Criminal Justice News

U.S. Border Patrol Agents Rescue Two From All American Canal

2012-02-01T16:09:00.001-08:00

Calexico, Calif. – On January 26, 2012, Border Patrol agents from the Calexico Station worked together to rescue two illegal aliens from the swift currents of the All American Canal.

The incident occurred at approximately 6:00 p.m., after Border Patrol agents using a remote video surveillance system (RVSS) observed five suspected illegal aliens enter the All American Canal and attempt to swim across. Agents responding observed two of the individuals being swept away by the hazardous current and having trouble staying afloat.

RVSS operators immediately notified nearby agents who responded to the crisis;: responding agents deployed rescue throw bags and assisted the victims out of the All American Canal to safety.

This incident serves as a reminder that a moving body of water, such as the All American Canal, while appearing calm can be extremely dangerous. Smugglers operate with little concern for illegal aliens as they continually place them in life threatening situations. Both individuals were found to be wearing life preserving vests, but still struggled to free themselves from the water.

All subjects were unharmed and found to be Mexican citizens illegally present in the U.S. The group was transported to the Calexico Border Patrol station for processing.

U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of our nation's borders at and between the official ports of entry. CBP is charged with keeping terrorists and terrorist weapons out of the country while enforcing hundreds of U.S. laws.

Phoenix Man Indicted for Stalking a Woman in Maryland

2012-02-01T16:08:00.001-08:00

BALTIMORE—A federal grand jury has indicted David Charles Richards, age 49, of Phoenix, Arizona today on charges of stalking a woman in Maryland.

The indictment 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 indictment alleges that from December 2006 through November 2011, Richards has been using the Internet, telephone, electronic mail, and the U.S. mail to stalk a woman in Maryland, including threatening to kill the woman. According to court documents, Richards and the victim met and began dating when the victim was 15 and Richards was 25 years old. According to court documents, the relationship was troubled and at times physically abusive. Richards and the victim were married in July 1991 and lived in Anne Arundel County. Within 10 weeks of their marriage, Richards told the victim that he had been arrested for assault and the victim told Richards to leave the residence and that she was going to seek a divorce. According to court documents, Richards did not contest the proceedings.

According to court documents, after not having any contact with the victim for almost 15 years, in June 2006, Richards contacted the victim’s sister telling her that he will stay connected to the victim and he will never stop as, “he has reclaimed his wife as of today.” Beginning in July 2006, and during each subsequent year, the victim has sought and been granted protective orders forbidding Richards to contact her. On December 11, 2006, the victim discovered that a website had been created in her name, which included a countdown clock to the expiration of the protective order the victim had taken out against Richards and other threatening material. In December 2009, Richards allegedly tore up one of the protective orders that was served upon him and mailed the torn pieces to the victim’s home. Court documents also detail repeated threats that Richards has posted on websites directed at the victim, including threats as recently at November 2011. The indictment alleges that Richards threatened and harassed the victim over a period of five years through telephone messages, e-mails, packages sent through the U.S. mail, as well as through the posting of messages and recordings on websites Richards created in the name of the victim.

Richards faces a maximum sentence of five years in prison for stalking. An initial appearance was held this afternoon in U.S. District Court in Baltimore. Richards is detained.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

United States Attorney Rod J. Rosenstein praised the FBI agents in Baltimore and Phoenix for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Kristi N. O’Malley, who is prosecuting the case.

U.S. Marshals Arrest Megan's Law Violator in Fairview Township, York County

2012-02-01T16:06:00.000-08:00

Harrisburg, PA – U.S. Marshal Martin J. Pane announced today that the United States Marshals Service (USMS) arrested Gregory Colt, a 31-year old man, in Fairview Township, York County. Colt was sought for failing to register as a previously convicted sex offender and faces possible prosecution for violating the Adam Walsh Child Protection and Safety Act of 2006.

On February 11, 2009, Colt was convicted of Sexual Assault in Sebastian County, Arkansas – an offense that required Colt to register as a convicted sex offender.

In July of 2011, Colt registered his home address in Charlotte County, Florida. But early in January of 2012, members of the Charlotte County Sheriff Department discovered that he no longer lived there and - on January 12, 2012 - obtained a warrant for his arrest.

Shortly after that, Deputy U. S. Marshals in Florida began searching for Colt. They discovered that he fled to Pennsylvania and passed that information to the USMS office in Harrisburg.

This morning, Deputy U. S. Marshals placed the home of one of Colt’s family members under surveillance. Shortly after 11 AM, Colt exited the home and was taken into custody without incident. The Fairview Township Police Department charged Colt as a fugitive from justice and turned him over to York County Central Booking to await arraignment.

The USMS continues to investigate Colt to determine if he violated the Adam Walsh Child Protection and Safety Act of 2006 - which made it a federal offense for a convicted sex offender to flee from state to state to avoid his registration requirements. It also designated the United States Marshals Service as the federal agency responsible for locating and investigating these offenders.

United States Marshal Martin J. Pane stated, “As the lead federal agency responsible for the arrest of non-compliant sex offenders, we’re committed to investigating Megan’s Law violators and Adam Walsh Act fugitive cases and bringing those violators to justice.”

Additional information about the U.S. Marshals Service can be found at USmarshals.gov.

Oceanside Woman Indicted for Operating Ponzi Schemes

2012-02-01T16:04:00.000-08:00

Defendant Allegedly Defrauded Investors of More Than $4 Million

Laurie Schneider, of Oceanside, New York, has been indicted for operating Ponzi schemes that defrauded investors of more than $4 million.1 The defendant was arraigned earlier today before United States Magistrate Judge A. Kathleen Tomlinson at the United States Courthouse, 100 Federal Plaza, Central Islip, New York.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Janice K. Fedarcyk, Assistant Director in Charge of the Federal Bureau of Investigation, New York Field Office.

As alleged in the indictment, Schneider began accepting money in September 2006 from individuals seeking a return on their investment. In one scheme, operating a shell company incorporated as Janitorial Close-Out City Corp., Schneider falsely informed potential investors that Janitorial Close-Out invested in industrial equipment and machinery manufactured by companies in China. To induce investments, Schneider, among other things, (1) personally guaranteed specified positive rates of return as high as 60 percent, (2) represented that she had a business contact who had strong relationships with companies in China, and (3) represented that she would be able to buy the industrial equipment and machinery at wholesale prices which Janitorial Close-Out would resell in the United States at a 15 to 60 percent profit over a nine to 18-month period. In fact, the indictment charges that Schneider actually was running a Ponzi scheme, paying returns to Janitorial Close-Out investors not from any profits earned on the purchase and resale of industrial equipment and machinery, but rather from existing investors’ deposits or money paid by new investors. Schneider never produced or earned the rates of return that she promised. Rather, the positive rates of return were simply pre-determined rates made up by Schneider based upon fictitious profits.

The government estimates that Schneider defrauded over 25 investors in Janitorial Close-Out of more than $4 million, and more than $5 million through related schemes.

“In these difficult economic times, it’s all the more troubling that, as alleged in the indictment, someone would take advantage of the trust of investors for personal financial gain,” stated United States Attorney Lynch. “As alleged, this defendant falsely represented herself as having international business connections that would benefit her investors, when in reality she was engaged in purely homegrown fraud and deception. This indictment serves as a warning that we will vigorously investigate and prosecute those who, by deceit and false promises, would steal from those who believed they were investing in a legitimate enterprise.” Ms. Lynch added that the government’s investigation is continuing.

FBI Assistant Director-in-Charge Fedarcyk stated, “Ponzi schemes have been around for so long because, unfortunately, they are such an effective means of swindling people out of their hard-earned money. Investors need to be wary of ‘investment opportunities’ that ‘guarantee’ inordinately high rates of return, and should perform due diligence. But it is the perpetrators of these fraudulent schemes, not their victims, who are to blame. The FBI remains committed to protecting the investing public from them.”

If convicted, Schneider faces a maximum sentence of 20 years’ imprisonment on each of three counts of wire fraud count.

The government’s case is being prosecuted by Assistant United States Attorneys Richard T. Lunger and Lara Treinis Gatz.

The Defendant:

LAURIE SCHNEIDER Age: 37

1 The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

Worley Man Sentenced for Assault on Coeur d’Alene Indian Reservation

2012-01-31T20:20:00.000-08:00

COEUR D’ALENE—Timothy Allen, Jr., 19, of Worley, Idaho, was sentenced today in federal court in Coeur d’Alene to 33 months in prison for two counts of assault with a dangerous weapon, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Allen to serve three years of supervised release following his prison term and perform 80 hours of community service. He pleaded guilty to the charges on November 16, 2011.

According to the indictment and the defendant’s admissions in court, on March 12, 2011, on the Coeur d’Alene Indian Reservation, Allen intentionally assaulted one victim by pushing a firearm into the victim’s body and the other victim by pointing a firearm in the victim’s direction. Allen verbally threatened both of the victims.

The case was investigated by the Coeur d’Alene Tribal Police and the Federal Bureau of Investigation.

Norfolk Contractor Sentenced to 37 Months in Prison for Kickback Scheme and Failure to File Tax Return

2012-01-31T20:19:00.000-08:00

WASHINGTON—A Virginia contractor was sentenced today to serve 37 months in prison for participating in a scheme to steer contracts to him for repair, maintenance, and renovation work at health care and nursing home facilities owned by Medical Facilities of America Inc. (MFA), the Department of Justice announced.

Edward T. Fodrey, a resident of Norfolk, Va., was sentenced in U.S. District Court in Norfolk by Judge Mark S. Davis and was ordered to pay $326,799 in restitution. Fodrey pleaded guilty on April 4, 2011, to one count of conspiracy to commit mail fraud in connection with his participation in a kickback scheme and one count of failing to file a tax return.

According to the charge filed on March 30, 2011, from about May 2006 until at least December 2006, Fodrey conspired with an MFA employee who oversaw the bidding process for repair, maintenance and renovation contracts at MFA facilities in North Carolina and Virginia. The MFA employee steered contracts to Fodrey in return for kickbacks by creating fictitious competitor bids that were higher than the quotes submitted by Fodrey and other co-conspirator venders in order to create the appearance of competition. The MFA employee directed subordinates to solicit quotes only from Fodrey or other conspiring vendors and specified the amount Fodrey should quote to MFA as well as the amount of the kickback on each of the contracts.

Fodrey paid more than $160,000 in kickbacks to the MFA employee and received contracts and subcontracts totaling more than $750,000. The court document states that as a result of the kickback scheme, MFA was deprived of competitive pricing to its financial detriment. Fodrey was also charged with failing to file a tax return for 2006, which is the year in which Fodrey received payment on the MFA contracts.

Fodrey is the first to be sentenced of the four individuals charged to date in connection with the department’s ongoing fraud investigation into the award of repair, maintenance, and renovation contracts at facilities owned by MFA. The investigation is being conducted by the Antitrust Division’s Philadelphia Field Office, the U.S. Attorney’s Offices for the Eastern District of Virginia and the Western District of Virginia, the FBI in Roanoke, Va., and the Internal Revenue Service-Criminal Investigation in Roanoke. Anyone with information concerning fraudulent behavior relating to the award of contracts by MFA should contact the Antitrust Division’s Philadelphia Field Office at 215-597-7405 or visit Justice.gov/atr/contact/newcase.htm.

CBP Officers Capture Man Sought on Child Sexual Assault Charges

2012-01-31T19:27:00.001-08:00

El Paso, Texas – U.S. Customs and Border Protection (CBP) officers working at the El Paso port of entry arrested a 21-year-old El Paso man who was being sought by the El Paso Police Department on two counts of sexual assault of a child. The arrest was made Sunday.

“CBP officers working at area ports of entry this weekend identified and took custody of six people being sought by law enforcement agencies,” said Hector Mancha, U.S. Customs and Border Protection El Paso Port Director. “The vigilance exhibited by CBP officers on a daily basis is leading to these apprehensions.”

The arrest was made shortly before noon at the Ysleta international crossing when Carlos Eduardo Rios entered the port as a pedestrian and presented his passport to the CBP officer working at the primary inspection booth. The CBP officer queried the document and received notification that Rios was being sought by local law enforcement. CBP officers took the subject into custody and confirmed the warrant. Rios was turned over to the El Paso County Sheriff’s office and booked into the El Paso County Jail where he is currently detained.

While anti-terrorism is the primary mission of U.S. Customs and Border Protection, the inspection process at the ports of entry associated with this mission results in impressive numbers of enforcement actions in all categories.

CBP Officers Locate Drug Load in Framed Quinceanera Plaques

2012-01-31T19:25:00.000-08:00

18-year-old from Denver arrested

Columbus, New Mexico – U.S. Customs and Border Protection (CBP) officers working at the Columbus port of entry made an unusual seizure Sunday. They discovered bundles of marijuana stashed inside wood-framed and mirrored Quinceanara plaques. The seizure was one of several large and unusual drug busts made by CBP officers in recent days.

“This seizure illustrates that smugglers will go to great lengths in the effort to conceal their contraband,” said Robert Reza, U.S. Customs and Border Protection Columbus Port Director. “No expense was spared in the production of these smuggling tools.”

The seizure was made shortly before noon when a 2002 Ford Explorer with a lone occupant entered the port from neighboring Palomas, Mexico. CBP officers were conducting an operation inspecting vehicles in line when they approached the driver of the vehicle. CBP officers selected the vehicle for a secondary exam.

CBP officers initiated an exam of the vehicle during which they located numerous boxes filled with quincinera decorations. A CBP officer noticed an anomaly in several framed/mirrored Quinceanara plaques which were in the vehicle. CBP officers drilled into one plaque and recovered a green substance which tested positive for marijuana. CBP officers dismantled the plaques and recovered 100 thin rectangular wrapped packages. The packages contained marijuana and weighed 104 pounds.

CBP officers arrested the driver of the vehicle, 18-year-old Tahlia Arana Perea of Denver, Colorado. She was turned over to U.S. Immigration and Customs Enforcement HSI agents to face federal charges including importation of a controlled substance and possession with intent to distribute a controlled substance.

In addition to the above seizure, CBP officers working at area ports of entry made six additional drug seizures this weekend during which they confiscated 1,046 pounds of marijuana and 2.5 pounds of cocaine.

Timeshare Marketing Scams

2012-01-31T19:22:00.001-08:00

Timeshare owners across the country are being scammed out of millions of dollars by unscrupulous companies that promise to sell or rent the unsuspecting victims’ timeshares. In the typical scam, timeshare owners receive unexpected or uninvited telephone calls or e-mails from criminals posing as sales representatives for a timeshare resale company. The representative promises a quick sale, often within 60-90 days. The sales representatives often use high-pressure sales tactics to add a sense of urgency to the deal. Some victims have reported that sales representatives pressured them by claiming there was a buyer waiting in the wings, either on the other line or even present in the office.

Timeshare owners who agree to sell are told that they must pay an upfront fee to cover anything from listing and advertising fees to closing costs. Many victims have provided credit cards to pay the fees ranging from a few hundred to a few thousand dollars. Once the fee is paid, timeshare owners report that the company becomes evasive—calls go unanswered, numbers are disconnected, and websites are inaccessible.

In some cases, timeshare owners who have been defrauded by a timeshare sales scheme have been subsequently contacted by an unscrupulous timeshare fraud recovery company as well. The representative from the recovery company promises assistance in recovering money lost in the sales scam. Some recovery companies require an up-front fee for services rendered, while others promise no fees will be paid unless a refund is obtained for the timeshare owner. The IC3 has identified some instances where people involved with the recovery company also have a connection to the resale company, raising the possibility that timeshare owners are being scammed twice by the same people.

If you are contacted by someone offering to sell or rent your timeshare, the IC3 recommends using caution. Listed below are tips you can use to avoid becoming a victim of a timeshare scheme:

■Be wary if a company asks you for up-front fees to sell or rent your timeshare.

■Read the fine print of any sales contract or rental agreement provided.
■Check with the Better Business Bureau to ensure the company is reputable.

To obtain more information on Internet schemes, visit www.LooksTooGoodToBeTrue.com.

Anyone who believes they have been a victim of this type of scam should promptly report it to the IC3’s website at www.IC3.gov. The IC3’s complaint database links complaints together to refer them to the appropriate law enforcement agency for case consideration.

Justice Department Charges St. Bernard Parish, Louisiana for Limited Rental Housing Opportunities for African-Americans

2012-01-31T16:01:00.001-08:00

WASHINGTON – The Department of Justice today filed a lawsuit against St. Bernard Parish, La., alleging that the parish violated the Fair Housing Act by engaging in a multi-year campaign to limit rental housing opportunities for African-Americans in the parish.

The complaint, filed in the U.S. District Court for the Eastern District of Louisiana, alleges that the parish violated the Fair Housing Act when it took repeated actions to limit the availability of multi-family and rental housing in the parish. These actions include the establishment of an onerous permit-approval process for single-family rentals, the elimination of multi-family housing in large portions of the parish and repeated attempts to block the development of multi-family affordable-housing. The complaint alleges that the parish’s actions both were intended to and had the effect of disproportionately disadvantaging African-Americans seeking to rent housing in St. Bernard Parish.

The parish has been sued previously over housing and land-use decisions since Hurricane Katrina and found in contempt of court orders repeatedly. In October 2011, a federal district court found that the parish had engaged in intentional discrimination in violation of the Fair Housing Act by “doggedly attempt[ing] to preserve the pre-Katrina demographics of St. Bernard Parish.”

“Every person should have the opportunity to choose where they will live. When a local government puts up discriminatory barriers, as St. Bernard Parish has, it violates the law,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We will use our enforcement tools to break down such barriers and ensure that people have housing choice free of discrimination.”

“The Department of Justice is committed to ensuring that everyone in our community – regardless of race, color or national origin – enjoys the equal protection of our Constitution and our laws, as well as the absolute right to live in any community of their choosing without discrimination,” said James Letten, U.S. Attorney for the Eastern District of Louisiana.

“Today’s action exemplifies how HUD and the Justice Department are working together to eradicate housing discrimination,” stated John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “Our agencies will not allow zoning or other exclusionary means to deny housing because of race.”

The complaint is based in part on referrals from the Department of Housing and Urban Development (HUD). From March 2008 to September 2011, 10 residents and homeowners filed complaints with HUD, alleging that the parish’s actions violated the Fair Housing Act. HUD referred these complaints to the Department of Justice in accordance with a provision in the Fair Housing Act that authorizes the department to enforce allegations of discriminatory zoning or land use practices by a local government.

Assistant Secretary for Fair Housing and Equal Opportunity, John Trasviña, also filed a complaint on behalf of the HUD Secretary alleging that the parish violated the Fair Housing Act by passing an ordinance that restricted new multifamily housing construction to certain areas of the city and prohibited it in others. HUD referred this complaint to the Department of Justice on Jan. 20, 2012.

The department’s lawsuit seeks a court order that would enjoin the parish from making unavailable or denying housing on the basis of race and requires it to take actions to prevent any similar discriminatory conduct in the future. The lawsuit also seeks monetary damages for persons harmed by the parish’s actions and a civil penalty.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at Justice.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at fairhousing@usdoj.gov, or contact HUD at 1-800-669-9777.

Justice Department Celebrates 25th Anniversary of False Claims Act Amendments of 1986

2012-01-31T15:59:00.000-08:00

Considered Single Most Important Tool U.S. Taxpayers Have to Recover Funds Lost Due to Fraud Against the Government

The Justice Department today celebrated the 25th anniversary of the 1986 amendments to the False Claims Act. The False Claims Act has been called the single most important tool that American taxpayers have to recover funds when false claims are made to the federal government, including health care fraud, mortgage fraud, and procurement fraud.

“In the last quarter century, the False Claims Act’s success has been unparalleled with more than $30 billion dollars recovered since it was amended in 1986 and $8.8 billion since January 2009,” said Attorney General Eric Holder. “In these challenging economic times when resources are scarce, government budgets are being tightened and so many Americans are forced to do more with less, the need to act as sound stewards of every taxpayer dollar has never been more clear or more urgent. The Department of Justice has achieved record recoveries in recent years and we will continue to aggressively pursue those who would take advantage of their fellow citizens.”

The False Claims Act was originally passed by Congress during the administration of President Abraham Lincoln in 1863 to help the government recover federal funds stolen through fraud by U.S. government contractors. During the Civil War, the law was used to recover monies from unscrupulous contractors who sold the Union Army decrepit horses and mules in ill health, faulty rifles and ammunition, and rancid rations and provisions.

In 1986, Senator Charles Grassley and Representative Howard Berman led successful efforts in Congress to amend the False Claims Act. The amendment permitted the government to seek treble damages and revised the statute’s qui tam, or whistleblower, provisions to increase the incentives for whistleblowers to come forward with allegations of fraud. Since those changes were enacted, the Justice Department has recovered more than $30 billion under the act.

On this, the 25th anniversary of the 1986 amendments, Tony West, Assistant Attorney General of the Civil Division of the Department of Justice, paid tribute to the bill’s sponsors, thanking them for “their foresight in providing the Department with this powerful tool to fight fraud, waste and abuse.” He also expressed his gratitude to Senator Patrick J. Leahy, Chairman of the Senate Judiciary Committee, and to Senator Grassley and Representative Berman for their support of the Fraud Enforcement and Recovery Act of 2009, which made additional improvements to the False Claims Act and other fraud statutes.

“One need look no further than the record recoveries this department has obtained in civil fraud cases to demonstrate the tremendous importance and effectiveness of the False Claims Act,” said Assistant Attorney General West. “That framework was put in place in 1986, but our successes would not have been possible without the ongoing efforts and collaboration of career civil servants, private counsel, and, of course, the whistleblowers who come forward to report fraud.”

In FY 2011 alone, the Department of Justice secured more than $3 billion in settlements and judgments in civil cases involving fraud against the government. Since January 2009, the department has recovered $8.8 billion under the False Claims Act – the largest three-year total in the Justice Department’s history, and 28 percent of all recoveries since the False Claims Act was amended in 1986.

Among the top settlements the government has achieved since the passage of the 1986 amendments are the following, which include, in some cases, criminal and state civil recoveries: $2.3 billion – Pfizer Inc. (2010); $1.7 billion – Columbia/HCA I & II (2000 and 2003); $1.415 billion – Eli Lilly and Company (2009); $950 million – Merck Sharp & Dohme (2011); $923 million – Tenet Healthcare Corporation (2006); $875 million – TAP Pharmaceuticals (2002); $750 million – GlaxoSmithKline (2010); $704 million – Serono, S.A. (2005); $650 million – Merck (2008); and $634 million – Purdue Pharma (2007).

Investigating Insurance Fraud, A $30-Billion-a-Year Racket

2012-01-31T15:56:00.000-08:00

Putting the brakes on major white-collar frauds of all kinds is one of our most important responsibilities, and there is no shortage of work these days for the FBI and its partners.

Our corporate and securities fraud cases, for example, resulted in more than 600 convictions last year—including a number of high-level executives—and more than $23 billion in recoveries, fines, and restitutions over the past three years. Our mortgage fraud efforts continue to pinpoint the most egregious offenders; approximately 70 percent of our 3,000 pending mortgage fraud investigations involve losses of more than $1 million. There are also plenty of cases involving health care fraud, bankruptcy fraud, credit card fraud, mass marketing fraud, and various wire and mail fraud schemes.

Insurance fraud—non-health care-related fraud involving casualty, property, disability, and life insurance—is another financial crime that falls under FBI jurisdiction. The U.S. insurance industry consists of thousands of companies that collect more than $1.1 trillion in premiums each year, according to the Insurance Information Institute, and the estimated cost of fraud is approximately $30 billion a year. Most of this expense is passed on to consumers in the form of higher insurance premiums, to the tune of about $200 to $300 a year per family, according to the National Insurance Crime Bureau. Not to mention the number of insurance companies that go under because of excessive claims and/or the looting of company assets.

There are many capable private and government investigative and regulatory entities at the national and state level that look into insurance fraud, so the FBI directs its resources toward identifying the most prevalent schemes and the top echelon criminals and criminal organizations who commit the fraud. But even when conducting our own investigations, we often work closely with private fraud associations, state fraud bureaus, state insurance regulators, and other federal agencies.

The FBI currently focuses on the following schemes:

■Disaster related fraud, which became such a problem after Hurricane Katrina that a special task force was created to address it (and evolved into today’s National Center for Disaster Fraud);

■Premium and asset diversion, which happens when insurance agents, brokers, even insurance company executives steal insurance premiums submitted by policy holders and sometimes plunder company financial assets for their own personal use;
■Viatical fraud (a “viatical” settlement is one where an investor buys the right to receive the benefit of a terminally ill or elderly person’s life insurance policy);
■Staged auto accidents;
■Bodily injury fraud; and
■Property insurance fraud.

Who commits insurance fraud. Mostly dishonest policy holders, insurance industry insiders (i.e., agents, brokers, company execs), and loosely organized networks of crooked medical professionals and attorneys who use their knowledge to bypass anti-fraud measures put in place by insurance companies.

How we investigate it. Like many other white-collar crime investigations, insurance fraud is mostly about following the money trail—which often involves questioning victims and victim companies, reviewing financial documents, and using sensitive techniques like informants and cooperating witnesses.

We also use our intelligence capabilities to keep our finger on the pulse of emerging trends—for example, as more insurance companies conduct business online, we fully expect to see a rise in the theft of policy holders’ identities and in cyber-based insurance scams. We will keep you posted.

Defend Yourself From Insurance Fraud

- Never ignore a notice from your insurance company—even if your agent tells you it’s a mistake and that he or she will take care of it.
- Don’t give an insurance agent money without getting a receipt.
- Don’t give out your insurance identification number to companies or individuals you don’t know.
- After an auto accident, be careful of strangers who offer you quick cash or recommend a particular attorney or health care provider.
• Don’t buy life insurance as an investment without fully understanding what it is you’re buying.
- Never buy insurance from unlicensed agents or companies, and if you have any doubts about them, check their status by contacting your state’s insurance office.

Two Defendants Indicted for Home Equity Loan Fraud

2012-01-30T18:37:00.001-08:00

SACRAMENTO, CA—United States Attorney Benjamin B. Wagner announced that a federal grand jury returned an indictment yesterday charging two defendants with mail fraud and money laundering in connection with a mortgage fraud scheme that resulted in losses of at least $180,000 to lenders. Charged are Andrey Kim, 28, of Sacramento; and Sultanmurod Rashidov, 29, of Brooklyn, N.Y. Kim was indicted for another mortgage fraud scam last month. He is scheduled to appear on the new charges on January 31, 2012, before Magistrate Judge Carolyn K. Delaney. Rashidov is believed to be out of the country.

According to court records, Kim and Rashidov were responsible for taking out more than $236,000 in home equity loans for a single property in West Sacramento. As part of the loan application process, Kim allegedly submitted false and fraudulent information related to his gross monthly income and outstanding mortgage balance. About a year after obtaining a $58,800 home equity loan, Kim signed a deed granting joint ownership of the property to Rashidov. The indictment alleges that Rashidov then submitted a home equity loan application containing false and fraudulent information related to his employer, gross monthly income, and outstanding mortgage balance. After obtaining $178,000 from the lender, Rashidov defaulted on the loan.

This case is the product of a joint investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Dominique N. Thomas is prosecuting the case.

If convicted of mail fraud, the defendants face a maximum statutory penalty of 30 years in prison and a $1 million fine. If convicted of money laundering, they face a maximum statutory penalty of 10 years in prison and a $250,000 fine. If convicted, the actual sentence will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

The charges are only allegations, and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Nogales CBP Officers Seize Cocaine Valued at nearly $250,000

2012-01-30T18:35:00.001-08:00

Nogales, Ariz. — Customs and Border Protection officers assigned to the Tucson Field Office seized more than 27 pounds of cocaine, valued at nearly $250,000, at the Dennis DeConcini Port Friday.

A 20-year-old Mexican male, attempting to enter the United States, was selected for a secondary inspection of his Chevrolet van. After a CBP narcotics detection canine alerted to the presence of drugs, the van was taken to a vehicle lift where officers located 10 packages of cocaine inside a non-factory compartment. The drugs and vehicle were processed for seizure. The man was arrested and turned over to U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

Individuals arrested are charged with a criminal complaint, which raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

CBP's Office of Field Operations is the primary organization within Homeland Security tasked with an anti-terrorism mission at our nation’s ports. Officers screen all people, vehicles and goods entering the United States while facilitating the flow of legitimate trade and travel. Their mission also includes carrying out border-related duties, including narcotics interdiction, enforcing immigration and trade laws, and protecting the nation's food supply and agriculture industry from pests and diseases.

Tennessee Man Arrested on Child Pornography Charges

2012-01-30T15:31:00.001-08:00

ATLANTA—Special Agent in Charge Brian D. Lamkin announces, on behalf of the FBI’s Northwest Georgia Safe Child Task Force, the following arrest at Chatsworth, Georgia:

Michael Robert Doan, 51 years of age, of Ooltewah, Tennessee, was arrested on Thursday, January 26, 2012, by FBI agents and task force officers after coming to the attention of undercover officers on the Internet. Doan is currently facing state charges of attempted aggravated child molestation (four counts) and violation of the Computer Pornography and Child Exploitation Act after having attempted to meet with a minor child for purposes of having sex. He was met instead by FBI agents and task force officers of the FBI’s Northwest Georgia Safe Child Task Force, where he was arrested.

Doan is currently being housed at the Murray County Jail, Chatsworth, Georgia.

The public should be reminded that the above are mere allegations and that all persons are presumed innocent until proven guilty in a court of law.

Yazaki Corp., Denso Corp., and Four Yazaki Executives Agree to Plead Guilty to Automobile Parts Price-Fixing and Bid-Rigging Conspiracies

2012-01-30T15:30:00.000-08:00

Companies Agree to Pay a Total of $548 Million in Criminal Fines–Includes Second Largest Criminal Fine Ever for an Antitrust Violation; Executives Agree to Serve Prison Time

WASHINGTON—Two Japanese suppliers of automotive electrical components—Yazaki Corporation and DENSO Corporation—have agreed to plead guilty and to pay a total of $548 million in criminal fines for their involvement in multiple price-fixing and bid-rigging conspiracies in the sale of parts to automobile manufacturers in the United States, the Department of Justice today announced. Four executives, all Japanese nationals, have also agreed to plead guilty and to serve prison time in the United States.

Yazaki has agreed to pay a $470 million criminal fine—the second largest criminal fine obtained for a Sherman Act antitrust violation—and DENSO has agreed to pay a $78 million criminal fine. The four executives from Yazaki—Tsuneaki Hanamura, Ryoji Kawai, Shigeru Ogawa, and Hisamitsu Takada—will serve prison time ranging from 15 months to two years. The two-year sentences would be the longest term of imprisonment imposed on a foreign national voluntarily submitting to U.S. jurisdiction for a Sherman Act antitrust violation. The fine amount and prison sentences are subject to court approval.

“As a result of the Antitrust Division’s ongoing criminal investigation of price fixing and bid rigging in the auto parts industry, more than $748 million in fines have been obtained—which already surpasses the total amount in criminal fines obtained by the division for all of last fiscal year,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Criminal antitrust enforcement remains a top priority and the Antitrust Division will continue to work with the FBI and our law enforcement counterparts to root out this kind of pernicious cartel conduct that results in higher prices to American consumers and businesses.”

“I would like to commend the employees of the FBI’s Detroit Field Office and the Department of Justice Antitrust Division for their fine work on this very important antitrust investigation. This team has devoted countless hours to the investigation and I appreciate their devotion to the mission. The companies involved in this case conspired to the price fixing and bid rigging of automotive parts. This criminal activity has a significant impact on the automotive manufacturers in the United States, Canada, Japan, and Europe and had been occurring at least a decade. The conduct had also affected commerce on a global scale in almost every market where automobiles are manufactured and/or sold,” said FBI’s Special Agent in Charge Andrew G. Arena.

According to court documents filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Yazaki, DENSO, Hanamura, Kawai, Ogawa, Takada, and their co-conspirators carried out the conspiracies by agreeing, during meetings and conversations, to allocate the supply of the named products on a model-by-model basis and to coordinate price adjustments requested by automobile manufacturers in the United States and elsewhere. They sold automotive electrical components to automobile manufacturers at inflated prices and engaged in meetings and conversations for the purpose of monitoring and enforcing adherence to the agreed-upon bid-rigging and price-fixing scheme.

According to a three-count felony charge, Yazaki engaged in three separate conspiracies: to rig bids for and fix, stabilize and maintain the prices of automotive wire harnesses and related products from 2000 through 2010; to rig bids for and fix, stabilize and maintain the prices of instrument panel clusters from 2002 through 2010; and to fix, stabilize and maintain the prices of fuel senders from 2004 through 2010. All three conspiracies involved products sold to customers in the United States and elsewhere. Automotive wire harnesses are automotive electrical distribution systems used to direct and control electronic components, wiring and circuit boards in cars. Instrument panel clusters, also known as meters, are the mounted array of instruments and gauges housed in front of the driver of an automobile. Fuel senders reside in the fuel tank of an automobile and measure the amount of fuel in the tank.

According to a two-count felony charge, DENSO engaged in conspiracies to rig bids for and to fix, stabilize and maintain the prices of electronic control units (ECUs) and heater control panels (HCPs) sold to customers in the United States and elsewhere. An ECU is an embedded system that controls one or more of the electronic systems or subsystems in a motor vehicle. HCPs are located in the center console of an automobile and control the temperature of the interior environment of a vehicle.

According to four separate one-count felony charges, Hanamura, Kawai, Ogawa, and Takada each engaged in a conspiracy to rig bids for and to fix, stabilize and maintain the prices of automotive wire harnesses and related products sold to customers in the United States and elsewhere. The department said that the individuals participated in the conspiracies at various times from at least as early as January 2000, until at least February 2010. During the conspiracies, the individuals held the following positions: Hanamura was a branch manager at Yazaki North America in Columbus, Ohio, and a Honda division sales manager in Japan; Kawai was director of Toyota Sales of Yazaki North America in Lexington, Ky., and vice division head of Yazaki’s Toyota Business Unit in Japan; Ogawa was assistant section manager and later section manager in Yazaki’s Honda Business Unit in Japan, and branch manager in Yazaki’s Honda Sales Unit and later director at Yazaki North America in Columbus; Takada was assistant manager in Yazaki’s Toyota Business Unit, director of Yazaki North America in Lexington, and manager of a sales department of Yazaki’s Toyota Business Unit in Japan. According to the plea agreements, which are subject to court approval, Ogawa and Takada have each agreed to serve 15 months in a U.S. prison. Hanamura and Kawai have each agreed to serve two years in a U.S. prison. Each of the four executives has also agreed to pay a $20,000 criminal fine. According to the plea agreements, Yazaki, DENSO, Hanamura, Kawai, Ogawa, and Takada have all agreed to assist the department in its ongoing investigation into the automotive parts industry.

On Nov. 14, 2011, Furukawa Electric Co. Ltd. pleaded guilty and was sentenced to pay a $200 million fine for its role in the wire harnesses price-fixing and bid-rigging conspiracy. Three of Furukawa’s executives also pleaded guilty. The court sentenced two of the executives to 15 and 18 month prison sentences, to be served in the United States. Sentencing of the third executive, who agreed to serve a year and a day in prison in the United States, is scheduled for Feb. 28, 2012.

Yazaki and DENSO are charged with price fixing in violation of the Sherman Act, which carries a maximum $100 million criminal fine for a corporation. Hanamura, Kawai, Ogawa and Takada are also charged with a violation of the Sherman Act, which carries a maximum sentence of 10 years in prison and a $1 million criminal fine for an individual. The maximum fine for both a company and an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s charges arise from an ongoing federal antitrust investigation into bid rigging, price fixing and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information concerning the focus of this investigation is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or the FBI’s Detroit Field Office at 313-965-2323.

Winter Storm Fire Safety

2012-01-30T15:28:00.000-08:00

A wide range of natural disasters occurs within the United States every year. Natural disasters can have a devastating effect on you and your home. The U.S. Fire Administration encourages you to use the following safety tips to help protect yourself, your family and your home from the potential threat of fire during or after a winter storm. You can greatly reduce your chances of becoming a fire casualty by being able to identify potential hazards and following the outlined safety tips.

Some Types of Fire Related Hazards Present During and After a Winter Storm

•Alternative heating devices used incorrectly create fire hazards.
•Damaged or downed utility lines can present a fire and life safety hazard.
•Water damaged appliances and utilities can be electrically charged.
•Frozen water pipes can burst and cause safety hazards.
•Leaking gas lines, damaged or leaking gas propane containers, and leaking vehicle gas tanks may explode or ignite.
•Generators are often used during power outages. Generators that are not properly used and maintained can be very hazardous.

Chemical Safety

•Look for combustible liquids like gasoline, lighter fluid, and paint thinner that may have spilled. Thoroughly clean the spill and place containers in a well-ventilated area.
•Keep combustible liquids away from heat sources.

Electrical Safety

•If your home has sustained flood or water damage, and you can safely get to the main breaker or fuse box, turn off the power.
•Assume all wires on the ground are electrically charged. This includes cable TV feeds.
•Look for and replace frayed or cracked extension and appliance cords, loose prongs, and plugs.
•Exposed outlets and wiring could present a fire and life safety hazard.
•Appliances that emit smoke or sparks should be repaired or replaced.
•Have a licensed electrician check your home for damage.

Gas Safety

•Smell and listen for leaky gas connections. If you believe there is a gas leak, immediately leave the house and leave the door(s) open.
•Never strike a match. Any size flame can spark an explosion.
•Before turning the gas back on, have the gas system checked by a professional.

Generator Safety

•Follow the manufacturer's instructions and guidelines when using generators.

•Use a generator or other fuel-powered machines outside the home. CO fumes are odorless and can quickly overwhelm you indoors.
•Use the appropriate sized and type power cords to carry the electric load. Overloaded cords can overheat and cause fires.
•Never run cords under rugs or carpets where heat might build up or damage to a cord may go unnoticed.
•Never connect generators to another power source such as power lines. The reverse flow of electricity or 'backfeed' can electrocute an unsuspecting utility worker.

Heating Safety

•Kerosene heaters may not be legal in your area and should only be used where approved by authorities.
•Do not use the kitchen oven range to heat your home. In addition to being a fire hazard, it can be a source of toxic fumes.
•Alternative heaters need their space. Keep anything combustible at least 3 feet away.
•Make sure your alternative heaters have 'tip switches.' These 'tip switches' are designed to automatically turn off the heater in the event they tip over.
•Only use the type of fuel recommended by the manufacturer and follow suggested guidelines.
•Never refill a space heater while it is operating or still hot.
•Refuel heaters only outdoors.
•Make sure wood stoves are properly installed, and at least 3 feet away from combustible materials. Ensure they have the proper floor support and adequate ventilation.
•Use a glass or metal screen in front of your fireplace to prevent sparks from igniting nearby carpets, furniture or other combustible items.

and Remember...

•Always use a flashlight - not a candle - for emergency lighting.
•Some smoke alarms may be dependent on your home's electrical service and could be inoperative during a power outage. Check to see if your smoke alarm uses a back-up battery and install a new battery at least once a year.
•Smoke alarms should be installed on every level of your home and inside and outside of sleeping areas.
•All smoke alarms should be tested monthly. All batteries should be replaced with new ones at least once a year.
•If there is a fire hydrant near your home, keep it clear of debris for easy access by the fire department.

Federal Court Bars Nevada Man from Promoting Tax Fraud Scheme

2012-01-30T15:23:00.000-08:00

California Court Says Promoter’s Theories About Taxing Authority Are Wrong

A federal court has permanently barred David Champion from promoting a tax fraud scheme designed to assist his customers evade federal taxes, the Justice Department announced today. The civil injunction order was signed by Judge Percy Anderson of the U.S. District Court for the Central District of California.

The court determined that Champion promotes a tax fraud scheme based on the frivolous claim that U.S. citizens can choose to opt out of federal income taxation by declaring themselves to be “non-taxpayers.” The court found that Champion promotes the scheme through websites, a radio program and a self-published work entitled Income Tax: Shattering the Myths. According to the government complaint, Champion, who currently resides in Nevada, repeatedly helped his customers evade taxes by establishing sham “pure trusts” to which they transferred their business and personal assets, and he falsely informed his customers that their purported trusts did not need to file income tax returns or pay taxes.

In granting the permanent injunction, Judge Anderson held that Champion’s theories concerning the government’s taxing authority are wrong. Among other things, the injunction order bars Champion from instructing people that they may become “non-taxpayers,” from offering his services to assist others in taking advantage of this false status, and from forming trusts for others.

The government alleged that Champion’s misconduct led to civil and criminal penalties against his customers. The complaint states that Internal Revenue Service (IRS) inquiries into eight of Champion’s customers revealed that he had assisted them in evading payment of approximately $1.4 million in income taxes.

In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax-fraud promoters and unscrupulous tax-return preparers. Information about these cases is available on the Justice Department website .

Fitchburg Man Sentenced for Child Pornography Offense

2012-01-30T13:03:00.001-08:00

BOSTON—A Fitchburg man was sentenced today in federal court on child pornography charges.

Dennis Bilotta, 69, was sentenced by U.S. District Judge Saylor to 30 months in prison to be followed by six years of supervised release. In October 2011, Bilotta pleaded guilty to possession of child pornography.

Had the case proceeded to trial, the government’s evidence would have proven that an undercover FBI investigation of peer-to-peer file-sharing over the Internet led federal authorities to obtain a search warrant for Bilotta’s home and computer. The execution of that search warrant resulted in the seizure of numerous photographs and videos depicting child pornography.

United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Boston Office of the Federal Bureau of Investigation, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Mark Grady and David Hennessy of Ortiz’s Worcester Branch Office.

D&R Car Lot Owners and Manager Indicted

2012-01-30T13:02:00.000-08:00

Indictment Alleges a Conspiracy to Defraud KeyBank

PORTLAND, OR—The former owners and manager of D&R Auto Sales, D&R Motors, and D&R Ford/Mercury appeared in federal court this week to face conspiracy charges. The IRS-Criminal Investigations Division, the FBI, and the Post Falls (Idaho) Police Department arrested Roger Spangenberg, 49, of Post Falls, Idaho, after a federal grand jury returned an indictment charging Spangenberg; his brother, David Spangenberg, 52, of Spokane WA; and Steven Johnson, 63, of Aberdeen, WA, with conspiracy to commit bank fraud. The Spangenberg brothers owned the now closed D&R automobile dealerships, formerly located in Hermiston and Enterprise, Oregon, and Steven Johnson served as a manager.

The indictment alleges that from January 2007 through August 2008, the Spangenbergs and Johnson conspired to defraud KeyBank in connection with a Floorplan Line of Credit and Security Agreement, known in the automobile industry as a “flooring loan.” KeyBank extended a line of credit to the D&R dealerships to purchase new inventory, but the Spangenbergs and Johnson failed to repay KeyBank after they sold the inventory. The indictment alleges that the Spangenbergs and Johnson deceived KeyBank into believing the dealerships had not yet sold inventory, including asking customers to return recently purchased automobiles to the dealerships to receive a free service on the day of an audit, and misrepresenting to KeyBank that automobiles not present on the lot were being used as rental cars. The indictment also alleges that the defendants submitted false Vehicle Identification Numbers (VIN) to KeyBank to receive funding for inventory the dealerships never purchased, and that defendants “double floored” vehicles with more than one financial institution. KeyBank suffered a loss of more than $6 million as a result of the alleged fraud.

All defendants pleaded not guilty to all charges. Trial is set for March 27, 2012, before U.S. District Judge Michael H. Simon.

“These defendants left a multi-million-dollar trail of destruction in eastern Oregon,” stated U.S. Attorney S. Amanda Marshall. “Financial fraud results in significant harm both to our financial institutions and our communities, and we will continue to work with our law enforcement and financial institution partners to pursue and prosecute financial fraud aggressively in this district.”

Conspiracy to commit bank fraud carries a maximum sentence of 30 years in prison and a $1,000,000 fine.

A criminal indictment is only an allegation and not evidence of guilt. Each of these defendants is presumed innocent unless and until proven guilty. The charges stem from an investigation by the IRS-Criminal Investigation Division and the FBI. The case is being prosecuted by Assistant U.S. Attorney Stacie Beckerman.

Jury Finds St. Augustine Beach Woman Guilty of Conspiracy, Mail Fraud, and Wire Fraud

2012-01-30T12:32:00.001-08:00

JACKSONVILLE, FL—U.S. Attorney Robert E. O’Neill announces that a federal jury yesterday found Lydia Cladek (67, St. Augustine Beach) guilty of conspiracy to commit mail and wire fraud, mail fraud, and wire fraud. Cladek was charged in a 14-count indictment on November 19, 2010. She was found guilty on all charges and faces a maximum penalty of 20 years in federal prison for each of the fourteen counts. Cladek’s sentencing hearing will be scheduled for a future date.

According to testimony and evidence presented at trial, Cladek offered investors the opportunity to “loan” money to Lydia Cladek, Inc. in exchange for a promissory note from the corporation. The notes were secured by car notes that Lydia Cladek, Inc. had purchased in the past. Cladek represented that the assigned notes were genuine and valid, had never been assigned before, and would not be assigned in the future. She also represented that she would use the funds that were loaned by the investors to purchase new car notes. All of these representations were false.

In some cases, the car notes attached as collateral to investor notes had previously been assigned to four or five investors in the past. In many cases, the car notes were then assigned to new victim investors, sometimes in as little as a week.

In addition to making false representations about the quality of the investors’ collateral, evidence also showed that Cladek used new investor funds to pay interest to old investors and to fund her lavish lifestyle. By as early as 2003, Lydia Cladek, Inc. did not have sufficient car notes on hand to provide promised collateral to all investors. By 2005, Cladek had outstanding investor notes of approximately $58 million, but only had car notes on hand for approximately $38 million. By March 31, 2010, the date on which the FBI served a search warrant on Lydia Cladek, Inc., the existing performing car notes owned by Cladek had dwindled to just under $4 million, while the outstanding loans to investors exceeded $90 million.

Cladek used money given to her from investors to maintain lavish real estate holdings, including three vacation homes in Captiva and Sanibel, Florida as well as a luxurious residence in St. Augustine Beach. Cladek maintained her own household “manager” who testified that she purchased much of the custom furnishings and accessories in the home for Lydia Cladek, including a set of sheets costing $2,000.

In order to invest, potential investors had to be personal friends of Cladek or be referred by an existing investor. Cladek obtained many of her investors from her church and other social organizations.

“This case represents personal greed at the highest level,” said U.S. Attorney Robert O’Neill. “We will continue to prosecute those who seek to deprive people of their hard-earned money. The conviction of Lydia Cladek should be a warning to those seeking to take advantage of a trusted business-client relationship, by engaging in fraudulent practices. And it should bring a greater awareness to those seeking to invest their dollars.”

“We are pleased with the jury’s verdict, and hope that Ms. Cladek’s victims can take some comfort in the fact that she has been brought to justice,” stated James Casey, Special Agent in Charge, Federal Bureau of Investigation

This case was investigated by the FBI. It is being prosecuted by Assistant United States Attorneys Jay Taylor and Mac Heavener.

Del Rio Sector Border Patrol Agents Continue to Seize Marijuana

2012-01-30T12:30:00.001-08:00

Del Rio, Texas – U.S. Border Patrol agents seized over half a million dollars worth of marijuana in two incidents this week.

Friday, Jan. 20, Eagle Pass North agents working near the Rio Grande River encountered an abandoned green army bag containing more than 62 pounds of marijuana. The narcotics have an approximate street value of $49,680, and were turned over to the Drug Enforcement Administration.

Tuesday, Jan. 24, Del Rio agents performed a vehicle stop on a 2007 Dodge pickup truck and discovered that it contained 579.6 pounds of marijuana worth $463,680. The driver, passenger, vehicle, and narcotics were turned over to the Texas Department of Public Safety.

Border Patrol Agents in Texas Rescue Juvenile

2012-01-30T12:29:00.001-08:00

Edinburg, TX ─ U.S. Border Patrol agents from the Rio Grande Valley Sector rescued an illegal alien early this morning, who had fallen victim to the harsh terrain of South Texas.

Agents rescued the illegal alien after receiving information from the Brooks County Sheriff’s Office about a distressed person, who called 9-1-1 after becoming lost in the brush. Agents were able to locate the illegal alien, who is a male juvenile from Mexico, using GPS coordinates provided by the sheriff’s office. The boy did not require medical attention and will be processed for return to Mexico.

So far this fiscal year, agents in the Rio Grande Valley Sector have rescued more than 60 illegal aliens, whose lives were at risk due to a variety of circumstances. Human smugglers are calloused individuals who are only concerned with making money. They will abandon people who become injured or cannot keep up with the rest of the group. Agents have found more than 20 people this fiscal year, who died while trying to illegally enter the U.S. or while attempting to circumvent a traffic checkpoint.

To report suspicious activity, call the Rio Grande Valley Border Patrol Sector’s toll-free telephone number at (800)-863-9382.

Former Celebrity Security Guard Sentenced to 108 Months for Distributing Oxycodone

2012-01-30T11:50:00.000-08:00

ALEXANDRIA, VA—Joseph Emmanuel Mann, 57, of New Carrollton, Md., was sentenced today to 108 months in prison for conspiring to distribute oxycodone.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by United States District T. S. Ellis III.

Mann was convicted by a jury in Alexandria, Va., on Oct. 14, 2011. According to evidence presented in trial, Mann was a former security guard for various celebrities, including Stevie Wonder, Tina Turner, Lionel Richie, and the late Marvin Gaye. From approximately 2003 through 2011, Mann directed a conspiracy to distribute massive quantities of prescription OxyContin80 mg pills throughout the Washington, D.C., metro area. To obtain these prescriptions, Mann wore disguises, including wigs and hats, and used multiple names and dates of birth. By changing his identity, Mann was able to receive high volumes of prescription narcotics on a regular basis from various local pharmacies.

Although Mann’s co-conspirators testified that they had seen him on numerous occasions with a bicycle or on a moped, they also testified that when Mann entered a pharmacy to fill a prescription for OxyContin, he would act as if he was in a lot of pain, wearing neck braces and carrying crutches to feign injury. Mann was seated in a wheel chair throughout trial, despite evidence that no witness had seen him in a wheel chair prior to his arrest on July 12, 2011. Trial evidence showed that Mann distributed more than 20,000 OxyContin 80 mg pills during the eight-year conspiracy, many of which were resold by co-conspirators to addicts throughout Northern Virginia. Witnesses at trial testified that Mann illegally distributed these pills near schools, libraries, restaurants, and on the National Mall.

Oxycodone is a commercially available, pharmaceutical narcotic analgesic that can be used to treat moderate to severe pain. Oxycodone is classified by the Drug Enforcement Administration as a Schedule II controlled substance. A Schedule II controlled substance is identified as one that has a high likelihood of causing addiction. Oxycodone is the active ingredient in OxyContin and Roxicodone brand pills.

This case was investigated by the FBI’s Washington Field Office and is part of an ongoing Organized Crime and Drug Enforcement Task Force (OCDETF) investigation called Operation “Cotton Candy,” which has been focusing on the illegal distribution by numerous doctors, pharmacists, nurses, and patients of pain medication. Prince William County, Fairfax County, Manassas City and the Virginia State Police Departments assisted with the investigation.

Special Assistant United States Attorney Lauren I. Dubick and Assistant United States Attorney Gene Rossi are prosecuting the case on behalf of the United States. A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.usdoj.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on http://pacer.uspci.uscourts.gov.

Florida Resident Sentenced to 14 Months in Federal Prison for Obstructing SEC Investigation

2012-01-30T11:48:00.000-08:00

NEW HAVEN, CT—Juan Carlos Horna Napolitano, 41, a citizen of both Venezuela and Italy residing in Florida, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport, Conn., to 14 months in prison, followed by two years of supervised release, for conspiring to obstruct a U.S. Securities and Exchange Commission (SEC) investigation of a Connecticut hedge fund advisor, announced David B. Fein, U.S. Attorney for the District of Connecticut.

“The U.S. Attorney’s Office, FBI and our Connecticut Securities, Commodities and Investor Fraud Task Force are committed to the aggressive investigation and prosecution of individuals who attempt to obstruct the SEC and its critically important mission of protecting investors and the integrity of American capital markets,” said U.S. Attorney Fein.

According to court documents and statements made in court, Francisco Illarramendi of New Canaan, Conn. acted as an investment adviser to certain hedge funds. In approximately 2005 and 2006, one hedge fund he advised lost millions of dollars of the money he was charged with investing. Rather than disclose to his investors the truth about the losses incurred, Illarramendi intentionally chose to conceal this information by engaging in a long-running scheme to defraud and mislead his investors, creditors and the SEC to prevent the truth about the losses from being discovered. As part of the scheme, Illarramendi and others created fraudulent documents, including a fictitious asset verification letter falsely representing that one of the hedge funds, the Short Term Liquidity Fund (STLF), had at least $275 million in credits as a result of outstanding loans, when Illarramendi and others knew it did not have any such credits.

Illarramendi asked Horna to help him document the existence of loans on the books of the STLF in order to mislead the SEC. Horna, in turn, recruited Juan Carlos Guillen Zerpa, the managing partner of a Venezuelan accounting firm, to sign a letter on his accounting firm’s letterhead regarding the list of loans that Illarramendi could use to improve the appearance of the assets of the STLF fund. Illarramendi represented to Horna that Illarramendi would pay him approximately $3.8 million for the creation of the fictitious asset verification letter.

In late 2010, Guillen, who expected to receive approximately $1 million for his participation, agreed to prepare the asset verification letter that would falsely indicate that the STLF had made outstanding loans to Venezuelan companies. Horna then worked with other persons to create a fraudulent list of loans and to incorporate this list in the asset verification letter to be signed by Guillen.

In approximately January 2011, Guillen executed the false asset verification letter and sent it by e-mail to Illarramendi. Thereafter, Horna and Guillen learned that the false asset verification letter had been supplied to the SEC, and that the SEC had initiated a civil action against Illarramendi and others (SEC v. Illarramendi, et al., 3:11-CV-00078). In an effort to deceive and mislead the SEC and to prevent the SEC from learning during the civil action that the asset verification letter was false, Horna, Guillen, Illarramendi and others sought to create fraudulent documentation to falsely support the information contained in the letter. Guillen also participated in a telephone call with representatives of the SEC in January 2011 in which he intentionally misrepresented that the assertions in the asset verification letter about the existence of the hedge funds’ assets were true, when he knew they were false.

Horna maintained control of a Florida bank account in the name of Jeislo Real Estate Investments LLC. In furtherance of the conspiracy, Illarramendi caused two transfers of funds in the total amount of $1.25 million to be made into this bank account. As partial payment for Guillen’s services in this conspiracy, Horna caused $250,000 to be transferred to a third party for the benefit of Guillen.

Today, Judge Underhill ordered Horna to forfeit $935,000, which represents the $1.25 million transferred into the account, minus $315,000 that Guillen has previously forfeited. Horna also was ordered to pay a fine in the amount of $10,000, which will be waived if he pays the full forfeiture amount.

Horna and Guillen were arrested by FBI special agents on March 3, 2011, in Florida. On May 19, 2011, Horna pleaded guilty to one count of conspiracy to obstruct an official proceeding of the SEC.

On Dec. 14, 2011, Guillen, who pleaded guilty to the same charge on May 4, 2011, was sentenced to 14 months in prison.

On March 7, 2011, Illarramendi pleaded guilty to two counts of wire fraud, one count of securities fraud, one count of investment advisor fraud and one count of conspiracy to obstruct justice, to obstruct an official proceeding and to defraud the SEC.

Illarramendi awaits sentencing.

This matter is being investigated by the FBI and is being prosecuted by Senior Litigation Counsel Richard J. Schechter and Assistant U.S. Attorney Paul A. Murphy.

U.S. Attorney Fein also acknowledged the substantial assistance provided by the U.S. Attorney’s Office for the Southern District of Florida.

In December 2010, the U.S. Attorney’s Office and several law enforcement and regulatory partners announced the formation of the Connecticut Securities, Commodities and Investor Fraud Task Force, which is investigating matters relating to insider trading, market manipulation, Ponzi schemes, investor fraud, financial statement fraud, violations of the Foreign Corrupt Practices Act and embezzlement. The task force includes representatives from the U.S. Attorney’s Office; FBI; Internal Revenue Service—Criminal Investigation; U.S. Secret Service; U.S. Postal Inspection Service; U.S. Department of Justice’s Criminal Division, Fraud Section and Antitrust Division; SEC; U.S. Commodity Futures Trading Commission (CFTC); Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Office of the Chief State’s Attorney; State of Connecticut Department of Banking; Greenwich Police Department and Stamford Police Department.

Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an e-mail to ctsecuritiesfraud@ic.fbi.gov.

This case was brought in coordination with the President’s Financial Fraud Enforcement Task Force, which was established to wage an aggressive and coordinated effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

For more information on the task force, please visit Stopfraud.gov.

District Man Sentenced to 40 Months in Prison in Mortgage Fraud Scheme

2012-01-30T11:46:00.000-08:00

Defendant Admitted Obtaining $2.4 Million as a Result of the Fraud

WASHINGTON—Akinola George, 42, of Washington, D.C., was sentenced today to a prison term of 40 months after earlier pleading guilty to conspiracy to commit bank fraud and mail fraud for his role in a mortgage fraud scheme.

The sentencing was announced by U.S. Attorney Ronald C. Machen Jr.; Daniel S. Cortez, Inspector in Charge, Washington Division, U.S. Postal Inspection Service; William P. White, Commissioner of the District of Columbia Department of Insurance, Securities and Banking; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, and Kenneth R. Taylor, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Housing and Urban Development.

George pled guilty in September 2011 in the U.S. District Court for the District of Columbia and was sentenced by the Honorable Reggie B. Walton. Judge Walton ordered that George begin serving his prison time immediately. He noted that George’s “elaborate scheme” caused a significant amount of loss. As part of his plea agreement, George agreed to forfeiture of $2.4 million. He also must pay restitution in the amount of $2,021,346 to victims of his crime.

According to a statement of offense, signed by the defendant, from October 2004 to April 2008, George, with the assistance of others, defrauded banks and other lenders of money through false statements and misrepresentations. George used about 22 sales of residential real estate properties (all but two sales were for property in the District of Columbia) to fraudulently obtain mortgage loans. Loan documents in support of these mortgages listed false employers and false salaries for the buyers, exaggerated the assets available to the buyers to pay back the loans and make a cash contribution, and incorrectly listed the buyers’ intent to occupy the houses.

During the settlement of the sales transactions, thousands of lender dollars were siphoned off through fake “renovation” invoices and misrepresentations on the settlement documents. Through this process, George fraudulently obtained approximately $2.4 million, even though he was not the seller on any of the properties. George used some of this money to pay for the assistance of others in the conspiracy, to share with other co-conspirators, and to pay for bogus “down payments” for the buyers, as well as other items. For many properties in the District of Columbia, a co-conspirator acting as the settlement agent submitted the signed Deed or Deed of Trust to the District of Columbia’s Recorder of Deeds, with the instructions that after recordation, the documents be mailed back to the title company, which did occur. After closing, the co-conspirators failed to continue to pay the mortgages on some of the properties. The lenders were forced to foreclose and resell the properties at a loss of more than $2 million.

In announcing the sentence, U.S. Attorney Machen, Inspector in Charge Cortez, Commissioner White, Assistant Director McJunkin, and Special Agent in Charge Taylor commended the efforts of those who worked on the case from the Postal Inspection Service, the District of Columbia Department of Insurance, Securities and Banking, the FBI’s Washington Field Office, the Office of Inspector General of the Department of Housing and Urban Development, and the Metropolitan Police Department.

They also praised those who worked on the case from the U.S. Attorney’s Office, including Forensic Accountant Crystal Boodoo, Paralegal Specialist Sarah Reis, Assistant U.S. Attorney Diane Lucas, who assisted in forfeiture, and Assistant U.S. Attorney Virginia Cheatham, who is prosecuting the case.

Illinois Resident Pleads Guilty to Mailing Threats to Metro-Atlanta Area Schools

2012-01-29T17:58:00.001-08:00

ATLANTA—VALTREZ STEWART, 29, of Oak Lawn, Illinois, pleaded guilty today in federal district court to mailing threats to Atlanta area schools.

Unites States Attorney Sally Quillian Yates said, “School should be a place where students are safe. All threats to harm schools, students, teachers, and school personnel will be taken seriously by law enforcement, regardless of whether the threat later is revealed to be a hoax perpetrated by a person with selfish, ulterior motives.”

According to United States Attorney Yates, the charges, and other information presented in court: STEWART mailed threats to at least four different schools between January 28, 2011, and February 2, 2011. The threats contained collages of newspaper and magazine clippings of words and numbers. The messages claimed, in part, that a bomb would detonate at the school killing at least 20 people, and promised brutal murders if money was not paid to certain individuals by a certain date. STEWART pleaded guilty to mailing the threats to Northview High School, Marietta High School, Stephenson Middle School, and Meadowcreek High School, all in the Atlanta metro area. Further investigation revealed that STEWART made the threats in hopes of getting law enforcement agencies to begin contacting and investigating people who STEWART personally disliked and sought to have targeted for making the deadly threats.

STEWART was indicted in July 2011. Today he pleaded guilty to four counts of mailing threatening communications. He could receive a maximum sentence of 20 years in prison and a fine of up to $250,000. In determining the actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

Sentencing is scheduled for March 28, 2012, at 10:00 a.m., before United States District Judge Willis B. Hunt.

This case is being investigated by task force officers of the Federal Bureau of Investigation.

Assistant United States Attorney Tracia M. King is prosecuting the case.

For further information, please contact Sally Q. Yates, United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is Justice.gov/usao/gan.

Former ANC Commissioner Pleads Guilty to Fraud; Admits Misuse of More Than $28,000 in Government Funds

2012-01-29T17:57:00.000-08:00

Community Leader Used Money for Personal Expenses

WASHINGTON—William Shelton, 42, a community leader in Northeast Washington, pled guilty today to a federal charge of access device fraud for using more than $28,000 in District of Columbia government funding, intended for the community, for his own personal expenses.

The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr.; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; and Charles J. Willoughby, Inspector General for the District of Columbia.

Shelton pled guilty in the U.S. District Court for the District of Columbia. The Honorable Beryl A. Howell scheduled sentencing for May 4, 2012. The charge carries a maximum statutory penalty of 10 years in prison, as well as a potential fine and order of restitution. Under federal sentencing guidelines, the parties have agreed that the applicable range would be six to 12 months in prison and a fine of up to $20,000. Under the plea agreement, Shelton must pay $28,526 in restitution to the District of Columbia government and forfeit proceeds of his crime.

According to a statement of offense signed by the government as well as the defendant, Shelton is the former chairman of the Advisory Neighborhood Commission (ANC) in Ward 5B of the District of Columbia. The D.C. government provides funds to ANCs each year to serve public purposes in the specific ANC area and to help pay for the functioning of the ANC office. Each ANC is permitted to establish a checking account, and any expenditures must be signed by at least two officers of the ANC, one of whom must be the treasurer or chairperson.

Shelton obtained a debit card for the ANC’s bank account, and knowingly used it for personal expenses with the intent to defraud the ANC.

From August 2010 through March 2011, Shelton used the debit card to make approximately 120 cash withdrawals, obtaining $27,129.85 in ANC funds. In addition, between February 2010 and February 2011, he used the debit card to pay directly for a total of $1,396.36 in purchases. None of the withdrawals or direct purchases were approved by the ANC or recorded in its books and records as required by law. All of the money was used by Shelton for personal expenditures.

“With today’s guilty plea, William Shelton became the latest city official to be held accountable for ripping off D.C. taxpayers,” said U.S. Attorney Machen. “There is no excuse for using the public treasury as a personal slush fund. We will continue our aggressive press against public officials who abuse the trust we place in them.”

“Mr. Shelton violated the trust of taxpayers by using government money for his own personal use,” said Assistant Director McJunkin. “His illegal conduct is deeply disappointing to our citizens and to the vast majority of elected officials who carry out their duties in an honest and ethical manner.”

“Today’s plea is demonstrative of how the Office of the Inspector General not only works to safeguard the interests of the District and its citizenry, but how it continues to work together with the Office of the United States Attorney in this worthy and rewarding endeavor,” stated Inspector General Willoughby. “I am and will continue to be proud of the role that the Office of the Inspector General plays in this regard.”

In announcing the guilty plea, U.S. Attorney Machen, Assistant Director McJunkin and Inspector General Willoughby praised the work of those who investigated the case, including the special agents of the FBI’s Washington Field Office and Special Agent Alexander H. Zion II, of the Office of the Inspector General. They also commended the efforts of those who worked on the case for the U.S. Attorney’s Office, including Paralegal Shanna Hays, Legal Assistant Krishawn Graham, Assistant U.S. Attorney Scott Sroka of the Asset Forfeiture and Money Laundering Section, and Assistant U.S. Attorney Bridget M. Fitzpatrick, of the Fraud and Public Corruption Section, who is prosecuting the matter.

Federal Judge Sentences Birmingham Man to Five Years in Prison for Mortgage Fraud Scheme

2012-01-29T17:50:00.000-08:00

BIRMINGHAM—A federal judge on Thursday sentenced a Birmingham man to five years in prison for a mortgage fraud scheme in which he sold three houses that he did not own, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Patrick Maley and the inspectors general of the departments of Housing and Urban Development and the Social Security Administration.

U.S. District Judge Sharon Lovelace Blackburn sentenced DARRYL COBB, 54, on two counts of mail fraud in connection to the scheme. Cobb pleaded guilty to the charges in August. The judge also ordered Cobb to pay restitution of $262,861 and to forfeit $262,861 to the government as proceeds of his illegal activity.

“Mortgage fraud is a considerable problem that plagues our communities and damages our country,” Vance said. “We will continue to work tirelessly to uncover, investigate and prosecute any individual committing mortgage fraud. We want to send the clear message that if you lie on mortgage documents, you will be held accountable for your fraud.”

According to Cobb’s plea agreement with the government, his scheme was uncovered after the owner of a home in the 7900 block of 4th Avenue South complained to Birmingham police that someone was living in the house, which should have been vacant. The owner had gotten the house in a will from a deceased parent.

The person living in the house said they had bought it from Cobb. Further investigation showed Cobb had filed false documents in Jefferson County court and with a mortgage company claiming to be the rightful owner of the property, according to the plea agreement. Records searches determined Cobb had conducted two other fraudulent transactions using identical methods to obtain control over two other properties, which he then sold under the false pretense that he was the rightful owner and seller.

Those Birmingham houses are located in the 2700 block of Wood Drive and the 7500 block of 4th Avenue South.

The FBI and inspector general’s offices for both HUD and the Social Security Administration investigated the case. Assistant U.S. Attorney Patrick Carney prosecuted the case.

Camp Buehring, Kuwait Postmaster Convicted of Stealing $565,000 in Money Orders

2012-01-29T16:08:00.000-08:00

HOUSTON—Delmus Eugene Scott, Jr., 34, of Humble, Texas, has pleaded guilty to one count of theft of government money, United States Attorney Kenneth Magidson announced today. Scott was the former custodian of public effects (COPE), which is the equivalent to a postmaster in the United States.

Scott was employed by a contractor of the U.S. Department of Defense responsible for providing postal services to U.S. military personnel deployed in Kuwait. Scott’s responsibilities included conducting and reporting financial transactions at the Army Post Office (APO) on a daily basis, to include the procurement and sale of U.S. Postal Service money orders. As the COPE, Scott had full autonomy to order blank money orders directly from the U.S. Postal Service distribution center.

Scott’s guilty plea today follows his indictment on July 27, 2011, at which time he was charged with one count of theft of government money resulting from a complaint into large deposits of postal money orders into bank accounts in Humble. Investigation determined Scott stole a total of 565 postal money orders, each valued at $1,000, with $181,000 clearing the Federal Reserve. Agents recovered the remaining $384,000 in postal money orders before they could be negotiated.

Further investigation determined that Scott mechanically imprinted the fraudulent amounts on the postal money orders using a money order imprinter exclusive to the Camp Buehring APO, under his custody and control, misrepresenting that they had been properly paid. Scott later deposited $90,000 in fraudulent postal money orders into his personal bank account and directed an additional $91,000 in fraudulent postal money order deposits to his fiancé’s bank account.

U.S. District Judge Sim Lake, who accepted his guilty plea today, has set sentencing for April 19, 2012, at which time he faces a maximum penalty of 10 years’ imprisonment and/or a $250,000 fine.

This case was investigated by the U.S. Postal Inspection Service with the assistance of the Major Procurement Fraud Unit in Kuwait, Department of Defense, U.S. Army Criminal Investigation Command, and the FBI and is being prosecuted by Special Assistant United States Attorney Tammie Y. Moore.

Jury Convicts Former Titusville Man of Child Pornography Offenses

2012-01-29T16:06:00.000-08:00

ERIE, PA—After deliberating approximately three hours, a federal jury found Craig Alan Finley guilty of four counts of violating federal laws relating to the sexual exploitation of children, United States Attorney David J. Hickton announced today.

Finley, 34, was tried before Senior United States District Judge Maurice B. Cohill, Jr. in Erie, Pennsylvania.

According to Assistant United States Attorney Christian A. Trabold, who prosecuted the case, the evidence presented at trial established that Finley used his cell phone to produce videos of himself sexually assaulting a 10-year-old male. These videos were then distributed on the Internet. The evidence also revealed that Finley received and was in possession of over 30,000 images and movies depicting minors, many younger than 10 years of age, engaged in sexually explicit conduct. Finley also distributed his enormous collection of child pornography to others on the Internet.

Launched in February 2006, Project Safe Childhood is a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys’ Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Judge Cohill scheduled sentencing for May 8, 2012 at 3:30 p.m. The law provides for a total sentence of 80 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses 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 Finley.

Erie Man Admits Transporting Cocaine from Detroit to Erie

2012-01-29T16:04:00.000-08:00

ERIE, PA—A resident of Erie, Pennsylvania pleaded guilty in federal court to a charge of violating federal drug laws, United States Attorney David J. Hickton announced today.

Ronald Wesley Thomas, 62, pleaded guilty to one count before Senior United States District Judge Maurice B. Cohill, Jr.

In connection with the guilty plea, the court was advised that Thomas transported a kilogram of cocaine from Detroit, Michigan to Erie, Pennsylvania in June 2008.

Judge Cohill scheduled sentencing for March 5, 2012 at 2:30 p.m. The law provides for a total sentence of forty 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.

Pending sentencing, the court continued Thomas on bond.

Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.

The EAGLE task force, which is comprised of members of the Federal Bureau of Investigation, the Pennsylvania State Police, and the Erie Police Department, conducted the investigation that led to the prosecution of Thomas.

Bridgeport Man Sentenced to Federal Prison for Possessing Child Pornography

2012-01-28T20:38:00.000-08:00

David B. Fein, United States Attorney for the District of Connecticut, announced that RAMON PAUL FERNANDEZ, 37, of Bridgeport, was sentenced today by United States District Judge Robert N. Chatigny in Hartford to 12 months and one day of imprisonment, followed by 10 years of supervised release for possessing child pornography.

According to court documents and statements made in court, on September 19, 2009, a Milford Police detective assigned to the Connecticut Computer Crimes Task Force connected to a peer-to-peer Internet file-sharing network in an effort to identify individuals distributing child pornography. The investigation revealed that images of child pornography had been sent from an Internet Protocol (IP) address assigned to an account holder at an apartment in Ansonia where FERNANDEZ sometimes resided. On December 18, 2009, law enforcement officers executed a federal search and seizure warrant at the apartment and seized a desktop computer. During an interview, FERNANDEZ acknowledged that he used a peer-to-peer program to download images of child pornography.

Subsequent forensic analysis of the hard drive of the seized computer confirmed the existence of child pornography images and videos.

On April 6, 2011, FERNANDEZ pleaded guilty to one count of possession of child pornography.

This case was investigated by the Federal Bureau of Investigation and the Connecticut Computer Crimes Task Force, which includes federal, state, and local law enforcement agencies, including the Milford Police Department. The case was prosecuted by Assistant United States Attorney Deborah R. Slater.

The Connecticut Computer Crimes Task Force investigates crimes occurring over the Internet, including computer intrusion, Internet fraud, copyright violations, Internet threats, and harassment and online crimes against children. The task force also provides computer forensic review services for participating agencies. The task force is housed in the main FBI office in New Haven. For more information about the task force, please contact the FBI at 203-777-6311.

U.S. Attorney Fein noted that this prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

To report cases of child exploitation, please visit Cybertipline.com.

Orange County Couple Pleads Guilty to Federal Fraud Charges for Bilking Banks Out of Nearly $5 Million

2012-01-28T20:35:00.001-08:00

SANTA ANA, CA—A Newport Coast couple pleaded guilty this morning to defrauding a consortium of seven banks, including Bank of America, in connection with a $130 million line of credit.

Thomas Chia Fu, 63, and his wife, Cheri L. Shyu (also known as Cheri Fu), 60, owned Anaheim-based Galleria USA, Inc., which imported home decor items manufactured in China. The Fus obtained a $130 million revolving line of credit for Galleria from a consortium of seven banks. In connection with that revolving line of credit, the couple overstated by tens of millions of dollars the accounts receivables of the company—lies they told the banks in order to continue borrowing funds under the revolving line of credit, according to plea agreements filed in this case. The Fus also admitted to falsifying in Galleria’s computer system the accounts receivable amounts by a factor of 10 or more times the actual amount purchased to support the exaggerated numbers and hide Galleria’s true financial status.

The banks suffered an estimated loss of $4.7 million on the revolving line of credit from October 2008 to July 2009.

The Fus pleaded guilty this morning before United States District Judge Cormac J. Carney. Cheri Fu is scheduled to be sentenced by Judge Carney on July 9, and Thomas Fu is scheduled to be sentenced on July 30.

At sentencing, the Fus each face a statutory maximum sentence of 30 years in federal prison.

This case was investigated by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Federal Bureau of Investigation, and the United States Secret Service.

“In 2008, American taxpayers stepped up to help our nation’s banks, while the Fus concocted a scheme to swindle them,” said Christy Romero, Deputy Special Inspector General for SIGTARP. “Today, the Fus pled guilty to using a false second set of books to defraud seven banks, including TARP recipients Bank of America and United Commercial Bank, out of loans that resulted in millions of dollars in bank losses. Defrauding institutions that received TARP funds is simply defrauding American taxpayers. SIGTARP will aggressively uncover and investigate fraud, waste and abuse related to TARP and actively support the prosecution of these crimes to ensure accountability and justice.”

SIGTARP investigates fraud, waste, and abuse in connection with the Troubled Asset Relief Program (TARP). To report suspected illicit activity involving TARP, call the SIGTARP Hotline at 1-877-SIG-2009 (1-877-744-2009).

CONTACT: Assistant United States Attorney Jeannie M. Joseph (714) 338-3576

Two Women Plead Guilty to Health Care Fraud Conspiracy and Related Offenses

2012-01-28T20:28:00.000-08:00

CHARLOTTE, NC—Two women charged with health care fraud related offenses have pled guilty to the charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Unit (MIU); Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region; Chris Briese, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Sheriff Kevin L. Auten of the Rowan County Sheriff’s Office; Russell F. Nelson, Special Agent in Charge of the United States Secret Service (USSS), Charlotte Field Division; Donnie Varnell, Special Agent in Charge of the Diversion and Environmental Crimes Unit of the North Carolina State Bureau of Investigation (NC SBI); and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department (CMPD).

Today, Wendy Gibson (a/k/a Wendy Fitzgerald), 40, of Charlotte, pled guilty to one count of health care fraud conspiracy, one count of paying and receiving illegal kickbacks, and one count of conspiracy to distribute controlled substances. Gibson’s co-defendant, Karen Wills (a/k/a Karen Boykin and Karen Jackson), 43, of Salisbury, entered a guilty plea to the same charges and to one additional count of health care fraud conspiracy on January 12, 2012. The defendants were charged by a criminal bill of indictment on August 17, 2011.

According to filed documents and statements made in court, from around 2008 to January 2011, Wills and others participated in a scheme to defraud Medicare and Medicaid by submitting false and fraudulent claims for medical services which were medically unnecessary, not provided, or both, including but not limited to, electromyography (“EMG”) and anorectal manometry (“AM”) procedures. As a result of this scheme, Medicare and Medicaid paid over $400,000 in reimbursement payments on the fraudulent claims. Court documents indicate that around August 2008, Wills and others became aware of the investigation into this fraudulent billing scheme. In an effort to conceal the fraud, Wills created several false EMG and AM reports and placed them in patient files. As part of her guilty plea, Willis admitted that the amount of loss intended to be caused by the scheme was in excess of $400,000 but less than $1,000,000.

Wills and Gibson also pled guilty to charges of conspiring to pay and receive illegal kickbacks. According to the indictment, from around January 2008 to around 2009, Wills, Gibson, and others engaged in an illegal kickback scheme involving power wheelchairs. According to plea documents, Wills used her position with her employer’s company to submit fictitious referrals for patients to receive medically unnecessary power wheelchairs from Gibson’s employer’s company. In some instances, Wills forged a physician’s signature on required qualification documents, while Gibson tracked and directed payment to those referrals. As part of their plea agreements, the defendants admitted to concealing the illegal kickback payments by falsely representing on invoices and checks that the payments were for nursing and billing services. This scheme resulted in payments for the medically unnecessary equipment from Medicare and Medicaid in excess of $300,000.

Wills and Gibson also pled guilty to charges of conspiracy to distribute controlled substances and to commit health care fraud. In pleading guilty to that charge, Wills admitted that she forged a physician’s signature on prescription pads she misappropriated from her employer, and issued fraudulent prescriptions in Gibson’s name. The prescriptions were written for controlled substances including oxycodone and hydrocodone/acetaminophen pills. In her plea, Gibson admitted that she used her health insurance prescription benefit program to pay for the fraudulent prescriptions resulting in payments in over $30,000 for these fraudulent prescriptions. Wills and Gibson obtained and illegally distributed approximately 3,000 oxycodone pills, and approximately 5,000 hydrocodone/acetaminophen pills.

At sentencing, Gibson and Wills face a maximum statutory sentence of 10 years in prison on the health care fraud conspiracy and a $250,000 fine, and five years in prison and a $25,000 fine for the illegal kickbacks charge. They also face 20 years in prison and a $1 million fine for the conspiracy to distribute controlled substances. Wills also faces a penalty of 10 years of imprisonment and a $250,000 fine for the additional charge of health care fraud conspiracy. Wills has been in federal custody on these charges since August 2011, and Gibson remains on bond. A sentencing date has not been set.

The investigation into Wills and Gibson was handled by HHS-OIG, MIU, FBI, USSS, NC SBI, CPMD, and Rowan County Sheriff’s Office. The prosecution is being handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte.

The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is a multi-agency team of experienced federal and state investigators and prosecutors, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations.

The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at HHSTips@oig.hhs.gov.

American Samoa Department of Education Official Convicted by Federal Jury in District of Columbia of Witness Tampering and Obstruction of Justice

2012-01-28T18:55:00.001-08:00

WASHINGTON—Paul Solofa, the director of the school lunch program for the government of the U.S. Territory of American Samoa, was convicted today in relation to his efforts to obstruct a federal grand jury and law enforcement investigation into a bribery scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

After a four-day trial, a federal jury in the District of Columbia found Solofa, 50, guilty of one count of witness tampering and one count of obstruction of justice.

According to evidence presented at trial, in approximately early 2008, federal authorities began conducting an investigation into allegations of cash bribes and kickbacks paid by vendors to officials of the American Samoa Government in connection with the government’s purchase of school bus parts and services.

According to the trial evidence, Solofa met on April 3, 2009, with a school bus parts vendor who told Solofa that the FBI was interested in interviewing the vendor regarding the bus parts investigation. Solofa, in a recorded meeting, allegedly told the vendor, “They cannot do anything with cash. Nothing. They cannot do anything with cash. They cannot track down you on cash. Because even if you say you gave me cash I’ll tell them ‘no.’ They cannot take your word on cash. Because that’s hearsay. So you know, but the best thing for you to do is ‘nope, I never give them any cash, I never’—because that will open up the whole operation . . . You get what I am saying. All you do is just tell them ‘no, yes, no, yes,’ period.”

In addition, according to the evidence presented at trial, Solofa met on April 14, 2009, with the same bus parts vendor, who told Solofa that a grand jury subpoena requiring production of specific documents and records, some of which related to Solofa and to the bus parts kickback scheme, would be issued shortly. After discussing how to respond, Solofa told the vendor that, as for documents he did not want to produce, “ [t]he only way to do it with those copies is burn it. That way, they won’t see it, and you won’t worry that they might see it, you know. . . . Just burn it, and nobody has a copy.”

Solofa faces a maximum penatly of 20 years in prison and a $250,000 fine on the witness tampering charge and 10 years in prison and a $250,000 fine on the obstruction of justice charge. Sentencing is scheduled for April 27, 2012.

This case is being prosecuted by Principal Deputy Chief Raymond N. Hulser and Trial Attorney Daniel A. Petalas of the Criminal Division’s Public Integrity Section. The case is being investigated by the FBI in Hawaii; the Office of the Inspector General for the U.S. Department of Education; and the Office of the Inspector General for the U.S. Department of the Interior.

Jacksonville Man Found Guilty of Production of Child Pornography and Making False Statements to FBI

2012-01-28T18:49:00.000-08:00

JACKSONVILLE, FL—U.S. Attorney Robert E. O’Neill announced today that a federal jury has found Alberto Martinez Riquene (44, Jacksonville) guilty of using a minor to produce a video of child pornography and of making false statements in connection with matters being investigated by the Federal Bureau of Investigation. Riquene faces up to 30 years in federal prison for the production charge, and up to 10 years in federal prison for making false statements. Riquene is in the custody of the United States Marshals Service pending his sentencing hearing.

According to testimony and evidence presented at trial, between February 24, 2010 and March 31, 2010, Riquene engaged in commercial sex acts on five to 10 occasions with a 15-year-old minor female at Riquene’s residence in Jacksonville. This minor child had become addicted to crack cocaine, and was introduced to prostitution by other individuals as a way to obtain more crack cocaine. On one such occasion, while the minor child and Riquene were engaged in a commercial sex act at his residence, Riquene made a video recording of the minor child engaged in sexually explicit conduct.

According to court records, on July 28, 2010, a special agent with the Federal Bureau of Investigation and three Jacksonville Sheriff’s Office detectives interviewed Riquene at his residence. Riquene acknowledged that he knew the minor child. However, when asked about his relationship with the minor child, Riquene falsely stated that the minor child had never been in his bedroom or in any part of his house, he had never had sex with her, and he had never touched her.

According to testimony and evidence presented at trial, law enforcement officers subsequently received information that the minor child had used Riquene’s computer to access her Myspace account while she was at Riquene’s residence. The FBI then obtained two search warrants for the computer media at the residence. Forensic analysis revealed that the minor child’s Myspace account had been accessed using Riquene’s computer. In addition, several videos were discovered on Riquene’s computer hard disk drive, including a video depicting the minor child and Riquene engaged in sexually explicit conduct.

This case was investigated by the Federal Bureau of Investigation and the Jacksonville Sheriff’s Office. It is being prosecuted by Assistant United States Attorneys Mac D. Heavener, Diidri W. Robinson, and D. Rodney Brown.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov. For more information about Internet safety education, please visit www.projectsafechildhood.gov and click on the tab “other resources.”

Founders of McGinn, Smith & Co., Inc. Indicted on Fraud and Tax Charges

2012-01-28T18:47:00.000-08:00

Defendants Timothy M. McGinn and David L. Smith Alleged to Have Engaged in Mail, Wire, and Securities Fraud and to Have Filed False Income Tax Returns

ALBANY, NY—United States Attorney Richard S. Hartunian; Victor W. Lessoff, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation, New York Field Office; and Clifford C. Holly, Special Agent in Charge, Federal Bureau of Investigation, Albany Division, announced that a grand jury sitting in the Northern District of New York returned an indictment today charging TIMOTHY M. McGINN, age 63, of Clifton Park, New York, and DAVID L. SMITH, age 66, of Saratoga Springs, New York, with (1) one count of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349; (2) 17 counts of mail and wire fraud, in violation of Title 18, United States Code, Sections 1341 & 1343; (3) six counts of securities fraud, in violation of Title 15, United States Code, Sections 78j(b) & 78ff and Title 18, United States Code, Section 2; and (4) three counts each of filing a false income tax return, in violation of Title 26, United States Code, Section 7206(1).

Count one charges the defendants with conspiracy to commit mail and wire fraud. The indictment alleges that the purpose of the conspiracy was to mislead investors regarding the safekeeping and use of investor money raised by 17 trusts and one corporation, the risks of the trust offerings, the performance of the underlying income streams, the source of investor payments, and the improper diversion of investor money in order to obtain money from investors and enrich themselves. As a result of the defendant’s conduct, the investors were not aware that the defendants had diverted approximately $4.1 million in connection with transactions related to the trusts for their own benefit and the benefit of another person. If the defendants are convicted of count one, the maximum potential penalties they face include imprisonment for 30 years, to be followed by supervised release for five years, and a fine of the greater of $1,000,000 or twice the gross pecuniary gain or loss.

Counts two through 18 charge the defendants with mail and wire fraud. The maximum potential penalty for each of Counts two through 18 is imprisonment for 30 years, supervised release for five years, and a fine of the greater of $1,000,000 or twice the gross pecuniary gain or loss. Counts two through six and eight through 11 relate to the Firstline Series B Trusts, which raised money from investors in connection with a loan of $2.4 million to Firstline Security, Inc., a company that generated alarm contracts. The Indictment alleges that the defendants knew that Firstline was facing litigation with its dealer, but did not disclose that to investors, or tell them when Firstline filed for bankruptcy and defaulted on loans. Instead, the defendants directed that investors receive $2 million of lulling payments by transferring money from other entities controlled by McGinn and Smith, and their firm sold approximately $600,000 of one of the Firstline investments without any disclosure of the bankruptcy or defaults.

Counts seven and 12 relate to the Integrated Excellence Trusts, for which the defendants raised about $1.2 million from investors in connection with a loan to benefit Integrated Excellence, Inc., which generated alarm contracts. The Indictment alleges that the defendant knew that the payments received from the loan were not sufficient to pay investors, but they directed that investors receive lulling payments by transferring money from other entities controlled by McGinn and Smith.

Counts 13 through 16 and 18 are wire fraud charges related to the misuse of investor money held in escrow accounts. Counts 13 and 14 involve the diversion of approximately $142,000 of investor money from an escrow account to make payments to investors in other trusts. Counts 15, 16, and 18 involve approximately $115,000 that McGinn and Smith took directly from escrow accounts holding investor funds. These transactions violated their duties as officers and owners of the company acting as the trustee for the Trusts, and they failed to disclose these transactions to investors.

Count 17 is a wire fraud charge related to approximately $230,000 McGinn took from McGinn Smith Transaction Funding Corp. between August 22, 2008 and July 8, 2009. McGinn repaid $100,000 of the money. When Smith discovered that McGinn had taken this money, he directed that a false accounting entry be made to conceal it.

Counts 19 through 24 relate to the failure to disclose improperly diverted fees to investors in violation of federal securities laws. Counts 19 and 20 relate to $100,000 in fees paid in connection with TDM Verifier Trust 08, and counts 21 through 24 relate to approximately $855,000 in fees paid in connection with Fortress Trust 08. All of these transaction fees were paid with investor money. The maximum potential penalty for each of Counts 19 through 24 is imprisonment for 20 years, supervised release for three years, and a fine of $5,000,000.

Counts 25 through 30 are tax charges arising from the failure of McGinn and Smith to declare the improperly diverted money on their personal tax returns for 2006 through 2008. McGinn and Smith later described the money as “loans,” but did not list them as such on personal financial statements. When the Financial Industry Regulatory Authority, Inc. (“FINRA”) discovered the false loan accounting entries for the diverted money, the defendants misled FINRA by directing the creation of backdated promissory notes. The maximum potential penalty for each of Counts 25 through 30 is imprisonment for three years, supervised release for one year, and a fine of $100,000.

The Indictment includes allegations for forfeiture of $8 million in proceeds of the offenses charged.

McGINN and SMITH are expected to be arraigned tomorrow, January 27, 2012, at 2:00 p.m. before the Honorable Randolph F. Treece, United States Magistrate Judge at the Federal Courthouse in Albany. The investigation is ongoing.

This case is being investigated by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorneys Elizabeth C. Coombe and Rick Belliss.

The charges are merely accusations and the defendants are presumed innocent until and unless proven guilty.

Owner and Employee of Miami Home Health Company Plead Guilty in $22 Million Health Care Fraud Scheme

2012-01-28T18:45:00.000-08:00

The owner and an employee of a Miami health care agency each pleaded guilty for their participation in a $22 million home health Medicare fraud scheme, the Department of Justice, the FBI and the Department of Health and Human Services (HHS) announced yesterday.

Marietha Morales, 38, pleaded guilty on Jan. 24, 2012, before U.S. District Judge Seitz to one count of conspiracy to commit health care fraud and Eduardo Saborit-Dominguez, 48, pleaded guilty yesterday before Judge Seitz to one count of conspiracy to violate the Anti-Kickback Statute. Sentencing for both defendants is scheduled for May 23, 2012. The charge of conspiracy to commit health care fraud carries a maximum prison sentence of 10 years.

According to the court documents, Morales was the president and Saborit-Dominguez was an employee of Prime Home Health Services Inc., a Florida home health agency that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries.

According to plea documents, Morales conspired with patient recruiters for the purpose of billing the Medicare program for unnecessary home health care and therapy services. Morales and her co-conspirators paid kickbacks and bribes to patient recruiters in return for these recruiters providing patients to Prime Home Health, as well as prescriptions, plans of care and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries. Saborit-Dominguez distributed the kickbacks and bribes to co-conspirator patient recruiters and knew that the payment of kickbacks and bribes was in violation of federal criminal laws. Morales used these prescriptions, plans of care and medical certifications to fraudulently bill the Medicare program for home health care services, which Morales knew was in violation of federal criminal laws.

According to plea documents, at Prime Home Health, nurses and office staff falsified patient files for Medicare beneficiaries to make it appear that such beneficiaries qualified for home health care and therapy services from Prime Home Health. Morales admitted that she knew the beneficiaries did not actually qualify for and did not receive such services. Morales knew that these files were falsified so that the Medicare program could be billed for medically unnecessary therapy and home health related services.

From approximately February 2005 through April 2011, Morales and her co-conspirators submitted approximately $22 million in false and fraudulent claims to Medicare and Medicare paid approximately $14 million on those claims.

The guilty pleas were announced by U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Assistant Attorney General Lanny A. Breuer of the Criminal Division; John V. Gillies, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.

This case is being prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Miami.

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to Stopmedicarefraud.gov.

Drunk Busters of America

2012-01-28T14:51:00.000-08:00

The February 2, 2012, episode of American Heroes Radio features a conversation with former Curt Kindschuh the founder of Drunk Busters of America.

Program Date: February 2, 2012

Program Time: 1500 hours, PACIFIC

Topic: Drunk Busters of America

Listen Live:

http://www.blogtalkradio.com/lawenforcement/2012/02/02/drunk-busters-of-america

About the Program

In 1995, Curt Kindschuh started Drunk Busters of America. Curt and his staff have now worked with over fifteen-thousand customers in 64 countries.

Curt Kindschuh worked in law enforcement for 18 years, and in 1993 was recognized in the Wisconsin Law Enforcement Officer of the Year Awards for his creative approaches to crime prevention. He was one of the first Drug Abuse Resistance Education (D.A.R.E.) Officers in Wisconsin, and worked for 4 years in 23 schools as a D.A.R.E. Officer. He started the “Shop With a Cop” program, which has since been duplicated in others areas of the United States, and also was a bicycle safety officer.

A volunteer with Mothers Against Drunk Driving (MADD) from 1990-2002, he worked full time as the Wisconsin State Executive Director of MADD from 1994-1997. Additionally, for 4 years he was a part-time instructor for the Group Dynamics Traffic Safety Program, which is mandatory for 1st time convicted drunk drivers in Wisconsin. Until his commitment to Drunk Busters of America forced him to cut back, he also taught criminal justice classes at a local college. Curt knows and understands impaired driving. He has arrested drunk drivers, investigated fatal crashes, counseled convicted DUI offenders and worked as an advocate for victims of impaired driving crashes.

Curt completed the National Highway Traffic Safety Administration (NHTSA) certified DWI Detection and Standardized Field Sobriety Testing course, and he is the designer and patent holder for Drunk Busters Impairment Goggles, used worldwide in the fight to stop impaired driving. Curt was a member of the Driving School Association of the Americas (DSAA), American Driver Traffic Safety Education Association (ADTSEA), the Wisconsin D.A.R.E. Officers Association, and the National D.A.R.E. Officers Association. He is a member of the International Association for Driver Education, and he has established a reputation as a creative, innovative, passionate visionary in impaired driving education. Curt has presented at over one-hundred state, national, and international conferences and for hundreds of school districts, universities, and other safety organizations.

About the Watering Hole

The Watering Hole is police slang for a location cops go off-duty to blow off steam and talk about work and life. Sometimes funny; sometimes serious; but, always interesting.

About the Host

Lieutenant Raymond E. Foster was a sworn member of the Los Angeles Police Department for 24 years. He retired in 2003 at the rank of Lieutenant. He holds a bachelor’s from the Union Institute and University in Criminal Justice Management and a Master’s Degree in Public Financial Management from California State University, Fullerton; and, has completed his doctoral course work. Raymond E. Foster has been a part-time lecturer at California State University, Fullerton and Fresno; and is currently a Criminal Justice Department chair, faculty advisor and lecturer with the Union Institute and University. He has experience teaching upper division courses in law enforcement, public policy, law enforcement technology and leadership. Raymond is an experienced author who has published numerous articles in a wide range of venues including magazines such as Government Technology, Mobile Government, Airborne Law Enforcement Magazine, and Police One. He has appeared on the History Channel and radio programs in the United States and Europe as subject matter expert in technological applications in law enforcement.

Listen, call, join us at the Watering Hole:

http://www.blogtalkradio.com/lawenforcement/2012/02/02/drunk-busters-of-america

Listen from the Archive:

http://www.americanheroesradio.com/drunk_busters.html

Program Contact Information

Lieutenant Raymond E. Foster, LAPD (ret.), MPA

editor@police-writers.com

909.599.7530

LinkedIn Event:

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Facebook Event:

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Patient Recruiter Sentenced to 30 Months in Prison in Connection with $5.4 Million Medicare Fraud Scheme

2012-01-27T17:30:00.001-08:00

WASHINGTON—A Miami resident was sentenced in Detroit today to 30 months in prison for his participation in a $5.4 million Detroit-area Medicare fraud scheme, announced the Department of Justice, FBI and Department of Health and Human Services (HHS).

Santiago Villa-Restrepo, 34, was sentenced by U.S. District Judge Arthur J. Tarnow of the Eastern District of Michigan. In addition to his prison term, Villa-Restrepo was ordered to pay approximately $2.9 million in restitution, jointly and severally with his co-defendants.

Villa-Restrepo pleaded guilty on Nov. 29, 2011, to one count of health care fraud. According to the plea documents, beginning approximately in 2007, Villa-Restrepo paid Medicare patients to undergo medically unnecessary diagnostic tests at three health care clinics owned by co-conspirators. In exchange for cash and other consideration offered by Villa-Restrepo and his co-conspirators, the Medicare beneficiaries signed documents indicating they had received the services billed to Medicare. Medicare was billed $5.4 million for medically unnecessary diagnostic tests by the clinics associated with the scheme.

The sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.

This case is being prosecuted by Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan, with assistance from Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since their inception in March 2007, the Medicare Fraud Strike Force operations in nine districts have charged more than 1,140 individuals who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to Stopmedicarefraud.gov.

Drug Trafficking Conspiracy Indictment Expanded

2012-01-27T16:41:00.001-08:00

ANCHORAGE—United States Attorney Karen L. Loeffler announced today, January 26, 2012, that on January 20, 2012, an Anchorage grand jury expanded a previously charged drug trafficking conspiracy involving Kostas Nikolaos Bairamis, Melissa Dawn Cue, BJ Griffith, William Gilbert, and Justin Clayton Ray Lane to charge three additional defendants: Homer resident Timothy Daniel Cissney, age 33; Christopher Sean Kendrick, age 36, from California; and Aaron O’Kito Dyson, aka “Punchy,” age 37, from Washington. The indictment alleges one count of conspiracy to distribute controlled substances, in violation of 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(C).

According to the indictment presented to the court, defendants conspired to distribute oxycodone and methadone between at least June 17, 2010, and October 5, 2010. Bairamis has been convicted of conspiring to distribute methamphetamine during a different time period and has been sentenced to served 11 years on that separate charge. Both Cue and Griffith have been previously indicted by a grand jury in the District of Nevada. Those charges remain pending.

Assistant United States Attorney Kimberly Sayers-Fay, who presented the case to the grand jury, advised that the maximum penalties for conspiring to distribute oxycodone and methadone are 20 years’ imprisonment, a $1,000,000 fine, three years’ supervised release, and a $100 special assessment.

The Federal Bureau of Investigation and Alaska State Troopers conducted the investigation the led to the indictments 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 guilty beyond a reasonable doubt.

Cincinnati Man Receives 37-Month Sentence for Selling More Than $1 Million in Counterfeit Financial and Tax Preparation Software

2012-01-27T16:30:00.000-08:00

CINCINNATI—Brandon C. Davis, 31, of Cincinnati, was sentenced in U.S. District Court to 37 months in federal prison for selling more than $1 million worth of counterfeit financial and tax preparation software through an Internet auction site.

Carter Stewart, U.S. Attorney for the Southern District of Ohio; Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS); Dugan T. Wong, Inspector in Charge, U.S. Postal Inspection Service, Pittsburgh Division; and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the sentence handed down today by Senior U.S. District Judge Herman J. Weber.

Davis pleaded guilty on June 6, 2011 to one count each of mail fraud, copyright infringement, and two counts of filing a false income tax return. His sentence is 37 months for the mail fraud and copyright infringement and 36 months for each of the two counts of filing a false income tax return. Judge Weber ordered the sentences to run concurrently.

According to a court documents, Davis purchased software by download or on a CD, with accompanying label and packaging that was protected by copyright, namely Quicken and Turbo Tax software manufactured by Intuit, Inc. Davis copied each CD of original software multiple times without permission and created counterfeit packaging and labeling for the CDs.

Davis sold the counterfeit Intuit software on eBay, received payment, and then mailed the counterfeit software to the purchaser via the United States Postal Service. Within the packaging, Davis sometimes included a false disclaimer claiming that he was merely acting as a broker for another seller. Davis also falsely represented on the online auctions that he was selling original software, but instead the defendant sold counterfeit software, usually at prices below manufacturer’s suggested retail price.

Davis failed to report the income from the counterfeit software sales when he filed his income tax returns for 2008 and 2009.

“To perpetuate his scheme, [Davis] created 37 different eBay accounts for the illegal sales, typically with false information used to set up the account,” Assistant U.S. Attorney Tim Mangan wrote in a sentencing memorandum filed with the court. “The funds from the sales were processed through… more than 20 different bank accounts controlled by the Defendant. This all stands in contrast to the Defendant’s tax returns, which represented that he made a modest living as an independent photographer.”

Davis was also ordered to pay $80,074.08 in restitution to the IRS, forfeit all computer items used to manufacture and distribute the fake software, as well as forfeiting a 2006 Hummer, and $192,117.31 that U.S. Postal Inspectors seized from his bank accounts. He also has to pay $158,980 in restitution to the software manufacturer.

The case was prosecuted by Assistant U.S. Attorney Timothy S. Mangan of the U.S. Attorney’s Office for the Southern District of Ohio and Trial Attorney Thomas Daugherty of the Criminal Division’s Computer Crime and Intellectual Property Section.

The sentencing announced today is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to Justice.gov/dag/iptaskforce.

New Haven Man Sentenced to Three Years in Federal Prison for Distributing Crack

2012-01-27T16:27:00.000-08:00

David B. Fein, United States Attorney for the District of Connecticut, announced that CHARLES NICHOLS, 45, of New Haven, was sentenced today by Senior United States District Judge Ellen Bree Burns in New Haven to 36 months of imprisonment, followed by three years of supervised release, for distributing crack cocaine.

This matter stems from a joint law enforcement investigation conducted by the FBI New Haven Safe Streets Task Force, the DEA New Haven Task Force, the New Haven Police Department, and the Hamden Police Department. Through the use of court-authorized wiretaps, investigating officers identified and dismantled a large drug-trafficking organization that was centered in the Newhallville section of New Haven and Hamden and was responsible for the distribution of crack cocaine and cocaine throughout the Greater New Haven area. According to court documents and statements made in court, for a period of approximately two weeks in August and September 2010, NICHOLS purchased distribution quantities of crack cocaine from other members of the drug trafficking organization, and then redistributed some of the crack to others.

On November 10, 2011, NICHOLS pleaded guilty to one count of conspiring to distribute cocaine base (“crack cocaine”).

Forty-seven individuals have been charged in federal court with various narcotics offenses as a result of this investigation.

This matter was investigated by the Federal Bureau of Investigation’s New Haven Safe Streets Task Force (composed of members of members of the New Haven, Ansonia, Milford, Hamden, and East Haven Police Departments, and the Connecticut State Police and the Connecticut Department of Correction), the Drug Enforcement Administration’s New Haven Task Force (composed of members of the New Haven, West Haven, Meriden, Ansonia, Hamden, and Branford Police Departments), along with substantial participation by members of the New Haven and Hamden Police Departments. The United States Marshals Service also has assisted the investigation.

The investigation was funded in significant part by the United States Attorney’s Office Organized Crime Drug Enforcement Task Force and supported by the Office’s Project Safe Neighborhoods and Anti-Gang programs.

This matter is being prosecuted by Assistant United States Attorneys Christopher M. Mattei and Robert M. Spector.

Lancaster Man Pleads Guilty to Federal Child Pornography Offense

2012-01-27T13:45:00.000-08:00

Defendant Downloaded and Shared 800-1,000 Files of Child Pornography

DALLAS—Terry Don Jackson, 55, of Lancaster, Texas, pleaded guilty this afternoon before U.S. District Judge Jorge A. Solis to an information charging one count of transporting and shipping child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Jackson, who remains on bond, faces a statutory sentence of not less than five years, nor more than 20 years in federal prison, up to a $250,000 fine and up to a lifetime of supervised release. Sentencing is set for April 25, 2012, before Judge Solis.

According to documents filed in the case, Jackson admitted using the Internet and peer-to-peer file-sharing software to share and transmit images of child pornography to undercover agents on at least four separate occasions in 2010. When FBI agents executed a federal search warrant at his home in March 2011, they seized his computer which he used to facilitate his possession, receipt and distribution of child pornography. When interviewed, Jackson admitted that he has downloaded and shared approximately 800-1,000 files of child pornography, including images of children as young as 8 to 10 years old, engaged in sexual acts, and that he had approximately 100 “friends” with whom he was sharing files. He admitted knowing that some of the images and videos included images of prepubescent minors and material that portrayed sadistic and/or masochistic conduct.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. 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 Projectsafechildhood.gov

The investigation is being conducted by the FBI and the Plano, Texas Police Department. Assistant U.S. Attorney Lisa J. Miller is in charge of the prosecution.

Former Executive Director of Children’s Advocacy Center of Tom Green County, Inc. Pleads Guilty in Federal Court

2012-01-27T13:43:00.001-08:00

LUBBOCK, TX—Debra Rucker Brown, the former executive director of the Children’s Advocacy Center (CAC) of Tom Green County, Inc., pleaded guilty today before U.S. District Judge Sam R. Cummings to one count of theft concerning a federally funded program, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Brown faces a maximum statutory sentence of 10 years in prison and a $250,000 fine. In addition, restitution could be ordered. Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report.

Brown, 51, served as the CAC’s executive director for more than 16 years—from August 1994 through February 2011. The CAC is a non-profit program that operates Court Appointed Special Advocates (CASA); Hope House; Family Enrichment Services (FES); and the Child Fatality Review Team (CFRT). CAC’s funding comes mostly from grants and contracts for services, with the balance coming from charitable contributions and money raised through special events it hosts. A significant source of the grant funding is provided by the U.S. government through Department of Justice and Department of Health and Human Services.

According to documents filed in the case, Brown admitted that from January 1, 2008, through December 31, 2008, she knowingly embezzled or stole from the CAC by submitting and processing several fictitious reimbursement forms seeking reimbursement for items purportedly purchased for the CAC, or one of its programs, and for purported expenses incurred, including travel by her and others for CAC business. Using these fictitious reimbursement forms, Brown then caused CAC checks to be fraudulently issued payable to her or for her benefit. She also caused CAC checks to be issued payable to her without providing any supporting documentation. She tendered the signed fraudulent checks at her bank for deposit to her personal checking account or for cash, or submitted them as payment on her personal credit card accounts.

The case is being investigated by the FBI and the Texas Rangers. Assistant U.S. Attorney Ann C. Roberts of the U.S. Attorney’s Office in Lubbock is in charge of the prosecution.

Bonnie Sweeten Sentenced for Fraud Schemes

2012-01-27T13:42:00.001-08:00

PHILADELPHIA—Bonnie Sweeten, 40, of Pennsylvania, was sentenced today to 100 months in prison for fraud schemes in which she stole in excess of $600,000 from her employer and family members. Sweeten pleaded guilty June 21, 2011 to wire fraud and aggravated identity theft. In addition to the prison term, U.S. District Court Judge William H. Yohn, Jr., ordered Sweeten to pay restitution in the amount of $1,091,831 and a special assessment of $200. Sweeten remains in federal custody.

Sweeten stole funds from family members, from the law office where she had been employed, and from the law firm’s clients. She used the identity of another person and posed as another person while using false identification and forging signatures on various documents including a property settlement. Additionally, Sweeten stole the identity of a friend and fellow employee and used the identity to facilitate her flight from the jurisdiction. She also forged a signature of a judge on a court order for the purpose of fraudulently withdrawing client funds from a bank. As part of her scheme to defraud, Sweeten concocted an elaborate hoax that she and her daughter had been kidnapped in order to deceive family members and law enforcement as to her whereabouts.

The case was jointly investigated by the Federal Bureau of Investigation and the Bucks County District Attorney’s Detectives. It was prosecuted by Assistant United States Attorney Denise S. Wolf.

Officer Wellness: 10-hour Shift is Best

2012-01-27T12:09:00.001-08:00

Police executives can improve morale, make sure officers get more sleep, and reduce overtime costs by offering officers the option of working 10-hour shifts. Importantly, 10-hour shifts do not adversely affect performance, according to NIJ-funded research. Read the final report here: https://www.ncjrs.gov/pdffiles1/nij/grants/237330.pdf.

The prevalence of sleep disorders in police officers may be as high as 40 percent, almost twice the estimated rate of sleep disorders in the general population, according to NIJ-funded research. These disorders are associated with an increased risk of safety violations and adverse health conditions among police officers. Read about the results of the study in the Journal of the American Medical Association: http://jama.ama-assn.org/content/306/23/2567.full.pdf.

Former Little Rock Banker Pleads Guilty to Bank Fraud, Money Laundering, and Social Security Charges

2012-01-26T23:10:00.001-08:00

LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced that Kelly Harbert, age 46, formerly of Little Rock, Arkansas, plead guilty today to a three-count superseding felony information charging her with a single count of bank fraud, a single count of money laundering and a single count Social Security violation. She had previously been indicted by a federal grand jury in a 22-count indictment charging her with 17 counts of bank fraud, two counts of money laundering, and one count of aggravated identity theft.

Harbert previously worked for One Bank and Trust, N.A. (One Bank) as a vice president and commercial loan officer and then later as a senior vice president in Little Rock. In her guilty plea today before United States Chief Judge J. Leon Holmes, Harbert admitted to devising a scheme to defraud various financial institutions by obtaining funds under false pretenses and then converting the proceeds from these fraudulent loans and lines of credit to her own personal use. As a loan officer Harbert had authority to approve unsecured loans in amounts up to $50,000. Using her position at One Bank, Harbert approved various types of unsecured loans and lines of credit in the names of her parents without their knowledge or authorization.

Harbert also used her business relationships with other financial institutions in the Little Rock, Arkansas area to arrange for various types of unsecured loans and lines of credits at these banks in the names of her parents and in the names of some of Harbert’s bank clients, using their personal identifiers all without their knowledge or authorization.

Harbert admitted to money laundering by converting proceeds through deposits and transfers in amounts in excess of $10,000 from one account to another. Lastly, Harbert admitted to willfully and knowingly disclosing and using the Social Security number of another person to commit the bank fraud which is, by itself, a Social Security violation.

Harbert will be sentenced at a later date to be determined by the Court. The maximum statutory penalty for bank fraud is not more than 30 years’ imprisonment and up to a $1,000,000 fine or both with five years’ supervised release. The maximum statutory penalty for money laundering is up to10 years’ imprisonment and a fine of $250,000 with three years’ supervised release. The Social Security violation is not more than five years’ imprisonment, a fine of not more $250,000 or both and one year of supervised release.

This investigation was conducted by agents from the Little Rock Field Office of the Federal Bureau of Investigation, the Social Security Administration Office of Inspector General, and Internal Revenue Service Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Angela S. Jegley.

Kailua Man Indicted for Hurricane Katrina Fraud

2012-01-26T23:07:00.000-08:00

HONOLULU—A federal grand jury returned a 28-count indictment today against Kailua (Oahu) resident Dan Doyle, age 54, for an investment fraud scheme marketed primarily on AM radio financial shows airing in California. Florence T. Nakakuni, United States Attorney for the District of Hawaii, and Frank Montoya, Jr., Honolulu FBI Special Agent in Charge, announced the indictment of Doyle on 27 counts of wire fraud and one count of mail fraud relating to real estate projects designed to rebuild affected areas of Mississippi following the destruction of Hurricane Katrina.

The indictment describes a program known as the “Gulf Opportunity Zone” (“GO Zone”) implemented by the federal government to provide tax incentives to real estate investors and developers seeking to build affordable housing in the Gulf region following the August 2005 devastation of Hurricane Katrina.The indictment also alleges:

■Doyle owned and operated a business in Kailua using names including Investment Real Estate Network and Investment Radio Network. From late 2007 through December 2009, DOYLE allegedly purchased air-time on California talk radio stations to broadcast “radio infomercials” that he hosted and produced touting the benefits of Mississippi “GO Zone” real estate investments. Listeners to the programs were encouraged to call DOYLE’s office in Kailua for investment information.

■When potential investors called Doyle’s Kailua office, they were allegedly encouraged to wire transfer a refundable deposit to Doyle’s business bank account in Hawaii.
■Seventeen individuals wire transferred or mailed over $890,000 to DOYLE in Hawaii as deposits for “GO Zone” investments that were never built.
■Instead of preserving the money for potential refunding, DOYLE spent investor money on unrelated personal and business obligations including mortgage payments on his Kailua home and yachting expenses, according to the indictment.

For each of the wire and mail fraud counts, DOYLE faces a maximum period of imprisonment of 20 years, plus possible fines of up to $250,000 and terms of supervised release of up to three years. The court issued a penal summons for DOYLE to appear in federal court for arraignment An indictment is only an accusation and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

The investigation of this case was conducted by the Honolulu office of the FBI. The prosecution is being handled by Assistant United States Attorney Larry Tong. The public is reminded that charges in an indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.

Fall River Man Pleads Guilty to Child Pornography Charge

2012-01-26T22:34:00.000-08:00

BOSTON—A Fall River man was convicted yesterday in federal court on child pornography charges.

RICHARD A. DOHERTY, JR, 22, pleaded guilty before U.S. District Judge Denise J. Casper to one count of possession of child pornography. Had the case proceeded to trial, the government’s evidence would have proven that DOHERTY used a peer-to-peer software trade child pornography online. Over 10,000 images and videos depicting minors engaged in sexually explicit conduct, were found on DOHERTY’s computer.

Judge Casper scheduled sentencing for April 24, 2012. DOHERTY faces up to 10 years in prison, to be followed by up to a lifetime of supervised release and a $250,000 fine.

U.S. Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation-Boston Division made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Michael Yoon, Chief of Ortiz’s Major Crimes Unit, and Trial Attorney Thomas Franzinger of the Department of Justice’s Child Exploitation & Obscenity Section.

This case is being prosecuted as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood to protect children from online exploitation and abuse. Led by the U.S. Attorneys’ Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit Projectsafechildhood.gov/.

Three Men Charged with Conspiring to Rob a Norwood Check-Cashing Business

2012-01-26T22:32:00.001-08:00

BOSTON—Three men were arrested and charged today in federal court with conspiring to rob a Norwood check-cashing business.

JOHN SALVUCCI, 65, of Medford, GEORGE WHALEN, 55, of Winthrop and JAMES CHAMBERS, 53, of Stoneham were arrested early this morning pursuant to federal arrest warrants.

United States Attorney Carmen Ortiz said, “The actions alleged in the complaint involved a dangerous and violent plot to commit a robbery and kidnap a store owner. Thanks to the diligence and hard work of the investigative team, the plot was thwarted and the defendants now face federal criminal charges.”

“Early this morning, when the FBI and Massachusetts State Police SWAT teams arrested Mr. Salvucci, Mr. Whalen and Mr. Chambers, after a round-the-clock investigation by the FBI’s Violent Crimes Task Force, the violent conspiracy allegedly hatched by the trio was interdicted and halted, preventing harm to the intended victims,” said Richard DesLauriers, the FBI Special Agent in Charge. “The victims targeted in this plot, and the community at large, were spared needless violence because of the resolve of the FBI, United States Attorney’s Office, Massachusetts State Police, Boston, Medford, Saugus, Somerville, Norwood, Canton, and Malden Police Departments to ensure the plot never came to fruition. The Commonwealth should derive comfort from our combined day-to-day efforts to prevent, detect, and deter violent criminal activity, as exemplified by these arrests.”

The complaint alleges that the three defendants conspired to rob Forest Hills Check Cashing in Norwood. It is alleged that in order to further the robbery conspiracy, in January 2012, Salvucci sought to obtain the assistance of an individual, who subsequently informed the FBI about the planned robbery and agreed to cooperate in the investigation of the robbery. In a series of recorded meetings, Salvucci told the cooperator that he, along with Whalen and Chambers, were going to rob Forest Hills Check Cashing because the defendants believed that the business carried a significant amount of cash. During these meetings, Salvucci allegedly discussed kidnaping the owner of the check-cashing business in order to use the owner to help them commit the robbery. According to the complaint, Salvucci also told the cooperator that Whalen and Chambers would kidnap the owner from the owner’s home the morning of the intended robbery.

It is alleged that Salvucci told the cooperator that the three defendants were going to case the Norwood business on Jan. 21, 2012, in anticipation of the robbery. On Jan. 21, federal agents and law enforcement officers followed the three defendants as they traveled from north of Boston to the targeted business in Norwood. Agents and officers observed the three engage in various acts related to their gathering information about the business, including Whalen and Chambers entering the business itself.

If convicted on this charge, Salvucci, Whalen, and Chambers each face up to 20 years in prison to be followed by three years of supervised release and a $250,000 fine.

U.S. Attorney Ortiz and SAC DesLauriers made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Nadine Pellegrini and Michael Crowley of Ortiz’s Major Crimes Unit.

The details contained in the complaint are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

New York Men Sentenced in Health Care Fraud Wheelchair Scam

2012-01-26T22:30:00.001-08:00

OKLAHOMA CITY—Today, ADEDAYO O. ADEGBOYE and OLALEKAN RUFAI, both age 48 and both of Brooklyn, New York, were each sentenced by United States District Judge Timothy D. DeGiusti to serve 12 months and one day in prison for health care fraud in connection with the sale of power wheelchairs and wheelchair accessories to Medicare beneficiaries, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. In addition, Judge DeGiusti ordered that the men pay restitution in the amount of $299,624.

Adegboye and Rufai opened First Century Medical Supply, Inc., located in Oklahoma City, to engage in the business of selling power wheelchairs and wheelchair accessories to Medicare beneficiaries. Evidence presented at trial last August showed that from 2007 through 2009 the business obtained identification numbers and personal information from Medicare beneficiaries and used that information to submit claims to Medicare for power wheelchairs and wheelchair accessories. Evidence also showed that the defendants billed Medicare for some beneficiaries who did not receive a power wheelchair at all, some who received a less expensive motorized scooter, and for others who did not have a medical need for a wheelchair or did not even request a wheelchair. In all, the evidence showed that through First Century the defendants submitted over $1.1 million in fraudulent claims to Medicare.

Adegboye and Rufai were indicted by a federal grand jury in January of 2011. Following a six-day trial last August, a jury found both men guilty of committing five counts of health care fraud.

This case was investigated by the Federal Bureau of Investigation and the Department of Health and Human Services Office of Inspector General. This case was prosecuted by Assistant United States Attorneys Amanda L. Maxfield Green and Vicki Zemp Behenna.

Rochester Man Sentenced in Computer Intrusion Case

2012-01-26T21:54:00.001-08:00

ROCHESTER, NY—U.S. Attorney William J. Hochul, Jr. announced today that David George Smith, 47, of Rochester, N.Y., who was convicted of wrecklessly causing damage to a computer domain, was sentenced to pay a fine of $500 and to pay restitution to the victim company in the amount of $4,671 by U.S. Magistrate Judge Jonathan W. Feldman.

Assistant U.S. Attorney Bradley E. Tyler, who handled the case, stated that the defendant had been convicted of illegally accessing the computer system of a local company, and wrecklessly causing damage to that computer system.

The sentencing is the culmination of an investigation on the part of special agents of the Federal Bureau of Investigation, under the direction Special Agent in Charge Christopher M. Piehota.

Jefferson County Man Charged in Armed Carjacking

2012-01-26T21:53:00.000-08:00

BEAUMONT, TX—An 18-year-old Beaumont man has been charged with federal firearms and carjacking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Charles James Mishaw, III, was indicted on Jan. 11, 2012, and charged with carjacking and possession of a firearm during a violent crime. Mishaw made an initial appearance today and was ordered detained. He will appear before U.S. Magistrate Judge Zachary J. Hawthorn on Jan. 30, 2012, for arraignment.

According to information presented in court, on Nov. 15, 2011, Mishaw approached a 69-year-old woman as she was entering her gated apartment complex in Orange, Texas. As the victim rolled down her car window to access the security key pad, Mishaw approached and placed a small caliber hand gun to her head and ordered her to surrender the car and her purse. She complied. Law enforcement officers arrived almost immediately and were able to locate and stop the vehicle in Bridge City, Texas. Mishaw was still driving the vehicle and was in possession of the victim’s credit cards and the firearm he had used to steal the vehicle. The victim’s purse was recovered from where it had been thrown by the side of the road.

If convicted, Mishaw faces up to 15 years for the carjacking and a minimum of seven years for the firearms violation.

This case is being investigated by the FBI, the Orange Police Department, and the Bridge City Police Department and is being prosecuted by Assistant U.S. Attorney John Craft.

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.

City Man Who Shot at Oklahoma City Police Helicopter in Flight to Serve 46 Months in Prison

2012-01-26T21:38:00.000-08:00

OKLAHOMA CITY—MICHAEL P. McMICHAEL, 19, from Oklahoma City, was sentenced by United States District Judge Joe Heaton to serve 46 months in prison for being a habitual user of methamphetamine unlawfully in possession of a firearm, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.

McMichael was originally indicted by a federal grand jury on January 18, 2011, and charged with shooting at an Oklahoma City Police helicopter while in flight on June 25 or 26, 2010, damaging the vertical stabilizer bar of the aircraft. McMichael eventually pled guilty on April 11, 2011, to a superseding information charging him with being a habitual user of methamphetamine unlawfully in possession of a firearm.

At the sentencing hearing today, Judge Heaton specifically found that McMichael shot at an Oklahoma City Police helicopter while in flight prior to imposing the 46-month prison term.

This case is the result of an investigation conducted by the Federal Bureau of Investigation and the Oklahoma City Police Department. The case is being prosecuted by Assistant U.S. Attorney Randy Sengel.

Hogsett Keeps Promise to Prioritize Public Safety of Employees of Terre Haute Prison

2012-01-26T18:29:00.000-08:00

Four Federal Inmates Sentenced After Possessing Dangerous Contraband in Terre Haute Federal Prison

TERRE HAUTE—Joseph H. Hogsett, United States Attorney, announced today the sentencing of four inmates of the Federal Correctional Complex in Terre Haute following their guilty pleas to possession of contraband in prison. These unrelated cases were all the result of investigations by the Federal Bureau of Investigation and Federal Bureau of Prisons.

“On May 25, 2011, I met with Warden Lockett and his staff, toured the facility, and left making public a commitment that our office will do all that it can to protect the 700 employees of the Federal Correctional Complex,” Hogsett said. “This federal facility is an economic engine for this region, and prosecutions such as these help ensure the safety of those who work there. These prosecutions also serve as a powerful message to other federal inmates that criminal activity will not go unpunished.”

Hogsett discussed the zero-tolerance approach his office has toward the possession of weapons in the federal prison system because of the inherent danger to corrections officers who already face challenging situations in their day to day employment, as well as other prisoners. Hogsett noted that in the past, correctional officers in Terre Haute have been assaulted by inmates who manage to craft a weapon from something as common as a pen, a kitchen utensil, or a piece of fence.

“If smuggled inside the complex, contraband becomes power,” Hogsett added. “We will do everything that we can to ensure that the power stays firmly in the hands of those who run the prison, not in the hands of those who reside there.”

Hogsett also pledged that the U.S. Attorney’s Office will continue to prosecute inmates and visitors who introduce marijuana and other drugs into the prison system. Such drugs create chaos among the prisoners and create additional dangers for prison employees.

On April 30, 2011, Ernesto Abeyta, age 36, an inmate serving a sentence related to drug trafficking with a firearm, was observed with marijuana after a visit with his wife. Abeyta’s wife brought the marijuana into the prison in over 20 small, multi-colored balloons which Abeyta attempted to consume while visiting with his children in the prison visitation room. Prison officials successfully intervened and prevented the marijuana from being introduced further into the prison. U.S. District Judge Jane Magnus-Stinson sentenced Abeyta to nine months to be served consecutive to any sentence previously imposed. Ernesto Abeyta’s wife, Tina Abeyta, will be separately prosecuted.

In an additional case, prison officials determined that Wilbert Lowe, age 26, currently serving a sentence related to his illegal possession of a firearm as a convicted felon, possessed marijuana within the prison on January 22, 2011. Lowe alleged that he purchased the marijuana from another inmate, and stated he carried it around with him to prevent it from being stolen by other inmates. Judge Magnus-Stinson sentenced Lowe to 15 months in prison consecutive to his current sentence.

On January 27, 2011, a wooden object, nine inches in length, sharpened to a deadly point, and designed to be a weapon, was found on the person of inmate Michael Toombs, age 27, who is currently serving a sentence for armed robbery. Following an investigation and subsequent guilty plea, Judge Magnus-Stinson sentenced Toombs to 27 months in prison consecutive to any previously imposed sentence.

Jeremy Johnson, age 22, who is currently serving a sentence for armed robbery, was also sentenced by U.S. District Judge William T. Lawrence to 20 months in prison for the possession of contraband in prison. During a random search at the prison on January 24, 2011, Johnson was found to be in possession of a homemade metal weapon described as “shank”—a piece of metal approximately six inches long and sharpened to a deadly point.

“I want to offer my sincere thanks to the corrections officers and support staff at the Federal Correctional Complex for all that they do to serve their country and defend this community,” Hogsett said. “And today, I reaffirm my office’s commitment to doing all that we can to help defend them.”

According to Assistant U.S. Attorney James M. Warden, who prosecuted the cases for the government, Abeyta, Lowe, and Toombs will also serve terms of supervised release at the conclusion of their prison terms.

Granite City Man Charged with Attempted Extortion by Means of Threatening Physical Violence

2012-01-26T18:05:00.000-08:00

The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that Brett L. Nash, 45, of Granite City, was arraigned in federal district court in East St. Louis yesterday on charges that he attempted to extort a targeted individual by threatening physical violence. The charges were alleged in a criminal complaint filed on January 24, 2012.

The criminal complaint charges Nash with attempted extortion, by use of threats of violence, under the Hobbs Act. The charge carries a maximum penalty of 20 years in prison, a $250,000 fine, and up to five years of supervised release.

The complaint alleges that on January 9, 2012, Nash tried to recruit an acquaintance’s assistance in carrying out an extortion scheme aimed at obtaining money from a targeted individual through threats of violence. After Nash obtained the money, it is alleged that Nash planned on killing the targeted individual in a manner which would look like an accident. The acquaintance reported the scheme to the Federal Bureau of Investigation and remained in contact with Nash in an undercover capacity.

The complaint alleges that over the course of the next two weeks, Nash had multiple meetings with the undercover acquaintance for the specific purpose of planning out the extortion scheme. Nash’s plan focused on the seizure of the targeted individual and the use of threats and force to get the individual to withdraw large amounts of money from his personal bank account and from a safe in the individual’s home. Nash planned on splitting the proceeds of the extortion with his undercover acquaintance. It is further alleged that Nash gathered many of the items needed for the operation including a head covering mask, a set of handcuffs and a CO2 Gun.

It is alleged that on January 23, 2012, the date of Nash’s arrest, he and his undercover acquaintance made a dry run to the targeted individual’s house to scout the location, for the planned operation. The complaint alleges that Nash had planned to execute his scheme later on that very evening.

The case was investigated by agents of the Federal Bureau of Investigation and officers of the Madison County Sheriff’s Department. The case is being prosecuted by Assistant U.S. Attorney Stephen B. Clark and Special Assistant U.S. Attorney Christopher C. Heery.

A criminal complaint is a charge against the defendant. Under the law, that charge is merely an accusation and the defendant is presumed innocent unless proven guilty.