco, and Respicio, 38, of Pleasant Hill, California, conspired to defraud an auto insurance company by submitting a fraudulent insurance claim on a wrecked car that Afanasyev purchased in May 2019. The Indictment alleges that, when Afanasyev bought the car, it was undrivable, with significant front-end damage. Nevertheless, the Indictment says, Respicio obtained an insurance policy on, and later took title to, the car before Afanasyev, posing as Respicio, falsely reported to the insurance company in August 2019 that Respicio had been in a single-car accident in it in San Francisco. The Indictment further alleges that Afanasyev made materially false statements and misrepresentations to the insurance company, after which the insurance company processed and approved the claim and sent Respicio an insurance reimbursement check for $47,856.34. The Indictment alleges that Badillo participated in this scheme to defraud by agreeing to falsely document that his towing company had towed the wrecked car from the purported accident location.
The Indictment alleges that Afanasyev, Badillo, and Naraja, 37, of Hayward, California, engaged in a second conspiracy and scheme to defraud another insurance company by submitting a fraudulent insurance claim regarding an accident involving multiple vehicles that had been staged by Badillo in San Mateo County. Specifically, the Indictment alleges that Badillo and Afanasyev planned the staged accident in which Badillo loaded a vehicle carrier with four vehicles (several of which were inoperable or had pre-existing damage) and purposefully drove them off the road on Guadalupe Canyon Parkway in San Mateo County in August 2019. The Indictment alleges that, after Badillo reported this “accident” to his insurance company, Badillo, Afanasyev, Naraja, and another individual all made false or misleading statements to an insurance company representative. The Indictment alleges that the insurance company ultimately denied Badillo’s claim as fraudulent but nevertheless paid one of Badillo’s towing companies $5,210 for its recovery, towing, and storage of vehicles involved in the staged accident.
The Indictment also alleges that, at the time of the offenses in 2019, Badillo owned and/or controlled at least two companies engaged in the business of towing vehicles: Jose’s Towing, LLC, and Auto Towing, LLC, both of which operated out of San Francisco.
In the first conspiracy and scheme to defraud, Afanasyev, Badillo, and Respicio are charged with one count each of (i) conspiracy to commit mail fraud and wire fraud, in violation of 18 U.S.C. § 1349; (ii) mail fraud, in violation of 18 U.S.C. §§ 1341 and 2; and (iii) wire fraud, in violation of 18 U.S.C. §§ 1343 and 2. Afanasyev and Respicio are also charged with one count of money laundering, in violation of 18 U.S.C. §§ 1957 and 2.
In the second conspiracy and scheme to defraud, Afanasyev, Badillo, and Naraja are charged with (i) one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; and (ii) four counts of wire fraud, in violation of 18 U.S.C. §§ 1343 and 2.
Naraja and Respicio were arrested in Hayward and Pleasant Hill, respectively, on August 27, 2024, and released on $50,000 bonds at their initial appearances on August 28, 2024. Naraja is next scheduled to appear in court on August 29, 2024, at 10:30 a.m., before the Hon. Lisa J. Cisneros for arraignment and identification of counsel. Respicio is next scheduled to appear in court on September 5, 2024, at 10:30 a.m., before the Hon. Alex G. Tse for arraignment and identification of counsel. Badillo was previously arrested and made his initial appearance in another insurance fraud case on August 8, 2024. He is scheduled to appear before the Hon. Lisa J. Cisneros for arraignment and identification of counsel in both cases on August 30, 2024, at 10:30 a.m. Afanasyev’s initial appearance and arraignment has been scheduled for September 9, 2024, at 10:30 a.m. before the Hon. Alex G. Tse.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Afanasyev, Badillo, and Respicio each face a maximum sentence of 20 years in prison, and a fine of $250,000 or twice the gross gain or loss, whichever is greater, plus restitution, if appropriate, on each of Counts 1 through 3, which charge mail fraud, wire fraud, and conspiracy to commit the same, in violation of 18 U.S.C. §§ 1341, 1343, 1349, and 2. Afanasyev and Respicio face a maximum sentence of 10 years in prison, and a fine of $250,000 or twice the amount of criminally derived property involved in the transaction, whichever is greater, plus restitution, if appropriate, on Count 4, which charges money laundering, in violation of 18 U.S.C. §§ 1957 and 2. Similarly, Afanasyev, Badillo, and Naraja each face a maximum sentence of 20 years in prison, and a fine of $250,000 or twice the gross gain or loss, whichever is greater, plus restitution, if appropriate, on each of Counts 5 through 9, which charge wire fraud and conspiracy to commit the same, in violation of 18 U.S.C. §§ 1343, 1349, and 2. The court also may order an additional term of supervised release to begin after any prison term as part of the sentence for any or all of the defendants. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
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.
Assistant U.S. Attorneys Kyle F. Waldinger and Galen A. Phillips are prosecuting the case with the assistance of Amala James and Carolyn Jusay Caparas. The prosecution is the result of a lengthy investigation by the FBI and IRS-CI. The U.S. Attorney’s Office, the FBI, and IRS-CI appreciate the assistance and support of the San Francisco Police Department in this insurance fraud investigation.
San Antonio Woman Arrested for Fraudulently Selling $18 Million Worth of Counterfeit Retail Store CouponsRead the Press Release
NEWARK, N.J. – A San Antonio, Texas, woman was arrested and charged with fraudulently selling over $18 million worth of counterfeit coupons used at various retail stores across the United States for the purchase of household items, U.S. Attorney Philip R. Sellinger announced today.
Janet Bernal, aka “Rocky,” aka “Rocky G,” aka “Rocky Gee,” aka “RockyG-Kruella,” of San Antonio, Texas, is charged by complaint with three counts of wire fraud. She appeared on Aug. 27, 2024, in the Western District of Texas, before U.S. Magistrate Judge Richard Farrer in San Antonio federal court, and was released on $15,000 secured bond.
According to documents filed in this case and statements made in court:
From June 2020 through June 2024, Bernal orchestrated a scheme to produce and sell fraudulent, counterfeit coupons for use by purchasers at retail stores throughout the United States, including large pharmacies and grocery stores. Bernal offered counterfeit coupons through a monthly fee-based subscription group that was available on a commonly used Internet cloud-based messaging application.
Purchasers subscribed to the group, paid a monthly fee, and then had unlimited access to numerous types of counterfeit coupons that Bernal posted for download on the application. Members paid the monthly fee to mobile cash accounts associated directly with Bernal. Members downloaded tens of thousands of counterfeit coupons and redeemed them at retail stores throughout New Jersey and elsewhere. The loss to 156 retail stores and to the manufacturers whose products were covered by the counterfeit coupons was approximately $18 million.
The charge of wire fraud carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense, whichever is greatest.
U.S. Attorney Sellinger credited postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Christopher A. Nielsen, Philadelphia Division, with the investigation leading to the arrest.
The government is represented by Assistant U.S. Attorney Blake Coppotelli of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Richland Man Indicted for Stealing More than $339,000 in COVID-19 Unemployment Insurance Fraud SchemeRead the Press Release
Richland, Washington - On August 21, 2024, a federal grand jury for the Eastern District of Washington returned an Indictment charging Gilbert Orosco, of Richland, Washington, with ten counts of conspiracy, fraud, and aggravated identify theft. Orozco made his first appearance in Federal Court on August 27, 2024.
The Indictment alleges that, beginning in July 2020, Orosco took part in a scheme in which he defrauded the United States government and the governments of California, Nevada, and Arizona to obtain money from the states’ COVID relief programs in the form of unemployment insurance proceeds funded, in part, by the United States government. Specifically, Orosco conspired with co-conspirators who acquired personal information from others and used it to fraudulently make mass online applications for money earmarked by the states to provide unemployment insurance relief for those who lost their jobs due to the COVID pandemic. The indictment alleges Orosco’s co-conspirators created and submitted false and fraudulent applications for unemployment insurance on behalf of individuals who were not seeking or eligible for the benefits, and did not know that their identities were being used to obtain benefits. Acting on the fraudulent applications, the states then mailed debit cards to Orosco’s home in Richland, Washington. According to the indictment, Orosco used the debit cards to withdraw cash from ATMs. After withdrawing the cash, Orosco would convert the money into cryptocurrency or money orders. Orosco would then allegedly use those assets himself or transfer them to co-conspirators.
The indictment alleges, between July 2020 and December 2021, unemployment insurance claims on behalf of approximately 70 different individuals were filed with state work force agencies, including in California, Nevada, and Arizona, that listed Orosco’s residence in Richland, Washington. Debit cards were then mailed to Orosco’s residence in the names of these individuals.
According to the indictment, during this period, Orosco used the debit cards in other people’s names to make 347 ATM withdrawals totaling approximately $282,814. Orosco also made another approximately 30 transactions using the debit cards at Winco, Albertson’s, and USPS locations in the Eastern District of Washington totaling approximately $57,095.
“Many people who lost their jobs during the pandemic were dependent on COVID-19 relief programs for financial support during an unprecedented time of uncertainty,” said U.S. Attorney Waldref. “We created the COVID-19 Fraud Strike force to protect everyone who relied on those critical funds and to combat pandemic-related fraud.”
This case was investigated by the Department of Labor, Office of Inspector General, and the Department of Homeland Security, Office of Inspector General COVID Fraud Unit. It is being prosecuted by Assistant United States Attorney Jeremy J. Kelley.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Repeat Sex Offender Sentenced to 15 years in Prison for Child Pornography Offenses, Failure to RegisterRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Christopher Daniels, 34, of Philadelphia, Pennsylvania, was sentenced by United States District Court Judge Juan R. Sánchez to 15 years’ imprisonment, to be followed by 15 years of supervised release for repeated child pornography and related offenses.
Daniels was charged with those violations in an August 2023 superseding indictment, and in March of this year, a federal jury convicted the defendant of all six counts against him, including receiving child pornography as a second time offender, possession of child pornography as a second time offender, access with intent to view child pornography as a second time offender, and failure to register as a sex offender, as required by the Sex Offender Registration and Notification Act (SORNA).
Daniels previously was convicted of possession of child pornography in federal court in 2015 and served 70 months in prison and 10 years of supervised release. His term of supervised release commenced on January 15, 2021. Under SORNA, he was required to keep his sex offender registration information, including his registered residential address, current. In July 2022, Daniels failed to verify his sex offender registration with Pennsylvania State Police as required and went into non-compliant status. Daniels was also found to be non-compliant with the terms of his federal supervised release and a bench warrant was issued for his arrest.
On November 3, 2022, the U.S. Marshals Service arrested Daniels and the FBI conducted a court-authorized search of his residence, seizing several electronic devices belonging to the defendant. Subsequent forensic examination of those devices found thousands of videos and images depicting child pornography and browser searches for such material.
“When he got out of prison, Christopher Daniels was given a non-negotiable to-do list,” said U.S. Attorney Romero. “Right at the top: stay away from material depicting the horrific sexual abuse of children, and keep his sex offender registry details current. He failed at both, proving himself a continued risk to the community. My office and our partners at the FBI will never stop working to protecting vulnerable children from sexual exploitation.”
“Having already served one sentence for exploiting innocent victims, the defendant then continued his heinous criminal behavior,” said Wayne A. Jacobs, Special Agent in Charge of FBI Philadelphia. “This sentencing is a testament to the diligent and unceasing work of the FBI and our law enforcement partners to combat violent crimes against children.”
The case was investigated by the FBI and the U.S. Marshals Service and is being prosecuted by Assistant United States Attorney Michelle Rotella.
Puerto Rican Man Who Manufactured Machine Guns, Trafficked Methamphetamine and Cocaine Sentenced to 23 Years in Federal PrisonRead the Press Release
Spartanburg, S.C. — Esteban Colon Pacheco, 27, of Ponce, Puerto Rico, was sentenced to more than 23 years in federal prison after he pled guilty to possessing a machine gun in furtherance of drug trafficking, distributing methamphetamine, and conspiring to distribute methamphetamine and cocaine.
Evidence presented to the Court showed that in 2022 and 2023, Pacheco was a cocaine and methamphetamine dealer in the Upstate of South Carolina. While dealing drugs, Pacheco also conscripted women to purchase guns for him so that he could modify them into fully automatic weapons. Law enforcement learned that Pacheco sold some of the machine guns that he illicitly manufactured, and he kept at least one of the machine guns with him during his drug deals. On one occasion, Pacheco shot the machine gun within a neighborhood to demonstrate its capabilities.
Noraimi Burgos Torres and Elizabeth Delzo Jaramillo pled guilty to charges related to purchasing firearms for Pacheco. Delzo, who also pled guilty to drug trafficking related charges, was sentenced to 102 months in federal prison. Torres, who pled guilty to a firearms charge on August 21, 2024, is awaiting sentencing.
United States District Judge Donald C. Coggins sentenced Esteban Pacheco to 276 months imprisonment, to be followed by a 5-year term of court-ordered supervision.
“People who sell illegal guns and drugs are a threat to the safety of our communities and must be stopped,” said United States Attorney Adair Boroughs. “I’m proud and grateful for the collaboration of so many law enforcement partners to achieve this significant measure of justice.”
“Putting criminal organizations like this out of business greatly reduces the flow of drugs, violence and crime into our communities, which makes everyone safer,” said Cardell T. Morant, Special Agent in Charge of HSI Charlotte that covers North and South Carolina. “HSI is a proud partner in the fight to identify, arrest and prosecute those responsible for flooding our streets with illicit drugs.”
ATF Special Agent in Charge Bennie Mims said, “Possessing or selling firearms that have been modified to function as fully automatic weapons is a serious threat and an issue law enforcement around the country is currently dealing with. We’re proud to be a part of this collaborative effort to identify and apprehend those that threaten our community.”
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. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
This case was investigated by Homeland Security Investigations (HSI), the Bureau of Alcohol, Tobacco, and Firearms (ATF), U.S. Postal Inspection Service, Spartanburg County Sheriff’s Office, Greenville County Sheriff’s Office, Greenville Police Department, Greenville County Multi-Jurisdictional Drug Enforcement Unit, and Anderson County Sheriff’s Office. Assistant U.S. Attorney Jamie Schoen is prosecuting the case.
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Pueblo Man Sentenced for Evading Income TaxRead the Press Release
DENVER – The U.S. Attorney’s Office for the District of Colorado announces that Solomon Paul Garcia, age 46, of Pueblo, Colorado was sentenced to one year and one day in federal prison followed by three years of supervised release for tax evasion.
According to the plea agreement, Mr. Garcia worked for various employers as a journeyman electrical lineman. Beginning in 2016, and continuing until January of 2020, the defendant willfully avoided paying a substantial amount of income tax by submitting to his employers inaccurate Form W-4s claiming up to 99 allowances or false claims of tax exemptions. During this time, the defendant was only allowed to claim two allowances.
Mr. Garcia’s filings caused his employers to withhold little, if any, withholding taxes from his earned income. Although the defendant had an opportunity to pay all taxes due and owing for each calendar year by the respective filing deadlines, he did not file a tax return for any of the years in question. This resulted in the evasion of $267,028.50 in federal taxes. Consistent with his plea agreement, the Court ordered Mr. Garcia to pay restitution – inclusive of interest and penalties as calculated by the IRS. That amount is in excess of $548,000.
“People who evade their taxes are stealing from all the other taxpayers who pay what they owe. Our office will continue to aggressively prosecute tax evaders,” said Acting United States Attorney for the District of Colorado Matt Kirsch.
“Falsifying Form W-4s and claiming up to 99 allowances to avoid paying taxes is not only a crime against the federal government, it also unfairly shifts the tax burden to honest taxpayers,” said IRS Criminal Investigation Acting Special Agent in Charge Tom Demeo. “Garcia brazenly attempted to avoid his tax liability and other tax cheats must understand these crimes carry with them severe consequences.”
United States District Court Judge Nina Y. Wang sentenced Mr. Garcia on August 28, 2024. IRS Criminal Investigation conducted the investigation. Assistant United States Attorney Bradley W. Giles handled the prosecution.
Previously Convicted Felon Sentenced to over Three Years in Federal Prison for Possessing “Glock Switch”Read the Press Release
INDIANAPOLIS—Jaquan Robinson, 21 of Indianapolis, has been sentenced to 37 months in federal prison, followed by three years of supervised release, after pleading guilty to possession of a machine gun.
According to court documents, on December 28, 2023, Marion County Probation officers conducted a compliance visit at Robinson’s apartment in Indianapolis. During the compliance visit, a backpack containing the frame of a Glock handgun and mail addressed to the defendant was found in a closet in the living room. During a court-authorized search of the apartment, officers located a safe in Robinson’s bedroom containing his identification documents and a Glock switch. Robinson admitted to knowingly possessing the machinegun conversion device and knowing that it was exclusively designed to convert an ordinary semiautomatic firearm into a fully-automatic machinegun. A review of Robinson’s Facebook messages revealed that Robinson was seeking to purchase additional handgun parts in order to have a fully-functional machinegun.
Machinegun conversion devices, sometimes called “Glock switches” or “auto-sears,” are devices that convert ordinary semiautomatic firearms into fully automatic machineguns. Machinegun conversion devices are themselves considered machineguns under federal law, even when not installed, and are illegal for individuals to possess or sell.
Robinson has a history of firearms convictions. In September 2021, Robinson was convicted of a felony in Marion County for illegally bringing a firearm into a school. In June 2022, while Robinson was still on probation for his first firearms offense, he was convicted of another firearms offense in Marion County after he was found in possession of two more firearms and fled from police on foot after the vehicle he was in was pulled over. Robinson was still on probation for this second Marion County offense when he was arrested with the machinegun conversion device. At the time of his most recent Indiana arrest there were also firearms charges against Robinson pending in Michigan. As a convicted felon, Robinson is prohibited under federal law from ever lawfully possessing a firearm again.
“Illegally armed criminals are a grave danger to our families and neighbors—especially when they have machineguns capable of spreading carnage in mere seconds,” said Zachary A. Myers, U.S. Attorney for the Southern District of Indiana. “Having or using a ‘Glock switch’ is a serious crime. The federal prison sentence imposed here should send the message that these weapons will not be accepted in our community. Our federal prosecutors, in partnership with the ATF and the City of Indianapolis, are committed to bringing these important federal prosecutions and making Marion County a safer place.”
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this case. The sentence was imposed by U.S. District Judge James P. Hanlon.
U.S. Attorney Myers thanked Special Assistant U.S. Attorney Nate Walter, who prosecuted this case. SAUSA Walter is prosecuting violent crime cases as a part of the partnership with the City of Indianapolis to identify, investigate, and federally prosecute violent crimes taking place in Marion County.
This case is also 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.
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Post Falls Man Sentenced to 20 Years in Federal Prison for Sexual Exploitation of ChildrenRead the Press Release
COEUR D’ALENE – Kevin Richmond, 63, of Post Falls, was sentenced to 20 years in federal prison for the crime of sexual exploitation of children, U.S. Attorney Josh Hurwit announced today. U.S. District Judge Amanda K. Brailsford sentenced Richmond to 20 years in federal prison with a lifetime of supervision to follow. Richmond was also ordered to pay $38,000 in restitution to his victims.
According to court records, in December 2022, law enforcement received several tips that Richmond was uploading child pornography to a data storage service. Based on the tips, a federal magistrate judge issued a search warrant for Richmond’s online account. Law enforcement executed the search warrant and examined the contents of his online data storage account.
In Richmond’s online accounts, law enforcement confirmed that he was in possession of child pornography. Law enforcement additionally discovered that Richmond was not only possessing child pornography, but he was also producing child pornography with a victim child.
Based on this discovery, a federal magistrate judge issued an additional search warrant authorizing law enforcement to seize digital devices from Richmond’s residence in Post Falls. Law enforcement executed this search warrant at Richmond’s residence where they found a cell phone belonging to him. Law enforcement forensically analyzed the phone and found child pornography on the device. Law enforcement also discovered that Richmond had online communications where he claimed he had access to a minor child for sexual purposes.
Law enforcement interviewed Richmond on the same day law enforcement executed the search warrant on his home. After law enforcement advised Richmond of his Miranda rights, he consented to an interview. During the interview, he admitted that he received child pornography from an internet application. Richmond also admitted to producing child pornography with an actual child using his cell phone. He admitted that he had the child engaged in a sexual act as part of a sexual fantasy. He admitted to adding the child’s name to the child pornography that he produced.
“We hope for healing for the victims of this horrific case,” said U.S. Attorney Hurwit. “Idahoans should know our office and our law enforcement partners have no higher calling than protecting children, and anyone out there engaging in the abuse of children should know that we will spare no effort to find them and hold them accountable just like this defendant.”
“The sentencing of Mr. Richmond to federal prison for sexual exploitation of children represents a significant step in our ongoing efforts to protect the community, particularly our children, from those who pose a severe threat,” said Post Falls Police Chief Greg McLean. “This case underscores the importance of vigilance and collaboration among law enforcement agencies to ensure that individuals who engage in such heinous crimes are held accountable”.
“It took the dedicated teamwork of ICAC and the U.S. Attorney’s Office and all our partner agencies working together to put this predator behind bars where he can no longer hurt our kids,” said Attorney General Raúl Labrador. “I’m grateful for the hard work of everyone involved – the prosecutors, the investigators, and the judge who clearly saw the danger presented to our community.”
“The U.S. Secret Service will continue to use all the tools, resources and expertise at our disposal to ensure that individuals, such as Mr. Richmond, are held accountable for crimes against children,” said Special Agent in Charge Glen T. Peterson. “The U.S. Secret Service stands firmly with our law enforcement partners like the U.S. Attorney’s Office, the Post Falls Police Department and the ICAC Task Force as we investigate these crimes and bring these offenders to justice.”
U.S. Attorney Hurwit commended the work of the Post Falls Police Department, the Idaho Internet Crimes Against Children (ICAC) Task Force, and the U.S. Secret Service, which led to the charges.
Assistant U.S. Attorneys Adam Johnson, Kassandra McGrady, and David Robins prosecuted 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. As part of Project Safe Childhood, the U.S. Attorney’s Office for the District of Idaho and the Idaho Attorney General’s Office partner to marshal 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.
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Pensacola Man Sentenced to Prison for Threatening A Federal Judge and Family MembersRead the Press Release
Tampa, Florida – U.S. District Judge William F. Jung today sentenced Stephen Jay Thorn (66, Pensacola) to five years in federal prison for transmitting a threat to harm a federal judge and members of the judge’s immediate family. Thorn entered a guilty plea on May 16, 2024.
According to court documents, on October 24, 2022, Thorn, unhappy with a judicial opinion that he had read about online, made five interstate telephone calls to the judge’s chambers and left vulgar, obscenity-laden voicemail messages threatening to harm the judge as well as members of the judge’s immediate family.
“Threatening harm against public officials, or their families, is an intolerable offense,” said U.S. Attorney Roger B. Handberg. “My office takes such threats seriously and is committed to investigating and federally prosecuting anyone who threatens this sort of violence.”
This case was investigated by the United States Marshals Service and was prosecuted by Special Assistant United States Attorney Joe Wheeler III.
Owner of Pittsburgh Resale Businesses Convicted at Trial of Running Lucrative Interstate Fencing Operation Involving the Sale of Hundreds of Thousands of Stolen Retail ItemsRead the Press Release
PITTSBURGH, Pa. - After deliberating for approximately five hours, a federal jury found Pittsburgh resident Durrell Waters guilty of five counts of money laundering and conspiracy in connection with the sale and interstate transportation of stolen goods, United States Attorney Eric G. Olshan announced today.
Waters, 41, was tried before Chief United States District Judge Mark R. Hornak in Pittsburgh. He was found guilty of one count of conspiracy and four counts of money laundering.According to evidence presented during the two-and-a-half-week trial, Waters was one of the primary owners of a series of second-hand or resale businesses called Trader Electronics, Last Call Entertainment, and The Outlet. Waters conspired with others to use these businesses as a front for a criminal fencing operation that sold over the internet a wide variety of health and beauty aids and over-the-counter medications.
From 2013 through 2016, retailers in the greater Pittsburgh area experienced a drastic uptick in the volume of thefts occurring at their stores. The investigation into those thefts led to the discovery that Waters’s stores and similar stores in the area engaged in high-volume purchases of brand-new retail health and beauty aids and other products, such as new-release DVDs, from walkin sellers who had shoplifted the items. The evidence established that, throughout this time, Waters and his co-conspirators knew that the vast majority of the products they were buying were stolen. The health and beauty aids included items like teeth whiteners, vitamins, hair and skin care products, makeup, and other similar items. Store records reflected that Waters and his businesses purchased hundreds of thousands of brand-new items from a group of repeat shoplifters. Waters and his businesses then resold that stolen property online via several Amazon and eBay storefronts, with the proceeds from the stores’s main Amazon account totaling over $4.3 million during the conspiracy.
Walk-in sellers to the Trader Electronics stores, several of whom testified during the trial, were often people experiencing drug addiction who would routinely steal large amounts of the products to fund their addiction by selling them at Waters’s and his co-conspirators’ stores. In addition to knowing that the items were stolen when purchasing them, Waters on several occasions bailed some of those same so-called “boosters” out of jail following their arrests for stealing goods and allowed the individuals to repay him the bail money in the form of other stolen goods.
“Durrell Waters and his conspirators brazenly used their second-hand stores as a front for fencing massive amounts of shoplifted retail products—some with the store identification and security stickers still intact—that they then turned around and sold for millions of dollars to online customers across the United States,” said U.S. Attorney Olshan. “To pull off their scheme, they relied on desperate people deep in the throes of addiction to maintain the flow of stolen goods, using them to steal from and ultimately undercut legitimate retailers. The ‘boosters’ in this case were reportedly lined up down the street outside Waters’s stores in the morning—waiting to get their first cash of the day so they could pay their dealers. This successful prosecution is the result of a regional effort involving the cooperation of many local law enforcement agencies, as well as the IRS, FBI, and U.S. Postal Inspection Service. We are committed to holding accountable those who would exploit the opioid epidemic as a way to line their pockets.”“Today’s verdict reflects that those who commit financial crimes such as money laundering, and who steal and profit from money to which they were not entitled, will be held accountable,” said IRS-CI Philadelphia Field Office Acting Special Agent in Charge Denise Leuenberger. “It should also serve as notice to others not to take part in similar unlawful conduct.”
“Legitimate businesses and the greater community suffer when fraud and money laundering take place,” said FBI Pittsburgh Special Agent in Charge Kevin Rojek. “The ripple effect of consequences from these criminal acts undermines the foundations of fairness and trust in the economy. The FBI and our partners continue to work diligently to investigate and bring to justice those who feel they can get ahead through criminal means.”
Waters’s date of sentencing will be determined by the Court. The law provides for a maximum sentence of ten years in prison and a fine of $250,000 on each money laundering count. The conspiracy offense carries a maximum sentence of five years in prison and a fine of $250,000 or twice the gross pecuniary gain associated with the offense, whichever is greater. Under the federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Waters’s co-defendant and co-owner of the various resale shops, Anthony Costanzo, 35, of Carnegie, Pennsylvania, pleaded guilty on July 24, 2024, to four counts of engaging in monetary transactions involving property from an unlawful act. His sentencing is scheduled for December 17, 2024.
Waters is the eighth and final resale store owner to be found guilty of similar schemes that occurred during the same time and were part of the same investigation. Thach Duc Le, Milton Barr, Shane McFall, Michael McDavid, Qamar Zaman, and Aliya Zaman all pleaded guilty to similar charges related to stores affiliated either with Waters and Costanzo or another entity known as Ninja Entertainment.
Assistant United States Attorneys James R. Wilson and Benjamin C. Dobkin are prosecuting the case on behalf of the government.
The Internal Revenue Service - Criminal Investigation, Federal Bureau of Investigation, and United States Postal Inspection Service conducted the investigation that led to the prosecution of Waters. Police departments from the City of Pittsburgh, Ross Township, and Shaler Township also assisted in the investigation.
Ontario truck driver arrested on drug charges at the borderRead the Press Release
BUFFALO, N.Y. - U.S. Attorney Trini E. Ross announced today that Bashir Kasozi, 41, of Ontario, Canada, was arrested and charged by criminal complaint with importation of morphine and possession with intent to distribute a morphine, which carry a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney P. Richard Antoine, who is handling the case, stated that according to the complaint, on the evening of August 23, 2024, Customs and Border Protection officers at the Lewiston Bridge Port of Entry encountered a commercial truck with Ontario plates being driven by Kasozi. During the outbound inspection, Kasozi told a CBP Officer that he was in the United States for three days, coming from Massachusetts with a load of paper. Asked if he had anything to declare, to include prescription or nonprescription narcotics, currency over $10,000, weapons of any kind, or if anyone else was in the vehicle with him, Kasozi stated no. Kasozi was then referred for secondary inspection. A scan of the truck detected an anomaly in the nose of the trailer by the front wall. A subsequent search of that area revealed a skid of 62 brown taped packages. One of the boxes was searched and found to contain a smaller gold box with a glass vial inside. The glass vials were found to contain morphine.
Kasozi made an initial appearance before U.S. Magistrate Judge Michael J. Romer and was held pending a detention hearing on September 4, 2024.
The criminal complaint is the result of an investigation by Customs and Border Protection, under the direction of Director of Field Operations Rose Brophy, and Homeland Security Investigations, under the direction of Special Agent-in-Charge Matthew Scarpino.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Ohio Man Arrested with Methamphetamine and an Illegal Firearm Is Sentenced to 20 Years in PrisonRead the Press Release
CHARLOTTE, N.C. – Michael Lamar Gaines, 40, of Akron, Ohio, was sentenced today to 20 years in prison followed by five years of supervised release for trafficking methamphetamine and illegal possession of a firearm, announced Dena J. King, U.S. Attorney for the Western District of North Carolina.
Bennie Mims, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Sheriff Darren Campbell of the Iredell County Sheriff’s Office, join U.S. Attorney King in making today’s announcement.
According to court records, on February 6, 2023, a deputy with the Iredell County Sheriff’s Office attempted to conduct a traffic stop of Gaines’s vehicle on I-77 for a traffic violation. Gaines did not comply and instead fled at a high rate of speed. Court records show that the deputy reported that Gaines had left the roadway multiple times and nearly struck other vehicles in his attempt to evade law enforcement. Ultimately, Gaines crashed his vehicle after exiting I-77 and running a stop sign. Gaines then attempted to flee on foot before he was apprehended. After Gaines was taken into custody, law enforcement searched his vehicle and found a handgun with an extended magazine and two bags that contained nearly half a kilogram of methamphetamine. Law enforcement also seized $8,940 in cash that Gaines had on his person. Court records show that Gaines has multiple prior criminal convictions including drug trafficking and theft and he is prohibited from possessing firearms.
On February 2, 2024, Gaines pleaded guilty to possession of a firearm by a convicted felon, and possession with intent to distribute methamphetamine. He is in the custody of the U.S. Marshals Service and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.
The ATF and the Iredell County Sheriff’s Office handled the investigation. The U.S. Attorney’s Office in Charlotte 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.
New York Bank Manager Sentenced to 114 Months for Scheme to Hire A Hitman to Murder Her Own Brother-In-LawRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that RESHMA MASSARONE, a former New York bank manager, was sentenced yesterday to 114 months in prison for plotting to hire a hitman to murder her own brother-in-law. MASSARONE previously pled guilty to murder-for-hire before U.S. District Judge Cathy Seibel, who imposed the sentence.
U.S. Attorney Damian Williams said: “The defendant devised a chilling plan to have a member of her own family murdered for the low price of ten thousand dollars. Her plan was unthinkably heartless. For this depraved crime, Reshma Massarone will spend 114 months in federal prison.”
According to the Complaint and the Indictment filed against the defendant, other documents filed in federal court, and statements made in public court proceedings:
Between July 20, 2023, and August 16, 2023, the defendant plotted with an individual (“Individual-1”) to hire a hitman to murder her own brother-in-law (the “Victim”), in exchange for $10,000. But Individual-1 was a member of a foreign police force, and he became an undercover law enforcement agent to develop evidence against MASSARONE that she was plotting to hire a hitman to have the Victim murdered.
MASSARONE exchanged with Individual-1 dozens of messages on social media and participated in numerous phone calls with Individual-1, imploring Individual-1 to murder the Victim or hire someone who would. For example, in Facebook Messenger communications, when Individual-1 told MASSARONE that the plan to murder her brother-in-law was set for the next day, MASSARONE responded that if Individual-1 “take[s] care of business,” then Individual-1 would get paid. MASSARONE also told Individual-1 that she had other “jobs” for him, and swore on her kids’ lives that Individual-1 would get paid if he “[got] rid” of the Victim for her. After that, MASSARONE told the Individual-1, “No more text.”
As part of MASSARONE’s plan, she wired $2,500 to Individual-1 to give to the hitman as a down payment for the Victim’s murder. Video surveillance at a Western Union captured MASSARONE counting 25 $100 bills, for a total amount of $2,500.
After MASSARONE wired the money to Individual-1, MASSARONE continued to plan the Victim’s murder. When Individual-1 told MASSARONE that the hitman’s plan was to shoot the Victim and that there was “no turning back,” MASSARONE replied, “Right. No turning back.”
The Victim was never murdered. As time passed and the Victim remained alive, MASSARONE grew impatient with Individual-1. MASSARONE urged Individual-1 to murder the Victim, suggesting that “rat poison can do a great job.” MASSARONE told Individual-1, “You is all talk and no action,” and “Come on do the thing and I will take care of you.” MASSARONE threatened to find someone else to murder the Victim, stating, “Either way, if I find somebody to do the job you’re going to get blame, so cut the bullshit and let’s get it done.”
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In addition to the prison sentence, MASSARONE, 40, of Pine Bush, New York, was sentenced to three years of supervised release.
Mr. Williams praised the outstanding work of the Drug Enforcement Administration, New York City Police Department, New York State Police, Homeland Security Investigations, and Internal Revenue Service.
The case is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Jared Hoffman is in charge of the prosecution.
Montgomery Man Sentenced to 30 Years in Federal Prison for Conspiracy to Distribute Methamphetamine Being Shipped Through the MailRead the Press Release
MONTGOMERY, ALABAMA – On August 27, 2024, a federal judge ordered that 33-year-old Charles Green Hall, from Montgomery, Alabama, receive a sentence of 360 months in prison for conspiracy to possess methamphetamine with intent to distribute the illegal drug, announced Acting United States Attorney Kevin P. Davidson. Following his prison sentence, Hall will be on supervised release for five years. There is no parole in the federal system.
According to Hall’s plea agreement and other court records, in March of 2021, federal agents began an investigation related to suspected drug and gang activity in Montgomery. The investigation revealed evidence indicating illegal narcotics were being mailed to Alabama from California. Agents worked with postal inspectors to identify and track two packages intended for Hall that were suspected to contain illegal drugs. When inspectors seized the packages, they found approximately two kilograms of suspected methamphetamine inside each one. Laboratory analysis of the contents confirmed that the packages together contained just over four kilograms of methamphetamine with a 98 percent purity level.
During his plea hearing in May of this year, Hall admitted that he conspired with others to distribute and possess the methamphetamine. A federal grand jury also indicted former postal employee Amber Lashawne Sellers, 30, a resident of Montgomery, for her alleged role in the conspiracy. Sellers’ trial is scheduled for September 23, 2024. An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The United States Postal Inspection Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Montgomery Police Department investigated this case. Assistant United States Attorneys Mark E. Andreu and Brandon W. Bates prosecuted the case.
Minnesota Man Pleads Guilty to Distributing Fentanyl that Resulted in the Death of a Tuscaloosa ManRead the Press Release
TUSCALOOSA, Ala. – A St. Francis, Minnesota, man pleaded guilty Tuesday to distributing fentanyl that resulted in a death, announced U.S. Attorney Prim F. Escalona and U.S. Postal Inspection Service Inspector-in-Charge Scott D. Fix, Houston Division.
Christopher Louis Bass, 46, pleaded guilty before U.S. District Judge L. Scott Coogler to distributing fentanyl, admitting that a person’s death resulted from the distribution.
According to the plea agreement, Bass used the United States Postal Service to distribute narcotics, namely counterfeit Oxycontin, throughout the United States. Bass received orders over the internet for counterfeit pills and then concealed shipments of pills within U.S. Postal Service Priority Mail packages. In August 2022, Dr. Louis Burgio of Tuscaloosa, Alabama, received counterfeit narcotics shipped by Bass. Unknown to Dr. Burgio, the counterfeit pills also contained fentanyl. Dr. Burgio passed away on August 21, 2022, as a result of the toxic effects of fentanyl. Priority Mail packaging found in Dr. Burgio’s home matched the Priority Mail packages shipped by Bass. A search of Bass’s residence in St. Francis, Minnesota, resulted in the seizure of counterfeit pills, fentanyl, and packaging material. A search of Bass’s phone revealed spreadsheets of customers, addresses, U.S. Postal Service tracking numbers, weights and quantities of orders, and pricing for pills.
Bass is scheduled to be sentenced before U.S. District Judge L. Scott Coogler at the Federal Courthouse in Tuscaloosa, Alabama, on December 17, 2024.
The U.S. Postal Inspection Service investigated the case. Assistant U.S. Attorney Alan Kirk is prosecuting the case.
Mifflin County Man Pleads Guilty to Filing False Tax ReturnRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Vincent Minervini, age 49, of Reedsville, Pennsylvania, pleaded guilty on August 27, 2024, to filing a false tax return in 2018.
According to United States Attorney Gerard M. Karam, from 2014 through 2018, Minervini, operated various companies that he either owned on his own or controlled through a partnership. These businesses included VM Holdings, LLC; Supreme Star Property Management, LLC; Boomer Builders LLC; Debt Free Partnerships, LP; Boomer Ranches DS, LLC; and VMJH Holdings, LLC.
Minervini filed personal and business tax returns in each of these years. Minervini made it appear that his businesses were incurring expenses, which were deducted from his businesses’ taxable income, by moving money from one of his companies to another and labeling such payments “Management Services,” “Management Fees,” “Operating Expenses,” “Operating Budget,” and “Transfers.” For example, in 2016, VMJH Holdings and Boomer Ranches made $134,500 worth of transfers to Boomer Builders that were labeled “Operating Budget” and “Operating Expenses,” but Boomer Builders did not declare any of these transfers as gross receipts on its own tax return. Minervini’s actions therefore reduced the amount of income that was subject to taxation by the IRS.
In addition, Minervini made payments from his companies to himself without reporting such transfers as income in his personal tax returns. For instance, in 2017, VM Holdings transferred approximately $809,648.22 to Minervini’s personal bank account, and Minervini deducted this amount as an expense on VM Holdings’ tax return, but he did not declare it as income on any other return, personal or business.
As a result of these actions, Minervini underreported approximately $2,102,512 in income.
Minervini submitted his tax returns to the IRS under penalty of perjury. As part of his guilty plea, Minervini admitted that the tax returns for 2014 to 2018 contained knowingly false information.
Minervini also admitted and accepted responsibility for $266,618 in unpaid taxes, which was the full amount of unpaid taxes for 2014 to 2018. He also agreed to pay restitution to the IRS in that amount prior to the date of sentencing. The IRS will also assess penalties and interest on Minervini’s back taxes following the completion of the criminal case.
The case was investigated by the IRS Criminal Investigations Division. Assistant U.S. Attorney Ravi Romel Sharma is prosecuting the case.
The maximum penalty under federal law for filing a false tax return is three years of imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
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Mastermind of $5 Million Unemployment Fraud Scheme and Accomplices Sentenced to PrisonRead the Press Release
NEWS RELEASE SUMMARY – August 28, 2024
SAN DIEGO – David Constantin, mastermind of a scheme to steal more than $5 million in California unemployment benefits intended to help workers affected by the pandemic, was sentenced in federal court today to five years in prison and was ordered to pay $ $5,178,276 in restitution to the state.
The co-mastermind of the scheme, Constantin Bobi Sandu, charged separately, was sentenced in 2023 to 40 months in prison.
According to Constantin’s plea agreement, between July 2020 and August 2022, Constantin and Sandu conspired with 213 co-conspirators to fraudulently obtain at least $5,178,276 in California unemployment insurance benefits.
Thirteen other defendants were charged on the same indictment as Constantin with wire fraud and money laundering related to the unemployment fraud scheme. Four of the defendants were sentenced on July 31, 2024, and ordered to pay restitution to the state of California. They are:
- Eduard Buse, 34 months and $244,050;
- Constantin Iosif Constantin, 32 months and $281,000;
- Leonard Miclescu, 15 months and $34,650; and
- Filip Nicolae, 13 months and $26,250.
Additional defendants include:
- Florentina Sima, wife of Buse, who was sentenced on May 29, 2024 to 15 months in custody and $28,350 in restitution; and
- Florin Nicolae, who pleaded guilty and is scheduled to be sentenced on August 30, 2024, at 9 a.m.
According to admissions in their plea agreements, these defendants submitted fraudulent applications to the California Economic Development Department, falsely claiming to be United States citizens who had been employed full time prior to the pandemic, and who had earned substantial income. To substantiate these claims, the defendants submitted false documents, including fake Forms W-2 purporting to be from their prior employers, phony health insurance cards, and fake utility bills to support their claimed residence in California.
These defendants caused the California Employment Development Department to pay out hundreds of thousands of dollars in fraudulent benefits to individuals who were not entitled to those benefits. Many of them laundered their fraudulent proceeds by transferring funds to Romania.
In some cases, while claiming that they needed the funds to take care of their families, the defendants used the proceeds of the fraud to purchase luxury items. Buse, for example, purchased a 2020 BMW for more than $100,000 and shipped it to Romania.
Other defendants are being sought by the United States so that they can be held accountable.
This case is being prosecuted by Assistant U.S. Attorneys Jessica Adeline Schulberg and Valerie H. Chu.
DEFENDANTS Case Number 23CR2090-RBM
David Constantin, Aka Vlad Alexandru Age: 28 Transient, Romanian
Eduard Buse Age: 31 Transient, Romanian
Leonard Miclescu Age: 49 Transient, Romanian
Constantin Iosif Constantin Age: 31 Transient, Romanian
Florentina Sima Age: 30 Transient, Romanian
Filip Nicolae Age: 31 Transient, Romanian
Florin Nicolae Age: 34 Transient, Romania
*Additional defendants are not in custody and their names are redacted
SUMMARY OF CHARGES
Title 18, U.S.C. § 1349 and 1343 - Conspiracy to Commit Wire Fraud
Maximum penalty: Thirty years in prison, a fine of $1 million or both;
Title 18 U.S.C. § 1943 – Wire Fraud
Maximum penalty: Thirty years in prison, a fine of $1 million or both;
Title 18 U.S.C. § 1956(a)(2)(A) — Laundering Monetary Instruments
Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater;
Title 18 U.S.C. § 1956(a)(2)(B)(i) – Laundering Monetary Instruments
Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater;
Title 18 U.S.C. §§ 981(a)(1)(C) and 982(a)(1), and Title 28, U.S.C. § 2461(c) - Criminal Forfeitures
INVESTIGATING AGENCIES
Federal Bureau of Investigation
San Diego Police Department Economic Crimes Unit
IRS Criminal Investigation
California Employment Development Department Investigative Division
Department of Labor Office of Investigator General
U.S. Department of Homeland Security
Massachusetts Man Sentenced to 3 Years for Supplying Drug Trafficking Biddeford Couple with FentanylRead the Press Release
PORTLAND, Maine: A Massachusetts man was sentenced today in U.S. District Court in Portland for possessing fentanyl with intent to distribute.
U.S. District Judge John A. Woodcock, Jr. sentenced Darwin Mateo, 25, to 36 months imprisonment to be followed by three years of supervised release. Mateo pleaded guilty on March 1, 2024.
According to court records, in August 2023, law enforcement encountered Mateo while executing a search warrant at the Biddeford residence of Michael and Jessica Bolster. Investigators discovered two large bundles of a mixture or substance containing fentanyl inside the residence. One bundle was located inside a backpack in a locked bedroom. The other bundle was discovered hidden at the bottom of the stairwell, a few inches from where investigators located Mateo. Each bundle contained numerous individual baggies, totaling approximately 541 grams. Mateo admitted to investigators that the backpack was his, and that he had traveled from Massachusetts to Maine to distribute the fentanyl.
Michael Bolster, 48, pleaded guilty on January 18, 2024, for his role in the trafficking conspiracy and faces 5-40 years in prison. Jessica Bolster, 43, pleaded guilty on February 21, 2024, and faces up to 20 years. They will each be sentenced after the completion of presentence investigative reports by the U.S. Probation Office. A federal district court judge will determine any sentences after considering the U.S. Sentencing Guidelines and other statutory factors.
The U.S. Drug Enforcement Administration investigated the case.
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Maryland Man Sentenced for Fraudulently Obtaining More Than $3.5 Million in Covid-19 Cares Act LoansRead the Press Release
Greenbelt, Maryland – On Tuesday, August 27, 2024, the Honorable Deborah L. Boardman sentenced Rudolph Brooks, age 48, of Cheltenham, Maryland, to 18 months in federal prison followed by 2 years of supervised release for fraudulently obtaining over $3.5 million in COVID-19 Coronavirus Aid, Relief, and Economic Security (“CARES”) Act Payroll Protection Program (PPP) loans. The Court also ordered Brooks to forfeit all property and assets derived from or obtained as a result of his criminal activity, including a 2018 Tesla Model 3, property located in Upper Marlboro, Maryland, and at least $2,231,141.49 from 17 bank accounts controlled by Brooks.
The sentence was announced by Erek L. Barron, U.S. Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge, Jeffrey D. Pittano, of the Federal Deposit Insurance Corporation Office of Inspector General, Mid-Atlantic Region; Special Agent in Charge Kareem A. Carter of the Internal Revenue Service - Criminal Investigation (IRS-CI), Washington, D.C. Field Office; Special Agent in Charge William J. DelBagno of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Amaleka McCall-Brathwaite, Eastern Region Investigations Division of the U.S. Small Business Administration Office of Inspector General (SBA OIG).
The CARES Act was enacted in March 2020 to provide emergency financial assistance to Americans suffering from the economic consequences of COVID-19. The CARES Act authorized forgivable loans to small businesses for employee retention and certain business expenses through the Paycheck Protection Program (“PPP”).
According to court documents, between April 2020 and September 2021, Brooks, who at times served as pastor at Kingdom Tabernacle of Restoration Ministries, participated in a scheme to fraudulently obtain PPP loans, used the loan proceeds for his personal enrichment, and concealed his misappropriation of the funds by laundering the loan proceeds. As stated in the plea agreement, Brooks used several entities to apply for PPP loans, including Cars Direct by Gavawn HWD Bob’s Motors (Cars Direct), Kingdom Tabernacle of Restoration Ministries, and Madaro, LLC. In each case, Brooks grossly inflated the number of employees and average monthly payroll, and submitted fraudulent IRS Forms 940, Employer’s Annual Federal Unemployment Tax Return, and other fraudulent IRS forms to support the loan applications.
For example, on May 12, 2020, Brooks received $1,556,589 in fraudulently-obtained PPP loan proceeds, deposited directly into a Cars Direct bank account on which Brooks was the sole signator. He also received $1.8 million in fraudulently obtained PPP loan proceeds, deposited directly into a Kingdom Tabernacle bank account on which Brooks was the sole signator. Similarly, on May 13, 2020, Brooks received $204,266 in such proceeds, deposited directly into a Madaro bank account in which Brooks was the sole signator.
Brooks admitted that he used the loan proceeds for his personal benefit and on payments and purchases not permissible under PPP, such as for a residence; for a luxury vehicle; and, for restaurant, retail store and grocery purchases. Brooks also made cash withdrawals and transfers to other accounts under his control. For example, Brooks opened a bank account in the name of Payroll by BJM, into which he transferred $500,000 of the Cars Direct PPP loan proceeds. Brooks also registered Payroll by BJM with the Maryland State Department of Assessments and Taxation, listing himself as “member” and sole signator. Although the name Payroll by BJM created the appearance that the account was associated with a payroll company, there were no payroll or payroll-related expenses paid from this account.
In addition, Brooks initiated numerous transfers of PPP loan funds, totaling approximately $196,000, from the Cars Direct account to his personal bank accounts. Of this amount, Brooks wired $60,407 to Tesla Motors Inc. on July 30, 2020, to purchase a 2018 Tesla Model 3 in the name of Brooks’ son, which was ultimately registered in Maryland in Brooks’ own name.
On February 5, 2021, Brooks transferred $750,000 in proceeds from the Kingdom Tabernacle PPP loan to a bank account in the name of Madaro, for which Brooks was the sole signator. On May 17, 2021, Brooks initiated a wire transfer of $507,010 to a title company to purchase property in Upper Marlboro, Maryland, in the name of “Rudolph Brooks.”
The District of Maryland Strike Force is one of three strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including fraud relating to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act was designed to provide emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.
For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
U.S. Attorney Barron commended the FDIC OIG, the IRS-CI, the FBI, and the SBA OIG for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Sean R. Delaney, who is prosecuting the case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit https://www.justice.gov/usao-md/community-outreach.
Man Charged with Robbing Suburban Chicago BankRead the Press Release
CHICAGO — A man has been charged in federal court with robbing a bank in Evanston, Ill. and attempting to rob a bank in Chicago on back-to-back days this month.
JEFFREY SULASKI robbed an Associated Bank branch in Evanston on Aug. 3, 2024, according to an indictment returned Tuesday in U.S. District Court in Chicago. A day earlier, Sulaski attempted to rob a Huntington Bank branch in Chicago, the indictment states. Sulaski committed the alleged offenses while on court-supervised release following his imprisonment for a prior bank robbery conviction.
The indictment charges Sulaski, 64, of Chicago, with one count of bank robbery and one count of attempted bank robbery. Arraignment is scheduled for Thursday at 2:30 p.m. before U.S. District Judge Matthew F. Kennelly.
The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI. The Chicago Police Department provided valuable assistance. The government is represented by Assistant U.S. Attorney Minje Shin.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Each count in the indictment is punishable by up to 20 years in federal prison.
Sulaski indictment