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28 August 2024
Albany Felon Sentenced to 27 Months for Illegally Possessing Loaded FirearmRead the Press Release
ALBANY, NEW YORK – Alexander Wilson, age 31, of Albany, was sentenced today to 27 months in prison for illegally possessing a pistol as a convicted felon.
United States Attorney Carla B. Freedman; United States Marshal David L. McNulty; Bryan Miller, Special Agent in Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF); and New York State Police (NYSP) Superintendent Steven G. James made the announcement.
As part of his previously entered guilty plea, Wilson, who has two prior felony convictions, admitted that on March 16, 2023, he threw a loaded pistol from a vehicle while being pursued by a New York State Trooper on Interstate 90 in Albany.
United States District Judge Mae A. D’Agostino also imposed a 3-year term of supervised release, to begin after Wilson is released from prison. Judge D’Agostino also ordered Wilson to forfeit the firearm.
The United States Marshals Service, ATF, and NYSP investigated the case. Assistant U.S. Attorney Joshua R. Rosenthal prosecuted the case as 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.
52 Members of a Violent Drug Trafficking Gang in Caguas, Puerto Rico, Charged in a Superseding IndictmentRead the Press Release
SAN JUAN, Puerto Rico – A federal grand jury issued a superseding indictment on August 21, 2024, charging 52 violent gang members from the municipality of Caguas with conspiracy to possess with intent to distribute, possession and distribution of controlled substances, firearms violations, murder, and money laundering, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico.
The initial federal indictment charged 38 individuals with drug trafficking, firearms violations, and one murder. The superseding indictment supplants the initial indictment, charges 14 additional defendants, and charges money laundering offenses and four more shootings involving 8 victims -- including the December 7, 2021, shooting in Cidra where five victims were killed.
“A year ago, we announced the arrests of some of the members of this violent gang, but our investigation did not end with those arrests. Today, we announce that through the efforts of our law enforcement partners and prosecutors, additional defendants have been arrested and charged with additional murders,” said United States Attorney Muldrow. “We will continue to hold violent gang members accountable for their crimes. Although the leader of this violent gang remains a fugitive from justice, we will continue to pursue him and his criminal associates, no matter where they hide or how long it takes.”
“Our communities are being torn apart by the devastating impact of drug trafficking. It’s crucial to understand that everyone involved, from the kingpins to those who support their criminal operations, share responsibility for the destruction and violence that follows in their wake. We will not rest until those responsible for perpetuating this cycle of suffering are brought to justice,” said Joseph González, Special Agent in Charge of the FBI’s San Juan Field Office. “In the FBI, we are committed to pursuing every avenue to dismantle this criminal network, which includes seizing and forfeiting all ill-gotten gains and assets acquired through drug trafficking. This will encompass everything from boats and cars to houses and businesses, and even the arrest of those who are making it possible for fugitives of this organization to remain at large. There will be no safe haven for those who profit from this illegal activity.”
The superseding indictment alleges that from 2017 through the present, the drug trafficking organization distributed heroin, cocaine base (commonly known as “crack”), cocaine, marihuana, Fentanyl, Oxycodone (Percocet), and Alprazolam (Xanax) within 1,000 feet of the Brisas del Turabo, the Raúl Castellón, the Turabo Heights, and the Juan Jiménez García Public Housing Projects; and at the Barriada Morales, Barriada La Pajilla, and Bunker Wards in Caguas, and other areas throughout Puerto Rico, all for significant financial gain and profit.
Defendant [1] Nelson Torres-Delgado, the alleged leader of the violent drug trafficking organization charged in this Superseding Indictment, has held power over drug trafficking in the Caguas area since the early 2010s. He has been a federal fugitive since 2017 and has maintained control over the organization as a fugitive through deadly violence and intimidation, and by engaging in violent turf wars against rival drug trafficking organizations. His methods of avoiding capture while controlling his gang include limiting face-to-face contact to only the highest and most trusted leaders in his organization.
The defendants allegedly acted in different roles to further the goals of the drug trafficking conspiracy, to include: leaders, enforcers, runners, sellers, facilitators, and lookouts. The members of the gang allegedly used force, violence, and intimidation to maintain control of the areas in which they operated. The defendants charged in the drug trafficking conspiracy are:
[1] Nelson Torres-Delgado, a.k.a. “El Burro/Burro/
Father/Nelsito/Cuatro Patas/El Animal/El Animal de Cuatro Patas
[2] Edwin Padilla-López, a.k.a. “Play/NBA/Pliki/Biscochito/Bizcochito/Juga”
[3] Ronald Aponte-Marquez, a.k.a. “El Enano/Enano/Sepe”
[4] Eroz Rodríguez-Hernández, a.k.a. “Eros/Wason/El Joker”
[5] José Jiménez-Ramos, a.k.a. “El Mono/Mono/Joel El Mono”
[6] Lenne Carrasquillo-Serrano, a.k.a. “Taz/Leny/Lenny/Lenee/La J”
[7] Giovanny Solis-Carrasco, a.k.a. “Blanquito/Jova El Blanco/Joba El Blanco/Jova”
[8] Evaristo González-Vega, a.k.a. “Sonic/Viejo/Eva”
[9] Jariel Figueroa-Maymi, a.k.a. “Moni”
[10] José Torres-Pagán, a.k.a. “Abelino/Ave/Abe”
[11] Carlos De Jesús-García, a.k.a. “Oreja/Orejas”
[12] Gabriel Vázquez-Roldán, a.k.a. “Gordo/Gabby Gordo/Goldo/
Goldito/Goldo Vázquez”
[13] José Martinez-Galvez, a.k.a. “El Chef/El Che/Chef”
[14] Armando L. Rivera-Rodríguez
[15] Jan Borges De Jesús, a.k.a. “El Man/Jan el Man/Jan El Chulo”
[16] Lester Vélez-Rodríguez, a.k.a. “El Eco/El Feo/Coco”
[17] Vanessa Santiago-Cotto
[18] Diana Mimoso-Figueroa, a.k.a. “La D/Di”
[19] José de la Vega, a.k.a. “Chupi/Pablo/Pablito”
[20] Michael Rodríguez-Flores, a.k.a. “Pinki”
[21] José Gautier-Medina, a.k.a. “Tempo”
[22] Miguel González-Sánchez, a.k.a. “Miky/Mikyy/El Code”
[23] Brian Sierra-Feliciano, a.k.a. “Kobe”
[24] Eric Camacho-Castro, a.k.a. “Pali”
[25] Héctor Torres-Pagán, a.k.a. “Pepo”
[26] Christian Martines-Franco, a.k.a. “El Menor/Menor/El Mynor/
Mynor/Christian Menor”
[27] Edward Vázquez-Concepción, a.k.a. “Draculín/Drácula/Draco/Bestia Demon”
[28] Juan Acevedo-Ramos, a.k.a. “Tono/Tonito/Pelotero Kuker”
[29] Jean Villanueva-Figueroa, a.k.a. “Mueca/Mueka/Jan Mueca/Jean Mueca”
[30] Waldemar Pedraza-Díaz, a.k.a. “Walde”
[31] Melquiades Santana-Martínez, a.k.a. “Melki/Melqi”
[32] Juan Orellano-Díaz, a.k.a. “El Indio/Indio”
[33] Cesar Acevedo-Adorno
[34] Elimelec García-Escoda, a.k.a. “Flaco/Eli/Elimelek”
[35] Christopher Contreras-Baez, a.k.a. “Chimuelo”
[36] Luis Burgos-Ofarril, a.k.a. “Pájaro”
[37] Francisco López-Sánchez
[39] José E. Ortiz-Colón, a.k.a. “Enki/Enky”
[40] Jean Carlos Baez-Algarín, a.k.a. “Taxista/Jan El Jincho/Lindo/Jan Buko/Jan”
[41] Juan Manuel González-Cotto, a.k.a. “Juanma”
[42] Carlos Rolón-Pérez
[43] Joel Omar Jiménez-Díaz, a.k.a. “Quiteo/Kuiteo”
[44] Edgard E. González-Vázquez, a.k.a. “Tomate”
[45] Rafael Acosta-Vega, a.k.a. “Gordo Rafa”
[46] Joey Divan Del Valle-Delgado, a.k.a. “Besito/Jowy”
[47] Minerys Burgos-Caez
[48] Glenda Irizarry-Campos
[49] Sebasthian García-Agostini, a.k.a. “Seba”
[50] Jeremy Johan Pérez-Bonilla, a.k.a. “Jere”
[51] Steven Omar Padilla-López,
[52] Wesley Abel Pedraza-Díaz
Thirty-six defendants are charged in Count Seven with possession of firearms in furtherance of a drug trafficking crime. Count Eight charges 10 defendants with possession of a machinegun in furtherance of a drug trafficking crime.
Count Nine charges defendants [15] Jan Borges De Jesús, [20] Michael Rodríguez-Flores, [21] José Gautier-Medina, [22] Miguel González-Sánchez, and [23] Brian Sierra-Feliciano for the murder of M.R.M. on May 15, 2022, in Caguas, in violation of 18 U.S.C. § 924(j). The superseding indictment now also charges those same defendants in Count Sixteen with the same murder in violation of another federal offense -- the drive-by shooting statute (18 U.S.C. § 36).
Count Ten charges [38] Sheila Luyando-Fuentes with wrongful disclosure of individually identifiable health information. According to the indictment, Luyando-Fuentes, who was employed in the health care industry and had access to protected health information, acted as a facilitator and shared protected health information with gang members, including information about rival gang members hospitalized with injuries resulting from gun fights between the gangs, to assist in the gang’s efforts to locate and kill their enemies.
Count Eleven charges [2] Edwin Padilla-López, [37] Francisco López-Sánchez, and [42] Carlos Rolón-Pérez for the murder of R.B.M., using firearms, on June 6, 2020.
Count Twelve charges [1] Nelson Torres-Delgado, [2] Edwin Padilla-López, [4] Eroz Rodríguez-Hernández, and [37] Francisco López-Sánchez for the murder of R.M.O. on July 18, 2021.
Counts Thirteen and Fourteen charge [2] Edwin Padilla-López, [3] Ronald Aponte-Marquez, [4] Eroz Rodríguez-Hernández, and [39] José E. Ortiz-Colón for a massacre that occurred on December 7, 2021, in Cidra, Puerto Rico. These defendants murdered J.O.C., S.F.C., A.B.R., J.D.R., and B.A.C. in a drive-by shooting.
Count Fifteen charges [1] Nelson Torres-Delgado, [3] Ronald Aponte-Marquez, [4] Eroz Rodríguez-Hernández, and [41] Juan Manuel González-Cotto for the murder of G.A.H. on March 19, 2022.
Count 17 charges [49] Sebasthian Agostini-García and Count 18 charges [48] Glenda Irizarry-Campos for harboring and concealing E.P.L., a fugitive.
Count 19 charges [2] Edwin Padilla-López, [5] Jose Jiménez-Ramos, [36] Luis Burgos-Ofarril, [37] Francisco López-Sánchez, [47] Minerys Burgos-Caez, [48] Glenda Irizarry-Campos, [49] Sebasthian Agostini-García, and [51] Steven Omar Padilla-López with conspiracy to commit money laundering. These defendants obtained proceeds from drug trafficking in the continental United States and in Puerto Rico and used businesses like M.O. Service LLC and Gnails Marketplace to launder the proceeds. The defendants opened personal and business bank accounts to invest the proceeds into real estate properties, rental properties, motor vehicles and improvements to residential and commercial real estate.
This investigation was led by the FBI San Juan Violent Gang Safe Streets Task Force, which is comprised of Special Agents and Task Force Officers from the FBI, Puerto Rico Police Bureau (PRPB), San Juan Municipal Police, Federal Bureau of Prisons (BOP), Puerto Rico Treasury Department (Hacienda), United States Department of Housing and Urban Development - Office of the Inspector General (HUD-OIG), Carolina Municipal Police Department, Bayamón Municipal Police Department and the Puerto Rico Department of Corrections and Rehabilitation.
The FBI thanks the United States Marshals Service (USMS) for their partnership in this investigation. The FBI also thanks the Puerto Rico Police Bureau, especially the Caguas Drug Unit, Caguas Intelligence Unit, Caguas Homicide Unit, Guayama Homicide Unit, Special Arrests Unit, and Caguas Strike Force, for their assistance in this investigation.
Assistant U.S. Attorney (AUSA) and Chief of the Gang Section Alberto López-Rocafort, Deputy Chief of the Gang Section, AUSA Teresa Zapata-Valladares, and AUSAs Héctor Siaca Flores, and R. Vance Eaton are prosecuting the case. If convicted on the drug charges, the defendants face a minimum sentence of 10 years, and up to life in prison. If convicted of both the drug and firearms charges in Count Seven, the defendants face a minimum sentence of 15 years, and up to life in prison. The defendants charged in Count Eight with possession of machineguns in furtherance of drug trafficking face a mandatory consecutive sentence of thirty years in prison. The defendants charged in Counts Nine and Eleven through Sixteen with the firearms-related murders face a potential sentence of life imprisonment and, if authorized by the Attorney General of the United States, the death penalty. The defendant charged in Count Ten faces a maximum sentence of ten years in prison. Defendants charged in Counts Seventeen and Eighteen face up to five years in prison. The defendants charged for the money laundering counts face up to 20 years in prison.
All defendants charged in the drug conspiracy are facing a narcotics forfeiture allegation of $132 million and the United States is seeking forfeiture of the following property:
- Cond. Costamar Beach Village West, Loíza, PR
- Urb. La Campiña, Las Piedras, PR
- Urb. Lake View State, Caguas, PR
- Jardines Palmarejo, Canóvanas, PR
- Urb. Estancias de Cambalache, Vistas de Río Grande, Canóvanas, PR
- Yagrumos St. Monteverde Cupey 1, Sand Juan, PR
- 2024 Lexus TX
- 2017 Mercedes Benz GLC 300
- 2020 Jeep Wrangler Unlimited
- $33,470 in cash
- Fourteen black cell phones cloud Mobile C7 (12 in boxes, 2 without boxes), and eighteen T-Mobile Sim cards.
This prosecution is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money 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.
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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31st Annual Four Corners Indian Country Conference Focuses on Partnership and JusticeRead the Press Release
IGNACIO – Acting United States Attorney for the District of Colorado Matt Kirsch hosted the 31st Annual Four Corners Indian Country Conference in Ignacio, Colorado this week.
The three-day event, held at the Sky Ute Casino Resort, focused on collaboration, commitment, and relationship building between the Department of Justice, Offices of the United States Attorneys in the region, and tribal communities.
“Our office and the Department of Justice have a long-held commitment to tribal communities here in Colorado and across the west,” said Acting United States Attorney for the District of Colorado Matt Kirsch. “I am proud of the work we do to support our Indian Country partners and appreciate our ability to come together to better our working relationships.”
Started in 1992, The Four Corners Indian Country Conference focuses on prosecution, justice, and victims’ issues in Indian Country, specifically in the “four corners” states of Colorado, Arizona, New Mexico, and Utah. The District of Colorado was proud to highlight additional efforts put in place this year to support the law enforcement on tribal lands including the hiring of additional federal prosecutors, law enforcement trainings, and successful prosecutions which sought justice for victims of domestic violence and sexual assault.
Colorado is home to two federally recognized tribes, the Southern Ute and the Ute Mountain Ute. In addition to critical meetings focused on law enforcement and legal issues, the conference featured speakers, cultural presentations, and a local tribal artist to help attendees celebrate the rich cultural legacy of these tribes.
Next year’s Four Corners Indian Country Conference will be held in New Mexico.
15 Arrested in Uvalde Gang TakedownRead the Press Release
DEL RIO, Texas – Five confirmed gang members and 10 other individuals with gang ties were arrested in Uvalde on criminal charges related to their alleged conspiracy to possess and distribute methamphetamine.
The following 15 defendants were indicted Aug. 21 in a federal court in Del Rio for one count of conspiracy to distribute & possess with intent to distribute methamphetamine and one count of distribution & possession of methamphetamine with intent to distribute.
- Cesar Ramirez-Musquiz, 49
- Kasandra Nicole Gutierrez, 31
- Shawn Kyle Garza, 23
- Rosemary Flores-Lopez, 44
- Sammy Josephine Arellano, 35
- Consuelo Gutierrez-Rodriguez, 36
- Fidencio Garcia Jr., 29
- Christopher Lee Salazar, 36
- Elysia Armendariz, 27
- Osvaldo Ortiz-Sandoval, 32
- Tommy Hernandez-Rodriguez, 24
- James Pargas Ruiz, 40
- Raul Alberto Olivarez Jr., 35
- Edmundo Nicolas Garza, 27
- Anthony Rios-Orozco, 22
If convicted, they face 10 years to life in prison and up to a $10 million fine for each charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Jaime Esparza of the Western District for Texas and Special Agent in Charge Craig Larrabee for Homeland Security Investigations San Antonio made the announcement.
HSI, Texas Department of Public Safety, Uvalde County Sheriff’s Office, and 38th Judicial District Attorney’s Office are investigating the case with valuable assistance from Border Patrol, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service, and the Drug Enforcement Administration.
Assistant U.S. Attorney Katy Garner 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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12 Arrested in San Antonio for Alleged Possession and Trafficking of Stolen Firearms, Machinegun Conversion DevicesRead the Press Release
SAN ANTONIO – 12 individuals were arrested Tuesday in San Antonio on criminal charges related to their alleged involvement in trafficking firearms stolen from vehicles in and around San Antonio.
The following defendants were indicted in a federal court in San Antonio for various charges that include firearm trafficking, possession of a stolen firearm, and possession of a machine gun.
Jonathan Adrian Briseno aka “SaTone Slick,” 20
- One count of firearm trafficking
- One count of possession of a stolen firearm
- One count of possession of a machine gun
- One count of possession of unregistered machine gun
Ruben Gonzalez Jr., aka “Roman Hernandez,” 29
- Two counts of possession of a machine gun
Joel Alejandro Martinez aka “Bo Jackson,” 25
- Three counts of firearm trafficking
- Three counts of possession of a stolen firearm
Margarita Hernandez Martinez, 43
- Two counts of firearm trafficking
- One count of possession of a stolen firearm
Julio Alejandro Sanchez, 27
- One count of firearms trafficking
- One count of dealing in firearms without a license
- One count of possession of a stolen firearm
Arnulfo Javier Maldonado, 21
- One count of firearm trafficking conspiracy
- One count of possession of a machine gun
- One count of dealing in firearms without a license
Darius Springs aka “Dee STN,” 21
- One count of firearm trafficking conspiracy
- Two counts of possession of a machine gun
- Two counts of firearms trafficking
- One count of possession of a stolen firearm
- One count of dealing in firearms without a license
Giovanni Martinez Larios, 18
- One count of firearm trafficking
- One count of dealing in firearms without a license
- Two counts of possession of a stolen firearm
- Two counts of possession of a machine gun
- Two counts of unregistered machine gun
Jesus Hernandez Jr. aka “Chuy,” 22
- One count of possession of a machine gun, aiding and abetting
- One count of possession of unregistered firearm
Bernardo Melendez Jr., 25
- One count of possession of a machine gun, aiding and abetting
Joe Randy Cano, 34
- One count of felon in possession of a firearm
Patrick Michael Cuellar, 23
- One count of possession of unregistered firearm
- One count of possession of a machine gun
Defendants indicted on charges related to machine gun possession allegedly possessed machinegun conversion devices, commonly referred to as “switches” or “auto sears,” which are designed and intended solely and exclusively for use in converting a semi-automatic weapon into a weapon that can be fired as a fully automatic weapon by a single function of the trigger.
Penalties in the indictments range from up to five years in prison for dealing in firearms without a license, to a maximum of 10 years in prison for the possession charges, and up to 15 years in prison for the firearm trafficking and felon in possession charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Jaime Esparza of the Western District of Texas made the announcement.
The Bureau of Alcohol, Tobacco, Firearms and Explosives is investigating the case with valuable support from the Department of Commerce, Bureau of Industry and Security.
Assistant U.S. Attorneys Sarah Wannarka and Zachary Parsons are 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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27 August 2024
Wilkes-Barre Accountant Sentenced to 30 Months in Prison for Embezzling over $1.5 Million from EmployerRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Lawrence Malachefski, age 39, of Wilkes-Barre, PA, was sentenced on August 26, 2024, by United States District Court Judge Malachy E. Mannion to 30 months’ imprisonment and a three-year term of supervised release for wire fraud.
According to the United States Attorney Gerard M. Karam, from approximately March 2023 to May 2023, while serving as the financial Controller of a Wilkes-Barre based Heating, Ventilation and Air Conditioning (HVAC) business, Malachefski embezzled over $1.5 million from his employer, converting the funds to his own personal use and then spending the money primarily on online sports betting websites. At his sentencing, Malachefski was also ordered to pay $1,586,557.45 in restitution to the victim-company.
This case was investigated by the Federal Bureau of Investigation (FBI) – Philadelphia Division and prosecuted by Assistant U.S. Attorney Jeffery St John.
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Uzbek National Sentenced for Role in Long-Running Immigration and Passport Fraud ConspiracyRead the Press Release
Orlando, Florida – U.S. District Judge Roy B. Dalton has sentenced Dilrabo Obidova (36, Uzbekistan) for her role in a long-running immigration and passport fraud conspiracy. The Court sentenced Obidova to a time-served sentence reflecting the time Obidova was detained pending trial. The Court has also entered an order immediately deporting Obidova to Uzbekistan with no option to apply for asylum or any other immigration relief. Obidova entered a guilty plea in May 2024. Obidova’s husband, Abduvosit Razikov, was charged in the same indictment. He remains at-large.
According to court documents, Razikov and Obidova conspired since at least 2007 to bring Obidova to the United States from Uzbekistan and fraudulently obtain immigration benefits for her. To this end, Obidova entered into a sham marriage with a U.S. citizen, even though she was already married to Razikov. To perpetuate the myth that she was legitimately married to a U.S. citizen, Obidova moved in with her sham husband, filed joint tax returns with him, staged photos, and even listed her sham husband on her and Razikov’s children’s birth certificates. Obidova, with Razikov’s assistance, also filed several immigration and passport applications, each time making false statements or concealing information about her sham marriage and her marriage to Razikov.
After obtaining lawful permanent resident status, Obidova attempted to become a naturalized U.S. citizen. In her application for naturalization, Obidova made numerous false statements, under penalty of perjury, relating to her background, marriages, and past attempts to illegally obtain immigration benefits and status. Law enforcement officers took Obidova into custody when she traveled to Orlando for her final naturalization interview.
This case was investigated by the Federal Bureau of Investigation’s Joint Terrorism Task Force, with valuable assistance from the U.S. Department of State’s Diplomatic Security Service, U.S. Customs and Border Protection, U.S. Citizenship and Immigration Services, Immigration and Customs Enforcement’s Enforcement and Removal Operations and Office of the Principal Legal Advisor, and the Orange County Sheriff’s Office. It was prosecuted by Assistant United States Attorneys Kara M. Wick and Richard Varadan.
U.S. Navy Shipbuilder Pleads Guilty to Financial Accounting Fraud Scheme and Obstructing a Defense Department AuditRead the Press Release
Austal USA LLC (Austal USA), a Mobile, Alabama-based shipbuilder that constructs vessels for the U.S. Navy and U.S. Coast Guard, pleaded guilty yesterday and has agreed to pay $24 million to resolve an investigation by the Justice Department related to an accounting fraud scheme and efforts to obstruct the Defense Contract Audit Agency (DCAA) during a financial capability audit. Austal USA is a wholly owned subsidiary of Austal Limited, an Australian company that is publicly traded on the Australian Securities Exchange and was traded over-the-counter in the United States via American Depositary Receipts.
The Justice Department’s criminal resolution was coordinated with the U.S. Securities and Exchange Commission (SEC). Separately, Austal USA also entered into a False Claims Act settlement with the department’s Civil Division to resolve claims that it knowingly provided non-compliant parts to the U.S. Navy.
“Austal USA, a shipbuilder for the U.S. military, engaged in a years-long scheme to illegally inflate its profits on ships the company was building for the U.S. Navy, reporting false financial results to investors, lenders, and its auditors,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “The investing public, the U.S. Navy, and the Defense Contract Audit Agency relied on Austal USA to tell the truth about its financial condition and its performance on U.S. Navy contracts. Today’s guilty plea underscores the Department of Justice’s commitment to holding U.S. government contractors accountable for their criminal misconduct and ensuring that they engage honestly with the U.S. government.”
“Maintaining our national security and military infrastructure cannot come at the cost of the integrity of our contracting processes,” said U.S. Attorney Sean P. Costello for the Southern District of Alabama. “Today’s actions ensure accountability and promote the rule of law in this critical arena.”
According to court documents, from at least in or around 2013 through at least in or around July 2016, Austal USA and its co-conspirators conspired to mislead Austal Limited’s shareholders, independent financial statement auditors and the investing public about Austal USA’s financial condition. Specifically, Austal USA artificially suppressed an accounting metric known as an “estimate at completion” (EAC) in relation to multiple Littoral Combat Ships that Austal USA was building for the U.S. Navy. Suppressing the EACs had the effect of falsely overstating Austal USA’s profitability on those shipbuilding efforts and Austal Limited’s earnings reported in its public financial statements. Austal USA and its co-conspirators manipulated the EAC figures in part by using so-called “program challenges,” which were false plug numbers to hide growing shipbuilding costs that should have been incorporated into the company’s financial statements. Austal USA did this to maintain and increase the share price of Austal Limited’s stock. When the higher costs were eventually disclosed to the market, Austal Limited wrote down over $100 million, and the stock price was significantly negatively impacted.
“Defense contractors that engage in fraud erode the public’s trust in our Armed Forces,” said Director Omar Lopez of the Naval Criminal Investigative Service (NCIS). “NCIS and our investigative partners are determined to hold those accountable whose actions erode that trust. We are committed to rooting out economic crime that negatively impacts the readiness of the Department of the Navy.”
“This case is a direct result of the superb dedication of the investigative and prosecution teams,” said Director Kelly P. Mayo of the Department of Defense (DoD) Office of Inspector General, Defense Criminal Investigative Service (DCIS). “These committed professionals’ efforts send a clear message to DoD contractors of our unwavering resolve to investigate and prosecute fraud, corruption, and efforts to circumvent compliance measures that reduce our combat effectiveness.”
The department reached this resolution with Austal USA based on a number of factors, including, among others, the nature and seriousness of the offense and the pervasiveness of the misconduct at the most senior levels of Austal USA. Austal USA received credit for affirmative acceptance of responsibility and limited credit for its cooperation with the department’s investigation, which included facilitating interviews with current and former employees, enabling the department to promptly produce records in a related court case, and making a timely disclosure of all relevant facts and documents pertaining to an unrelated matter. However, Austal USA’s cooperation was limited in a number of respects, including: Austal USA did not provide to the department any relevant facts relating to this conduct until two years after learning of the department’s investigation; Austal USA produced certain relevant documents after significant delay; Austal USA was delayed in responding to certain requests from the government, and often required follow-up requests from the government before responding; and Austal USA did not at all times demonstrate a commitment to full and timely cooperation.
Austal USA also engaged in remedial measures, but those remedial measures were untimely and incomplete, including that Austal USA did not begin disciplining employees involved in the misconduct until more than two years after Austal USA learned of the government’s investigation and did not undertake any independent steps to make restitution to the victims of its securities fraud scheme. Austal USA has begun remediating weaknesses in internal controls that allowed the company’s misconduct to occur, but Austal USA’s remediation of its controls is still ongoing and requires additional improvements and testing.
Under the terms of the plea agreement, which still must be accepted by the court, Austal USA pleaded guilty to one count of securities fraud and one count of obstruction of a federal audit. Based on application of the U.S. Sentencing Guidelines, the department determined that the appropriate criminal penalty is $73,572,680.10. However, due to Austal USA’s demonstrated inability to pay the criminal fine, Austal USA and the department agreed, consistent with the department’s inability to pay guidance, that Austal USA would pay a criminal fine of $24 million and restitution of up to $24 million for losses to Austal Limited shareholders. The department has agreed to credit all of the criminal fine and restitution against amounts Austal USA will pay to resolve an investigation by the SEC for related conduct.
Austal USA has also agreed to retain an independent compliance monitor for a period of three years, and Austal USA and Austal Limited have agreed to continue to implement a compliance and ethics program at Austal USA designed to prevent and detect fraudulent conduct throughout its operations. Austal USA and Austal Limited have also agreed to continue to cooperate with the Justice Department in any ongoing or future criminal investigations relating to this conduct. In addition, Austal USA will serve three years of probation.
A sentencing hearing is scheduled for Nov. 25.
Three former Austal USA executives, Craig Perciavalle, Williams Adams, and Joseph Runkel, were indicted on March 30, 2023 on one count of conspiracy to commit wire fraud and wire fraud affecting a financial institution, five counts of wire fraud, and two counts of wire fraud affecting a financial institution. They await trial.
NCIS and DCIS are investigating the case. The Justice Department’s Office of International Affairs and authorities in Australia, as well as DCAA’s Office of Investigative Support, provided valuable assistance in the matter.
Assistant Chief Kyle Hankey and Trial Attorneys Laura Connelly and Spencer Ryan of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Christopher Bodnar for the Southern District of Alabama are prosecuting the case.
If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at [email protected]. Victims can find case updates and additional information at www.justice.gov/criminal/criminal-vns/case/austal-usa-llc.
Under the terms of the plea agreement, the SEC would handle the distribution of funds to harmed investors. Investors harmed as a result of the misconduct of defendant should watch the SEC’s Harmed Investors page for further developments regarding the SEC’s distribution of funds to harmed investors.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney’s Office Shares Internet Safety Materials for Families During the Start of the SchoolyearRead the Press Release
BOISE – With families and communities throughout Idaho marking the start of the school year, U.S. Attorney Josh Hurwit and his team are sharing online safety resources with parents, educators, and students.
The U.S. Attorney’s Office works hand-in-hand with federal, state, and local partners to ensure Idaho’s children are protected online. Sadly, the prevalence of smartphones and other electronic devices has been associated with criminal activity targeted at young people. Predators seek to exploit and abuse children through online communication and through “sextortion” and other schemes. In 2023, the National Center for Missing and Exploited Children (NCMEC) received over 36 million reports related to online sexual exploitation, an increase of 12 percent from 2022. And this problem extends to Idaho. In the first half of 2024, the Idaho Internet Crimes Against Children Task Force received 2,424 reports of child exploitation.
Awareness is critical to preventing these heinous crimes. The U.S. Attorney’s Office encourages parents, educators, and community members to review helpful safety resources available to the public, including those found at NCMEC’s NetSmartz website: missingkids.org/NetSmartz/home. Printable internet safety tips sheets for parents and children, in both English and Spanish, are provided with this press release.
In addition, today, U.S. Attorney Hurwit and his Office’s Project Safe Childhood Coordinator, Kassandra McGrady, released a public service announcement, available here, to bring awareness to sextortion, a type of blackmail used by offenders to acquire sexual content from a child. The criminal may use deceit or coercion to obtain a nude or sexual image of the child before blackmailing them for money or more content.
“As we begin a new schoolyear full of excitement and promise, I urge parents and educators to help educate our youth on internet safety,” said U.S. Attorney Hurwit. “Sextortion and other crimes lead to devastating effects on our children, causing stress, mental health issues, and even suicide. We must protect our children from online predators and arm our children with the knowledge and resources for how to seek help if they fall victim.”
The PSA aims to raise awareness about the unfortunate growing prevalence of sextortion and highlight the U.S. Attorney’s Office’s commitment to working alongside Idaho’s dedicated federal, state, and local law enforcement partners to put an end to this awful crime.
Follow these steps if you believe your child has been a victim of sextortion:
- Preserve the evidence. Take screenshots or write down names, usernames, and phone numbers.
- Report to law enforcement. Contact your local law enforcement and/or your local FBI field office and report it online at tips.FBI.gov.
- Report the perpetrator on social media. Social media apps have safety features you can use to report misconduct that violates their terms of service.
- Please do not comply with the predator’s demands. Complying with, or paying the perpetrator, rarely stops the harassment or blackmail and may fuel them to continue.
- Let NCMEC help get your images down. Visit missingkids.org/IsYourExplicitContentOutThere to learn how to notify companies yourself or visit missingkids.org/gethelpnow/cybertipline to report to NCMEC for help with the process.
Remember, the blackmailer is to blame. Even if your child made a choice they regret, the blackmailer is committing a very serious crime.
“We are here to help. If you have concerns, reach out to our office, your local law enforcement agency or contact the National Center for Missing and Exploited Children,” said U.S. Attorney Hurwit. “Together we can end the sexual exploitation of teens and kids in Idaho. Please take time to learn how to identify and respond to people who are at risk or who have experienced sextortion.”
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U.S. Attorney Jesse Laslovich announces $10.8 million civil settlement with St. Peter’s Health over False Claims Act misconductRead the Press Release
HELENA — U.S. Attorney for the District of Montana, Jesse Laslovich, today announced a settlement agreement between the federal government and St. Peter’s Health, in Helena, in which St. Peter’s will pay $10,844,201 to resolve allegations that it violated the False Claims Act by submitting false claims for payments to federal health care programs for services performed by an oncology doctor.
U.S. Attorney Laslovich announced the settlement agreement today during a press conference at the U.S. Attorney’s Office in the Paul G. Hatfield Federal Courthouse in Helena.
“One of the purposes of the False Claims Act is to protect the American taxpayer from paying for false claims submitted by health care providers to federal health care programs. We take these allegations seriously, which is why I am pleased we obtained this settlement agreement that returns almost $11 million to the United States. Our health care providers simply must submit accurate claims when billing these taxpayer-supported federal health care programs for services. This settlement would not have been possible without the cooperation of St. Peter’s Health, who voluntarily disclosed the misconduct and cooperated with federal investigators to identify the problem and amount of false billing,” U.S. Attorney Laslovich said.
“Today’s settlement highlights our unwavering commitment to enforcing the False Claims Act and upholding the integrity of federal health care programs,” said Special Agent in Charge Linda T. Hanley, of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “St. Peter’s submission of false claims and its associated compensation practices violated both legal and ethical standards. We will continue collaborating with our law enforcement partners to hold entities accountable, prevent similar violations, and safeguard public funds.”
“VA’s Community Care programs provide veterans and their families critical healthcare services from providers within their own communities,” said Special Agent in Charge Dimitriana Nikolov, of the Department of Veterans Affairs Office of Inspector General’s Northwest Field Office. “This civil settlement reinforces the VA OIG’s commitment to safeguarding the integrity of VA’s healthcare programs and operations and preserving taxpayer funds.”
The settlement agreement, signed on August 26, 2024, is among the U.S. Department of Justice, the Office of Inspector General of the Department of Health and Human Services, on behalf of the Medicare and Medicaid programs; the Defense Health Agency, on behalf of the TRICARE program; the Office of Personnel Management, which administers the Federal Employees Health Benefits Program (FEHBP), the U.S. Department of Veterans Affairs (VA); the Office of Inspector General of the Railroad Retirement Board (RRB) and St. Peter’s Health.
Under the terms and conditions of the settlement agreement, St. Peter’s is to pay $10,844,201 no later than 30 days after the effective date of the agreement.
The settlement agreement contends that St. Peter’s violated the False Claims Act by submitting false claims for payments to federal health care programs relating to services performed and referred by Dr. Thomas Weiner, an oncologist employed at its cancer treatment center. The government alleged that between Jan. 1, 2015 and Dec. 31, 2020, St. Peter’s, relying on Dr. Weiner’s documentation and certification, submitted claims which were determined to be false. St. Peter’s knew, or should have known, that Dr. Weiner submitted claims for office visits that were coded at a higher level of service than was actually performed or did not meet the requirements of a significant, separately identifiable service when performed on the same day as administration of chemotherapy. Further, St. Peter’s, relying on Dr. Weiner’s documentation and certification, compensated Dr. Weiner with a salary that was based on the false claims, and therefore, caused his salary to be inconsistent with fair market value.
The settlement agreement credits St. Peter’s for voluntarily self-disclosing the misconduct. St. Peter’s also performed and disclosed the results of an internal investigation; disclosed documents beyond existing business practices or legal requirements; identified individuals who were aware of relevant information or conduct; made officers and employees available for interviews; assisted in determining the losses caused by the misconduct; and has enhanced its corporate compliance program.
The U.S. Attorney’s Office’s handled the matter. The U.S. Department of Health and Human Services Office of Inspector General and U.S. Department of Veterans Affairs Office of Inspector General provided investigative support.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
Attachment
Settlement agreementXXX
Two Men Sentenced to Prison for Their Roles in a $300 Million Nationwide Magazine Fraud Scheme Targeting EldersRead the Press Release
MINNEAPOLIS – Anthony Eugene Moulder and Abdou-Rahmane Diallo have been sentenced to 120 months and 90 months in prison, respectively, for their roles in a $300 million nationwide telemarketing fraud scheme that targeted elderly and vulnerable victims, announced U.S. Attorney Andrew M. Luger.
According to court documents, Moulder, 63, of Fort Myers, Florida, owned and operated several Florida-based companies involved in fraudulent magazine sales, including Gulf Coast Readers Inc., ARCO Media Inc., KMK Magazines Inc., and Leisure Time Resources Inc. As part of the scheme, from 2008 through 2020, Moulder purchased lists that contained the information of consumers—many of whom were elderly and vulnerable—who were already receiving magazines through other companies. Moulder provided the lists to his sales teams and directed them to use deceptive sales scripts to induce victims into making large or repeat payments to Moulder’s companies for unwanted magazine subscriptions. Over the course of the scheme, Moulder and his companies defrauded thousands of victims across the United States out of approximately $86,589,272.
According to court documents, Diallo, 36, of Montreal, Quebec, was a co-owner and operator of Readers Services, a Canadian-based company that carried out a telemarking fraud scheme. From 2011 through 2020, Diallo and other participants of the fraud scheme targeted people who had previously been victimized by fraudulent magazine companies and were currently being billed by one or more fraudulent magazine companies on an ongoing basis—and used this vulnerability to victimize them all over again through promises of being able to cancel their unwanted magazine subscriptions. Diallo pretended to be from the “magazine cancellation department” and offered to pay off the victims’ “outstanding balance” and cancel their existing magazine subscriptions in exchange for a large, lump-sum payment. In reality, the victims did not owe Diallo or his company any money, and Diallo had no power or ability to cancel the victims’ existing magazine subscriptions or any outstanding balances. As a result of this “piggyback” fraud scheme, Diallo and other participants in the fraud scheme defrauded more than 20,000 victims—many of whom were elderly and vulnerable—across the United States out of approximately $30 million.
On January 13, 2023, Moulder pleaded guilty to one count of conspiracy to commit mail fraud. On March 4, 2024, Diallo pleaded guilty to two counts of wire fraud. Both men were sentenced yesterday in U.S. District Court by Judge John R. Tunheim.
This case is the result of an investigation conducted by the United States Postal Inspection Service and the FBI. Additional assistance was provided by Homeland Security Investigations, the Treasury Inspector General for Tax Administration (TIGTA), and the Minnesota Attorney General’s Office.
Assistant U.S. Attorneys Harry M. Jacobs and Garrett S. Fields prosecuted the cases.
Suffolk services provider pleads guilty to healthcare fraudRead the Press Release
NORFOLK, Va. – A Suffolk woman pled guilty yesterday to one count of healthcare fraud and six counts of making false statements relating to healthcare matters.
According to court documents, from June 2016 through October 2018, Whitteney Guyton, 43, engaged in a scheme to defraud the Virginia Department of Medical Assistance Services (DMAS), which administers Medicaid in the Commonwealth. Guyton owned and operated Synergy Health Systems LLC (Synergy), Which provided healthcare services to patients covered by Medicaid. Ms. Guyton billed Medicaid for the services she claimed Synergy provided to patients. However, the company’s records were falsified, incomplete, failed to comply with basic Medicaid requirements, and included inflated time.
Synergy offered two types of care: personal and respite care, and mental health skill building (MHSS). The services that Synergy offered required assessments by licensed professionals to comply with Medicaid regulations. To be paid for personal care, a registered nurse (RN) must complete the patient assessment. A licensed mental health professional (LMHP), such as a licensed clinical social worker (LCSW) is required to fill out assessments for, and periodically re-assess, patients receiving mental health services.
While Guyton had an LCSW contractor from 2016 to July 2017, she did not have another LMHP to do the assessments or reassessments until October 2018. Guyton instructed her staff to forge the original LCSW's signature on assessments and certifications. Guyton and Synergy submitted documents to DMAS for authorization for MHSS for over 35 patients that contained forged signatures and authorizations, fraudulently billing and receiving over $740,000 from DMAS.
Guyton and Synergy did the same for personal care and respite services. Guyton and Synergy forged signatures of an RN and fraudulently billed and received over $50,000 from DMAS. Synergy billed and received from DMAS an additional $480,000 for patients for whom there was no documentation that any assessment had ever been done or while they were in the hospital or at other care settings. Guyton and Synergy also inflated the time for billing for mental health services.
As a result of these schemes, Guyton illegally obtained approximately $1,320,088.
Guyton is scheduled to be sentenced on Jan. 10, 2025. She faces up to 10 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Maureen R. Dixon, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services (HHS); and Jason S. Miyares, Attorney General of Virginia, made the announcement after Senior U.S. District Judge John A. Gibney Jr. accepted the plea.
Assistant U.S. Attorneys Elizabeth M. Yusi and Clayton D. LaForge are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:23-cr-35.
St. Francis Man Sentenced for Failure to Register as a Sex OffenderRead the Press Release
PIERRE - United States Attorney Alison J. Ramsdell announced today that U.S. District Judge Eric C. Schulte has sentenced a St. Francis, South Dakota, man convicted of Failure to Register as a Sex Offender. The sentencing took place on August 26, 2024.
George Allen Scott, age 39, was sentenced to 16 months in federal prison, followed by five years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Scott was indicted by a federal grand jury in January of 2024. He pleaded guilty on May 30, 2024.
Scott was convicted of Abusive Sexual Contact in 2012. As a result of this conviction, he is required to register as a sex offender and to update his registration within three business days of relocation or changing employment. In December of 2023, Scott relocated from St. Francis to Sioux Falls, South Dakota, and appropriately updated his sex offender registration. He subsequently moved out of his Sioux Falls residence, however, and did not update his registration. He was arrested in St. Francis on January 26, 2024.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Kirk Albertson prosecuted the case.
Scott was immediately remanded to the custody of the U.S. Marshals Service.
Springfield Business Owner Indicted for Illegal FirearmRead the Press Release
SPRINGFIELD, Mo. – A Springfield, Mo., business owner was indicted by a federal grand jury today for illegally possessing a firearm.
Garry Earl Shidler, 49, was charged with one count of being a felon in possession of a firearm in an indictment returned by a federal grand jury in Springfield. Shidler is the owner of Chappell’s Tire in Springfield.
Today’s indictment alleges that Shidler was in possession of a Colt 5.56-caliber semi-automatic rifle with a 30-round magazine on Dec. 18, 2023.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Shidler has three prior felony convictions for burglary and prior felony convictions for forgery, tampering and trafficking in stolen identities.
This case is being prosecuted by Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Springfield, Mo., Police Department, the Dallas County, Mo., Sheriff’s Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
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.
Sex Trafficker Sentenced to 17.5 years in prisonRead the Press Release
DETROIT –For years, Quiyemabi Summerlin preyed on drug addicted women and lured them into his basement with false promises. Once there, he supplied them with heroin, fentanyl, and cocaine, and forced them to engage in endless commercial sex acts. At times, Summerlin used violence to ensure his victims’ compliance. He also raped several of his victims.
Summerlin, 45, of Detroit, was sentenced to 17.5 years for sex trafficking using force and coercion, maintaining a drug premises, and felon in possession of a firearm, announced U.S. Attorney Dawn N. Ison. Ison was joined in the announcement by Special Agent in Charge Cheyvoryea Gibson of FBI Detroit.
“This defendant treated his victims like commodities,” stated U.S. Attorney Ison. “He targeted vulnerable women and exploited them for his own profit. He manipulated his victims’ drug addictions and provided them with a constant supply of heroin and crack cocaine. He built a business through violence and coercion without regard to the consequences for other human lives.”
"Sex trafficking, violent acts and coercion are never acceptable and will be meticulously investigated by members of FBI Michigan, including local law enforcement partners assigned to the FBI’s Southeast Michigan Trafficking and Exploitation Crimes (SEMTEC) Task Force,” said Cheyvoryea Gibson, Special Agent in Charge of the FBI in Michigan. “The sentencing of Quiyemabi Summerlin is a testament of the diligent work performed by the men and women of the FBI and the thorough prosecution from the United States Attorney’s Office of Eastern Michigan. Mr. Summerlin’s sentencing is an important next step in healing to those victimized by his heinous and deplorable actions.”
Summerlin pleaded guilty to trafficking three victims. During the investigation, the FBI identified 25 women that stayed in Summerlin’s home for some period of time, performing commercial sex acts at his direction.
The case was investigated by special agents of the FBI and was prosecuted by Assistant United States Attorneys Sara D. Woodward and Tara Hindelang.
Prospect Man Sentenced to over 11 Years in Federal Prison for Bank Fraud, Wire Fraud, and Money LaunderingRead the Press Release
Louisville, KY –A Prospect, Kentucky, man was sentenced yesterday to 11 years and 4 months in federal prison for seven felony offenses which include conspiracy to commit bank fraud, bank fraud, wire fraud, and money laundering. The man’s wife was sentenced to three months for misprision of a felony.
U.S. Attorney Michael A. Bennett of the Western District of Kentucky, Special Agent in Charge Vince Zehme of the FDIC Office of Inspector General, and Special Agent in Charge Michael E. Stansbury of the FBI Louisville Field Office made the announcement.
According to court documents, Jeffrey Robert Owen, age 60, was sentenced to 11 years and 4 months in federal prison, followed by three years of supervised release, for two counts of conspiracy to commit bank fraud, two counts of bank fraud, two counts of wire fraud, and one count of money laundering. Jeffrey Owen’s wife, Kimberly Dawn Owen, age 56, was sentenced to three months in federal prison for one count of misprision of a felony. Jeffrey Owen and Kimberly Owen were convicted following a jury trial in March of 2024.
Both Jeffrey Owen and Kimberly Owen were ordered to pay $587,345.07 in restitution.
There is no parole in the federal system.
From 2013 to 2014, Jeffrey Owen conspired with Kimberly Owen to apply for four commercial real estate loans from three financial institutions using personal financial statements that omitted liabilities and judgments. After the loans at one of the banks went into default, Jeffrey Owen and his wife took steps to block the collection through fraud, including filing a fraudulent bankruptcy petition to stay foreclosure proceedings on one of the properties. To obtain escrowed insurance proceeds, Jeffrey Owen also provided the bank with invoices from a fake business and identified an acquaintance who had been dead for several years as one of the people who worked at the business. To thwart the bank and other creditors, Jeffrey Owen and his wife filed a lawsuit on behalf of one of their entities against Jeffrey Owen’s wife in her individual capacity. Jeffrey Owen used the lawsuit to garnish his wife’s wages, so another creditor would be unable to garnish them. They then spent the money from the garnishment on their household expenses such as the mortgage on their $750,000 home and tuition for their two children at a local private school.
The FDIC Office of Inspector General and the FBI investigated the case.
Assistant U.S. Attorneys Amanda Gregory and Nicole Elver prosecuted the case with assistance from paralegal James Aaron Cooper.
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Peoria Man Sentenced to 42 Months in Federal Prison for Threatening to Assault and Murder a U.S. District Court JudgeRead the Press Release
PEORIA, Ill. – A Peoria, Illinois, man, Paul Jordan Klawer, 34, was sentenced on August 21, 2024, to 42 months in federal prison for threatening a federal judge. Klawer was also order to serve a three-year term of supervised release upon completion of his term of confinement.
At the sentencing hearing before U.S. District Judge Lindsay C. Jenkins, the government established that in May 2022 Klawer was representing himself as a party in a civil rights case pending in federal court in the Central District of Illinois. When Klawer became frustrated with matters in that case, he wrote a series of threatening emails to the lawyer representing the opposing party. In the emails, Klawer made multiple threats, including “tell the judge if he doesn’t take my warnings serious…I’ll blow his f****** brains out in broad daylight and put on his Tombstone exactly how much value he gave our future by suppressing evidence of misconduct…” Klawer went on to threaten others as well, promising that if his demands in the case were not met, he would commit various violent acts including blowing up the Department of Human Services in Springfield.
Also at the sentencing hearing, Judge Jenkins found Klawer’s repeated threats to the judge who was presiding over the civil case were “tremendously serious.” Judge Jenkins noted that the threats were “specific, graphic, disgusting, and criminal, and all arising out of the normal and natural progression” of any civil case instituted in the country. Jenkins stated that the messages Klawer sent degrade our justice system, are destabilizing, and are dangerous when directed to people who were fulfilling their role in the larger justice system.
Klawer was arrested in December 2023 after a criminal complaint was filed in federal court. A federal grand jury returned an indictment in mid-December 2023. Klawer initially pled not guilty but entered a change of plea with Judge Jenkins in April 2024. He has remained in the custody of the U.S. Marshals Service since his arrest.
“The judiciary is designed to be insulated from intimidation, harassment, and fear of retribution so judges can render fair, impartial and independent decisions. The defendant’s actions were an attack on the justice system itself,” said Assistant U.S. Attorney, Ronald L. Hanna. “We will not tolerate actors like Klawer who try to use fear and intimidation to get their way.”
The statutory penalties for threatening a federal official are up to 10 years’ imprisonment, followed by up to three years of supervised release.
The U.S. Marshals Service; Federal Bureau of Investigation, Springfield Field Office; the Illinois State Police; and the Northbrook, Illinois, Police Department investigated the case. Assistant U.S. Attorney Hanna represented the government in the prosecution.
Owners of Local Real Estate Investment Company Indicted in Federal Court for FraudRead the Press Release
PORTLAND, Ore.—An indictment was unsealed in federal court today charging the owners of a local real estate investment company with defrauding individual investors and commercial lenders out of more than $18 million.
Robert D. Christensen, 54, of Sherwood, Oregon, and Anthony M. Matic, 55, of Damascus, Oregon, have been charged in a 21-count indictment with conspiracy to commit wire fraud, wire fraud, and money laundering.
According to the indictment, from approximately January 2019 through June 2023, Christensen and Matic are alleged to have devised and carried out a scheme wherein they convinced individual investors to fund the purchase and renovation of undervalued residential real estate properties. After renovating the properties, Christensen and Matic claimed they would rent the properties to generate income and then refinance them to extract their increased value from the renovations. The pair further misled investors into believing they would be repaid their full principal investment along with interest as high as eight to fifteen percent and a large lump sum payout, all within periods as short as 30 to 90 days.
Christensen and Matic’s scheme failed to generate the promised returns almost immediately and they began using new investments to repay earlier investors to keep their business afloat. When they were unable to raise enough money from new investors, Christensen and Matic are alleged to have devised a separate scheme to defraud commercial lenders. By December 2020, the pair began submitting loan applications with false financial information to different commercial lenders and, based on their misrepresentations, received millions of dollars in loans.
In total, Christensen and Matic’s two schemes defrauded individual investors out of more than $11 million and commercial lenders out of more than $7 million.
Christensen and Matic made their initial appearances in federal court today before a U.S. Magistrate Judge. Both were arraigned, pleaded not guilty, and released on conditions pending a 7-day jury trial scheduled to begin on October 29, 2024.
Conspiracy to commit wire fraud and wire fraud are punishable by up to 20 years in federal prison and three years’ supervised release. Money laundering in punishable by up to 10 years in federal prison and three years’ supervised release. All three charges may also result in fines of up to $250,000 or twice the gross gains or losses resulting from the offense.
This case was investigated by the FBI and IRS Criminal Investigation. It is being prosecuted by Assistant U.S. Attorney Robert Trisotto.
An indictment is only an accusation of a crime, and defendants are presumed innocent unless and until proven guilty.
Old Town Man Sentenced to 3 Years for Possessing Child Sexual Abuse MaterialRead the Press Release
BANGOR, Maine: An Old Town man was sentenced today in U.S. District Court in Bangor for possessing child pornography of a child under 12.
Chief U.S. District Judge Lance E. Walker sentenced Matthew Podlaski, 40, to 36 months in prison to be followed by five years of supervised release. He was also ordered to pay $58,000 in restitution.
According to court records, between October and December 2022, Podlaski searched the internet for and downloaded images of the sexual abuse of young children, storing the images on multiple devices. Investigators seized 14 devices belonging to him, including laptop computers, flash drives and external storage devices. He pleaded guilty on May 9, 2024.
Homeland Security Investigations investigated the case.
To report an incident involving the possession, distribution, receipt, or production of child pornography: Child sexual abuse material – in legal terms, "child pornography” – captures the sexual abuse and exploitation of children. These images document victims’ exploitation and abuse, and they suffer revictimization every time the images are shared or viewed. File a report with the National Center for Missing & Exploited Children at https://report.cybertip.org or 1-800-843-5678. If you are in Maine and you or someone you know has been sexually assaulted or abused, you can get help by calling the free, private 24-hour statewide sexual assault helpline at 1-800-871-7741.
Project Safe Childhood: This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Department’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, visit https://www.justice.gov/usao-me/psc.
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Oklahoma Medical Clinic, Owners, and Treating Physician Pay $246,000 to Settle Allegations of Submitting False Medicare Claims for Medically Unnecessary Ultrasound ProceduresRead the Press Release
OKLAHOMA CITY – Oklahoma Medical Clinic, LLC (“OMC”), Tracy Ellis, D.C., (“Dr. Ellis”) and Tristan Ellis (“Mrs. Ellis”), paid $150,000 to resolve allegations that they submitted or caused the submission of false claims to the Medicare program for medically unnecessary ultrasound procedures, announced United States Attorney Robert J. Troester. In a separate agreement Mark L. Wells, PA-C (“Mr. Wells”), paid $96,000 to resolve allegations he, as the practitioner treating the patients and performing the medically unnecessary ultrasound services, caused the submission of false claims to the Medicare program.
OMC was an Oklahoma limited liability company that provided chiropractic, medical and durable medical equipment services in Oklahoma City, Oklahoma. Dr. Ellis is a chiropractic physician licensed to practice in the State of Oklahoma who worked at OMC during the relevant time and was responsible for the submission of claims to Medicare. Mrs. Ellis was a part owner of OMC and was aware of the services provided by OMC. Mr. Wells is a physician assistant licensed to practice in the State of Oklahoma who worked at OMC during the relevant time.
The United States alleges that from December 1, 2017, through November 30, 2022, OMC billed Medicare for medically unnecessary ultrasound services performed by Mr. Wells. The Medicare program does not cover medically unreasonable or unnecessary services and supplies, including, for example, excessive and/or unnecessary diagnostic procedures. To resolve these allegations, OMC and the Ellis’ paid $150,000, and Mr. Wells paid $96,000, to the United States.
In reaching this settlement, OMC, the Ellis’, and Mr. Wells did not admit liability, and the government did not make any concessions about the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
Assistant U.S. Attorneys Amanda R. Johnson and Ronald R. Gallegos prosecuted the case. Investigative assistance was provided by HHS-OIG Office of Audit Services.
Oklahoma City Physician Pays $165,000 to Settle Civil Penalty Claims Stemming from his Alleged Issuance of Invalid Prescriptions for Schedule III Controlled SubstancesRead the Press Release
OKLAHOMA CITY – Tuan Alex Nguyen, M.D. (“Dr. Nguyen”), paid $165,000 to settle civil penalty claims stemming from allegations he violated the Comprehensive Drug Abuse Prevention and Control Act of 1970 (“Act”) and its regulations, announced United States Attorney Robert J. Troester.
During the relevant time, Dr. Nguyen was licensed and practiced medicine in Oklahoma City, Oklahoma. Practitioners prescribing controlled substances must be registered under the Act and meet the applicable Act requirements. Among other things, when issuing a prescription for a controlled substance, the Act requires the practitioner be authorized to prescribe that substance by the jurisdiction in which he or she is licensed to practice.
The United States alleges that from November 2022 to September 2023, Dr. Nguyen issued prescriptions in the state of Oklahoma for Schedule III Controlled Substances without the required certificate of registration from the Oklahoma Bureau of Narcotics. To resolve these allegations, Dr. Nguyen agreed to pay $165,000 to the United States.
In reaching this settlement, Dr. Nguyen did not admit liability, and the government did not make any concessions about the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the Drug Enforcement Administration, Office of Diversion Control. Assistant U.S. Attorneys Amanda R. Johnson and Ronald R. Gallegos prosecuted the case.
Ocala Woman Arrested for COVID FraudRead the Press Release
Ocala, Florida – United States Attorney Roger B. Handberg announces the arrest of Lisa Yvette Starkes (52, Ocala) on an indictment charging her with two counts of wire fraud. If convicted, Starkes faces up to 20 years in federal prison on each count and a forfeiture order for $41,452—an amount representing the unlawful proceeds of the offense. The indictment was returned on August 6, 2024.
According to court documents, between August 4, 2020, and April 12, 2021, Starkes devised a scheme to defraud the Small Business Administration (SBA) by submitting false Paycheck Protection Program (PPP) loan applications. PPP loans were one of the sources of economic relief provided for by the Coronavirus Aid, Relief and Economic Security (CARES) Act. Starkes, however, provided false representations in her PPP applications to secure the loans. The loan proceeds—$41,452—were later electronically transferred into her bank account.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case is being investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Hannah Nowalk.
On May 17, 2021, 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 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 Justice.gov/Coronavirus and Justice.gov/Coronavirus/CombatingFraud.
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 via the NCDF Web Complaint Form.
North Carolina Tax Return Preparer IndictedRead the Press Release
A federal grand jury in Greensboro, North Carolina, returned an indictment yesterday charging a former Raleigh, North Carolina, man with 27 counts of preparing and filing false tax returns and obstructing the IRS.
According to the indictment, Jerome Osuamadi Nwabueze owned and operated Total Tax Services, located in High Point, North Carolina. Between 2018 and 2022, to secure higher refunds for his clients, Nwabueze allegedly prepared and filed with the IRS false tax returns that reported wages and withholdings, business income and expenses and education expenses that were fabricated or inflated. Nwabueze also allegedly prepared and filed false tax returns for himself that reported similar false items, and omitted income he earned from preparing tax returns. These false tax returns also generated refunds for Nwabueze to which he was not entitled.
The indictment further alleges that, when the IRS audited Nwabueze in 2020, he fabricated tax documents and provided them to the IRS.
If convicted, Nwabueze faces a maximum penalty of three years in prison for each false tax return charge and three years in prison for the obstruction charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina made the announcement.
IRS Criminal Investigation is investigating the case.
Trial Attorney Isaiah Boyd of the Tax Division and Assistant U.S. Attorney Ashley Waid for the Middle District of North Carolina are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
New York Woman Charged with Child Exploitation OffenseRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, and Robert Fuller, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that SASHA MAY, formerly known as Owen May, 23, of Pelham, New York, has been charged by federal criminal complaint with distribution of child pornography.
May appeared today before U.S. Magistrate Judge Maria E. Garcia in New Haven and was released on a $100,000 bond into home confinement with electronic monitoring.
As alleged in court documents and statements made in court, between December 2023 and May 2024, May engaged in online conversations with an undercover law enforcement officer on the messaging platforms Kik and Whisper. In those conversations, May detailed her sexual interest in children and distributed child pornography.
The charge of distribution of child pornography carries a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 20 years.
U.S. Attorney Avery stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the FBI’s Child Exploitation Task Force, the Greenwich Police Department and the Pelham (N.Y.) Police Department. The Task Force includes federal, state, and local law enforcement agencies. The case is being prosecuted by Assistant U.S. Attorneys Christopher Lembo and Neeraj Patel.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
New York City Man Sentenced to 188 Months for Drug and Gun OffensesRead the Press Release
SYRACUSE, NEW YORK – Rasheed Mingues, age 45, a resident of New York City, was sentenced today to 188 months in prison following his convictions for possession of controlled substances with the intent to distribute and possession of a firearm as a previously convicted felon. United States Attorney Carla B. Freedman and Frank A. Tarentino III, Special Agent in Charge of the U.S. Drug Enforcement Administration (DEA), New York Division, made the announcement.
As part of his previous guilty plea, Mingues admitted that between April and October 2022, he sold over 100 grams of methamphetamine and over 30 grams of fentanyl in the Utica, New York area, where he had been temporarily staying. He also admitted that on December 9, 2022, he possessed over 700 grams of fentanyl, over 700 grams of methamphetamine, and over 100 grams of cocaine with the intent to distribute them, and that he possessed a loaded 9mm handgun in the same bag as the drugs. Federal law prohibits Mingues from possessing the firearm as a result of his prior felony conviction.
Chief United States District Judge Brenda K. Sannes also imposed a 5-year term of supervised release, to begin after Mingues is released from prison. Chief Judge Sannes also ordered Mingues to forfeit the firearm.
The DEA and New York State Police investigated the case with assistance from the Utica Police Department, Syracuse Police Department, Oneida County Sheriff’s Office, and the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Assistant U.S. Attorneys Jessica N. Carbone and Benjamin Gillis prosecuted the case.
Multi-Convicted Felon Sentenced to 8 Years in Federal Prison for Illegal Possession of A FirearmRead the Press Release
Ocala, Florida – United States District Judge Thomas P. Barber has sentenced Jerome Junior Swopshire (40, Silver Springs) to eight years in federal prison for possession of a firearm and ammunition by a convicted felon. The court also ordered Swopshire to forfeit the firearm involved in the offense. Swopshire entered a guilty plea on July 29, 2024.
According to court documents, on August 9, 2023, the United States Marshals Service (USMS) Fugitive Task Force received information that Swopshire, a wanted fugitive, was in Ocala, Florida. A USMS Task Force Officer conducted surveillance and observed Swopshire leaving a residence in Ocala. Swopshire was detained as he was getting into the driver’s seat of a rented vehicle. A search of a backpack Swopshire was wearing revealed a loaded Taurus pistol with an extended ammunition magazine. Swopshire’s backpack also contained a digital scale (coated in a powdery substance that tested positive for cocaine), a jar of marijuana, and small plastic baggies. In the center console of Swopshire’s vehicle was a hard white substance which tested positive for fentanyl and more plastic baggies. Under the driver’s seat, officers located a spent 9mm shell casing—the same caliber as the ammunition in Swopshire’s firearm. At the time, Swopshire had previous state felony convictions for robbery, child abuse, resisting an officer with violence, felony domestic battery, and possession of a controlled substance without a prescription. As a convicted felon, he is prohibited from possessing firearms or ammunition under federal law.
Swopshire’s firearm with extended magazine.
This case was investigated by the United States Marshals Service Fugitive Task Force, the Alachua County Sheriff’s Office, the City of Ocala Police Department, and Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Sarah Janette Swartzberg.
This case is part of the Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence for occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Mississippi Seafood Distributor and Managers Plead Guilty to Conspiracy and Misbranding of SeafoodRead the Press Release
A Mississippi seafood distributor and two company managers pleaded guilty today to conspiring with others to mislabel seafood and to commit wire fraud by marketing inexpensive and frozen imported substitutes as more expensive and premium local species.
Quality Poultry and Seafood Inc. (QPS), the largest seafood wholesaler on the Mississippi Gulf Coast, has agreed to pay the United States $1 million in forfeitures and a criminal fine of $150,000. QPS sales manager Todd A. Rosetti and business manager James W. Gunkel, both of Ocean Springs, Mississippi, also pleaded guilty to misbranding seafood to facilitate QPS’ fraud.
QPS admitted to participating in this fish substitution scheme from as early as 2002 and continuing through November 2019. The indictment alleges that QPS recommended and sold to its restaurant customers foreign-sourced fish that could serve as convincing substitutes for the local species the restaurants advertised on their menus. QPS also labeled the cheap imports that it sold to customers at its own retail shop and café as premium local fish.
“QPS and company officials went to great lengths in conspiring with others to perpetuate fraud for more than a decade, even after they knew they were under federal investigation,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Mislabeling seafood harms local wholesalers and fishermen who compete to sell locally sourced, premium fish in a market unfairly flooded with less expensive fish, frozen and imported from overseas.”
“When imported substitutes are marketed as local domestic seafood, it depresses the value of authentic Gulf Coast seafood, which means that honest local fishermen and wholesalers have a harder time making a profit,” said U.S. Attorney Todd W. Gee for the Southern District of Mississippi. “This kind of mislabeling fraud hurts the overall local seafood market and rips off restaurant customers who were paying extra to eat a premium local product. These convictions should serve as a warning: restaurants and wholesalers will face criminal prosecution if they are not honest with customers about what they are actually buying.”
“U.S. consumers expect their seafood to be correctly identified. When sellers purposefully substitute one fish species for another, they deceive consumers and cause potential food safety hazards to be overlooked or misidentified by processors or end users,” said Special Agent in Charge Justin Fielder of the Food and Drug Administration (FDA)’s Office of Criminal Investigations, Miami Field Office. “We will continue to investigate and bring to justice those who put profits above public health.”
The indictment alleges that even after agents from the FDA executed a criminal search warrant at QPS to investigate its sale of mislabeled fish, QPS continued for over a year to sell frozen fish imported from Africa, South America and India for use as substitutes for local premium species.
Mary Mahoney’s, which pleaded guilty in May, admitted that between December 2013 and November 2019, it fraudulently sold, as local premium species, approximately 58,750 pounds (over 29 tons) of fish that was not the species identified on its menu. QPS supplied seafood to Mary Mahoney’s and many other restaurant restaurants and retailers.
QPS, Rosetti and Gunkel will be sentenced on Dec. 11. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
FDA’s Office of Criminal Investigations is investigating the case.
Senior Trial Attorney Jeremy F. Korzenik of the Environment and Natural Resources Division’s Environmental Crimes Section and Assistant U.S. Attorney Andrea Jones for the Southern District of Mississippi are prosecuting the case.
Mississippi Seafood Distributor and Managers Plead Guilty to Conspiracy and Misbranding of SeafoodRead the Press Release
A Mississippi seafood distributor and two company managers pleaded guilty today to conspiring with others to mislabel seafood and to commit wire fraud by marketing inexpensive and frozen imported substitutes as more expensive and premium local species.
Quality Poultry and Seafood Inc. (QPS), the largest seafood wholesaler on the Mississippi Gulf Coast, has agreed to pay the United States $1 million in forfeitures and a criminal fine of $150,000. QPS sales manager Todd A. Rosetti and business manager James W. Gunkel, both of Ocean Springs, Mississippi, also pleaded guilty to misbranding seafood to facilitate QPS’ fraud.
QPS admitted to participating in this fish substitution scheme from as early as 2002 and continuing through November 2019. The indictment alleges that QPS recommended and sold to its restaurant customers foreign-sourced fish that could serve as convincing substitutes for the local species the restaurants advertised on their menus. QPS also labeled the cheap imports that it sold to customers at its own retail shop and café as premium local fish.
“QPS and company officials went to great lengths in conspiring with others to perpetuate fraud for more than a decade, even after they knew they were under federal investigation,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Mislabeling seafood harms local wholesalers and fishermen who compete to sell locally sourced, premium fish in a market unfairly flooded with less expensive fish, frozen and imported from overseas.”
“When imported substitutes are marketed as local domestic seafood, it depresses the value of authentic Gulf Coast seafood, which means that honest local fishermen and wholesalers have a harder time making a profit,” said U.S. Attorney Todd W. Gee for the Southern District of Mississippi. “This kind of mislabeling fraud hurts the overall local seafood market and rips off restaurant customers who were paying extra to eat a premium local product. These convictions should serve as a warning: restaurants and wholesalers will face criminal prosecution if they are not honest with customers about what they are actually buying.”
“U.S. consumers expect their seafood to be correctly identified. When sellers purposefully substitute one fish species for another, they deceive consumers and cause potential food safety hazards to be overlooked or misidentified by processors or end users,” said Special Agent in Charge Justin Fielder of the Food and Drug Administration (FDA)’s Office of Criminal Investigations, Miami Field Office. “We will continue to investigate and bring to justice those who put profits above public health.”
The indictment alleges that even after agents from the FDA executed a criminal search warrant at QPS to investigate its sale of mislabeled fish, QPS continued for over a year to sell frozen fish imported from Africa, South America and India for use as substitutes for local premium species.
Mary Mahoney’s, which pleaded guilty in May, admitted that between December 2013 and November 2019, it fraudulently sold, as local premium species, approximately 58,750 pounds (over 29 tons) of fish that was not the species identified on its menu. QPS supplied seafood to Mary Mahoney’s and many other restaurant restaurants and retailers.
QPS, Rosetti and Gunkel will be sentenced on Dec. 11. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
FDA’s Office of Criminal Investigations is investigating the case.
Senior Trial Attorney Jeremy F. Korzenik of the Environment and Natural Resources Division’s Environmental Crimes Section and Assistant U.S. Attorney Andrea Jones for the Southern District of Mississippi are prosecuting the case.
Marysville Man Sentenced to 27 Years in Prison for Child Exploitation ChargesRead the Press Release
SACRAMENTO, Calif. — Brent Hooton, 51, of Marysville, was sentenced today by U.S. District Judge Dale A. Drozd to 27 years in prison for sexual exploitation of a child and distribution of child pornography, U.S. Attorney Phillip A. Talbert announced.
According to court documents, in May 2021 Hooton produced three images of a severely autistic child who was under the age of 12 engaged in sexually explicit conduct. Hooton shared these images on Kik Messenger with an undercover FBI agent. When Hooton’s phone was searched pursuant to a warrant, agents discovered that in May 2021, Hooton distributed sexually explicit images of the child victim to at least six other users on Kik. Further, in this timeframe, Hooton distributed on Kik at least four images of other children engaged in sexually explicit conduct.
This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Audrey B. Hemesath and Denise N. Yasinow prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit Justice.gov/PSC.
Marion County Convicted Felon Pleads Guilty to Illegally Possessing A FirearmRead the Press Release
Ocala, Florida – United States Attorney Roger B. Handberg announces that Marcus Cleaver Morgan, Jr. (24, Ocala) has pleaded guilty to possessing a firearm as a convicted felon. Morgan faces a maximum penalty of 15 years in federal prison. A sentencing date has not yet been set.
According to court documents, on January 14, 2023, officers from the Ocala Police Department attempted to conduct a traffic stop on a vehicle driven by Morgan. Morgan failed to stop, and a high-speed pursuit took place. The pursuit ended when the vehicle Morgan was driving crashed into an embankment. Officers located a backpack near the open driver’s side door where Morgan had been seated. The backpack contained two Glock pistols, approximately 239 grams of marijuana, 33.5 grams of MDPV, and a scale. Testing by the FBI DNA Casework Unit confirmed Morgan’s DNA on the trigger, grip, and slide of one of firearms. At that time, Morgan had a previous state felony conviction for carrying a concealed firearm, therefore, he is prohibited from possessing firearms or ammunition under federal law.
This case was investigated by the Ocala Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Sarah Janette Swartzberg.
This case is part of the Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence for occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Local attorney pleads guilty to child pornography crimesRead the Press Release
COLUMBUS, Ohio – A local attorney pleaded guilty in federal court here today to receiving and possessing child pornography.
The plea agreement for Stephen Chinn, 40, of Columbus, includes a recommended sentence of 60 to 108 months in prison.
According to court documents, in May 2023, Chinn uploaded child pornography to the internet that depicted prepubescent minors engaged in sexually explicit conduct including sex acts with adults and animals. These uploads were flagged by the National Center for Missing and Exploited Children (NCMEC).
When investigators executed a search warrant in August 2023 at Chinn’s Grandview Heights residence, they discovered a desktop computer containing more than 4,000 child sexual abuse images.
In addition, a forensic analysis of Chinn’s computer revealed he had downloaded and saved other child sexual abuse material in August 2023. The material included prepubescent children engaged in bestiality and sexual intercourse with adults, as well as minor victims subjected to sadistic and masochistic abuse. Forensic data revealed that much of this content was downloaded from a Russian social media site known to be used for the download and exchange of child sexual abuse material.
At the time, Chinn was employed as a public defender in Franklin County.
Chinn was initially arrested charged locally with Pandering Sexually Oriented Matter Involving a Minor and Pandering Obscenity. Chinn was released on bond in that matter. He was charged federally in September 2023, and the federal indictment superseded the charges in his local case.
The case was investigated by the Franklin County Internet Crimes Against Children (ICAC) Task Force.
Kenneth L. Parker, United States Attorney for the Southern District of Ohio; Angie M. Salazar, Special Agent in Charge, Homeland Security Investigations (HSI); Grandview Heights Police Chief Ryan Starns; Franklin County Sheriff Dallas Baldwin; and Franklin County Prosecutor Gary Tyack announced the guilty plea entered today. Assistant United States Attorneys Emily Czerniejewski and Noah R. Litton are representing the United States in this case.
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Leechburg Man Pleads Guilty to Cocaine ViolationRead the Press Release
JOHNSTOWN, Pa. – A resident of Leechburg, Pennsylvania, pleaded guilty in federal court to a charge of violating federal narcotics laws, United States Attorney Eric G. Olshan announced today.
Ernest Clinton, 42, pleaded guilty before Senior United States District Judge Kim R. Gibson.
In connection with the guilty plea, the Court was advised that, from in and around August 2018 to March 2023, in the Western District of Pennsylvania, Clinton conspired with others to distribute and possess with intent to distribute 500 grams or more of a mixture and substance containing cocaine. Clinton was intercepted on a federal wiretap obtaining cocaine that he distributed to others.
Judge Gibson scheduled sentencing for January 14, 2025. The law provides for a total sentence of not less than five years and up to 40 years in prison, a fine of up to $5 million, or both.
Under the federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant. Assistant United States Attorney Arnold P. Bernard Jr. is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation’s Laurel Highlands Resident Agency and Homeland Security Investigations conducted the investigation that led to the prosecution of Clinton. Additional agencies participating in this investigation include the Internal Revenue Service – Criminal Investigation, United States Postal Inspection Service, and other local law enforcement agencies.
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.
Lebanon Man Sentenced to 25 Years for Child Sexual ExploitationRead the Press Release
SPRINGFIELD, Mo. – A Lebanon, Mo., man was sentenced in federal court today for sexually exploiting children from several different countries.
John Anthony Carpenter, 43, was sentenced by U.S. District Judge Brian C. Wimes to 25 years in federal prison without parole. The court also sentenced Carpenter to 25 years of supervised release following incarceration and ordered him to pay $15,000 in restitution to his victims. Carpenter will be required to register as a sex offender upon his release from prison and will be subject to federal and state sex offender registration requirements, which may apply throughout his life.
On Jan. 30, 2024, Carpenter pleaded guilty to one count of the sexual exploitation of children.
Law enforcement officers executed a search warrant at Carpenter’s residence on April 13, 2022, in relation to two separate child sexual exploitation investigations in Connecticut and New Jersey. Officers located Carpenter at his place of employment and he turned over two cell phones to investigators.
Carpenter admitted to viewing child pornography, sending child pornography, and soliciting child pornography from multiple victims. Carpenter sent Robux (the currency used with the online game platform Roblox) to juvenile females in exchange for nude photos and videos. Investigators found 36 pre-paid Robux cards in Carpenter’s bedroom. Carpenter told investigators that, a week prior, he sent a $10 Robux gift card to a 16- or 17-year-old girl in exchange for nude images of her.
Carpenter stated he used applications and sites such as Snapchat, Likee, Discord, and Omegle to solicit and exchange child pornography.
Investigators found 956 files of child sexual abuse material and 6,512 files of child exploitative or age-difficult material on Carpenter’s electronic devices. Among those files were images and videos that Carpenter solicited from minor victims living in Dubai, the Philippines, and the United Kingdom.
This case was prosecuted by Assistant U.S. Attorney Stephanie L. Wan. It was investigated by the Connecticut State Police, the Essex County, N.J., Prosecutor’s Office, Homeland Security Investigations, the Horry County, S. C., Sheriff’s Department, the Laclede County, Mo., Sheriff’s Department, and the Southwest Missouri Cyber Crimes Task Force.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Knox County Enters into Settlement Agreement Following Complaint by Deaf CitizenRead the Press Release
Knox County, Texas will take steps to ensure qualified sign language interpreters, real-time transcription services, and other accommodations are available to deaf and hard-of-hearing citizens as required by the Americans with Disabilities Act, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.
In February of 2020, a citizen contacted the county, via email, about arranging a marriage ceremony at the county courthouse. He explained that both he and his fiancée (now spouse) are deaf and would need an interpreting service. The county’s Justice of the Peace responded, also via email, that “the arrangement for an interpreter will need to be made by you and funded by you.”
The Justice Department later determined that the response constituted a violation of Title II of the Americans with Disabilities Act (ADA), which requires public entities to “furnish appropriate auxiliary aids and services where necessary to afford individuals with disabilities … an equal opportunity to participate in, and enjoy the benefits of, a service, program, or activity of a public entity.”
The county entered into a settlement agreement with the United States Attorney’s Office on Aug. 27. The agreement requires the county to post a notice outlining its responsibilities under the ADA on its website, in conspicuous locations in each of its public buildings, and in a newspaper of general circulation serving the county. It also requires the county to identify and develop procedures for using vendors able to provide sign language interpreters, real-time transcription services, braille, and other accommodations, and to develop and implement a training program to educate its employees on the requirements of the Americans with Disabilities Act.
Complaints that a county service, program, or activity is not accessible to persons with disabilities may be directed to the Knox County Judge at (940) 459-2191 or [email protected]. Under the terms of the agreement, any complaints made to the county alleging discrimination based on disability must be forwarded to the Department of Justice within 21 days.
Justice Department Finds Kentucky Unnecessarily Institutionalizes Louisville Residents with Serious Mental Illness in Psychiatric HospitalsRead the Press Release
WASHINGTON – The Justice Department announced today that it has reasonable cause to believe that the Commonwealth of Kentucky (Kentucky) is violating the Americans with Disabilities Act (ADA) in the Louisville/Jefferson County Metro area by unnecessarily segregating adults with serious mental illness in psychiatric hospitals, rather than providing care in integrated community settings.
“People with serious mental illnesses in Louisville are caught in an unacceptable cycle of repeated psychiatric hospitalizations because they cannot access community-based care,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “We thank Kentucky for its full cooperation with our investigation, including readily providing access to staff, documents, and data. We also recognize that Kentucky has already begun taking important steps to expand access to a range of key services, including crisis response services; medication management supports; and housing and employment supports. Our goal is to work collaboratively with Kentucky so that it implements the right community-based mental health services and complies with the ADA. The Justice Department will continue to safeguard the rights of people with disabilities to ensure that they can fully participate in and contribute to their communities.”
“These findings demonstrate that the Commonwealth of Kentucky fails to provide adequate community-based mental health services for individuals with serious mental illness in the Louisville Metro area,” said U.S. Attorney Michael A. Bennett for the Western District of Kentucky. “Beyond the violations, however, these findings are also about recognizing the dignity and potential of every individual who has mental illness.”
The department’s investigation found Kentucky fails to provide access to community-based mental health services for many people with serious mental illness who need them, including services such as: mobile crisis response, crisis stabilization and crisis respite, case management, Assertive Community Treatment, Permanent Supportive Housing, supported employment and peer support. Instead, Kentucky relies unnecessarily on psychiatric hospitals in violation of the ADA. Each year, thousands of people are admitted to psychiatric hospitals in Louisville, and more than a thousand people experience multiple admissions to these restrictive and often traumatizing settings. With the right community-based services, many of these hospitalizations could be prevented. Kentucky can remedy this violation by expanding community-based services and implementing processes to ensure that individuals can receive those services.
The lack of community-based services has also left law enforcement as routine responders to mental health crises, contributing to avoidable law enforcement encounters and incarceration.
Deficiencies in Louisville Metro Government’s emergency response system also contribute to these outcomes. In a separate investigation, the Justice Department concluded, in March 2023, that the Louisville Metro Government and Louisville Metro Police Department violated the ADA by subjecting people with behavioral health disabilities to an unnecessary police response. The department and Louisville are currently negotiating a consent decree to resolve these and other issues.
Individuals with information relevant to this matter can contact the department by emailing [email protected].
Additional information about the Civil Rights Division of the Justice Department is available at www.justice.gov/crt/rights-persons-disabilities and www.ada.gov.
Additional information about the U.S. Attorney’s Office for the Western District of Kentucky’s Civil Rights Program is available at www.justice.gov/usao-wdky/civil-rights-program.
Justice Department Finds Kentucky Unnecessarily Institutionalizes Louisville Residents with Serious Mental Illness in Psychiatric HospitalsRead the Press Release
The Justice Department announced today that it has reasonable cause to believe that the Commonwealth of Kentucky (Kentucky) is violating the Americans with Disabilities Act (ADA) in the Louisville/Jefferson County Metro area by unnecessarily segregating adults with serious mental illness in psychiatric hospitals, rather than providing care in integrated community settings.
“People with serious mental illnesses in Louisville are caught in an unacceptable cycle of repeated psychiatric hospitalizations because they cannot access community-based care,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “We thank Kentucky for its full cooperation with our investigation, including readily providing access to staff, documents, and data. We also recognize that Kentucky has already begun taking important steps to expand access to a range of key services, including crisis response services; medication management supports; and housing and employment supports. Our goal is to work collaboratively with Kentucky so that it implements the right community-based mental health services and complies with the ADA. The Justice Department will continue to safeguard the rights of people with disabilities to ensure that they can fully participate in and contribute to their communities.”
“These findings demonstrate that the Commonwealth of Kentucky fails to provide adequate community-based mental health services for individuals with serious mental illness in the Louisville Metro area,” said U.S. Attorney Michael A. Bennett for the Western District of Kentucky. “Beyond the violations, however, these findings are also about recognizing the dignity and potential of every individual who has mental illness.”
The department’s investigation found Kentucky fails to provide access to community-based mental health services for many people with serious mental illness who need them, including services such as: mobile crisis response, crisis stabilization and crisis respite, case management, Assertive Community Treatment, Permanent Supportive Housing, supported employment and peer support. Instead, Kentucky relies unnecessarily on psychiatric hospitals in violation of the ADA. Each year, thousands of people are admitted to psychiatric hospitals in Louisville, and more than a thousand people experience multiple admissions to these restrictive and often traumatizing settings. With the right community-based services, many of these hospitalizations could be prevented. Kentucky can remedy this violation by expanding community-based services and implementing processes to ensure that individuals can receive those services.
The lack of community-based services has also left law enforcement as routine responders to mental health crises, contributing to avoidable law enforcement encounters and incarceration.
Deficiencies in Louisville Metro Government’s emergency response system also contribute to these outcomes. In a separate investigation, the Justice Department concluded, in March 2023, that the Louisville Metro Government and Louisville Metro Police Department violated the ADA by subjecting people with behavioral health disabilities to an unnecessary police response. The department and Louisville are currently negotiating a consent decree to resolve these and other issues.
Individuals with information relevant to this matter can contact the department by emailing [email protected].
Additional information about the Civil Rights Division of the Justice Department is available at www.justice.gov/crt/rights-persons-disabilities and www.ada.gov.
Additional information about the U.S. Attorney’s Office for the Western District of Kentucky’s Civil Rights Program is available at www.justice.gov/usao-wdky/civil-rights-program.
Jamaican National Extradited for Scheme to Defraud American CitizenRead the Press Release
WASHINGTON - A Jamaican national was extradited to the United States and made his initial appearance today in Sioux Falls, South Dakota, following his role in a long-running scheme to defraud a California woman.
Dwayne Anderson, 35, of Hannover, Jamaica, will face federal wire fraud charges. He was arrested, pursuant to the U.S. request for extradition, on July 11, by Jamaican authorities. He has remained in custody in Jamaica since that time.
According to the indictment, from as early as 2010 until September 2017, Anderson participated in a scheme to defraud an American woman. Using phony names, he contacted the victim by telephone, text message, and email and falsely informed her that she had won millions of dollars in a sweepstakes. Anderson persuaded the victim, who believed the defendant’s false representations, to send money to pay various fees and taxes associated with the sweepstakes. He instructed the victim on how, and to whom, to send these payments. Anderson repeatedly contacted the victim with additional requests to pay money and told the victim that her winnings would be forthcoming if she paid the requested money.
Anderson induced the victim to travel to Jamaica in September 2017 by falsely informing her that she would be able to collect her prize winnings. He told the victim to bring $1,600 in cash with her to Jamaica and instructed the victim to give the money to a driver that met her at the airport. The victim paid the purported fees but never received any of her purported winnings.
“The Justice Department’s Consumer Protection Branch is committed to bringing transnational criminals who defraud Americans to justice, wherever they are located,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Ensuring that those who perpetrate these types of fraud schemes are held accountable is a priority of the department, and I thank the government of Jamaica for its assistance extraditing the defendant to face charges here in the United States.”
“Making a living by exploiting the trust of Americans and draining their hard-earned savings is despicable,” said U.S. Attorney Alison Ramsdell for the District of South Dakota. “The District of South Dakota, working alongside our law enforcement partners, will pursue and prosecute anyone who engages in criminal acts that harm Americans.
“Collaboration between international law enforcement partners is critical to protecting the international rule of law and the U.S. Mailstream,” said Inspector in Charge Eric Shen of the U.S. Postal Inspection Service (USPIS) Criminal Investigations Group. “The U.S. Postal Inspection Service is committed to protecting Americans from transnational crime and is grateful to our partners in Jamaica for assistance in bringing Anderson to Justice.”
Anderson is charged with eight counts of wire fraud filed in the U.S. District Court for the District of South Dakota in February 2023 and was unsealed upon the defendant’s extradition to the United States on Aug. 22. If convicted, Anderson faces a maximum penalty of 20 years in prison for each count.
USPIS investigated the case. The Jamaica Constabulary Force provided critical assistance. The Justice Department’s Office of International Affairs worked with law enforcement partners in Jamaica to secure the arrest and extradition of Anderson.
Trial Attorneys Brandon Robers and Edward Emokpae of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Ann Hoffman for the District of South Dakota prosecuted the case.
The Justice Department continues to investigate and bring charges in other similar matters involving attempts to defraud residents of the United States. If you or someone you know is age 60 or older and has experienced financial fraud, experienced professionals are standing by at the National Elder Fraud Hotline 1-833-FRAUD-11 (1-833-372-8311). This Justice Department hotline, managed by the Office for Victims of Crime, can provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is open Monday through Friday from 10:00 a.m. to 6:00 p.m. ET. English, Spanish and other languages are available.
More information about the department’s efforts to help American seniors is available at its Elder Justice Initiative webpage www.justice.gov/elderjustice. For more information about the Consumer Protection Branch and its enforcement efforts visit www.justice.gov/civil/consumer-protection-branch. Elder fraud complaints can be filed with the FTC at www.reportfraud.ftc.gov/ or at 877-FTC-HELP. The Justice Department provides a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, at www.ovc.gov.
For more information about the Consumer Protection Branch and its fraud enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Jackson Man Sentenced to over 22 Years in Prison for Brandishing a Firearm During Convenience Store RobberiesRead the Press Release
Jackson, Miss. – A Jackson man was sentenced to 274 months in federal prison for brandishing a firearm during two convenience store robberies. He was also ordered to pay $5105 in restitution.
According to court documents and admissions during public court proceedings, Kenneth Edwards Lewis, Jr., 35, used a firearm during the commission of two convenience store robberies along with his co-defendant, Tramaine Jadell Pettaway, in January and February of 2018. One store was in Clinton and the other was in Ridgeland. The Ridgeland Police Department was able to arrest both Lewis and Pettaway after a short chase following the Ridgeland robbery.
Lewis and Pettaway, who has also pled guilty and is awaiting sentencing, have been in custody since February 2018.
U.S. Attorney Todd W. Gee of the Southern District of Mississippi and Special Agent in Charge Robert Eikhoff of the Federal Bureau of Investigation made the announcement.
The Ridgeland Police Department, the Clinton Police Department, and the FBI investigated the case.
Deputy Criminal Chief Lynn Murray and Assistant United States Attorney Charles Kirkham prosecuted the case.
This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Indictment Charges Hartford Man with Defrauding AmazonRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, and Patrick J. Freaney, Special Agent in Charge, United States Secret Service, New York Field Office, today announced that a federal grand jury in New Haven has returned a four-count indictment charging TERRELL KIMBLE, 44, of Hartford, with offenses stemming from a scheme to defraud Amazon.
The indictment was returned on August 7, 2024. Kimble was arrested on August 15, 2024, pleaded not guilty to the charges, and was released on a $250,000 bond.
The indictment alleges that Kimble was employed by Amazon as a Regional Fleet Specialist and an Area Manager, based in Connecticut. Amazon operated an employee reward program called Peak, administered through a procurement portal called Coupa. Coupa allowed certain employees, including Area Managers, to reward other employees on their work team for superior performance by ordering an item from Amazon for the employee at no cost. Between approximately July 2021 and December 2022, Kimble placed at least 196 Coupa orders fraudulently representing that they were to reward employee performance, but instead having the products, mainly high-end electronic goods, delivered to his mother’s residence for his own use. The electronic items included Apple iPad Pro, Apple AirPods Pro, and Apple Watch devices, and Nintendo Switches.
The indictment charges Kimble with four counts of wire fraud, an offense that carries a maximum term of imprisonment of 20 years on each count.
U.S. Attorney Avery stressed that an indictment is not evidence of guilt. Charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the U.S. Secret Service and the Connecticut Financial Crimes Task Force, with the assistance of the Windsor, West Hartford, and Hartford Police Departments. The case is being prosecuted by Assistant U.S. Attorney Ray Miller.
Independence Man Indicted for Fentanyl Trafficking, Illegal FirearmsRead the Press Release
KANSAS CITY, Mo. – An Independence, Mo., man was indicted by a federal grand jury today for his role in a conspiracy to distribute fentanyl and illegally possessing firearms.
Demarkus Q. Shelton, 44, was charged in a 16-count indictment returned by a federal grand jury in Kansas City, Mo. Today’s indictment replaces a federal criminal complaint that was filed against Shelton on Aug. 2, 2024, and includes additional charges.
According to an affidavit filed in support of the original criminal complaint, the investigation began on Feb. 22, 2024, when a teenager was found dead of an apparent overdose in Johnson County, Mo. Evidence at the scene, including fentanyl and smoking paraphernalia, indicated the victim had been using fentanyl prior to his death. An autopsy was conducted, which cited a cause of death as the toxic effects of fentanyl.
Investigators learned the overdose victim was among several Johnson County youth who allegedly purchased fentanyl from Shelton earlier that same day.
The affidavit cites a series of controlled purchases from Shelton resulting in the seizure of over 95 grams of powder or “raw” fentanyl. As little as two milligrams of fentanyl can be fatal. During the drug transactions, the affidavit says, Shelton was usually armed with a handgun with a drum magazine and/or an AK-47 or AR-style rifle. In one transaction, Shelton allegedly sold the confidential informant a Palmetto State Armory AR model multi-caliber firearm with a 30-round magazine in addition to 22.7 grams of powder fentanyl for $2,300.
On Aug. 5, 2024, law enforcement officers executed a search warrant at the hotel room where Shelton was arrested on the complaint. Officers found a Taurus .40-caliber semi-automatic firearm and a Taurus .22-caliber semi-automatic handgun.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Shelton, who is on state probation, has prior felony convictions for possession of a controlled substance, burglary, and tampering with a motor vehicle.
The federal indictment charges Shelton with one count of conspiracy to distribute fentanyl, seven counts of distributing fentanyl, six counts of possessing a firearm in furtherance of a drug-trafficking crime, and two counts of being a felon in possession of a firearm.
This case is being prosecuted by Assistant U.S. Attorney Ashleigh A. Ragner. It was investigated by the Jackson County Drug Task Force, the Missouri State Highway Patrol, the Johnson County, Mo., Sheriff's Department and the Drug Enforcement Administration.
Honduran Man Sentenced to Prison for Illegally Reentering the United States After Being Deported Six TimesRead the Press Release
A man who had been deported, illegally returned to the United States, and then used someone else’s social security number to obtain employment was sentenced Monday to ten months in federal prison.
Elder Moises Ramirez-Melgar, age 32, a citizen of Honduras illegally present in the United States and residing in Postville, Iowa, received the prison term after a June 17, 2024, guilty plea to one count of unlawful possession of an identification document and one count of illegal reentry into the United States after having been deported.
In a plea agreement, Ramirez-Melgar admitted he had previously been deported from the United States and illegally reentered the United States without the permission of the United States government. Ramirez-Melgar was previously deported in December 2009, September 2014, March 2016, March 2017, May 2020, and March 2023.
Ramirez-Melgar also admitted he possessed a fraudulent Social Security card bearing an alias name when he was arrested on January 30, 2024, for operating a motor vehicle while under the influence (OWI). Ramirez-Melgar admitted he knowingly used the fraudulent Social Security card to prove his authorization to work in the United States when he completed employment and tax forms at businesses in West Union, Iowa in December 2021, in Lime Springs, Iowa in August 2022, and in Cresco, Iowa in November 2023. Illegal aliens are not authorized to work in the United States. The number on the Social Security card was a real Social Security number assigned to a United States citizen. On the employment applications, Ramirez-Melgar falsely claimed to be a citizen of the United States.
On January 31, 2024, immigration officials learned Ramirez-Melgar had illegally returned to the United States and found Ramirez-Melgar at the Allamakee County Jail following his arrest for OWI. On March 15, 2024, Ramirez-Melgar was convicted of OWI in state court and sentenced to 35 days’ imprisonment. Ramirez-Melgar was previously convicted in January 2023 in the Northern District of Iowa of illegally reentering the United States, served four months’ imprisonment and was deported. Ramirez-Melgar was also convicted in the District of Arizona in February 2017 and March 2020 of illegal entry into the United States.
Ramirez-Melgar was sentenced in Cedar Rapids by United States District Court Chief Judge C.J. Williams. Ramirez-Melgar was sentenced to ten months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Ramirez-Melgar is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by the Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 24-CR-1004.
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Grand jury indicts Elma man on multiple child pornography chargesRead the Press Release
BUFFALO, N.Y.-U.S. Attorney Trini E. Ross announced today that a federal grand jury has indicted Matthew A. Steele, 53, of Elma, NY, on charges of production, distribution, and possession of child pornography, which carry a mandatory minimum penalty of 15 years in prison and a maximum penalty of 30 years.
Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that according to the indictment, on more than one occasion between July 2008 and July 2012, Steele coerced a minor victim to engage in sexually explicit conduct for the purpose of producing a visual depiction. Steele then distributed some of the images that were produced. In addition, Steele possessed images of a prepubescent minor on a hard drive.
Steele was arraigned today before U.S. Magistrate Judge Jeremiah J. McCarthy and was detained.
The indictment is the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Matthew Scarpino and the Great Falls, Montana Police Department, under the direction of Chief Jeff Newton.
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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Four Admit Illegally Dealing in FirearmsRead the Press Release
CAPE GIRARDEAU – Four people, including one felon, have admitted involvement in the illegal sale of firearms, including guns that were later found at crime scenes.
Terry Lee Allen, 38, pleaded guilty Tuesday in U.S. District Court in Cape Girardeau to one count of unlicensed firearms dealing.
On Nov. 19, 2021, Bureau of Alcohol, Tobacco, Firearms and Explosives agents identified Allen as someone who repeatedly bought multiple firearms from licensed dealers. He was the last known purchaser of seven guns linked to crime scenes in several states, his plea says. Six of the seven guns and 38 of the firearms Allen bought between June 24, 2018, and June 6, 2021, came from Bull Run Weaponry in Marble Hill, Missouri. Bull Run owner William Henry Otto did not report Allen’s suspicious conduct to the ATF.
Undercover ATF special agents bought firearms from Allen twice: two Glock pistols on Dec. 2, 2021, and a Pioneer Arms Corp. “Hellpup” AK-style pistol and two Glock pistols on Dec. 14, 2021. Allen had purchased all the pistols from Otto. Otto falsely reported two of the Glocks had been sold five days after Allen sold them to the ATF agent, Allen’s plea says.
During a Dec. 21, 2021, court-approved search of Allen’s home, agents found 24 firearms and $55,200 cash. Allen admitted not having a Federal Firearms License (FFL).
Otto’s records show that he sold at least 199 guns to Allen, the vast majority of which Allen illegally sold to others. Allen and Otto also exchanged messages in which they discuss Allen’s illegal firearm sales.
Otto, 46, pleaded guilty August 22 to aiding and abetting unlicensed firearms dealing and admitted knowingly aiding Allen in his illegal gun sales.
Otto also pleaded guilty in July in a separate case and admitted allowing a convicted felon, Shawn Dennis Stockard, to use his FFL to buy firearms at an auction house in Illinois. Stockard then transported the guns to Missouri and transferred them to his wife via Otto.
In early 2022, ATF agents learned of Stockard’s gun sales, and of his connection to Otto. During a court-approved search of Stockard’s home, they found 215 firearms, thousands of rounds of ammunition and numerous accessories, including high-capacity magazines. The Stockards have also pleaded guilty and await sentencing.
Otto is scheduled to be sentenced November 21. Allen is scheduled to be sentenced November 26.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. Assistant U.S. Attorney Timothy Willis is prosecuting the case.
Founder and Chief Executive Officer of Injectable Stem Cell Product Manufacturer Pleads Guilty to Felony Distribution of Unapproved DrugRead the Press Release
The founder and chief executive officer of a California-based company that marketed stem cell-based products linked to multiple hospitalizations pleaded guilty yesterday to a felony violation of the Federal Food, Drug and Cosmetic Act.
John W. Kosolcharoen, 53, most recently of Orange County, California, pleaded guilty to introducing an unapproved new drug into interstate commerce with the intent to defraud and mislead. Kosolcharoen is currently in custody serving a sentence for a separate, unconnected conviction. U.S. District Judge Otis D. Wright II for the Central District of California presided over the hearing pursuant to a plea agreement with the government. The court set Kosolcharoen’s sentencing for Sept. 23.
According to court documents, beginning in 2016, Kosolcharoen created two companies, Liveyon LLC and Genetech Inc., to manufacture and distribute injectable stem cell products made from human umbilical cord blood. Liveyon marketed the products under different brand names, including “ReGen.” In pleading guilty, Kosolcharoen admitted that he and others misrepresented ReGen as suitable for the treatment of a variety of conditions, such as lung and heart diseases, autoimmune disorders, Alzheimer’s disease, Parkinson’s disease and others. Liveyon marketed the products throughout the United States until about April 2019 using advertising materials that contained multiple false and misleading statements about their purported safety and effectiveness.
In recent years, the U.S. Food and Drug Administration (FDA) has warned consumers that patients seeking cures and remedies for serious diseases and conditions may be misled about unapproved stem cell products that are illegally marketed, have not been shown to be safe or effective, and, in some cases, may have significant safety issues that put patients at risk. Stem cell products are regulated by FDA, and generally they must have FDA approval before being introduced into interstate commerce.
As part of the plea agreement, Kosolcharoen admitted that to mislead FDA about Liveyon’s activities, he directed Liveyon’s purchase orders to falsely state that the stem cell products were being sold “for research purposes only.” In 2018, FDA and the Centers for Disease Control and Prevention (CDC) received reports of patients in multiple states requiring hospitalization for bacterial infections after receiving Liveyon products. Kosolcharoen admitted that he and others fraudulently induced customers into purchasing stem cell-derived Liveyon products by, among other things, misleading the public about the cause and severity of adverse events suffered by Liveyon patients, and falsely reporting and concealing material facts regarding the outcome of an FDA inspection of Genetech. According to FDA records, that inspection documented evidence of significant deviations from good manufacturing and tissue practices.
“Unapproved stem cell treatments not only endanger public health but also exploit the hopes of patients who seek relief from the most serious of diseases,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “The Department of Justice is committed to safeguarding the public from these schemes and will vigorously pursue legal action to hold accountable those who unlawfully market and sell these unproven therapies.”
“This defendant recklessly put people’s lives in danger, giving false hope to patients with serious illnesses,” said U.S. Attorney Martin Estrada for the Central District of California. “Today’s guilty plea shows that we will hold accountable corporate executives and healthcare professionals who put profits over patients.”
“We are grateful for the work by the Department of Justice to hold accountable establishments that prey upon vulnerable populations by marketing potentially dangerous stem cell products with false and misleading claims about their safety and effectiveness,” said Director Peter Marks, M.D., Ph.D. of FDA’s Center for Biologics Evaluation and Research.
“When unscrupulous providers offer umbilical cord blood stem cell products and treatments that are both unapproved and unproven, they put consumers’ health at risk, and multiple users of this firm’s products in fact suffered adverse events,” said Special Agent in Charge Robert Iwanicki of FDA Office of Criminal Investigations Los Angeles Field Office. “FDA will continue to investigate and bring to justice those who endanger the public’s health for material gain.”
“This investigation was a joint effort between multiple federal agencies and state and local health departments to quickly put a stop to the distribution of unsafe, contaminated products,” said Director Michael Bell, M.D. of CDC’s Division of Healthcare Quality Promotion. “The rapid response by our public health system identified products marketed as stem cell treatments to be the source of serious infections in dozens of patients. Our message to all consumers and providers is to heed the warning against the use of unapproved products like these with unproven claims of effectiveness for conditions like joint disease, chronic pain, or COVID-19. Please don’t let products like these put you or your patients’ health at risk.”
FDA’s Office of Criminal Investigations, FBI, Amtrak Office of Inspector General, Defense Criminal Investigative Service, Department of Health and Human Services Office of Inspector General, Department of Labor Employment Benefits Security Administration and California Department of Health Care Services investigated the case.
Assistant U.S. Attorneys Mark Aveis and David Chao for the Central District of California, Assistant Director Ross S. Goldstein and Trial Attorneys Meredith B. Healy, Kathryn A. Schmidt and Peter J. Leininger of the Justice Department’s Consumer Protection Branch are prosecuting the case.
Additional information about the Consumer Protection Branch and its enforcement efforts can be found at www.justice.gov/civil/consumer-protection-branch.
Founder and CEO of Injectable Stem Cell Product Manufacturer Pleads Guilty to Felony Distribution of Unapproved DrugRead the Press Release
LOS ANGELES – The founder and chief executive officer of a California-based company that marketed stem cell-based products linked to multiple hospitalizations has pleaded guilty to a felony violation of the Federal Food, Drug and Cosmetic Act, the Justice Department announced today.
John Warrington Kosolcharoen, 53, most recently of Rancho Santa Margarita, pleaded guilty to one count of introducing an unapproved new drug into interstate commerce with the intent to defraud and mislead. Kosolcharoen is currently in custody serving a sentence for a separate, unconnected conviction.
“This defendant recklessly put people’s lives in danger, giving false hope to patients with serious illnesses,” said United States Attorney Martin Estrada. “Today’s guilty plea shows that we will hold accountable corporate executives and healthcare professionals who put profits over patients.”
According to court documents, beginning in 2016, Kosolcharoen created two companies, the Irvine-based Liveyon LLC and the San Diego-based Genetech Inc., to manufacture and distribute injectable stem cell products made from human umbilical cord blood. Liveyon marketed the products under different brand names, including “ReGen.” In pleading guilty, Kosolcharoen admitted that he and others misrepresented ReGen as suitable for the treatment of a variety of conditions, such as lung and heart diseases, autoimmune disorders, Alzheimer’s disease, Parkinson’s disease and others. Liveyon marketed the products throughout the United States until about April 2019 using advertising materials that contained multiple false and misleading statements about their purported safety and effectiveness.
In recent years, the U.S. Food and Drug Administration (FDA) has warned consumers that patients seeking cures and remedies for serious diseases and conditions may be misled about unapproved stem cell products that are illegally marketed, have not been shown to be safe or effective, and, in some cases, may have significant safety issues that put patients at risk. Stem cell products are regulated by FDA, and generally they must have FDA approval before being introduced into interstate commerce.
As part of the plea agreement, Kosolcharoen admitted that to mislead FDA about Liveyon’s activities, he directed Liveyon’s purchase orders to falsely state that the stem cell products were being sold “for research purposes only.” In 2018, FDA and the Centers for Disease Control and Prevention (CDC) received reports of patients in multiple states requiring hospitalization for bacterial infections after receiving Liveyon products. Kosolcharoen admitted that he and others fraudulently induced customers into purchasing stem cell-derived Liveyon products by, among other things, misleading the public about the cause and severity of adverse events suffered by Liveyon patients, and falsely reporting and concealing material facts regarding the outcome of an FDA inspection of Genetech. According to FDA records, that inspection documented evidence of significant deviations from good manufacturing and tissue practices.
“Unapproved stem cell treatments not only endanger public health but also exploit the hopes of patients who seek relief from the most serious of diseases,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “The Department of Justice is committed to safeguarding the public from these schemes and will vigorously pursue legal action to hold accountable those who unlawfully market and sell these unproven therapies.”
“We are grateful for the work by the Department of Justice to hold accountable establishments that prey upon vulnerable populations by marketing potentially dangerous stem cell products with false and misleading claims about their safety and effectiveness,” said Director Peter Marks, M.D., Ph.D. of FDA’s Center for Biologics Evaluation and Research.
“When unscrupulous providers offer umbilical cord blood stem cell products and treatments that are both unapproved and unproven, they put consumers’ health at risk, and multiple users of this firm’s products in fact suffered adverse events,” said Special Agent in Charge Robert Iwanicki of FDA Office of Criminal Investigations Los Angeles Field Office. “FDA will continue to investigate and bring to justice those who endanger the public’s health for material gain.”
“This investigation was a joint effort between multiple federal agencies and state and local health departments to quickly put a stop to the distribution of unsafe, contaminated products,” said Director Michael Bell, M.D. of CDC’s Division of Healthcare Quality Promotion. “The rapid response by our public health system identified products marketed as stem cell treatments to be the source of serious infections in dozens of patients. Our message to all consumers and providers is to heed the warning against the use of unapproved products like these with unproven claims of effectiveness for conditions like joint disease, chronic pain, or COVID-19. Please don’t let products like these put you or your patients’ health at risk.”
FDA’s Office of Criminal Investigations, FBI, Amtrak Office of Inspector General, Defense Criminal Investigative Service, Department of Health and Human Services Office of Inspector General, Department of Labor Employment Benefits Security Administration and California Department of Health Care Services investigated the case.
Assistant United States Attorneys Mark Aveis of the Major Frauds Section and David H. Chao of the General Crimes Section, Assistant Director Ross S. Goldstein and Trial Attorneys Meredith B. Healy, Kathryn A. Schmidt and Peter J. Leininger of the Justice Department’s Consumer Protection Branch are prosecuting the case.
United States District Judge Otis D. Wright II scheduled a September 23 sentencing hearing, at which time Kosolcharoen will face a statutory maximum sentence of three years in federal prison.
Former corrections officer admits to accepting bribesRead the Press Release
CORPUS CHRISTI, Texas – A 26-year-old Three Rivers man has entered a guilty plea to bribery of a public official, announced U.S. Attorney Alamdar S. Hamdani.
Justin Matthew Gonzalez was a former corrections officer with the federal Bureau of Prisons at the Three Rivers Correctional Institution.
As part of his plea, he admitted to receiving approximately $1,600 in what he described as “bribe” payments in return for smuggling cigarettes into the facility. When he reported to work on or about Feb. 11, 2021, authorities searched his bag and discovered 16 packets of cigarettes.
“Public service is a public trust, especially for those in positions in corrections and law enforcement,” said Hamdani. “The vast majority of these officers serve with honesty and integrity. However, we must still root out any and all forms of corruption or abuse in our federal prisons and hold accountable those who choose to break the law themselves.”
“Gonzalez’s selfish acts compromised the safety and security of the federal prison. The Department of Justice – Office of the Inspector General (DOJ-OIG) is committed to rooting out bribery schemes and bringing perpetrators to justice,” said Special Agent in Charge Cloey C. Pierce, DOJ-OIG, South Central Region.
U.S. District Judge David S. Morales will impose sentencing Nov. 20. At that time, Gonzalez faces up to 15 years in federal prison and a possible $250,000 maximum fine.
Gonzalez was permitted to remain on bond pending that hearing.
The Department of Justice - Office of Inspector General conducted the investigation. Assistant U.S. Attorneys Lisa Collins and Carolyn Ferko are prosecuting the case.
Former Real Estate Executive Sentenced to 14 Months in Prison for Defrauding Williams SonomaRead the Press Release
SAN FRANCISCO – Augusto Alizo was sentenced today to 14 months in prison for charges related to his role in a multi-million-dollar fraud scheme, announced United States Attorney Ismail J. Ramsey and IRS Criminal Investigation (IRS-CI) Acting Special Agent in Charge Michael Mosley. The sentence was handed down by the Hon. Richard Seeborg, Chief U.S. District Judge.
On February 27, 2024, Alizo, 52, of Weston, Florida, admitted he conspired with two co-defendants—a Vice President at Williams Sonoma, Inc. (WSI), and Kourosh Mirmehdi, Alizo’s direct report at the global logistics company where they both worked—to divert and steal more than $4.1 million in commercial real estate broker commission rebates that should have gone to WSI.
WSI is a home-goods retailer headquartered in San Francisco that operates brands such as Williams Sonoma, Pottery Barn, and West Elm. The global logistics company where Alizo worked helped clients secure commercial real estate, including large commercial warehouses. In his plea agreement, Alizo admitted that he concealed from the global logistics company that co-defendant Mirmehdi was helping WSI obtain commercial warehouse space. Alizo also admitted that he and his co-defendants concealed from WSI and the global logistics company that he, Mirmehdi, and the conspiring Vice President at WSI pocketed real estate broker commissions rebates that should have gone to WSI.
As part of his plea agreement, Alizo admitted that from 2020 through 2022, co-defendant Mirmehdi was working to secure commercial warehouse space for WSI in Georgia, New Jersey, Arizona, and California. Alizo hid this from their employer. Alizo also hid from their employer the fact that his co-defendants were negotiating with real estate brokers to obtain broker commission rebates that should have gone to WSI. These broker commissions rebates were paid to a shell company owned by the conspiring WSI Vice President, and then distributed to private bank accounts controlled by Alizo and his co-conspirators.
Alizo also admitted in his plea agreement that he knew co-defendant Mirmehdi was holding himself out to real estate brokers as an employee of the global logistics company and that in negotiating with real estate brokers Mirmehdi was benefitting from status and bargaining power due to his position and title at the global logistics company. Alizo further admitted that he knew Mirmehdi was falsely and deceptively representing that WSI was the global logistics company’s client when in fact it was not. Alizo concealed this deception from his and Mirmehdi’s employer.
As part of his plea agreement, Alizo admitted that he acted with the intent to deceive and cheat both his employer and WSI to further the scheme and conspiracy to defraud so that he and his co-defendants could obtain broker commissions rebates that should have gone to WSI. Alizo admitted that he received approximately 25% of the broker commissions and rebates obtained as part of the conspiracy. Alizo admitted that the conspirators obtained a total of $4,110,323.81 and that he personally obtained $965,526.51.
In a memorandum filed for the sentencing, the government argued that Alizo’s involvement in the fraud conspiracy was critical. Rather than using his authority as a corporate executive to stop the fraud before it began, Alizo gave his direct report, co-defendant Mirmehdi, the green light to engage in fraud, identified how the conspirators would conceal the fraud, and ensured the fraud would not be discovered by his employer. As a result, Alizo pocketed nearly $1 million in fraud proceeds.
Alizo was indicted by a federal grand jury on April 11, 2023. He was charged with one count of wire fraud conspiracy, in violation of 18 U.S.C. § 1349; four counts of wire fraud, in violation of 18 U.S.C. § 1343; and one count of money laundering conspiracy, in violation of 18 U.S.C § 1956(h). Under the plea agreement, Alizo pleaded guilty to the wire fraud conspiracy.
In addition to the 14-month term of imprisonment, Chief Judge Seeborg further sentenced the defendant to a two-year period of supervision following his release from prison and ordered Alizo to pay $965,526.51 in restitution to Williams Sonoma. Alizo was ordered to surrender into custody on December 2, 2024.
Assistant U.S. Attorney Christiaan Highsmith is prosecuting the case with the assistance of Sara Slattery. The prosecution is the result of an investigation by the IRS-CI.
Former Kearney Man Sentenced to 9 Years for Wire FraudRead the Press Release
United States Attorney Susan Lehr announced that Jeffery S. Sikes, age 43, formerly of Kearney, Nebraska, was sentenced on August 27, 2024, in federal court in Lincoln, Nebraska for committing wire fraud. Senior United States District Judge John M. Gerrard sentenced Sikes to 108 months’ imprisonment. After Sikes’ release from prison, he will begin a 3-year term of supervised release. There is no parole in the federal system. Sikes was additionally ordered to pay $819,169.96 in restitution to the victims of his crimes.
Beginning in early 2012, and continuing through on or about July 1, 2014, Sikes devised and enacted multiple fraudulent schemes in the District of Nebraska. The Indictment charged Sikes with enacting several separate schemes with different victims being preyed upon by Sikes for each individual scheme. In each scheme Sikes defrauded others, obtaining money and property by the means of materially false and fraudulent pretenses, representations, promises, and omissions and during the course of which different wires or mails would be used in furtherance of the schemes. The charges included a scheme representing to real estate developers that Sikes had located tenants and demanding a finder’s fee—when in fact no tenants existed. In another scheme, Sikes convinced others to invest their retirement into an alleged new research and development company which did not in reality exist. Each scheme typically included complex fraudulent documents which were used to lull the victims into a sense of security.
In the scheme to which Sikes pled guilty, he approached B & J Partnership, d/b/a Speedway Properties (“B & J”), as a “consultant” for Vanguard Nebraska, a limited liability company (“Vanguard”). He contacted B & J about obtaining a lease for commercial space owned by B & J in Lincoln, Nebraska. Sikes represented to B & J that Vanguard intended to establish laboratory space in Lincoln for use in research and development. Sikes proposed that B & J provide $750,000 in financing for the build out of the commercial space owned by B & J. He provided complex falsified documents to convince B & J to enter into the lease and to finance the building including fraudulent balance sheets and IRS tax forms; fraudulent information about purported subcontractors who were allegedly responsible for the construction; and fraudulent bills payable from said subcontractors for work performed or materials related to the construction costs for the property. In reality, Vanguard was never a real company. All documents submitted to B &J and others concerning Vanguard and the subcontractors allegedly working on the project were manufactured and fraudulently created by Sikes and others working with Sikes. During the course of this scheme, Sikes directed the disbursement of funds for fraudulent invoices of $507,231.96 causing a loss to B & J.
In addition to the loss to B & J, the other schemes mentioned within the Indictment resulted in the loss of an additional $311,938 to other victims. In total, Sikes is responsible for defrauding multiple companies, organizations, and individuals for $819,169.96.
Sikes pled guilty to one count of wire fraud on April 28, 2017. On January 5, 2018, Sikes did not appear for his sentencing hearing and a warrant was issued for his arrest. It was later determined that Sikes fled Nebraska to Alabama, where he was living in hiding with others and using the alias “Kenneth Allen.” In February of 2022, Sikes was arrested and charged with conspiracy to maliciously destroy by fire in the District of Alabama—a crime for which he was convicted on May 30, 2023. Pursuant to the documents in that case, while living as a fugitive in Alabama, Sikes led a conspiracy of seven other co-defendants. As part of the conspiracy, Sikes and the others set fires to four different Walmart stores in Alabama and Mississippi. Each of the fires were set during business hours while customers, employees, and vendors were inside the stores. In the lead up to setting these fires, Sikes and his conspirators had meetings and drafted a “Declaration of War and Demands for the People” that made demands and consisted of threats against Walmart if their demands were not met.
Sikes pled guilty to the conspiracy charge in the Alabama case. He was sentenced to 216 months’ (18 years) imprisonment, supervised release for 3 years, and to pay restitution in the amount of $7,295,533.23 to be paid jointly and severally with co-defendants from that case. After Sikes’ sentencing in Alabama, he was returned to the District of Nebraska to face sentencing for his crimes committed as part of this case in the District of Nebraska. The sentence of imprisonment imposed today by Senior District Judge Gerrard was ordered to be consecutive to Sikes’ term of imprisonment imposed in the Alabama case.
Following today’s sentencing United States Attorney Susan T. Lehr stated “The United States Attorney’s Office is dedicated to ensuring justice is served for all crimes committed in the District of Nebraska and to holding defendants accountable regardless of the number of years it takes. Jeffery Sikes’ serious crimes perpetrated against numerous Nebraska citizens and businesses was not forgotten and today’s sentence is a reflection of the dedication and hard work of all those involved with this case both before and after Sikes fled in 2018.”
"Jeffrey S. Sikes' fraudulent schemes had devastating financial consequences for his Nebraska victims," said FBI Omaha Special Agent in Charge Eugene Kowel. "His attempt to avoid facing the consequences of his crimes was futile. No matter how long it takes, the FBI is dedicated to working with our federal, state, and local law enforcement partners to bring criminals to justice."
This case was investigated by the Federal Bureau of Investigation.
Former Inglewood Police Officer Sentenced to 2½ Years in Federal Prison for Stealing Cocaine from Lockup Then Reselling ItRead the Press Release
SANTA ANA, California – A former Inglewood Police Department (IPD) officer was sentenced today to 30 months in federal prison for stealing cocaine from IPD’s lock-up and reselling it on the street.
John Abel Baca, 48, of Whittier, then a 21-year veteran of the Inglewood Police Department and its union representative, was sentenced by United States District Judge James V. Selna. Judge Selna also ordered Baca to pay a $40,000 fine and found that Baca abused his position of trust as a police officer and that his sales extended over a lengthy period beginning in 2020.
Baca pleaded guilty in October 2023 to one count of distribution of cocaine.
“This defendant – a veteran of the Inglewood Police Department – abused his position as a law enforcement officer to promote his drug trafficking activities,” said United States Attorney Martin Estrada. “I thank IPD for its cooperation in bringing the defendant to justice – someone who broke his oath to protect the public.”
“Former officer Baca tarnished the badge and dishonored the majority of those who serve and protect our communities with integrity,” said Akil Davis, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “This case serves as a reminder that no one is above the law, and corruption and criminal behavior will not be tolerated.”
Baca distributed cocaine on two occasions, the first in April 2021, when he delivered cocaine to a buyer. Baca then delivered approximately one kilogram of cocaine to the same buyer during another meeting in May 2021, in exchange for $22,000 in cash.
In February 2021, the buyer informed the FBI that Baca, then an active-duty IPD officer, previously had offered to sell the buyer one kilogram of cocaine, two kilograms of “White China” heroin, and an unlimited supply of black tar heroin. The buyer reported that Baca claimed to have stolen drugs and cash during routine traffic stops that Baca made as a drug task force officer with IPD.
During a secretly recorded meeting in late April 2021, Baca provided a sample of the cocaine to the buyer to provide to purported buyers. During that meeting, Baca also offered to sell the buyer a kilogram of “China White” heroin for $10,000. Several days later, Baca negotiated the price for one kilogram of cocaine – $22,000 in cash – and then delivered a brick of cocaine to the buyer’s workplace on May 4, 2021. Later the same day, Baca collected $22,000 in cash from the CW’s residence.
The FBI investigated this matter. The Inglewood Police Department provided its full cooperation during the investigation.
Assistant United States Attorney Cassie D. Palmer of the Public Corruption and Civil Rights Section prosecuted this case.
Former Federal Correction Officer Pleads Guilty to Smuggling Contraband into Metropolitan Detention Center in BrooklynRead the Press Release
Earlier today, in federal court in Brooklyn, Fabienne Osias, a former federal correction officer employed by the United States Bureau of Prisons (BOP), pleaded guilty to smuggling cell phone chargers into the Metropolitan Detention Center (MDC) in Brooklyn. The proceeding was held before United States Magistrate Judge Marcia M. Henry. When sentenced, Osias faces up to one year in prison. Osias resigned from the BOP on August 23, 2024.
Breon Peace, United States Attorney for the Eastern District of New York, and Ryan T. Geach, Special Agent in Charge, Department of Justice, Office of the Inspector General, Northeast Region (DOJ-OIG) announced the arrest and guilty plea.
“The defendant abused her position of trust to smuggle cell phone chargers into the Metropolitan Detention Center,” stated United States Attorney Peace. “Contraband cell phones enable federal inmates to continue committing crimes even while they are in custody at the MDC, which endangers both the jail population and the community at large. This Office will vigorously investigate and prosecute acts of public corruption at the MDC at every level.”
“Contraband, including cell phones, in prisons can be dangerous weapons. The Department of Justice Office of the Inspector General is committed to bringing to justice any Correctional Officer that violates their oath and smuggles contraband into federal prison facilities,” stated DOJ-OIG Special Agent in Charge Geach.
On February 28, 2023, Osias attempted to provide to an inmate of the MDC the following prohibited devices: five Universal Serial Bus (USB) charging cubes and nine USB charging cables, which are utilized by users of commercial mobile phone services. The Cell Phone Contraband Act of 2010 prohibits the possession of cell phones in federal prisons by unauthorized persons, including inmates.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorney Sara K. Winik is in charge of the prosecution.
The Defendant:
Fabienne Osias
Age: 40
Brooklyn, New YorkE.D.N.Y. Docket No. 24-CR-321 (MMH)