February 10, 2010 - PREET BHARARA, the United States Attorney for the Southern District of New York, and JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation ("FBI"), announced the arrest of ROBERT EGAN, the President of Mt. Vernon Money Centers ("MVMC"), on charges of defrauding Webster Bank out of $12 million in funds that had been entrusted to MVMC.
According to the Complaint filed today in Manhattan federal court:
Among other money services, MVMC performed the services of replenishing Automated Teller Machines ("ATMs") for banks and other entities. One of MVMC's clients was Webster Bank, which has 162 ATMs that MVMC was responsible for stocking. Webster Bank would transfer the funds needed to replenish their ATMs to a bank account to which MVMC had access. MVMC collected this cash, took it to its own cash vault where it filled ATM "canisters" with the cash. MVMC employees then removed the depleted or partially-depleted canisters from Webster ATMs and replaced them with newly filled canisters. The canisters removed from the ATMs by MVMC employees typically contained "residual cash" that was supposed to be returned to Webster Bank, or retained by MVMC for the benefit of Webster.
In January 2010, on eight separate occasions under EGAN's direction, MVMC falsely represented to Webster Bank that it had returned the cash it had collected from Webster's ATMs or was retaining the cash in its own vault for the benefit of Webster Bank. In fact, EGAN failed to return over $12 million of Webster Bank's money to Webster Bank, and instead misappropriated the money for use in MVMC's business operations.
On January 29, 2010, EGAN admitted in a recorded conversation that he had taken over $12 million of Webster Bank's money without its knowledge or authorization. EGAN stated that he used the money to fund other aspects of MVMC's business, and to fund "shortfalls" with respect to other MVMC clients.
EGAN, 64, currently resides in Bedford Corners, New York. He is charged with one count of conspiracy to commit bank fraud, which carries a maximum prison term of 30 years and a maximum fine of $1,000,000 or twice the gain or loss resulting from the crime. U.S. Attorney PREET BHARARA said, "Banks holding the hard-earned deposits of working people entrusted tens of millions of dollars to MVMC and Robert Egan, its president. Egan allegedly abused that trust by using other people's money to prop up his own company. This Office remains committed to uncovering and prosecuting large-scale frauds, and we will continue to work with our partners at the FBI to aggressively investigate and punish similar conduct."
Mr. BHARARA praised the investigative work of the FBI. Mr. BHARARA said that the investigation is continuing.
This matter is being handled by the Office's Complex Frauds Unit. Assistant United States Attorneys ANTONIA M. APPS is in charge of the prosecution.
The charge and allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Wednesday, February 10, 2010
Tuesday, February 09, 2010
Former Baltimore Accountant Wilkins McNair Pleads Guilty in Scheme to Steal Nearly $1 Million from a Client
Defendant Stole from New Victim While Awaiting Trial on Other Fraud Charges
February 9, 2010 - BALTIMORE, MD—Wilkins McNair, age 52, formerly of Ellicott City, pleaded guilty today to wire fraud and witness tampering in connection with a scheme to defraud a client of $950,000.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation.
“The evidence shows that Wilkins McNair was a serial con artist,” said U.S. Attorney Rod J. Rosenstein. “While awaiting trial on serious federal fraud charges, he found a new vulnerable victim and stole almost $1 million dollars from her.”
According to court documents, McNair was a certified public accountant, and owned and operated an accounting firm known at different times as Wilkins McNair, CPA, P.C.; Wilkins McNair LLC; or The Accounting Offices of Wilkins McNair, LLC. The firm initially had offices at 201 North Charles Street in Baltimore and later operated out of McNair’s residence in Ellicott City.
McNair admitted that on January 24, 2006, he was retained by a widow whose husband, a general contractor who owned his own business, had recently died. The widow had no business, financial, or real estate experience, and she retained McNair to assist her in wrapping up the affairs of her husband’s business, probating his estate, and managing the assets of the family trust she had established with his life insurance proceeds. From January 30, 2006 to March 7, 2006, the widow transferred $367,546.32 she had previously received from life insurance payments and as proceeds of a real estate closing to McNair. McNair advised the widow that he would establish a trust fund with the money and she could draw upon the trust when she needed money to pay for family expenses. In the summer of 2006, McNair further persuaded the widow to refinance her residence to take out a mortgage of $576,000 and a second mortgage of $72,000, advising the widow that he would use the proceeds to make the payments on those loans. McNair received the proceeds of $552,764.67 from these transactions, after he told the widow that he would deposit them into a bank account to be held and managed for her. Finally, McNair received the proceeds from the sale of assets belonging to the estate of the widow’s late husband, totaling approximately $114,601.
McNair further admitted that, as alleged in the indictment, McNair deposited all of the funds into accounts which he controlled and used the money to pay salary and other expenses at his accounting firm, for the financial support of a woman with whom he was romantically involved, to pay some of his legal expenses for a then-pending criminal case, and for other personal expenses. On several occasions, including as late as April 23, 2007, McNair provided the widow with purported statements of her account showing that he was holding the funds for her, but despite subsequent demands from the widow and her attorney, McNair failed to return or further account for any of the funds he received from the widow or her husband’s estate.
McNair also admitted that he misled the widow in connection with federal criminal fraud charges he was facing at the time, by providing her with false assurances of his innocence and fraudulent account statements as to the status of her funds, in an effort to prevent her from testifying in the grand jury and to prevent information relating to his alleged fraud against the widow from being communicated to law enforcement in connection with his pending sentencing in the other case.
As part of the plea, the government is seeking the forfeiture of approximately $950,000, which are the proceeds of the scheme.
McNair faces a maximum sentence of 20 years in prison for wire fraud and a maximum of 20 years in prison for witness tampering. U.S. District Judge Catherine C. Blake has asked the parties to file a status report concerning possible sentencing dates by March 5, 2010.
United States Attorney Rod J. Rosenstein commended Assistant United States Attorneys Jefferson M. Gray and Jonathan Biran, who are prosecuting the case.
February 9, 2010 - BALTIMORE, MD—Wilkins McNair, age 52, formerly of Ellicott City, pleaded guilty today to wire fraud and witness tampering in connection with a scheme to defraud a client of $950,000.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation.
“The evidence shows that Wilkins McNair was a serial con artist,” said U.S. Attorney Rod J. Rosenstein. “While awaiting trial on serious federal fraud charges, he found a new vulnerable victim and stole almost $1 million dollars from her.”
According to court documents, McNair was a certified public accountant, and owned and operated an accounting firm known at different times as Wilkins McNair, CPA, P.C.; Wilkins McNair LLC; or The Accounting Offices of Wilkins McNair, LLC. The firm initially had offices at 201 North Charles Street in Baltimore and later operated out of McNair’s residence in Ellicott City.
McNair admitted that on January 24, 2006, he was retained by a widow whose husband, a general contractor who owned his own business, had recently died. The widow had no business, financial, or real estate experience, and she retained McNair to assist her in wrapping up the affairs of her husband’s business, probating his estate, and managing the assets of the family trust she had established with his life insurance proceeds. From January 30, 2006 to March 7, 2006, the widow transferred $367,546.32 she had previously received from life insurance payments and as proceeds of a real estate closing to McNair. McNair advised the widow that he would establish a trust fund with the money and she could draw upon the trust when she needed money to pay for family expenses. In the summer of 2006, McNair further persuaded the widow to refinance her residence to take out a mortgage of $576,000 and a second mortgage of $72,000, advising the widow that he would use the proceeds to make the payments on those loans. McNair received the proceeds of $552,764.67 from these transactions, after he told the widow that he would deposit them into a bank account to be held and managed for her. Finally, McNair received the proceeds from the sale of assets belonging to the estate of the widow’s late husband, totaling approximately $114,601.
McNair further admitted that, as alleged in the indictment, McNair deposited all of the funds into accounts which he controlled and used the money to pay salary and other expenses at his accounting firm, for the financial support of a woman with whom he was romantically involved, to pay some of his legal expenses for a then-pending criminal case, and for other personal expenses. On several occasions, including as late as April 23, 2007, McNair provided the widow with purported statements of her account showing that he was holding the funds for her, but despite subsequent demands from the widow and her attorney, McNair failed to return or further account for any of the funds he received from the widow or her husband’s estate.
McNair also admitted that he misled the widow in connection with federal criminal fraud charges he was facing at the time, by providing her with false assurances of his innocence and fraudulent account statements as to the status of her funds, in an effort to prevent her from testifying in the grand jury and to prevent information relating to his alleged fraud against the widow from being communicated to law enforcement in connection with his pending sentencing in the other case.
As part of the plea, the government is seeking the forfeiture of approximately $950,000, which are the proceeds of the scheme.
McNair faces a maximum sentence of 20 years in prison for wire fraud and a maximum of 20 years in prison for witness tampering. U.S. District Judge Catherine C. Blake has asked the parties to file a status report concerning possible sentencing dates by March 5, 2010.
United States Attorney Rod J. Rosenstein commended Assistant United States Attorneys Jefferson M. Gray and Jonathan Biran, who are prosecuting the case.
Former Intel Executive Pleads Guilty in Manhattan Federal Court to Insider Trading with Galleon Hedge Fund Manager
February 9, 2010 - PREET BHARARA, the United States Attorney for the Southern District of New York, announced that RAJIV GOEL, a former executive at Intel Corp., pleaded guilty today to a twocount Information charging him with conspiracy and securities fraud stemming from his involvement in the largest hedge fund insider trading case in history. GOEL pleaded guilty before United States District Judge ALVIN K. HELLERSTEIN to conspiring to commit insider trading with RAJ RAJARATNAM of the Galleon Group family of hedge funds, as well as to substantive securities fraud. RAJARATNAM served as the portfolio manager of Galleon Technology Offshore, Ltd. ("Galleon Tech"), as well as certain accounts of Galleon Diversified Fund, Ltd. ("Diversified").
According to the Information filed today in Manhattan federal court, as well as statements made during today's guilty plea proceeding:
Rajiv Goel and Raj Rajaratnam's Corrupt Agreement
From 2007 through 2009, GOEL and RAJARATNAM (who met in the 1980s while attending the same business school) engaged in an insider trading scheme in which GOEL obtained material, nonpublic information ("Inside Information") relating to Intel and provided that information to RAJARATNAM. GOEL provided the Inside Information with the understanding that RAJARATNAM would trade on it, in breach of his fiduciary and other duties of trust and confidence owed to Intel.
GOEL provided Inside Information to RAJARATNAM because of his friendship with RAJARATNAM, from which GOEL benefited in various ways, including financially. For example, in 2005 and 2006, RAJARATNAM gave GOEL money to help GOEL with personal financial matters, and, from 2005 to 2009, RAJARATNAM earned trading profits for GOEL by executing securities transactions in GOEL's personal brokerage account.
Specifically, in April 2007, GOEL obtained Inside Information regarding Intel's earnings announcement for the quarter ending in March 2007 from a colleague who worked at Intel. GOEL provided this Inside Information to RAJARATNAM on Friday, April 13, 2007, at which time Galleon Tech held a short position of approximately 1,150,000 shares of Intel common stock (worth approximately $23.5 million). Intel was scheduled to announce its quarterly earnings on Tuesday, April 17, 2007. Between April 13 and April 17, 2007, after receiving the Inside Information from GOEL, RAJARATNAM caused Galleon Tech to cover its entire short position in Intel common stock and to purchase approximately 1.72 million additional shares of Intel common stock (worth approximately $36 million). These trades changed Galleon Tech's position in Intel common stock from short approximately $23.5 million to long approximately $36 million -- a swing of approximately $59.5 million -- in the three business days preceding Intel's earnings announcement. In addition, on April 17, 2007, RAJARATNAM also caused Diversified to purchase approximately 250,000 shares of Intel common stock.
On April 17, 2007, Intel announced its quarterly earnings for the quarter ending in March 2007, and the price of Intel's stock rose significantly. Galleon Tech and Diversified subsequently sold their shares of Intel common stock, thereby realizing profits and avoiding losses.
In addition, in early 2008, GOEL obtained Inside Information from a colleague at Intel regarding Intel's plans to invest in a joint venture involving Clearwire Corp. GOEL provided this Inside Information to RAJARATNAM who, in turn, caused Galleon Tech and Diversified to purchase Clearwire common stock on the basis of the Inside Information provided by GOEL. On or about March 26, 2008, the price of Clearwire common stock rose significantly after news articles indicated that various companies, including Intel, were in discussions with Clearwire to create a joint venture. RAJARATNAM thereafter caused Galleon Tech to sell the shares of Clearwire common stock he had previously caused to be purchased based on GOEL's Inside Information and realized substantial profits.
The Information charges GOEL with one count of conspiracy to commit securities fraud and one count of securities fraud. The conspiracy count carries a maximum sentence of five years in prison and a maximum fine of the greater of $250,000 or twice the gross gain or loss from the offense. The securities fraud count carries a maximum sentence of 20 years in prison and a fine of $5 million. The Information also seeks forfeiture from GOEL of the property that constitutes or is derived from proceeds traceable to the commission of the offenses charged.
GOEL, 51, resides in Los Altos, California. GOEL is scheduled to be sentenced on May 28, 2010, by Judge HELLERSTEIN.
Mr. BHARARA praised the investigative work of the Federal Bureau of Investigation ("FBI") and thanked the U.S. Securities and Exchange Commission ("SEC") for its assistance. Mr. BHARARA added that the investigation is continuing.
U.S. Attorney PREET BHARARA said: "Rajiv Goel is a professional who abused the access he had to sensitive corporate secrets to benefit a select few, and today he admitted to helping his friend supercharge returns with illegal inside information. We will continue to work with our partners at the FBI and the SEC to pursue corporate corruption to the fullest extent of the law."
Assistant United States Attorneys JONATHAN STREETER and REED BRODSKY and Special Assistant United States Attorney ANDREW MICHAELSON are in charge of the prosecution.
According to the Information filed today in Manhattan federal court, as well as statements made during today's guilty plea proceeding:
Rajiv Goel and Raj Rajaratnam's Corrupt Agreement
From 2007 through 2009, GOEL and RAJARATNAM (who met in the 1980s while attending the same business school) engaged in an insider trading scheme in which GOEL obtained material, nonpublic information ("Inside Information") relating to Intel and provided that information to RAJARATNAM. GOEL provided the Inside Information with the understanding that RAJARATNAM would trade on it, in breach of his fiduciary and other duties of trust and confidence owed to Intel.
GOEL provided Inside Information to RAJARATNAM because of his friendship with RAJARATNAM, from which GOEL benefited in various ways, including financially. For example, in 2005 and 2006, RAJARATNAM gave GOEL money to help GOEL with personal financial matters, and, from 2005 to 2009, RAJARATNAM earned trading profits for GOEL by executing securities transactions in GOEL's personal brokerage account.
Specifically, in April 2007, GOEL obtained Inside Information regarding Intel's earnings announcement for the quarter ending in March 2007 from a colleague who worked at Intel. GOEL provided this Inside Information to RAJARATNAM on Friday, April 13, 2007, at which time Galleon Tech held a short position of approximately 1,150,000 shares of Intel common stock (worth approximately $23.5 million). Intel was scheduled to announce its quarterly earnings on Tuesday, April 17, 2007. Between April 13 and April 17, 2007, after receiving the Inside Information from GOEL, RAJARATNAM caused Galleon Tech to cover its entire short position in Intel common stock and to purchase approximately 1.72 million additional shares of Intel common stock (worth approximately $36 million). These trades changed Galleon Tech's position in Intel common stock from short approximately $23.5 million to long approximately $36 million -- a swing of approximately $59.5 million -- in the three business days preceding Intel's earnings announcement. In addition, on April 17, 2007, RAJARATNAM also caused Diversified to purchase approximately 250,000 shares of Intel common stock.
On April 17, 2007, Intel announced its quarterly earnings for the quarter ending in March 2007, and the price of Intel's stock rose significantly. Galleon Tech and Diversified subsequently sold their shares of Intel common stock, thereby realizing profits and avoiding losses.
In addition, in early 2008, GOEL obtained Inside Information from a colleague at Intel regarding Intel's plans to invest in a joint venture involving Clearwire Corp. GOEL provided this Inside Information to RAJARATNAM who, in turn, caused Galleon Tech and Diversified to purchase Clearwire common stock on the basis of the Inside Information provided by GOEL. On or about March 26, 2008, the price of Clearwire common stock rose significantly after news articles indicated that various companies, including Intel, were in discussions with Clearwire to create a joint venture. RAJARATNAM thereafter caused Galleon Tech to sell the shares of Clearwire common stock he had previously caused to be purchased based on GOEL's Inside Information and realized substantial profits.
The Information charges GOEL with one count of conspiracy to commit securities fraud and one count of securities fraud. The conspiracy count carries a maximum sentence of five years in prison and a maximum fine of the greater of $250,000 or twice the gross gain or loss from the offense. The securities fraud count carries a maximum sentence of 20 years in prison and a fine of $5 million. The Information also seeks forfeiture from GOEL of the property that constitutes or is derived from proceeds traceable to the commission of the offenses charged.
GOEL, 51, resides in Los Altos, California. GOEL is scheduled to be sentenced on May 28, 2010, by Judge HELLERSTEIN.
Mr. BHARARA praised the investigative work of the Federal Bureau of Investigation ("FBI") and thanked the U.S. Securities and Exchange Commission ("SEC") for its assistance. Mr. BHARARA added that the investigation is continuing.
U.S. Attorney PREET BHARARA said: "Rajiv Goel is a professional who abused the access he had to sensitive corporate secrets to benefit a select few, and today he admitted to helping his friend supercharge returns with illegal inside information. We will continue to work with our partners at the FBI and the SEC to pursue corporate corruption to the fullest extent of the law."
Assistant United States Attorneys JONATHAN STREETER and REED BRODSKY and Special Assistant United States Attorney ANDREW MICHAELSON are in charge of the prosecution.
Operator of Malibu-Based ‘Cap X’ Investment Program Arrested for Allegedly Running $12 Million Ponzi Scheme
February 9, 2010 - The promoter of a bogus investment offering involving distressed business assets was taken into custody this morning on federal mail and wire fraud charges that charge him with running a Ponzi scheme in which he raised at least $12 million from victims across the United States. Peter Jerald Frommer, 34, formerly of Malibu and currently believed to be residing in Carpenteria, surrendered this morning to special agents with the Federal Bureau of Investigation and IRS-Criminal Investigation.
Frommer was arrested after being named in a 17-count indictment that was returned yesterday by a federal grand jury in Los Angeles. The indictment accuses Frommer of two counts of mail fraud, seven counts of wire fraud, five counts of money laundering and three counts of failing to file federal income tax returns for the tax years 2004 through 2006.
According to the indictment, Frommer operated a bogus investment scheme under the names “Cap Exchange” and “Cap X” that purported to trade in surplus property of defunct companies. Frommer told numerous victims throughout the United States that he used commercial auction websites to purchase large lots of equipment for resale at higher prices.
From January 2004 until August 2006, Frommer allegedly solicited at least $12 million from victims by promising “guaranteed” returns of 8 percent to 15 percent during cycles as short as six weeks. Frommer claimed that he would use victims’ money to buy the distressed assets for Cap X, and then would share profits from the subsequent sales. In addition to personal promissory notes, Frommer issued account statements that purported to show returns in the Cap X investment. The indictment alleges that Frommer solicited investments in the bogus scheme from more than 50 investors throughout the United States, including residents of California, Oregon, Virginia, Illinois and Massachusetts.
The indictment alleges that Frommer did not purchase distressed assets with the victims’ money. Instead, Frommer allegedly misappropriated this money to maintain his lavish personal lifestyle and to make Ponzi payments to victims, while falsifying Cap X account statements to lull victims into believing that their money was safe and earning high returns.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted of the 17 counts in the indictment, Frommer faces a statutory maximum sentence of 233 years in prison.
Frommer surrendered to FBI and IRS-Criminal Investigation agents this morning. Frommer is expected to make his initial court appearance this afternoon in United States District Court in downtown Los Angeles.
Frommer was arrested after being named in a 17-count indictment that was returned yesterday by a federal grand jury in Los Angeles. The indictment accuses Frommer of two counts of mail fraud, seven counts of wire fraud, five counts of money laundering and three counts of failing to file federal income tax returns for the tax years 2004 through 2006.
According to the indictment, Frommer operated a bogus investment scheme under the names “Cap Exchange” and “Cap X” that purported to trade in surplus property of defunct companies. Frommer told numerous victims throughout the United States that he used commercial auction websites to purchase large lots of equipment for resale at higher prices.
From January 2004 until August 2006, Frommer allegedly solicited at least $12 million from victims by promising “guaranteed” returns of 8 percent to 15 percent during cycles as short as six weeks. Frommer claimed that he would use victims’ money to buy the distressed assets for Cap X, and then would share profits from the subsequent sales. In addition to personal promissory notes, Frommer issued account statements that purported to show returns in the Cap X investment. The indictment alleges that Frommer solicited investments in the bogus scheme from more than 50 investors throughout the United States, including residents of California, Oregon, Virginia, Illinois and Massachusetts.
The indictment alleges that Frommer did not purchase distressed assets with the victims’ money. Instead, Frommer allegedly misappropriated this money to maintain his lavish personal lifestyle and to make Ponzi payments to victims, while falsifying Cap X account statements to lull victims into believing that their money was safe and earning high returns.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted of the 17 counts in the indictment, Frommer faces a statutory maximum sentence of 233 years in prison.
Frommer surrendered to FBI and IRS-Criminal Investigation agents this morning. Frommer is expected to make his initial court appearance this afternoon in United States District Court in downtown Los Angeles.
Gainesville Man Sentenced to 150 Months for Distribution of Child Pornography
February 9, 2010 - GAINESVILLE, FL—Thomas F. Kirwin, the United States Attorney for the Northern District of Florida announced today that Micah C. Peacock, 33, of Gainesville, was sentenced earlier this week to 150 months in federal prison for distribution and possession of child pornography.
Evidence introduced at Peacock’s September 2009 jury trial established that between June and December 2008, Peacock used Limewire, a peer to peer file sharing program, to receive and distribute child pornography over the internet. A search of Peacock’s Gainesville apartment in December 2008, disclosed that Peacock was in possession of a computer and hard drive containing 28 videos and 65 images of child pornography. A number of the images depicted children under the age of 12.
Mr. Kirwin praised the work of the Federal Bureau of Investigation and the Alachua County Sheriff’s Office, whose joint investigation led to Peacock’s conviction and sentence.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched by the Department of Justice in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. Led by 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 exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Assistant United States Attorney Brett Meltzer.
Evidence introduced at Peacock’s September 2009 jury trial established that between June and December 2008, Peacock used Limewire, a peer to peer file sharing program, to receive and distribute child pornography over the internet. A search of Peacock’s Gainesville apartment in December 2008, disclosed that Peacock was in possession of a computer and hard drive containing 28 videos and 65 images of child pornography. A number of the images depicted children under the age of 12.
Mr. Kirwin praised the work of the Federal Bureau of Investigation and the Alachua County Sheriff’s Office, whose joint investigation led to Peacock’s conviction and sentence.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched by the Department of Justice in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. Led by 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 exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Assistant United States Attorney Brett Meltzer.
Inver Grove Heights Man Pleads Guilty to Possessing Child Pornography
February 9, 2010 - Today in federal court in Minneapolis, Minnesota, a 34-year-old Inver Grove Heights man pleaded guilty to possessing more than 600 images of child pornography. Appearing before United States District Court Chief Judge Michael J. Davis in Minneapolis, Matthew Charles Stuart pled guilty to one count of possession of child pornography. He was indicted on December 16, 2009.
In his plea agreement, Stuart admitted that on June 2, 2009, he possessed over 600 images of children engaged in sexually explicit conduct. In addition, Stuart admitted downloading the images onto his home computer from the Internet.
For his crime, Stuart faces a potential maximum penalty of 10 years in prison. Judge Davis will determine his sentence at a future date.
This case is the result of an investigation by the Inver Grove Heights Police Department and the Federal Bureau of Investigation, an affiliate agency of the Minnesota Internet Crimes Against Children Task Force. It is being prosecuted by Assistant U.S. Attorney Richard Newberry.
This case is part of Project Safe Childhood (“PSC”), a national initiative to combat the growing epidemic of sexually exploiting children, particularly via the Internet. PSC was launched by the U.S. Department of Justice in May of 2006. Led by the Department’s Criminal Division, Child Exploitation and Obscenity Section, along with U.S. Attorney’s nationwide, PSC encourages federal, state, and local law enforcement partnerships and provides resources to locate, apprehend, and prosecute those who abuse children while identifying and rescuing victims of that crime. In 2008, PSC was credited with 2,289 child-pornography indictments being filed in federal court nationwide, a 33-percent increase over 2006. For more information about PSC, visit http://www.projectsafechildhood.gov/.
In his plea agreement, Stuart admitted that on June 2, 2009, he possessed over 600 images of children engaged in sexually explicit conduct. In addition, Stuart admitted downloading the images onto his home computer from the Internet.
For his crime, Stuart faces a potential maximum penalty of 10 years in prison. Judge Davis will determine his sentence at a future date.
This case is the result of an investigation by the Inver Grove Heights Police Department and the Federal Bureau of Investigation, an affiliate agency of the Minnesota Internet Crimes Against Children Task Force. It is being prosecuted by Assistant U.S. Attorney Richard Newberry.
This case is part of Project Safe Childhood (“PSC”), a national initiative to combat the growing epidemic of sexually exploiting children, particularly via the Internet. PSC was launched by the U.S. Department of Justice in May of 2006. Led by the Department’s Criminal Division, Child Exploitation and Obscenity Section, along with U.S. Attorney’s nationwide, PSC encourages federal, state, and local law enforcement partnerships and provides resources to locate, apprehend, and prosecute those who abuse children while identifying and rescuing victims of that crime. In 2008, PSC was credited with 2,289 child-pornography indictments being filed in federal court nationwide, a 33-percent increase over 2006. For more information about PSC, visit http://www.projectsafechildhood.gov/.
New York Mills Woman Pleads Guilty to Stealing from Credit Union
February 9, 2010 - Today in federal court in Minneapolis, Minnesota, a 41-year-old woman from the small central Minnesota town of New York Mills pleaded guilty to embezzling $65,000 from the credit union where she worked. Appearing before United States District Court Chief Judge Michael J. Davis in Minneapolis, Jodi Lynn Wiirre pleaded guilty to one count of theft of credit union funds. She was charged on January 21, 2010.
In her plea agreement, Wiirre, who was employed as a teller at the Heart of the Lakes Credit Union in New York Mills, admitted stealing the money from the accounts of six depositors between February 2008 and May 2009. She obtained the funds by making fraudulent and unauthorized withdrawals from the accounts. She then used the money to pay personal expenses.
For her crime, Wiirre faces a potential maximum penalty of 30 years in prison. Judge Davis will determine her sentence at a future date.
This case is the result of an investigation by the Federal Bureau of Investigation, the Minnesota Bureau of Criminal Apprehension, the Ottertail County Sheriff’s Office and the New York Mills Police Department. It is being prosecuted by Assistant U.S. Attorney David J. MacLaughlin.
In her plea agreement, Wiirre, who was employed as a teller at the Heart of the Lakes Credit Union in New York Mills, admitted stealing the money from the accounts of six depositors between February 2008 and May 2009. She obtained the funds by making fraudulent and unauthorized withdrawals from the accounts. She then used the money to pay personal expenses.
For her crime, Wiirre faces a potential maximum penalty of 30 years in prison. Judge Davis will determine her sentence at a future date.
This case is the result of an investigation by the Federal Bureau of Investigation, the Minnesota Bureau of Criminal Apprehension, the Ottertail County Sheriff’s Office and the New York Mills Police Department. It is being prosecuted by Assistant U.S. Attorney David J. MacLaughlin.
Colombian Cartel Leader Brought to New Jersey to Face Federal Charges
February 9, 2010 - NEWARK—Salomon Camacho Mora, a reputed Colombian cartel leader, was brought from Venezuela to New Jersey yesterday evening to face federal conspiracy, drug trafficking and money laundering charges, announced U.S. Attorney Paul J. Fishman and FBI Acting Special Agent in Charge Kevin B. Cruise.
Camacho, 65, a citizen of Colombia, a.k.a. “Papa Grande,” “El Viejo” and “Hector,” was arrested in Valencia, Venezuela, on Jan. 13, 2010, by Venezuelan authorities. Camacho, who has been designated a Consolidated Priority Organization Target (CPOT) by the Department of Justice, had been a New Jersey FBI fugitive for over eight years.
Camacho was originally indicted in September 2002 in U.S. District Court for the District of New Jersey. On Aug. 9, 2005, a grand jury returned an eight-count Superseding Indictment charging Camacho and four co-defendants with one count of conspiracy to commit money laundering, five counts of laundering of monetary instruments and one count each of conspiracy to commit narcotics trafficking and narcotics trafficking.
Camacho made his an initial appearance in U.S. District Court today before U.S. Magistrate Judge Mark Falk in Newark. Judge Falk ordered the defendant to be detained pending trial, which is scheduled for April 13.
The Superseding Indictment describes a scheme in which Camacho led an organization that smuggled large quantities of cocaine from Colombia to the United States, via Venezuela and Puerto Rico. According to the Indictment, Camacho and members of his drug organization purchased multi-kilogram quantities of cocaine from various cocaine processing laboratories in Colombia and arranged for the transportation of the cocaine loads to various shipping ports in Venezuela. Once the shipments arrived in Venezuela, Camacho and coconspirators allegedly sold cocaine to other drug trafficking organizations operating in Puerto Rico, the Dominican Republic and the United States. Camacho and his co-conspirators also arranged for maritime transportation of drug shipments to Puerto Rico and the United States, where they later sold the cocaine. According to the Indictment, the alleged drug transactions generated large profits for the defendants, which they then wire transferred out of the United States using various bank accounts.
According to the U.S. Department of State, Camacho allegedly began his drug trafficking career in the 1980's with the Colombian Medellin Cartel and then became partners with Alberto Orlandez Gamboa, a powerful leader of the Colombian North Coast Cartel. Camacho allegedly had a series of other drug trafficking partnerships, including with the Orejuela brothers of the Cali Cartel and, from 1998 to the present, he worked in partnership with Hermagoras Gonzalez Polanco, in what is often referred to as the Guajira Cartel, a State Department advisory indicated. The State Department advisory alleges that Camacho and Gonzalez Polanco were responsible for sending many tons of cocaine to the United States, including as much as 9 metric tons between 1999 and 2000 and reportedly had strong ties to Dominican drug trafficking organizations, which paid for the drugs. The Guajira Cartel is known to use violence, intimidation, extortion, and murder to further their organization’s success. The State Department offered a $5 million reward for Camacho’s arrest.
“Camacho’s arrest and his arrival in New Jersey sends a very clear message to other drug kingpins outside our borders,” said Fishman. “It may have taken some time, but this major cartel leader has been brought to justice as will others who engage in similar conduct.”
"We consider Salomon Camacho Mora a significant figure in the drug trafficking underworld," said Kevin Cruise, Acting Special Agent in Charge of the FBI's Newark Field Office. "This arrest will effectively send a powerful message to other major crime figures around the world: the FBI never forgets, and we don't give up. We thank our FBI and DEA counterparts in Caracas, Venezuela and Bogota, Columbia, our partners in the National Guard Counter Drug Task Force for their unwavering commitment and dedication, the IRS, and the governments of Columbia and Venezuela, all without whom this arrest would not have been possible."
The Indictments describe a hierarchy of individuals, with Camacho at the top, involved in conspiracies to direct the movement of drug money in the United States to conceal the nature, source, and ownership of the money. Camacho’s co-defendants allegedly gathered cash from the sale of drugs, directed the movement of cash, acted as money couriers or controlled bank accounts through which the drug money was moved. The Superseding Indictment specifically identifies approximately $1.6 million that was laundered.
In September 2002, Camacho was indicted in the District of New Jersey along with 34 other members of his organization and charged with conspiracy to launder money and multiple substantive money laundering counts. To date, 24 members of Camacho’s organization have been arrested, six of these defendants were extradited from Colombia. Currently, 20 of the defendants have pleaded guilty, of those 19 have been sentenced.
In August 2005, when the Superseding Indictment was returned, a forfeiture order in the amount of $35 million was obtained against Camacho. Shortly thereafter, the Colombian government seized 24 properties, in excess of 12,350 acres, belonging to Camacho. Despite indictment, all defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
On the narcotics charges, Camacho faces a statutory mandatory minimum of 10 years in prison, a statutory maximum of life in prison, and fines of up to $4 million or twice the amount of profits he gained from his illegal conduct. Camacho also faces up to 20 years in prison and a $500,000 fine on the money laundering charges.
In determining an actual sentence, the judge to whom the case is assigned would, upon a conviction, consult the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant's criminal history, if any, and other factors. The judge, however, is not bound by those guidelines in determining a sentence. Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.
Fishman credited Special Agents of the FBI, under the direction of Acting Special Agent in Charge Kevin B. Cruise in Newark; the IRS Criminal Investigation Division, under the direction of Special Agent in Charge William P. Offord; the New Jersey National Guard Anti-Narcotics Task Force, under the direction of Lieutenant Commander Gerard R. Gagnon; and the DEA, under the direction of DEA Regional Director Jay B. Bergman, Andean Region, and Special Agent in Charge Gerard P. McAleer in Newark, with the investigation leading to the defendants’ indictment and arrest.
Fishman also thanked the U.S. Department of Justice Criminal Division's Office of International Affairs for providing assistance in this matter. Additionally, Fishman thanked the Venezuelan agencies Oficina Nacional Anti Drogas (ONA), Servicio Bolivariano de Intelligencia Nacional, (SEBIN), Servicio Administrativo de identificacion migracion y Extranjeria, (SAIME) and the Colombian Departamento Administrativo De Seguridad, (DAS) for their assistance in Camacho’s arrest and deportation.
The government is represented by Assistant U.S. Attorneys Eric Moran and Ronald Chillemi of the Criminal Division in Newark.
Camacho, 65, a citizen of Colombia, a.k.a. “Papa Grande,” “El Viejo” and “Hector,” was arrested in Valencia, Venezuela, on Jan. 13, 2010, by Venezuelan authorities. Camacho, who has been designated a Consolidated Priority Organization Target (CPOT) by the Department of Justice, had been a New Jersey FBI fugitive for over eight years.
Camacho was originally indicted in September 2002 in U.S. District Court for the District of New Jersey. On Aug. 9, 2005, a grand jury returned an eight-count Superseding Indictment charging Camacho and four co-defendants with one count of conspiracy to commit money laundering, five counts of laundering of monetary instruments and one count each of conspiracy to commit narcotics trafficking and narcotics trafficking.
Camacho made his an initial appearance in U.S. District Court today before U.S. Magistrate Judge Mark Falk in Newark. Judge Falk ordered the defendant to be detained pending trial, which is scheduled for April 13.
The Superseding Indictment describes a scheme in which Camacho led an organization that smuggled large quantities of cocaine from Colombia to the United States, via Venezuela and Puerto Rico. According to the Indictment, Camacho and members of his drug organization purchased multi-kilogram quantities of cocaine from various cocaine processing laboratories in Colombia and arranged for the transportation of the cocaine loads to various shipping ports in Venezuela. Once the shipments arrived in Venezuela, Camacho and coconspirators allegedly sold cocaine to other drug trafficking organizations operating in Puerto Rico, the Dominican Republic and the United States. Camacho and his co-conspirators also arranged for maritime transportation of drug shipments to Puerto Rico and the United States, where they later sold the cocaine. According to the Indictment, the alleged drug transactions generated large profits for the defendants, which they then wire transferred out of the United States using various bank accounts.
According to the U.S. Department of State, Camacho allegedly began his drug trafficking career in the 1980's with the Colombian Medellin Cartel and then became partners with Alberto Orlandez Gamboa, a powerful leader of the Colombian North Coast Cartel. Camacho allegedly had a series of other drug trafficking partnerships, including with the Orejuela brothers of the Cali Cartel and, from 1998 to the present, he worked in partnership with Hermagoras Gonzalez Polanco, in what is often referred to as the Guajira Cartel, a State Department advisory indicated. The State Department advisory alleges that Camacho and Gonzalez Polanco were responsible for sending many tons of cocaine to the United States, including as much as 9 metric tons between 1999 and 2000 and reportedly had strong ties to Dominican drug trafficking organizations, which paid for the drugs. The Guajira Cartel is known to use violence, intimidation, extortion, and murder to further their organization’s success. The State Department offered a $5 million reward for Camacho’s arrest.
“Camacho’s arrest and his arrival in New Jersey sends a very clear message to other drug kingpins outside our borders,” said Fishman. “It may have taken some time, but this major cartel leader has been brought to justice as will others who engage in similar conduct.”
"We consider Salomon Camacho Mora a significant figure in the drug trafficking underworld," said Kevin Cruise, Acting Special Agent in Charge of the FBI's Newark Field Office. "This arrest will effectively send a powerful message to other major crime figures around the world: the FBI never forgets, and we don't give up. We thank our FBI and DEA counterparts in Caracas, Venezuela and Bogota, Columbia, our partners in the National Guard Counter Drug Task Force for their unwavering commitment and dedication, the IRS, and the governments of Columbia and Venezuela, all without whom this arrest would not have been possible."
The Indictments describe a hierarchy of individuals, with Camacho at the top, involved in conspiracies to direct the movement of drug money in the United States to conceal the nature, source, and ownership of the money. Camacho’s co-defendants allegedly gathered cash from the sale of drugs, directed the movement of cash, acted as money couriers or controlled bank accounts through which the drug money was moved. The Superseding Indictment specifically identifies approximately $1.6 million that was laundered.
In September 2002, Camacho was indicted in the District of New Jersey along with 34 other members of his organization and charged with conspiracy to launder money and multiple substantive money laundering counts. To date, 24 members of Camacho’s organization have been arrested, six of these defendants were extradited from Colombia. Currently, 20 of the defendants have pleaded guilty, of those 19 have been sentenced.
In August 2005, when the Superseding Indictment was returned, a forfeiture order in the amount of $35 million was obtained against Camacho. Shortly thereafter, the Colombian government seized 24 properties, in excess of 12,350 acres, belonging to Camacho. Despite indictment, all defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
On the narcotics charges, Camacho faces a statutory mandatory minimum of 10 years in prison, a statutory maximum of life in prison, and fines of up to $4 million or twice the amount of profits he gained from his illegal conduct. Camacho also faces up to 20 years in prison and a $500,000 fine on the money laundering charges.
In determining an actual sentence, the judge to whom the case is assigned would, upon a conviction, consult the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant's criminal history, if any, and other factors. The judge, however, is not bound by those guidelines in determining a sentence. Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.
Fishman credited Special Agents of the FBI, under the direction of Acting Special Agent in Charge Kevin B. Cruise in Newark; the IRS Criminal Investigation Division, under the direction of Special Agent in Charge William P. Offord; the New Jersey National Guard Anti-Narcotics Task Force, under the direction of Lieutenant Commander Gerard R. Gagnon; and the DEA, under the direction of DEA Regional Director Jay B. Bergman, Andean Region, and Special Agent in Charge Gerard P. McAleer in Newark, with the investigation leading to the defendants’ indictment and arrest.
Fishman also thanked the U.S. Department of Justice Criminal Division's Office of International Affairs for providing assistance in this matter. Additionally, Fishman thanked the Venezuelan agencies Oficina Nacional Anti Drogas (ONA), Servicio Bolivariano de Intelligencia Nacional, (SEBIN), Servicio Administrativo de identificacion migracion y Extranjeria, (SAIME) and the Colombian Departamento Administrativo De Seguridad, (DAS) for their assistance in Camacho’s arrest and deportation.
The government is represented by Assistant U.S. Attorneys Eric Moran and Ronald Chillemi of the Criminal Division in Newark.
Bridgeport Man Sentenced to More Than Seven Years in Federal Prison for Dealing Crack Cocaine
February 9, 2010 - Nora R. Dannehy, United States Attorney for the District of Connecticut, announced that VICTOR ROBERSON, also known as “Cool V,” 38, of Cottage Street, Bridgeport, was sentenced today by United States District Judge Janet C. Hall in Bridgeport to 90 months of imprisonment, followed by five years of supervised release, for his participation in a Bridgeport-based narcotics-trafficking ring. On October 8, 2009, ROBERSON pleaded guilty to one count of possession with the intent to distribute five grams or more of cocaine base (“crack cocaine”).
This matter stems from “Operation G-Force,” a joint law enforcement investigation into Bridgeport-area narcotics trafficking headed by the Federal Bureau of Investigation’s Safe Streets Task Force. The year-long investigation, which led to the federal prosecution of 46 individuals, included the use of court-authorized wiretaps, controlled purchases of cocaine, crack cocaine, and heroin, and physical surveillance.
According to court documents and statements made in court, from approximately January 2002 to February 2009, George Sanchez headed a large-scale cocaine and crack cocaine distribution ring operating in Bridgeport. Using the U.S. Mail and other shipping services, Sanchez had, on average, two kilograms of cocaine shipped from Puerto Rico to various residences in Bridgeport each week. The cocaine was wrapped and secreted inside electronic devices such as VCRs, clothing, and other items. Once the packages were received in Bridgeport, Sanchez and his associates would process some of the cocaine into crack cocaine, and package the cocaine and crack cocaine for distribution to other narcotics traffickers in the Bridgeport area. During this period, ROBERSON was actively involved in distributing narcotics with Sanchez and his associates.
During the sentencing proceeding, Judge Hall noted that this federal conviction is ROBERSON’s fourth felony conviction for illegal drug distribution in Bridgeport.
On September 25, 2009, Sanchez pleaded guilty to one count of conspiracy to possess with intent to distribute five kilograms or more of cocaine, and one count of conspiracy to possess with intent to distribute 50 grams or more of cocaine base (“crack cocaine”). He awaits sentencing.
This matter was investigated by members of the FBI Safe Streets Task Force, which is composed of federal agents and state and local officers from the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation Division, the Connecticut State Police Statewide Narcotics Task Force, and the Bridgeport, Stamford, Stratford, Fairfield, Trumbull and Norwalk Police Departments. This matter is being prosecuted by Assistant U.S. Attorneys Hal Chen and Dave Vatti
This matter stems from “Operation G-Force,” a joint law enforcement investigation into Bridgeport-area narcotics trafficking headed by the Federal Bureau of Investigation’s Safe Streets Task Force. The year-long investigation, which led to the federal prosecution of 46 individuals, included the use of court-authorized wiretaps, controlled purchases of cocaine, crack cocaine, and heroin, and physical surveillance.
According to court documents and statements made in court, from approximately January 2002 to February 2009, George Sanchez headed a large-scale cocaine and crack cocaine distribution ring operating in Bridgeport. Using the U.S. Mail and other shipping services, Sanchez had, on average, two kilograms of cocaine shipped from Puerto Rico to various residences in Bridgeport each week. The cocaine was wrapped and secreted inside electronic devices such as VCRs, clothing, and other items. Once the packages were received in Bridgeport, Sanchez and his associates would process some of the cocaine into crack cocaine, and package the cocaine and crack cocaine for distribution to other narcotics traffickers in the Bridgeport area. During this period, ROBERSON was actively involved in distributing narcotics with Sanchez and his associates.
During the sentencing proceeding, Judge Hall noted that this federal conviction is ROBERSON’s fourth felony conviction for illegal drug distribution in Bridgeport.
On September 25, 2009, Sanchez pleaded guilty to one count of conspiracy to possess with intent to distribute five kilograms or more of cocaine, and one count of conspiracy to possess with intent to distribute 50 grams or more of cocaine base (“crack cocaine”). He awaits sentencing.
This matter was investigated by members of the FBI Safe Streets Task Force, which is composed of federal agents and state and local officers from the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation Division, the Connecticut State Police Statewide Narcotics Task Force, and the Bridgeport, Stamford, Stratford, Fairfield, Trumbull and Norwalk Police Departments. This matter is being prosecuted by Assistant U.S. Attorneys Hal Chen and Dave Vatti
Avelino Gonzalez-Claudio Pleads Guilty to Charges Related to 1983 Wells Fargo Robbery
February 9, 2010 - The United States Attorney for the District of Connecticut announced that AVELINO GONZALEZ-CLAUDIO, 67, pleaded guilty today before United States District Judge Stefan R. Underhill in Hartford to federal charges related to his involvement in a 1983 armored truck robbery of approximately $7 million in West Hartford, Connecticut.
GONZALEZ-CLAUDIO pleaded guilty to Count 12 of a superseding indictment that charges him with one count of foreign transportation of stolen money, and Count 16, which charges him with one count of conspiracy to rob federally insured bank funds, to commit theft from interstate shipment, and to transport stolen money in interstate and foreign commerce.
According to court documents and statements made in court, from April 1983 to April 1984, GONZALEZ-CLAUDIO conspired with others to rob approximately $7 million in cash from the Wells Fargo Armored Service Corporation in West Hartford, and to transport the stolen money to Mexico. In pleading guilty, GONZALEZ-CLAUDIO acknowledged that he and other co-conspirators approved and authorized the robbery, which occurred on September 12, 1983. On March 27, 1984, GONZALEZ-CLAUDIO and others transported stolen currency from the United States to Mexico.
The Government alleges that the robbery was perpetrated to fund the activities of Los Macheteros, a clandestine organization that seeks Puerto Rican independence.
GONZALEZ-CLAUDIO, who was a fugitive for more than 22 years, was arrested by FBI Agents and Police of Puerto Rico officers in Manati, Puerto Rico, on February 7, 2008. He has been detained since his arrest.
GONZALEZ-CLAUDIO is scheduled to be sentenced on May 26, 2010, at which time he faces a maximum term of imprisonment of 15 years and a fine of up to $20,000. In a binding plea agreement, subject to approval by the Court, the parties have agreed that a sentence of seven years of imprisonment and fine of up to $10,000, should the Court find that the defendant is able to pay a fine, is an appropriate disposition of this case.
This matter is being investigated by the Federal Bureau of Investigation in New Haven and San Juan, with the assistance of the Naval Criminal Investigative Service and the United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Henry K. Kopel and Paul H. McConnell.
GONZALEZ-CLAUDIO pleaded guilty to Count 12 of a superseding indictment that charges him with one count of foreign transportation of stolen money, and Count 16, which charges him with one count of conspiracy to rob federally insured bank funds, to commit theft from interstate shipment, and to transport stolen money in interstate and foreign commerce.
According to court documents and statements made in court, from April 1983 to April 1984, GONZALEZ-CLAUDIO conspired with others to rob approximately $7 million in cash from the Wells Fargo Armored Service Corporation in West Hartford, and to transport the stolen money to Mexico. In pleading guilty, GONZALEZ-CLAUDIO acknowledged that he and other co-conspirators approved and authorized the robbery, which occurred on September 12, 1983. On March 27, 1984, GONZALEZ-CLAUDIO and others transported stolen currency from the United States to Mexico.
The Government alleges that the robbery was perpetrated to fund the activities of Los Macheteros, a clandestine organization that seeks Puerto Rican independence.
GONZALEZ-CLAUDIO, who was a fugitive for more than 22 years, was arrested by FBI Agents and Police of Puerto Rico officers in Manati, Puerto Rico, on February 7, 2008. He has been detained since his arrest.
GONZALEZ-CLAUDIO is scheduled to be sentenced on May 26, 2010, at which time he faces a maximum term of imprisonment of 15 years and a fine of up to $20,000. In a binding plea agreement, subject to approval by the Court, the parties have agreed that a sentence of seven years of imprisonment and fine of up to $10,000, should the Court find that the defendant is able to pay a fine, is an appropriate disposition of this case.
This matter is being investigated by the Federal Bureau of Investigation in New Haven and San Juan, with the assistance of the Naval Criminal Investigative Service and the United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Henry K. Kopel and Paul H. McConnell.
Saturday, February 06, 2010
Carterville Man Charged with Child Pornography Offense
February 6, 2010 - A. Courtney Cox, United States Attorney for the Southern District of Illinois, announced today that on February 2, 2010, KENNETH LEWIS GORDON, age 27, of Carterville, Illinois, was named in a one-count indictment returned by a Federal Grand Jury sitting in Benton, Illinois.
The indictment charges that on August 14, 2009, GORDON possessed child pornography that had been mailed or shipped or transported in interstate commerce by any means, including by computer.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
GORDON had his initial appearance in United States District Court on February 4, 2010. GORDON has been ordered into the custody of the United States Marshal Service pending trial, which is scheduled for April 2010, in United States District Court in Benton, Illinois.
GORDON faces up to 10 years' imprisonment, up to a $250,000 fine, and from five years' to lifetime supervised release.
The investigation in this case was conducted by the Federal Bureau of Investigation Southern Illinois Cyber Crimes Task Force, the Carterville Police Department, and a number of state and local law enforcement agencies. This case is part of Project Safe Childhood, in which the United States Attorney’s Office, in conjunction with federal and state law enforcement authorities, is actively investigating and prosecuting individuals who produce, distribute, or possess child pornography. Anyone with information concerning the use of the Internet for the purposes of possessing, producing, or trafficking in child pornography is encouraged to contact the Federal Bureau of Investigation or their local police department.
The case is being prosecuted by Assistant United States Attorney George A. Norwood.
The indictment charges that on August 14, 2009, GORDON possessed child pornography that had been mailed or shipped or transported in interstate commerce by any means, including by computer.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
GORDON had his initial appearance in United States District Court on February 4, 2010. GORDON has been ordered into the custody of the United States Marshal Service pending trial, which is scheduled for April 2010, in United States District Court in Benton, Illinois.
GORDON faces up to 10 years' imprisonment, up to a $250,000 fine, and from five years' to lifetime supervised release.
The investigation in this case was conducted by the Federal Bureau of Investigation Southern Illinois Cyber Crimes Task Force, the Carterville Police Department, and a number of state and local law enforcement agencies. This case is part of Project Safe Childhood, in which the United States Attorney’s Office, in conjunction with federal and state law enforcement authorities, is actively investigating and prosecuting individuals who produce, distribute, or possess child pornography. Anyone with information concerning the use of the Internet for the purposes of possessing, producing, or trafficking in child pornography is encouraged to contact the Federal Bureau of Investigation or their local police department.
The case is being prosecuted by Assistant United States Attorney George A. Norwood.
Illinois Secretary of State Bomb Squad Receives Re-Accreditation
February 6, 2010 - Stuart R. McArthur, Special Agent in Charge of the FBI’s Springfield Division, announced today the re-accreditation of the Illinois Secretary of State Bomb Squad. The squad is one of 470 nationally accredited public safety bomb squads in the United States and one of 12 squads in the State of Illinois.
The accreditation is provided by the FBI's Hazardous Device Operations Center (HDOC) in Quantico, Virginia. This unit provides the training and oversight for all of the accredited bomb squads in the United States. HDOC funds the training and certifies all bomb technicians pursuant to nationally recognized standards. HDOC also facilitates technical intelligence sharing and provides equipment and resources to local jurisdictions to enhance their capability to respond to bombing incidents and terrorist threats involving improvised explosive devices (IEDs). All of the Secretary of State Bomb Squad bomb technicians are nationally certified to standards promulgated by the National Bomb Squad Commanders Advisory Board (NBSCAB) and are thereafter certified by the FBI. All bomb technicians are required to re-certify every three years at the FBI's Hazardous Devices School (HDS) located on Redstone Arsenal at Huntsville, Alabama. The bomb squad accreditation is valid for a period of five years and verifies that bomb squad safety equipment, such as state-of-the-art robots and X-Ray systems, are in their equipment inventory and that there are certified technicians available for bomb response.
The Springfield Division of the FBI has formed a partnership with several law enforcement agencies within Central and Southern Illinois, to enhance the multi-jurisdictional response capability of Illinois Bomb Squads. As society becomes more global, the threats facing our communities are less restricted by jurisdictional boundaries. Law enforcement must be proactive in maintaining the ability to counter those threats.
In an effort to enhance public safety and our ability to respond to threats posed by improvised explosive devices, and other weapons of mass destruction (WMD), the FBI joined forces, in 2006, with the Secretary of State Bomb Squad. The Illinois law enforcement agencies who participate in this partnership include:
• FBI, Springfield Division;
• Illinois Secretary of State Police Bomb Squad;
• Peoria Police Bomb Squad;
• Quad Cities Bomb Squad;
• SIUC and the Carbondale Police Department Bomb Squad;
• University of Illinois/Champaign Police Bomb Squad.
By sharing resources, expertise, and training opportunities, law enforcement in Illinois will be better equipped to respond effectively and efficiently to WMD threats. The Springfield FBI field office appreciates the partnership with the Secretary of State and congratulates this agency on the re-accreditation of their bomb squad.
The accreditation is provided by the FBI's Hazardous Device Operations Center (HDOC) in Quantico, Virginia. This unit provides the training and oversight for all of the accredited bomb squads in the United States. HDOC funds the training and certifies all bomb technicians pursuant to nationally recognized standards. HDOC also facilitates technical intelligence sharing and provides equipment and resources to local jurisdictions to enhance their capability to respond to bombing incidents and terrorist threats involving improvised explosive devices (IEDs). All of the Secretary of State Bomb Squad bomb technicians are nationally certified to standards promulgated by the National Bomb Squad Commanders Advisory Board (NBSCAB) and are thereafter certified by the FBI. All bomb technicians are required to re-certify every three years at the FBI's Hazardous Devices School (HDS) located on Redstone Arsenal at Huntsville, Alabama. The bomb squad accreditation is valid for a period of five years and verifies that bomb squad safety equipment, such as state-of-the-art robots and X-Ray systems, are in their equipment inventory and that there are certified technicians available for bomb response.
The Springfield Division of the FBI has formed a partnership with several law enforcement agencies within Central and Southern Illinois, to enhance the multi-jurisdictional response capability of Illinois Bomb Squads. As society becomes more global, the threats facing our communities are less restricted by jurisdictional boundaries. Law enforcement must be proactive in maintaining the ability to counter those threats.
In an effort to enhance public safety and our ability to respond to threats posed by improvised explosive devices, and other weapons of mass destruction (WMD), the FBI joined forces, in 2006, with the Secretary of State Bomb Squad. The Illinois law enforcement agencies who participate in this partnership include:
• FBI, Springfield Division;
• Illinois Secretary of State Police Bomb Squad;
• Peoria Police Bomb Squad;
• Quad Cities Bomb Squad;
• SIUC and the Carbondale Police Department Bomb Squad;
• University of Illinois/Champaign Police Bomb Squad.
By sharing resources, expertise, and training opportunities, law enforcement in Illinois will be better equipped to respond effectively and efficiently to WMD threats. The Springfield FBI field office appreciates the partnership with the Secretary of State and congratulates this agency on the re-accreditation of their bomb squad.
Seeking Public's Assistance in Locating Two Armed Bank Robbers
February 6, 2010 - The FBI is seeking the public's assistance to locate Robert McKnight, aka "Tweetie," and Lamont E. Paige, aka "Mont." Paige, 37 years old, 5'10" tall and 170 pounds, and McNight, 52 years old, 6'3" tall and 210 pounds, were charged today via Criminal Complaint in the U.S. District Court for the Eastern District of Pennsylvania in connection with the armed robbery of the Trumark Financial Credit Union in Jenkintown, PA, on January 20, 2010.
These subjects, who are both known to frequent the Frankford section of Philadelphia, are considered armed and dangerous. Anyone with information about their whereabouts is asked to call the FBI at 215-418-4000 or their local police department.
Robbery of TD Bank Branch in Philadelphia
February 6, 2010 - The FBI and the Philadelphia Police Department are seeking the public's assistance to identify and locate the subject responsible for the robbery of the TD Bank Branch located at 3920 Woodhaven Road earlier today.
At approximately 12:55 p.m, an unidentified subject entered the bank and presented a threatening demand note to a teller. The subject is described as a black male in his early 20's, 6'3" tall, thin build, unshaven with a mustache and goatee, wearing a white baseball cap with a blue front panel and a logo on it, a grey zip-up hooded sweatshirt, and black gloves. After obtaining an undisclosed amount of cash, the subject fled the bank on foot and was last seen on Knights Road heading towards Frankford Avenue.
Two pictures from the bank's security cameras are below.
This subject is considered armed and dangerous, and anyone with information is asked to call the FBI at 215-418-4000 or the Philadelphia Police Department. There may be a reward for information leading to this subject's identification and arrest, and tipsters can remain anonymous.
Military and Police Books of the Year
Between the three websites, more than 2,200 American Heroes and their books are listed.
February 6, 2010, (San Dimas, CA) American Heroes Press, the publishers of www.military-writers.com, www.police-writers.com and www.firefighter-writers.com, announced the results of their annual recognition.
About the Websites
Military-Writers.com is a website that lists servicemembers from all branches of the United States Armed Forces who have authored books. Currently, the site lists 1146 servicemembers and their more than 3,700 books. Servicemembers are listed by name, branch, rank and type of book.
Police-Writers.com is a website that lists state and local law enforcement officials who have written books. Currently, the website lists 1,082 state or local police officers and their more than 2,300 books. Law enforcement officials are listed by name, department and type of book. Additionally, the website has separate sections which list federal law enforcement officials, international police officers and civilian police personnel.
FireFighter-Writers.com lists American firefighters and other emergency services personnel who have authored books. Currently, the site lists 22 firefighters and over 200 books.
About the Awards
The Military-Writers.com Book of Year 2010 focuses solely on the written contribution made by the servicemember. It is that book found by the panel of judges to be the most significant literary contribution made by a servicemember in the previous year.
The Police-Writers.com Book of the Year 2010 focuses solely on the written contribution made by the police officer. It is that book found by the panel of judges to be the most significant literary contribution made by a police officer in the previous year.
The Military-Writers.com 2010 Book of the Year
Ride the Thunder: A Vietnam War Story of Honor and Triumph authored by former Major Richard Botkin, USMC, is the Military-Writers.com Book of the Year.
Former United States Marine Corps Major Richard Botkin “graduated from the University of Michigan's School of Business. He served from 1980 to 1995 on active and reserve duty as a Marine Corps infantry officer with units to include 2nd Battalion 7th Marines, 1st Reconnaissance Battalion, and 4th Force Reconnaissance Company. His understanding for Southeast Asia has been enhanced by the nine medical/dental mission trips he helped to organize and lead to Cambodia between 1998 and 2007, and four trips to Vietnam, including one with his main Vietnamese character Le Ba Binh, to specifically do research for Ride the Thunder. Richard Botkin currently lives with his family in northern California, where he is an investment advisor for a major brokerage firm.” Richard Botkin is the author of Ride the Thunder: A Vietnam War Story of Honor and Triumph.
According to the book description of Ride the Thunder: A Vietnam War Story of Honor and Triumph, “Richard Botkin breaks new ground in telling the heroic story of a few American and Vietnamese Marines who fought brilliantly and turned the tide of the Vietnam War, only to have policymakers surrender the battlefield. Botkin recounts the exploits of the American Marines and their Vietnamese allies who were largely responsible for thwarting the North Vietnamese invasion of the northern portions of South Vietnam - known as the 'Easter Offensive of 1972' in the West that was intended to bring the nation to its knees. These are the men who 'rode the thunder' and almost saved a nation. Botkin tells the story of Captain John Ripley's daring raid to destroy the Dong Ha Bridge; Major Le Ba Binh and his seven hundred Marines bravely holding off more than 20 thousand North Vietnamese troops; Lieutenant Colonel Gerry Turley's leadership and bravery that helped thwart the Easter Offensive - and much more.”
The Police-Writers.com Book of the Year 2010
The Sixth Session authored by Lieutenant Joe Hefferon, Essex County Sheriff’s Office, is the Police-Writers.com Book of the Year.
Lieutenant Joe Hefferon of the Essex County Sheriff’s Office is a 22 year veteran of law enforcement who is currently assigned to the office of the chief. He “has been a police officer for more than twenty-two years. His experiences have given him access to the scarier hallways of the human psyche, helping to layer his narrative with poignancy, grit, and dark humor. Joe Hefferon is the proud parent of two beautiful children, Jack and Kaitlin.” Lieutenant Joe Hefferon is the author of The Sixth Session.
According to the book description of The Sixth Session, “Newspaper man Carter Jackson forms an unlikely alliance with Detective Brooke Enright to stop the awful killing of children while reconciling their own inner torment. Carter is reeling over the death of his beloved wife and immerses himself in the brutal investigation, set against one bitter cold December. The Sixth Session will make you think about the best and worst of human capacities. It will make you want to fall in love again, even with all its tragic consequences.”
American Heroes Press Contact Information
Lieutenant Raymond E. Foster, LAPD (ret.), MPA
editor@police-writers.com
909.599.7530
February 6, 2010, (San Dimas, CA) American Heroes Press, the publishers of www.military-writers.com, www.police-writers.com and www.firefighter-writers.com, announced the results of their annual recognition.
About the Websites
Military-Writers.com is a website that lists servicemembers from all branches of the United States Armed Forces who have authored books. Currently, the site lists 1146 servicemembers and their more than 3,700 books. Servicemembers are listed by name, branch, rank and type of book.
Police-Writers.com is a website that lists state and local law enforcement officials who have written books. Currently, the website lists 1,082 state or local police officers and their more than 2,300 books. Law enforcement officials are listed by name, department and type of book. Additionally, the website has separate sections which list federal law enforcement officials, international police officers and civilian police personnel.
FireFighter-Writers.com lists American firefighters and other emergency services personnel who have authored books. Currently, the site lists 22 firefighters and over 200 books.
About the Awards
The Military-Writers.com Book of Year 2010 focuses solely on the written contribution made by the servicemember. It is that book found by the panel of judges to be the most significant literary contribution made by a servicemember in the previous year.
The Police-Writers.com Book of the Year 2010 focuses solely on the written contribution made by the police officer. It is that book found by the panel of judges to be the most significant literary contribution made by a police officer in the previous year.
The Military-Writers.com 2010 Book of the Year
Ride the Thunder: A Vietnam War Story of Honor and Triumph authored by former Major Richard Botkin, USMC, is the Military-Writers.com Book of the Year.
Former United States Marine Corps Major Richard Botkin “graduated from the University of Michigan's School of Business. He served from 1980 to 1995 on active and reserve duty as a Marine Corps infantry officer with units to include 2nd Battalion 7th Marines, 1st Reconnaissance Battalion, and 4th Force Reconnaissance Company. His understanding for Southeast Asia has been enhanced by the nine medical/dental mission trips he helped to organize and lead to Cambodia between 1998 and 2007, and four trips to Vietnam, including one with his main Vietnamese character Le Ba Binh, to specifically do research for Ride the Thunder. Richard Botkin currently lives with his family in northern California, where he is an investment advisor for a major brokerage firm.” Richard Botkin is the author of Ride the Thunder: A Vietnam War Story of Honor and Triumph.
According to the book description of Ride the Thunder: A Vietnam War Story of Honor and Triumph, “Richard Botkin breaks new ground in telling the heroic story of a few American and Vietnamese Marines who fought brilliantly and turned the tide of the Vietnam War, only to have policymakers surrender the battlefield. Botkin recounts the exploits of the American Marines and their Vietnamese allies who were largely responsible for thwarting the North Vietnamese invasion of the northern portions of South Vietnam - known as the 'Easter Offensive of 1972' in the West that was intended to bring the nation to its knees. These are the men who 'rode the thunder' and almost saved a nation. Botkin tells the story of Captain John Ripley's daring raid to destroy the Dong Ha Bridge; Major Le Ba Binh and his seven hundred Marines bravely holding off more than 20 thousand North Vietnamese troops; Lieutenant Colonel Gerry Turley's leadership and bravery that helped thwart the Easter Offensive - and much more.”
The Police-Writers.com Book of the Year 2010
The Sixth Session authored by Lieutenant Joe Hefferon, Essex County Sheriff’s Office, is the Police-Writers.com Book of the Year.
Lieutenant Joe Hefferon of the Essex County Sheriff’s Office is a 22 year veteran of law enforcement who is currently assigned to the office of the chief. He “has been a police officer for more than twenty-two years. His experiences have given him access to the scarier hallways of the human psyche, helping to layer his narrative with poignancy, grit, and dark humor. Joe Hefferon is the proud parent of two beautiful children, Jack and Kaitlin.” Lieutenant Joe Hefferon is the author of The Sixth Session.
According to the book description of The Sixth Session, “Newspaper man Carter Jackson forms an unlikely alliance with Detective Brooke Enright to stop the awful killing of children while reconciling their own inner torment. Carter is reeling over the death of his beloved wife and immerses himself in the brutal investigation, set against one bitter cold December. The Sixth Session will make you think about the best and worst of human capacities. It will make you want to fall in love again, even with all its tragic consequences.”
American Heroes Press Contact Information
Lieutenant Raymond E. Foster, LAPD (ret.), MPA
editor@police-writers.com
909.599.7530
Another Scarecrow Bandit Sentenced
Participated in Three Robbery Events; Sentenced to 140 Years in Federal Prison Without Parole
February 6, 2010 - DALLAS—Another “Scarecrow Bandit” was sentenced today by U.S. District Judge Jane J. Boyle, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Antonyo Reece, a.k.a. “Seven,”32, was sentenced to 1680 months (140 years) in federal prison, without parole, for his participation in three robbery events in the Dallas/Fort Worth, Texas, area in 2008. The “Scarecrow Bandits” were a group of seven who committed a series of violent “takeover-style" bank robberies in the Dallas area between January and June 2008. Just last week, one of the leaders, Corey Deyon Duffey, a.k.a. “Kenyo,” a.k.a. “Calvin Brown,” 29, was sentenced to a total of 4253 months (354 years and five months) in prison and ordered to pay $355,976 in restitution.
Reese, along with Duffey, Tony R. Hewitt, a.k.a. “PricelessT,” 43; Jarvis Dupree Ross, a.k.a. “Dookie,” a.k.a.“Dapree Dollars,” a.k.a. “Fifty,” 30; and Charles Runnels, a.k.a. “Junior,” 43; were convicted at trial in August 2009. All were convicted on all but two counts of the superseding indictment that charged multiple counts of conspiracy to commit bank robbery; bank robbery; attempted bank robbery; and using firearms in relation to crimes of violence. Ross was also convicted on one count of kidnaping. Duffey, Hewitt, and Runnels were each convicted on one count of being a felon in possession of a firearm, while Ross was convicted on two counts of being a felon in possession of a firearm. All face life in prison.
Two defendants pleaded guilty prior to trial. Yolanda McDow, a.k.a. “Yo,” 34 pleaded guilty to three counts of bank robbery, two counts of conspiracy to commit bank robbery, and one count of using and carrying a firearm during and in relation to conspiracy to commit bank robbery. She pleaded guilty to the five robberies in which she participated as a “lookout” for the group. In addition, following her arrest, she cooperated in the investigation and testified for the prosecution at the trial. She was sentenced in December to 190 months in prison and ordered to pay $336,976 in restitution. Darobie Kentay Stenline, a.k.a. “Fish,” a.k.a. “Dude White,” 31, pleaded guilty the week prior to trial to various conspiracy to commit bank robbery, bank robbery and firearms charges. He is scheduled to be sentenced by Judge Boyle on March 4, 2010; he faces a maximum statutory sentence of life in prison.
The defendants were known as the Scarecrow Bandits by the FBI because they wore loose, sometimes plaid shirts and floppy hats during the first several of the 21 robberies they are believed to have committed. During later robberies, however, their outfits changed to mostly black gear and they wore masks, gloves, and body armor. At trial, the government presented evidence that the defendants conspired together to commit, committed, or attempted to commit, several armed bank robberies, as listed below:
• June 2, 2008 Regions Bank – 2245 West Campbell Road, Garland, Texas
• May 2008 Bank of America – 1431 Spring Valley Road, Richardson, Texas
• May 2008 Bank of America – 534 Centennial Road, Richardson, Texas
• May 16, 2008 Bank of America – 4751 South Hulen Road, Fort Worth, Texas
• April 24, 2008 Bank of America – 7300 North MacArthur Blvd., Irving, Texas
• March 28, 2008 State Bank of Texas – 517 West Interstate 30, Garland, Texas
• March 28, 2008 Century Bank – 3015 Frankford Road, Dallas, Texas
• February 1, 2008 Comerica Bank – 1483 North Hampton Road, Desoto, Texas
• January 28, 2008 Citibank – 2720 Beltline Road, Garland, Texas
• Reese joined the Scarecrow Bandits in April 2008, and participated in the April 24, 2008; May 16, 2008; and June 2, 2008 robbery events.
According to evidence presented at trial, each robbery was well-organized and researched, executed with precision and discipline, and involved aggressive use of firearms (including assault rifles) and tasers by the defendants. The defendants routinely terrorized bank employees by pointing handguns within inches of their faces and threatening violence if their orders were not obeyed. In fact, in one robbery, a taser was discharged on a bank employee. They communicated using cell phones and walkie-talkies and generally spent less than two to three minutes inside each bank. Additionally, they always used stolen cars for their getaways.
The defendants were arrested in June 2008, after a foiled bank robbery in Garland, Texas. When law enforcement attempted to arrest Hewitt, who along with Duffey were the group’s leaders, he used his vehicle to lead them on a high-speed pursuit, attempting to avoid apprehension by entering a Costco store in Plano, Texas, where he was arrested after law enforcement was compelled to evacuate the store. The same day, when law enforcement attempted to arrest Ross, who was in the same vehicle as Duffey, Duffey dropped Ross off at an apartment complex where he broke into an apartment and kidnapped an innocent victim at gunpoint, in hopes of thwarting apprehension. When law enforcement attempted to arrest Runnels and Reece, not only did they attempt to flee from law enforcement, but Runnels used his vehicle to ram the vehicles of the pursuing law enforcement officers.
U.S. Attorney Jacks praised the excellent investigative efforts of the Dallas, Richardson, Garland, DeSoto, Irving and Plano Police Departments and the FBI. The case was prosecuted by Assistant U.S. Attorneys Gary Tromblay, John Kull, and Jay DeWald.
February 6, 2010 - DALLAS—Another “Scarecrow Bandit” was sentenced today by U.S. District Judge Jane J. Boyle, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Antonyo Reece, a.k.a. “Seven,”32, was sentenced to 1680 months (140 years) in federal prison, without parole, for his participation in three robbery events in the Dallas/Fort Worth, Texas, area in 2008. The “Scarecrow Bandits” were a group of seven who committed a series of violent “takeover-style" bank robberies in the Dallas area between January and June 2008. Just last week, one of the leaders, Corey Deyon Duffey, a.k.a. “Kenyo,” a.k.a. “Calvin Brown,” 29, was sentenced to a total of 4253 months (354 years and five months) in prison and ordered to pay $355,976 in restitution.
Reese, along with Duffey, Tony R. Hewitt, a.k.a. “PricelessT,” 43; Jarvis Dupree Ross, a.k.a. “Dookie,” a.k.a.“Dapree Dollars,” a.k.a. “Fifty,” 30; and Charles Runnels, a.k.a. “Junior,” 43; were convicted at trial in August 2009. All were convicted on all but two counts of the superseding indictment that charged multiple counts of conspiracy to commit bank robbery; bank robbery; attempted bank robbery; and using firearms in relation to crimes of violence. Ross was also convicted on one count of kidnaping. Duffey, Hewitt, and Runnels were each convicted on one count of being a felon in possession of a firearm, while Ross was convicted on two counts of being a felon in possession of a firearm. All face life in prison.
Two defendants pleaded guilty prior to trial. Yolanda McDow, a.k.a. “Yo,” 34 pleaded guilty to three counts of bank robbery, two counts of conspiracy to commit bank robbery, and one count of using and carrying a firearm during and in relation to conspiracy to commit bank robbery. She pleaded guilty to the five robberies in which she participated as a “lookout” for the group. In addition, following her arrest, she cooperated in the investigation and testified for the prosecution at the trial. She was sentenced in December to 190 months in prison and ordered to pay $336,976 in restitution. Darobie Kentay Stenline, a.k.a. “Fish,” a.k.a. “Dude White,” 31, pleaded guilty the week prior to trial to various conspiracy to commit bank robbery, bank robbery and firearms charges. He is scheduled to be sentenced by Judge Boyle on March 4, 2010; he faces a maximum statutory sentence of life in prison.
The defendants were known as the Scarecrow Bandits by the FBI because they wore loose, sometimes plaid shirts and floppy hats during the first several of the 21 robberies they are believed to have committed. During later robberies, however, their outfits changed to mostly black gear and they wore masks, gloves, and body armor. At trial, the government presented evidence that the defendants conspired together to commit, committed, or attempted to commit, several armed bank robberies, as listed below:
• June 2, 2008 Regions Bank – 2245 West Campbell Road, Garland, Texas
• May 2008 Bank of America – 1431 Spring Valley Road, Richardson, Texas
• May 2008 Bank of America – 534 Centennial Road, Richardson, Texas
• May 16, 2008 Bank of America – 4751 South Hulen Road, Fort Worth, Texas
• April 24, 2008 Bank of America – 7300 North MacArthur Blvd., Irving, Texas
• March 28, 2008 State Bank of Texas – 517 West Interstate 30, Garland, Texas
• March 28, 2008 Century Bank – 3015 Frankford Road, Dallas, Texas
• February 1, 2008 Comerica Bank – 1483 North Hampton Road, Desoto, Texas
• January 28, 2008 Citibank – 2720 Beltline Road, Garland, Texas
• Reese joined the Scarecrow Bandits in April 2008, and participated in the April 24, 2008; May 16, 2008; and June 2, 2008 robbery events.
According to evidence presented at trial, each robbery was well-organized and researched, executed with precision and discipline, and involved aggressive use of firearms (including assault rifles) and tasers by the defendants. The defendants routinely terrorized bank employees by pointing handguns within inches of their faces and threatening violence if their orders were not obeyed. In fact, in one robbery, a taser was discharged on a bank employee. They communicated using cell phones and walkie-talkies and generally spent less than two to three minutes inside each bank. Additionally, they always used stolen cars for their getaways.
The defendants were arrested in June 2008, after a foiled bank robbery in Garland, Texas. When law enforcement attempted to arrest Hewitt, who along with Duffey were the group’s leaders, he used his vehicle to lead them on a high-speed pursuit, attempting to avoid apprehension by entering a Costco store in Plano, Texas, where he was arrested after law enforcement was compelled to evacuate the store. The same day, when law enforcement attempted to arrest Ross, who was in the same vehicle as Duffey, Duffey dropped Ross off at an apartment complex where he broke into an apartment and kidnapped an innocent victim at gunpoint, in hopes of thwarting apprehension. When law enforcement attempted to arrest Runnels and Reece, not only did they attempt to flee from law enforcement, but Runnels used his vehicle to ram the vehicles of the pursuing law enforcement officers.
U.S. Attorney Jacks praised the excellent investigative efforts of the Dallas, Richardson, Garland, DeSoto, Irving and Plano Police Departments and the FBI. The case was prosecuted by Assistant U.S. Attorneys Gary Tromblay, John Kull, and Jay DeWald.
Father and Son Sentencted for Transporting Stolen Property
February 6, 2010 - SHERMAN, TX—U.S. Attorney John M. Bales announced today that a Quinlan, Texas father and son have been sentenced to federal prison for transporting stolen property and wildlife trafficking in the Eastern District of Texas.
JAMES DEWAYNE ANDERTON, 49, and JIMMIE WALLACE ANDERTON, 26, both of Quinlan, Texas, pleaded guilty on Aug. 31, 2009, to charges of interstate transportation of stolen property (ITSP) and interstate trafficking of wildlife under the Lacey Act, and were sentenced to federal prison on Feb. 2, 2010 by U.S. District Judge Marcia Crone.
According to information presented in court, in May, 2006 search warrants were executed at two ranches, one in Delta County and the other in Hunt County, owned by the Andertons. During the search, officers recovered stolen farm machinery and construction equipment. A federal grand jury returned an indictment on July 8, 2009, charging the Andertons and TIMOTHY SHANE PEAVLER, 37, of Lone Oak, Texas, with federal crimes.
James Anderton was sentenced to 30 months in federal prison for the ITSP charge and was ordered to pay restitution in the amount of $180,952.45. Jimmie Anderton was sentenced to 27 months in federal prison for the ITSP charge and was ordered to be jointly responsible for $180,952.45 in restitution. Peavler pleaded guilty on July 27, 2009, to conspiracy to commit interstate transportation of stolen property and was sentenced to six months in federal prison and ordered to pay $42,403.42 in restitution. In addition, James Anderton and Jimmie Anderton were charged with violations of the Lacey Act involving the illegal transportation of deer across state lines. Each was sentenced to 12 months' confinement on the Lacey Act charges to be served concurrently with their ITSP convictions.
This case was investigated by the U.S. Fish and Wildlife Service, Texas Parks and Wildlife, Texas Department of Public Safety, and the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Randall Blake.
JAMES DEWAYNE ANDERTON, 49, and JIMMIE WALLACE ANDERTON, 26, both of Quinlan, Texas, pleaded guilty on Aug. 31, 2009, to charges of interstate transportation of stolen property (ITSP) and interstate trafficking of wildlife under the Lacey Act, and were sentenced to federal prison on Feb. 2, 2010 by U.S. District Judge Marcia Crone.
According to information presented in court, in May, 2006 search warrants were executed at two ranches, one in Delta County and the other in Hunt County, owned by the Andertons. During the search, officers recovered stolen farm machinery and construction equipment. A federal grand jury returned an indictment on July 8, 2009, charging the Andertons and TIMOTHY SHANE PEAVLER, 37, of Lone Oak, Texas, with federal crimes.
James Anderton was sentenced to 30 months in federal prison for the ITSP charge and was ordered to pay restitution in the amount of $180,952.45. Jimmie Anderton was sentenced to 27 months in federal prison for the ITSP charge and was ordered to be jointly responsible for $180,952.45 in restitution. Peavler pleaded guilty on July 27, 2009, to conspiracy to commit interstate transportation of stolen property and was sentenced to six months in federal prison and ordered to pay $42,403.42 in restitution. In addition, James Anderton and Jimmie Anderton were charged with violations of the Lacey Act involving the illegal transportation of deer across state lines. Each was sentenced to 12 months' confinement on the Lacey Act charges to be served concurrently with their ITSP convictions.
This case was investigated by the U.S. Fish and Wildlife Service, Texas Parks and Wildlife, Texas Department of Public Safety, and the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Randall Blake.
San Angelo Man Pleads Guilty to Child Pornography Charge
Faces 20 Years in Federal Prison
February 6, 2010 - LUBBOCK, TX—William Ray Nobles, 32, of San Angelo, Texas, pleaded guilty today before U.S. District Judge Sam R. Cummings to one count of receipt of child pornography, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Nobles has been in federal custody since his arrest in mid-October following the execution of a federal search warrant by FBI agents at his residence.
Nobles, who was charged in November 2009 in a superseding indictment with 10 counts of child pornography, child enticement, and child obscenity felony offenses, admitted in plea documents that he used various computers that he owned to download various forms of pornography, including child pornography, from the Internet.
According to those plea documents, Nobles and the government agree that a sentence of 240 months (20 years) is appropriate in this case. Nobles and the government also stipulate in those documents that Nobles has a prior conviction in Texas relating to sexual abuse or abusive sexual conduct involving a minor. The Court may either accept or reject the agreed-upon sentence.
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 United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being investigated by the FBI, the San Angelo, Texas Police Department, the Collin County, Texas, Sheriff's Office, and the St. Charles County, Missouri, Sheriff's Office.
Assistant U.S. Attorney Steven M. Sucsy of the Lubbock, Texas U.S. Attorney’s Office, is in charge of the prosecution.
February 6, 2010 - LUBBOCK, TX—William Ray Nobles, 32, of San Angelo, Texas, pleaded guilty today before U.S. District Judge Sam R. Cummings to one count of receipt of child pornography, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Nobles has been in federal custody since his arrest in mid-October following the execution of a federal search warrant by FBI agents at his residence.
Nobles, who was charged in November 2009 in a superseding indictment with 10 counts of child pornography, child enticement, and child obscenity felony offenses, admitted in plea documents that he used various computers that he owned to download various forms of pornography, including child pornography, from the Internet.
According to those plea documents, Nobles and the government agree that a sentence of 240 months (20 years) is appropriate in this case. Nobles and the government also stipulate in those documents that Nobles has a prior conviction in Texas relating to sexual abuse or abusive sexual conduct involving a minor. The Court may either accept or reject the agreed-upon sentence.
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 United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being investigated by the FBI, the San Angelo, Texas Police Department, the Collin County, Texas, Sheriff's Office, and the St. Charles County, Missouri, Sheriff's Office.
Assistant U.S. Attorney Steven M. Sucsy of the Lubbock, Texas U.S. Attorney’s Office, is in charge of the prosecution.
Hoover, Ala. Explosives Detection Canine Helps Miami Prepare for Super Bowl XLIV
February 6, 2010 - MIAMI, Fla. — Not everyone participating in this year’s Super Bowl is a football player. The Bureau of Alcohol, Tobacco Firearms and Explosives (ATF) have fielded their best players to help prepare for a safe and secure Super Bowl XLIV. These pros include ATF K-9 explosives detection teams that have been deployed to Miami from around the country. The K-9 teams are working side-by-side with other federal, state and local law-enforcement officers to keep the football teams and fans safe throughout this event.
“The K-9 teams that are here in Miami for the Super Bowl are the best of the best,” said Hugo Barrera, Special Agent in Charge of the ATF Miami Field Division. “Like the football teams that will be playing in the Super Bowl, these handlers and their K-9 partners have been training and preparing all year for this event,” Barrera further stated. “We are proud to say that the only thing the fans have to worry about is whether their team wins or loses.”
One of the K-9 teams working in Miami is Hoover Police Officer / Canine Handler Lee Love and his black Labrador retriever, “Hans.” Officer Love and ATF K-9 Hans have been partners for three years and are detailed to Miami from the Hoover Police Department, Hoover Ala. They routinely work together in criminal investigations and at high profile security events where their expertise is needed detecting the presence of explosives, firearms and ammunition. They were called to assist at this year’s Super Bowl to help locate any type of explosive, which may be in close proximity to the Sun Life Stadium or any other venues relating to the big game.
ATF has used its explosives detecting canines at other special events including the Republican and Democratic National Conventions, the Presidential Inauguration, the G-8, the World Series, NASCAR, the 2002 Salt Lake City Olympics and of course, the Super Bowls.
ATF’s program, which began in 1986, uses only Labrador retrievers. The dogs are supplied by the Guiding Eyes for the Blind, the Guide Dog Foundation, and Canine Companions for Independence. These specialty canines attend a 10-week training program with their handlers that are conducted at the ATF Canine Training Center in Front Royal, Va. Upon completion of this course, the canines are trained to detect a variety of explosive compounds and materials that could be used in an explosive device. The canines can also detect firearms and ammunition and are used in the more traditional protective search and sweep operations. Once the canine and the handler complete the ATF basic training course, they begin their field work and continue to train on a daily basis.
ATF National Response Team Activated to Hoover, Alabama
Hotel Fire Results in Four Fatalities
February 5, 2010 - Hoover, Ala. — The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) National Response Team, along with ATF special agents from the Nashville Field Division, have entered the investigation of a hotel fire that occurred Saturday, January 16, 2010, at 1535 Montgomery Highway, in Hoover. The NRT responded at the request of Hoover authorities, and the Nashville Field Division has established a command post in the area. Agents at the command post will track leads and run the investigation through the use of computerized case management software.
Early reports indicate that a large portion of the hotel was destroyed by the fire, which was reported to authorities at around 8:15 p.m. Saturday. Fire departments and other emergency management personnel from the surrounding area assisted in efforts to extinguish the fire, which resulted in the deaths of two Alabama and two Mississippi residents.
The NRT brings its definitive expertise and an array of state-of-the-art equipment to the investigation of major fire and explosives incidents since 1978. The team can respond within 24 hours to provide resources and expertise in onsite fire investigations.
The responding NRT component normally has 18 members, including veteran special agents who have post-blast and fire origin-and-cause expertise; forensic chemists; explosives enforcement officers; fire protection engineers; accelerant detection canines; explosives detection canines; and intelligence, computer forensic and audit support. A fleet of fully equipped response vehicles strategically located throughout the United States provides logistical support.
ATF’s partnership with federal, state and local officers is vital to the most effective processing efforts at an explosives or fire scene. The NRT capitalizes on that by working alongside its partners in reconstructing the scene, identifying the seat of the blast or the origin of the fire, conducting interviews and sifting through debris to obtain evidence related to the explosion or fire.
In addition to investigating hundreds of large fire and explosives scenes, the NRT trucks were deployed for the 2001 terrorist attack on the Pentagon; the Olympics and other major sporting events in the United States; presidential inaugurations and the national political conventions; and major international conferences.
This is the 689th NRT activation since its inception, and the seventh activation of FY 2010. Other agencies involved in the investigation are the Hoover Fire and Police Departments and the Alabama State Fire Marshal’s Office.
February 5, 2010 - Hoover, Ala. — The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) National Response Team, along with ATF special agents from the Nashville Field Division, have entered the investigation of a hotel fire that occurred Saturday, January 16, 2010, at 1535 Montgomery Highway, in Hoover. The NRT responded at the request of Hoover authorities, and the Nashville Field Division has established a command post in the area. Agents at the command post will track leads and run the investigation through the use of computerized case management software.
Early reports indicate that a large portion of the hotel was destroyed by the fire, which was reported to authorities at around 8:15 p.m. Saturday. Fire departments and other emergency management personnel from the surrounding area assisted in efforts to extinguish the fire, which resulted in the deaths of two Alabama and two Mississippi residents.
The NRT brings its definitive expertise and an array of state-of-the-art equipment to the investigation of major fire and explosives incidents since 1978. The team can respond within 24 hours to provide resources and expertise in onsite fire investigations.
The responding NRT component normally has 18 members, including veteran special agents who have post-blast and fire origin-and-cause expertise; forensic chemists; explosives enforcement officers; fire protection engineers; accelerant detection canines; explosives detection canines; and intelligence, computer forensic and audit support. A fleet of fully equipped response vehicles strategically located throughout the United States provides logistical support.
ATF’s partnership with federal, state and local officers is vital to the most effective processing efforts at an explosives or fire scene. The NRT capitalizes on that by working alongside its partners in reconstructing the scene, identifying the seat of the blast or the origin of the fire, conducting interviews and sifting through debris to obtain evidence related to the explosion or fire.
In addition to investigating hundreds of large fire and explosives scenes, the NRT trucks were deployed for the 2001 terrorist attack on the Pentagon; the Olympics and other major sporting events in the United States; presidential inaugurations and the national political conventions; and major international conferences.
This is the 689th NRT activation since its inception, and the seventh activation of FY 2010. Other agencies involved in the investigation are the Hoover Fire and Police Departments and the Alabama State Fire Marshal’s Office.
Friday, February 05, 2010
Justice Department to Monitor Election in Louisiana
February 5, 2010 - WASHINGTON – The Justice Department today announced that it will monitor the Feb.6, 2010, municipal primary election in the city of New Orleans to ensure compliance with the anti-discrimination requirements of the Voting Rights Act of 1965. The Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group. Attorneys from the department’s Civil Rights Division will coordinate the federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from the Office of Personnel Management, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Civil Rights Division at 1-800-253-3931.
Visit http://www.justice.gov/crt/voting/index.htm for more information about the Voting Rights Act and other federal voting laws.
Red Lake Man Charged with Murder
February 5, 2010 - A 19-year-old Red Lake man was federally charged today in connection with the recent murder of another resident of the Red Lake Indian Reservation. In a criminal complaint filed with the U.S. District Court, Ryan Roy Cloud was charged with one count of murder in the second degree. The complaint alleges that with malice, Cloud killed a 27-year-old Red Lake man on February 1, 2010. Cloud was arrested earlier today and immediately made his initial appearance before Magistrate Judge M.K. Klein in Bemidji. He remains in custody.
According to a Federal Bureau of Investigation affidavit filed in this case, Red Lake tribal police received a call at 9:20 p.m. on February 1 from the Indian Health Service Hospital. The police were told the victim of a stabbing had just arrived for care. That victim was pronounced dead at 9:42 p.m.
Shortly thereafter, police learned the victim had sustained his injuries at a Red Lake residence, so they immediately visited the scene. Outside the home, they spotted a pool of blood with a knife lying next to it. They also saw blood droplets leading from the blood pool to the entrance of the home. Inside the residence, the police found and arrested several individuals, including Cloud. Later police learned Cloud and the victim had been wrestling, and Cloud had stabbed the victim several times.
If convicted, Cloud faces a potential maximum penalty of life in prison. All sentences are determined by a federal district court judge.
The federal government has primary law enforcement jurisdiction over the Red Lake Indian Reservation. Thus, this case was investigated by the FBI in concert with the Red Lake Tribal Police Department. The case is being prosecuted by Assistant United States Attorney Clifford B. Wardlaw.
According to a Federal Bureau of Investigation affidavit filed in this case, Red Lake tribal police received a call at 9:20 p.m. on February 1 from the Indian Health Service Hospital. The police were told the victim of a stabbing had just arrived for care. That victim was pronounced dead at 9:42 p.m.
Shortly thereafter, police learned the victim had sustained his injuries at a Red Lake residence, so they immediately visited the scene. Outside the home, they spotted a pool of blood with a knife lying next to it. They also saw blood droplets leading from the blood pool to the entrance of the home. Inside the residence, the police found and arrested several individuals, including Cloud. Later police learned Cloud and the victim had been wrestling, and Cloud had stabbed the victim several times.
If convicted, Cloud faces a potential maximum penalty of life in prison. All sentences are determined by a federal district court judge.
The federal government has primary law enforcement jurisdiction over the Red Lake Indian Reservation. Thus, this case was investigated by the FBI in concert with the Red Lake Tribal Police Department. The case is being prosecuted by Assistant United States Attorney Clifford B. Wardlaw.
Oakdale Woman Pleads Guilty to Stealing $41,445 from School District
February 5, 2010 - A 35-year-old Oakdale woman pleaded guilty today in federal court to stealing more than $41,000 from her employer, the North St. Paul-Maplewood-Oakdale Public School District (District 622). Appearing before United States District Court Judge Ann D. Montgomery in Minneapolis, Tina Marie Berlin specifically pled guilty to one count of mail fraud in connection to her crime. She was charged on December 7, 2009.
In her plea agreement, Berlin admitted fraudulently obtaining a total of $41,445 from the Gladstone Community Center and its clients, including District 622, between February 2000 and November 2006. The school district offers its senior program, early childhood family education program, early childhood special program, and other programs through the Center. Berlin also admitted obtaining $68,820 under false pretenses from an individual identified in court documents as “BL.” That money was transferred over time from accounts belonging to the Gladstone Community Center and “BL” to accounts under the name and control of Berlin. On July 8, 2004, Berlin received a bank statement highlighting those transfers.
For her crime, Berlin faces a potential maximum penalty of 20 years in prison. Judge Montgomery will determine her sentence at a future date.
This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Ann M. Anaya.
In her plea agreement, Berlin admitted fraudulently obtaining a total of $41,445 from the Gladstone Community Center and its clients, including District 622, between February 2000 and November 2006. The school district offers its senior program, early childhood family education program, early childhood special program, and other programs through the Center. Berlin also admitted obtaining $68,820 under false pretenses from an individual identified in court documents as “BL.” That money was transferred over time from accounts belonging to the Gladstone Community Center and “BL” to accounts under the name and control of Berlin. On July 8, 2004, Berlin received a bank statement highlighting those transfers.
For her crime, Berlin faces a potential maximum penalty of 20 years in prison. Judge Montgomery will determine her sentence at a future date.
This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Ann M. Anaya.
Kimberly Jean Palmer Pleads Guilty in U.S. Federal Court
February 5, 2010 - The United States Attorney’s Office announced that during a federal court session in Billings on February 4, 2010, before U.S. Magistrate Judge Jeremiah C. Lynch, KIMBERLY JEAN PALMER, a 50-year-old resident of Gresham, Oregon, formerly of Helena, pled guilty to wire fraud and bank fraud. Sentencing is set for May 6, 2010. She is currently released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorney Carl E. Rostad, the government stated it would have proved at trial the following:
PALMER, then known as Kimberly Deford, was employed as the Office Manager at Valley Metal Buildings in Helena from January 2006 through February 2009. During PALMER’s tenure at Valley Metal Buildings, she was responsible for bookkeeping, purchasing, inventory, and handling all accounts payable, accounts receivable, and payroll.
On February 7, 2009, the daughter of the owner of Valley Metal Buildings identified ripped up credit card receipts in one of the office’s waste baskets. Also found in the garbage were a number of ripped check stubs and credit card statements. Some of the credit card statements had been cut and pasted together to other statements to cover up what appeared to be personal related charges. The Valley Metal Buildings owner subsequently reviewed some of the credit card statements and noted numerous unauthorized charges on them.
On February 9, 2009, the owner confronted PALMER, at which time she admitted to stealing around $50,000 from Valley Metal Buildings. During the conversation, PALMER told the owner that “this is going to ruin my life.”
In interviews with law enforcement, PALMER admitted to using several business credit cards to make personal charges. PALMER used a Capitol One card (Valley Metal Buildings credit card in PALMER’s name); an Edward Jones card (Valley Metal Buildings credit card in PALMER’s name); a Capital One card (Valley Metal Buildings credit card in prior employee’s name); a Lowe’s card (Valley Metal Buildings credit card); an HSBC card (PALMER’s personal credit card – used Valley Metal Buildings monies to pay for charges); and a Capital One card (PALMER’s personal credit card – used Valley Metal Buildings monies to pay for charges).
PALMER admitted using the embezzled funds to pay for her granddaughter’s day care expenses, power bill for her son, QVC charges, Home Shopping Network charges, Bresnan bills, Amazon charges, and miscellaneous online pet supplies and other online shopping outlets
With regard to the Lowe’s credit card, PALMER admitted that during 2008, she used the credit card to purchase flooring for her residence. PALMER advised that she paid the above credit cards online via the internet by transferring money from Valley Metal Building’s bank account at Valley Bank.
In a February 2009 interview with the Federal Bureau of Investigation and the Helena Police Department, PALMER initially advised that she was not authorized to use the Valley Metal Buildings credit cards to make personal purchases but later maintained that the owner of Valley Metal Buildings told her she could make personal purchases as long as she paid the account using her own money. PALMER admitted that she rarely paid for the personal items she purchased and utilized a couple of schemes in an attempt to hide her personal charges from the accountant. PALMER explained that for the Valley Metal Buildings Edward Jones credit card, she used a cut and paste method to cover the personal charges on the monthly statements. PALMER explained that she would cut out legitimate Valley Metal Buildings business expenses and then paste them over the personal charges that were reflected on the monthly statements. With regard to the Valley Metal Buildings Capital One credit cards, PALMER advised that she would copy the online monthly statements into a Word document and then replace her personal charges with what would appear to be legitimate Valley Metal Buildings charges.
PALMER advised that Valley Metal Buildings banked at Valley Bank and that as part of the bill paying process, the owner would sign his name to blank checks so that PALMER could later pay Valley Metal Buildings bills. PALMER admitted that she made 5 to 10 checks payable to herself which she deposited into one of her accounts at Wells Fargo and hid their true nature in Valley Metal Buildings’s accounting records. PALMER accomplished this by mis-coding the expense classification and inputting a different payee. PALMER recalled inputting one of the checks as payable to R&R Diesel and coding it as hauling. PALMER advised that she engaged in the above scheme to hide her thefts from the accountant. Finally, PALMER also admitted to diverting Valley Metal Buildings funds to pay personal expenses.
A private audit of the books and records of Valley Metal Buildings revealed that for the period January 2007 thru April 2009, the audit identified numerous schemes and devices used by PALMER that resulted in actual and attempted losses to Valley Metal Buildings totaling over $157,000. There was a cursory review of 2006 which also showed fraudulent transactions but that was not within the actual audit period. For example, PALMER utilized business credit card accounts to make personal purchases. PALMER was identified as an authorized user on the accounts. PALMER used the accounts to make personal purchases and then hid the true nature of the charges with entries that had the appearance of legitimate Valley Metal Buildings business activity.
PALMER also paid for purchases on her own HSBC and Capital One credit cards via online payments using the transfer of funds from Valley Metal Buildings’ bank account to HSBC and/or Capital One.
In another aspect of the larger embezzlement scheme, PALMER made numerous pre-signed checks payable to herself and then hid the true payee of the check by recording a randomly chosen vendor’s name in Valley Metal Buildings’s books and records.
PALMER faces possible penalties of 30 years in prison, a $250,000 fine and 5 years supervised release.
The investigation was a cooperative effort between the Federal Bureau of Investigation and the Helena Police Department.
In an Offer of Proof filed by Assistant U.S. Attorney Carl E. Rostad, the government stated it would have proved at trial the following:
PALMER, then known as Kimberly Deford, was employed as the Office Manager at Valley Metal Buildings in Helena from January 2006 through February 2009. During PALMER’s tenure at Valley Metal Buildings, she was responsible for bookkeeping, purchasing, inventory, and handling all accounts payable, accounts receivable, and payroll.
On February 7, 2009, the daughter of the owner of Valley Metal Buildings identified ripped up credit card receipts in one of the office’s waste baskets. Also found in the garbage were a number of ripped check stubs and credit card statements. Some of the credit card statements had been cut and pasted together to other statements to cover up what appeared to be personal related charges. The Valley Metal Buildings owner subsequently reviewed some of the credit card statements and noted numerous unauthorized charges on them.
On February 9, 2009, the owner confronted PALMER, at which time she admitted to stealing around $50,000 from Valley Metal Buildings. During the conversation, PALMER told the owner that “this is going to ruin my life.”
In interviews with law enforcement, PALMER admitted to using several business credit cards to make personal charges. PALMER used a Capitol One card (Valley Metal Buildings credit card in PALMER’s name); an Edward Jones card (Valley Metal Buildings credit card in PALMER’s name); a Capital One card (Valley Metal Buildings credit card in prior employee’s name); a Lowe’s card (Valley Metal Buildings credit card); an HSBC card (PALMER’s personal credit card – used Valley Metal Buildings monies to pay for charges); and a Capital One card (PALMER’s personal credit card – used Valley Metal Buildings monies to pay for charges).
PALMER admitted using the embezzled funds to pay for her granddaughter’s day care expenses, power bill for her son, QVC charges, Home Shopping Network charges, Bresnan bills, Amazon charges, and miscellaneous online pet supplies and other online shopping outlets
With regard to the Lowe’s credit card, PALMER admitted that during 2008, she used the credit card to purchase flooring for her residence. PALMER advised that she paid the above credit cards online via the internet by transferring money from Valley Metal Building’s bank account at Valley Bank.
In a February 2009 interview with the Federal Bureau of Investigation and the Helena Police Department, PALMER initially advised that she was not authorized to use the Valley Metal Buildings credit cards to make personal purchases but later maintained that the owner of Valley Metal Buildings told her she could make personal purchases as long as she paid the account using her own money. PALMER admitted that she rarely paid for the personal items she purchased and utilized a couple of schemes in an attempt to hide her personal charges from the accountant. PALMER explained that for the Valley Metal Buildings Edward Jones credit card, she used a cut and paste method to cover the personal charges on the monthly statements. PALMER explained that she would cut out legitimate Valley Metal Buildings business expenses and then paste them over the personal charges that were reflected on the monthly statements. With regard to the Valley Metal Buildings Capital One credit cards, PALMER advised that she would copy the online monthly statements into a Word document and then replace her personal charges with what would appear to be legitimate Valley Metal Buildings charges.
PALMER advised that Valley Metal Buildings banked at Valley Bank and that as part of the bill paying process, the owner would sign his name to blank checks so that PALMER could later pay Valley Metal Buildings bills. PALMER admitted that she made 5 to 10 checks payable to herself which she deposited into one of her accounts at Wells Fargo and hid their true nature in Valley Metal Buildings’s accounting records. PALMER accomplished this by mis-coding the expense classification and inputting a different payee. PALMER recalled inputting one of the checks as payable to R&R Diesel and coding it as hauling. PALMER advised that she engaged in the above scheme to hide her thefts from the accountant. Finally, PALMER also admitted to diverting Valley Metal Buildings funds to pay personal expenses.
A private audit of the books and records of Valley Metal Buildings revealed that for the period January 2007 thru April 2009, the audit identified numerous schemes and devices used by PALMER that resulted in actual and attempted losses to Valley Metal Buildings totaling over $157,000. There was a cursory review of 2006 which also showed fraudulent transactions but that was not within the actual audit period. For example, PALMER utilized business credit card accounts to make personal purchases. PALMER was identified as an authorized user on the accounts. PALMER used the accounts to make personal purchases and then hid the true nature of the charges with entries that had the appearance of legitimate Valley Metal Buildings business activity.
PALMER also paid for purchases on her own HSBC and Capital One credit cards via online payments using the transfer of funds from Valley Metal Buildings’ bank account to HSBC and/or Capital One.
In another aspect of the larger embezzlement scheme, PALMER made numerous pre-signed checks payable to herself and then hid the true payee of the check by recording a randomly chosen vendor’s name in Valley Metal Buildings’s books and records.
PALMER faces possible penalties of 30 years in prison, a $250,000 fine and 5 years supervised release.
The investigation was a cooperative effort between the Federal Bureau of Investigation and the Helena Police Department.
Robert James Lawton Sentenced in U.S. District Court
February 5, 2010 - The United States Attorney’s Office announced that during a federal court session in Missoula, on February 4, 2010, before U.S. District Judge Donald W. Molloy, ROBERT JAMES LAWTON, a 53-year-old resident of Bozeman, appeared for sentencing. LAWTON was sentenced to a term of:
• Prison: 72 months
• Special Assessment: $200
• Forfeiture: computer equipment
• Supervised Release: 15 years
LAWTON was sentenced in connection with his guilty plea to receipt and possession of child pornography.
In an Offer of Proof filed by Assistant U.S. Attorney Marcia K. Hurd, the government stated it would have proved at trial the following:
Agents with U.S. Immigration and Customs Enforcement were investigating allegations of child pornography access by users utilizing the peer-to-peer file sharing network. One investigation involved a person in Bozeman who had child pornography available to share via a file sharing program beginning in 2008. The computer IP address was tracked to LAWTON’S residence in Bozeman.
On January 27, 2009, a search warrant was served at the residence. When questioned, LAWTON admitted that he used the peer-to-peer file sharing program Limewire to receive and possess child pornography videos and images. Agents seized various computer equipment and a subsequent forensic examination revealed images and movies of child pornography that LAWTON had received via the Internet from approximately 2005 through 2009 and still possessed on January 27, 2009, when the items were seized. LAWTON possessed images and movies of children clearly prepubescent and children engaged in sadistic or masochistic abuse or other depictions of violence.
Because there is no parole in the federal system, the “truth in sentencing” guidelines mandate that LAWTON will likely serve all of the time imposed by the court. In the federal system, LAWTON does have the opportunity to earn a sentence reduction for “good behavior.” However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Federal Bureau of Investigation, the Helena Police Department, U.S. Immigration and Customs Enforcement and the Montana Division of Criminal Investigation.
• Prison: 72 months
• Special Assessment: $200
• Forfeiture: computer equipment
• Supervised Release: 15 years
LAWTON was sentenced in connection with his guilty plea to receipt and possession of child pornography.
In an Offer of Proof filed by Assistant U.S. Attorney Marcia K. Hurd, the government stated it would have proved at trial the following:
Agents with U.S. Immigration and Customs Enforcement were investigating allegations of child pornography access by users utilizing the peer-to-peer file sharing network. One investigation involved a person in Bozeman who had child pornography available to share via a file sharing program beginning in 2008. The computer IP address was tracked to LAWTON’S residence in Bozeman.
On January 27, 2009, a search warrant was served at the residence. When questioned, LAWTON admitted that he used the peer-to-peer file sharing program Limewire to receive and possess child pornography videos and images. Agents seized various computer equipment and a subsequent forensic examination revealed images and movies of child pornography that LAWTON had received via the Internet from approximately 2005 through 2009 and still possessed on January 27, 2009, when the items were seized. LAWTON possessed images and movies of children clearly prepubescent and children engaged in sadistic or masochistic abuse or other depictions of violence.
Because there is no parole in the federal system, the “truth in sentencing” guidelines mandate that LAWTON will likely serve all of the time imposed by the court. In the federal system, LAWTON does have the opportunity to earn a sentence reduction for “good behavior.” However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Federal Bureau of Investigation, the Helena Police Department, U.S. Immigration and Customs Enforcement and the Montana Division of Criminal Investigation.
Federal Jury Convicts Former El Paso Criminal District Court Judge Manuel Barraza
February 5, 2010 - United States Attorney John E. Murphy and David Cuthbertson, Special Agent in Charge of the Federal Bureau of Investigation–El Paso Division, announced that a federal jury this morning found former El Paso Criminal District Court Judge Manuel Joseph Barraza, aka Manny Barraza, guilty of charges related to a bribery scheme.
The jury convicted Barraza of two counts of wire fraud and the deprivation of honest services and one count of making false statements. The jury acquitted Barraza of one count of mail fraud.
Evidence presented during trial revealed that beginning on or about December 2008 and continuing and including February 26, 2009, Barraza solicited, agreed to accept, and accepted bribes in the form of cash money. He also solicited sex and agreed to accept a bribe of engaging in sexual activity with women. These acts were all committed in exchange for his influence and exercise of discretion in his official capacity as an elected judge. In carrying out his bribery scheme, Judge Barraza promised to intervene in a felony criminal case filed by the State of Texas pending in state district court in order to influence the outcome of the case.
Barraza, who remains on bond pending sentencing, faces up to 20 years in prison and a $250,000 fine on each of the two fraud counts, and up to three years in prison and a $250,000 fine on the false statements charge. Sentencing is scheduled for 2:00 p.m. on April 28, 2010, before United States District Judge Frank Montalvo. At sentencing, Judge Montalvo is expected to enter a judgement of criminal forfeiture against Barraza, who today agreed to forfeit to the Government the bribe money he received—$5,100.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted for the government by Assistant United States Attorney Laura Franco Gregory and Antonio Franco.
The jury convicted Barraza of two counts of wire fraud and the deprivation of honest services and one count of making false statements. The jury acquitted Barraza of one count of mail fraud.
Evidence presented during trial revealed that beginning on or about December 2008 and continuing and including February 26, 2009, Barraza solicited, agreed to accept, and accepted bribes in the form of cash money. He also solicited sex and agreed to accept a bribe of engaging in sexual activity with women. These acts were all committed in exchange for his influence and exercise of discretion in his official capacity as an elected judge. In carrying out his bribery scheme, Judge Barraza promised to intervene in a felony criminal case filed by the State of Texas pending in state district court in order to influence the outcome of the case.
Barraza, who remains on bond pending sentencing, faces up to 20 years in prison and a $250,000 fine on each of the two fraud counts, and up to three years in prison and a $250,000 fine on the false statements charge. Sentencing is scheduled for 2:00 p.m. on April 28, 2010, before United States District Judge Frank Montalvo. At sentencing, Judge Montalvo is expected to enter a judgement of criminal forfeiture against Barraza, who today agreed to forfeit to the Government the bribe money he received—$5,100.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted for the government by Assistant United States Attorney Laura Franco Gregory and Antonio Franco.
Greater Omaha Safe Streets Task Force Arrest
February 5, 2010 - Weysan Dun, Special Agent in Charge, announced that early this morning, the FBI led Greater Omaha Safe Streets Task Force, served a search warrant at a 3932 L Street, in connection with an ongoing gang investigation. The task force is comprised of the following agencies: FBI, Omaha Police Department, Nebraska State Patrol, Bellevue Police Department and ICE.
One subject, Jesse Crawford was arrested on state charges as a Felon in Possession of a firearm. It is anticipated that he will be indicted federally on a later date.
An indictment is only an accusation of a crime and a defendant should be presumed innocent unless and until proven guilty.
One subject, Jesse Crawford was arrested on state charges as a Felon in Possession of a firearm. It is anticipated that he will be indicted federally on a later date.
An indictment is only an accusation of a crime and a defendant should be presumed innocent unless and until proven guilty.
SK Foods LP Former Owner and CEO Arrested at JFK Airport
February 5, 2010 - SACRAMENTO, CA—United States Attorney Benjamin B. Wagner announced today the arrest of the former owner and chief executive officer for the Monterey-based SK Foods LP today at John F. Kennedy Airport in New York City. FREDERICK SCOTT SALYER, 54, of Pebble Beach, Calif., is charged with 20 counts of mail and wire fraud in connection with his direction of various schemes to defraud SK Foods’ corporate customers through bribery and food misbranding and adulteration. SALYER will make his initial appearance in court tomorrow afternoon before a U.S. Magistrate Judge in the Eastern District of New York.
This case is the product of a joint and extensive investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the United States Department of Justice’s Antitrust Division.
According to Assistant United States Attorney Sean C. Flynn, who is prosecuting the case together with Barbara Nelson and Richard Cohen of the San Francisco Field Office of the Antitrust Division, a 20-count criminal complaint was signed by United States Magistrate Judge Dale A. Drozd and filed on January 5, 2010. The complaint was unsealed today. Between 1990 and 2008, SALYER was the owner and served as chief executive officer of SK Foods LP, a grower, processor, and distributor of tomato products and other food products for sale to food product manufacturers, food service distributors and marketers, and retail outlets nationwide.
The complaint alleges that over a period of at least 10 years, SALYER orchestrated a number of wide-ranging schemes whereby SK Foods regularly paid bribes to the purchasing managers of many of its customers such as Kraft Foods Inc., Frito-Lay Inc., B&G Foods Inc., and Safeway Inc. to ensure that those customers purchased processed tomato products from SK Foods rather than from its competitors, and that they purchased the product from SK Foods at elevated, above-market prices. In other instances, SK Foods’ bribes to purchasing managers were made in order to wrongfully obtain its competitors’ proprietary bid information.
As SK Foods’ leader and primary decision maker, SALYER is alleged to have directed a widespread practice of selling and shipping processed tomato product to customers that did not meet contractual specifications, and was adulterated because it contained mold levels in excess of the thresholds established by the United States Food and Drug Administration and was thus unsaleable domestically. At SALYER’s direction, various individuals at SK Foods falsified both internal and customer-bound documentation to make the product appear as if it were legal and contractually compliant when, in fact, it was not.
FBI Special Agents arrested SALYER at John F. Kennedy International Airport in New York City this afternoon. According to the complaint, SALYER left the United States in October 2009, following the guilty pleas of several employees of SK Foods and some of its customers, intending to permanently relocate abroad. SALYER had instructed a subordinate to sell many of SALYER’s belongings and had transferred millions of dollars from bank accounts formerly associated with SK Foods entities to bank accounts in the Caribbean and Liechtenstein. The complaint alleges that SALYER spoke with a former SK Foods employee about obtaining permanent residence status in Uruguay, Paraguay, Andorra, and France because he believed he would not be extradited from these countries.
U.S. Attorney Wagner said, “Mr. Salyer apparently intended to become a fugitive from justice. We are pleased that he will now have his day in court, and we commend the FBI for its excellent work in apprehending him.”
The current charges against SALYER are the latest in the government’s ongoing investigation in the domestic tomato processing industry. Between January 2008 and January 2009, four high-ranking corporate purchasing managers pleaded guilty to receiving bribes from SK Foods while working at some of the nation’s largest food companies:
MICHAEL CHAVEZ, 52, of Fremont, Calif., former purchasing manager at Safeway; ROBERT L. WATSON, 59, of White Plains, N.Y., former purchasing managers at Kraft Foods; JAMES RICHARD WAHL, 58, of Dallas, Texas, former purchasing managers at Frito-Lay; ROBERT TURNER, 59, of Randolph, N.J., former purchasing managers at B&G Foods.
They all admitted to receiving illicit payments from former SK Foods sales broker and director RANDALL LEE RAHAL, 61, of Ramsey, N.J. RAHAL pleaded guilty in December 2008 to participating in racketeering, bid rigging, and contract allocation conspiracies, among other charges. He has admitted that the hundreds of thousands of dollars in bribe payments he made to customer purchasing managers were ordered by SALYER. WATSON was sentenced on August 11, 2009 to two years and three months in prison to be followed by two years of supervised release. He was also ordered to pay $1,858,000 in restitution to his former employer, Kraft. The other defendants are awaiting sentencing.
Furthermore, on November 17, 2009, former SK Foods Vice President ALAN SCOTT HUEY pleaded guilty to participating in a conspiracy involving honest services fraud and causing the introduction and delivery for introduction of adulterated and misbranded food into interstate commerce with the intent to defraud and mislead. In his plea agreement, HUEY admitted that at the instruction and direction of SALYER, he routinely falsified, and directed other SK Foods employees to falsify, the various grading factors and data contained on Certificates of Analysis and other quality control documents that accompanied customer-bound shipments of tomato product that was produced, purchased and sold by SK Foods. HUEY admitted that the quality control documents were falsified so that they reflected mold count levels in SK Foods tomato product as being below the applicable U.S. Food and Drug Administration Food Defect Action Level in many instances when, in fact, those levels were significantly above the federal threshold. Huey also admitted that at SALYER’s direction, SK Foods intentionally falsified quality control documents so that they reflected natural tomato soluble solids levels that were higher than what the product actually contained. In other instances, they altered dates of production of the tomato product. At SALYER’s direction, SK Foods routinely shipped adulterated and misbranded tomato product to at least 55 different customers in 22 different states.
One SK Foods employee that was directed in this fashion was former Records and Business Analyst JENNIFER LOU DAHLMAN, 48, of Lemoore, Calif. DAHLMAN pleaded guilty on February 18, 2009 to causing the shipment of processed tomato products that were adulterated and unsaleable domestically due to their excessive mold content.
Former SK Foods Vice President JEFFREY SHERMAN BEASLEY pleaded guilty to participating in honest services and mislabeling conspiracies on August 25, 2009. RAHAL, HUEY, DAHLMAN, WAHL and BEASLEY are all cooperating in the government’s ongoing investigation.
In a related case, ANTHONY RAY MANUEL, 57, of Turlock, Calif., formerly an employee of Morning Star Packing Company and then of SK Foods, pleaded guilty on January 27, 2009 to embezzling approximately $975,000 from Morning Star and to filing a false tax return.
The maximum statutory penalty on the mail and wire fraud charges is twenty years in prison, and a criminal fine of $250,000. The actual sentence, however, will be determined at the discretion of the court after consideration of the Federal Sentencing Guidelines, which take into account a number of variables and any applicable statutory sentencing factors.
The charges in the complaint are only allegations and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is the product of a joint and extensive investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the United States Department of Justice’s Antitrust Division.
According to Assistant United States Attorney Sean C. Flynn, who is prosecuting the case together with Barbara Nelson and Richard Cohen of the San Francisco Field Office of the Antitrust Division, a 20-count criminal complaint was signed by United States Magistrate Judge Dale A. Drozd and filed on January 5, 2010. The complaint was unsealed today. Between 1990 and 2008, SALYER was the owner and served as chief executive officer of SK Foods LP, a grower, processor, and distributor of tomato products and other food products for sale to food product manufacturers, food service distributors and marketers, and retail outlets nationwide.
The complaint alleges that over a period of at least 10 years, SALYER orchestrated a number of wide-ranging schemes whereby SK Foods regularly paid bribes to the purchasing managers of many of its customers such as Kraft Foods Inc., Frito-Lay Inc., B&G Foods Inc., and Safeway Inc. to ensure that those customers purchased processed tomato products from SK Foods rather than from its competitors, and that they purchased the product from SK Foods at elevated, above-market prices. In other instances, SK Foods’ bribes to purchasing managers were made in order to wrongfully obtain its competitors’ proprietary bid information.
As SK Foods’ leader and primary decision maker, SALYER is alleged to have directed a widespread practice of selling and shipping processed tomato product to customers that did not meet contractual specifications, and was adulterated because it contained mold levels in excess of the thresholds established by the United States Food and Drug Administration and was thus unsaleable domestically. At SALYER’s direction, various individuals at SK Foods falsified both internal and customer-bound documentation to make the product appear as if it were legal and contractually compliant when, in fact, it was not.
FBI Special Agents arrested SALYER at John F. Kennedy International Airport in New York City this afternoon. According to the complaint, SALYER left the United States in October 2009, following the guilty pleas of several employees of SK Foods and some of its customers, intending to permanently relocate abroad. SALYER had instructed a subordinate to sell many of SALYER’s belongings and had transferred millions of dollars from bank accounts formerly associated with SK Foods entities to bank accounts in the Caribbean and Liechtenstein. The complaint alleges that SALYER spoke with a former SK Foods employee about obtaining permanent residence status in Uruguay, Paraguay, Andorra, and France because he believed he would not be extradited from these countries.
U.S. Attorney Wagner said, “Mr. Salyer apparently intended to become a fugitive from justice. We are pleased that he will now have his day in court, and we commend the FBI for its excellent work in apprehending him.”
The current charges against SALYER are the latest in the government’s ongoing investigation in the domestic tomato processing industry. Between January 2008 and January 2009, four high-ranking corporate purchasing managers pleaded guilty to receiving bribes from SK Foods while working at some of the nation’s largest food companies:
MICHAEL CHAVEZ, 52, of Fremont, Calif., former purchasing manager at Safeway; ROBERT L. WATSON, 59, of White Plains, N.Y., former purchasing managers at Kraft Foods; JAMES RICHARD WAHL, 58, of Dallas, Texas, former purchasing managers at Frito-Lay; ROBERT TURNER, 59, of Randolph, N.J., former purchasing managers at B&G Foods.
They all admitted to receiving illicit payments from former SK Foods sales broker and director RANDALL LEE RAHAL, 61, of Ramsey, N.J. RAHAL pleaded guilty in December 2008 to participating in racketeering, bid rigging, and contract allocation conspiracies, among other charges. He has admitted that the hundreds of thousands of dollars in bribe payments he made to customer purchasing managers were ordered by SALYER. WATSON was sentenced on August 11, 2009 to two years and three months in prison to be followed by two years of supervised release. He was also ordered to pay $1,858,000 in restitution to his former employer, Kraft. The other defendants are awaiting sentencing.
Furthermore, on November 17, 2009, former SK Foods Vice President ALAN SCOTT HUEY pleaded guilty to participating in a conspiracy involving honest services fraud and causing the introduction and delivery for introduction of adulterated and misbranded food into interstate commerce with the intent to defraud and mislead. In his plea agreement, HUEY admitted that at the instruction and direction of SALYER, he routinely falsified, and directed other SK Foods employees to falsify, the various grading factors and data contained on Certificates of Analysis and other quality control documents that accompanied customer-bound shipments of tomato product that was produced, purchased and sold by SK Foods. HUEY admitted that the quality control documents were falsified so that they reflected mold count levels in SK Foods tomato product as being below the applicable U.S. Food and Drug Administration Food Defect Action Level in many instances when, in fact, those levels were significantly above the federal threshold. Huey also admitted that at SALYER’s direction, SK Foods intentionally falsified quality control documents so that they reflected natural tomato soluble solids levels that were higher than what the product actually contained. In other instances, they altered dates of production of the tomato product. At SALYER’s direction, SK Foods routinely shipped adulterated and misbranded tomato product to at least 55 different customers in 22 different states.
One SK Foods employee that was directed in this fashion was former Records and Business Analyst JENNIFER LOU DAHLMAN, 48, of Lemoore, Calif. DAHLMAN pleaded guilty on February 18, 2009 to causing the shipment of processed tomato products that were adulterated and unsaleable domestically due to their excessive mold content.
Former SK Foods Vice President JEFFREY SHERMAN BEASLEY pleaded guilty to participating in honest services and mislabeling conspiracies on August 25, 2009. RAHAL, HUEY, DAHLMAN, WAHL and BEASLEY are all cooperating in the government’s ongoing investigation.
In a related case, ANTHONY RAY MANUEL, 57, of Turlock, Calif., formerly an employee of Morning Star Packing Company and then of SK Foods, pleaded guilty on January 27, 2009 to embezzling approximately $975,000 from Morning Star and to filing a false tax return.
The maximum statutory penalty on the mail and wire fraud charges is twenty years in prison, and a criminal fine of $250,000. The actual sentence, however, will be determined at the discretion of the court after consideration of the Federal Sentencing Guidelines, which take into account a number of variables and any applicable statutory sentencing factors.
The charges in the complaint are only allegations and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Inmate Accused of Fabricating Evidence of Murder Plot
February 5, 2010 - FRESNO, CA—United States Attorney Benjamin B. Wagner announced today that a federal grand jury returned a four-count indictment charging ROY ALONZO DICKINSON, 48, currently incarcerated in CI Taft Correctional Institution, with submitting false documents to the Federal Bureau of Investigation.
This case is the product of an investigation by the Federal Bureau of Investigation.
According to Assistant United States Attorney Kathleen A. Servatius, who is prosecuting the case, the indictment alleges that Dickinson created false documents to support his claim that another inmate at the correctional institution was plotting to murder two government attorneys, including an attorney employed the Securities and Exchange Commission as well as an Assistant
United States Attorney prosecuting criminal cases. The defendant then submitted these documents to the Federal Bureau of Investigation.
United States Attorney Wagner stated, “Allegations that someone is planning to murder government attorneys are necessarily taken extremely seriously. Creating false documents and providing those false documents to an investigative agency to support such a claim is a serious crime that we cannot and will not ignore.”
The maximum statutory penalty for each violation of submitting false documents to the FBI is five years in prison, a fine of $250,000, a $100 penalty assessment, to be followed by a three-year term of supervised release. The actual sentence, however, will be determined at the discretion of the court after consideration of the Federal Sentencing Guidelines, which take into account a number of variables and any applicable statutory sentencing factors.
The charges are only allegations and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is the product of an investigation by the Federal Bureau of Investigation.
According to Assistant United States Attorney Kathleen A. Servatius, who is prosecuting the case, the indictment alleges that Dickinson created false documents to support his claim that another inmate at the correctional institution was plotting to murder two government attorneys, including an attorney employed the Securities and Exchange Commission as well as an Assistant
United States Attorney prosecuting criminal cases. The defendant then submitted these documents to the Federal Bureau of Investigation.
United States Attorney Wagner stated, “Allegations that someone is planning to murder government attorneys are necessarily taken extremely seriously. Creating false documents and providing those false documents to an investigative agency to support such a claim is a serious crime that we cannot and will not ignore.”
The maximum statutory penalty for each violation of submitting false documents to the FBI is five years in prison, a fine of $250,000, a $100 penalty assessment, to be followed by a three-year term of supervised release. The actual sentence, however, will be determined at the discretion of the court after consideration of the Federal Sentencing Guidelines, which take into account a number of variables and any applicable statutory sentencing factors.
The charges are only allegations and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
A Team Approach, Part 1
The Sotheby’s auctioneer scanned the room as the bidding continued for a first-century Roman bronze sculpture of the goddess Aphrodite. When the gavel finally came down and the sale price was recorded at more than $530,000, members of our art crime team observing the action were reminded once again that when it comes to the world of art, the stakes can be very high.
With so much money changing hands, is it any wonder that thieves and scammers steal valuable works and pass off fakes as originals?
The ability to deal with such crimes is one of the reasons the art crime team—made up of 13 agents from around the country and three special prosecutors from the Department of Justice—was established in 2004. It’s also why the team, which celebrated its fifth anniversary last October, recently gathered for a week-long training seminar in the art capital of the world, New York City.
Since the team’s inception, more than 2,400 objects of cultural property valued at more than $142 million have been recovered. A number of art criminals have been sent to jail, and many of the recovered items have been returned or repatriated. Even so, said Bonnie Magness-Gardiner, who manages our Art Theft Program, “We are seeing an increase in these types of crimes.” Some estimates place the total losses due to art and cultural property crimes at $8 billion per year.
Considering an Art Purchase?
• Get a thorough provenance (history of ownership) on the work. Don’t rely on a simple certificate of authenticity.
• Carefully research the dealer. Check the Better Business Bureau for possible complaints. Find out if they sell only online or if they have a gallery.
• For works you already own, go back to the gallery and ask for provenance. You can also contact artists’ foundations that will do side-by-side comparisons with originals for a fee.
• Be cautious. You are most likely to let your guard down when you think you’ve found a treasure at a bargain price.
The training is an annual event that brings team members together to talk about their cases, to share investigative techniques, and to hear from experts in the field. Agents on the team must know how to investigate art crimes, but they also need to interact with art specialists, research a work’s provenance (history of ownership), and understand how to store and conserve seized works that may be worth millions of dollars.
A focus of this year’s training was on authentication—how to determine if a work is real or fake. Experts participating in panel discussions spoke of identifying forgeries using time-tested methods of scholarship and experience. One physicist discussed his use of cutting-edge technology to identify a work’s “image DNA.”
Consider the ramifications of a fake work being taken as an original: A fraudster bought a $100 unsigned painting, forged the signature of the artist Juan Gris, and sold it to a dealer for $65,000. The dealer then sold it to a collector for $135,000.
“The first buyer may know it’s a fake, but the second buyer doesn’t,” Gardiner said. “And then it’s in the marketplace.”
“Nobody wants to see stolen or forged artworks passing through the marketplace,” said Jane Levine, director of Sotheby’s worldwide compliance division. During a tour of the auction house, Levine told the team, “The work the FBI does investigating and prosecuting art crimes is necessary and important—and it’s good for the art business.”
The problem with fakes is significant. One long-time gallery owner told agents that about 30 percent of the works people bring him to sell are probably not authentic. (Some in the business illustrate the problem with a joke: Of the 4,000 paintings produced by the artist Jean-Baptiste Camille Corot, 7,000 are in the United States.)
Collectively, members of the team have decades of experience investigating art crimes. Next, we’ll meet some of its agents and learn about their cases.
Go to Part Two
http://criminal-justice-online.blogspot.com/2010/02/art-crime-team-approach-part-2.html
With so much money changing hands, is it any wonder that thieves and scammers steal valuable works and pass off fakes as originals?
The ability to deal with such crimes is one of the reasons the art crime team—made up of 13 agents from around the country and three special prosecutors from the Department of Justice—was established in 2004. It’s also why the team, which celebrated its fifth anniversary last October, recently gathered for a week-long training seminar in the art capital of the world, New York City.
Since the team’s inception, more than 2,400 objects of cultural property valued at more than $142 million have been recovered. A number of art criminals have been sent to jail, and many of the recovered items have been returned or repatriated. Even so, said Bonnie Magness-Gardiner, who manages our Art Theft Program, “We are seeing an increase in these types of crimes.” Some estimates place the total losses due to art and cultural property crimes at $8 billion per year.
Considering an Art Purchase?
• Get a thorough provenance (history of ownership) on the work. Don’t rely on a simple certificate of authenticity.
• Carefully research the dealer. Check the Better Business Bureau for possible complaints. Find out if they sell only online or if they have a gallery.
• For works you already own, go back to the gallery and ask for provenance. You can also contact artists’ foundations that will do side-by-side comparisons with originals for a fee.
• Be cautious. You are most likely to let your guard down when you think you’ve found a treasure at a bargain price.
The training is an annual event that brings team members together to talk about their cases, to share investigative techniques, and to hear from experts in the field. Agents on the team must know how to investigate art crimes, but they also need to interact with art specialists, research a work’s provenance (history of ownership), and understand how to store and conserve seized works that may be worth millions of dollars.
A focus of this year’s training was on authentication—how to determine if a work is real or fake. Experts participating in panel discussions spoke of identifying forgeries using time-tested methods of scholarship and experience. One physicist discussed his use of cutting-edge technology to identify a work’s “image DNA.”
Consider the ramifications of a fake work being taken as an original: A fraudster bought a $100 unsigned painting, forged the signature of the artist Juan Gris, and sold it to a dealer for $65,000. The dealer then sold it to a collector for $135,000.
“The first buyer may know it’s a fake, but the second buyer doesn’t,” Gardiner said. “And then it’s in the marketplace.”
“Nobody wants to see stolen or forged artworks passing through the marketplace,” said Jane Levine, director of Sotheby’s worldwide compliance division. During a tour of the auction house, Levine told the team, “The work the FBI does investigating and prosecuting art crimes is necessary and important—and it’s good for the art business.”
The problem with fakes is significant. One long-time gallery owner told agents that about 30 percent of the works people bring him to sell are probably not authentic. (Some in the business illustrate the problem with a joke: Of the 4,000 paintings produced by the artist Jean-Baptiste Camille Corot, 7,000 are in the United States.)
Collectively, members of the team have decades of experience investigating art crimes. Next, we’ll meet some of its agents and learn about their cases.
Go to Part Two
http://criminal-justice-online.blogspot.com/2010/02/art-crime-team-approach-part-2.html
President of First Fidelity Mortgage, Inc. Sentenced for Bank Fraud
Nichols Prepared Fraudulent Notes by Forging Signatures of Borrowers
February 5, 2010 - SHREVEPORT, LA—William Everett Nichols, 56, of Alexandria, La., President and sole shareholder of First Fidelity Mortgage, Inc., was sentenced to six years in federal prison and ordered to pay $3,903,071.00 in restitution for bank fraud, Acting United States Attorney William J. Flanagan announced today. Today’s sentence was imposed by U. S. District Court Judge Donald E. Walter in Shreveport.
Nichols pled guilty to bank fraud in November 2009. The FBI investigation of Nichols and First Fidelity Mortgage, Inc., doing business as Southern Funding, showed that Southern Funding was involved in the mortgage lending business and provided mortgages to customers in central Louisiana. Sabine State Bank and Peoples State Bank of Many, Louisiana, provided credit to Southern Funding for mortgages which were secured by customer notes pledged by Southern Funding to the banks. Nichols also had private investors as a funding source.
Nichols forged signatures of borrowers and provided the forged notes as collateral. He is responsible for a total amount of loss to banks and private investors of $3,903,071.00.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Alexander C. Van Hook.
February 5, 2010 - SHREVEPORT, LA—William Everett Nichols, 56, of Alexandria, La., President and sole shareholder of First Fidelity Mortgage, Inc., was sentenced to six years in federal prison and ordered to pay $3,903,071.00 in restitution for bank fraud, Acting United States Attorney William J. Flanagan announced today. Today’s sentence was imposed by U. S. District Court Judge Donald E. Walter in Shreveport.
Nichols pled guilty to bank fraud in November 2009. The FBI investigation of Nichols and First Fidelity Mortgage, Inc., doing business as Southern Funding, showed that Southern Funding was involved in the mortgage lending business and provided mortgages to customers in central Louisiana. Sabine State Bank and Peoples State Bank of Many, Louisiana, provided credit to Southern Funding for mortgages which were secured by customer notes pledged by Southern Funding to the banks. Nichols also had private investors as a funding source.
Nichols forged signatures of borrowers and provided the forged notes as collateral. He is responsible for a total amount of loss to banks and private investors of $3,903,071.00.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Alexander C. Van Hook.
Activity in Federal Court - Chicago
February 5, 2010 - HAMMOND, IN—The United States Attorney's Office announced that a Grand Jury sitting in the Northern District of Illinois, returned the following indictment on February 3, 2010:
Frank Caira, 39, of Downers Grove, Illinois, and Jack Mann, 41, of Naperville, Illinois, were charged by indictment with conspiracy to kill or attempt to kill an officer of the United States. In this case, the indictment alleges that the intended victims were an Assistant United States Attorney and a Drug Enforcement Administration Special Agent. This indictment is related to criminal complaints filed against Caira and Mann on January 14, 2010 in the Northern District of Illinois.
This case was investigated jointly by the Chicago Federal Bureau of Investigation Violent Crimes Task Force and the United States Marshal’s Service Northern Illinois Threat Assessment Task Force. This case is being prosecuted by the United States Attorney’s Office of the Northern District of Indiana.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
The specific sentence in each case to be imposed upon conviction will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Frank Caira, 39, of Downers Grove, Illinois, and Jack Mann, 41, of Naperville, Illinois, were charged by indictment with conspiracy to kill or attempt to kill an officer of the United States. In this case, the indictment alleges that the intended victims were an Assistant United States Attorney and a Drug Enforcement Administration Special Agent. This indictment is related to criminal complaints filed against Caira and Mann on January 14, 2010 in the Northern District of Illinois.
This case was investigated jointly by the Chicago Federal Bureau of Investigation Violent Crimes Task Force and the United States Marshal’s Service Northern Illinois Threat Assessment Task Force. This case is being prosecuted by the United States Attorney’s Office of the Northern District of Indiana.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
The specific sentence in each case to be imposed upon conviction will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Manhattan U.S. Attorney Charges Two Doctors and Three Others with Running Fraudulent AIDS/HIV Clinics That Cheated Medicare of Approximately $8.5 Million
February 5, 2010 - PREET BHARARA, the United States Attorney for the Southern District of New York, JOSEPH DEMAREST, JR., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation ("FBI"), and THOMAS F. O'DONNELL, the Special Agent-in-Charge of the Department of Health and Human Services, Office of Inspector General, New York Region. ("HHSOIG"), announced that Dr. ROBERTO AYMAT, Dr. JORGE RIVERO, ASMED BARRERA, AUGUSTO GUZMAN, and OSVALDO SOTOLONGO were charged today for defrauding the Medicare system out of $8.5 million using three AIDS/HIV clinics in Manhattan and Brooklyn.
According to a Complaint unsealed in Manhattan federal Court today:
From January 2007 to April 2009, the defendants operated three medical clinics located on Wadsworth Avenue in Manhattan, Second Avenue in Manhattan, and Rockaway Parkway in Brooklyn that purported to provide drug treatments to Medicareeligible AIDS/HIV patients. In fact, the clinics were healthcare fraud mills, which routinely billed Medicare for treatments that were either never provided, or which were unnecessary. The defendants executed the scheme by recruiting AIDS/HIV positive patients eligible for Medicare, and paying them a kickback of $50 each in exchange for their Medicare beneficiary numbers. The defendants then used the numbers to submit claims to Medicare for reimbursement for drugs that had either never been purchased, never been administered, or were medically unnecessary. From January 2007 to April 2009, the defendants billed Medicare for over ten times the number of units of prescription drugs as they actually purchased, defrauding the Medicare system out of at least approximately $8.5 million.
AYMAT, 44, of Manhattan, New York, and RIVERO, 82, of East Brunswick, New Jersey, both medical doctors, as well as SOTOLONGO, 38, of Miami, the general manager of the Wadsworth Avenue, Manhattan clinic, and GUZMAN, 42, of Miami, and BARRERA, 38, of East New York, New Jersey, who worked at the clinics administering unnecessary drugs, are each charged with conspiring to commit fraud in connection with a health care benefits program. Each of the defendants faces a maximum penalty of 20 years in prison.
AYMAT and BARRERA were arrested this morning in New York and New Jersey, respectively, and SOTOLONGO and GUZMAN were arrested in the Southern District of Florida. RIVERO is expected to surrender at a later date.
U.S. Attorney PREET BHARARA stated: "The doctors and managers of these alleged fraud mills used their professional positions to cheat the Medicare system out of $8.5 million, taking away millions meant for elderly Americans in need of medical care. Today's arrests demonstrate this Office's continuing commitment to work with our partners at the FBI and HHS-OIG to investigate and prosecute criminals who steal from Medicare."
JOSEPH DEMAREST, Assistant Director-in-Charge for FBI, stated: "Fraud is a major burden on Medicare, a program created to provide coverage and manage costs for older Americans. The FBI is committed to policing Medicare fraud, because fraud threatens the financial viability of a program ultimately paid for by the American taxpayer. These defendants weren't just manipulating the system; they were stealing our money."
THOMAS F. O'DONNELL, Special Agent-in-Charge for HHSOIG stated, "Infusion fraud is a serious and increasingly alarming problem affecting both patients and taxpayers. We will continue to aggressively pursue all those taking advantage of Medicare."
Mr. BHARARA praised the investigative work of the FBI and HHS-OIG, and stated that the investigation is ongoing.
The prosecution is being handled by the Office's Complex Frauds Unit. Assistant United States Attorney KAN M. NAWADAY is in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
According to a Complaint unsealed in Manhattan federal Court today:
From January 2007 to April 2009, the defendants operated three medical clinics located on Wadsworth Avenue in Manhattan, Second Avenue in Manhattan, and Rockaway Parkway in Brooklyn that purported to provide drug treatments to Medicareeligible AIDS/HIV patients. In fact, the clinics were healthcare fraud mills, which routinely billed Medicare for treatments that were either never provided, or which were unnecessary. The defendants executed the scheme by recruiting AIDS/HIV positive patients eligible for Medicare, and paying them a kickback of $50 each in exchange for their Medicare beneficiary numbers. The defendants then used the numbers to submit claims to Medicare for reimbursement for drugs that had either never been purchased, never been administered, or were medically unnecessary. From January 2007 to April 2009, the defendants billed Medicare for over ten times the number of units of prescription drugs as they actually purchased, defrauding the Medicare system out of at least approximately $8.5 million.
AYMAT, 44, of Manhattan, New York, and RIVERO, 82, of East Brunswick, New Jersey, both medical doctors, as well as SOTOLONGO, 38, of Miami, the general manager of the Wadsworth Avenue, Manhattan clinic, and GUZMAN, 42, of Miami, and BARRERA, 38, of East New York, New Jersey, who worked at the clinics administering unnecessary drugs, are each charged with conspiring to commit fraud in connection with a health care benefits program. Each of the defendants faces a maximum penalty of 20 years in prison.
AYMAT and BARRERA were arrested this morning in New York and New Jersey, respectively, and SOTOLONGO and GUZMAN were arrested in the Southern District of Florida. RIVERO is expected to surrender at a later date.
U.S. Attorney PREET BHARARA stated: "The doctors and managers of these alleged fraud mills used their professional positions to cheat the Medicare system out of $8.5 million, taking away millions meant for elderly Americans in need of medical care. Today's arrests demonstrate this Office's continuing commitment to work with our partners at the FBI and HHS-OIG to investigate and prosecute criminals who steal from Medicare."
JOSEPH DEMAREST, Assistant Director-in-Charge for FBI, stated: "Fraud is a major burden on Medicare, a program created to provide coverage and manage costs for older Americans. The FBI is committed to policing Medicare fraud, because fraud threatens the financial viability of a program ultimately paid for by the American taxpayer. These defendants weren't just manipulating the system; they were stealing our money."
THOMAS F. O'DONNELL, Special Agent-in-Charge for HHSOIG stated, "Infusion fraud is a serious and increasingly alarming problem affecting both patients and taxpayers. We will continue to aggressively pursue all those taking advantage of Medicare."
Mr. BHARARA praised the investigative work of the FBI and HHS-OIG, and stated that the investigation is ongoing.
The prosecution is being handled by the Office's Complex Frauds Unit. Assistant United States Attorney KAN M. NAWADAY is in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
Manhattan U.S. Attorney Charges Colorado Man with Aiding and Abetting Hassan Nemazee in $292 Million Bank Fraud Scheme
February 5, 2010 - PREET BHARARA, the United States Attorney for the Southern District of New York, announced the indictment today of SHAHIN KASHANCHI, who aided and abetted HASSAN NEMAZEE in a scheme to defraud Bank of America, N.A. ("BofA"), Citibank, N.A. ("Citibank"), and HSBC Bank USA, N.A. ("HSBC") of more than $290 million in loan proceeds. KASHANCHI was arrested on a Complaint on September 25, 2009.
According to the Indictment returned today by a grand jury and other documents filed in court:
From approximately 1997 through 2009, NEMAZEE obtained hundreds of millions of dollars worth of loans from BofA, Citibank, and HSBC. As of August 2009, NEMAZEE owed approximately $142 million to BofA and approximately $74.9 million to HSBC. Documents and signatures that NEMAZEE used to obtain these loans, including documents he submitted to purportedly show that he had hundreds of millions of dollars worth of collateral, were fake.
NEMAZEE's scheme depended on his use of fraudulent documents, including phony account statements and phony correspondence bearing forged signatures. These fraudulent documents were designed to convince the various banks to whom NEMAZEE submitted the documents that NEMAZEE had assets totaling hundreds of millions of dollars and that he had placed many millions of dollars of United States Treasury securities in certain specified accounts as collateral for the loans from the various banks.
Many of the fraudulent documents submitted by NEMAZEE to BofA, Citibank, and HSBC were created by KASHANCHI at the direction of Nemazee. In particular, over the course of NEMAZEE's efforts to defraud BofA, Citibank, and HSBC, KASHANCHI regularly manufactured account statements for the non-existent collateral accounts. In addition, when Citibank began to ask questions of NEMAZEE in order to verify the existence of collateral for its loan, KASHANCHI manufactured, at NEMAZEE's request, letterhead of Pershing LLC that NEMAZEE subsequently used to falsely and fraudulently represent to Citibank that the collateral for its loan existed, when, in fact, it did not.
After submitting this false and fraudulent letter to Citibank, NEMAZEE drew down upon a line of credit fraudulently obtained from HSBC to pay off the outstanding loan of approximately $74.9 million to Citibank.
KASHANCHI, 46, currently resides in Telluride, Colorado. He is charged with one count of bank fraud, which carries a maximum prison term of 30 years and a maximum fine of $1,000,000 or twice the gain or loss resulting from the crime. This case has been assigned to United States District Judge DEBORAH A. BATTS.
NEMAZEE, 60, has been separately charged in an Indictment in the Southern District of New York with three counts of bank fraud, each of which carries a maximum prison term of 30 years and a maximum fine of $1,000,000 or twice the gain or loss resulting from the crime. NEMAZEE is also charged with one count of aggravated identity theft, which carries a mandatory prison term of two years and which must be consecutive to any sentence imposed on the bank fraud counts. NEMAZEE was arrested on a Complaint on August 25, 2009. NEMAZEE's case is currently pending before United States District Judge SIDNEY H. STEIN.
Mr. BHARARA praised the investigative work of the Federal Bureau of Investigation.
The case is being prosecuted by the Office's Complex Frauds Unit. Assistant United States Attorneys DANIEL W. LEVY and MICHAEL D. LOCKARD are in charge of the prosecution.
The charge and allegations contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
According to the Indictment returned today by a grand jury and other documents filed in court:
From approximately 1997 through 2009, NEMAZEE obtained hundreds of millions of dollars worth of loans from BofA, Citibank, and HSBC. As of August 2009, NEMAZEE owed approximately $142 million to BofA and approximately $74.9 million to HSBC. Documents and signatures that NEMAZEE used to obtain these loans, including documents he submitted to purportedly show that he had hundreds of millions of dollars worth of collateral, were fake.
NEMAZEE's scheme depended on his use of fraudulent documents, including phony account statements and phony correspondence bearing forged signatures. These fraudulent documents were designed to convince the various banks to whom NEMAZEE submitted the documents that NEMAZEE had assets totaling hundreds of millions of dollars and that he had placed many millions of dollars of United States Treasury securities in certain specified accounts as collateral for the loans from the various banks.
Many of the fraudulent documents submitted by NEMAZEE to BofA, Citibank, and HSBC were created by KASHANCHI at the direction of Nemazee. In particular, over the course of NEMAZEE's efforts to defraud BofA, Citibank, and HSBC, KASHANCHI regularly manufactured account statements for the non-existent collateral accounts. In addition, when Citibank began to ask questions of NEMAZEE in order to verify the existence of collateral for its loan, KASHANCHI manufactured, at NEMAZEE's request, letterhead of Pershing LLC that NEMAZEE subsequently used to falsely and fraudulently represent to Citibank that the collateral for its loan existed, when, in fact, it did not.
After submitting this false and fraudulent letter to Citibank, NEMAZEE drew down upon a line of credit fraudulently obtained from HSBC to pay off the outstanding loan of approximately $74.9 million to Citibank.
KASHANCHI, 46, currently resides in Telluride, Colorado. He is charged with one count of bank fraud, which carries a maximum prison term of 30 years and a maximum fine of $1,000,000 or twice the gain or loss resulting from the crime. This case has been assigned to United States District Judge DEBORAH A. BATTS.
NEMAZEE, 60, has been separately charged in an Indictment in the Southern District of New York with three counts of bank fraud, each of which carries a maximum prison term of 30 years and a maximum fine of $1,000,000 or twice the gain or loss resulting from the crime. NEMAZEE is also charged with one count of aggravated identity theft, which carries a mandatory prison term of two years and which must be consecutive to any sentence imposed on the bank fraud counts. NEMAZEE was arrested on a Complaint on August 25, 2009. NEMAZEE's case is currently pending before United States District Judge SIDNEY H. STEIN.
Mr. BHARARA praised the investigative work of the Federal Bureau of Investigation.
The case is being prosecuted by the Office's Complex Frauds Unit. Assistant United States Attorneys DANIEL W. LEVY and MICHAEL D. LOCKARD are in charge of the prosecution.
The charge and allegations contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
West Covina Man Pleads Guilty in Ponzi Scheme Based on Bogus Investments in Latex Gloves After 9/11 Attacks
February 5, 2010 - A West Covina man has pleaded guilty to federal mail fraud charges for running a Ponzi scheme that took nearly $700,000 from victims who thought they were investing in latex gloves, which were portrayed as being in high demand following the 9/11 terrorist attacks.
Miguel Salazar, 36, pleaded guilty late yesterday to one count of mail fraud before United States District Judge Manuel Real.
Salazar's former partner, Carlos Flores, 43, of Lakewood, pleaded guilty to mail fraud in December.
Salazar and Flores operated SF Capital, which had mail drops in Alhambra and Glendale, and was described to investors as being in the business of factoring accounts receivable for latex gloves. Investors in SF Capital were typically told that the terrorist attacks of 9/11, concerns about infectious diseases, and other global issues had resulted in an extraordinarily high demand for latex gloves and that this enormous demand provided a secure investment vehicle for individuals and institutions. SF Capital investors were typically promised quarterly returns of 5 percent.
Between 2002 and 2006, more than 30 individuals invested more than $1.3 million with SF Capital. Many individuals renewed or increased their investments after receiving payments from SF Capital that appeared to be interest or dividend payments. However, SF Capital was not in the business of financing accounts receivable and the purported investment returns paid to investors were Ponzi payments that came from other investors. Flores and Salazar also used proceeds from the scheme for their personal benefit. For example, Salazar used investor money to pay more than $140,000 for luxury dugout seats at Dodger Stadium.
As a result of the scheme, victims lost nearly $700,000.
Salazar is scheduled to be sentenced by Judge Real on May 3. Flores is scheduled to be sentenced on February 22. Both men face statutory maximum sentences of 20 years in federal prison.
This case is the result of an investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service.
Miguel Salazar, 36, pleaded guilty late yesterday to one count of mail fraud before United States District Judge Manuel Real.
Salazar's former partner, Carlos Flores, 43, of Lakewood, pleaded guilty to mail fraud in December.
Salazar and Flores operated SF Capital, which had mail drops in Alhambra and Glendale, and was described to investors as being in the business of factoring accounts receivable for latex gloves. Investors in SF Capital were typically told that the terrorist attacks of 9/11, concerns about infectious diseases, and other global issues had resulted in an extraordinarily high demand for latex gloves and that this enormous demand provided a secure investment vehicle for individuals and institutions. SF Capital investors were typically promised quarterly returns of 5 percent.
Between 2002 and 2006, more than 30 individuals invested more than $1.3 million with SF Capital. Many individuals renewed or increased their investments after receiving payments from SF Capital that appeared to be interest or dividend payments. However, SF Capital was not in the business of financing accounts receivable and the purported investment returns paid to investors were Ponzi payments that came from other investors. Flores and Salazar also used proceeds from the scheme for their personal benefit. For example, Salazar used investor money to pay more than $140,000 for luxury dugout seats at Dodger Stadium.
As a result of the scheme, victims lost nearly $700,000.
Salazar is scheduled to be sentenced by Judge Real on May 3. Flores is scheduled to be sentenced on February 22. Both men face statutory maximum sentences of 20 years in federal prison.
This case is the result of an investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service.
Thursday, February 04, 2010
Collins Ray Russell Pleads Guilty in U.S. Federal Court
February 4, 2010 - The United States Attorney’s Office announced that during a federal court session in Billings on February 3, 2010, before Chief U.S. District Judge Richard F. Cebull, COLLINS RAY RUSSELL, a 22-year-old resident of Billings, pled guilty to possession with the intent to distribute marijuana and possession of a firearm during a drug trafficking crime. Sentencing is set for May 6, 2010. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Lori Harper Suek, the government stated it would have proved at trial the following:
On March 1, 2009, law enforcement received information that RUSSELL was driving from Billings toward the Northern Cheyenne Reservation with marijuana. They were also provided a description of the car. Big Horn County and Crow law enforcement kept a look-out for the car and advised Northern Cheyenne law enforcement as it passed through their jurisdictions. When the car arrived in Busby, law enforcement pulled over the car because another male occupant of the car had an outstanding tribal warrant for domestic violence. RUSSELL, a federal felon on supervised release at the time, was driving. He gave permission for the officer to look in the trunk. The trunk had a strong odor of marijuana. RUSSELL quickly shut the trunk and tried to divert the officer’s attention by telling him that there was alcohol in the car. All of the occupants (RUSSELL, another male and a woman) were arrested for possession of alcohol.
In a search conducted after the arrests, a gun was found under the dashboard in the center between the passenger and driver. About 1½ pounds of marijuana were found in the trunk.
Witnesses confirmed that RUSSELL had guns, and was seen with a similar handgun prior to the stop. His fingerprints were found on a cartridge that was seized along with the gun from the car. Pictures of RUSSELL holding the gun were on RUSSELL’s cell phone. RUSSELL faces possible penalties of five years in prison, a $250,000 fine and at least two years of supervised release. In addition, RUSSELL faces an additional mandatory five year imprisonment, consecutive to any other sentence, for the use or possession of a firearm during a drug-trafficking crime.
The investigation was a cooperative effort between the Bureau of Indian Affairs and the Federal Bureau of Investigation.
In an Offer of Proof filed by Assistant U.S. Attorney Lori Harper Suek, the government stated it would have proved at trial the following:
On March 1, 2009, law enforcement received information that RUSSELL was driving from Billings toward the Northern Cheyenne Reservation with marijuana. They were also provided a description of the car. Big Horn County and Crow law enforcement kept a look-out for the car and advised Northern Cheyenne law enforcement as it passed through their jurisdictions. When the car arrived in Busby, law enforcement pulled over the car because another male occupant of the car had an outstanding tribal warrant for domestic violence. RUSSELL, a federal felon on supervised release at the time, was driving. He gave permission for the officer to look in the trunk. The trunk had a strong odor of marijuana. RUSSELL quickly shut the trunk and tried to divert the officer’s attention by telling him that there was alcohol in the car. All of the occupants (RUSSELL, another male and a woman) were arrested for possession of alcohol.
In a search conducted after the arrests, a gun was found under the dashboard in the center between the passenger and driver. About 1½ pounds of marijuana were found in the trunk.
Witnesses confirmed that RUSSELL had guns, and was seen with a similar handgun prior to the stop. His fingerprints were found on a cartridge that was seized along with the gun from the car. Pictures of RUSSELL holding the gun were on RUSSELL’s cell phone. RUSSELL faces possible penalties of five years in prison, a $250,000 fine and at least two years of supervised release. In addition, RUSSELL faces an additional mandatory five year imprisonment, consecutive to any other sentence, for the use or possession of a firearm during a drug-trafficking crime.
The investigation was a cooperative effort between the Bureau of Indian Affairs and the Federal Bureau of Investigation.
Nathaniel Jansen Pleads Guilty in U.S. Federal Court
February 4, 2010 - The United States Attorney’s Office announced that during a federal court session in Billings on February 3, 2010, before Senior U.S. District Judge Jack D. Shanstrom, NATHANIEL JANSEN, a resident of Billings, pled guilty to distribution of methamphetamine. Sentencing is set for May 5, 2010. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney James E. Seykora, the government stated it would have proved at trial the following:
Approximately mid-2006, FBI Big Sky Safe Streets Task Force members began obtaining information suggesting an organization that involved JANSEN was responsible for distributing large amounts of cocaine and methamphetamine in Billings.
In early 2008, agents began interviewing co-conspirators and taking investigative actions aimed at dismantling the organization.
Utilizing an FBI Confidential Human Source (CHS), an FBI Undercover Employee (UCE) was introduced to JANSEN in August of 2008. Subsequently, the UCE arranged to purchase methamphetamine from or through JANSEN on the following occasions:
• August 8, 2008 (3.5 grams net; 42.5 percent purity; 1.4 grams actual drug);
• August 13, 2008 (6.9 grams net; 28.7 percent purity; 1.9 grams actual drug);
• February 10, 2009 (3.4 grams net; 40.4 percent purity; 1.3 grams actual drug);
• February 11, 2009 (3.2 grams – uncontrolled); and,
• February 17, 2009 (3.0 grams – uncontrolled).
On March 4, 2009, JANSEN was arrested with 5.4 grams of methamphetamine (36.3 percent pure), or 1.9 grams of actual methamphetamine. JANSEN admitted that between 2007 and 2009, he obtained approximately one to one and a half pounds (1 to 1½) of methamphetamine from Chester Secrist, Shimmeri Selph, and others for redistribution. The amount of methamphetamine JANSEN possessed with intent to distribute exceeded 500 grams of a mixture of methamphetamine. In addition, JANSEN has admitted that he possessed a firearm during the time he was distributing methamphetamine.
Secrist and Selph pled guilty to federal charges and are awaiting sentencing.
JANSEN faces possible penalties of a mandatory minimum of five years in prison and could be sentenced to 40 years, a $2,000,000 fine and at least four years of supervised release.
The investigation was conducted by the Federal Bureau of Investigation’s Billings Big Sky Safe Streets Task Force.
In an Offer of Proof filed by Assistant U.S. Attorney James E. Seykora, the government stated it would have proved at trial the following:
Approximately mid-2006, FBI Big Sky Safe Streets Task Force members began obtaining information suggesting an organization that involved JANSEN was responsible for distributing large amounts of cocaine and methamphetamine in Billings.
In early 2008, agents began interviewing co-conspirators and taking investigative actions aimed at dismantling the organization.
Utilizing an FBI Confidential Human Source (CHS), an FBI Undercover Employee (UCE) was introduced to JANSEN in August of 2008. Subsequently, the UCE arranged to purchase methamphetamine from or through JANSEN on the following occasions:
• August 8, 2008 (3.5 grams net; 42.5 percent purity; 1.4 grams actual drug);
• August 13, 2008 (6.9 grams net; 28.7 percent purity; 1.9 grams actual drug);
• February 10, 2009 (3.4 grams net; 40.4 percent purity; 1.3 grams actual drug);
• February 11, 2009 (3.2 grams – uncontrolled); and,
• February 17, 2009 (3.0 grams – uncontrolled).
On March 4, 2009, JANSEN was arrested with 5.4 grams of methamphetamine (36.3 percent pure), or 1.9 grams of actual methamphetamine. JANSEN admitted that between 2007 and 2009, he obtained approximately one to one and a half pounds (1 to 1½) of methamphetamine from Chester Secrist, Shimmeri Selph, and others for redistribution. The amount of methamphetamine JANSEN possessed with intent to distribute exceeded 500 grams of a mixture of methamphetamine. In addition, JANSEN has admitted that he possessed a firearm during the time he was distributing methamphetamine.
Secrist and Selph pled guilty to federal charges and are awaiting sentencing.
JANSEN faces possible penalties of a mandatory minimum of five years in prison and could be sentenced to 40 years, a $2,000,000 fine and at least four years of supervised release.
The investigation was conducted by the Federal Bureau of Investigation’s Billings Big Sky Safe Streets Task Force.
Three Men Indicted for Armed Bank Robberies
February 4, 2010 - KANSAS CITY, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced that three men were indicted by a federal grand jury today for the armed robberies of three area banks.
Michael K. Scott, 53, of Kansas City, Mo.; Claude White, 54, of Kansas City, Kan.; and Woodrow McCoy, 36, no known address, were charged in an eight-count indictment returned by a federal grand jury in Kansas City. Today’s indictment replaces two federal criminal complaints that were filed against Scott and McCoy last week, which charged them separately in one of the armed bank robberies.
The federal indictment alleges that Scott and McCoy used firearms to steal $110,200 from Commerce Bank, 9155 N.W. Highway 45, Parkville, Mo., on Jan. 27, 2010. The indictment also alleges that Scott used a firearm to steal $169,430 from Bank Midwest, 6430 N. Crosby, Kansas City, Mo., on Sept. 2, 2008. The indictment also alleges that Scott and White used firearms to steal $93,496 from Valley View Bank, 4550 Belleview, Kansas City, Mo., on June 19, 2009.
Scott is also charged with one count of using a using a firearm during a crime of violence in relation to the Bank Midwest robbery. Scott and McCoy are also charged together with one count of using firearms during a crime of violence in relation to the Commerce Bank robbery. Scott and White are also charged together with one count of using firearms during a crime of violence in relation to the Valley View Bank robbery.
Scott is also charged with being a felon in possession of firearm. Scott, who has a prior felony conviction, allegedly possessed a Llama .357-caliber revolver on the date of the Commerce Bank robbery. McCoy is also charged with one count of being a felon in possession of a firearm. McCoy, who has a prior felony conviction, allegedly possessed a Baikal .380-caliber semi-automatic pistol on the date of the Commerce Bank robbery.
According to the affidavits filed in support of the federal criminal complaints, Scott was arrested by Kansas City, Mo., police officers following a high-speed car chase after the Commerce Bank robbery on Wednesday, Jan. 27, 2010. Police officers pursued the vehicle, driven by Scott, from the vicinity of Interstate 635 and 18th Street into Kansas City, Kan. The vehicle drove through residential yards and crashed into an embankment in the front yard of a residence. Scott attempted to flee but was apprehended by a police officer.
McCoy, who was a passenger in the vehicle, fled from the scene. McCoy carjacked a truck from a nearby house after demanding the keys from its owner, a 73-year-old man. McCoy was arrested the next day, Thursday, Jan. 28, 2010.
Phillips cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Bruce E. Clark and Special Assistant U.S. Attorney Joseph Vanover. It was investigated by the Kansas City, Mo., Police Department and the Federal Bureau of Investigation.
Michael K. Scott, 53, of Kansas City, Mo.; Claude White, 54, of Kansas City, Kan.; and Woodrow McCoy, 36, no known address, were charged in an eight-count indictment returned by a federal grand jury in Kansas City. Today’s indictment replaces two federal criminal complaints that were filed against Scott and McCoy last week, which charged them separately in one of the armed bank robberies.
The federal indictment alleges that Scott and McCoy used firearms to steal $110,200 from Commerce Bank, 9155 N.W. Highway 45, Parkville, Mo., on Jan. 27, 2010. The indictment also alleges that Scott used a firearm to steal $169,430 from Bank Midwest, 6430 N. Crosby, Kansas City, Mo., on Sept. 2, 2008. The indictment also alleges that Scott and White used firearms to steal $93,496 from Valley View Bank, 4550 Belleview, Kansas City, Mo., on June 19, 2009.
Scott is also charged with one count of using a using a firearm during a crime of violence in relation to the Bank Midwest robbery. Scott and McCoy are also charged together with one count of using firearms during a crime of violence in relation to the Commerce Bank robbery. Scott and White are also charged together with one count of using firearms during a crime of violence in relation to the Valley View Bank robbery.
Scott is also charged with being a felon in possession of firearm. Scott, who has a prior felony conviction, allegedly possessed a Llama .357-caliber revolver on the date of the Commerce Bank robbery. McCoy is also charged with one count of being a felon in possession of a firearm. McCoy, who has a prior felony conviction, allegedly possessed a Baikal .380-caliber semi-automatic pistol on the date of the Commerce Bank robbery.
According to the affidavits filed in support of the federal criminal complaints, Scott was arrested by Kansas City, Mo., police officers following a high-speed car chase after the Commerce Bank robbery on Wednesday, Jan. 27, 2010. Police officers pursued the vehicle, driven by Scott, from the vicinity of Interstate 635 and 18th Street into Kansas City, Kan. The vehicle drove through residential yards and crashed into an embankment in the front yard of a residence. Scott attempted to flee but was apprehended by a police officer.
McCoy, who was a passenger in the vehicle, fled from the scene. McCoy carjacked a truck from a nearby house after demanding the keys from its owner, a 73-year-old man. McCoy was arrested the next day, Thursday, Jan. 28, 2010.
Phillips cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Bruce E. Clark and Special Assistant U.S. Attorney Joseph Vanover. It was investigated by the Kansas City, Mo., Police Department and the Federal Bureau of Investigation.
Second Defendant in Cuyahoga County Corruption Probe Sentenced
February 4, 2010 - William J. Edwards, First Assistant United States Attorney for the Northern District of Ohio; C. Frank Figliuzzi, Special Agent in Charge of the Cleveland Division of the FBI; and Jose A. Gonzalez, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, today announced the sentencing of defendant Timothy Armstrong, the second defendant sentenced in connection with the Cuyahoga County Corruption Probe. Judge Kathleen M. O’Malley sentenced Armstrong, age 65, of Huron, Ohio, to 42 months of imprisonment, two years of supervised release, and 200 hours of community service for his role in a kickback scheme that caused a loss of approximately $11.5 million to the County. Judge O’Malley also ordered Armstrong to pay $1,573,345 (his share of the proceeds of the scheme) in restitution to Cuyahoga County. Armstrong had fulfilled that restitution obligation in advance of sentencing.
Armstrong previously pleaded guilty to conspiring with attorneys Louis C. Damiani (deceased), Bruce Zaccagnini and an unnamed lawyer to pay PO2 approximately $1.2 million in cash kickbacks on approximately $22 million in County commercial reappraisal contracts over a period of 10 years. Former Auditor’s Office employee Santina Klimkowski has pleaded guilty to serving as an intermediary for the kickback payments and has admitted accepting approximately $154,000 in cash kickbacks herself. Klimkowski has paid $91,859.48 toward restitution. The Court has not scheduled a sentencing date for Klimkowski. Zaccagnini has pleaded guilty for his role in the conspiracy and was sentenced yesterday to 60 months' imprisonment. In addition, the United States Attorney’s Office has filed a forfeiture action against $1.95 million which Louis Damiani obtained as a result of the conspiracy.
Armstrong previously pleaded guilty to conspiring with attorneys Louis C. Damiani (deceased), Bruce Zaccagnini and an unnamed lawyer to pay PO2 approximately $1.2 million in cash kickbacks on approximately $22 million in County commercial reappraisal contracts over a period of 10 years. Former Auditor’s Office employee Santina Klimkowski has pleaded guilty to serving as an intermediary for the kickback payments and has admitted accepting approximately $154,000 in cash kickbacks herself. Klimkowski has paid $91,859.48 toward restitution. The Court has not scheduled a sentencing date for Klimkowski. Zaccagnini has pleaded guilty for his role in the conspiracy and was sentenced yesterday to 60 months' imprisonment. In addition, the United States Attorney’s Office has filed a forfeiture action against $1.95 million which Louis Damiani obtained as a result of the conspiracy.
Hartford Man Sentenced to 33 Months in Federal Prison for Role in Drug Ring
February 4, 2010 - Nora R. Dannehy, United States Attorney for the District of Connecticut, announced that MIGUEL CORREA, also known as “Jose Negron” and “Mikey,” 38, of Harold Street, Hartford, was sentenced today by Senior United States District Judge Peter C. Dorsey in New Haven to 33 months of imprisonment, followed by three years of supervised release, for his participation in a narcotics trafficking ring. On November 16, 2009, CORREA pleaded guilty to one count of conspiracy to possess with intent to distribute, and distribution of, cocaine.
This matter stems from “Operation Solid Gold,” a joint law enforcement investigation headed by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force. The year-long investigation included the use of court-authorized wiretaps, controlled purchases of cocaine and heroin, and physical surveillance. As a result of the investigation, 55 individuals were charged with various offenses related to the distribution of cocaine and heroin in and around Hartford.
According to court documents and statements made in court, the investigation revealed that Victor Esteves, also known as “Gadget,” and Reynaldo Laureano, also known as “Pichy,” were high-ranking members of the Almighty Latin King Nation (“Latin Kings”) who controlled the drug trade in separate neighborhoods in Hartford. During the investigation, CORREA, who also is an admitted member of the Latin Kings, was intercepted frequently over wiretaps ordering quantities of cocaine and heroin from both Esteves and Laureano, some of which he sold to others.
Esteves and Laureano previously pleaded guilty to charges related to their participation in this narcotics trafficking conspiracy. On October 16, 2009, Esteves was sentenced to 72 months of imprisonment. On January 22, 2010, Laureano was sentenced to 97 months of imprisonment.
This matter was investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force, the Statewide Cooperative Crime Control Task Force of the Connecticut State Police and the Hartford Police Department, with assistance from the Statewide Organized Crime Investigative Task Force of the Connecticut State Police, Connecticut State Police, Troop H, and the Connecticut Department of Correction. The case is being prosecuted by Assistant United States Attorneys Brian P. Leaming and Geoffrey M. Stone.
This matter stems from “Operation Solid Gold,” a joint law enforcement investigation headed by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force. The year-long investigation included the use of court-authorized wiretaps, controlled purchases of cocaine and heroin, and physical surveillance. As a result of the investigation, 55 individuals were charged with various offenses related to the distribution of cocaine and heroin in and around Hartford.
According to court documents and statements made in court, the investigation revealed that Victor Esteves, also known as “Gadget,” and Reynaldo Laureano, also known as “Pichy,” were high-ranking members of the Almighty Latin King Nation (“Latin Kings”) who controlled the drug trade in separate neighborhoods in Hartford. During the investigation, CORREA, who also is an admitted member of the Latin Kings, was intercepted frequently over wiretaps ordering quantities of cocaine and heroin from both Esteves and Laureano, some of which he sold to others.
Esteves and Laureano previously pleaded guilty to charges related to their participation in this narcotics trafficking conspiracy. On October 16, 2009, Esteves was sentenced to 72 months of imprisonment. On January 22, 2010, Laureano was sentenced to 97 months of imprisonment.
This matter was investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force, the Statewide Cooperative Crime Control Task Force of the Connecticut State Police and the Hartford Police Department, with assistance from the Statewide Organized Crime Investigative Task Force of the Connecticut State Police, Connecticut State Police, Troop H, and the Connecticut Department of Correction. The case is being prosecuted by Assistant United States Attorneys Brian P. Leaming and Geoffrey M. Stone.
Minneapolis Police Officer Indicted for Armed Bank Robbery
February 4, 2010 - A federal grand jury has returned an indictment against a Minneapolis police officer, charging him with the January 6, 2010, robbery of an Apple Valley Wells Fargo bank. In the indictment, which was filed with the U.S. District Court earlier today, Timothy Edward Carson, age 28, of Rosemount, was formally charged with one count of armed bank robbery and one count of possessing a firearm in furtherance of a crime of violence. The indictment alleges Carson took $4,580 from the bank and put the lives of others in jeopardy by brandishing a 40-caliber Beretta handgun during the robbery.
According to a Federal Bureau of Investigation affidavit, the bank was robbed at 9:16 a.m., on January 6, by a man brandishing a handgun. The man, later identified as Carson, allegedly jumped onto the counter and pointed the gun at three tellers. He then purportedly ordered everyone to put their hands up and their heads down, after which he directed the tellers to give him money. Upon receiving the cash, he allegedly fled the bank. Security cameras from a nearby Target store recorded him getting into a parked vehicle near a vacant strip mall.
Before the robbery, at precisely 8:37 a.m., on January 6, Carson was stopped by Apple Valley police about three miles from the bank. The stop was made because Carson’s vehicle did not have a front license plate. Carson identified himself as a Minneapolis police officer and, ultimately, was allowed to go on his way.
The same Apple Valley officer later responded to the bank robbery and, while enroute to the scene, reportedly observed Carson’s vehicle stopped at the intersection of Johnny Cake Ridge Road and 140th Street. The affidavit states Carson was scheduled to work at 9 a.m. on January 6 but failed to arrive until 10 a.m. Later that day he was arrested by the Apple Valley Police Department and the FBI.
If convicted, Carson faces a potential maximum penalty of 25 years in prison on the bank robbery charge and a mandatory minimum penalty of seven years on the firearm charge. All sentences will be determined by a federal district court judge.
This case is the result of an investigation by the Apple Valley Police Department, the Minneapolis Police Department, and the FBI. It is being prosecuted by Assistant United States Attorney Nathan P. Petterson
According to a Federal Bureau of Investigation affidavit, the bank was robbed at 9:16 a.m., on January 6, by a man brandishing a handgun. The man, later identified as Carson, allegedly jumped onto the counter and pointed the gun at three tellers. He then purportedly ordered everyone to put their hands up and their heads down, after which he directed the tellers to give him money. Upon receiving the cash, he allegedly fled the bank. Security cameras from a nearby Target store recorded him getting into a parked vehicle near a vacant strip mall.
Before the robbery, at precisely 8:37 a.m., on January 6, Carson was stopped by Apple Valley police about three miles from the bank. The stop was made because Carson’s vehicle did not have a front license plate. Carson identified himself as a Minneapolis police officer and, ultimately, was allowed to go on his way.
The same Apple Valley officer later responded to the bank robbery and, while enroute to the scene, reportedly observed Carson’s vehicle stopped at the intersection of Johnny Cake Ridge Road and 140th Street. The affidavit states Carson was scheduled to work at 9 a.m. on January 6 but failed to arrive until 10 a.m. Later that day he was arrested by the Apple Valley Police Department and the FBI.
If convicted, Carson faces a potential maximum penalty of 25 years in prison on the bank robbery charge and a mandatory minimum penalty of seven years on the firearm charge. All sentences will be determined by a federal district court judge.
This case is the result of an investigation by the Apple Valley Police Department, the Minneapolis Police Department, and the FBI. It is being prosecuted by Assistant United States Attorney Nathan P. Petterson
Former UBS Client Pleads Guilty to Hiding $10 Million in Offshore Bank Accounts
Defendant Skimmed Proceeds from His Watch Businesses to Fund Secret Accounts
February 4, 2010 - WASHINGTON - Jack Barouh of Golden Beach, Fla., pleaded guilty today to filing a false tax return, the Justice Department and Internal Revenue Service (IRS) announced. Sentencing has been set for April 16, 2010, before U.S. District Judge Adalberto Jordan in Miami. The defendant remains free on a $1 million bail pending sentencing. He faces a maximum sentence of three years in prison.
According to court documents and statements made in court, Barouh admitted to filing a false tax return for 2007 in which he failed to report that he had an interest in or a signature authority over financial accounts at UBS AG, one of Switzerland’s largest banks. He also failed to report income earned on his UBS Swiss bank accounts. The UBS accounts were opened in the names of Domilou S.A., a nominee Panamanian corporation, and Similen Investments Limited, a nominee British Virgin Island corporation. For years 2002 through 2007, the tax loss associated with the Domilou and Similen accounts at UBS is approximately $736,269.
In addition to the Domilou and Similen accounts, the defendant owned and controlled several additional offshore bank accounts located at banks other than UBS, including accounts in Switzerland and Hong Kong.
According to court documents, the defendant owned and operated several businesses that manufactured and sold watches. Beginning in 1976, the defendant skimmed income from his watch businesses and deposited the proceeds into his undeclared UBS bank accounts. The defendant also deposited unreported sales commissions into the accounts.
According to court documents, beginning in 2007, the defendant attempted to withdraw his funds from Switzerland and repatriate all of the money into the United States. However, a Swiss attorney persuaded the defendant to transfer the money from Switzerland to a newly created bank account in Hong Kong in the name of a nominee Hong Kong corporation. The Swiss attorney then told the defendant to pay himself an annual "consulting fee" until all of the funds were brought into the United States. The Swiss attorney knew the defendant was not going to perform any consulting work.
As part of his plea agreement, the defendant agreed to pay a 50 percent penalty for the one year with the highest balance in his offshore accounts in order to resolve his civil liability for failing to file Reports of Foreign Bank and Financial Accounts, Forms TD F 90-22.1. The highest balance of all of the assets the defendant owned and controlled offshore was approximately $10,017,613. The defendant also must pay any additional taxes, interest and penalties he may owe.
"Today’s guilty plea is the latest success in our crackdown on illegal offshore tax evasion," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "The Justice Department and U.S. Attorneys’ Offices will continue our investigations and prosecutions of individuals who utilize offshore accounts in Switzerland and elsewhere."
"Skimming from one’s business and placing the assets in a secret offshore bank account is a classic example of tax evasion," said Jeffrey H. Sloman, U.S. Attorney for the Southern District of Florida. "With tax day looming, today’s guilty plea is a reminder that those who violate the tax laws will be held accountable."
"Hiding money in foreign bank accounts to evade paying taxes is a crime," said Victor S. O. Song, Chief, IRS Criminal Investigation. "The IRS will continue our efforts to bring non-compliant taxpayers into the tax system either through the voluntary disclosure program or criminal prosecution."
Acting Assistant Attorney General John DiCicco and U.S. Attorney Jeffrey H. Sloman commended the investigative efforts of the IRS agents involved in this case, as well as Senior Litigation Counsel Kevin M. Downing and Trial Attorney Mark F. Daly of the Tax Division, and Assistant U.S. Attorney Jeffrey A. Neiman, who are prosecuting the case.
In February 2009, UBS entered into a deferred prosecution agreement pursuant to which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS provided the United States government with the identities of, and account information for, certain United States customers of UBS’s cross-border business. Jack Barouh is the seventh former client of UBS to plead guilty to a tax felony.
U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return. Additionally, United States citizens much file a Report of Foreign Bank and Financial Accounts, or F-Bar, with the U.S. Treasury, disclosing any financial account in a foreign country with assets in excess of $10,000 for which they have a financial interest in or signature authority, or other authority over.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
February 4, 2010 - WASHINGTON - Jack Barouh of Golden Beach, Fla., pleaded guilty today to filing a false tax return, the Justice Department and Internal Revenue Service (IRS) announced. Sentencing has been set for April 16, 2010, before U.S. District Judge Adalberto Jordan in Miami. The defendant remains free on a $1 million bail pending sentencing. He faces a maximum sentence of three years in prison.
According to court documents and statements made in court, Barouh admitted to filing a false tax return for 2007 in which he failed to report that he had an interest in or a signature authority over financial accounts at UBS AG, one of Switzerland’s largest banks. He also failed to report income earned on his UBS Swiss bank accounts. The UBS accounts were opened in the names of Domilou S.A., a nominee Panamanian corporation, and Similen Investments Limited, a nominee British Virgin Island corporation. For years 2002 through 2007, the tax loss associated with the Domilou and Similen accounts at UBS is approximately $736,269.
In addition to the Domilou and Similen accounts, the defendant owned and controlled several additional offshore bank accounts located at banks other than UBS, including accounts in Switzerland and Hong Kong.
According to court documents, the defendant owned and operated several businesses that manufactured and sold watches. Beginning in 1976, the defendant skimmed income from his watch businesses and deposited the proceeds into his undeclared UBS bank accounts. The defendant also deposited unreported sales commissions into the accounts.
According to court documents, beginning in 2007, the defendant attempted to withdraw his funds from Switzerland and repatriate all of the money into the United States. However, a Swiss attorney persuaded the defendant to transfer the money from Switzerland to a newly created bank account in Hong Kong in the name of a nominee Hong Kong corporation. The Swiss attorney then told the defendant to pay himself an annual "consulting fee" until all of the funds were brought into the United States. The Swiss attorney knew the defendant was not going to perform any consulting work.
As part of his plea agreement, the defendant agreed to pay a 50 percent penalty for the one year with the highest balance in his offshore accounts in order to resolve his civil liability for failing to file Reports of Foreign Bank and Financial Accounts, Forms TD F 90-22.1. The highest balance of all of the assets the defendant owned and controlled offshore was approximately $10,017,613. The defendant also must pay any additional taxes, interest and penalties he may owe.
"Today’s guilty plea is the latest success in our crackdown on illegal offshore tax evasion," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "The Justice Department and U.S. Attorneys’ Offices will continue our investigations and prosecutions of individuals who utilize offshore accounts in Switzerland and elsewhere."
"Skimming from one’s business and placing the assets in a secret offshore bank account is a classic example of tax evasion," said Jeffrey H. Sloman, U.S. Attorney for the Southern District of Florida. "With tax day looming, today’s guilty plea is a reminder that those who violate the tax laws will be held accountable."
"Hiding money in foreign bank accounts to evade paying taxes is a crime," said Victor S. O. Song, Chief, IRS Criminal Investigation. "The IRS will continue our efforts to bring non-compliant taxpayers into the tax system either through the voluntary disclosure program or criminal prosecution."
Acting Assistant Attorney General John DiCicco and U.S. Attorney Jeffrey H. Sloman commended the investigative efforts of the IRS agents involved in this case, as well as Senior Litigation Counsel Kevin M. Downing and Trial Attorney Mark F. Daly of the Tax Division, and Assistant U.S. Attorney Jeffrey A. Neiman, who are prosecuting the case.
In February 2009, UBS entered into a deferred prosecution agreement pursuant to which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS provided the United States government with the identities of, and account information for, certain United States customers of UBS’s cross-border business. Jack Barouh is the seventh former client of UBS to plead guilty to a tax felony.
U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return. Additionally, United States citizens much file a Report of Foreign Bank and Financial Accounts, or F-Bar, with the U.S. Treasury, disclosing any financial account in a foreign country with assets in excess of $10,000 for which they have a financial interest in or signature authority, or other authority over.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
Plum Man Sentenced to Five Years in Prison for Armed Bank Robbery
February 4, 2010 - Acting United States Attorney Robert S. Cessar announced today, February 3, 2010, that on February 2, 2010, Scott David Baird, a resident of Plum Borough, Pennsylvania, was sentenced in federal court in Pittsburgh to 60 months in prison, followed by five years of supervised release, on his conviction of bank robbery and armed bank robbery.
Senior United States District Judge Maurice B. Cohill imposed the sentence on Baird, age 30.
According to information presented to the court by Assistant United States Attorney Ross E. Lenhardt, on February 5, 2008, Baird robbed the S&T Bank located at 2190 Hulton Road, Plum Borough, Pennsylvania.
Mr. Cessar commended the Federal Bureau of Investigation and detectives from the Plum Borough Police Department for the investigation leading to the successful prosecution of Scott David Baird.
Senior United States District Judge Maurice B. Cohill imposed the sentence on Baird, age 30.
According to information presented to the court by Assistant United States Attorney Ross E. Lenhardt, on February 5, 2008, Baird robbed the S&T Bank located at 2190 Hulton Road, Plum Borough, Pennsylvania.
Mr. Cessar commended the Federal Bureau of Investigation and detectives from the Plum Borough Police Department for the investigation leading to the successful prosecution of Scott David Baird.
Former New York State Assemblyman Sentenced to Six Years in Prison for Public Corruption Crimes
February 4, 2010 - PREET BHARARA, the United States Attorney for the Southern District of New York, announced that ANTHONY SEMINERIO, 74, of Queens, New York, was sentenced today to six years in prison by United States District Judge NAOMI REICE BUCHWALD for defrauding the people of New York of his honest services as an Assemblyman in the New York State legislature.
According to the Indictment, the Court's findings, and the evidence at the October 20, 21, and 30, 2009, sentencing hearing:
Seminerio's Overall Scheme Using "Marc Consultants"
SEMINERIO served as a member of the New York Assembly from 1978 until his June 23, 2009, resignation from that body. From 1999 through September 2008, SEMINERIO engaged in a scheme to defraud the public of his honest services by using a purported consulting firm, "Marc Consultants," to solicit and receive "consulting" payments from persons and entities having business before the State of New York. In fact, the Court found that SEMINERIO did not perform "any bona fide consulting services that fall outside the scope of activities an elected official could readily be expected to perform on behalf of his or her constituents." Instead, the Court found that he "solicited and received payments from a number of organizations and used his elected office to lobby state legislators and agency officials on behalf of those paying clients." Those entities included hospitals and related entities; a consulting firm associated with an educational institution; and a firm engaged in marketing supplemental insurance packages to public institutions.
Seminerio's Extortion of the Consultant
In 1999, SEMINERIO, among other things, approached ARLENE PEDONE, the founder of a Queens-based consulting company for whom he had previously worked and demanded a share of the company's revenue. When PEDONE resisted, SEMINERIO retaliated by writing and calling many of PEDONE's clients, telling them he was no longer associated with the firm, and pressuring some of them to stop paying PEDONE and instead hire SEMINERIO. As a result, PEDONE lost her client base and her company folded.
Seminerio's Extortion of a Non-Profit Executive
That summer, SEMINERIO also pressured ROBERT RICHARDS, the president of the Jamaica Chamber of Commerce, which depended largely on New York State funding. SEMINERIO asked RICHARDS to become his consulting client, repeatedly advancing his request when RICHARDS refused to respond. In January 2000, SEMINERIO met with RICHARDS at SEMINERIO's Albany legislative office and warned that if RICHARDS failed to hire him, SEMINERIO would block RICHARDS's efforts in the legislature in Albany. After this meeting, RICHARDS agreed to hire SEMINERIO and paid a monthly fee for approximately two years to Marc Consultants.
Seminerio's Bribery Scheme with a Client Hospital
More recently, on July 10, 2008, SEMINERIO called DENNIS WHALEN, a senior New York State health department official, and assured him that he had "a friend of me in the Assembly." WHALEN mentioned that he had been speaking with CARL KRUGER, a New York State Senator who supported the acquisition of the Caritas Hospitals in Queens, New York, by Parkway Hospital, which had previously refused to pay SEMINERIO consulting fees. SEMINERIO replied that he would rather see Jamaica Hospital, a client that had paid him nearly a decade's worth of consulting fees, "get it." SEMINERIO did not disclose to WHALEN that Jamaica Hospital had hired him, nor did he disclose that Parkway Hospital had refused to do so.
JUDGE BUCHWALD rejected SEMINERIO's contention that his criminal activity was limited to a "single, isolated criminal act" of failing to disclose a conflict of interest to WHALEN during the July 10, 2008, call. The Court also rejected SEMINERIO's claim that his activities had been approved in 1996 and thereafter by the New York Legislative Ethics Committee. The Court criticized SEMINERIO's failure to disclose the true nature of his work to the Committee and rejected his reliance on the Committee's opinion as "a classic illustration of 'garbage in, garbage out.'"
In imposing the sentence, Judge BUCHWALD described in detail how SEMINERIO "accepted bribes and engaged in extortion as part of a decade-long scheme to use his office - both literally and figuratively - for personal gain and at the expense of the public trust." As the Court highlighted, SEMINERIO was secretly recorded providing his own view of what it means to be a public official: "It doesn't mean [expletive deleted]."
In addition to his prison term, Judge BUCHWALD ordered SEMINERIO to pay $1,000,000 in forfeiture.
U.S. Attorney PREET BHARARA said, "When an elected official such as Seminerio violates the public trust, it threatens the public's confidence in our democracy. Seminerio was elected to serve the people, not himself. Judge Buchwald's powerful words and sentence reaffirm the commitment to the fair and impartial exercise of governmental power. We will continue to work tirelessly to prosecute those who betray for private gain the people they are elected to represent."
Mr. BHARARA praised the investigative work of the Federal Bureau of Investigation in this case. The investigation is continuing.
The prosecution is being handled by the Office's Public Corruption Unit. Assistant United States Attorneys DANIEL L. STEIN and WILLIAM J. HARRINGTON are in charge of the prosecution.
According to the Indictment, the Court's findings, and the evidence at the October 20, 21, and 30, 2009, sentencing hearing:
Seminerio's Overall Scheme Using "Marc Consultants"
SEMINERIO served as a member of the New York Assembly from 1978 until his June 23, 2009, resignation from that body. From 1999 through September 2008, SEMINERIO engaged in a scheme to defraud the public of his honest services by using a purported consulting firm, "Marc Consultants," to solicit and receive "consulting" payments from persons and entities having business before the State of New York. In fact, the Court found that SEMINERIO did not perform "any bona fide consulting services that fall outside the scope of activities an elected official could readily be expected to perform on behalf of his or her constituents." Instead, the Court found that he "solicited and received payments from a number of organizations and used his elected office to lobby state legislators and agency officials on behalf of those paying clients." Those entities included hospitals and related entities; a consulting firm associated with an educational institution; and a firm engaged in marketing supplemental insurance packages to public institutions.
Seminerio's Extortion of the Consultant
In 1999, SEMINERIO, among other things, approached ARLENE PEDONE, the founder of a Queens-based consulting company for whom he had previously worked and demanded a share of the company's revenue. When PEDONE resisted, SEMINERIO retaliated by writing and calling many of PEDONE's clients, telling them he was no longer associated with the firm, and pressuring some of them to stop paying PEDONE and instead hire SEMINERIO. As a result, PEDONE lost her client base and her company folded.
Seminerio's Extortion of a Non-Profit Executive
That summer, SEMINERIO also pressured ROBERT RICHARDS, the president of the Jamaica Chamber of Commerce, which depended largely on New York State funding. SEMINERIO asked RICHARDS to become his consulting client, repeatedly advancing his request when RICHARDS refused to respond. In January 2000, SEMINERIO met with RICHARDS at SEMINERIO's Albany legislative office and warned that if RICHARDS failed to hire him, SEMINERIO would block RICHARDS's efforts in the legislature in Albany. After this meeting, RICHARDS agreed to hire SEMINERIO and paid a monthly fee for approximately two years to Marc Consultants.
Seminerio's Bribery Scheme with a Client Hospital
More recently, on July 10, 2008, SEMINERIO called DENNIS WHALEN, a senior New York State health department official, and assured him that he had "a friend of me in the Assembly." WHALEN mentioned that he had been speaking with CARL KRUGER, a New York State Senator who supported the acquisition of the Caritas Hospitals in Queens, New York, by Parkway Hospital, which had previously refused to pay SEMINERIO consulting fees. SEMINERIO replied that he would rather see Jamaica Hospital, a client that had paid him nearly a decade's worth of consulting fees, "get it." SEMINERIO did not disclose to WHALEN that Jamaica Hospital had hired him, nor did he disclose that Parkway Hospital had refused to do so.
JUDGE BUCHWALD rejected SEMINERIO's contention that his criminal activity was limited to a "single, isolated criminal act" of failing to disclose a conflict of interest to WHALEN during the July 10, 2008, call. The Court also rejected SEMINERIO's claim that his activities had been approved in 1996 and thereafter by the New York Legislative Ethics Committee. The Court criticized SEMINERIO's failure to disclose the true nature of his work to the Committee and rejected his reliance on the Committee's opinion as "a classic illustration of 'garbage in, garbage out.'"
In imposing the sentence, Judge BUCHWALD described in detail how SEMINERIO "accepted bribes and engaged in extortion as part of a decade-long scheme to use his office - both literally and figuratively - for personal gain and at the expense of the public trust." As the Court highlighted, SEMINERIO was secretly recorded providing his own view of what it means to be a public official: "It doesn't mean [expletive deleted]."
In addition to his prison term, Judge BUCHWALD ordered SEMINERIO to pay $1,000,000 in forfeiture.
U.S. Attorney PREET BHARARA said, "When an elected official such as Seminerio violates the public trust, it threatens the public's confidence in our democracy. Seminerio was elected to serve the people, not himself. Judge Buchwald's powerful words and sentence reaffirm the commitment to the fair and impartial exercise of governmental power. We will continue to work tirelessly to prosecute those who betray for private gain the people they are elected to represent."
Mr. BHARARA praised the investigative work of the Federal Bureau of Investigation in this case. The investigation is continuing.
The prosecution is being handled by the Office's Public Corruption Unit. Assistant United States Attorneys DANIEL L. STEIN and WILLIAM J. HARRINGTON are in charge of the prosecution.
Woman Sentenced to More Than 10 Years in Prison for Identity Theft and Bank Fraud
February 4, 2010 - PORTLAND, OR—Carol Crane, 47, was sentenced to 124 months in prison in connection with the investigation of an identity theft ring which operated in the Portland metropolitan area from 2004 through early 2007. Crane was the sixth person to plead guilty and be sentenced based on participation in the ring. She was also ordered to pay restitution to banks and individuals totaling nearly $200,000 as detailed below. In December 2006, Crane pled guilty to one count of bank fraud, which carries a maximum penalty of 30 years in prison, a $1,000,000 fine, and up to five years of supervised release.
According to the government, in 2004 and 2005, Crane and a group of accomplices defrauded various banks and other financial institutions, including the Portland Teachers Credit Union, now known as OnPoint Community Credit Union, and obtained money by stealing identification and documents from unsuspecting victims and then using the stolen documents to obtain money from the victim banks.
An investigation by federal and state law enforcement agencies revealed that Crane and her accomplices would steal purses, wallets, personal identification, checks, credit cards and other items belonging to individuals and businesses from public and private premises in and around the Portland, Oregon area. Crane and her group would use stolen checks and create forgeries made payable to persons whose identification had been stolen. Crane would then direct others to use stolen identification to pose as the payees and cash the forged checks at various financial institutions. Members of the group would also use stolen credit and debit cards to get cash advances at various financial institutions or to make purchases.
After her plea in 2006, investigators developed evidence that Crane continued to commit identity theft and bank fraud during 2006 and 2007. An additional indictment was returned in April 2007, alleging that Crane and others continued to commit bank fraud and aggravated identity theft in the Portland area and in Washington along the I-5 corridor. It charges bank fraud and aggravated identity theft in connection with specific transactions at US Bank branches in Portland in December 2006, and alleges that Crane and two other individuals traveled to Federal Way and Tumwater, Washington during January and February 2007 as part of a conspiracy to commit bank fraud and identity theft.
During Crane's plea hearing in 2006, Crane acknowledged that her involvement in identity theft resulted in theft of identification from more than 50 individuals and caused losses to various financial institutions totaling $151,542. As part of the agreement that led to her sentencing, Crane acknowledged responsibility for additional victims and losses totaling over $54,000.
The successful prosecution of Crane and the co-defendants involved in this ring was made possible by the extraordinary cooperation of federal and local law enforcement agencies including the Washington County Fraud Identity Theft Enforcement (FITE) Team, Westside Interagency Narcotics Team (WIN), Washington County Sheriff's Office Forensic Criminalists, West Linn Police Department assigned to the Regional Economic Crime Investigation Center, Portland Police Bureau's Investigations Division, Portland Police Bureau's Neighborhood Response Team Fraud Investigations, Gresham Police Department, Vancouver Police Department Investigations Division, Federal Bureau of Investigation (FBI), Clackamas County District Attorney's Office, Multnomah County District Attorney's Office, and Washington County District Attorney's Office.
The case was prosecuted by Assistant United States Attorney Lance Caldwell. Anyone who has information relating to identity theft in the Portland metropolitan area should contact their local police or sheriff's department or the FBI.
According to the government, in 2004 and 2005, Crane and a group of accomplices defrauded various banks and other financial institutions, including the Portland Teachers Credit Union, now known as OnPoint Community Credit Union, and obtained money by stealing identification and documents from unsuspecting victims and then using the stolen documents to obtain money from the victim banks.
An investigation by federal and state law enforcement agencies revealed that Crane and her accomplices would steal purses, wallets, personal identification, checks, credit cards and other items belonging to individuals and businesses from public and private premises in and around the Portland, Oregon area. Crane and her group would use stolen checks and create forgeries made payable to persons whose identification had been stolen. Crane would then direct others to use stolen identification to pose as the payees and cash the forged checks at various financial institutions. Members of the group would also use stolen credit and debit cards to get cash advances at various financial institutions or to make purchases.
After her plea in 2006, investigators developed evidence that Crane continued to commit identity theft and bank fraud during 2006 and 2007. An additional indictment was returned in April 2007, alleging that Crane and others continued to commit bank fraud and aggravated identity theft in the Portland area and in Washington along the I-5 corridor. It charges bank fraud and aggravated identity theft in connection with specific transactions at US Bank branches in Portland in December 2006, and alleges that Crane and two other individuals traveled to Federal Way and Tumwater, Washington during January and February 2007 as part of a conspiracy to commit bank fraud and identity theft.
During Crane's plea hearing in 2006, Crane acknowledged that her involvement in identity theft resulted in theft of identification from more than 50 individuals and caused losses to various financial institutions totaling $151,542. As part of the agreement that led to her sentencing, Crane acknowledged responsibility for additional victims and losses totaling over $54,000.
The successful prosecution of Crane and the co-defendants involved in this ring was made possible by the extraordinary cooperation of federal and local law enforcement agencies including the Washington County Fraud Identity Theft Enforcement (FITE) Team, Westside Interagency Narcotics Team (WIN), Washington County Sheriff's Office Forensic Criminalists, West Linn Police Department assigned to the Regional Economic Crime Investigation Center, Portland Police Bureau's Investigations Division, Portland Police Bureau's Neighborhood Response Team Fraud Investigations, Gresham Police Department, Vancouver Police Department Investigations Division, Federal Bureau of Investigation (FBI), Clackamas County District Attorney's Office, Multnomah County District Attorney's Office, and Washington County District Attorney's Office.
The case was prosecuted by Assistant United States Attorney Lance Caldwell. Anyone who has information relating to identity theft in the Portland metropolitan area should contact their local police or sheriff's department or the FBI.
Texas State Representative Terri Hodge Pleads Guilty to Federal Charge and Agrees to Resign from Public Office
February 4, 2010 - DALLAS—Gladys E. Hodge, also known as “Terri Hodge,” who was to go on trial early next month on charges outlined in a 31-count indictment charging 14 public officials and their associates with various offenses related to a bribery and extortion scheme involving affordable housing developments in the Dallas area, has pleaded guilty, announced U.S. Attorney James T. Jacks of the Northern District of Texas. As a condition of her plea with the government, Hodge, who was elected to the Texas House of Representatives, District 100, in 1996, and re-elected to the same position in 1998, 2000, 2002, 2004, 2006, and 2008, has agreed to resign her office and never seek or hold future public office.
Hodge entered her guilty plea this morning, before U.S. District Judge Barbara M.G. Lynn, to fraud and false statements on an income tax return. She faces a maximum statutory sentence of three years in prison, a $100,000 fine, and restitution to the IRS. At this morning’s hearing, Judge Lynn indicated that she would be setting the sentencing date as expeditiously as possible.
According to the factual resume filed in the case, over the course of her tenure as a state representative, Hodge supported Southwest Housing Development Company, Inc. (SWH) developments which, among others, included affordable housing developments in District 100. Co-defendant Cheryl L. Potashnik, the wife of co-defendant Brian L. Potashnik, a real estate developer and the founder, president and a principal of SWH, served in multiple roles in management and development of SWH, including that of chief operating officer and principal of SHW. Cheryl Potashnik pleaded guilty to bribery in connection with benefits given to Hodge by the Potashniks and SWH. (See attached plea documents). Brian Potashnik also pleaded guilty to bribery of various public officials. Both Potashniks are awaiting sentencing.
According to the factual resume filed, sometime on or before February 27, 2002, Hodge asked Brian Potashnik for assistance in the form of affordable housing for herself within the geographical boundaries of her political district. She indicated that she had financial problems and could not afford to pay the full rate for housing. Beginning in April 2002, the Potashniks made arrangements to provide Hodge with housing in one of SWH’s market-rate affordable housing development units, which was located at Rosemont at Arlington Park in District 100. Hodge moved into the apartment on April 1, 2002, and renewed her lease, at the same rental rate of $200 per month, in November 2002 and again in March 2003. As reflected in the executed lease agreements, the market rate for this unit was $899 per month, and the difference in rent was paid by the Potashniks.
In addition, the Potashniks paid the utility bills on the apartment from their development funds and provided new carpeting for her house located on Abrams Road in Dallas. The carpeting cost $1,995 and was paid for by the construction arm of SWH, a company named Affordable Housing Construction, Inc.
The total value of the rental subsidies, utilities and carpeting provided to Hodge by the Potashniks from 2002 through 2005 was $32,541. None of this amount was included as income on the corresponding federal income tax returns for the tax years in which it was received by Hodge.
The plea documents further state that Hodge had additional income, in tax years 2001 through 2005, totaling $41,465, comprised, in part, of campaign contributions which she used for her own personal benefit and which she did not include as income on the corresponding federal income tax returns for the tax years in which she received it.
Hodge admits that she filed a U.S. Individual Income Tax Return, Form 1040, with the IRS, that she well knew omitted income of $6914 in 2001; $27,062 in 2002; $13,402 in 2003; $19,908 in 2004; and $6720 in 2005. Hodge further admits that as a result, she owes the following in taxes (excluding penalties and interest) to the IRS: $1,937 for 2001; $1,496 for 2002; $1,908 for 2003, $3,887 for 2004, and $1,680 for tax year 2005, for a grand total of $10,908.
The case is being investigated by the FBI and IRS-CI. Assistant U.S. Attorneys Sarah Saldaña, Chad Meacham, Chris Stokes, Steven Fahey and Leigha Simonton are prosecuting.
Hodge entered her guilty plea this morning, before U.S. District Judge Barbara M.G. Lynn, to fraud and false statements on an income tax return. She faces a maximum statutory sentence of three years in prison, a $100,000 fine, and restitution to the IRS. At this morning’s hearing, Judge Lynn indicated that she would be setting the sentencing date as expeditiously as possible.
According to the factual resume filed in the case, over the course of her tenure as a state representative, Hodge supported Southwest Housing Development Company, Inc. (SWH) developments which, among others, included affordable housing developments in District 100. Co-defendant Cheryl L. Potashnik, the wife of co-defendant Brian L. Potashnik, a real estate developer and the founder, president and a principal of SWH, served in multiple roles in management and development of SWH, including that of chief operating officer and principal of SHW. Cheryl Potashnik pleaded guilty to bribery in connection with benefits given to Hodge by the Potashniks and SWH. (See attached plea documents). Brian Potashnik also pleaded guilty to bribery of various public officials. Both Potashniks are awaiting sentencing.
According to the factual resume filed, sometime on or before February 27, 2002, Hodge asked Brian Potashnik for assistance in the form of affordable housing for herself within the geographical boundaries of her political district. She indicated that she had financial problems and could not afford to pay the full rate for housing. Beginning in April 2002, the Potashniks made arrangements to provide Hodge with housing in one of SWH’s market-rate affordable housing development units, which was located at Rosemont at Arlington Park in District 100. Hodge moved into the apartment on April 1, 2002, and renewed her lease, at the same rental rate of $200 per month, in November 2002 and again in March 2003. As reflected in the executed lease agreements, the market rate for this unit was $899 per month, and the difference in rent was paid by the Potashniks.
In addition, the Potashniks paid the utility bills on the apartment from their development funds and provided new carpeting for her house located on Abrams Road in Dallas. The carpeting cost $1,995 and was paid for by the construction arm of SWH, a company named Affordable Housing Construction, Inc.
The total value of the rental subsidies, utilities and carpeting provided to Hodge by the Potashniks from 2002 through 2005 was $32,541. None of this amount was included as income on the corresponding federal income tax returns for the tax years in which it was received by Hodge.
The plea documents further state that Hodge had additional income, in tax years 2001 through 2005, totaling $41,465, comprised, in part, of campaign contributions which she used for her own personal benefit and which she did not include as income on the corresponding federal income tax returns for the tax years in which she received it.
Hodge admits that she filed a U.S. Individual Income Tax Return, Form 1040, with the IRS, that she well knew omitted income of $6914 in 2001; $27,062 in 2002; $13,402 in 2003; $19,908 in 2004; and $6720 in 2005. Hodge further admits that as a result, she owes the following in taxes (excluding penalties and interest) to the IRS: $1,937 for 2001; $1,496 for 2002; $1,908 for 2003, $3,887 for 2004, and $1,680 for tax year 2005, for a grand total of $10,908.
The case is being investigated by the FBI and IRS-CI. Assistant U.S. Attorneys Sarah Saldaña, Chad Meacham, Chris Stokes, Steven Fahey and Leigha Simonton are prosecuting.
Brumley Man, Nevada Woman Indicted for $1.8 Million Bank Fraud
February 4, 2010 - SPRINGFIELD, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced today that a Brumley, Mo., man and a Nevada, Mo., woman have been indicted by a federal grand jury for their roles in a $1.8 million bank fraud scheme.
Earnest Ray Schenker, 38, of Brumley, and Donis Gayle Duncan, 39, of Nevada, were charged in a 15-count indictment returned by a federal grand jury in Springfield on Wednesday, Feb. 3, 2010.
The federal indictment alleges that Schenker and Duncan defrauded Farmers State Bank from February 2003 to March 2004. Duncan was employed as an assistant cashier at the Schell City, Mo., facility, where Schenker had a joint checking account with his wife.
According to the indictment, Schenker asked Duncan to give him immediate credit for large checks that he deposited into his account, and to permit him to immediately withdraw funds from his account based on the increased balance or to purchase money orders from the bank. Duncan, in violation of Farmers’ policy, did as Schenker requested.
The indictment alleges that both Schenker and Duncan knew that many of the checks Schenker deposited would be returned to Farmers as uncollectible. When that occurred, in order to prevent Farmers from learning about the scheme, Duncan allegedly violated Farmers’ policy by holding the check in her desk drawer instead of charging it to Schenker’s account, until he was able to make a deposit to cover the returned check. Duncan held checks for anywhere from a day to more than 50 days, the indictment says. Frequently, Schenker would cover the returned check by depositing another check that he and Duncan knew would also be returned to Farmers’ as uncollectible, the indictment alleges.
In the course of the scheme, the indictment alleges, Schenker deposited (and Duncan gave him immediate credit for) more than 75 checks that were returned to Farmers as uncollectible. When Farmers learned of the scheme in March 2004, the economic loss to Farmers was more than $1.8 million.
The federal indictment charges Schenker and Duncan with 15 counts of bank fraud related to the scheme.
Phillips cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Douglas C. Bunch. It was investigated by the Federal Bureau of Investigation.
Detroit Man Sentenced for Bank Robbery
February 4, 2010 - MADISON, WI—Stephen P. Sinnott, United States Attorney for the Western District of Wisconsin, announced that Paul Walker, 43, of Detroit, Michigan, was sentenced today by U.S. District Judge Barbara B. Crabb to 12½ years in federal prison for bank robbery. Walker pleaded guilty to the charge on December 2, 2009.
Walker robbed five Dane County area banks during a two-week period in the Summer of 2009. Walker has an extensive criminal history including prior felony convictions for robbery and felon in possession of a firearm. At the time of these offenses, Walker was on supervision after serving a prison sentence in Michigan.
The charges against Walker were the result of an investigation conducted by the Madison Police Department, the Sun Prairie Police Department, and the Federal Bureau of Investigation. The prosecution of the case has been handled by Assistant U.S. Attorney Meredith P. Duchemin.
Walker robbed five Dane County area banks during a two-week period in the Summer of 2009. Walker has an extensive criminal history including prior felony convictions for robbery and felon in possession of a firearm. At the time of these offenses, Walker was on supervision after serving a prison sentence in Michigan.
The charges against Walker were the result of an investigation conducted by the Madison Police Department, the Sun Prairie Police Department, and the Federal Bureau of Investigation. The prosecution of the case has been handled by Assistant U.S. Attorney Meredith P. Duchemin.
Unknown Bank Robber
Age: Mid to Late 30s Build: Medium
Sex: Male Hair: Brown
Height: 5'6" to 5'8" Eyes: Unknown
Weight: 165 to 200 pounds Race: Black
Remarks: This individual generally wears a thin goatee. He periodically has worn wire-rimmed prescription-style eyeglasses and carries a dark-colored messenger bag.
CAUTION
This unknown bank robber is suspected of committing at least fifteen bank robberies in and around the Boston, Massachusetts, area since October of 2009. In several of the robberies, demand notes, threatening a gun, were used. A small black handgun has been displayed in at least one of the robberies. The suspect has worn a baseball hat or knit cap in most of the robberies, as well as a puffy jacket, earning him the nickname "PJ Bandit".
SHOULD BE CONSIDERED ARMED AND DANGEROUS
IF YOU HAVE ANY INFORMATION CONCERNING THIS PERSON, PLEASE CONTACT YOUR LOCAL FBI OFFICE OR THE NEAREST AMERICAN EMBASSY OR CONSULATE.
Wednesday, February 03, 2010
Pittsburgh Man Admits Attempting to Entice Minor for Sex and Transporting Child Pornography Via Computer
February 3, 2010 - Dennis C. Pfannenschmidt, United States Attorney for the Middle District of Pennsylvania, announced that a Pittsburgh resident pleaded guilty today before U.S. District Court Judge A. Richard Caputo to using the Internet to attempt to entice a minor for sex and transporting child pornography. Pfannenschmidt stated that George Carvlin, age 56, admitted to committing both offenses in May 2008.
Carvlin was indicted by a federal grand jury on February 3, 2009. Carvlin’s charges resulted from an investigation conducted by the Federal Bureau of Investigation (FBI) and the Barrett Township Police Department in Monroe County.
Carvlin faces a mandatory minimum sentence of 10 years in prison and a possible maximum sentence of life in prison. Judge Caputo scheduled sentencing for May 14, 2010.
Pfannenschmidt noted that 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 United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Pfannenschmidt noted that the case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Carvlin was indicted by a federal grand jury on February 3, 2009. Carvlin’s charges resulted from an investigation conducted by the Federal Bureau of Investigation (FBI) and the Barrett Township Police Department in Monroe County.
Carvlin faces a mandatory minimum sentence of 10 years in prison and a possible maximum sentence of life in prison. Judge Caputo scheduled sentencing for May 14, 2010.
Pfannenschmidt noted that 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 United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Pfannenschmidt noted that the case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Brookville Man Pleads Guilty to Illegally Possessing Firearms
February 3, 2010 - Acting United States Attorney Robert S. Cessar announced today, February 2, 2010, that on February 1, 2010, Marvin E. Hall, a resident of Brookville, Pennsylvania, pleaded guilty in federal court to a charge violating federal firearms laws.
Hall, age 51, pleaded guilty to one count before United States District Judge Arthur J. Schwab.
In connection with the guilty plea, Assistant United States Attorney Margaret E. Picking advised the court that on January 11, 2008, Hall, a convicted felon, had in his possession a 12 gauge shotgun and an SKS assault rifle. As a convicted felon, Hall is not permitted to posses firearms.
Judge Schwab scheduled sentencing for June 25, 2010 at 9:30 a.m. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation that led to the prosecution of Marvin E. Hall.
Hall, age 51, pleaded guilty to one count before United States District Judge Arthur J. Schwab.
In connection with the guilty plea, Assistant United States Attorney Margaret E. Picking advised the court that on January 11, 2008, Hall, a convicted felon, had in his possession a 12 gauge shotgun and an SKS assault rifle. As a convicted felon, Hall is not permitted to posses firearms.
Judge Schwab scheduled sentencing for June 25, 2010 at 9:30 a.m. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation that led to the prosecution of Marvin E. Hall.
Two Charged in Armed Robbery of Westmoreland Federal Credit Union
February 3, 2010 - Acting United States Attorney Robert S. Cessar announced today, February 2, 2010, that a resident of Crafton, Pennsylvania and a resident of Huntington, West Virginia have been indicted by a federal grand jury in Pittsburgh on charges of bank robbery and firearms violations.
The six-count indictment named David Mathis, age 45, of Crafton, Pennsylvania, and Lamont Laprade, age 33, of Huntington, West Virginia.
According to the indictment, Mathis and Laprade committed the armed robbery of the Westmoreland Community Federal Credit Union located at 1007 Georges Station Road, Hempfield Township, Westmoreland County, Pennsylvania, on or about January 8, 2010. On or about January 8, 2006, Mathis possessed a firearm, namely, a Glock 26, 9mm pistol, bearing serial number KPE340. Because Mathis has a previous conviction for a felony offense, he is prohibited under federal law from possessing a firearm.
Assistant United States Attorney Constance M. Bowden, who presented the case to the grand jury, indicated that the law provides for a maximum total sentence of life in prison, a fine of $1,250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation leading to the indictment in this case.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
The six-count indictment named David Mathis, age 45, of Crafton, Pennsylvania, and Lamont Laprade, age 33, of Huntington, West Virginia.
According to the indictment, Mathis and Laprade committed the armed robbery of the Westmoreland Community Federal Credit Union located at 1007 Georges Station Road, Hempfield Township, Westmoreland County, Pennsylvania, on or about January 8, 2010. On or about January 8, 2006, Mathis possessed a firearm, namely, a Glock 26, 9mm pistol, bearing serial number KPE340. Because Mathis has a previous conviction for a felony offense, he is prohibited under federal law from possessing a firearm.
Assistant United States Attorney Constance M. Bowden, who presented the case to the grand jury, indicated that the law provides for a maximum total sentence of life in prison, a fine of $1,250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation leading to the indictment in this case.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Federal Grand Jury Indicts Couple for Bank Robbery
Couple Had Premature Infant in Bank Seat of Their Getaway Car
February 3, 2010 - DALLAS—A federal grand jury in Dallas returned an indictment yesterday charging Waylon McDonald, 32, and Inequa Rushing, 24, both of Dallas, with conspiracy to commit bank robbery and bank robbery, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Both are charged with committing the January 19, 2009, robbery of Comerica Bank at 5201 East R.L Thornton Freeway in Dallas. They have been in custody since their arrest shortly after the robbery.
According to the complaint filed in the case, Rushing entered the bank at approximately 1:51 p.m. and approached a teller station. Rushing was on her cell phone at the time. The teller asked Rushing if she could be of assistance and Rushing placed her brown purse and a handwritten note face down on the counter. The teller turned the note over to read it and it stated, “I HAVE A GUN GIVE ME THE MONEY - N- NO ONE WILL GET HURT.. ‘HURRY’ Bitch!!” The teller removed currency and a dye pack from her drawer and handed it to the suspect. Rushing then put the money in her purse and told the teller not to touch anything. Rushing left the bank with the money and fled in a getaway car driven by Waylon McDonald.
When Dallas Police Officers arrived at the bank, they found Rushing’s brown purse in the parking lot, and could see the red dye stained money and assorted identification and personal papers for Inequa Rushing, listing an address in Dallas. They went to that address and spoke to Rushing and McDonald. Rushing told officers that she had robbed the bank and that McDonald had driven her to and from the bank. A search of the residence revealed the wig, clothing, and red dye-stained shoes that Rushing had worn during the robbery. According to evidence presented at their detention hearing, the red dye-pack exploded in the getaway car, spraying noxious fumes and dye. Rushing’s 4-month-old baby, who was on oxygen because of premature birth, was in the back seat of the getaway car at the time.
An indictment is an accusation by a grand jury and a defendant is presumed innocent unless proven otherwise. Upon conviction, however, the conspiracy count carries a maximum statutory sentence of five years in prison and a $250,000 fine. Upon conviction, the bank robbery count carries a maximum statutory sentence of 20 years in prison and a $250,000 fine.
The case is being investigated by the FBI and the Dallas Police Department. Assistant U.S. Attorney Gary Tromblay is in charge of the prosecution.
February 3, 2010 - DALLAS—A federal grand jury in Dallas returned an indictment yesterday charging Waylon McDonald, 32, and Inequa Rushing, 24, both of Dallas, with conspiracy to commit bank robbery and bank robbery, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Both are charged with committing the January 19, 2009, robbery of Comerica Bank at 5201 East R.L Thornton Freeway in Dallas. They have been in custody since their arrest shortly after the robbery.
According to the complaint filed in the case, Rushing entered the bank at approximately 1:51 p.m. and approached a teller station. Rushing was on her cell phone at the time. The teller asked Rushing if she could be of assistance and Rushing placed her brown purse and a handwritten note face down on the counter. The teller turned the note over to read it and it stated, “I HAVE A GUN GIVE ME THE MONEY - N- NO ONE WILL GET HURT.. ‘HURRY’ Bitch!!” The teller removed currency and a dye pack from her drawer and handed it to the suspect. Rushing then put the money in her purse and told the teller not to touch anything. Rushing left the bank with the money and fled in a getaway car driven by Waylon McDonald.
When Dallas Police Officers arrived at the bank, they found Rushing’s brown purse in the parking lot, and could see the red dye stained money and assorted identification and personal papers for Inequa Rushing, listing an address in Dallas. They went to that address and spoke to Rushing and McDonald. Rushing told officers that she had robbed the bank and that McDonald had driven her to and from the bank. A search of the residence revealed the wig, clothing, and red dye-stained shoes that Rushing had worn during the robbery. According to evidence presented at their detention hearing, the red dye-pack exploded in the getaway car, spraying noxious fumes and dye. Rushing’s 4-month-old baby, who was on oxygen because of premature birth, was in the back seat of the getaway car at the time.
An indictment is an accusation by a grand jury and a defendant is presumed innocent unless proven otherwise. Upon conviction, however, the conspiracy count carries a maximum statutory sentence of five years in prison and a $250,000 fine. Upon conviction, the bank robbery count carries a maximum statutory sentence of 20 years in prison and a $250,000 fine.
The case is being investigated by the FBI and the Dallas Police Department. Assistant U.S. Attorney Gary Tromblay is in charge of the prosecution.
Federal Indictments Returned in the Eastern District of Texas
February 3, 2010 - TYLER, TX—U.S. Attorney John M. Bales announced that indictments were returned on Feb. 2, 2010, charging individuals with federal crimes in the Eastern District of Texas.
JIM BOB SHIPP, 60, of Mount Pleasant, Texas, was indicted and charged with health care fraud; false statement relating to health care matters; felon in possession of a firearm; and false statement during the purchase of a firearm. If convicted, Shipp faces up to 10 years in federal prison for each of the health care and firearms charges and up to five years for the false statement during the purchase of a firearms charge.
According to the indictment, from March 1987 to December 2009, Shipp is alleged to have committed health care fraud and made false statements in relation to obtaining health care services from the Veterans Disability Program. It is alleged that Shipp falsely represented to doctors that he had extreme loss of vision in both eyes. As a result of these false claims, the Veterans' Affairs Disability Compensation Program awarded the Defendant special monthly compensation during the time period alleged. Also, the indictment alleges that on Sep. 11, 2006, in Titus County, Shipp, possessed a firearm after having been previously convicted of a felony. The Indictment also alleges that on Feb. 7, 2006, in Titus County, Shipp attempted to purchase a firearm from a licensed dealer, during which time, Shipp made false statements by representing that he had not been convicted of a felony or a crime which would prohibit him from legally purchasing a firearm.
This case is being investigated by the Veterans Affairs Office of Inspector General, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Denise O. Simpson is prosecuting the case.
VICTORIA LYNN FIELDS, 39, of Texarkana, Texas, was indicted on charges of possessing a firearm in a federal court facility. According to the indictment, on Jan. 28, 2010, Fields entered the federal courthouse in Texarkana, Texas, with a pistol in a duffle bag. If convicted, Fields faces up to 10 years in federal prison.
This case is being investigated by the U.S. Marshals Service (USMS) and is being prosecuted by Assistant U.S. Attorney Carol K. Wheeler.
MARK ANTHONY MERRYMAN, 44, of San Antonio, was indicted for possession, uttering, and manufacturing of counterfeit currency. According to the indictment, on Dec. 12, 2009, Merryman is alleged to have manufactured and passed several counterfeit $20 bills in Hopkins County, Texas. If convicted, he faces up to 20 years in federal prison. The government also intends to seek forfeiture of the equipment Merryman used to make the counterfeit currency.
This case is being investigated by the U.S. Secret Service and prosecuted by Assistant U.S. Attorney Jim Noble.
ANSAN SUMAN-AMIR MEADOWS, 33, SHAKIA LASHA MEADOWS, 33, and CLARENCE LEE WILLIAMS, JR., 30, all of Texarkana, Texas, and RICHARD LYNE YOUNG, 34, of Texarkana, Arkansas, were indicted on charges of conspiracy with intent to distribute cocaine and marijuana. Williams and Shakia Meadows were also charged with possession with intent to distribute cocaine. According to the indictment, the defendants are alleged to have conspired to distribute five kilograms or more of cocaine and 1000 kilograms or more of marijuana in the Eastern District of Texas. If convicted, the defendants could each receive up to life in federal prison.
This case is being investigated by the Texas Department of Public Safety and prosecuted by Assistant U.S. Attorney Denise O. Simpson.
FREDDIE ESPINO, 39, of Texarkana, Texas, has been indicted for possession of a prohibited object in a federal correctional institution. According to the indictment, Espino, a federal inmate serving time in FCI Texarkana for drug trafficking, was found to be in possession of 16 individually wrapped bags of marijuana in a gym bag. If convicted, he faces up to five years in federal prison.
This case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Carol K. Wheeler.
RICHARD LEE BENNETT, 52, of Chandler, Texas, has been indicted for being a felon in possession of a firearm. According to the indictment, in December 2009, Bennett was found to be in possession of a rifle and ammunition. Further investigation revealed the defendant is a convicted felon, having been convicted of murder in Texas in 1991, and prohibited from owning or possessing firearms or ammunition. If convicted, he faces up to 10 years in federal prison.
This case is being investigated by the U.S. Marshals Service and prosecuted by Assistant U.S. Attorney Gregg A. Marchessault.
VINCENT TREVINO HERRERA, 33, of Lufkin, has been charged in a 12-count indictment with being a felon in possession of a firearm, possession with intent to deliver a controlled substance, and possession of a firearm during a drug trafficking crime. According to the indictment, Lufkin police made undercover buys from the defendant on 10 different occasions. They also purchased a firearm during one of the buys. Further investigation revealed the defendant is a convicted felon and prohibited from owning or possessing firearms or ammunition. If convicted, he faces up to 20 years in federal prison for the drug charges and up to 10 years for the firearms charges.
This case is being investigated by the Lufkin Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Lisa Flournoy.
JORGE GILBERTO DOMINGUEZ, 31, of Lufkin, has been charged in a three-count indictment with being a felon in possession of a firearm, an illegal alien in possession of a firearm and illegal reentry of a deported alien. According to the indictment, Lufkin police located a firearm in the defendant's possession. Further investigation revealed the defendant has a prior felony conviction and he was in the United States illegally after having been previously deported. If convicted, he faces up to 10 years in federal prison for the firearms charges and up to 20 years and deportation for the illegal re-entry charge.
This case is being investigated by the Lufkin Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and U.S. Immigration and Customs Enforcement and prosecuted by Assistant U.S. Attorney Lisa Flournoy.
EDGAR TORRES SOLIS, 28, of Haskell, Texas, has been indicted for illegal reentry of a deported alien. According to the indictment, on Oct. 11, 2009, Solis was found in Gregg County, Texas after having been previously deported from the United States. If convicted, he faces up 20 years in federal prison and deportation.
This case is being investigated by U.S. Immigration and Customs Enforcement and prosecuted by Assistant U.S. Attorney Gregg A. Marchessault.
A grand jury indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
JIM BOB SHIPP, 60, of Mount Pleasant, Texas, was indicted and charged with health care fraud; false statement relating to health care matters; felon in possession of a firearm; and false statement during the purchase of a firearm. If convicted, Shipp faces up to 10 years in federal prison for each of the health care and firearms charges and up to five years for the false statement during the purchase of a firearms charge.
According to the indictment, from March 1987 to December 2009, Shipp is alleged to have committed health care fraud and made false statements in relation to obtaining health care services from the Veterans Disability Program. It is alleged that Shipp falsely represented to doctors that he had extreme loss of vision in both eyes. As a result of these false claims, the Veterans' Affairs Disability Compensation Program awarded the Defendant special monthly compensation during the time period alleged. Also, the indictment alleges that on Sep. 11, 2006, in Titus County, Shipp, possessed a firearm after having been previously convicted of a felony. The Indictment also alleges that on Feb. 7, 2006, in Titus County, Shipp attempted to purchase a firearm from a licensed dealer, during which time, Shipp made false statements by representing that he had not been convicted of a felony or a crime which would prohibit him from legally purchasing a firearm.
This case is being investigated by the Veterans Affairs Office of Inspector General, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Denise O. Simpson is prosecuting the case.
VICTORIA LYNN FIELDS, 39, of Texarkana, Texas, was indicted on charges of possessing a firearm in a federal court facility. According to the indictment, on Jan. 28, 2010, Fields entered the federal courthouse in Texarkana, Texas, with a pistol in a duffle bag. If convicted, Fields faces up to 10 years in federal prison.
This case is being investigated by the U.S. Marshals Service (USMS) and is being prosecuted by Assistant U.S. Attorney Carol K. Wheeler.
MARK ANTHONY MERRYMAN, 44, of San Antonio, was indicted for possession, uttering, and manufacturing of counterfeit currency. According to the indictment, on Dec. 12, 2009, Merryman is alleged to have manufactured and passed several counterfeit $20 bills in Hopkins County, Texas. If convicted, he faces up to 20 years in federal prison. The government also intends to seek forfeiture of the equipment Merryman used to make the counterfeit currency.
This case is being investigated by the U.S. Secret Service and prosecuted by Assistant U.S. Attorney Jim Noble.
ANSAN SUMAN-AMIR MEADOWS, 33, SHAKIA LASHA MEADOWS, 33, and CLARENCE LEE WILLIAMS, JR., 30, all of Texarkana, Texas, and RICHARD LYNE YOUNG, 34, of Texarkana, Arkansas, were indicted on charges of conspiracy with intent to distribute cocaine and marijuana. Williams and Shakia Meadows were also charged with possession with intent to distribute cocaine. According to the indictment, the defendants are alleged to have conspired to distribute five kilograms or more of cocaine and 1000 kilograms or more of marijuana in the Eastern District of Texas. If convicted, the defendants could each receive up to life in federal prison.
This case is being investigated by the Texas Department of Public Safety and prosecuted by Assistant U.S. Attorney Denise O. Simpson.
FREDDIE ESPINO, 39, of Texarkana, Texas, has been indicted for possession of a prohibited object in a federal correctional institution. According to the indictment, Espino, a federal inmate serving time in FCI Texarkana for drug trafficking, was found to be in possession of 16 individually wrapped bags of marijuana in a gym bag. If convicted, he faces up to five years in federal prison.
This case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Carol K. Wheeler.
RICHARD LEE BENNETT, 52, of Chandler, Texas, has been indicted for being a felon in possession of a firearm. According to the indictment, in December 2009, Bennett was found to be in possession of a rifle and ammunition. Further investigation revealed the defendant is a convicted felon, having been convicted of murder in Texas in 1991, and prohibited from owning or possessing firearms or ammunition. If convicted, he faces up to 10 years in federal prison.
This case is being investigated by the U.S. Marshals Service and prosecuted by Assistant U.S. Attorney Gregg A. Marchessault.
VINCENT TREVINO HERRERA, 33, of Lufkin, has been charged in a 12-count indictment with being a felon in possession of a firearm, possession with intent to deliver a controlled substance, and possession of a firearm during a drug trafficking crime. According to the indictment, Lufkin police made undercover buys from the defendant on 10 different occasions. They also purchased a firearm during one of the buys. Further investigation revealed the defendant is a convicted felon and prohibited from owning or possessing firearms or ammunition. If convicted, he faces up to 20 years in federal prison for the drug charges and up to 10 years for the firearms charges.
This case is being investigated by the Lufkin Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Lisa Flournoy.
JORGE GILBERTO DOMINGUEZ, 31, of Lufkin, has been charged in a three-count indictment with being a felon in possession of a firearm, an illegal alien in possession of a firearm and illegal reentry of a deported alien. According to the indictment, Lufkin police located a firearm in the defendant's possession. Further investigation revealed the defendant has a prior felony conviction and he was in the United States illegally after having been previously deported. If convicted, he faces up to 10 years in federal prison for the firearms charges and up to 20 years and deportation for the illegal re-entry charge.
This case is being investigated by the Lufkin Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and U.S. Immigration and Customs Enforcement and prosecuted by Assistant U.S. Attorney Lisa Flournoy.
EDGAR TORRES SOLIS, 28, of Haskell, Texas, has been indicted for illegal reentry of a deported alien. According to the indictment, on Oct. 11, 2009, Solis was found in Gregg County, Texas after having been previously deported from the United States. If convicted, he faces up 20 years in federal prison and deportation.
This case is being investigated by U.S. Immigration and Customs Enforcement and prosecuted by Assistant U.S. Attorney Gregg A. Marchessault.
A grand jury indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Texas State Representative Terri Hodge Pleads Guilty to Federal Charge and Agrees to Resign from Public Office
February 3, 2010 - DALLAS—Gladys E. Hodge, also known as “Terri Hodge,” who was to go on trial early next month on charges outlined in a 31-count indictment charging 14 public officials and their associates with various offenses related to a bribery and extortion scheme involving affordable housing developments in the Dallas area, has pleaded guilty, announced U.S. Attorney James T. Jacks of the Northern District of Texas. As a condition of her plea with the government, Hodge, who was elected to the Texas House of Representatives, District 100, in 1996, and re-elected to the same position in 1998, 2000, 2002, 2004, 2006, and 2008, has agreed to resign her office and never seek or hold future public office.
Hodge entered her guilty plea this morning, before U.S. District Judge Barbara M.G. Lynn, to fraud and false statements on an income tax return. She faces a maximum statutory sentence of three years in prison, a $100,000 fine, and restitution to the IRS. At this morning’s hearing, Judge Lynn indicated that she would be setting the sentencing date as expeditiously as possible.
According to the factual resume filed in the case, over the course of her tenure as a state representative, Hodge supported Southwest Housing Development Company, Inc. (SWH) developments which, among others, included affordable housing developments in District 100. Co-defendant Cheryl L. Potashnik, the wife of co-defendant Brian L. Potashnik, a real estate developer and the founder, president and a principal of SWH, served in multiple roles in management and development of SWH, including that of chief operating officer and principal of SHW. Cheryl Potashnik pleaded guilty to bribery in connection with benefits given to Hodge by the Potashniks and SWH. (See attached plea documents). Brian Potashnik also pleaded guilty to bribery of various public officials. Both Potashniks are awaiting sentencing.
According to the factual resume filed, sometime on or before February 27, 2002, Hodge asked Brian Potashnik for assistance in the form of affordable housing for herself within the geographical boundaries of her political district. She indicated that she had financial problems and could not afford to pay the full rate for housing. Beginning in April 2002, the Potashniks made arrangements to provide Hodge with housing in one of SWH’s market-rate affordable housing development units, which was located at Rosemont at Arlington Park in District 100. Hodge moved into the apartment on April 1, 2002, and renewed her lease, at the same rental rate of $200 per month, in November 2002 and again in March 2003. As reflected in the executed lease agreements, the market rate for this unit was $899 per month, and the difference in rent was paid by the Potashniks.
In addition, the Potashniks paid the utility bills on the apartment from their development funds and provided new carpeting for her house located on Abrams Road in Dallas. The carpeting cost $1,995 and was paid for by the construction arm of SWH, a company named Affordable Housing Construction, Inc.
The total value of the rental subsidies, utilities and carpeting provided to Hodge by the Potashniks from 2002 through 2005 was $32,541. None of this amount was included as income on the corresponding federal income tax returns for the tax years in which it was received by Hodge.
The plea documents further state that Hodge had additional income, in tax years 2001 through 2005, totaling $41,465, comprised, in part, of campaign contributions which she used for her own personal benefit and which she did not include as income on the corresponding federal income tax returns for the tax years in which she received it.
Hodge admits that she filed a U.S. Individual Income Tax Return, Form 1040, with the IRS, that she well knew omitted income of $6914 in 2001; $27,062 in 2002; $13,402 in 2003; $19,908 in 2004; and $6720 in 2005. Hodge further admits that as a result, she owes the following in taxes (excluding penalties and interest) to the IRS: $1,937 for 2001; $1,496 for 2002; $1,908 for 2003, $3,887 for 2004, and $1,680 for tax year 2005, for a grand total of $10,908.
The case is being investigated by the FBI and IRS-CI. Assistant U.S. Attorneys Sarah Saldaña, Chad Meacham, Chris Stokes, Steven Fahey and Leigha Simonton are prosecuting.
Hodge entered her guilty plea this morning, before U.S. District Judge Barbara M.G. Lynn, to fraud and false statements on an income tax return. She faces a maximum statutory sentence of three years in prison, a $100,000 fine, and restitution to the IRS. At this morning’s hearing, Judge Lynn indicated that she would be setting the sentencing date as expeditiously as possible.
According to the factual resume filed in the case, over the course of her tenure as a state representative, Hodge supported Southwest Housing Development Company, Inc. (SWH) developments which, among others, included affordable housing developments in District 100. Co-defendant Cheryl L. Potashnik, the wife of co-defendant Brian L. Potashnik, a real estate developer and the founder, president and a principal of SWH, served in multiple roles in management and development of SWH, including that of chief operating officer and principal of SHW. Cheryl Potashnik pleaded guilty to bribery in connection with benefits given to Hodge by the Potashniks and SWH. (See attached plea documents). Brian Potashnik also pleaded guilty to bribery of various public officials. Both Potashniks are awaiting sentencing.
According to the factual resume filed, sometime on or before February 27, 2002, Hodge asked Brian Potashnik for assistance in the form of affordable housing for herself within the geographical boundaries of her political district. She indicated that she had financial problems and could not afford to pay the full rate for housing. Beginning in April 2002, the Potashniks made arrangements to provide Hodge with housing in one of SWH’s market-rate affordable housing development units, which was located at Rosemont at Arlington Park in District 100. Hodge moved into the apartment on April 1, 2002, and renewed her lease, at the same rental rate of $200 per month, in November 2002 and again in March 2003. As reflected in the executed lease agreements, the market rate for this unit was $899 per month, and the difference in rent was paid by the Potashniks.
In addition, the Potashniks paid the utility bills on the apartment from their development funds and provided new carpeting for her house located on Abrams Road in Dallas. The carpeting cost $1,995 and was paid for by the construction arm of SWH, a company named Affordable Housing Construction, Inc.
The total value of the rental subsidies, utilities and carpeting provided to Hodge by the Potashniks from 2002 through 2005 was $32,541. None of this amount was included as income on the corresponding federal income tax returns for the tax years in which it was received by Hodge.
The plea documents further state that Hodge had additional income, in tax years 2001 through 2005, totaling $41,465, comprised, in part, of campaign contributions which she used for her own personal benefit and which she did not include as income on the corresponding federal income tax returns for the tax years in which she received it.
Hodge admits that she filed a U.S. Individual Income Tax Return, Form 1040, with the IRS, that she well knew omitted income of $6914 in 2001; $27,062 in 2002; $13,402 in 2003; $19,908 in 2004; and $6720 in 2005. Hodge further admits that as a result, she owes the following in taxes (excluding penalties and interest) to the IRS: $1,937 for 2001; $1,496 for 2002; $1,908 for 2003, $3,887 for 2004, and $1,680 for tax year 2005, for a grand total of $10,908.
The case is being investigated by the FBI and IRS-CI. Assistant U.S. Attorneys Sarah Saldaña, Chad Meacham, Chris Stokes, Steven Fahey and Leigha Simonton are prosecuting.
Ft. Pierce Man Sentenced for Armed Robbery of Riverside National Bank
February 3, 2010 - Jeffrey H. Sloman, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office, announced the sentencing of defendant Terry Burney Delion, Jr., 23, of Ft. Pierce, Florida. The defendant had been charged with bank robbery, in violation of 18 U.S.C. § 2113(a), and using/brandishing a firearm during a crime of violence, in violation of 18 U.S.C. § 924(c)(1)(A)(ii).
On February 1, 2010, U.S. District Court Judge Donald L. Graham sentenced Terry Burney Delion, Jr. to 33 months in prison on the bank robbery charge, and imposed a separate consecutive term of seven years in prison on the charge of using a firearm during the robbery. The total sentence was 117 months' incarceration, to be followed by three years of supervised release.
According to records filed with the court, at approximately 9:00 a.m. on September 30, 2009, Terry Burney Delion, Jr., wearing all black clothing and mask, entered the Riverside National Bank branch on Okeechobee Road in Ft. Pierce, FL. Delion shouted for everyone in the bank to put their hands up and he pointed his silver hand gun at the four tellers. As he went to each teller, Delion demanded that the cash drawers be emptied into the white plastic bag. A bank audit determined that Delion received approximately $24,437.70 from the tellers.
A witness saw Delion run and enter a four door black car. As Delion drove away, Ft. Pierce Police and the St. Lucie County Sheriffs spotted him. Following a car chase and foot pursuit, Delion was captured without incident. Upon capture, officers recovered a white bag filled with cash, a black knit mask with eye holes cut out, and a loaded silver-colored .22 caliber hand gun, and other items.
Mr. Sloman commended the investigative efforts of the Ft. Pierce Police Department, St. Lucie County Sheriff’s Office and the Federal Bureau of Investigation. The case is being handled by Assistant U.S. Attorneys Carmen Lineberger and Theodore Cooperstein.
On February 1, 2010, U.S. District Court Judge Donald L. Graham sentenced Terry Burney Delion, Jr. to 33 months in prison on the bank robbery charge, and imposed a separate consecutive term of seven years in prison on the charge of using a firearm during the robbery. The total sentence was 117 months' incarceration, to be followed by three years of supervised release.
According to records filed with the court, at approximately 9:00 a.m. on September 30, 2009, Terry Burney Delion, Jr., wearing all black clothing and mask, entered the Riverside National Bank branch on Okeechobee Road in Ft. Pierce, FL. Delion shouted for everyone in the bank to put their hands up and he pointed his silver hand gun at the four tellers. As he went to each teller, Delion demanded that the cash drawers be emptied into the white plastic bag. A bank audit determined that Delion received approximately $24,437.70 from the tellers.
A witness saw Delion run and enter a four door black car. As Delion drove away, Ft. Pierce Police and the St. Lucie County Sheriffs spotted him. Following a car chase and foot pursuit, Delion was captured without incident. Upon capture, officers recovered a white bag filled with cash, a black knit mask with eye holes cut out, and a loaded silver-colored .22 caliber hand gun, and other items.
Mr. Sloman commended the investigative efforts of the Ft. Pierce Police Department, St. Lucie County Sheriff’s Office and the Federal Bureau of Investigation. The case is being handled by Assistant U.S. Attorneys Carmen Lineberger and Theodore Cooperstein.
Kansas City Man Pleads Guilty in $3.6 Million Mortgage Fraud, Money Laundering Scheme
February 3, 2010 - KANSAS CITY, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man pleaded guilty in federal court today to his role in a mortgage fraud conspiracy that involved loans on 34 properties in the inner city and midtown areas of Kansas City totaling more than $3.6 million.
Quentin Henley, 37, of Kansas City, pleaded guilty before U.S. Chief District Judge Fernando J. Gaitan this morning to the charges contained in a July 14, 2009, federal indictment.
Henley did business as Quality Remodeling, as All and One Construction and as Corporate Remodeling Associates. Henley admitted that he participated in a mortgage fraud conspiracy from July 2003 to January 2009, in which he acquired residential properties at reduced rates for the stated purpose of rehabbing the properties, then renting or selling them. In reality, Henley did little or no work to rehab some of the properties.
Henley and his co-conspirators submitted materially false, fraudulent and misleading loan applications and supporting documentation to mortgage lenders, all to induce the lenders to approve the applications and lend funds. Henley admitted that he caused mortgage lenders to make loans regarding at least 34 properties in the amount of at least $3,600,482.
In addition to the mortgage fraud conspiracy, Henley also pleaded guilty to money laundering. Henley admitted that he engaged in a financial transaction that involved funds obtained by fraud.
Under federal statutes, Henley is subject to a sentence of up to 15 years in federal prison without parole, plus a fine up to $500,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by IRS-Criminal Investigation and the Federal Bureau of Investigation.
Quentin Henley, 37, of Kansas City, pleaded guilty before U.S. Chief District Judge Fernando J. Gaitan this morning to the charges contained in a July 14, 2009, federal indictment.
Henley did business as Quality Remodeling, as All and One Construction and as Corporate Remodeling Associates. Henley admitted that he participated in a mortgage fraud conspiracy from July 2003 to January 2009, in which he acquired residential properties at reduced rates for the stated purpose of rehabbing the properties, then renting or selling them. In reality, Henley did little or no work to rehab some of the properties.
Henley and his co-conspirators submitted materially false, fraudulent and misleading loan applications and supporting documentation to mortgage lenders, all to induce the lenders to approve the applications and lend funds. Henley admitted that he caused mortgage lenders to make loans regarding at least 34 properties in the amount of at least $3,600,482.
In addition to the mortgage fraud conspiracy, Henley also pleaded guilty to money laundering. Henley admitted that he engaged in a financial transaction that involved funds obtained by fraud.
Under federal statutes, Henley is subject to a sentence of up to 15 years in federal prison without parole, plus a fine up to $500,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by IRS-Criminal Investigation and the Federal Bureau of Investigation.
Fifteenth Defendant Sentenced in St. Croix Tribal Drug Investigation
February 3, 2010 - MADISON, WI—Stephen P. Sinnott, United States Attorney for the Western District of Wisconsin, announced that Steven R. Lang, 30, Webster, Wis., was sentenced today in U.S. District Court in Madison by Chief U.S. District Judge Barbara B. Crabb for his role in distributing methamphetamine on St. Croix tribal lands from approximately 2005 to 2008. Chief Judge Crabb sentenced Lang to four years in prison without parole.
With today’s sentencing, 15 defendants have now been sentenced as a result of this investigation into drug dealing on St. Croix tribal lands. The previous defendants sentenced are set forth below:
• Joseph Merrill Distribution of Crack Cocaine 4 years
• Manley L. Williams Distribution of Crack Cocaine 8 years, 4 months
• Christifer Sonnenberg Distribution of Crack Cocaine 5 years, 6 months
• Jean Sonnenberg Conspiracy to Distribute Crack Cocaine 19 years, 7 months
• Bruce Sonnenberg Conspiracy to Distribute Crack Cocaine 24 years, 4 months
• Amanda Sonnenberg Distribution of Crack Cocaine 3 years, 10 months
• George Rainey Distribution of Crack Cocaine 14 years
• Bruce Rainey Distribution of Crack Cocaine 17 years, 6 months
• Diana Martin Conspiracy to Distribute Crack Cocaine 9 years
• Margrette Cobb Conspiracy to Distribute Crack Cocaine 13 years, 4 months
• Andrew Sonnenberg Distribution of Crack Cocaine 17 years, 6 months
• Ericka J. Reynolds Conspiracy to Distribute Crack Cocaine 1 year, 6 months
• Shaleah Reynolds Distribution of Crack Cocaine 2 years
• Michael D. Hammond Distribution of Crack Cocaine 12 years, 7 months
United States Attorney Sinnott stated that today’s sentencing was the result of a long-term investigation being conducted by the Wisconsin Department of Justice, Division of Criminal Investigation; Federal Bureau of Investigation; St. Croix Tribal Police Department; Rice Lake Police Department; Barron County Sheriff's Department; Burnett County Sheriff's Department; Sawyer County Sheriff’s Department; Polk County Sheriff's Department; the Native American Drug & Gang Initiative; and Wisconsin State Patrol. As set out above, 15 defendants have now been convicted of federal drug offenses as a result of this investigation. Four additional defendants have pleaded guilty and are awaiting sentencing; six additional defendants were indicted on December 2, 2009, and are awaiting trial.
Assistant U.S. Attorney John W. Vaudreuil is handling the prosecution of these cases.
With today’s sentencing, 15 defendants have now been sentenced as a result of this investigation into drug dealing on St. Croix tribal lands. The previous defendants sentenced are set forth below:
• Joseph Merrill Distribution of Crack Cocaine 4 years
• Manley L. Williams Distribution of Crack Cocaine 8 years, 4 months
• Christifer Sonnenberg Distribution of Crack Cocaine 5 years, 6 months
• Jean Sonnenberg Conspiracy to Distribute Crack Cocaine 19 years, 7 months
• Bruce Sonnenberg Conspiracy to Distribute Crack Cocaine 24 years, 4 months
• Amanda Sonnenberg Distribution of Crack Cocaine 3 years, 10 months
• George Rainey Distribution of Crack Cocaine 14 years
• Bruce Rainey Distribution of Crack Cocaine 17 years, 6 months
• Diana Martin Conspiracy to Distribute Crack Cocaine 9 years
• Margrette Cobb Conspiracy to Distribute Crack Cocaine 13 years, 4 months
• Andrew Sonnenberg Distribution of Crack Cocaine 17 years, 6 months
• Ericka J. Reynolds Conspiracy to Distribute Crack Cocaine 1 year, 6 months
• Shaleah Reynolds Distribution of Crack Cocaine 2 years
• Michael D. Hammond Distribution of Crack Cocaine 12 years, 7 months
United States Attorney Sinnott stated that today’s sentencing was the result of a long-term investigation being conducted by the Wisconsin Department of Justice, Division of Criminal Investigation; Federal Bureau of Investigation; St. Croix Tribal Police Department; Rice Lake Police Department; Barron County Sheriff's Department; Burnett County Sheriff's Department; Sawyer County Sheriff’s Department; Polk County Sheriff's Department; the Native American Drug & Gang Initiative; and Wisconsin State Patrol. As set out above, 15 defendants have now been convicted of federal drug offenses as a result of this investigation. Four additional defendants have pleaded guilty and are awaiting sentencing; six additional defendants were indicted on December 2, 2009, and are awaiting trial.
Assistant U.S. Attorney John W. Vaudreuil is handling the prosecution of these cases.
Marshall Man Convicted in Cocaine Conspiracy
February 3, 2010 - ALEXANDRIA, VA—Alejandro Hernandez, 39, of Marshall, Virginia, was convicted by a federal jury in Alexandria of conspiring to traffic cocaine in Great Falls, Va. Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Willie Brownlee, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division; and Colonel David Rohrer, Fairfax County Chief of Police, made the announcement after the verdict was accepted by United States District Judge Claude M. Hilton.
Hernandez was convicted of conspiring to distribute 500 grams or more of cocaine and faces a mandatory minimum penalty of five years in prison and a maximum of 40 years in prison when he is sentenced on April 23, 2010.
According to court documents and evidence at trial, Hernandez was part of a drug trafficking conspiracy that transports cocaine across the Mexican border into the United States, including into Virginia. On Sept. 3, 2009, Hernandez and three co-conspirators transported a kilogram of cocaine from Fauquier County to Fairfax Country, where they were arrested as the Hernandez stood lookout during the sale of the cocaine to a confidential informant.
In addition, evidence at trial showed that after his arrest, Hernandez attempted to threaten and intimidate potential witnesses to prevent them from cooperating with law enforcement and to prevent them from testifying at trial.
Others charged in the conspiracy include:
• Uriel Evencio Sandoval-Covarrubias, 24, of Marshall, Va., who is a fugitive based on the criminal complaint on Oct. 23, 2009.
• Aquiles Fuentes Ordas, 32, of Manassas, Va., who pled guilty on Dec. 22, 2009, and is scheduled to be sentenced on March 12, 2010.
• Danis Francisco Romero Lopez, 24, of Manassas, Va., who pled guilty on Dec. 23, 2009, and is scheduled to be sentenced on March 12, 2010.
This case is being investigated by the ATF and the Fairfax County Police Department. Assistant United States Attorney Kimberly Pedersen and Special Assistant United States Attorney Lisa Owings are prosecuting the case on behalf of the United States.
Hernandez was convicted of conspiring to distribute 500 grams or more of cocaine and faces a mandatory minimum penalty of five years in prison and a maximum of 40 years in prison when he is sentenced on April 23, 2010.
According to court documents and evidence at trial, Hernandez was part of a drug trafficking conspiracy that transports cocaine across the Mexican border into the United States, including into Virginia. On Sept. 3, 2009, Hernandez and three co-conspirators transported a kilogram of cocaine from Fauquier County to Fairfax Country, where they were arrested as the Hernandez stood lookout during the sale of the cocaine to a confidential informant.
In addition, evidence at trial showed that after his arrest, Hernandez attempted to threaten and intimidate potential witnesses to prevent them from cooperating with law enforcement and to prevent them from testifying at trial.
Others charged in the conspiracy include:
• Uriel Evencio Sandoval-Covarrubias, 24, of Marshall, Va., who is a fugitive based on the criminal complaint on Oct. 23, 2009.
• Aquiles Fuentes Ordas, 32, of Manassas, Va., who pled guilty on Dec. 22, 2009, and is scheduled to be sentenced on March 12, 2010.
• Danis Francisco Romero Lopez, 24, of Manassas, Va., who pled guilty on Dec. 23, 2009, and is scheduled to be sentenced on March 12, 2010.
This case is being investigated by the ATF and the Fairfax County Police Department. Assistant United States Attorney Kimberly Pedersen and Special Assistant United States Attorney Lisa Owings are prosecuting the case on behalf of the United States.
Mountain View Woman Convicted of Wire Fraud and Witness Tampering
Self-Proclaimed “Honorable Lady of San Francisco” Defrauded Mortgage Lenders, Financial Institutions of $6.5 Million
February 3, 2010 - SAN FRANCISCO—Judy “Miu Wan” Yeung was convicted of one count of conspiracy to commit wire fraud, eight counts of wire fraud, and three counts of witness tampering by a federal jury yesterday afternoon, United States Attorney Joseph P. Russoniello announced.
The jury, after deliberating for one day, found that Yeung engaged in a mortgage fraud conspiracy between approximately December 2004 and January 2007. Yeung, together with two mortgage brokers, recruited five individuals to submit loan applications in their names in order to obtain loans totaling more than $6.5 million. Evidence at trial established that Yeung had bad credit and could not have obtained these loans in her own name. Yeung engaged in these transactions in order to purchase investment properties in Gilroy, Calif., when real estate prices were still rising. Yeung also fraudulently refinanced her San Francisco residence in Balboa Terrace, in order to obtain cash from mortgage lenders and to pay off existing loans. Testimony at trial established that Yeung obtained more than $624,000 in cash from these fraudulent transactions.
“The conviction of Ms. Yeung should be taken as affirmation that our efforts to uncover and prosecute those engaged in mortgage fraud, at whatever level of their involvement are serious and ongoing,” U.S. Attorney Russoniello said. “Mortgage fraud has weakened our economy nationally and done irreparable damage to households, neighborhoods, and communities throughout this district. Unscrupulous mortgage brokers often encouraged many borrowers who knew or should have known better to exaggerate their qualifications for a loan they couldn’t afford on a home whose value was overstated, often due to the complicity of unprincipled real estate appraisers. With unwarranted confidence that any risk of default could be passed on to unwary investors, many lenders, including some major banks, which had been pressured to relax their lending standards so as to expand the prospect of home ownership to persons otherwise financially unqualified, made loans that will never be repaid.
“To all those homeowners who stay in their homes and struggle each month to meet their contractual obligations, we owe a responsibility to ferret out, wherever possible, the perpetrators and abettors of this massive fraud,” U.S. Attorney Russoniello added. “The Obama Administration through the United States Department of Justice has made the prosecution of mortgage fraud a priority of its white collar crime enforcement program and this office is committed to using its resources to the fullest to meet this mandate. We continue to work with the FBI, other federal investigative agencies and our state and local partners to effectively bring those responsible for misconduct in this district to justice.”
Yeung’s scheme involved the submission of false information and forged documents to mortgage lenders, including Washington Mutual and J.P. Morgan Chase. For example, the loan applications in each case grossly exaggerated the income, assets, and creditworthiness of the individuals posing as borrowers for Yeung. In addition, evidence at trial established that Yeung induced others to forge letters from Hang Seng Bank that falsely verified assets held by the borrowers. The forged letters were then used in support of the loan applications. Some of the individuals posing as borrowers testified at trial. They stated that Yeung had promised to pay the mortgages obtained in their names and that, in two cases, Yeung promised to pay them a reward of $20,000 to $40,000.
Several of the witnesses stated that Yeung touted herself as the “Honorable Lady of San Francisco,” and she even provided business cards reflecting that title. Some witnesses testified that they believed Yeung when she told them that she could further their careers and, in some cases, would use her political connections in San Francisco to do so.
In addition, the jury found Yeung guilty of three counts of witness tampering. Two of the “straw buyers” whom Yeung had recruited testified at trial that Yeung told them to lie to the FBI agents who were investigating the case.
The guilty verdict followed a three week jury trial before U.S. District Court Judge Susan Illston.
Two mortgage brokers were charged in connection with the case, which was referred to the FBI by the San Francisco District Attorney’s Office. They have pleaded guilty to wire fraud conspiracy charges and are awaiting sentencing.
Yeung, 58, of Mountain View, Calif., was indicted by a federal grand jury on April 9, 2009. The grand jury then returned a superseding indictment against her on July 30, 2009.
Yeung is released on a secured bond. The sentencing of Yeung is scheduled for May 14, 2010, before Judge Susan Illston in San Francisco. The maximum statutory penalty for each count in violation of Title 18, United States Code, Section 1349, is 30 years and a fine of $1,000,000, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Susan E. Badger and Jeffrey Rabkin are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Helen Yee and Elizabeth Garcia. The prosecution is the result of a three-year investigation by the Federal Bureau of Investigation.
February 3, 2010 - SAN FRANCISCO—Judy “Miu Wan” Yeung was convicted of one count of conspiracy to commit wire fraud, eight counts of wire fraud, and three counts of witness tampering by a federal jury yesterday afternoon, United States Attorney Joseph P. Russoniello announced.
The jury, after deliberating for one day, found that Yeung engaged in a mortgage fraud conspiracy between approximately December 2004 and January 2007. Yeung, together with two mortgage brokers, recruited five individuals to submit loan applications in their names in order to obtain loans totaling more than $6.5 million. Evidence at trial established that Yeung had bad credit and could not have obtained these loans in her own name. Yeung engaged in these transactions in order to purchase investment properties in Gilroy, Calif., when real estate prices were still rising. Yeung also fraudulently refinanced her San Francisco residence in Balboa Terrace, in order to obtain cash from mortgage lenders and to pay off existing loans. Testimony at trial established that Yeung obtained more than $624,000 in cash from these fraudulent transactions.
“The conviction of Ms. Yeung should be taken as affirmation that our efforts to uncover and prosecute those engaged in mortgage fraud, at whatever level of their involvement are serious and ongoing,” U.S. Attorney Russoniello said. “Mortgage fraud has weakened our economy nationally and done irreparable damage to households, neighborhoods, and communities throughout this district. Unscrupulous mortgage brokers often encouraged many borrowers who knew or should have known better to exaggerate their qualifications for a loan they couldn’t afford on a home whose value was overstated, often due to the complicity of unprincipled real estate appraisers. With unwarranted confidence that any risk of default could be passed on to unwary investors, many lenders, including some major banks, which had been pressured to relax their lending standards so as to expand the prospect of home ownership to persons otherwise financially unqualified, made loans that will never be repaid.
“To all those homeowners who stay in their homes and struggle each month to meet their contractual obligations, we owe a responsibility to ferret out, wherever possible, the perpetrators and abettors of this massive fraud,” U.S. Attorney Russoniello added. “The Obama Administration through the United States Department of Justice has made the prosecution of mortgage fraud a priority of its white collar crime enforcement program and this office is committed to using its resources to the fullest to meet this mandate. We continue to work with the FBI, other federal investigative agencies and our state and local partners to effectively bring those responsible for misconduct in this district to justice.”
Yeung’s scheme involved the submission of false information and forged documents to mortgage lenders, including Washington Mutual and J.P. Morgan Chase. For example, the loan applications in each case grossly exaggerated the income, assets, and creditworthiness of the individuals posing as borrowers for Yeung. In addition, evidence at trial established that Yeung induced others to forge letters from Hang Seng Bank that falsely verified assets held by the borrowers. The forged letters were then used in support of the loan applications. Some of the individuals posing as borrowers testified at trial. They stated that Yeung had promised to pay the mortgages obtained in their names and that, in two cases, Yeung promised to pay them a reward of $20,000 to $40,000.
Several of the witnesses stated that Yeung touted herself as the “Honorable Lady of San Francisco,” and she even provided business cards reflecting that title. Some witnesses testified that they believed Yeung when she told them that she could further their careers and, in some cases, would use her political connections in San Francisco to do so.
In addition, the jury found Yeung guilty of three counts of witness tampering. Two of the “straw buyers” whom Yeung had recruited testified at trial that Yeung told them to lie to the FBI agents who were investigating the case.
The guilty verdict followed a three week jury trial before U.S. District Court Judge Susan Illston.
Two mortgage brokers were charged in connection with the case, which was referred to the FBI by the San Francisco District Attorney’s Office. They have pleaded guilty to wire fraud conspiracy charges and are awaiting sentencing.
Yeung, 58, of Mountain View, Calif., was indicted by a federal grand jury on April 9, 2009. The grand jury then returned a superseding indictment against her on July 30, 2009.
Yeung is released on a secured bond. The sentencing of Yeung is scheduled for May 14, 2010, before Judge Susan Illston in San Francisco. The maximum statutory penalty for each count in violation of Title 18, United States Code, Section 1349, is 30 years and a fine of $1,000,000, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Susan E. Badger and Jeffrey Rabkin are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Helen Yee and Elizabeth Garcia. The prosecution is the result of a three-year investigation by the Federal Bureau of Investigation.
The Lone Star Fugitive Task Force Assists in the Arrest of the Final Suspect in Connection with Recent Kidnapping in San Antonio, Texas
February 3, 2010 - San Antonio, TX – On 01/21/2010, two victims were kidnapped at gun point from their home by a total of six suspects, and were held while the suspects demanded ransom for their release. The victims subsequently escaped from their captors.
On 02/02/2010 (Tuesday night) the San Antonio Police Department, assisted by the Lone Star Fugitive Task Force captured Steven Arreola, the last remaining suspect involved in the recent San Antonio kidnappings. Steven Arreola is being charged with 2 counts of aggravated kidnapping.
Acting United States Marshal Fernando Karl said, “The pursuit of this fugitive highlights what the Lone Star Fugitive Task Force does. We have taken a violent offender off the streets.” Additional information about the U.S. Marshals can be found at http://www.usmarshals.gov.
On 02/02/2010 (Tuesday night) the San Antonio Police Department, assisted by the Lone Star Fugitive Task Force captured Steven Arreola, the last remaining suspect involved in the recent San Antonio kidnappings. Steven Arreola is being charged with 2 counts of aggravated kidnapping.
Acting United States Marshal Fernando Karl said, “The pursuit of this fugitive highlights what the Lone Star Fugitive Task Force does. We have taken a violent offender off the streets.” Additional information about the U.S. Marshals can be found at http://www.usmarshals.gov.
Seeking Information on Credit Union Robbery in Gurnee
February 3, 2010 - The Chicago FBI and Gurnee Police Department are investigating the take-over robbery of the Community Trust Credit Union, located at 1313 Route 41, on Friday evening. Investigation so far has determined that a lone robber, described only as a black/male dressed in all black clothing and wearing a ski mask, entered the credit union at closing time armed with a hand gun. After obtaining an undisclosed amount of cash, he fled the area on foot, disappearing behind a nearby building, possibly into a waiting vehicle. While fleeing, the robber fired at a Gurnee Police Officer, who was responding to the robbery. The officer was not struck and no injuries were reported during the robbery.
This individual should be considered armed and dangerous. Downloadable photographs of the robber are available today on the Bandit Tracker website, www.bandittrackerchicago.com.
Additional information will be forthcoming.
This individual should be considered armed and dangerous. Downloadable photographs of the robber are available today on the Bandit Tracker website, www.bandittrackerchicago.com.
Additional information will be forthcoming.
Former Detroit Public School Official and Former Employee Plead Guilty
February 3, 2010 - A former payroll manager of the Detroit Public Schools(“DPS”) pleaded guilty today of conspiring with a retired DPS employee to fraudulently obtain money from the DPS, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Andrew G. Arena, Special Agent In Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Robert Bobb, Detroit Public Schools’ Emergency Financial Manager.
The fraud from DPS, an agency receiving federal funding, occurred between 2000 and 2005. During that time, Toni D. Gilbert, age 45, of Detroit, worked as a payroll manager for DPS, with authority to issue payroll checks. According to the guilty pleas, during the term of the conspiracy, Gilbert issued regular DPS payroll checks to codefendant, Anton V. Carter, age 56, of Detroit, totaling $378,765, after Carter had retired from DPS due to a disability for which he was receiving disability checks from DPS. In addition, at her guilty plea, Gilbert acknowledged inappropriately issuing paychecks to other deceased DPS employees during the same time period.
United States Attorney Barbara McQuade said, “Stealing money from our schools, when our school system is already financially strapped, robs our children of their future.”
McQuade offered special thanks the Detroit Public Schools for its cooperation and strong efforts to weed out corruption from within its own institution.
The investigation of this case was conducted by the Federal Bureau of Investigation.
McQuade was joined in the announcement by Andrew G. Arena, Special Agent In Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Robert Bobb, Detroit Public Schools’ Emergency Financial Manager.
The fraud from DPS, an agency receiving federal funding, occurred between 2000 and 2005. During that time, Toni D. Gilbert, age 45, of Detroit, worked as a payroll manager for DPS, with authority to issue payroll checks. According to the guilty pleas, during the term of the conspiracy, Gilbert issued regular DPS payroll checks to codefendant, Anton V. Carter, age 56, of Detroit, totaling $378,765, after Carter had retired from DPS due to a disability for which he was receiving disability checks from DPS. In addition, at her guilty plea, Gilbert acknowledged inappropriately issuing paychecks to other deceased DPS employees during the same time period.
United States Attorney Barbara McQuade said, “Stealing money from our schools, when our school system is already financially strapped, robs our children of their future.”
McQuade offered special thanks the Detroit Public Schools for its cooperation and strong efforts to weed out corruption from within its own institution.
The investigation of this case was conducted by the Federal Bureau of Investigation.
Former City Official Pleads Guilty to Bribery Scheme Related to Sales of Camp Brighton and 8th Precinct
February 3, 2010 - DeDan C. Milton, 37, of Detroit, former Executive Assistant to the former Mayor of Detroit, pleaded guilty today before United States District Judge Gerald Rosen to participating in a bribery scheme, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Andrew G. Arena, Special Agent In Charge of the Detroit Field Office of the Federal Bureau of Investigation.
According to the charges in the indictment, facts stipulated in the written plea agreement, and other court documents, in 2006 and 2007, in exchange for $50,000, DeDan Milton, Kandia Milton (the Liaison to City Council for the former Mayor), and Jerry Rivers (a former police officer) assisted a non-profit entity in purchasing property from the City of Detroit—namely, a 160-acre campsite in Livingston County called Camp Brighton/Detroit Recreation Camp. DeDan and Kandia Milton used their positions in the city administration to move forward consideration of the sale of Camp Brighton to the non-profit entity for $3.5 million. After the sale closed, the $50,000 payment from the non-profit entity was divided roughly as follows: $10,000 to DeDan Milton; $20,000 to Kandia Milton; and $20,000 to Rivers. A middleman was recruited to accept the money from the non-profit entity because they did not want the money to go directly to themselves.
The indictment and plea agreement also indicate that in 2006, DeDan and Kandia Milton helped Rivers facilitate the sale of the City of Detroit’s 8th Precinct police station, located at West Grand River and McNichols Roads, to a developer. In February 2007, after the sale closed, Rivers gave the Miltons each about $6,000 in cash for their help.
United States Attorney McQuade said, “This guilty plea and cooperation agreement are a significant step in our march forward against public corruption in our community.”
Special Agent Arena stated, “This investigation demonstrates the FBI's commitment in investigating public corruption on every level. Public corruption is a top criminal priority of the FBI and will not be tolerated. The FBI will continue to aggressively investigate those who betray the public's trust.”
DeDan Milton is released on bond pending his sentencing. He was referred to the United States Probation Department for a presentence investigation. Milton faces a statutory maximum sentence of up to five years in prison or a fine of $250,000, or both.
Under the terms of the plea agreement, the parties agreed that the sentence would not exceed 46 months in prison. The agreement also provided that Mr. Milton would cooperate in the government’s continuing investigation of others, and that he could be eligible to receive a sentence reduction if his cooperation is deemed to be substantial assistance under the Federal Sentencing Guidelines.
The investigation of this case is being conducted by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Mark Chutkow and R. Michael Bullotta.
According to the charges in the indictment, facts stipulated in the written plea agreement, and other court documents, in 2006 and 2007, in exchange for $50,000, DeDan Milton, Kandia Milton (the Liaison to City Council for the former Mayor), and Jerry Rivers (a former police officer) assisted a non-profit entity in purchasing property from the City of Detroit—namely, a 160-acre campsite in Livingston County called Camp Brighton/Detroit Recreation Camp. DeDan and Kandia Milton used their positions in the city administration to move forward consideration of the sale of Camp Brighton to the non-profit entity for $3.5 million. After the sale closed, the $50,000 payment from the non-profit entity was divided roughly as follows: $10,000 to DeDan Milton; $20,000 to Kandia Milton; and $20,000 to Rivers. A middleman was recruited to accept the money from the non-profit entity because they did not want the money to go directly to themselves.
The indictment and plea agreement also indicate that in 2006, DeDan and Kandia Milton helped Rivers facilitate the sale of the City of Detroit’s 8th Precinct police station, located at West Grand River and McNichols Roads, to a developer. In February 2007, after the sale closed, Rivers gave the Miltons each about $6,000 in cash for their help.
United States Attorney McQuade said, “This guilty plea and cooperation agreement are a significant step in our march forward against public corruption in our community.”
Special Agent Arena stated, “This investigation demonstrates the FBI's commitment in investigating public corruption on every level. Public corruption is a top criminal priority of the FBI and will not be tolerated. The FBI will continue to aggressively investigate those who betray the public's trust.”
DeDan Milton is released on bond pending his sentencing. He was referred to the United States Probation Department for a presentence investigation. Milton faces a statutory maximum sentence of up to five years in prison or a fine of $250,000, or both.
Under the terms of the plea agreement, the parties agreed that the sentence would not exceed 46 months in prison. The agreement also provided that Mr. Milton would cooperate in the government’s continuing investigation of others, and that he could be eligible to receive a sentence reduction if his cooperation is deemed to be substantial assistance under the Federal Sentencing Guidelines.
The investigation of this case is being conducted by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Mark Chutkow and R. Michael Bullotta.
Two More People Sentenced for Mortgage Fraud Crimes
February 3, 2010 - INDIANAPOLIS—Kevin Lafavers, age 46, formerly of Indianapolis, was sentenced today to 33 months in federal prison, and Donald T. Brown, age 67, Lebanon, Indiana was sentenced to 27 months in prison. Circuit Judge David F. Hamilton sentenced both individuals following Lafavers' guilty pleas to conspiracy to commit wire fraud and wire fraud and Brown’s guilty pleas to conspiracy to commit wire fraud and money laundering. These proceedings concerned the defendants' participation in a multi-million dollar mortgage fraud scheme operated by Robert Penn in the Indianapolis area.
Today's sentencing follows a lengthy investigation conducted by Special Agents of the Internal Revenue Service - Criminal Investigation Division, with the assistance of the Federal Bureau of Investigation. Judge Hamilton previously imposed sentence on six other individuals charged in the scheme as follows: Robert Penn, 84 months' imprisonment; Mark Roth, 43 months' imprisonment; Timothy Brown, 37 months' imprisonment; Stephen Scott Brown, 37 months' imprisonment; Jerry Jaquess, 30 months' imprisonment; Tamara Scott, 24 months' imprisonment.
Between November 2003 and August 2005, at least 136 fraudulent loans, totaling $16,613,850.00, were obtained by Robert Penn and his numerous business entities, assisted by Lafavers and Brown and others. The loans were obtained from Argent Mortgage Company, The MoneyStation, and People’s Choice Mortgage/Countrywide Home Loans.
The mortgage fraud schemes carried out by the defendants were accomplished as follows. Participants in the schemes, including Lafavers, located properties and arranged to purchase them at a fair market value generally by means of an option agreement or unrecorded land contract. Other participants in the scheme located straw purchasers who invested their good credit, but no money, to be the purchasers of these properties at a much higher price than that negotiated with the seller. Co-conspirators, including Brown, funded the down payments.
Lafavers was employed by Penn to locate properties for sale, negotiate the purchases of those properties, and enter into option agreements and land contracts with the sellers on behalf of Penn and his businesses. Lafavers generally received $1,000.00 per property located. Lafavers also attended some property closings on behalf of Penn’s companies and received checks that represented illegal proceeds. Lafavers’ sentence reflected his involvement in approximately 19 fraudulent loans. The total amount of those loans was $3,771,000.00.
Brown was primarily involved in funding down payments for investors on the fraudulent real estate transactions. Brown used a bank account, which was maintained by him and his son in the name of Brown Funding Inc. to fund the down payments. Brown obtained down payment checks and provided those checks to the title company, or to another co-conspirator, to be used for the closing. After the property closing, Brown received repayment of the checks from the fraudulent loan proceeds. In addition, Brown Funding Inc. received a fee of $1,000.00 - $3,000.00 for each down payment provided. The sole purpose of Brown Funding Inc. was to fund down payments for investors.
Brown borrowed some of the money for these down payments from individuals who he knew, but did not tell these people that they were in fact funding a fraudulent real estate scheme. Brown also added investors’ names to the Brown Funding Inc. bank account in order to convince the lenders that the investors had access to money which they did not have. Brown’s sentence reflected his involvement in approximately 113 fraudulent loans, including 86 Windsor Village loans. The total amount of those loans was $12,541,000.00.
According to Assistant U. S. Attorney Susan Heckard Dowd, who prosecuted the cases for the government, Judge Hamilton also ordered Lafavers to serve three years on supervised release, and Brown to serve two years on supervised release following their incarceration. Judge Hamilton also ordered the defendants to pay restitution as follows:
Lafavers - $ 1,475,851.63
Brown - $ 9,985,004.15
Today's sentencing follows a lengthy investigation conducted by Special Agents of the Internal Revenue Service - Criminal Investigation Division, with the assistance of the Federal Bureau of Investigation. Judge Hamilton previously imposed sentence on six other individuals charged in the scheme as follows: Robert Penn, 84 months' imprisonment; Mark Roth, 43 months' imprisonment; Timothy Brown, 37 months' imprisonment; Stephen Scott Brown, 37 months' imprisonment; Jerry Jaquess, 30 months' imprisonment; Tamara Scott, 24 months' imprisonment.
Between November 2003 and August 2005, at least 136 fraudulent loans, totaling $16,613,850.00, were obtained by Robert Penn and his numerous business entities, assisted by Lafavers and Brown and others. The loans were obtained from Argent Mortgage Company, The MoneyStation, and People’s Choice Mortgage/Countrywide Home Loans.
The mortgage fraud schemes carried out by the defendants were accomplished as follows. Participants in the schemes, including Lafavers, located properties and arranged to purchase them at a fair market value generally by means of an option agreement or unrecorded land contract. Other participants in the scheme located straw purchasers who invested their good credit, but no money, to be the purchasers of these properties at a much higher price than that negotiated with the seller. Co-conspirators, including Brown, funded the down payments.
Lafavers was employed by Penn to locate properties for sale, negotiate the purchases of those properties, and enter into option agreements and land contracts with the sellers on behalf of Penn and his businesses. Lafavers generally received $1,000.00 per property located. Lafavers also attended some property closings on behalf of Penn’s companies and received checks that represented illegal proceeds. Lafavers’ sentence reflected his involvement in approximately 19 fraudulent loans. The total amount of those loans was $3,771,000.00.
Brown was primarily involved in funding down payments for investors on the fraudulent real estate transactions. Brown used a bank account, which was maintained by him and his son in the name of Brown Funding Inc. to fund the down payments. Brown obtained down payment checks and provided those checks to the title company, or to another co-conspirator, to be used for the closing. After the property closing, Brown received repayment of the checks from the fraudulent loan proceeds. In addition, Brown Funding Inc. received a fee of $1,000.00 - $3,000.00 for each down payment provided. The sole purpose of Brown Funding Inc. was to fund down payments for investors.
Brown borrowed some of the money for these down payments from individuals who he knew, but did not tell these people that they were in fact funding a fraudulent real estate scheme. Brown also added investors’ names to the Brown Funding Inc. bank account in order to convince the lenders that the investors had access to money which they did not have. Brown’s sentence reflected his involvement in approximately 113 fraudulent loans, including 86 Windsor Village loans. The total amount of those loans was $12,541,000.00.
According to Assistant U. S. Attorney Susan Heckard Dowd, who prosecuted the cases for the government, Judge Hamilton also ordered Lafavers to serve three years on supervised release, and Brown to serve two years on supervised release following their incarceration. Judge Hamilton also ordered the defendants to pay restitution as follows:
Lafavers - $ 1,475,851.63
Brown - $ 9,985,004.15
Arlington, Texas, Couple Convicted of Forced Labor and Other Crimes for Holding Nigerian Woman in Domestic Servitude
February 3, 2010WASHINGTON – A federal jury has convicted an Arlington, Texas, husband and wife, Emmanuel and Ngozi Nnaji, of engaging in a nine-year scheme to compel the labor of a Nigerian victim as their domestic servant, the Justice Department announced today. The jury found the defendants guilty of conspiracy, forced labor, document servitude, alien harboring and false statements. Ngozi and Emmanuel Nnaji each face a maximum sentence of up to 55 years in prison.
According to the evidence at trial, Emmanuel Nnaji and Ngozi Nnaji enticed a widowed Nigerian mother of six to come to the United States to be their domestic servant by falsely promising a salary and support for her children, who she was struggling to support.
" Holding other human beings in servitude against their will is a violation of human rights that will not be tolerated in our free society, " stated Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. " This prosecution demonstrates our commitment to combating human trafficking in all its forms, vindicating the rights of trafficking victims and bringing human traffickers to justice. "
James T. Jacks, U.S. Attorney for the Northern District of Texas, said, "We are pleased that this North Texas jury was able to return such a swift verdict, validating the hard work of the Civil Rights Division and the Federal Bureau of Investigation."
FBI, Dallas Division Special Agent in Charge Robert Casey said, "The crimes proven in this case underscore the importance of enforcing the nation's Civil Rights laws, and the FBI is firmly committed to that enforcement. The FBI's pursuit of this investigation should send a clear message to those who would hold another human being in criminal servitude."
The defendants procured fraudulent immigration documents, confiscated the victim’s documents, harbored her in their home, compelled her to work long hours with no days off for little or no pay, used a scheme to isolate her and restrict her communications, withheld her documents and pay, and refused her requests to return home or be paid. The defendants also failed to provide support for the victim’s six children in Nigeria, limited and monitored contact with her family in Nigeria, isolated her from normal society in the United States, and refused to allow her to regularly attend church. According to the evidence at trial, Emmanuel Nnaji sexually assaulted the victim and made her fearful to call the police.
This case was investigated by the FBI and prosecuted by Trial Attorney Susan L. French and Michael J. Frank of the Civil Rights Division’s Human Trafficking Prosecution Unit.
According to the evidence at trial, Emmanuel Nnaji and Ngozi Nnaji enticed a widowed Nigerian mother of six to come to the United States to be their domestic servant by falsely promising a salary and support for her children, who she was struggling to support.
" Holding other human beings in servitude against their will is a violation of human rights that will not be tolerated in our free society, " stated Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. " This prosecution demonstrates our commitment to combating human trafficking in all its forms, vindicating the rights of trafficking victims and bringing human traffickers to justice. "
James T. Jacks, U.S. Attorney for the Northern District of Texas, said, "We are pleased that this North Texas jury was able to return such a swift verdict, validating the hard work of the Civil Rights Division and the Federal Bureau of Investigation."
FBI, Dallas Division Special Agent in Charge Robert Casey said, "The crimes proven in this case underscore the importance of enforcing the nation's Civil Rights laws, and the FBI is firmly committed to that enforcement. The FBI's pursuit of this investigation should send a clear message to those who would hold another human being in criminal servitude."
The defendants procured fraudulent immigration documents, confiscated the victim’s documents, harbored her in their home, compelled her to work long hours with no days off for little or no pay, used a scheme to isolate her and restrict her communications, withheld her documents and pay, and refused her requests to return home or be paid. The defendants also failed to provide support for the victim’s six children in Nigeria, limited and monitored contact with her family in Nigeria, isolated her from normal society in the United States, and refused to allow her to regularly attend church. According to the evidence at trial, Emmanuel Nnaji sexually assaulted the victim and made her fearful to call the police.
This case was investigated by the FBI and prosecuted by Trial Attorney Susan L. French and Michael J. Frank of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Tuesday, February 02, 2010
Dunseith Man Receives 30-Year Sentence for Sexual Abuse of a Child
February 2, 2010 - MINOT, ND—Acting United States Attorney Lynn Jordheim announced that on February 1, 2010, Michael P. Baker, 34, of Dunseith, North Dakota, was sentenced before United States District Court Judge Daniel L. Hovland on a charge of aggravated sexual abuse of a child.
Baker pleaded guilty to the charge on September 15, 2009. Baker acknowledged sexually abusing a child on January 31, 2009, in Dunseith. Judge Hovland sentenced Baker to serve 30 years in federal prison, to be followed by five years of supervised release. Baker was ordered to pay restitution of $476 and to pay a $100 special assessment to the Crime Victim's Fund.
The case was investigated by the Federal Bureau of Investigation and Bureau of Indian Affairs.
Assistant United States Attorney Gary Delorme prosecuted the case.
Baker pleaded guilty to the charge on September 15, 2009. Baker acknowledged sexually abusing a child on January 31, 2009, in Dunseith. Judge Hovland sentenced Baker to serve 30 years in federal prison, to be followed by five years of supervised release. Baker was ordered to pay restitution of $476 and to pay a $100 special assessment to the Crime Victim's Fund.
The case was investigated by the Federal Bureau of Investigation and Bureau of Indian Affairs.
Assistant United States Attorney Gary Delorme prosecuted the case.
Dunseith Man Sentenced to 30 Years in Prison for Voluntary Manslaughter and Child Abuse
February 2, 2010 - MINOT, ND—Acting United States Attorney Lynn Jordheim announced that on February 1, 2010, James Haggerty, 25, of Dunseith, North Dakota, was sentenced to 30 years in federal prison by United States District Court Judge Daniel L. Hovland on charges of voluntary manslaughter and child abuse. Haggerty pleaded guilty to the charges on September 15, 2009.
The term of imprisonment will be followed by five years of supervised release. Haggerty was ordered to pay restitution of $3222 and to pay a $200 special assessment to the Crime Victim's Fund.
The voluntary manslaughter charge resulted from Haggerty’s conduct on March 19, 2009, when he threw his 3-month-old child against a wall, causing traumatic injury and death to the child. The child abuse charge resulted from Haggerty’s conduct from September 2008 through March 19, 2009, when Haggerty inflicted bodily injury upon his 2-year-old child by striking and throwing her.
The case was investigated by the Federal Bureau of Investigation and Bureau of Indian Affairs - Turtle Mountain Agency.
Assistant United States Attorney Brandi Sasse-Russell prosecuted the case.
The term of imprisonment will be followed by five years of supervised release. Haggerty was ordered to pay restitution of $3222 and to pay a $200 special assessment to the Crime Victim's Fund.
The voluntary manslaughter charge resulted from Haggerty’s conduct on March 19, 2009, when he threw his 3-month-old child against a wall, causing traumatic injury and death to the child. The child abuse charge resulted from Haggerty’s conduct from September 2008 through March 19, 2009, when Haggerty inflicted bodily injury upon his 2-year-old child by striking and throwing her.
The case was investigated by the Federal Bureau of Investigation and Bureau of Indian Affairs - Turtle Mountain Agency.
Assistant United States Attorney Brandi Sasse-Russell prosecuted the case.
The Lone Star Fugitive Task Force Assists in the Arrests of Suspects in Connection with Recent Kidnapping in San Antonio, Texas
February 2, 2010 - San Antonio, TX – On 01/21/2010, two victims were kidnapped at gun point from their home by a total of six suspects, and were held while the suspects demanded ransom for their release. The victims subsequently escaped from their captors. Since then, the San Antonio Police Department, assisted by the Lone Star Fugitive Task Force has captured five of the six suspects, leaving one (Steven Arreola) still on the run.
Most recently, suspect Richard Guevara was arrested by the Lone Star Fugitive Task Force on 02/01/2010, when information was obtained on his location in San Antonio, TX. Richard Guevara is wanted for multiple counts of aggravated kidnapping, and one count of aggravated burglary.
Acting U.S. Marshal Fernando Karl states, “Aggravated kidnapping is a felony crime in any state, and this is what our cooperative efforts with the San Antonio Police Department are all about, taking violent fugitives off the streets.”
Most recently, suspect Richard Guevara was arrested by the Lone Star Fugitive Task Force on 02/01/2010, when information was obtained on his location in San Antonio, TX. Richard Guevara is wanted for multiple counts of aggravated kidnapping, and one count of aggravated burglary.
Acting U.S. Marshal Fernando Karl states, “Aggravated kidnapping is a felony crime in any state, and this is what our cooperative efforts with the San Antonio Police Department are all about, taking violent fugitives off the streets.”
U.S. Marshals Task Force Arrests Ohio Armed Robbery Suspect in Georgia
February 2, 2010 - Elyria, OH - Earlier today, the U.S. Marshals Southeast Regional Fugitive Task Force apprehended violent fugitive Johnny Jackson III, age 20, in Stockbridge, GA based on a lead from the U.S. Marshals Northern Ohio Violent Fugitive Task Force – Lorain County Division. Jackson fled Ohio earlier this month and several leads led investigators to focus on Stockbridge, GA where he was arrested.
At approximately, 12:00 p.m., Deputy U.S. Marshals and Task Force Officers approached a residence in the 100 block of Appleton Avenue in Stockbridge, GA. As the officers surrounded the residence, an alert Task Force Officer observed Jackson attempting to flee out the back window of the house. When Jackson realized he was surrounded, he surrendered to the officers.
Jackson was wanted by the Lorain County Sheriff’s Office and Elyria Police Department for aggravated robbery, two counts of aggravated burglary, and kidnapping, stemming from an incident which occurred on January 9, 2010. It is alleged that Jackson, armed with a handgun, along with several associates, robbed the victim and stole nearly $2000 in personal belongings. Jackson is currently awaiting extradition from Georgia and will be brought back to Lorain County to face his charges.
U.S. Marshal Pete Elliott stated, “The Task Force came together again to safely track down and apprehend a wanted violent fugitive who fled to avoid prosecution. Together with our law enforcement partners in Georgia, we were able to bring this fugitive into custody to face his charges. Great job all around!”
If anyone has any information in reference to any wanted fugitive, please contact the Northern Ohio Violent Fugitive Task Force at 1-866-4WANTED.
The Northern Ohio Violent Fugitive Task Force - Lorain County Division is composed of the following federal, state and local agencies: U.S. Marshals Service, Amherst Police Department, Avon Police Department, Avon Lake Police Department, Bureau of Alcohol, Tobacco & Firearms, Elyria Police Department, Lorain County Adult Probation, Lorain Police Department, North Ridgeville Police Department, Oberlin Police Department, Ohio Adult Parole Authority, Sheffield Village Police Department and Vermilion Police Department.
At approximately, 12:00 p.m., Deputy U.S. Marshals and Task Force Officers approached a residence in the 100 block of Appleton Avenue in Stockbridge, GA. As the officers surrounded the residence, an alert Task Force Officer observed Jackson attempting to flee out the back window of the house. When Jackson realized he was surrounded, he surrendered to the officers.
Jackson was wanted by the Lorain County Sheriff’s Office and Elyria Police Department for aggravated robbery, two counts of aggravated burglary, and kidnapping, stemming from an incident which occurred on January 9, 2010. It is alleged that Jackson, armed with a handgun, along with several associates, robbed the victim and stole nearly $2000 in personal belongings. Jackson is currently awaiting extradition from Georgia and will be brought back to Lorain County to face his charges.
U.S. Marshal Pete Elliott stated, “The Task Force came together again to safely track down and apprehend a wanted violent fugitive who fled to avoid prosecution. Together with our law enforcement partners in Georgia, we were able to bring this fugitive into custody to face his charges. Great job all around!”
If anyone has any information in reference to any wanted fugitive, please contact the Northern Ohio Violent Fugitive Task Force at 1-866-4WANTED.
The Northern Ohio Violent Fugitive Task Force - Lorain County Division is composed of the following federal, state and local agencies: U.S. Marshals Service, Amherst Police Department, Avon Police Department, Avon Lake Police Department, Bureau of Alcohol, Tobacco & Firearms, Elyria Police Department, Lorain County Adult Probation, Lorain Police Department, North Ridgeville Police Department, Oberlin Police Department, Ohio Adult Parole Authority, Sheffield Village Police Department and Vermilion Police Department.
Judge Sentences Cocaine Dealer to 10 Years in Prison
February 2, 2010 - Acting United States Attorney Robert S. Cessar announced today, February 1, 2010, that on January 29, 2010, Victor Nelson, a resident of Pittsburgh, Pennsylvania, was sentenced in federal court in Pittsburgh to 120 months (10 years) in prison, to be followed by five years of supervised release, on his conviction of violating the federal drug laws.
United States District Judge Terrence F. McVerry imposed the sentence on Nelson, age 41.
According to information presented to the court by Assistant United States Attorney Troy Rivetti, from in or around October 2007, and continuing until in or around September 2008, in the Western District of Pennsylvania and elsewhere, Nelson conspired with others to distribute and possess with intent to distribute more than five kilograms of cocaine, a Schedule II controlled substance.
Mr. Cessar commended the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of Victor Nelson. Other agencies participating in the investigation include the Pennsylvania State Police, the District Attorney's Office - Violent Crimes/Firearms Task Force, the Allegheny County Sheriff's Department, the Allegheny County Police Department, the Allegheny County Adult Probation, the Internal Revenue Service - Criminal Investigation, the United States Marshals Service, the West Mifflin Police Department, the Coraopolis Police Department, the Jefferson Hills Police Department, the Mount Lebanon Police Department, and the Pennsylvania State Parole Office.
United States District Judge Terrence F. McVerry imposed the sentence on Nelson, age 41.
According to information presented to the court by Assistant United States Attorney Troy Rivetti, from in or around October 2007, and continuing until in or around September 2008, in the Western District of Pennsylvania and elsewhere, Nelson conspired with others to distribute and possess with intent to distribute more than five kilograms of cocaine, a Schedule II controlled substance.
Mr. Cessar commended the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of Victor Nelson. Other agencies participating in the investigation include the Pennsylvania State Police, the District Attorney's Office - Violent Crimes/Firearms Task Force, the Allegheny County Sheriff's Department, the Allegheny County Police Department, the Allegheny County Adult Probation, the Internal Revenue Service - Criminal Investigation, the United States Marshals Service, the West Mifflin Police Department, the Coraopolis Police Department, the Jefferson Hills Police Department, the Mount Lebanon Police Department, and the Pennsylvania State Parole Office.
Pittsburgh Man Pleads Guilty to Conspiring to Distribute Cocaine
February 2, 2010 - Acting United States Attorney Robert S. Cessar announced today, February 1, 2010, that on January 29, 2010, Anthony Terry, a resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court in Pittsburgh to a violation of the federal drug laws.
Terry, age 25, pleaded guilty to one count before United States District Judge Terrence F. McVerry.
In connection with the guilty plea, Assistant United States Attorney Troy Rivetti advised the court that from in or around October 2007, and continuing until in or around September 2008, in the Western District of Pennsylvania and elsewhere, Terry conspired with others to distribute and possess with the intent to distribute more than five kilograms of cocaine, a Schedule II controlled substance.
Judge McVerry scheduled sentencing for May 28, 2010, at 9:30 a.m. The law provides for a total sentence of not less than 10 years and up to life in prison, a fine of $4,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
The Drug Enforcement Administration, the Federal Bureau of Investigation, and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Anthony Terry. Other agencies participating in the investigation include the Pennsylvania State Police, the District Attorney's Office - Violent Crimes/Firearms Task Force, the Allegheny County Sheriff's Department, the Allegheny County Police Department, the Allegheny County Adult Probation, the Internal Revenue Service - Criminal Investigation, the United States Marshals Service, the West Mifflin Police Department, the Coraopolis Police Department, the Jefferson Hills Police Department, the Mount Lebanon Police Department, and the Pennsylvania State Parole Office.
Terry, age 25, pleaded guilty to one count before United States District Judge Terrence F. McVerry.
In connection with the guilty plea, Assistant United States Attorney Troy Rivetti advised the court that from in or around October 2007, and continuing until in or around September 2008, in the Western District of Pennsylvania and elsewhere, Terry conspired with others to distribute and possess with the intent to distribute more than five kilograms of cocaine, a Schedule II controlled substance.
Judge McVerry scheduled sentencing for May 28, 2010, at 9:30 a.m. The law provides for a total sentence of not less than 10 years and up to life in prison, a fine of $4,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
The Drug Enforcement Administration, the Federal Bureau of Investigation, and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Anthony Terry. Other agencies participating in the investigation include the Pennsylvania State Police, the District Attorney's Office - Violent Crimes/Firearms Task Force, the Allegheny County Sheriff's Department, the Allegheny County Police Department, the Allegheny County Adult Probation, the Internal Revenue Service - Criminal Investigation, the United States Marshals Service, the West Mifflin Police Department, the Coraopolis Police Department, the Jefferson Hills Police Department, the Mount Lebanon Police Department, and the Pennsylvania State Parole Office.
Beechview Man Pleads Guilty to Drug Charge
February 2, 2010 - Acting United States Attorney Robert S. Cessar announced today, February 1, 2010, that on January 29, 2010, Michael Costanzo, a resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court in Pittsburgh to a violation of the federal drug laws. Costanzo, age 26, pleaded guilty to one count before United States District Judge Terrence F. McVerry.
In connection with the guilty plea, Assistant United States Attorney Troy Rivetti advised the court that from in or around October 2007, and continuing until in or around September 2008, in the Western District of Pennsylvania and elsewhere, Costanzo conspired with others to distribute and possess with the intent to distribute more than 500 grams but less than two kilograms of cocaine, a Schedule II controlled substance.
Judge McVerry scheduled sentencing for May 28, 2010, at 9:30 a.m. The law provides for a total sentence of not less than five years and up to 40 years in prison, a fine of $2,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
The Drug Enforcement Administration, the Federal Bureau of Investigation, and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Michael Costanzo. Other agencies participating in the investigation include the Pennsylvania State Police, the District Attorney's Office - Violent Crimes/Firearms Task Force, the Allegheny County Sheriff's Department, the Allegheny County Police Department, the Allegheny County Adult Probation, the Internal Revenue Service - Criminal Investigation, the United States Marshals Service, the West Mifflin Police Department, the Coraopolis Police Department, the Jefferson Hills Police Department, the Mount Lebanon Police Department, and the Pennsylvania State Parole Office.
In connection with the guilty plea, Assistant United States Attorney Troy Rivetti advised the court that from in or around October 2007, and continuing until in or around September 2008, in the Western District of Pennsylvania and elsewhere, Costanzo conspired with others to distribute and possess with the intent to distribute more than 500 grams but less than two kilograms of cocaine, a Schedule II controlled substance.
Judge McVerry scheduled sentencing for May 28, 2010, at 9:30 a.m. The law provides for a total sentence of not less than five years and up to 40 years in prison, a fine of $2,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
The Drug Enforcement Administration, the Federal Bureau of Investigation, and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Michael Costanzo. Other agencies participating in the investigation include the Pennsylvania State Police, the District Attorney's Office - Violent Crimes/Firearms Task Force, the Allegheny County Sheriff's Department, the Allegheny County Police Department, the Allegheny County Adult Probation, the Internal Revenue Service - Criminal Investigation, the United States Marshals Service, the West Mifflin Police Department, the Coraopolis Police Department, the Jefferson Hills Police Department, the Mount Lebanon Police Department, and the Pennsylvania State Parole Office.
Former Hedge Fund Employee Pleads Guilty in Manhattan Federal Court to Insider Trading Charges
February 2, 2010 - PREET BHARARA, the United States Attorney for the Southern District of New York, announced today the unsealing of an Information charging DAVID SLAINE, a former employee of a hedge fund called Chelsey Capital ("Chelsey"), with participating in an insider trading scheme that, according to submissions in related cases, resulted in over $3 million in profits to Chelsey. SLAINE previously pleaded guilty in December 2009 to conspiracy and securities fraud charges arising from the insider trading scheme.
According to the charging documents and court proceedings in this and related cases:
Between February and December 2002, SLAINE worked for Chelsey, where he participated in trading equity securities on behalf of Chelsey. During that time another Chelsey employee—ERIK FRANKLIN—was obtaining material, nonpublic information regarding upcoming upgrades and downgrades in UBS analysts' securities recommendations (the "UBS Inside Information"). FRANKLIN obtained the UBS Inside Information from MITCHEL GUTTENBERG, an employee in the New York City office of UBS. FRANKLIN shared the UBS Inside Information with SLAINE, and they used it to execute profitable securities transactions for Chelsey. In addition, SLAINE used the UBS Inside Information to executes profitable securities transactions in his personal brokerage account.
SLAINE, 50, pleaded guilty on December 18, 2009, to conspiracy and securities fraud charges before United States District Judge RICHARD J. HOLWELL. SLAINE faces a maximum sentence of 25 years in prison. He is scheduled to be sentenced on June 25, 2010.
United States Attorney PREET BHARARA said: "David Slaine used insider information in order to gain an illegal advantage over others who were playing by the rules. Slaine's guilty plea represents another step in our ongoing effort to hold corrupt professionals on Wall Street accountable."
Mr. BHARARA praised the work of the Federal Bureau of Investigation and thanked the United States Securities and Exchange Commission for its assistance in the investigation.
Assistant United States Attorneys ANDREW FISH and REED BRODSKY are in charge of the prosecution.
According to the charging documents and court proceedings in this and related cases:
Between February and December 2002, SLAINE worked for Chelsey, where he participated in trading equity securities on behalf of Chelsey. During that time another Chelsey employee—ERIK FRANKLIN—was obtaining material, nonpublic information regarding upcoming upgrades and downgrades in UBS analysts' securities recommendations (the "UBS Inside Information"). FRANKLIN obtained the UBS Inside Information from MITCHEL GUTTENBERG, an employee in the New York City office of UBS. FRANKLIN shared the UBS Inside Information with SLAINE, and they used it to execute profitable securities transactions for Chelsey. In addition, SLAINE used the UBS Inside Information to executes profitable securities transactions in his personal brokerage account.
SLAINE, 50, pleaded guilty on December 18, 2009, to conspiracy and securities fraud charges before United States District Judge RICHARD J. HOLWELL. SLAINE faces a maximum sentence of 25 years in prison. He is scheduled to be sentenced on June 25, 2010.
United States Attorney PREET BHARARA said: "David Slaine used insider information in order to gain an illegal advantage over others who were playing by the rules. Slaine's guilty plea represents another step in our ongoing effort to hold corrupt professionals on Wall Street accountable."
Mr. BHARARA praised the work of the Federal Bureau of Investigation and thanked the United States Securities and Exchange Commission for its assistance in the investigation.
Assistant United States Attorneys ANDREW FISH and REED BRODSKY are in charge of the prosecution.
Brockton Official Pleads Guilty to Bribery
February 2, 2010 - BOSTON, MA—The former Brockton Superintendent of Buildings pled guilty today in federal court on charges that he received kickbacks from a contractor in exchange for his allowing the contractor to perform work for the City.
United States Attorney Carmen M. Ortiz, Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Division and Susan Dukes, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation – Boston Field Office announced today that JOSEPH L. VASAPOLLO, JR., age 67, of Brockton, pled guilty to three counts of extortion under color of official right and one count of bribery.
The case arose out of VASAPOLLO's relationship with an asbestos removal contractor who previously had performed work for the city. In 2007, VASAPOLLO hired the Norwoodbased contractor to remove materials containing asbestos from the Brockton War Memorial Building, which the City of Brockton has been renovating into a performing arts center. VASAPOLLO directed the contractor to break the work up into multiple invoices under $5,000, so that he alone would be authorized to approve them without resorting to the City’s more formal bidding process. After the work was completed, VASAPOLLO approved the City’s payment of three invoices totaling approximately $15,000 to the contractor. In three secretly recorded meetings that took place in parking lots in Brockton, the contractor paid VASAPOLLO a total of $4,000 in cash kickbacks for his approval of the work. At the conclusion of one of the meetings, VASAPOLLO insisted that they continue the kickback arrangement with new asbestos removal projects, encouraging the contractor to "keep the flow" so that they could "make a couple of bucks on the side."
Sentencing in the case is scheduled for April 28, 2010 before United States Senior District Judge Edward F. Harrington.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service. It is being prosecuted by Assistant U.S. Attorney Jonathan F. Mitchell of Ortiz’s Economic Crimes Unit.
United States Attorney Carmen M. Ortiz, Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Division and Susan Dukes, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation – Boston Field Office announced today that JOSEPH L. VASAPOLLO, JR., age 67, of Brockton, pled guilty to three counts of extortion under color of official right and one count of bribery.
The case arose out of VASAPOLLO's relationship with an asbestos removal contractor who previously had performed work for the city. In 2007, VASAPOLLO hired the Norwoodbased contractor to remove materials containing asbestos from the Brockton War Memorial Building, which the City of Brockton has been renovating into a performing arts center. VASAPOLLO directed the contractor to break the work up into multiple invoices under $5,000, so that he alone would be authorized to approve them without resorting to the City’s more formal bidding process. After the work was completed, VASAPOLLO approved the City’s payment of three invoices totaling approximately $15,000 to the contractor. In three secretly recorded meetings that took place in parking lots in Brockton, the contractor paid VASAPOLLO a total of $4,000 in cash kickbacks for his approval of the work. At the conclusion of one of the meetings, VASAPOLLO insisted that they continue the kickback arrangement with new asbestos removal projects, encouraging the contractor to "keep the flow" so that they could "make a couple of bucks on the side."
Sentencing in the case is scheduled for April 28, 2010 before United States Senior District Judge Edward F. Harrington.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service. It is being prosecuted by Assistant U.S. Attorney Jonathan F. Mitchell of Ortiz’s Economic Crimes Unit.
Man Sentenced to 120 Months in Prison for Child Pornography Offenses
February 2, 2010 - A Mesilla Park, New Mexico man was sentenced to 120 months in prison on Thursday as a result of a child pornography investigation by the United States Attorney’s Office for the District of New Mexico, United States Immigration and Customs Enforcement (ICE), Federal Bureau of Investigation (FBI), the Las Cruces Police Department (LCPD), and the New York City Police Department (NYPD).
David Joseph Dube, 56, a former United States Army captain, worked as an information technology contractor. ICE special agents began investigating him in November 2008 after receiving information from the NYPD.
On Nov. 9, 2009, authorities executed a search warrant of his home in Mesilla Park, N.M. and seized computers and other evidence indicative of criminal behavior towards children.
ICE agents arrested Dube on Nov. 24, 2008, after a preliminary forensic examination of his home computer revealed multiple images of minors engaging in sexually explicit conduct with adults.
A federal grand jury indicted Dube on Dec. 18, 2008, for receiving and possessing matters and visual depictions of minors engaged in sexually explicit conduct. His sentence handed down Thursday in federal court includes supervised release for the rest of his life.
This case demonstrates how—working together—local, state, and federal law enforcement can safeguard our children.
Suspected child sexual exploitation or missing children may be reported to the National Center for Missing and Exploited Children, an Operation Predator partner, at 1-800-843-5678 or http://www.cybertipline.com.
David Joseph Dube, 56, a former United States Army captain, worked as an information technology contractor. ICE special agents began investigating him in November 2008 after receiving information from the NYPD.
On Nov. 9, 2009, authorities executed a search warrant of his home in Mesilla Park, N.M. and seized computers and other evidence indicative of criminal behavior towards children.
ICE agents arrested Dube on Nov. 24, 2008, after a preliminary forensic examination of his home computer revealed multiple images of minors engaging in sexually explicit conduct with adults.
A federal grand jury indicted Dube on Dec. 18, 2008, for receiving and possessing matters and visual depictions of minors engaged in sexually explicit conduct. His sentence handed down Thursday in federal court includes supervised release for the rest of his life.
This case demonstrates how—working together—local, state, and federal law enforcement can safeguard our children.
Suspected child sexual exploitation or missing children may be reported to the National Center for Missing and Exploited Children, an Operation Predator partner, at 1-800-843-5678 or http://www.cybertipline.com.
Former Pittston Area School Board Member Sentenced
February 2, 2010 - Dennis C. Pfannenschmidt, United States Attorney for the Middle District of Pennsylvania; Janice Fedarcyk, Special Agent in Charge, Federal Bureau of Investigation; and Don Fort, Special Agent in Charge, Internal Revenue Service-Criminal Investigation Division, and Mary Mitchelson, Acting Inspector General of the U.S. Department of Education, Office of Inspector General jointly announced today that Joseph Oliveri, age 52, of Hughestown, Pennsylvania, was sentenced today by United States District Court Judge Thomas I. Vanaskie. Judge Vanaskie sentenced Oliveri to a 12 month and one day term of imprisonment followed by two years of supervised release and a $3,000 fine.
In August 2009, federal officials announced that a criminal information and plea agreement had been filed against Oliveri. The Criminal Information charged Oliveri with corrupt receipt of a reward for official action concerning a program receiving federal funds after Oliveri accepted a cash reward of $1,500 from a contractor in connection with support Oliveri provided for a contract awarded to the contractor by the Pittston Area School District Board of Education.
This case is part of an ongoing investigation by the Federal Bureau of Investigation and the Internal Revenue Service and was prosecuted by a team of federal prosecutors led by Senior Litigation Counsel Gordon Zubrod and includes Assistant U.S. Attorneys William Houser, Michael Consiglio, Amy Phillips and Criminal Division Chief Christian Fisanick.
In August 2009, federal officials announced that a criminal information and plea agreement had been filed against Oliveri. The Criminal Information charged Oliveri with corrupt receipt of a reward for official action concerning a program receiving federal funds after Oliveri accepted a cash reward of $1,500 from a contractor in connection with support Oliveri provided for a contract awarded to the contractor by the Pittston Area School District Board of Education.
This case is part of an ongoing investigation by the Federal Bureau of Investigation and the Internal Revenue Service and was prosecuted by a team of federal prosecutors led by Senior Litigation Counsel Gordon Zubrod and includes Assistant U.S. Attorneys William Houser, Michael Consiglio, Amy Phillips and Criminal Division Chief Christian Fisanick.
Guilty Plea in Million-Dollar-Plus Check Kiting Case
February 2, 2010 - BROWNSVILLE, TX—Jeff Woodard, Jr., 48, of Harlingen, Texas, has pleaded guilty to defrauding three local banks by means of a check kiting scheme, United States Attorney Tim Johnson announced today.
At a hearing before United States District Judge Andrew S. Hanen, Woodard pleaded guilty to one count of bank fraud, admitting he operated a check kite scheme involving four bank accounts held in the names of several of his former businesses. The scheme resulted in combined total of more than a million-dollar loss affecting three local banks.
A check kite exists when a person passes checks back and forth between banks before the checks have time to clear to create the appearance that the bank customer has more money in the accounts than he actually does. A check is written on one bank and deposited in a second bank. Checks not backed by sufficient collectable funds are written from the second bank (or a third bank) and deposited with the first bank to mask the fact that there are insufficient funds to pay the initial check. The process continues until the kite is discovered.
Woodard operated Harlingen Imports, also known as Competition Car and Truck Center, in Harlingen, Texas; Competition Chrysler Dodge Jeep and Competition RGV in Raymondville, Texas; and Competition Motor Sports, with locations in Harlingen, Texas, and McAllen, Texas. The check kite scheme covered the period from Nov. 1, 2004 through Jan. 30, 2006.
In this case, Woodard or persons acting under his direction wrote multiple checks on one account and deposited them with another of the three banking institutions daily. There was no legitimate business reason for the vast majority of the checks to be written. The checks were all written in whole dollar amounts, typically in even hundreds, and were typically sequential. Woodard signed about half of the checks. Others were signed by employees or business partners, acting under his direction. The number and size of the checks dwarfed the reported revenues of the three businesses combined.
Over the time period covered by the FBI’s detailed computer analysis, October 2005 through December 2005, Woodard was responsible for kiting resulting in an actual loss of approximately $1.6 million.
The maximum statutory penalty is 30 years' imprisonment, a $1 million fine, and five years of supervised release. Sentencing is set for May 10, 2010 at 8:30 a.m. before Judge Hanen.
This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorneys Michael Wynne and Israel Cano.
At a hearing before United States District Judge Andrew S. Hanen, Woodard pleaded guilty to one count of bank fraud, admitting he operated a check kite scheme involving four bank accounts held in the names of several of his former businesses. The scheme resulted in combined total of more than a million-dollar loss affecting three local banks.
A check kite exists when a person passes checks back and forth between banks before the checks have time to clear to create the appearance that the bank customer has more money in the accounts than he actually does. A check is written on one bank and deposited in a second bank. Checks not backed by sufficient collectable funds are written from the second bank (or a third bank) and deposited with the first bank to mask the fact that there are insufficient funds to pay the initial check. The process continues until the kite is discovered.
Woodard operated Harlingen Imports, also known as Competition Car and Truck Center, in Harlingen, Texas; Competition Chrysler Dodge Jeep and Competition RGV in Raymondville, Texas; and Competition Motor Sports, with locations in Harlingen, Texas, and McAllen, Texas. The check kite scheme covered the period from Nov. 1, 2004 through Jan. 30, 2006.
In this case, Woodard or persons acting under his direction wrote multiple checks on one account and deposited them with another of the three banking institutions daily. There was no legitimate business reason for the vast majority of the checks to be written. The checks were all written in whole dollar amounts, typically in even hundreds, and were typically sequential. Woodard signed about half of the checks. Others were signed by employees or business partners, acting under his direction. The number and size of the checks dwarfed the reported revenues of the three businesses combined.
Over the time period covered by the FBI’s detailed computer analysis, October 2005 through December 2005, Woodard was responsible for kiting resulting in an actual loss of approximately $1.6 million.
The maximum statutory penalty is 30 years' imprisonment, a $1 million fine, and five years of supervised release. Sentencing is set for May 10, 2010 at 8:30 a.m. before Judge Hanen.
This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorneys Michael Wynne and Israel Cano.
Law Enforcement Officials and Community Leaders Offer Reward
February 2, 2010 - The greater Sacramento area has experienced a recent uptick in hate crime incidents, and two in particular have authorities and community leaders asking for the public’s help in solving the crimes. The first incident occurred on November 10, 2009, at Congregation Beth Shalom, 4746 El Camino Avenue, Carmichael, California. Congregation Beth Shalom, a Jewish synagogue, was the target of racist graffiti, a hate message, and an attempt to burn a sign bearing the congregation’s name.
Video footage obtained from outside the synagogue captured the image of an individual dressed in all black spray painting the words “Kristallnact still lives” (sic).This message pertains to the November 1938 attacks against Jews by Nazis in Germany and Austria.
A swastika and SS symbols were painted on the building and there was also an attempt to burn the sign in front of the synagogue as evidenced by the burnt bushes below the sign.
The perpetrator wore a black hooded sweat shirt to obscure his/her face from the camera and can be seen making an obscene gesture to the camera before departing the scene.
The second incident occurred on January 1, 2010, at Kenesset Israel Torah Center, 1165 Morse Avenue, Sacramento, California, where someone spray painted satanic messages on the exterior walls of the center and racial epithets and two swastikas on the SMUD power box located at the edge of the property.
The Sacramento FBI is offering a reward of up to $2,500 for information leading to the arrest and conviction of the individual(s) responsible for these crimes.Representatives from the Jewish Federation of the Sacramento Region have also offered a reward, up to $1500, for information leading to the arrest and conviction of those responsible for these two acts.
Anyone with information regarding these two incidents is urged to contact the Sacramento FBI at 916-481-9110.
Video footage obtained from outside the synagogue captured the image of an individual dressed in all black spray painting the words “Kristallnact still lives” (sic).This message pertains to the November 1938 attacks against Jews by Nazis in Germany and Austria.
A swastika and SS symbols were painted on the building and there was also an attempt to burn the sign in front of the synagogue as evidenced by the burnt bushes below the sign.
The perpetrator wore a black hooded sweat shirt to obscure his/her face from the camera and can be seen making an obscene gesture to the camera before departing the scene.
The second incident occurred on January 1, 2010, at Kenesset Israel Torah Center, 1165 Morse Avenue, Sacramento, California, where someone spray painted satanic messages on the exterior walls of the center and racial epithets and two swastikas on the SMUD power box located at the edge of the property.
The Sacramento FBI is offering a reward of up to $2,500 for information leading to the arrest and conviction of the individual(s) responsible for these crimes.Representatives from the Jewish Federation of the Sacramento Region have also offered a reward, up to $1500, for information leading to the arrest and conviction of those responsible for these two acts.
Anyone with information regarding these two incidents is urged to contact the Sacramento FBI at 916-481-9110.
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