March 25, 2010 - WASHINGTON—The Justice Department announced that Lloyd Mack Royal, III aka “Blyss,” aka “B,” aka “Furious,” was convicted late yesterday of sex trafficking of minors and sex trafficking by force, fraud, and coercion, as well as firearm and drug charges. Two other co-defendants, Angela Samantha Bentolila and Paul Raymond Green, previously pleaded guilty to related charges.
The jury found Royal guilty of three counts of sex trafficking, including sex trafficking of minors and sex trafficking by force, fraud, and coercion. The jury also convicted Royal of conspiracy to commit sex trafficking, conspiracy to distribute controlled substances, possession of a firearm in the commission of a crime of violence, and two counts of distribution of controlled substances to a person under the age of 21.
“The defendant preyed upon vulnerable minors and prostituted them by a variety of deplorable means for his own benefit,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Department of Justice will continue to devote its full efforts to prosecuting those who commit such exploitative crimes.”
“We have made it a priority in Maryland to pursue criminals who lure or coerce children into prostitution,” said U.S. Attorney Rod J. Rosenstein. “Maryland’s Human Trafficking Task Force works with law enforcement officers and private sector organizations to identify and rescue victims of human trafficking and prosecute criminals who exploit them. Pimps who victimize children are at the top of our list.”
Sentencing before U.S. District Judge Alexander Williams, Jr. is scheduled for April 29, 2010. Royal faces incarceration of up to life in prison and potential fines in excess of $1 million.
In announcing the convictions, Assistant Attorney General Perez, and U.S. Attorney Rosenstein commended the Federal Bureau of Investigation, Montgomery County Police Department and Maryland Human Trafficking Task Force for their work in this cooperative investigation and prosecution. Assistant U.S. Attorney Solette Magnelli and Civil Rights Division Human Trafficking Prosecution Unit Trial Attorney Jim Felte are prosecuting this case for the government.
Thursday, March 25, 2010
Attorney General Eric Holder Delivers Remarks at the Phoenix Mortgage Fraud Summit
Phoenix, Ariz. ~ Thursday, March 25, 2010
Thank you all for being here. Today’s summit marks another important step in our aggressive, comprehensive, and collaborative effort to combat mortgage fraud and protect American homeowners.
Here in Phoenix, and in cities across the country, mortgage fraud crimes have reached crisis proportions. But we are fighting back. And with the Financial Fraud Enforcement Task Force that President Obama created last November, we’re tackling the challenges and consequences of mortgage fraud in bold, innovative, and coordinated ways.
The Justice Department is honored to lead this historic initiative. And we’re proud to work in partnership with the FBI, with agencies across the federal government, and with state and local law enforcement offices. Here in Arizona, we’re fortunate to have the strong leadership of U.S. Attorney Dennis Burke and Attorney General Terry Goddard. And we’re all grateful for the outstanding work of Assistant Attorney General Tony West, who heads the Justice Department’s Civil Division, and U.S. Attorney for the Eastern District of California, Ben Wagner, who both serve as co-chair of the Task Force’s Mortgage Fraud Working Group.
Through this broad federal, state, and local coalition, we’re using every tool at our disposal – including advanced technologies, new communication platforms, and the very best talent we have – to prevent, to prosecute, and to punish mortgage fraud crimes. And we’re making meaningful progress in our work to protect families and communities, to combat discrimination in our lending markets, to recover proceeds for fraud victims, and to restore confidence in our housing and financial markets.
Now, in recent weeks, we’ve seen some encouraging signs that our economy is improving. But we also know that millions of Americans are still struggling to cope with the housing crisis that has devastated so many neighborhoods and families.
This morning, we heard from victims and industry experts about how mortgage fraud crimes are evolving and about the pain caused by these schemes. And, this afternoon, the task force will hear from local law enforcement representatives who will offer their recommendations on how we can respond quickly and fight back most effectively.
This discussion is critical. We will use information gained here in Phoenix – and in other epicenters of mortgage fraud – to focus and strengthen our law enforcement activities. Mortgage fraud schemes must be stopped in their tracks. And those willing to exploit our national financial crisis for personal gain will be brought to justice.
In fact, right now, the FBI is investigating more than 2,800 mortgage fraud cases, up almost 400 percent from five years ago. And, with additional resources, we will be able to enhance and expand current efforts. Today, I’m pleased to announce that new investments included in the FY 2010 budget will soon be distributed to combat mortgage fraud. This spring, we expect nearly $8 million to be allocated for this work, and nearly $2 million of this funding will go to Arizona. I’m confident that these new investments will allow us to build on the recent success we’ve seen across the country and the progress that’s been made here in Arizona.
Just last week, Attorney General Goddard announced a $120,000 settlement with several defendants for their roles in a real estate scheme in Pima County. And two days earlier, Mario Bernadel – the leader of a massive fraud scheme here in Phoenix – was sentenced to 17 years in federal prison. He and his co-conspirators had used fraudulent documents to buy nearly 40 properties, resulting in more than $9 million in losses to this city’s banks. Like so many others, Mr. Bernadel had seen mortgage fraud as a pathway to riches. Instead, it proved to be his ticket to jail.
Let his case be a lesson to those who would engage in mortgage fraud schemes: You will be found. You will be prosecuted. And you will be punished.
Let this case, and this summit, also send a message to mortgage fraud victims: We are working tirelessly to restore what you’ve lost and to rebuild the trust that will drive our nation’s economic recovery.
Thank you all for you partnership in this work and your historic commitment to protecting the American people.
Thank you all for being here. Today’s summit marks another important step in our aggressive, comprehensive, and collaborative effort to combat mortgage fraud and protect American homeowners.
Here in Phoenix, and in cities across the country, mortgage fraud crimes have reached crisis proportions. But we are fighting back. And with the Financial Fraud Enforcement Task Force that President Obama created last November, we’re tackling the challenges and consequences of mortgage fraud in bold, innovative, and coordinated ways.
The Justice Department is honored to lead this historic initiative. And we’re proud to work in partnership with the FBI, with agencies across the federal government, and with state and local law enforcement offices. Here in Arizona, we’re fortunate to have the strong leadership of U.S. Attorney Dennis Burke and Attorney General Terry Goddard. And we’re all grateful for the outstanding work of Assistant Attorney General Tony West, who heads the Justice Department’s Civil Division, and U.S. Attorney for the Eastern District of California, Ben Wagner, who both serve as co-chair of the Task Force’s Mortgage Fraud Working Group.
Through this broad federal, state, and local coalition, we’re using every tool at our disposal – including advanced technologies, new communication platforms, and the very best talent we have – to prevent, to prosecute, and to punish mortgage fraud crimes. And we’re making meaningful progress in our work to protect families and communities, to combat discrimination in our lending markets, to recover proceeds for fraud victims, and to restore confidence in our housing and financial markets.
Now, in recent weeks, we’ve seen some encouraging signs that our economy is improving. But we also know that millions of Americans are still struggling to cope with the housing crisis that has devastated so many neighborhoods and families.
This morning, we heard from victims and industry experts about how mortgage fraud crimes are evolving and about the pain caused by these schemes. And, this afternoon, the task force will hear from local law enforcement representatives who will offer their recommendations on how we can respond quickly and fight back most effectively.
This discussion is critical. We will use information gained here in Phoenix – and in other epicenters of mortgage fraud – to focus and strengthen our law enforcement activities. Mortgage fraud schemes must be stopped in their tracks. And those willing to exploit our national financial crisis for personal gain will be brought to justice.
In fact, right now, the FBI is investigating more than 2,800 mortgage fraud cases, up almost 400 percent from five years ago. And, with additional resources, we will be able to enhance and expand current efforts. Today, I’m pleased to announce that new investments included in the FY 2010 budget will soon be distributed to combat mortgage fraud. This spring, we expect nearly $8 million to be allocated for this work, and nearly $2 million of this funding will go to Arizona. I’m confident that these new investments will allow us to build on the recent success we’ve seen across the country and the progress that’s been made here in Arizona.
Just last week, Attorney General Goddard announced a $120,000 settlement with several defendants for their roles in a real estate scheme in Pima County. And two days earlier, Mario Bernadel – the leader of a massive fraud scheme here in Phoenix – was sentenced to 17 years in federal prison. He and his co-conspirators had used fraudulent documents to buy nearly 40 properties, resulting in more than $9 million in losses to this city’s banks. Like so many others, Mr. Bernadel had seen mortgage fraud as a pathway to riches. Instead, it proved to be his ticket to jail.
Let his case be a lesson to those who would engage in mortgage fraud schemes: You will be found. You will be prosecuted. And you will be punished.
Let this case, and this summit, also send a message to mortgage fraud victims: We are working tirelessly to restore what you’ve lost and to rebuild the trust that will drive our nation’s economic recovery.
Thank you all for you partnership in this work and your historic commitment to protecting the American people.
Memphis, Tennessee Man Sentenced for Interstate Transportation of Stolen Goods
March 25, 2010 - ST. LOUIS, MO—The United States Attorney’s Office announced today that Richard J. Shorter was sentenced to 15 months' imprisonment and three years of supervised release on charges of theft of an interstate shipment. Shorter was also ordered to pay $60,000 in restitution from a prior conviction that he never paid.
On November 23, 2008, Shorter went to the B & D Auto Truck Plaza in Lebanon, Missouri, where he discovered a trailer that was unattended while its driver was washing his tractor. Shorter attached the unattended trailer to his tractor and drove away. The stolen trailer was a 2000 Trailmobile 53' box trailer that contained consumer products that were being shipped from Springfield, Missouri, to Marquoketa, Iowa. The value of the goods contained in the trailer was approximately $67,000 and was intended for delivery to Dollar General. Shorter was arrested by the Franklin County Sheriff’s Department. At the time of his arrest he possessed pry bars, trailer tape, bolt cutters, and other equipment used in thefts involving trailers.
RICHARD J. SHORTER, Memphis, Tennessee, pleaded guilty December 21, 2009, to one felony count of theft of an interstate shipment. He appeared today for sentencing before United States District Judge Catherine D. Perry.
This case was investigated by the Federal Bureau of Investigation, the Franklin County Sheriff’s Office and the Lebanon, Missouri, Police Department. Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney’s Office.
On November 23, 2008, Shorter went to the B & D Auto Truck Plaza in Lebanon, Missouri, where he discovered a trailer that was unattended while its driver was washing his tractor. Shorter attached the unattended trailer to his tractor and drove away. The stolen trailer was a 2000 Trailmobile 53' box trailer that contained consumer products that were being shipped from Springfield, Missouri, to Marquoketa, Iowa. The value of the goods contained in the trailer was approximately $67,000 and was intended for delivery to Dollar General. Shorter was arrested by the Franklin County Sheriff’s Department. At the time of his arrest he possessed pry bars, trailer tape, bolt cutters, and other equipment used in thefts involving trailers.
RICHARD J. SHORTER, Memphis, Tennessee, pleaded guilty December 21, 2009, to one felony count of theft of an interstate shipment. He appeared today for sentencing before United States District Judge Catherine D. Perry.
This case was investigated by the Federal Bureau of Investigation, the Franklin County Sheriff’s Office and the Lebanon, Missouri, Police Department. Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney’s Office.
Boston FBI Asks for Public’s Help in Locating Bank Robber
March 25, 2010 - The FBI is releasing photographs in hopes that coverage by media will generate tips from the public as to the identity and location of the subject who is believed responsible for a bank robbery on March 5, 2010. At approximately 11:19 a.m., a lone male entered the Sovereign Bank, 125 Broadway, Somerville, MA. He threatened a gun and demanded money from the teller.
Witnesses describe the subject as:
Gender: Male
Age: Late 30's
Height: 5'8"-5'10"
Weight: Heavy build
Misc: Wearing a dark jacket and dark winter knit cap
Anyone with information is asked to call the FBI at (617)742-5533.
Augusta Businessman Walter Marion Williams Pleads Guilty to Mail Fraud
Owner of Insurance Company Defrauded Clients Out of Over $1.7 Million
March 25, 2010 - AUGUSTA, GA—Edward J. Tarver, United States Attorney for the Southern District of Georgia, announced today the guilty plea of Augusta businessman Walter Marion Williams, age 65, in United States District Court before District Judge J. Randal Hall. Williams pled guilty to count one of an information that charged Wire Fraud in violation of Title 18, United States Code, Section 1341.
United States Attorney Ed Tarver stated, “This case demonstrates that the United States Attorney’s Office remains committed to the investigation and prosecution of those who use interstate wires, the mail, the telephone, or the Internet to commit fraud against innocent victims.”
The one-count information against Williams was filed by the United States Attorney in February of 2010, and alleged that from May 1992 through October 2009, Williams defrauded investors. During today’s guilty plea hearing, the evidence showed that in October 2009, the United States Federal Bureau of Investigation began an investigation of Williams to determine whether he had defrauded clients of their investments in his insurance and investment company, Walt Williams Insurance Associates. The evidence further showed that Williams misled his clients into believing that he had invested money for them in various life insurance and annuity investments. Williams failed to invest the funds and instead deposited them into his own personal and business accounts. The evidence showed that Williams defrauded numerous clients out of more than $1.7 million.
Williams faces a maximum statutory penalty of twenty (20) years' imprisonment; a fine of $250,000; and three (3) years of supervised release. As part of his plea agreement with the government, the court can order that Williams make restitution to all the victims of this fraudulent scheme. Williams remains free on bond pending sentence. A sentencing date will be scheduled following completion of a presentence investigation and report by the United States Probation Office.
This case was investigated by agents with the Federal Bureau of Investigation, led by Special Agent Paul Kubala. Assistant United States Attorney Stephen T. Inman prosecuted the case.
For further information, please contact James D. Durham, First Assistant United States Attorney, at (912) 201-2547.
March 25, 2010 - AUGUSTA, GA—Edward J. Tarver, United States Attorney for the Southern District of Georgia, announced today the guilty plea of Augusta businessman Walter Marion Williams, age 65, in United States District Court before District Judge J. Randal Hall. Williams pled guilty to count one of an information that charged Wire Fraud in violation of Title 18, United States Code, Section 1341.
United States Attorney Ed Tarver stated, “This case demonstrates that the United States Attorney’s Office remains committed to the investigation and prosecution of those who use interstate wires, the mail, the telephone, or the Internet to commit fraud against innocent victims.”
The one-count information against Williams was filed by the United States Attorney in February of 2010, and alleged that from May 1992 through October 2009, Williams defrauded investors. During today’s guilty plea hearing, the evidence showed that in October 2009, the United States Federal Bureau of Investigation began an investigation of Williams to determine whether he had defrauded clients of their investments in his insurance and investment company, Walt Williams Insurance Associates. The evidence further showed that Williams misled his clients into believing that he had invested money for them in various life insurance and annuity investments. Williams failed to invest the funds and instead deposited them into his own personal and business accounts. The evidence showed that Williams defrauded numerous clients out of more than $1.7 million.
Williams faces a maximum statutory penalty of twenty (20) years' imprisonment; a fine of $250,000; and three (3) years of supervised release. As part of his plea agreement with the government, the court can order that Williams make restitution to all the victims of this fraudulent scheme. Williams remains free on bond pending sentence. A sentencing date will be scheduled following completion of a presentence investigation and report by the United States Probation Office.
This case was investigated by agents with the Federal Bureau of Investigation, led by Special Agent Paul Kubala. Assistant United States Attorney Stephen T. Inman prosecuted the case.
For further information, please contact James D. Durham, First Assistant United States Attorney, at (912) 201-2547.
Tennessee Man Sentenced to 183 Months in Prison for Burning Islamic Center
March 25, 2010 - WASHINGTON – Senior Judge Robert L. Echols of the Middle District of Tennessee today sentenced Eric Ian Baker to 183 months in prison for vandalizing and burning down the Islamic Center of Columbia, Tenn., the Justice Department announced. Baker pleaded guilty on Sept. 18, 2009, to destruction of religious property and using fire to commit a felony.
Baker, 34, previously admitted to the court that he and two others constructed Molotov cocktail explosive devices, ignited them and used them to destroy the mosque on Feb. 9, 2008. Baker further admitted that he committed the arson because of the religious character of the property and that he painted swastikas and the phrase "White Power" on the mosque in the course of the arson.
One of Baker’s co-defendants, Michael Corey Golden, was sentenced to 171 months for his role in the arson. The other co-defendant, Jonathan Edward Stone, pleaded guilty but has not yet been sentenced.
"The right to worship without fear of this kind of violent interference is among our most fundamental civil rights," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We will aggressively prosecute anyone who seeks to intimidate or injure any congregation because of what they believe, how they worship, or who they are."
"This type of crime strikes at the heart of our civil rights and religious freedoms in America. I am very pleased that through local, state and federal cooperation, all defendants responsible for this vile attack have been brought to justice," said U.S. Attorney Edward M. Yarbrough for the Middle District of Tennessee.
This case was investigated by the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Tennessee State Bomb and Arson and the Columbia, Tenn., Police Department. Assistant U.S. Attorney Hal McDonough from the U.S. Attorney’s Office in Nashville and Trial Attorney Jonathan Skrmetti from the Civil Rights Division prosecuted the case.
Baker, 34, previously admitted to the court that he and two others constructed Molotov cocktail explosive devices, ignited them and used them to destroy the mosque on Feb. 9, 2008. Baker further admitted that he committed the arson because of the religious character of the property and that he painted swastikas and the phrase "White Power" on the mosque in the course of the arson.
One of Baker’s co-defendants, Michael Corey Golden, was sentenced to 171 months for his role in the arson. The other co-defendant, Jonathan Edward Stone, pleaded guilty but has not yet been sentenced.
"The right to worship without fear of this kind of violent interference is among our most fundamental civil rights," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We will aggressively prosecute anyone who seeks to intimidate or injure any congregation because of what they believe, how they worship, or who they are."
"This type of crime strikes at the heart of our civil rights and religious freedoms in America. I am very pleased that through local, state and federal cooperation, all defendants responsible for this vile attack have been brought to justice," said U.S. Attorney Edward M. Yarbrough for the Middle District of Tennessee.
This case was investigated by the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Tennessee State Bomb and Arson and the Columbia, Tenn., Police Department. Assistant U.S. Attorney Hal McDonough from the U.S. Attorney’s Office in Nashville and Trial Attorney Jonathan Skrmetti from the Civil Rights Division prosecuted the case.
Two Puerto Rico Police Officers Sentenced for Federal Civil Rights Charges Related to Fatal Assault
March 25, 2010 - WASHINGTON – U.S. District Court Judge Daniel R. Dominguez sentenced former San Juan, Puerto Rico Police Officers, Carlos Pagan Ferrer, 32, and Juan Morales Rosado, 32, today for their role in the fatal assault by San Juan officers against Jose Rivera Robles, an unarmed civilian, the Justice Department announced. Defendants Pagan Ferrer and Morales Rosado both received sentences of 10 years, after conviction at trial for using excessive force, resulting in bodily injury, and for committing various obstruction of justice offenses.
At trial, the government presented evidence that on July 20, 2003, in the course of arresting the victim at a Citgo gas station, defendants Morales Rosado and Carlos Pagan, as well as other co-defendants repeatedly kicked and otherwise assaulted Rivera Robles when he was lying face down on the ground, in no way resisting or posing a threat to the officers. Defendant Aaron Vidal Maldonado was the senior officer on the scene during the gas station beating, and failed to discourage the excessive force used by his subordinates. After this beating, defendant Vidal Maldonado directed officers to transport the badly injured, semiconscious victim to a nearby police station, where a co-defendant again assaulted the victim in Vidal Maldonado’s presence. The injuries to the victim caused by the beatings resulted in his death.
"Law enforcement officers who use their badges as an excuse to commit egregious acts of violence are an affront to the rule of law," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will continue to aggressively prosecute officers who abuse their power in this manner."
On December 20, 2009, co-defendants Elias Perocier Morales and Eliezer Rivera Gonzalez were sentenced to 10 years in prison and 6-and-a-half years in prison, respectively, for their roles in the unlawful beating. Co-defendants Aaron Vidal Maldonado and Jose Pacheco Cruz are scheduled for April 30, 2010.
Special Agent Luis Rivero of the FBI’s San Juan Office investigated this matter. The case was prosecuted by Assistant U.S. Attorney Antonio Bazan, Special Litigation Counsel Gerard Hogan, and Trial Attorney Avner Shapiro of the Justice Department’s Civil Rights Division.
At trial, the government presented evidence that on July 20, 2003, in the course of arresting the victim at a Citgo gas station, defendants Morales Rosado and Carlos Pagan, as well as other co-defendants repeatedly kicked and otherwise assaulted Rivera Robles when he was lying face down on the ground, in no way resisting or posing a threat to the officers. Defendant Aaron Vidal Maldonado was the senior officer on the scene during the gas station beating, and failed to discourage the excessive force used by his subordinates. After this beating, defendant Vidal Maldonado directed officers to transport the badly injured, semiconscious victim to a nearby police station, where a co-defendant again assaulted the victim in Vidal Maldonado’s presence. The injuries to the victim caused by the beatings resulted in his death.
"Law enforcement officers who use their badges as an excuse to commit egregious acts of violence are an affront to the rule of law," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will continue to aggressively prosecute officers who abuse their power in this manner."
On December 20, 2009, co-defendants Elias Perocier Morales and Eliezer Rivera Gonzalez were sentenced to 10 years in prison and 6-and-a-half years in prison, respectively, for their roles in the unlawful beating. Co-defendants Aaron Vidal Maldonado and Jose Pacheco Cruz are scheduled for April 30, 2010.
Special Agent Luis Rivero of the FBI’s San Juan Office investigated this matter. The case was prosecuted by Assistant U.S. Attorney Antonio Bazan, Special Litigation Counsel Gerard Hogan, and Trial Attorney Avner Shapiro of the Justice Department’s Civil Rights Division.
Trotwood Man Pleads Guilty in Federal Court to String of Armed Bank Robberies
Robberies Included Attempt to Abduct Credit Union Manager
March 25, 2010 - DAYTON—Chukwuemeka O. Eziolisa, 25, of Trotwood, pleaded guilty to one count of armed credit union robbery and one count of brandishing a firearm during and in relation to a crime of violence, stemming from the December, 2009 robbery at Abbey Credit Union in Vandalia, Ohio.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Keith L. Bennett, Special Agent in Charge, Federal Bureau of Investigations; Chief Robert Schommer, Huber Heights Police Department; and Chief Douglas L. Knight, Vandalia Division of Police, announced the pleas entered today before United States Magistrate Judge Michael R. Merz. The case is assigned to -- and sentence will be imposed by -- United States District Judge Thomas M. Rose, who set sentencing for June 18, 2010.
According to the statement of facts filed in Court, Eziolisa entered Abbey Credit Union on Falls Church Drive in Vandalia on December 19, 2009, wearing black clothing, black gloves, and a black ski mask. Eziolisa brandished a .380 Bryco Jennings handgun and demanded money from credit union employees, fleeing with cash. Officers later recovered the loaded firearm at Eziolisa’s residence during the execution of a search warrant.
As part of his plea, Eziolisa admitted committing additional crimes, including an attempted robbery of a credit union on December 4, 2009, and a related abduction attempt, stemming from a scheme where he sat in the parking lot of the DayMet credit Union on Wagner Ford Road waiting for the credit union to close. Eziolisa then followed the credit union manager in her car and, when she stopped at a restaurant on her way home, Eziolisa pulled up next to her car, pointed a firearm at her, and told the manager to get in his car intending to take her back to the credit union so he could rob it. The manager thwarted the attempted abduction, assault and robbery by yelling, fleeing to a neighboring business and obtaining help, while Eziolisa fled the scene.
Eziolisa further admitted to robbing the Check Into Cash business on Brandt Pike in Huber Heights on December 5, 2009, when he donned a black ski mask, brandished a firearm, and demanded money from an employee, again fleeing with cash.
Eziolisa was arrested on December 29, 2009 and has been in custody since his arrest.
Eziolisa faces a sentence of up to 25 years in prison on the armed credit union robbery charge and a consecutive term of at least seven years up to life imprisonment for brandishing the firearm during and in relation to the robbery. Both counts carry additional penalties including a fine of up to a $250,000 and up to five years of supervised release, a form of probation, on each count. He also faces additional non-binding federal Sentencing Guidelines enhancements for the additional robbery and attempted abduction and robbery.
Stewart commended the investigation and handling of this case by FBI agents, Huber Heights and Vandalia police officers and detectives, and District Criminal Chief Vipal Patel and Assistant United States Attorney Andrew Hunt, who are prosecuting the case.
March 25, 2010 - DAYTON—Chukwuemeka O. Eziolisa, 25, of Trotwood, pleaded guilty to one count of armed credit union robbery and one count of brandishing a firearm during and in relation to a crime of violence, stemming from the December, 2009 robbery at Abbey Credit Union in Vandalia, Ohio.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Keith L. Bennett, Special Agent in Charge, Federal Bureau of Investigations; Chief Robert Schommer, Huber Heights Police Department; and Chief Douglas L. Knight, Vandalia Division of Police, announced the pleas entered today before United States Magistrate Judge Michael R. Merz. The case is assigned to -- and sentence will be imposed by -- United States District Judge Thomas M. Rose, who set sentencing for June 18, 2010.
According to the statement of facts filed in Court, Eziolisa entered Abbey Credit Union on Falls Church Drive in Vandalia on December 19, 2009, wearing black clothing, black gloves, and a black ski mask. Eziolisa brandished a .380 Bryco Jennings handgun and demanded money from credit union employees, fleeing with cash. Officers later recovered the loaded firearm at Eziolisa’s residence during the execution of a search warrant.
As part of his plea, Eziolisa admitted committing additional crimes, including an attempted robbery of a credit union on December 4, 2009, and a related abduction attempt, stemming from a scheme where he sat in the parking lot of the DayMet credit Union on Wagner Ford Road waiting for the credit union to close. Eziolisa then followed the credit union manager in her car and, when she stopped at a restaurant on her way home, Eziolisa pulled up next to her car, pointed a firearm at her, and told the manager to get in his car intending to take her back to the credit union so he could rob it. The manager thwarted the attempted abduction, assault and robbery by yelling, fleeing to a neighboring business and obtaining help, while Eziolisa fled the scene.
Eziolisa further admitted to robbing the Check Into Cash business on Brandt Pike in Huber Heights on December 5, 2009, when he donned a black ski mask, brandished a firearm, and demanded money from an employee, again fleeing with cash.
Eziolisa was arrested on December 29, 2009 and has been in custody since his arrest.
Eziolisa faces a sentence of up to 25 years in prison on the armed credit union robbery charge and a consecutive term of at least seven years up to life imprisonment for brandishing the firearm during and in relation to the robbery. Both counts carry additional penalties including a fine of up to a $250,000 and up to five years of supervised release, a form of probation, on each count. He also faces additional non-binding federal Sentencing Guidelines enhancements for the additional robbery and attempted abduction and robbery.
Stewart commended the investigation and handling of this case by FBI agents, Huber Heights and Vandalia police officers and detectives, and District Criminal Chief Vipal Patel and Assistant United States Attorney Andrew Hunt, who are prosecuting the case.
Former Chico Man Convicted of Federal Hate Crime for Race-Motivated Assault
March 25, 2010 - SACRAMENTO, CA—A federal jury today convicted Eric Clawson, 28, of San Francisco, of a federal hate crime for his assault of an African-American man in a Chico bar, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, and Benjamin B. Wagner, U.S. Attorney for the Eastern District of California.
Clawson was convicted following a three-day trial. The evidence at trial showed that on the evening of July 6, 2008, Clawson entered Riley’s Bar & Grill in Chico while the victim was sitting inside with a friend. Shortly after entering the bar, Clawson used a racially derogatory term to object to the victim’s presence. Clawson repeated this slur several times and, a short while later, without any verbal or physical provocation, approached and punched the victim in the face. The assault rendered the victim unconscious and inflicted injuries to his face and mouth.
A second defendant and associate of Clawson who was with Clawson when the assault took place, Joe Grivette, pleaded guilty on March 15, 2010, to a related charge of concealing a felony.
“Bias-motivated acts of violence are offensive to our nation's fundamental values of equal rights and equal justice. Such acts of violence have no place in our country,” said Assistant Attorney General Perez. “The Justice Department is committed to vigorously prosecuting the federal laws prohibiting violent acts motivated by hate.”
“There is no place for the reprehensible, violent conduct of the defendant in our community,” said U.S. Attorney Wagner. “We will continue working together with state and local authorities to bring to justice those who intimidate and assault people because of race or national origin.”
Clawson faces a maximum of 10 years in prison and a fine of $250,000. Sentencing is scheduled for June 10, 2010. He was remanded into custody following today’s verdict.
Agents from the Sacramento Division of the Federal Bureau of Investigation, investigators from the Butte County District Attorney’s Office and the Chico Police Department investigated this matter. The case is being jointly prosecuted by Assistant U.S. Attorney Russell Carlberg of the U.S. Attorney’s Office for the Eastern District of California and Trial Attorney Edward Chung of the Justice Department’s Civil Rights Division.
Clawson was convicted following a three-day trial. The evidence at trial showed that on the evening of July 6, 2008, Clawson entered Riley’s Bar & Grill in Chico while the victim was sitting inside with a friend. Shortly after entering the bar, Clawson used a racially derogatory term to object to the victim’s presence. Clawson repeated this slur several times and, a short while later, without any verbal or physical provocation, approached and punched the victim in the face. The assault rendered the victim unconscious and inflicted injuries to his face and mouth.
A second defendant and associate of Clawson who was with Clawson when the assault took place, Joe Grivette, pleaded guilty on March 15, 2010, to a related charge of concealing a felony.
“Bias-motivated acts of violence are offensive to our nation's fundamental values of equal rights and equal justice. Such acts of violence have no place in our country,” said Assistant Attorney General Perez. “The Justice Department is committed to vigorously prosecuting the federal laws prohibiting violent acts motivated by hate.”
“There is no place for the reprehensible, violent conduct of the defendant in our community,” said U.S. Attorney Wagner. “We will continue working together with state and local authorities to bring to justice those who intimidate and assault people because of race or national origin.”
Clawson faces a maximum of 10 years in prison and a fine of $250,000. Sentencing is scheduled for June 10, 2010. He was remanded into custody following today’s verdict.
Agents from the Sacramento Division of the Federal Bureau of Investigation, investigators from the Butte County District Attorney’s Office and the Chico Police Department investigated this matter. The case is being jointly prosecuted by Assistant U.S. Attorney Russell Carlberg of the U.S. Attorney’s Office for the Eastern District of California and Trial Attorney Edward Chung of the Justice Department’s Civil Rights Division.
False Tax Returns
Manhattan U.S. Attorney Announces Indictment of Former Director of Operations for Bernard L. Madoff Investment Securities, LLC, on Charges of Conspiracy, Falsifying Records, Securities Fraud, and Filing False Tax Returns
March 25, 2010 - PREET BHARARA, the United States Attorney for the Southern District of New York, announced that DANIEL BONVENTRE—the former Director of Operations for Bernard L. Madoff Investment Securities, LLC ("BLMIS")—was indicted today by a federal grand jury in Manhattan on charges of conspiracy, falsifying records of a broker-dealer, falsifying records of an investment adviser, securities fraud, false filings with the U.S. Securities and Exchange Commission ("SEC"), and filing false tax returns. The Superseding Indictment adds BONVENTRE to the Indictment returned last week against former BLMIS computer programmers JEROME O'HARA and GEORGE PEREZ, and adds the charge of falsifying records of an investment adviser to the charges against BONVENTRE contained in the previously-filed Complaint. No new charges are added against O'HARA and PEREZ.
As alleged in the Superseding Indictment returned today in Manhattan federal court, other documents filed in this and related cases, and statements made in the course of relevant court proceedings:
For decades, BERNARD L. MADOFF purported to provide investment advisory ("IA") services through BLMIS. In fact, MADOFF defrauded thousands of IA clients out of billions of dollars through an elaborate Ponzi scheme.
In 1968, BONVENTRE was employed at BLMIS and served as its Director of Operations beginning at least as early as 1978. In that capacity, BONVENTRE was responsible for, among other things: maintaining and supervising the production of the principal internal accounting documents for BLMIS, including its general ledger (the "G/L"); maintaining the stock record for BLMIS and resolving any discrepancies between internal and external records; supervising the use and reconciliation of BLMIS bank accounts through which the Market Making, Proprietary Trading, and IA business operations were funded; and supervising BLMIS employees who were responsible for accounting and other "back office" functions, including settlement and clearing of trades executed by the Market Making and Proprietary Trading operations.
As Director of Operations, BONVENTRE directed that false entries be made in the G/L that concealed the scope of the IA operations and understated BLMIS's liabilities by billions of dollars. Moreover, as BONVENTRE knew, the G/L did not accurately reflect the assets contained in the bank and brokerage accounts into which IA investor funds were deposited, and likewise did not reflect the liability of BLMIS to its IA clients that arose from the custody of IA client funds in those accounts. At various points in time, the assets and associated liabilities of BLMIS's IA operations, which were omitted from the G/L, ranged from millions to billions of dollars.
Between November 2005 and June 2006, BLMIS experienced a liquidity crisis caused by IA clients' demands for withdrawals that exceeded cash on hand. Rather than sell securities to meet those demands—which could not be done because BLMIS had not actually purchased any such securities on behalf of those clients—BONVENTRE requested $145 million of loans from a bank, using $154 million of an IA client's bonds as collateral, to meet obligations to other IA clients. During the same period, BONVENTRE monitored lines of credit, which BLMIS drew down by more than $340 million and used to meet IA clients' withdrawal requests. BONVENTRE also created false and fraudulent books and records that had the effect of disguising $262 million worth of payments to IA clients from the principal bank account that funded BLMIS's operations as purchases of bonds and other debt instruments when, in fact, no such purchases had been made.
During the liquidity crisis, BLMIS was required to file Financial and Operational Combined Uniform Single Reports ("FOCUS Reports") with the SEC. FOCUS Reports require the production of basic information that amounts to a condensed version of a broker-dealer's general ledger. Because the G/L was inaccurate, as BONVENTRE well knew, the FOCUS Reports were likewise false because they failed accurately to reflect BLMIS's assets and liabilities. For example, the April 2006 report, filed during the liquidity crisis, failed to reflect at least $299 million in BLMIS liabilities related to $154 million of an IA client's bonds and the $145 million that BLMIS had borrowed using those bonds as collateral.
In as early as 1983, BONVENTRE also had his own IA account at BLMIS. Between 2002 and 2006, BONVENTRE obtained more than $1.8 million in at least three fictitious backdated trades that appeared in his account. For example, one purported trade, which appeared in BONVENTRE's IA account in 2002, included a purchase that was backdated twelve years, to 1990, and generated purported long-term capital gains of nearly $1 million. BONVENTRE is also charged with four counts of filing false federal tax returns related to his accounting for the three fictitious trades, and his failure to report a total of more than approximately $273,000 in income that he obtained from BLMIS bank accounts in 2003, 2004, 2006, and 2007.
BONVENTRE, 63, of New York, New York, O'HARA, 47, of Malverne, New York, and PEREZ, 44, of East Brunswick, New Jersey, face a maximum sentence, if convicted, of five years on Count One (Conspiracy) and a maximum fine of $250,000 or twice the gross gain or loss from the offense; 20 years on Count Two (Falsifying Records of a Broker-Dealer) and a maximum fine of $5 million or twice the gross gain or loss from the offense; five years on Count Three (Falsifying Records of an Investment Adviser), and a maximum fine of $250,000 or twice the gross gain or loss from the offense—for a total maximum sentence for O'HARA and PEREZ of 30 years in prison.
BONVENTRE also faces a maximum potential penalty of 20 years on Count Four (Securities Fraud) and a maximum fine of $5 million or twice the gross gain or loss from the offense; 20 years on Count Five (False Filing with the SEC), and a maximum fine of $5 million or twice the gross gain or loss from the offense; and 12 years on Counts Six through Nine (Filing False Tax Returns), and a maximum fine of $250,000 or twice the gross gain or loss from the offense—for a total maximum sentence of 82 years in prison. The case is assigned to United States District Judge LAURA TAYLOR SWAIN. The arraignment of the defendants is scheduled for March 25, 2010, at 11:30 a.m., before United States Magistrate Judge GABRIEL W. GORENSTEIN. A pretrial conference is scheduled before Judge SWAIN on April 12, 2010, at 4:30 p.m.
Mr. BHARARA praised the work of the Federal Bureau of Investigation in this case and also praised the United States Department of Labor's Employee Benefits Security Administration and the Internal Revenue Service for their roles in the ongoing investigation. He also thanked the SEC for its assistance.
Assistant United States Attorneys MARC LITT, LISA A. BARONI, WILLIAM J. STELLMACH, JULIAN MOORE, BARBARA A. WARD, and MATTHEW SCHWARTZ are in charge of the prosecution.
This case was brought in coordination with President BARACK OBAMA's Financial Fraud Enforcement Task Force, on which Mr. BHARARA serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President OBAMA established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive 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.
The charges and allegations contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
March 25, 2010 - PREET BHARARA, the United States Attorney for the Southern District of New York, announced that DANIEL BONVENTRE—the former Director of Operations for Bernard L. Madoff Investment Securities, LLC ("BLMIS")—was indicted today by a federal grand jury in Manhattan on charges of conspiracy, falsifying records of a broker-dealer, falsifying records of an investment adviser, securities fraud, false filings with the U.S. Securities and Exchange Commission ("SEC"), and filing false tax returns. The Superseding Indictment adds BONVENTRE to the Indictment returned last week against former BLMIS computer programmers JEROME O'HARA and GEORGE PEREZ, and adds the charge of falsifying records of an investment adviser to the charges against BONVENTRE contained in the previously-filed Complaint. No new charges are added against O'HARA and PEREZ.
As alleged in the Superseding Indictment returned today in Manhattan federal court, other documents filed in this and related cases, and statements made in the course of relevant court proceedings:
For decades, BERNARD L. MADOFF purported to provide investment advisory ("IA") services through BLMIS. In fact, MADOFF defrauded thousands of IA clients out of billions of dollars through an elaborate Ponzi scheme.
In 1968, BONVENTRE was employed at BLMIS and served as its Director of Operations beginning at least as early as 1978. In that capacity, BONVENTRE was responsible for, among other things: maintaining and supervising the production of the principal internal accounting documents for BLMIS, including its general ledger (the "G/L"); maintaining the stock record for BLMIS and resolving any discrepancies between internal and external records; supervising the use and reconciliation of BLMIS bank accounts through which the Market Making, Proprietary Trading, and IA business operations were funded; and supervising BLMIS employees who were responsible for accounting and other "back office" functions, including settlement and clearing of trades executed by the Market Making and Proprietary Trading operations.
As Director of Operations, BONVENTRE directed that false entries be made in the G/L that concealed the scope of the IA operations and understated BLMIS's liabilities by billions of dollars. Moreover, as BONVENTRE knew, the G/L did not accurately reflect the assets contained in the bank and brokerage accounts into which IA investor funds were deposited, and likewise did not reflect the liability of BLMIS to its IA clients that arose from the custody of IA client funds in those accounts. At various points in time, the assets and associated liabilities of BLMIS's IA operations, which were omitted from the G/L, ranged from millions to billions of dollars.
Between November 2005 and June 2006, BLMIS experienced a liquidity crisis caused by IA clients' demands for withdrawals that exceeded cash on hand. Rather than sell securities to meet those demands—which could not be done because BLMIS had not actually purchased any such securities on behalf of those clients—BONVENTRE requested $145 million of loans from a bank, using $154 million of an IA client's bonds as collateral, to meet obligations to other IA clients. During the same period, BONVENTRE monitored lines of credit, which BLMIS drew down by more than $340 million and used to meet IA clients' withdrawal requests. BONVENTRE also created false and fraudulent books and records that had the effect of disguising $262 million worth of payments to IA clients from the principal bank account that funded BLMIS's operations as purchases of bonds and other debt instruments when, in fact, no such purchases had been made.
During the liquidity crisis, BLMIS was required to file Financial and Operational Combined Uniform Single Reports ("FOCUS Reports") with the SEC. FOCUS Reports require the production of basic information that amounts to a condensed version of a broker-dealer's general ledger. Because the G/L was inaccurate, as BONVENTRE well knew, the FOCUS Reports were likewise false because they failed accurately to reflect BLMIS's assets and liabilities. For example, the April 2006 report, filed during the liquidity crisis, failed to reflect at least $299 million in BLMIS liabilities related to $154 million of an IA client's bonds and the $145 million that BLMIS had borrowed using those bonds as collateral.
In as early as 1983, BONVENTRE also had his own IA account at BLMIS. Between 2002 and 2006, BONVENTRE obtained more than $1.8 million in at least three fictitious backdated trades that appeared in his account. For example, one purported trade, which appeared in BONVENTRE's IA account in 2002, included a purchase that was backdated twelve years, to 1990, and generated purported long-term capital gains of nearly $1 million. BONVENTRE is also charged with four counts of filing false federal tax returns related to his accounting for the three fictitious trades, and his failure to report a total of more than approximately $273,000 in income that he obtained from BLMIS bank accounts in 2003, 2004, 2006, and 2007.
BONVENTRE, 63, of New York, New York, O'HARA, 47, of Malverne, New York, and PEREZ, 44, of East Brunswick, New Jersey, face a maximum sentence, if convicted, of five years on Count One (Conspiracy) and a maximum fine of $250,000 or twice the gross gain or loss from the offense; 20 years on Count Two (Falsifying Records of a Broker-Dealer) and a maximum fine of $5 million or twice the gross gain or loss from the offense; five years on Count Three (Falsifying Records of an Investment Adviser), and a maximum fine of $250,000 or twice the gross gain or loss from the offense—for a total maximum sentence for O'HARA and PEREZ of 30 years in prison.
BONVENTRE also faces a maximum potential penalty of 20 years on Count Four (Securities Fraud) and a maximum fine of $5 million or twice the gross gain or loss from the offense; 20 years on Count Five (False Filing with the SEC), and a maximum fine of $5 million or twice the gross gain or loss from the offense; and 12 years on Counts Six through Nine (Filing False Tax Returns), and a maximum fine of $250,000 or twice the gross gain or loss from the offense—for a total maximum sentence of 82 years in prison. The case is assigned to United States District Judge LAURA TAYLOR SWAIN. The arraignment of the defendants is scheduled for March 25, 2010, at 11:30 a.m., before United States Magistrate Judge GABRIEL W. GORENSTEIN. A pretrial conference is scheduled before Judge SWAIN on April 12, 2010, at 4:30 p.m.
Mr. BHARARA praised the work of the Federal Bureau of Investigation in this case and also praised the United States Department of Labor's Employee Benefits Security Administration and the Internal Revenue Service for their roles in the ongoing investigation. He also thanked the SEC for its assistance.
Assistant United States Attorneys MARC LITT, LISA A. BARONI, WILLIAM J. STELLMACH, JULIAN MOORE, BARBARA A. WARD, and MATTHEW SCHWARTZ are in charge of the prosecution.
This case was brought in coordination with President BARACK OBAMA's Financial Fraud Enforcement Task Force, on which Mr. BHARARA serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President OBAMA established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive 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.
The charges and allegations contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
Manhattan U.S. Attorney Charges UBS Investment Banker and Accomplice with Insider Trading
Alleged Trading on Tips About Six UBS Health Care Client Acquisitions Netted Approximately $870,000 in Illegal Profits
March 25, 2010 - PREET BHARARA, the United States Attorney for the Southern District of New York, and JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation ("FBI"), announced the arrests today of IGOR POTEROBA, an investment banker in the health care group of UBS Securities LLC ("UBS"), and ALEXEI P. KOVAL, a/k/a "Aleksey Koval," for their alleged participation in an insider trading scheme in which POTEROBA, in his capacity as a UBS investment banker, obtained inside information about six mergers and acquisitions that certain of UBS’s clients were contemplating and passed that information on to KOVAL.
According to the four-count Complaint filed in Manhattan federal court:
From 2005 through at least February 2009, POTEROBA agreed to leak confidential information about UBS and six of its clients to KOVAL. The information related to forthcoming announcements about mergers or acquisitions involving the following six publicly traded health care companies: Guilford Pharmaceuticals, Inc., Molecular Devices Corporation, PharmaNet Development Group, Inc., Via Cell, Inc., Millennium Pharmaceuticals, Inc., and Indevus Pharmaceuticals, Inc. (collectively, the "Health Care Companies").
Since approximately 2006, POTEROBA has served as an Executive Director at UBS. POTEROBA obtained material, nonpublic information in the course of his employment with UBS regarding certain mergers and acquisitions involving the Health Care Companies (the "UBS Inside Information"). In violation of his duties of trust and confidence, POTEROBA then disclosed the UBS Inside Information to KOVAL, who in turn disclosed the UBS Inside Information to another co-conspirator ("CC-1").
As part of the scheme, POTEROBA typically tipped KOVAL by phone in advance of a public announcement that one of the Health Care Companies was to be acquired. Shortly after receiving such a call, KOVAL and CC-1 purchased securities in a Health Care Company on the basis of the UBS Inside Information. Following the public announcement of the acquisition, KOVAL and CC-1 quickly sold the securities they had purchased. KOVAL and CC-1 executed dozens of securities transactions based on UBS Inside Information provided by POTEROBA. KOVAL, CC-1, and others earned total profits of at least approximately $870,000 from the scheme.
During the same time period that he provided the UBS Inside Information to KOVAL, POTEROBA received at least two checks totaling $28,000 from KOVAL.
POTEROBA, KOVAL, and CC-1 studied at the University of New Haven. POTEROBA and KOVAL also went on to study at Baruch College, City University of New York.
POTEROBA, 36, of Darien, Connecticut, was arrested this afternoon in Manhattan and is expected to be presented tomorrow before a United States Magistrate Judge in Manhattan federal court. KOVAL, 36, of Chicago, Illinois and Pasadena, California, was arrested this afternoon at Chicago O'Hare International Airport and is expected to be presented later this evening before a United States Magistrate Judge in Chicago federal court.
POTEROBA and KOVAL each are charged with one count of conspiracy to commit securities fraud and three counts of securities fraud. The conspiracy charge carries a maximum sentence of five years in prison and a maximum fine of the greater of $250,000, or twice the gross gain or gross loss from the offense. Each securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million.
Mr. BHARARA praised the investigative work of the FBI. Mr. BHARARA also thanked the United States Securities and Exchange Commission for its assistance in the investigation. Additionally, Mr. BHARARA expressed his gratitude to UBS for its cooperation and assistance in this matter. He added that the investigation is continuing.
United States Attorney PREET BHARARA said: "Financial professionals are part of a privileged elite who should be setting an example, not breaking the law. Once again, we have brought charges alleging significant insider trading, this time involving secrets about pending health care mergers. We are not finished with our efforts to combat unfair and illegal conduct in the financial industry. We will continue to work with our extraordinary partners at the FBI and the SEC to root out the corruption of our securities markets."
FBI Assistant Director-in-Charge JOSEPH M. DEMAREST, JR., said: "For a three-year period, Poteroba, an officer at UBS, allegedly acted like an unscrupulous blackjack dealer. It was easy for Koval to make winning bets when he was dealt only aces and face cards. The FBI's job is to keep the game honest."
This case was brought in coordination with President BARACK OBAMA's Financial Fraud Enforcement Task Force, on which Mr. BHARARA serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President OBAMA established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive 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.
Assistant United States Attorneys ALEXANDER J. WILLSCHER, MARISSA MOLÉ, and WILLIAM J. STELLMACH are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
March 25, 2010 - PREET BHARARA, the United States Attorney for the Southern District of New York, and JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation ("FBI"), announced the arrests today of IGOR POTEROBA, an investment banker in the health care group of UBS Securities LLC ("UBS"), and ALEXEI P. KOVAL, a/k/a "Aleksey Koval," for their alleged participation in an insider trading scheme in which POTEROBA, in his capacity as a UBS investment banker, obtained inside information about six mergers and acquisitions that certain of UBS’s clients were contemplating and passed that information on to KOVAL.
According to the four-count Complaint filed in Manhattan federal court:
From 2005 through at least February 2009, POTEROBA agreed to leak confidential information about UBS and six of its clients to KOVAL. The information related to forthcoming announcements about mergers or acquisitions involving the following six publicly traded health care companies: Guilford Pharmaceuticals, Inc., Molecular Devices Corporation, PharmaNet Development Group, Inc., Via Cell, Inc., Millennium Pharmaceuticals, Inc., and Indevus Pharmaceuticals, Inc. (collectively, the "Health Care Companies").
Since approximately 2006, POTEROBA has served as an Executive Director at UBS. POTEROBA obtained material, nonpublic information in the course of his employment with UBS regarding certain mergers and acquisitions involving the Health Care Companies (the "UBS Inside Information"). In violation of his duties of trust and confidence, POTEROBA then disclosed the UBS Inside Information to KOVAL, who in turn disclosed the UBS Inside Information to another co-conspirator ("CC-1").
As part of the scheme, POTEROBA typically tipped KOVAL by phone in advance of a public announcement that one of the Health Care Companies was to be acquired. Shortly after receiving such a call, KOVAL and CC-1 purchased securities in a Health Care Company on the basis of the UBS Inside Information. Following the public announcement of the acquisition, KOVAL and CC-1 quickly sold the securities they had purchased. KOVAL and CC-1 executed dozens of securities transactions based on UBS Inside Information provided by POTEROBA. KOVAL, CC-1, and others earned total profits of at least approximately $870,000 from the scheme.
During the same time period that he provided the UBS Inside Information to KOVAL, POTEROBA received at least two checks totaling $28,000 from KOVAL.
POTEROBA, KOVAL, and CC-1 studied at the University of New Haven. POTEROBA and KOVAL also went on to study at Baruch College, City University of New York.
POTEROBA, 36, of Darien, Connecticut, was arrested this afternoon in Manhattan and is expected to be presented tomorrow before a United States Magistrate Judge in Manhattan federal court. KOVAL, 36, of Chicago, Illinois and Pasadena, California, was arrested this afternoon at Chicago O'Hare International Airport and is expected to be presented later this evening before a United States Magistrate Judge in Chicago federal court.
POTEROBA and KOVAL each are charged with one count of conspiracy to commit securities fraud and three counts of securities fraud. The conspiracy charge carries a maximum sentence of five years in prison and a maximum fine of the greater of $250,000, or twice the gross gain or gross loss from the offense. Each securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million.
Mr. BHARARA praised the investigative work of the FBI. Mr. BHARARA also thanked the United States Securities and Exchange Commission for its assistance in the investigation. Additionally, Mr. BHARARA expressed his gratitude to UBS for its cooperation and assistance in this matter. He added that the investigation is continuing.
United States Attorney PREET BHARARA said: "Financial professionals are part of a privileged elite who should be setting an example, not breaking the law. Once again, we have brought charges alleging significant insider trading, this time involving secrets about pending health care mergers. We are not finished with our efforts to combat unfair and illegal conduct in the financial industry. We will continue to work with our extraordinary partners at the FBI and the SEC to root out the corruption of our securities markets."
FBI Assistant Director-in-Charge JOSEPH M. DEMAREST, JR., said: "For a three-year period, Poteroba, an officer at UBS, allegedly acted like an unscrupulous blackjack dealer. It was easy for Koval to make winning bets when he was dealt only aces and face cards. The FBI's job is to keep the game honest."
This case was brought in coordination with President BARACK OBAMA's Financial Fraud Enforcement Task Force, on which Mr. BHARARA serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President OBAMA established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive 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.
Assistant United States Attorneys ALEXANDER J. WILLSCHER, MARISSA MOLÉ, and WILLIAM J. STELLMACH are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Owner of Los Angeles-Area Company Sentenced to Nine Years in Prison for Medicare Fraud
A federal court issued an order yesterday sentencing the owner and operator of a Los Angeles-area durable medical equipment (DME) company to prison in connection with an approximately $1 million power wheelchair fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney André Birotte Jr., for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse (Cal DOJ); Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the Office of Inspector General (OIG) for the Department of Health and Human Services (HHS); and Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office.
Leonard Nwafor, 44, was sentenced in absentia by U.S. District Judge John F. Walter of the Central District of California to nine years in prison. In addition, Nwafor was ordered to serve three years of supervised release following his prison term, pay $526,243 in restitution and $25,000 in fines, and forfeit more than $526,000 in stolen Medicare funds to the U.S. government.
Nwafor was convicted at trial in September 2008 of conspiracy to commit health care fraud and health care fraud. After his conviction, Nwafor fled the jurisdiction and is considered a fugitive.
At trial, evidence established that Nwafor, through his company, Pacific City Group Inc., aka Pacific City Medical Equipment, submitted $1,109,438 in fraudulent claims to Medicare. As a result of the fraudulent claims, Nwafor received $526,243 in payments from Medicare. The evidence presented at trial showed that almost all the claims Nwafor submitted to Medicare were for expensive, high-end power wheelchairs and wheelchair accessories that were not needed by the beneficiaries.
At trial, elderly and disabled Medicare beneficiaries testified that individuals known as "marketers" approached them on the street, at home or in church and encouraged the beneficiaries to give the marketers their Medicare numbers and other personal information in exchange for free power wheelchairs. Evidence presented at trial established that Nwafor billed Medicare for power wheelchairs on behalf of more than 170 beneficiaries, none of whom actually needed the wheelchairs. The power wheelchairs Nwafor claimed Pacific City provided to the beneficiaries can be billed to Medicare for up to $7,000 each.
The evidence also showed that Nwafor supplied power wheelchairs to beneficiaries who were not able to use the chairs. One beneficiary, who was blind, testified that he could not see to operate the wheelchair and never used it. The same beneficiary also testified that a delivery driver working for Nwafor and the delivery driver’s girlfriend paid him $200 to refer them to other Medicare beneficiaries.
Another beneficiary testified about the aggressive techniques marketers used to recruit her and her husband into the fraudulent scheme. This beneficiary testified that an individual purporting to be from Medicare, but who was actually associated with Nwafor and his co-conspirators, threatened to terminate the Medicare benefits of the beneficiary and her husband unless they accepted two power wheelchairs that the beneficiary and her husband did not need.
The evidence at trial included testimony from Los Angeles-area physicians whose names appeared on prescriptions Nwafor used to support his false claims to Medicare. One of these physicians, a psychiatrist, testified that he does not prescribe power wheelchairs as part of his practice, and had never written a prescription for one. Other physicians testified that the prescriptions bearing their names were phony and that their handwriting was not on any of the prescriptions.
After his conviction, Nwafor admitted in documents he filed with the court that he purchased the prescriptions and documents he used to support his false claims to Medicare from a co-conspirator for approximately $1,300 per prescription. One of Nwafor’s co-conspirators, Ajibola Sadiqr, admitted that he purchased fraudulent prescriptions and documents from Nwafor to perpetrate his own fraudulent power wheelchair Medicare fraud scheme. Sadiqr pleaded guilty and is scheduled to be sentenced on April 12, 2010. The case was prosecuted by Trial Attorney Jonathan Baum, former Special Trial Attorney Spencer Turnbull and Assistant Chief John S. (Jay) Darden of the Criminal Division’s Fraud Section, with the investigative assistance of the Cal DOJ and HHS-OIG. The case 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 Central District of California.
Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $1.1 billion. In addition, HHS’s 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.
Leonard Nwafor, 44, was sentenced in absentia by U.S. District Judge John F. Walter of the Central District of California to nine years in prison. In addition, Nwafor was ordered to serve three years of supervised release following his prison term, pay $526,243 in restitution and $25,000 in fines, and forfeit more than $526,000 in stolen Medicare funds to the U.S. government.
Nwafor was convicted at trial in September 2008 of conspiracy to commit health care fraud and health care fraud. After his conviction, Nwafor fled the jurisdiction and is considered a fugitive.
At trial, evidence established that Nwafor, through his company, Pacific City Group Inc., aka Pacific City Medical Equipment, submitted $1,109,438 in fraudulent claims to Medicare. As a result of the fraudulent claims, Nwafor received $526,243 in payments from Medicare. The evidence presented at trial showed that almost all the claims Nwafor submitted to Medicare were for expensive, high-end power wheelchairs and wheelchair accessories that were not needed by the beneficiaries.
At trial, elderly and disabled Medicare beneficiaries testified that individuals known as "marketers" approached them on the street, at home or in church and encouraged the beneficiaries to give the marketers their Medicare numbers and other personal information in exchange for free power wheelchairs. Evidence presented at trial established that Nwafor billed Medicare for power wheelchairs on behalf of more than 170 beneficiaries, none of whom actually needed the wheelchairs. The power wheelchairs Nwafor claimed Pacific City provided to the beneficiaries can be billed to Medicare for up to $7,000 each.
The evidence also showed that Nwafor supplied power wheelchairs to beneficiaries who were not able to use the chairs. One beneficiary, who was blind, testified that he could not see to operate the wheelchair and never used it. The same beneficiary also testified that a delivery driver working for Nwafor and the delivery driver’s girlfriend paid him $200 to refer them to other Medicare beneficiaries.
Another beneficiary testified about the aggressive techniques marketers used to recruit her and her husband into the fraudulent scheme. This beneficiary testified that an individual purporting to be from Medicare, but who was actually associated with Nwafor and his co-conspirators, threatened to terminate the Medicare benefits of the beneficiary and her husband unless they accepted two power wheelchairs that the beneficiary and her husband did not need.
The evidence at trial included testimony from Los Angeles-area physicians whose names appeared on prescriptions Nwafor used to support his false claims to Medicare. One of these physicians, a psychiatrist, testified that he does not prescribe power wheelchairs as part of his practice, and had never written a prescription for one. Other physicians testified that the prescriptions bearing their names were phony and that their handwriting was not on any of the prescriptions.
After his conviction, Nwafor admitted in documents he filed with the court that he purchased the prescriptions and documents he used to support his false claims to Medicare from a co-conspirator for approximately $1,300 per prescription. One of Nwafor’s co-conspirators, Ajibola Sadiqr, admitted that he purchased fraudulent prescriptions and documents from Nwafor to perpetrate his own fraudulent power wheelchair Medicare fraud scheme. Sadiqr pleaded guilty and is scheduled to be sentenced on April 12, 2010. The case was prosecuted by Trial Attorney Jonathan Baum, former Special Trial Attorney Spencer Turnbull and Assistant Chief John S. (Jay) Darden of the Criminal Division’s Fraud Section, with the investigative assistance of the Cal DOJ and HHS-OIG. The case 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 Central District of California.
Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $1.1 billion. In addition, HHS’s 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.
Maryland Man Convicted of Sex Trafficking, Firearm and Drug Charges
March 25, 2010 - WASHINGTON- The Justice Department announced that Lloyd Mack Royal, III aka "Blyss", aka "B", aka "Furious" was convicted late yesterday of sex trafficking of minors and sex trafficking by force, fraud, and coercion, as well as firearm and drug charges. Two other co-defendants, Angela Samantha Bentolila and Paul Raymond Green, previously pleaded guilty to related charges.
The jury found Royal guilty of 3 counts of sex trafficking, including sex trafficking of minors and sex trafficking by force, fraud, and coercion. The jury also convicted Royal of conspiracy to commit sex trafficking, conspiracy to distribute controlled substances, possession of a firearm in the commission of a crime of violence, and two counts of distribution of controlled substances to a person under the age of twenty-one.
"The defendant preyed upon vulnerable minors and prostituted them by a variety of deplorable means for his own benefit," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Department of Justice will continue to devote its full efforts to prosecuting those who commit such exploitative crimes."
"We have made it a priority in Maryland to pursue criminals who lure or coerce children into prostitution," said U.S. Attorney Rod J. Rosenstein. "Maryland’s Human Trafficking Task Force works with law enforcement officers and private sector organizations to identify and rescue victims of human trafficking and prosecute criminals who exploit them. Pimps who victimize children are at the top of our list."
Sentencing before U.S. District Judge Alexander Williams, Jr. is scheduled for April 29, 2010. Royal faces incarceration of up to life in prison and potential fines in excess of $1 million.
In announcing the convictions, Assistant Attorney General Perez, and U.S. Attorney Rosenstein commended the Federal Bureau of Investigation, Montgomery County Police Department and Maryland Human Trafficking Task Force for their work in this cooperative investigation and prosecution. Assistant U.S. Attorney Solette Magnelli and Civil Rights Division Human Trafficking Prosecution Unit Trial Attorney Jim Felte are prosecuting this case for the government.
The jury found Royal guilty of 3 counts of sex trafficking, including sex trafficking of minors and sex trafficking by force, fraud, and coercion. The jury also convicted Royal of conspiracy to commit sex trafficking, conspiracy to distribute controlled substances, possession of a firearm in the commission of a crime of violence, and two counts of distribution of controlled substances to a person under the age of twenty-one.
"The defendant preyed upon vulnerable minors and prostituted them by a variety of deplorable means for his own benefit," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Department of Justice will continue to devote its full efforts to prosecuting those who commit such exploitative crimes."
"We have made it a priority in Maryland to pursue criminals who lure or coerce children into prostitution," said U.S. Attorney Rod J. Rosenstein. "Maryland’s Human Trafficking Task Force works with law enforcement officers and private sector organizations to identify and rescue victims of human trafficking and prosecute criminals who exploit them. Pimps who victimize children are at the top of our list."
Sentencing before U.S. District Judge Alexander Williams, Jr. is scheduled for April 29, 2010. Royal faces incarceration of up to life in prison and potential fines in excess of $1 million.
In announcing the convictions, Assistant Attorney General Perez, and U.S. Attorney Rosenstein commended the Federal Bureau of Investigation, Montgomery County Police Department and Maryland Human Trafficking Task Force for their work in this cooperative investigation and prosecution. Assistant U.S. Attorney Solette Magnelli and Civil Rights Division Human Trafficking Prosecution Unit Trial Attorney Jim Felte are prosecuting this case for the government.
Grapeland, Texas Man Sentenced for Child Pornography Violation
Palestine ISD Substitute Teacher Gets 2.5 Years in Federal Prison
March 25, 2010 - TYLER, TX—U.S. Attorney John M. Bales announced today that a 66-year-old Grapeland, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas.
ROBERT CARL SAMPSON pleaded guilty on Oct. 23, 2009, to possession of child pornography and was sentenced to 30 months in federal prison on Mar. 23, 2010 by U.S. District Judge Leonard Davis. Sampson was also ordered to forfeit his personal computer equipment.
According to information presented in court, in February 2008, Sampson, a substitute teacher for the Palestine Independent School District, brought several boxes of teaching aides to a fellow teacher, who discovered discs containing child pornography with the teaching materials.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Federal Bureau of Investigation and the Palestine Police Department and prosecuted by Assistant U.S. Attorney Bill Baldwin.
March 25, 2010 - TYLER, TX—U.S. Attorney John M. Bales announced today that a 66-year-old Grapeland, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas.
ROBERT CARL SAMPSON pleaded guilty on Oct. 23, 2009, to possession of child pornography and was sentenced to 30 months in federal prison on Mar. 23, 2010 by U.S. District Judge Leonard Davis. Sampson was also ordered to forfeit his personal computer equipment.
According to information presented in court, in February 2008, Sampson, a substitute teacher for the Palestine Independent School District, brought several boxes of teaching aides to a fellow teacher, who discovered discs containing child pornography with the teaching materials.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Federal Bureau of Investigation and the Palestine Police Department and prosecuted by Assistant U.S. Attorney Bill Baldwin.
Wednesday, March 24, 2010
U.S. Marshals Add Drug Trafficker to 15 Most Wanted Fugitive List
March 24, 2010 - Washington - The U.S. Marshals Service added Enrique Done to their 15 Most Wanted Fugitives list today. Done is wanted by the U.S. Drug Enforcement Agency in Newark, N.J., and has been charged for his alleged role as the leader of an international drug trafficking conspiracy. Following a DEA Organized Crime Drug Enforcement Task Force investigation last year, Done was identified as the leader of a large-scale narcotics organization responsible for the alleged importation and distribution of multiple quantities of heroin and cocaine. He is also suspected of laundering the funds gained through his drug trade in New York, New Jersey and Pennsylvania.
The U.S. Marshals are not the only federal agency that have elevated Done to a higher priority, the DEA considers him a Priority Target. He is also wanted by the U.S. Immigration and Customs Enforcement on an outstanding arrest warrant for deportation.
“Done has a wide-ranging, violent criminal history, both domestically and abroad.” said Director John F. Clark of the U.S. Marshals Service. “The fact that so many agencies have made Done’s arrest a priority is a clear indication that he needs to be found and locked up.”
Done is an alleged ranking member of the Los Deminos 666 (The Demons) street gang in the Newark area. He is a violent offender with several prior convictions for weapons possession and aggravated assault.
Done is known to use multiple aliases including Ricardo Done and Daniel Martinez. He operates in the northern New Jersey area and has significant ties to the Dominican Republic.
Done is a 35-year-old Black Hispanic (Dominican Republic) male. He is 5 feet 6 inches tall and weighs 175 pounds. He has brown eyes and black hair. He has a scar on his forehead.
A reward up to $25,000 is offered for information leading directly to Done’s arrest. Done and his associates are known to be armed and violent. If you have information about Enrique Done’s whereabouts, immediately contact your nearest U.S. Marshals office or call the Marshals 24-hour hotline at 1-800-336-0102.
Nigerian National Found Guilty for Role in “Advance-Fee” Fraud Scheme
March 24, 2010 - A federal jury in the Western District of North Carolina convicted Ugochukwu Enwerem yesterday on charges stemming from an advance-fee fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Deputy Chief Postal Inspector Zane M. Hill.
Following six days of trial and four hours of deliberation, Enwerem was found guilty on one count of conspiracy to commit mail and wire fraud, and 14 counts of wire fraud charged in a July 2007 indictment stemming from an "advance-fee" scheme. Forfeiture of more than $9.5 million has also been ordered. In September 2009, co-defendant Kent Oserumen Okojie pleaded guilty to one count of conspiracy and two counts of wire fraud. He is awaiting sentencing. Okojie and Enwerem, Nigerian citizens who resided in the Netherlands, originally were charged in a June 2007 complaint and were subsequently extradited to the United States from The Netherlands, where they had been in custody on Dutch charges.
According to evidence presented at trial, between at least September 2002 and April 2007, Okojie, Enwerem and their co-conspirators solicited individuals by sending spam e-mails informing potential victims that they had either won a foreign lottery or inherited a large sum of money from a long lost relative. When individuals responded to the e-mails, the defendants or their co-conspirators, posing as lawyers, bankers and European government officials, solicited fees from victims ostensibly to pay for things such as "anti-terrorism certificates," "EU bank clearances" and legal fees in order to secure their lottery winnings or inheritance. Trial evidence established that Okojie and Enwerem instructed U.S. and international victims to wire funds through Western Union and other money transfer services to the defendants and their designees in The Netherlands, Spain and the United Kingdom. The Western Union servers are located in the Western District of North Carolina. According to trial testimony, at least 18 U.S. and international victims lost more than $9.5 million as a result of this scheme.
At sentencing, Enwerem faces a maximum sentence of five years in prison and a $250,000 fine for the conspiracy count and 20 years in prison and a $250,000 fine for each of the 14 wire fraud counts.
The case was investigated by a team of U.S. Postal Inspectors working with the Criminal Division’s Fraud Section and the Amsterdam Politie. The case was prosecuted by Trial Attorneys Laura Perkins and Nicole H. Sprinzen of the Fraud Section. Significant assistance was provided by the Criminal Division’s Office of International Affairs.
Following six days of trial and four hours of deliberation, Enwerem was found guilty on one count of conspiracy to commit mail and wire fraud, and 14 counts of wire fraud charged in a July 2007 indictment stemming from an "advance-fee" scheme. Forfeiture of more than $9.5 million has also been ordered. In September 2009, co-defendant Kent Oserumen Okojie pleaded guilty to one count of conspiracy and two counts of wire fraud. He is awaiting sentencing. Okojie and Enwerem, Nigerian citizens who resided in the Netherlands, originally were charged in a June 2007 complaint and were subsequently extradited to the United States from The Netherlands, where they had been in custody on Dutch charges.
According to evidence presented at trial, between at least September 2002 and April 2007, Okojie, Enwerem and their co-conspirators solicited individuals by sending spam e-mails informing potential victims that they had either won a foreign lottery or inherited a large sum of money from a long lost relative. When individuals responded to the e-mails, the defendants or their co-conspirators, posing as lawyers, bankers and European government officials, solicited fees from victims ostensibly to pay for things such as "anti-terrorism certificates," "EU bank clearances" and legal fees in order to secure their lottery winnings or inheritance. Trial evidence established that Okojie and Enwerem instructed U.S. and international victims to wire funds through Western Union and other money transfer services to the defendants and their designees in The Netherlands, Spain and the United Kingdom. The Western Union servers are located in the Western District of North Carolina. According to trial testimony, at least 18 U.S. and international victims lost more than $9.5 million as a result of this scheme.
At sentencing, Enwerem faces a maximum sentence of five years in prison and a $250,000 fine for the conspiracy count and 20 years in prison and a $250,000 fine for each of the 14 wire fraud counts.
The case was investigated by a team of U.S. Postal Inspectors working with the Criminal Division’s Fraud Section and the Amsterdam Politie. The case was prosecuted by Trial Attorneys Laura Perkins and Nicole H. Sprinzen of the Fraud Section. Significant assistance was provided by the Criminal Division’s Office of International Affairs.
Three Found Guilty in Mortgage Loan Fraud Scheme
March 24, 2010 - JACKSON, MS—U.S. Attorney Donald R. Burkhalter, FBI Special Agent in Charge Daniel McMullen, and IRS Criminal Investigation Special Agent in Charge Michael J. De Palma announced that on Monday, March 22, 2010, a federal jury convicted former loan closing agents J. Larry Kennedy and Keith M. Kennedy on 35 total counts of conspiracy to commit mail and wire fraud, conspiracy to launder money, multiple counts of wire fraud, and multiple counts of money laundering in relation to their roles in a mortgage fraud conspiracy and scheme. Also convicted on 33 of the counts was former mortgage loan originator Mark J. Calhoun. All defendants are scheduled to appear for sentencing on July 16, 2010, at 9:00 a.m. before U.S. District Judge Daniel P. Jordan III. Mark J. Calhoun’s daughter, April Calhoun, who was one of Mark Calhoun’s co-conspirators, previously pled guilty on January 26, 2010, and testified against both Mark Calhoun and against the Kennedys during the trial. Willie Jones, also a co-conspirator, previously pled guilty on January 29, 2010, and testified against both Mark Calhoun and the Kennedys during the trial.
The offenses charged in the indictment carry the following maximum statutory penalties:
(a) conspiracy to commit mail and/or wire fraud carries up to 20 years' imprisonment and/or fines up to $200,000.00;
(b) each wire fraud offense carries a maximum statutory penalty of 20 years' imprisonment and/or fines up to $250,000.00;
(c) each money laundering conspiracy and each promotion money laundering offense carries a maximum statutory penalty of 20 years' imprisonment and/or fines up to $500,000.00 or twice the value of the property involved in the transaction, whichever is greater;
(d) each charge for engaging in a monetary transaction over $10,000.00 with criminally derived property carries a maximum statutory penalty of 10 years' imprisonment and/or a fine of $250,000.00 or twice the value of the property involved in the transaction, whichever is greater.
Information in the court record revealed that between September 2004 and at least through September 2006, while operating in the Jackson-metro area as Loan Closing & Title Services, Inc., the Kennedys were the closing agents involved with the fraudulent mortgage loans. During the conspiracy and scheme, the Kennedys and their co-conspirators provided fraudulent loan documents to various lenders; thereafter, the Kennedys disbursed proceeds from the fraudulent loans to Mark J. Calhoun, April Calhoun, Willie Jones, and their respective companies as fictitious creditors. As part of the conspiracy and scheme, on some of the fraudulent loans the Kennedys falsely notarized loan documents during the loan closing process that were relied upon by the lenders to demonstrate that the specific borrower personally appeared at the loan closing and signed the closing documents in the presence of the loan closing agent in order to retrieve the mortgage loan proceeds.
Michael J. De Palma, Special Agent in Charge of Internal Revenue Service Criminal Investigation stated, “We are pleased with today's guilty verdict. It is the goal of IRS Criminal Investigation to work with the Department of Justice to ensure that those engaged in illegal activities are brought to justice. These types of crimes create a significant loss of tax revenue, drive buyers into foreclosure, leave lenders burdened with bad loans and neighborhoods with abandoned and deteriorating properties. Special Agents of IRS Criminal Investigation are united with the rest of the law enforcement community in our commitment to pursuing individuals who create such havoc and threaten our country's financial foundation. Special Agents of IRS Criminal Investigation are highly skilled investigators who will continue to work with the US Attorney's Office to ensure that those engaged in illegal activities are brought to justice.”
Daniel McMullen, Special Agent in Charge of the FBI's Jackson Division stated, "The investigation and trial of this case were cooperative efforts between the FBI, the IRS, the FDIC and the United States Attorney's Office. We are pleased that the guilty verdict rendered today will provide both a measure of relief to the victims of this scheme and a deterrent to others who would attempt to commit similar crimes."
The case was prosecuted by Assistant United States Attorneys Carla J. Clark and Jerry L. Rushing as a result of a joint investigation by federal agents with IRS-CI, FBI, and FDIC-OIG who participate with other federal, state, and local agencies in the Jackson Financial Crimes Task Force.
The offenses charged in the indictment carry the following maximum statutory penalties:
(a) conspiracy to commit mail and/or wire fraud carries up to 20 years' imprisonment and/or fines up to $200,000.00;
(b) each wire fraud offense carries a maximum statutory penalty of 20 years' imprisonment and/or fines up to $250,000.00;
(c) each money laundering conspiracy and each promotion money laundering offense carries a maximum statutory penalty of 20 years' imprisonment and/or fines up to $500,000.00 or twice the value of the property involved in the transaction, whichever is greater;
(d) each charge for engaging in a monetary transaction over $10,000.00 with criminally derived property carries a maximum statutory penalty of 10 years' imprisonment and/or a fine of $250,000.00 or twice the value of the property involved in the transaction, whichever is greater.
Information in the court record revealed that between September 2004 and at least through September 2006, while operating in the Jackson-metro area as Loan Closing & Title Services, Inc., the Kennedys were the closing agents involved with the fraudulent mortgage loans. During the conspiracy and scheme, the Kennedys and their co-conspirators provided fraudulent loan documents to various lenders; thereafter, the Kennedys disbursed proceeds from the fraudulent loans to Mark J. Calhoun, April Calhoun, Willie Jones, and their respective companies as fictitious creditors. As part of the conspiracy and scheme, on some of the fraudulent loans the Kennedys falsely notarized loan documents during the loan closing process that were relied upon by the lenders to demonstrate that the specific borrower personally appeared at the loan closing and signed the closing documents in the presence of the loan closing agent in order to retrieve the mortgage loan proceeds.
Michael J. De Palma, Special Agent in Charge of Internal Revenue Service Criminal Investigation stated, “We are pleased with today's guilty verdict. It is the goal of IRS Criminal Investigation to work with the Department of Justice to ensure that those engaged in illegal activities are brought to justice. These types of crimes create a significant loss of tax revenue, drive buyers into foreclosure, leave lenders burdened with bad loans and neighborhoods with abandoned and deteriorating properties. Special Agents of IRS Criminal Investigation are united with the rest of the law enforcement community in our commitment to pursuing individuals who create such havoc and threaten our country's financial foundation. Special Agents of IRS Criminal Investigation are highly skilled investigators who will continue to work with the US Attorney's Office to ensure that those engaged in illegal activities are brought to justice.”
Daniel McMullen, Special Agent in Charge of the FBI's Jackson Division stated, "The investigation and trial of this case were cooperative efforts between the FBI, the IRS, the FDIC and the United States Attorney's Office. We are pleased that the guilty verdict rendered today will provide both a measure of relief to the victims of this scheme and a deterrent to others who would attempt to commit similar crimes."
The case was prosecuted by Assistant United States Attorneys Carla J. Clark and Jerry L. Rushing as a result of a joint investigation by federal agents with IRS-CI, FBI, and FDIC-OIG who participate with other federal, state, and local agencies in the Jackson Financial Crimes Task Force.
Leavenworth Man Sentenced to 11+ Years in Lenexa Bank Robbery, High Speed Chase
March 24, 2010 - KANSAS CITY, KN—Isha Jackson, 34, Leavenworth, Kan., has been sentenced to 142 months in federal prison for robbing a bank in Lenexa, Kan., U.S. Attorney Lanny Welch said today.
Jackson pleaded guilty to one count of armed bank robbery and one count of brandishing a firearm during the robbery. According to court documents, on Sept. 21, 2009, Jackson entered Wachovia Bank at 12000 West 95th in Lenexa, Kan., pointed a Smith & Wesson .38 Special revolver at tellers and demanded money.
Police responding to bank’s alarm spotted Jackson’s car and pursued him. Jackson led police on a high speed chase until he crashed the car near 87th Street. He was ordered to pay more than $13,000 in restitution for damage to a car he struck during the chase and damage to the Enterprise rental car he was driving.
Welch commended the Lenexa Police Department, the Federal Bureau of Investigation and Assistant U.S. Attorney Leon Patton for their work on the case.
Jackson pleaded guilty to one count of armed bank robbery and one count of brandishing a firearm during the robbery. According to court documents, on Sept. 21, 2009, Jackson entered Wachovia Bank at 12000 West 95th in Lenexa, Kan., pointed a Smith & Wesson .38 Special revolver at tellers and demanded money.
Police responding to bank’s alarm spotted Jackson’s car and pursued him. Jackson led police on a high speed chase until he crashed the car near 87th Street. He was ordered to pay more than $13,000 in restitution for damage to a car he struck during the chase and damage to the Enterprise rental car he was driving.
Welch commended the Lenexa Police Department, the Federal Bureau of Investigation and Assistant U.S. Attorney Leon Patton for their work on the case.
Decrease in Bank Crime Statistics Noted for 2009 in New York State
March 24, 2010 - Yesterday the FBI released bank crime statistics for calendar year 2009. Overall, bank crimes decreased by just over 11% across the country and by over 52% throughout the state of New York.
Between January 1, 2009 and December 31, 2009, there were 5,943 robberies, 100 burglaries, 19 larcenies, and three extortions of financial institutions1 reported to law enforcement. The total 6,065 reported violations represent a decrease from 2008, during which 6,8572 violations of the Federal Bank Robbery and Incidental Crimes Statute were reported.
For the state of New York, between January 1, 2009 and December 31, 2009, there were 241robberies, two burglaries and no larcenies or extortions of financial institutions1 reported to law enforcement. The total 243 reported violations represent a decrease from 2008, during which 5133 violations of the Federal Bank Robbery and Incidental Crimes Statute were reported.
These statistics were recorded as of February 22, 2010. Note that not all bank crimes are reported to the FBI, and therefore the report is not a complete statistical compilation of all bank crimes that occurred in the United States.
The FBI has had a primary role in bank robbery investigations since the 1930s, when John Dillinger and his gang were robbing banks and capturing the public’s imagination. In 1934, it became a federal crime to rob any national bank or state member bank of the Federal Reserve System. The law soon expanded to include bank burglary, larceny, and similar crimes, with jurisdiction delegated to the FBI. Now, as then, the FBI has a role alongside local law enforcement in bank robbery investigations.
“It’s good to see the numbers decrease, but there are still plenty of bank robbers that need to be identified. We encourage the public to look at www.bandittrackernortheast.com and contact law enforcement if they recognize any of these people,” said Special Agent Richard Kolko.
Between January 1, 2009 and December 31, 2009, there were 5,943 robberies, 100 burglaries, 19 larcenies, and three extortions of financial institutions1 reported to law enforcement. The total 6,065 reported violations represent a decrease from 2008, during which 6,8572 violations of the Federal Bank Robbery and Incidental Crimes Statute were reported.
For the state of New York, between January 1, 2009 and December 31, 2009, there were 241robberies, two burglaries and no larcenies or extortions of financial institutions1 reported to law enforcement. The total 243 reported violations represent a decrease from 2008, during which 5133 violations of the Federal Bank Robbery and Incidental Crimes Statute were reported.
These statistics were recorded as of February 22, 2010. Note that not all bank crimes are reported to the FBI, and therefore the report is not a complete statistical compilation of all bank crimes that occurred in the United States.
The FBI has had a primary role in bank robbery investigations since the 1930s, when John Dillinger and his gang were robbing banks and capturing the public’s imagination. In 1934, it became a federal crime to rob any national bank or state member bank of the Federal Reserve System. The law soon expanded to include bank burglary, larceny, and similar crimes, with jurisdiction delegated to the FBI. Now, as then, the FBI has a role alongside local law enforcement in bank robbery investigations.
“It’s good to see the numbers decrease, but there are still plenty of bank robbers that need to be identified. We encourage the public to look at www.bandittrackernortheast.com and contact law enforcement if they recognize any of these people,” said Special Agent Richard Kolko.
New Website Profiles Bank Robbers Throughout New York and New Jersey
March 24, 2010 - Joseph M. Demarest, Jr., Assistant Director-in-Charge of the FBI in New York, and Michael Ward, Special Agent in Charge of the FBI in New Jersey, announced a new website that will help in investigating and solving bank robberies.
The website, www.bandittrackernortheast.com, features color photos and descriptions of bank robbers throughout the 13 counties covered by the FBI’s New York office and the 18 counties covered by the FBI's New Jersey office. People can now go to one website to see all the bank robbers who are being sought within the New York and New Jersey FBI Offices’ territories. The site features a map of where the crimes occurred.
The New York FBI’s Mr. Demarest said, “This website has proven to be a very effective tool for other FBI offices in identifying and catching bank robbers, and we expect it to be a great asset for New York. The site will provide 24-hour access for the public, bank employees and the news media. And it will provide confidential information to law enforcement around the clock.”
“New Jersey has been effective in addressing violent bank robberies,” said Michael Ward of the FBI's Newark Division. “With this new tool, we are optimistic that law enforcement efforts will be enhanced further in addressing this threat.”
Other FBI offices have launched similar BanditTracker sites with great success in Arkansas, Chicago, Georgia, Indiana, Texas and St. Louis.
The sites receive exposure on more than a dozen Internet search engines. As a result, BanditTracker has visitors from 132 different countries and nearly 7,900 different cities. To date, BanditTracker sites have received more than 300,000 visits, with subject photos displayed more than 10 million times.
The first of the BanditTracker sites was designed in 2007 by the FBI, the North Texas Crime Commission and Electronic Tracking Systems (ETS). ETS specializes in tracking and location, and works closely with law enforcement, financial institutions and businesses to capture bank robbers and other felony offenders. The use of BanditTracker is free to law enforcement agencies. Rick Battelle, the North Central Regional Managing Director for ETS said, “We are very pleased that the ETS-facilitated Community Coalition, consisting of financial institutions, law enforcement agencies and our company, can provide the unique support offered by the BanditTracker site to aid our law enforcement partners in New York and New Jersey.”
The New York FBI is home to the FBI-NYPD Joint Bank Robbery Task Force, the nation’s first-ever permanent FBI-local law enforcement task force, created in 1979. In addition, there are violent crime task forces with investigative responsibility for bank robberies in the New York FBI’s satellite offices in White Plains, Melville and Goshen, NY.
The website will also feature bank robbery fugitives from New Jersey. The Newark FBI Division, together with its law enforcement partners, has one of the highest bank robbery solution rates in the nation. In 2009, New Jersey law enforcement agencies solved over 71 percent of the 190 robberies that occurred in New Jersey, with ongoing investigations on the remaining unsolved cases. This is due in large part to the excellent working relationship between federal, state, and local law enforcement agencies in New Jersey working together and sharing information. With participation in the bandittrackernortheast.com website, the FBI seeks to further this cooperative effort by adding the public as our partners in battling bank robberies.
The website, www.bandittrackernortheast.com, features color photos and descriptions of bank robbers throughout the 13 counties covered by the FBI’s New York office and the 18 counties covered by the FBI's New Jersey office. People can now go to one website to see all the bank robbers who are being sought within the New York and New Jersey FBI Offices’ territories. The site features a map of where the crimes occurred.
The New York FBI’s Mr. Demarest said, “This website has proven to be a very effective tool for other FBI offices in identifying and catching bank robbers, and we expect it to be a great asset for New York. The site will provide 24-hour access for the public, bank employees and the news media. And it will provide confidential information to law enforcement around the clock.”
“New Jersey has been effective in addressing violent bank robberies,” said Michael Ward of the FBI's Newark Division. “With this new tool, we are optimistic that law enforcement efforts will be enhanced further in addressing this threat.”
Other FBI offices have launched similar BanditTracker sites with great success in Arkansas, Chicago, Georgia, Indiana, Texas and St. Louis.
The sites receive exposure on more than a dozen Internet search engines. As a result, BanditTracker has visitors from 132 different countries and nearly 7,900 different cities. To date, BanditTracker sites have received more than 300,000 visits, with subject photos displayed more than 10 million times.
The first of the BanditTracker sites was designed in 2007 by the FBI, the North Texas Crime Commission and Electronic Tracking Systems (ETS). ETS specializes in tracking and location, and works closely with law enforcement, financial institutions and businesses to capture bank robbers and other felony offenders. The use of BanditTracker is free to law enforcement agencies. Rick Battelle, the North Central Regional Managing Director for ETS said, “We are very pleased that the ETS-facilitated Community Coalition, consisting of financial institutions, law enforcement agencies and our company, can provide the unique support offered by the BanditTracker site to aid our law enforcement partners in New York and New Jersey.”
The New York FBI is home to the FBI-NYPD Joint Bank Robbery Task Force, the nation’s first-ever permanent FBI-local law enforcement task force, created in 1979. In addition, there are violent crime task forces with investigative responsibility for bank robberies in the New York FBI’s satellite offices in White Plains, Melville and Goshen, NY.
The website will also feature bank robbery fugitives from New Jersey. The Newark FBI Division, together with its law enforcement partners, has one of the highest bank robbery solution rates in the nation. In 2009, New Jersey law enforcement agencies solved over 71 percent of the 190 robberies that occurred in New Jersey, with ongoing investigations on the remaining unsolved cases. This is due in large part to the excellent working relationship between federal, state, and local law enforcement agencies in New Jersey working together and sharing information. With participation in the bandittrackernortheast.com website, the FBI seeks to further this cooperative effort by adding the public as our partners in battling bank robberies.
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