Criminal Justice News

Monday, December 10, 2018

Ambridge Crack Dealer Sentenced to 5 Years in Prison

PITTSBURGH, PA - A resident of Beaver County, Pennsylvania, has been sentenced in federal court to five years in prison and five years of supervised release on his conviction of violations of the federal narcotics laws, United States Attorney Scott W. Brady announced today.

United States District Judge Mark R. Hornak imposed the sentence on Matthew Smith, 53, of Ambridge, Pa.

According to information presented to the court, Smith conspired with others to distribute and possess with intent to distribute 28 grams or more of a mixture and substance containing a detectable amount of cocaine base, in the form commonly known as crack, a Schedule II controlled substance, and a quantity of a mixture and substance containing a detectable amount of cociane..

Assistant United States Attorney Robert C. Schupansky prosecuted this case on behalf of the government.

This prosecution was part of a long-term investigation by the FBI Greater Pittsburgh Safe Streets Task Force (GPSSTF), which targeted a large scale Drug Trafficking Organization operating in Butler, Beaver and Allegheny Counties. The GPSSTF is comprised of dedicated law enforcement professionals from the Wilkinsburg Police Department, Pennsylvania Attorney General’s Bureau of Narcotics Investigations, Allegheny County Sheriff’s Office, Allegheny County Police Department, Pittsburgh Bureau of Police and the FBI.

This investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.

United States Attorney Brady commended the Federal Bureau of Investigation, along with the other federal, state and local agencies involved, for the investigation leading to the successful prosecution of Smith.

Advertising Executive Sentenced To Forty Years In Federal Prison For Fraud Scheme

Tampa, Florida – United States Attorney Maria Chapa Lopez announces that U.S. District Judge Elizabeth Kovachevich today sentenced Gary Todd Smith (49, Fayetteville, North Carolina) to 40 years in federal prison for wire fraud and conspiracy to commit wire and mail fraud. The court also ordered Smith to forfeit $63 million, an amount traceable to proceeds of the offense. Smith had pleaded guilty on June 7, 2017.

According to court records, Smith ran Smith Advertising, which turned into a massive fraud scheme. Smith borrowed money from more than 150 people, and each earlier loan was repaid from subsequent loans. Smith lied about the purpose of the loans, and he and his co-conspirators created fake documents to mask the scheme. Over the course of the five-day sentencing hearing, the court heard from more than 50 victims who described the devastation wrought upon their lives by Smith’s massive fraud scheme. The victims suffered bankruptcies, loss of their homes, loss of retirement funds, and loss of their children’s education funds.

“This was a crime motivated by greed and a desire to fund an extravagant lifestyle,” said U.S. Attorney Chapa Lopez. “We will continue to work with our law enforcement partners to vigorously prosecute those who defraud and steal from honest, hardworking Americans.”

“This investigation and subsequent sentencing exemplifies the strength of the federal law enforcement collaboration with the U.S. Attorney’s Office,” said Patrick Henry, Assistant Special Agent in Charge of the U.S. Secret Service Tampa Field Office. “Each agency involved brought to bear its talent, resources, and commitment to mission. The Secret Service remains dedicated to aggressively protecting our nation and its citizens from financial fraud.”

“With more than 100 victims in this case, our agents and analysts worked tirelessly to ensure justice was served,” said Eric W. Sporre, Special Agent in Charge of the FBI Tampa Division. “This investigation shows how greed can consume everything in its path and why any suspicions of financial fraud should be reported immediately to authorities.”

This case was investigated by the United States Secret Service and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Thomas N. Palermo.

Former 5Linx Owner Sentenced On Wire Fraud And Tax Charges For His Role In Multi-Million Dollar Marketing Scheme

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Craig Jerabeck, 57, of Rochester, NY, who was convicted of conspiracy to commit wire fraud and filing a false tax return, was sentenced to serve 14 months in prison by U.S. District Judge David G. Larimer. The defendant was also ordered to pay $2,310,510 in restitution to victims and $118,628.00 to the Internal Revenue Service.

Assistant U.S. Attorney Richard A. Resnick, who is handling the prosecution of the case, stated that in 2001, the defendant, along with co-defendants Jeb Tyler and Jason Guck, started 5LINX Enterprise, Inc. (5LINX), a multi-level marketing company headquartered in Rochester. The company offered utility and telecommunications services, health insurance, nutritional supplements, and business services. 5LINX utilized independent representatives to sell products and services, and to recruit additional representatives. Jerabeck was President and Chief Executive Officer, Guck was Vice President and Secretary, and Tyler was also a Vice President. In June 2006 and July 2006, Jerabeck, Tyler and Guck sold 5LINX stock for $5,500,000 to three investment companies, Trillium Lakefront Partners III, L.P.; Trillium Lakefront Partners III, NY L.P.; and Shalam Investment Co., L.L.C. (collectively known as "the Investors").

Between May 2010 and April 2016, 5LINX sold and distributed products for a Florida vendor. As part of his plea agreement, Jarabeck admitted that he, together with Guck and Tyler, personally, and by companies they owned, received approximately $2,310,510 from a Florida vendor, without the knowledge of the 5LINX’s Investors, Board of Directors, or other stockholders. Jerabeck further admitted that he, Guck, and Tyler were each prohibited from receiving such money by their Stockholders Agreements. 5LINX, its investors, as owners between 2006 and January 2014, and as creditors thereafter, and stockholders, were entitled to and should have received the funds instead of Jerabeck, Guck, and Tyler.

In addition, Jerabeck provided false information on his personal tax returns for the years 2011 through 2013, and 2015. The defendant failed to report income he received from 5LINX, and took deductions to which he was not entitled, that is, commissions that were not paid.  The false returns resulted in a tax loss to the Internal Revenue Service of approximately $118,628.

Judge Larimer also ordered the forfeiture of the defendant’s interest in real property at 90 East Lake Road, in Middlesex, NY.

Jeb Tyler and Jason Guck were previously convicted and are scheduled to be sentenced on December 12, 2018, and December 19, 2018, respectively.

Today’s sentencing is the culmination of an investigation by Special Agents of the Federal Bureau of Investigations, under the direction of Special Agent-in-Charge Gary Loeffert, and the Internal Revenue Service, Criminal Investigation Division, under the direction of James D. Robnett, Special Agent in Charge, New York Field Office.