Criminal Justice News

Thursday, May 31, 2012

Former Lakeland School District Transportation Director Sentenced to Prison


The United States Attorney’s Office for the Middle District of Pennsylvania announced that the former director of transportation for the Lakeland School District was sentenced today by Senior U.S. District Court Judge Edwin M. Kosik to five months in prison for his role in a conspiracy to obtain by fraud federal program funds in connection with school district transportation contracts he recommended during 2006 through 2009.

According to United States Attorney Peter J. Smith, John Wansacz, Jr., age 42, of Greenfield Township, previously admitted to using his official position to steer school district transportation contracts to a company in which he had a financial interest and from which he received payments in excess of $70,000 during a three-year time period.

Wansacz was charged in an information filed by the United States Attorney on July 27, 2011. The charge resulted from an investigation by the Federal Bureau of Investigation.

Judge Kosik also ordered Wansacz to serve two years on supervised release after his prison stay and to serve the first five months of supervised release on home confinement. Wansacz must also pay a $3,000 fine and a $100 special assessment and perform 50 hours of community service.

Judge Kosik ordered Wansacz to surrender to an institution designated by the Bureau of Prisons on June 13, 2012.

The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.

Northern Cambria Man Pleads Guilty to Conspiring to Launder Drug Proceeds


JOHNSTOWN, PA—A resident of Northern Cambria, Pennsylvania pleaded guilty in federal court to a charge of conspiracy to commit money laundering, United States Attorney David J. Hickton announced today.

Robert J. Paterno, 48, pleaded guilty to one count before United States District Judge Kim R. Gibson.

In connection with the guilty plea, the court was advised that from March 2008 to May 9, 2011, Paterno conspired to commit money laundering. In addition, evidence presented to the court at the time of Paterno’s guilty plea reflected that Paterno conspired with George M. Lowmaster and others to conduct financial transactions involving proceeds generated through Lowmaster’s drug distribution organization with the intent to conceal the source of the proceeds and with the intent to promote the carrying on of Lowmaster’s drug distribution organization.

Judge Gibson scheduled sentencing for November 6, 2012 at 10 a.m. The law provides for a total sentence of 20 years in prison, a fine of $500,000, 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.

Pending sentencing, the court continued Paterno on bond.

Assistant United States Attorney John J. Valkovci, Jr. is prosecuting this case on behalf of the government.

A joint task force, headed by the Laurel Highlands Resident Agency of the Federal Bureau of Investigation, conducted the investigation that led to the prosecution of Paterno. Other agencies participating on the task force include the Internal Revenue Service-Criminal Investigation; Pennsylvania State Police; the Pennsylvania Attorney General’s Office; the Cambria County District Attorney’s Office; the Carrolltown Police Department; the Patton Police Department; the Ebensburg Police Department; the Portage Police Department; and the Paint Township Police Department.

Executive Director of Bronx Not-for-Profit Found Guilty in Manhattan Federal Court of Fraud and Obstruction of Justice


Preet Bharara, the United States Attorney for the Southern District of New York, announced that David Griffiths, the executive director of the Neighborhood Enhancement for Training Services Inc. (NETS), a now non-operating not-for-profit corporation in the Bronx, New York that provided programs and services for young people and for senior citizens, was found guilty yesterday in Manhattan federal court on all three counts contained in an information charging him with making false statements to the government, obstruction of justice, and mail fraud. Griffiths was convicted after a four-week jury trial before U.S. District Judge Alvin K. Hellerstein.

Manhattan U.S. Attorney Preet Bharara said, “In just two hours, a jury of 12 men and women convicted David Griffiths of lying to cover up the fact that he had taken taxpayer dollars from a not-for-profit organization that provided services to Bronx residents in need. Their swift verdict demonstrates that there is no tolerance for this illegal conduct and that those who engage in it will be punished.”

According to the evidence introduced at trial, other proceedings in this case, and documents previously filed in Manhattan federal court:

Griffiths began serving as the executive director of NETS in November 2003. NETS received almost all of its funding from government grants sponsored by a Bronx Assemblyman. In 2008, the FBI began investigating the not-for-profit and how it had used those government funds.

In June 2009, Griffiths made materially false statements and representations in documents he provided to the FBI in response to a Southern District of New York grand jury subpoena. The documents were purported minutes of meetings of the board of directors of NETS that related to, among other things, alleged authorizations he had obtained from the board to take certain payments from the not-for-profit. Griffiths gave the minutes to the FBI in an attempt to mislead them and obstruct their investigation of NETS. Specifically, Griffiths attempted to cover up tens of thousands of dollars he had taken from NETS with no authorization and his scheme to take almost $200,000 more from the not-for-profit.

In September 2010, Griffiths, on behalf of NETS, attempted to obtain additional grant money from a New York State agency under false pretenses. Specifically, Griffiths misrepresented to the agency that the not-for-profit and its officers and directors had not been the subject of a criminal investigation, a civil investigation, and/or unsatisfied tax liens and judgments for the past five years. At the time Griffiths made these misrepresentations, he knew that both he and the not-for-profit were under investigation by the FBI as well as by the State Attorney General’s Office and that NETS had unsatisfied tax liens and judgments against it.

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Griffiths, 66, of White Plains, New York, faces a maximum penalty of 45 years in prison and a fine of $250,000 in addition to the proceeds of the crime. He is scheduled to be sentenced after post-trial briefing.

Mr. Bharara praised the work of the Federal Bureau of Investigation in the investigation of this case.

This prosecution is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Carrie H. Cohen and Justin Anderson are in charge of the prosecutions.

New London Woman Sentenced to More Than Three Years in Federal Prison for Role in Mortgage Fraud Scheme


David B. Fein, United States Attorney for the District of Connecticut, announced that Isaura Guzman, 28, of New London, was sentenced today by Senior United States District Judge Alfred V. Covello in Hartford to 37 months of imprisonment, followed by three years of supervised release, for her participation in an eastern Connecticut mortgage fraud scheme.

According to court documents and statements made in court, from approximately 2004 to 2007, Jose Guzman, his daughter, Isaura Guzman, and others used mortgage brokerage, property management, and home improvement companies to arrange for individuals (“borrowers”) to purchase real estate, primarily residential housing properties located in New London County, by obtaining funding from various mortgage companies and mortgage originators after submitting false information on the borrowers’ mortgage loan applications. The fraudulent information included information regarding income, assets, employment, rent history, as well as the borrowers’ intention to make the properties their primary residence. The borrowers were compensated for participating in the scheme.

Isaura Guzman participated in the scheme, first as an assistant to Jose Guzman, and later as a licensed real estate agent for Elizabeth Athan Realty. Isaura Guzman bought and/or sold at least four houses as part of the conspiracy, and she recruited at least other three individuals into the scheme to act as buyers.

According to previously filed court documents, the government believes that more than 200 fraudulent mortgages were funded through this mortgage fraud scheme, causing more than $9 million in losses to lenders.

As part of her sentence, Judge Covello ordered Isaura Guzman to pay restitution in the amount of $7,811,695.44.

On June 14, 2010, Isaura Guzman pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud. Fifteen other individuals, including Jose Guzman, have pleaded guilty to various charges stemming from this scheme. Jose Guzman awaits sentencing.

This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Developmen, Office of Inspector General. The case is being prosecuted by Assistant United States Attorneys Michael S. McGarry and David T. Huang.

In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force or by sending an e-mail to ctmortgagefraud@ic.fbi.gov.

The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service-Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.

To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.

Lancaster Man Sentenced for Using the Internet to Entice a Minor


BUFFALO—U.S. Attorney William J. Hochul, Jr. announced today that Kevin Martis, 23, of Lancaster, New York, who was convicted of enticement of a minor and possession of child pornography, was sentenced to 78 months in prison U.S. District Judge Richard J. Arcara.

Assistant U.S. Attorney Maura O’Donnell, who handled the case, stated that the defendant used the Internet on two separate occasions to attempt to encourage a 13-year-old and a 15-year-old to engage in sexual activity. Martis initially contacted the minor victims through Facebook. Police were alerted by the parents of the minor victims. Law enforcement also found over 600 images of child pornography on the defendant’s computer, which included images of children under the age of 12.

“This case shows the important role parents can play in keeping their children safe,” said U.S. Attorney Hochul. “Thanks to the involvement of the parents, law enforcement was able to prevent this defendant from seriously harming two children.”

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.

The sentencing is the result of an investigation by special agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Christopher M. Piehota; and detectives from the Cheektowaga Police Department, under the direction of Police Chief David Zack. The FBI was assisted by the Kenmore, Depew, and Lancaster Police Departments.