Leroy Township Man Sentenced to Nearly Six Years in Prison for Fraud

A Leroy Township man was sentenced to nearly six years in prison for fraud that occurred during his employment as a manager with the Fowler Company, which cost the company nearly $1 million, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Jeffrey A. Boring, 49, previously pleaded guilty to five counts of mail fraud. U.S. Judge Sara Lioi sentenced him to 71 months in prison and ordered him to pay $978,810 in restitution.
Boring, while employed as a project manager with the Fowler Company, created and approved fraudulent invoices from a company he created called Fairport Industrial Group. Additionally, Boring instructed vendors, who provided materials and services for Boring’s personal purposes, to invoice the cost to Fowler, according to court documents.
The conduct took place between on or about June 27, 2006, through on or about January 18, 2011.
This case was being prosecuted by Assistant United States Attorney Henry F. DeBaggis following an investigation by the Cleveland Field Office of the Federal Bureau of Investigation.

Bay Village Man Sentenced to Nearly Four Years in Prison, Ordered to Pay $620,000

A Bay Village man was sentenced to nearly four years in prison and ordered to pay more than $620,0000 for fraud and tax crimes, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Frederick C. Bryant, age 45, admitted to embezzling $505,832 from a victim that he guaranteed a five percent rate of return. Bryant converted the money for his own personal use. Bryant also failed to report the funds to the IRS, according to court documents.
He pleaded guilty earlier this year to crimes of mail fraud and tax evasion.
U.S. District Judge Dan Polster sentence Bryant to 46 months in prison. He also ordered Bryant to pay $505,832 in restitution to the victim and more than $115,000 in interest and penalties to the Internal Revenue Service.
This case is being prosecuted by Assistant United States Attorney Vasile C. Katsaros, following an investigation by the Federal Bureau of Investigation and the Internal Revenue Service.

Ashland Man Pleads Guilty to His Role in Labor Trafficking Conspiracy

An Ashland man pleaded guilty to one count of conspiracy for his role in a holding woman with cognitive disabilities and her child against their will and forcing the woman to perform manual labor, law enforcement officials said today.
Daniel J. Brown, 33, admitted that from between August 2010 through October 2012, he conspired with Jordie L. Callahan, Jessica L. Hunt, and Dezerah L. Silsby to establish and continue a pattern of domination and control over their victims, identified only as S.E. and B.E.
The plea agreement includes a provision that Brown will cooperate with investigators, including testifying truthfully at all court proceedings if necessary.
Callahan, 26; Hunt, 31; and Silsby, 21, all of Ashland, were indicted earlier this month on multiple charges. They are accused of using a combination of violence, threats, sexual assaults, humiliation, deprivation, and monitoring to establish and continue a pattern of domination and control over S.E. and B.E., according to the indictment.
Their tactics included beating S.E., threats of beatings to S.E. and B.E., taunting and threatening the victims with pit bulls and snakes, causing the victims to sleep in unsafe and unsanitary conditions, restricting B.E. and S.E.’s access to the bathroom, preventing them from eating regular and suitable meals, and forcing S.E. to eat dog food and crawl on the floor while wearing a dog collar, according to the indictment.
Callahan pointed a firearm at S.E.’s head and threatened to kill her if she did not perform the labor and services he and other conspirators commanded. Callahan also forced S.E. on multiple occasions to engage in sex acts with him and threatened that he and Hunt would kill S.E. if she told anyone about the forced sexual acts, according to the indictment.
Callahan, Hunt, and Silsby face one count each of the following: conspiracy to violate laws; forced labor; theft of government benefits; and acquiring a controlled substance by deception. Callahan and Hunt face an additional charge of tampering with a witness.
The case is being prosecuted by Assistant U.S. Attorneys Chelsea Rice and Thomas E. Getz, with assistance from Trial Attorney Victor Boutros of the Justice Department’s Human Trafficking Prosecution Unit, following an investigation by the FBI and Ashland Police Department, with assistance from the Ashland County Prosecutor’s Office.
If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including each defendant’s prior criminal record (if any), his or her role in the offenses, and the characteristics of the violations. In all cases, the sentences will not exceed the statutory maximum and in most cases they will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Aurora Man Sentenced to Six Years in Prison for $300,000 Construction Scheme

An Aurora man was sentenced to more than six years in prison and ordered to pay restitution for crimes related to a scheme of more than $300,000 involving construction projects, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Field Office.
Robert J. Berryhill, 51, previously pleaded guilty to five counts of mail fraud, two counts of wire fraud, and one count each of aggravated identity theft and false personation of an officer or employee of the United States.
U.S. District Judge Sara Lioi sentenced Berryhill to 75 months in prison. She ordered him taken into custody and remanded at the conclusion of the hearing.
Berryhill created a fictitious company as a way to divert money on construction projects for his own personal use, including the restoration of a vintage Corvette sports car he had purchased, according to court documents.
“This defendant abused the trust of his employer, his colleagues, and his customers in an effort to enrich himself,” said Dettelbach. “He used public contracts as a way to get his Corvette restored and his pockets lined with hundreds of thousands of dollars.”
“Robert Berryhill created false businesses and false invoices and ultimately pretended to be an FBI employee, all in a desperate attempt to defraud others out of $304,000,” Anthony said. “The FBI remains committed to detecting and stopping those defrauding others.”
Berryhill previously served as the senior vice president of Carnegie Management and Development Corp. (CMDC) in Westlake, Ohio.
Knoxbi Company LLC, which was managed by CMDC, won the bid to build an FBI office in Knoxville, Tennessee, in August 2007. The company used Blaine Construction Company to serve as the on-site general contractor, according to court documents.
In March 2009, Indy-Fedreau LLC, which was also managed by CMDC, won the bid to construct an FBI building in Indianapolis. The company used Welty Building Company as the general contractor, according to court documents.
At the same time, Berryhill also created a fictitious contractor known as American Excavators Company (AEC) for the purpose of submitting false invoices to divert CMDC money to his personal use, according to court documents.
From August 2008 through September 2009, Berryhill defrauded CMDC, Knoxbi, Indy-Fedreau, Blaine, and Welty to obtain money. He did this by creating false invoices in the name of Ore Enterprises—the Pennsylvania company Berryhill hired to restore his vintage Corvette—and then submitted them to Blaine and Welty. Those companies paid the invoices then passed the cost on to Knoxbi and Indy-Fedreau for final payment, according to court documents.
Berryhill also created false invoices in the name of AEC that he submitted to Blaine and Welty. Those companies paid AEC and then passed the cost of the invoice to Knoxbi and Indy-Fedreau for final payment, according to court documents.
Overall, Berryhill caused an actual loss of at least $304,669. Judge Lioi ordered him to pay that amount in restitution.
Berryhill also falsely pretended to be an FBI employee identified as “W.C.M.” on July 28, 2008, and demanded that Blaine pay an invoice from Ore regarding the construction of an FBI building in Knoxville, according to court documents.
The case resulted from an investigation conducted by Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Robert J. Patton.

FBI Statement on Arrest of Columbus Police Detective

COLUMBUS—Kevin R. Cornelius, Special Agent in Charge (SAC) of the Cincinnati Division of the Federal Bureau of Investigation (FBI), today announced that the FBI recently arrested Stevie Billups, 48, of Columbus, Ohio, a detective with the Columbus Division of Police on a criminal complaint for the attempted distribution of heroin and for the use or carrying of a firearm during and in relation to a drug trafficking crime.
The investigation into Billups was conducted jointly by the Ohio Casino Control Commission and the FBI’s Central Ohio Public Corruption Task Force which includes special agents from the FBI and the Ohio Bureau of Criminal Investigation (BCI).
SAC Cornelius commended the Columbus Division of Police and Police Chief Kim Jacobs for the tremendous cooperation they provided during this investigation. SAC Cornelius also thanked the Homeland Security Investigations directorate (ICE) for assisting in the investigation.
The criminal complaint filed by the FBI in this investigation was recently unsealed by a U.S. District Court Magistrate Judge. The public is reminded that criminal complaints contain only allegations of criminal misconduct and that defendants are presumed to be innocent unless proven guilty in a court of law.

Hudson County Man Convicted of Sexually Abusing Sleeping Woman on Domestic Flight

NEWARK, NJ—A Hudson County, New Jersey man was convicted by a federal jury today of sexually abusing a sleeping woman aboard a flight from Phoenix to Newark Liberty International Airport last summer, U.S. Attorney Paul J. Fishman announced.
Bawer Aksal, 49, of North Bergen, New Jersey, was convicted of one count of sexual abuse and one count of abusive sexual contact following a five-day trial before U.S. District Judge Jose L. Linares in Newark federal court. The jury deliberated seven hours before returning its guilty verdicts.
According to documents filed in this case and the evidence presented at trial:
Aksal was a passenger on a United Airlines flight from Phoenix to Newark on August 20, 2012. He was sitting in the middle seat in a row of three seats. Neither Aksal, the victim, who was seated in the window seat, nor the passenger in the aisle seat knew each other. Before take-off, the victim texted a friend complaining about Aksal’s arm encroaching into her seating area.
About one hour before landing, the aisle passenger looked to his right and saw Aksal half into the victim’s seat, with his body against the victim’s, his right arm around the back of her, and his left hand beneath a sweater that was draped over her. The victim awoke to find Aksal’s hands inside her shirt and shorts and struggled out of his grasp. The aisle passenger observed her jolting awake. The aisle passenger and the victim both gathered their belongings and headed to the back of the plane to report what happened to the flight attendants.
Aksal was detained upon arrival in Newark and arrested by agents of the FBI. He now faces a maximum potential sentence of life in prison and a $250,000 fine. Sentencing before Judge Linares is scheduled for October 23, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and the Port Authority Police Department, under the direction of Superintendent Michael Fedorko, with the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman and Robert Frazer of the U.S. Attorney’s Office Criminal Division in Newark.
The federal government has exclusive jurisdiction over all sexual abuse cases that occur in American airplanes, as such events are outside the jurisdiction of any state.

California Truck Driver Pleads Guilty to Meat Theft Scam

United States Attorney Deborah R. Gilg announced that Artak Medjbarian of Sherman Oaks, California, pled guilty to conspiring with others to attempt to steal $163,000 worth of beef products from a Nebraska Beef facility in Omaha, Nebraska. Medjbarian, age 33, was charged in May 2012 by a federal grand jury in a scheme with others to steal loads of meat cargo by pretending to be the legitimate freight haulers to whom authority to transport the loads had been given. The indictment specifically charged a conspiracy to commit wire fraud and to engage in the interstate transportation of stolen property.
The indictment alleged that Medjbarian used the identity of a legitimate trucking company in Arizona to bid on hauling a load of meat from Nebraska Beef to California. Due to discrepancies with respect to the documentation forwarded by unknown co-conspirators on Medjbarian’s behalf, the freight brokers contacted the owners of the true Lopez Trucking and determined that Lopez Trucking did not have trucks operating under their authority in the state of Nebraska on January 27, 2012, the day Medjbarian showed up at Nebraska Beef pretending to have the transport authority of Lopez Trucking. The Omaha Police were contacted, and Medjbarian was initially arrested on local charges.
The guilty plea was entered before the Honorable Laurie Smith Camp. Judge Smith Camp set the sentencing of this matter for October 7, 2013. Medjbarian is detained pending sentencing. Medjbarian faces a maximum penalty of up to five years in prison on the conspiracy conviction.
In addition to the Omaha Police Department, the case was also investigated by the Nebraska State Patrol and by the Federal Bureau of Investigation.

Local Real Estate Business Owner Indicted on Fraud Charges

ST. LOUIS, MO—Richard Saddler owned Omicron Capital LLC, a company in the business of assisting customers in refinancing commercial and real estate loans.
According to the indictment, between January 1, 2010 and March 31, 2012, Saddler accepted roughly $250,000 from at least five customers and said that the money would be used for down payments or appraisals. Instead, Saddler actually used the money to pay the mortgage on his home, which was in danger of foreclosure, as well as airline tickets, meals, and other personal expenses.
Saddler, St. Louis County, was indicted by a federal grand jury on three felony counts of wire fraud.
If convicted, wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.

Topeka Man Pleads Guilty to Commercial Robberies

TOPEKA, KS—A Topeka man has pleaded guilty to two commercial robberies, U.S. Attorney Barry Grissom said today.
Brendon R. Thompson, 26, Topeka, Kansas, pleaded guilty to two counts of robbery. On November 16, 2012, he robbed the EZ Payday Advance store at 2613 S.W. 21st Street in Topeka. On January 17, 2013, he robbed the Family Dollar at 1313 S.W. 21st Street in Topeka.
Sentencing is set for November 5. He faces a maximum penalty of 20 years in federal prison and a fine up to $250,000 on each count. Grissom commended the Topeka Police Department, the FBI, and Assistant U.S. Attorney Jared Maag for their work on the case.

Former Bank Employees Indicted for Embezzling, Staging Robbery

WICHITA, KS—Four former bank employees are charged with embezzling from a bank in Grant County, Kansas, and staging a robbery to cover the thefts, U.S. Attorney Barry Grissom said today.
Four former employees of Western State Bank in Ulysses, Kansas, are charged in a federal grand jury indictment unsealed today. The defendants are:

• Amber Gutierrez, 32, Ulysses, Kansas, who is charged with two counts of embezzlement by a bank employee and one count of bank robbery.
• Hattie Wiginton, 32, Ulysses, Kansas, who is charged with two counts of embezzlement by a bank employee, one count of bank robbery, and one count of making a false statement to the FBI.
• Ashley Cravens, 28, Ulysses, Kansas, who is charged with two counts of embezzlement by a bank employee and one count of bank robbery.
• Linda Wise, 59, Ulysses, Kansas, who is charged with one count of embezzlement by a bank employee.

The indictment alleges:
From 2008 to July 24, 2010, while Gutierrez was head teller and Wiginton and Cravens were clerks, they embezzled up to $84,200 from the bank.
On July 24, 2010, Gutierrez, Wiginton and Cravens staged a robbery at the bank, taking an undetermined amount of cash.
On July 24, 2010, Wiginton made false statements to the FBI, including false claims that she did not know who robbed the bank, that there were two robbers and that one of the robbers was a male with an Hispanic accent.
From late 2010 to March 2013, Gutierrez, Cravens, and Wise, who were still bank employees, embezzled $24,450 from the bank. They created falsified cash deposit slips and deposited funds in their personal accounts.
If convicted, they face a maximum penalty of 30 years in federal prison and a fine up to $1,000 on the each count of theft by a bank employee; a maximum penalty of 25 years and a fine up to $250,000 on the charge of bank robbery; and a maximum penalty of five years and a fine up to $250,000 on the charge of making a false statement to the FBI. The FBI, the KBI, the Grant County Sheriff’s Office, and the Ulysses Police Department investigated. Assistant U.S. Attorney Aaron Smith is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.

Former Bank CEO Sentenced for Money Laundering and Bank Fraud

JACKSON—Larry Barnette Hill, 58, of Meadville, Mississippi, was sentenced in federal court today to 78 months in federal prison, followed by five years of supervised release, for money laundering and bank fraud, announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Daniel McMullen. Hill was also ordered to pay $1,243,703 in restitution to People’s Bank of the South.
From 2004 through 2012, while serving as CEO of People’s Bank of the South in Bude, Mississippi, Hill fraudulently withdrew money from the bank’s Payroll Clearing Account and deposited those funds into the bank accounts of his family members and into a “shell” bank account he created for his own use. He also used the bank’s credit card to pay personal expenses without the bank’s authorization, and he used third-party checks issued in the name of People’s Bank for his own personal benefit, including making payments on a personal loan at another bank.
Hill concealed his fraudulent activities by creating false general ledger tickets at the bank that appeared to be for bank expenses and inflating the bank’s budget each month in order to cover up his embezzlement.
This case was investigated by the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation’s Office of Inspector General. It was prosecuted by Assistant U.S. Attorney Mike Hurst.

Former Law Enforcement Officers Sentenced for Theft of Government Funds

JACKSON, MS—Two former law enforcement officers were sentenced today by U.S. District Judge Tom S. Lee for theft of government funds and property.
Zach Robinson, a former deputy with the Hinds County Sheriff’s Office, and Kent Daniels, a former Jackson Police officer and investigator for the Hinds County District Attorney’s Office, were each sentenced to 12 months in federal prison. They were also ordered to pay joint restitution in the amount of $21,996.
In March 2013, Robinson and Daniels pled guilty to robbing a motel room that they believed was being used by a drug dealer. They took $23,000 and seven iPads that had actually been placed in the room by the FBI.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Jerry Rushing and Mike Hurst.

Bank Employee Charged with Bank Fraud

MCALLEN, TX—Edna Edith Sepulveda, 39, of McAllen, has surrendered to federal authorities following the return of an indictment alleging she perpetrated more than $200,000 in bank fraud, United States Attorney Kenneth Magidson announced today.
The indictment was returned July 9, 2013, and she made her initial appearance today, at which time she was permitted release upon posting bond.
According to the indictment, Sepulveda was a former employee of Inter National Bank of McAllen. Beginning in January 10, 2006, she allegedly devised a scheme to take money from Inter National Bank by fraudulent means. She then placed the funds into the accounts of her parents allegedly intended for her own personal use, according to the allegations. The total amount of loss to Inter National Bank is $232,351.19.
If convicted, Sepulveda faces up to 30 years in federal prison, as well as a $1 million fine.
This case is being investigated by the FBI with the cooperation of Inter National Bank. Assistant United States Attorney Jason C. Honeycutt is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

Former CEO and Former CFO of ArthroCare Corp. Charged with Orchestrating $400 Million Securities Fraud Scheme

WASHINGTON—The former chief executive officer and former chief financial officer of ArthroCare Corp., a publicly traded medical device company based in Austin, Texas, were charged for their alleged leading roles in a $400 million scheme to defraud the company’s shareholders and members of the investing public by falsely inflating ArthroCare’s earnings by tens of millions of dollars, announced Acting Assistant Attorney Mythili Raman of the Department of Justice’s Criminal Division and U.S. Attorney Robert Pitman of the Western District of Texas.
A 17-count indictment was unsealed today in the U.S. District Court for the Western District of Texas against Michael Baker, the former chief executive officer and director of ArthroCare, and Michael Gluk, the former chief financial officer of ArthroCare. Both defendants surrendered to authorities this morning.
The indictment, which was returned on July 16, 2013, charges Baker and Gluk with one count of conspiracy to commit wire and securities fraud, 11 counts of wire fraud, and two counts of securities fraud; it charges Baker alone with three counts of false statements. The indictment also seeks forfeiture of assets held by Baker and Gluk.
“Truthful corporate earnings reports are critical to the soundness of our financial system,” said Acting Assistant Attorney General Raman. “Today’s indictment alleges that those at the top of ArthroCare deceived investors and regulators by manipulating the company’s reports to inflate its stock, ultimately causing hundreds of millions in losses in shareholder value. The Criminal Division will continue to aggressively pursue corporate executives who undermine our financial markets for personal gain.”
According to the indictment, from at least December 2005 through December 2008, Baker, Gluk, and other senior executives and employees of ArthroCare allegedly falsely inflated ArthroCare’s sales and revenue through a series of end-of-quarter transactions involving several of ArthroCare’s distributors. According to court documents, Baker, Gluk, and other ArthroCare employees determined the type and amount of product to be shipped to distributors based on ArthroCare’s need to meet Wall Street analyst forecasts, rather than distributors’ actual orders. Baker, Gluk, and others then allegedly caused ArthroCare to “park” millions of dollars worth of ArthroCare’s medical devices at its distributors at the end of each relevant quarter. ArthroCare would then report these shipments as sales in its quarterly and annual filings at the time of the shipment, enabling the company to meet or exceed internal and external earnings forecasts.
The indictment alleges that ArthroCare’s distributors agreed to accept shipment of millions of dollars of product in exchange for substantial, upfront cash commissions; extended payment terms; and the ability to return product, as well as other special conditions, allowing ArthroCare to falsely inflate its revenue by tens of millions of dollars.
Baker, Gluk, and others allegedly used DiscoCare, a privately owned Delaware corporation, as one of the distributors to cover shortfalls in ArthroCare’s revenue. According to the indictment, at Baker and Gluk’s direction, ArthroCare shipped product to DiscoCare that far exceeded DiscoCare’s needs.
In addition, Baker, Gluk, and others allegedly lied to investors and analysts about ArthroCare’s relationships with its distributors, including its largest distributor, DiscoCare. According to the indictment, Baker and Gluk caused ArthroCare to acquire DiscoCare specifically to conceal from the investing public the nature and financial significance of ArthroCare’s relationship with DiscoCare.
The indictment further alleges that when Baker was deposed by the U.S. Securities and Exchange Commission about the DiscoCare relationship in November 2009, he lied again on multiple occasions.
According to court documents, between December 2005 and December 2008, ArthroCare’s shareholders held more than 25 million shares of ArthroCare stock. On July 21, 2008, after ArthroCare announced publicly that it would be restating its previously reported financial results from the third quarter 2006 through the first quarter 2008 to reflect the results of an internal investigation, the price of ArthroCare shares dropped from $40.03 to $23.21 per share. The drop in ArthroCare’s share price caused an immediate loss in shareholder value of more than $400 million.
If convicted, Baker and Gluk would face a maximum prison sentence of 25 years for the conspiracy charge, 20 years for each count of wire fraud, and 25 years for each securities fraud count. Baker faces five years for each count of false statements.
An indictment is merely a charge, and the defendants are presumed innocent until proven guilty.
This case was investigated by the FBI’s Austin Resident Agency. The case is being prosecuted by Deputy Chief Benjamin D. Singer and Trial Attorneys Henry P. Van Dyck and William Chang of the Criminal Division’s Fraud Section. The Department recognizes the substantial assistance of the U.S. Securities and Exchange Commission.

Martha Mae Mitchell Pleads Guilty in U.S. Federal Court

The United States Attorney’s Office announced that during a federal court session in Great Falls, on July 16, 2013, before U.S. Magistrate Judge Keith Strong, Martha Mae Mitchell, a 57-year-old resident of Box Elder and an enrolled member of the Chippewa Cree Tribe, pled guilty to assault resulting in serious bodily injury. Sentencing has been set for October 22, 2013. She is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Danna R. Jackson, the government stated it would have proved at trial the following:
On January 23, 2013, Mitchell became frustrated when a 9-month-old child would not stop crying. Mitchell told law enforcement that she twisted the baby’s legs and both arms, causing injuries to them. Mitchell further told law enforcement that she was “shocked and disgusted” at herself. The crime occurred within the exterior boundaries of the Rocky Boy’s Indian Reservation.
Medical evidence would have shown that the victim suffered fractures to all four of the baby’s limbs. The victim was hospitalized for a week. The medical evidence would also show that the victim sustained additional injuries that may not be attributed to Mitchell’s conduct.
Mitchell faces possible penalties of 10 years in prison, a $250,000 fine, and three years’ supervised release.
The investigation was conducted by the Federal Bureau of Investigation.

Four Arrested in Large-Scale Telemarketing Scheme

On July 11, 2013, Patricia M. Ferrick, Acting Special Agent in Charge of the Milwaukee Division of the Federal Bureau of Investigation (FBI), was joined by Pete Zegarac, Inspector in Charge of the Chicago Division of the U.S. Postal Inspection Service, in announcing the arrest today of four individuals charged to have owned, operated, and engaged in a timeshare telemarketing fraud scheme in violation of Title 18, United States Code, Sections 371, 1341, 1343, 1344, 1349, 1956, 2326, and 2.
The subjects are identified as Mark S. Parks (age: 39) of New London, Wisconsin; Ashley M. Conant (age: 28) of Bellevue, Wisconsin; Eileen M. Goltz (age: 51) of Port Charlotte, Florida; and Mindy L. Parks (age: 34) of Brussels, Wisconsin. All were taken into custody without incident.
From October 2009 through April 2011, the aforementioned individuals are alleged to have engaged in fraudulent and deceptive business tactics associated with several telemarketing businesses. Those businesses include National Timeshare Resales (NTR), Intergrated Advertising Solutions (IAS), Administrative Timeshare Resales (ATR), and Midwest Timeshares (MT). All these companies based out of Green Bay, Wisconsin, were owned and operated at various times by all four subjects. Telemarketers employed at these companies would contact timeshare owners by telephone to inquire whether they were interested in selling their timeshares. In the majority of cases, these companies falsely represented they found buyers for consumers’ timeshare properties and solicited fees ranging from $200 to $2,500 from each consumer, totaling more than $2,000,000 in fraudulently obtained funds.
This case was a joint investigation by the Federal Bureau of Investigation and the U.S. Postal Inspection Service with assistance of the Brown County Sheriff’s Office, Door County Sheriff’s Office, Waupaca County Sheriff’s Office, and the Wisconsin Department of Agriculture Trade and Consumer Protection.

Friendship Man Charged in Grand Marsh Bank Robbery

MADISON, WI—John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced that a complaint has been filed in U.S. District Court in Madison charging Randy Glenn Paulson, 55, Friendship, Wisconsin, with bank robbery. If convicted, the defendant faces a maximum penalty of 20 years in federal prison.
The complaint charges that on July 3, 2013, Paulson took by force, violence, and intimidation money which was in the care, custody, and control of Grand Marsh State Bank, Grand Marsh, Wisconsin. The complaint alleges that Paulson entered the bank armed with a handgun that he pointed at the tellers and announced, “This is a robbery.”
After obtaining cash from the teller drawers, he approached a customer and demanded her car keys. The customer did not respond, and a teller volunteered her car keys, which Paulson took, and he then left the bank. Paulson was arrested in Illinois on July 11, 2013, on the federal bank robbery charge and is currently in custody.
He made an initial appearance in federal court in Madison today, and his arraignment is scheduled for July 19, 2013.
The charge against Paulson is a result of an investigation conducted by the Madison Residence Agency of the Federal Bureau of Investigation and the Adams County Sheriff’s Department, with assistance from the Villa Park, Illinois Police Department and the Chicago Field Office of the FBI. The prosecution of this case has been assigned to Assistant U.S. Attorney Grant C. Johnson.
You are advised that a charge is merely an accusation and that a defendant is presumed innocent until and unless proven guilty.

Oxon Hill Woman Pleads Guilty in Two Separate Mortgage Fraud Schemes That Resulted in Losses of More Than $2.5 Million

BALTIMORE—Rhonda Scott, age 52, of Oxon Hill, Maryland, pleaded guilty today before U.S. District Judge James K. Bredar to conspiring to commit wire fraud in connection with two separate mortgage fraud schemes that resulted in losses of over $2,500,000.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge David Beach of the United States Secret Service-Washington Field Office; Inspector General Jon T. Rymer of the Federal Deposit Insurance Corporation; Special Agent in Charge Joe Clarke of the Housing and Urban Development Office of Inspector General-Office of Investigations; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge Gene E. Morrison, Washington Field Office, U.S. Department of Justice Office of the Inspector General; Howard County Police Chief William McMahon; Acting Special Agent in Charge Lisa Quinn of the United States Secret Service-Baltimore Field Office; and Howard County State’s Attorney Dario Broccolino.
According to her plea, beginning in 2008, Scott agreed to participate in several fraudulent real estate transactions that settled at M&R Title Inc. and Sanford Title Services LLC. The fraudulent transactions at each title company were part of different conspiracies, both of which Scott joined. In both schemes, Scott facilitated deals between her co-conspirators, identified and recruited individuals that could be parties to the real estate transactions generating proceeds for the co-conspirators, received proceeds of the fraudulent transactions through a shell company designed to disguise her receipt of the funds, sent money to co-conspirators, and identified mortgage transactions that the co-conspirators could use to enrich themselves.
As part of the M&R Title conspiracy, the co-conspirators deceived buyers, sellers, and lenders to make it appear to sellers that they were selling their property at a low price and to buyers and lenders that the property was being sold at a higher price. The co-conspirators created paperwork for two different sales of the property at the same time. The first sale was fraudulent because it was backdated, the buyer was planning to immediately flip the property in a subsequent sale, and the settlement statement listed a fake hard money loan. The second sale involved a significantly increased sales price, and the settlement statement showed a significant sum being disbursed to the hard money lender as a payoff of an existing lien, but in reality, those funds would be used for improper disbursements to the co-conspirators.
With respect to the Sanford Title conspiracy, improper disbursements were made from the title company to Scott and others. The conspirators engaged in many fraudulent techniques, including short sales in which the property would be sold for a higher price than the seller was aware of; sales of properties not owned by the seller including properties Scott purported to own but did not own at the time of settlement; real estate transactions in which there were multiple sales of the same property at the same time; showing difference settlement statements to the seller and/or buyer using the difference between the figures in the two statements to enrich themselves; and Sanford Title not disbursing money that should have been paid to lien holders and instead diverting a portion of those funds to co-conspirators.
Both of the M&R Title and Sanford Title fraud schemes involved at least 25 victims, including lenders, sellers, and buyers of real estate, title insurance companies, and lien holders. The reasonably foreseeable loss associated with Scott’s conduct is at least $2.5 million.
Scott will be required to forfeit at least $2.7 million and pay restitution of at least $1 million.
Scott faces a maximum penalty of 30 years in prison and a $1 million fine for conspiring to commit wire fraud. No sentencing date has been scheduled.
Emeka Udeze, age 38, of Bowie, Maryland; Shola Risikat Balogun, age 47, of Upper Marlboro; and Niesha Williams, age 33, of Fort Washington, Maryland, each previously pleaded guilty to their role in the fraud schemes. No sentencing date has been scheduled for them at this time.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention, and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the task force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud, and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available at www.justice.gov/usao/md/Mortgage-Fraud/index.html.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the U.S. Secret Service, FDIC, HUD-OIG, FBI, Department of Justice OIG, Howard County Police Department, Secret Service, and Howard County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Harry Gruber and Special Assistant United States Attorney Colleen McGuinn assigned to this case from the Howard County State’s Attorney’s Office, who are prosecuting the case.

Former Longview Woman Sentenced for Embezzling $425,000 from Pizza Business

TYLER, TX—A 64-year-old woman who lived and worked in Longview, Texas has been sentenced to federal prison for federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Jo Beth Westergard pleaded guilty today to wire fraud and was then sentenced to 24 months in federal prison by U.S. District Judge John D. Love. Westergard was also ordered to pay restitution in the amount of $425,323.45 to Pizza Hut of East Texas.
According to information presented in court, from 2000 to 2012, Westergard was employed as a bookkeeper for Pizza Hut of East Texas and had access to the company’s computers and banking information. On February 18, 2005, Westergard wired $5,970.94 from a Pizza Hut of East Texas checking account to her personal American Express credit card account. This transaction was part of a larger scheme devised by Westergard to embezzle funds from Pizza Hut of East Texas for her personal use. Westergard also transferred funds to her personal Visa credit card account and her personal PayPal account.
This case was investigated by the Federal Bureau of Investigation and the Gregg County District Attorney’s Office and prosecuted by Assistant U.S. Attorney Jim Noble.

Manhattan Business Owner Pleads Guilty in Manhattan Federal Court to Multi-Million-Dollar Ponzi Scheme

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that Jason Konior, the founder and manager of a number of related business entities in New York City, collectively referred to as “Absolute,” pled guilty today in Manhattan federal court in connection with his operation of a multi-million-dollar Ponzi scheme in which he stole at least $2.9 million from small hedge fund investors and used the funds to pay off prior investors and to pay himself. Konior was originally charged in February 2013 and pled guilty today before U.S. District Judge Alvin K. Hellerstein.
Manhattan U.S. Attorney Preet Bharara said, “In the space of less than a year, Jason Konior managed to take at least $2.9 million that he had solicited from his investors and then use it to settle up with previous investors and to pay himself. Today’s plea ensures that he will be punished for perpetrating this Ponzi scheme on his victims.”
According to the Information, statements made during today’s guilty plea proceeding, and a complaint previously unsealed in Manhattan federal court:
From late 2011 through May 2012, Konior organized and managed a Ponzi scheme in which he misappropriated at least $2.9 million in funds he had solicited from hedge fund investors. He represented to these investors that Absolute would provide additional trading funds of up to nine times the investment they made in Absolute. As part of Absolute’s “first loss” investment program, Konior claimed that he would place the combined funds—the investors’ funds and the additional funds to be provided by Absolute—in a brokerage account designated by Absolute. According to Konior, the hedge fund investors would then be able to trade securities utilizing that brokerage account. Under the arrangement, the hedge funds would be responsible for trading losses, and they would share any profits with Absolute.
Instead of establishing brokerage accounts for the victim hedge funds, however, Konior misappropriated the funds they provided by paying redemptions to prior investors, making payments to himself, and paying various personal and business expenses. In e-mails, text messages, and telephone conversations, Konior pretended that he was establishing brokerage accounts for the three hedge fund investors, when he had already stolen their money. For example, in one case, after Konior repeatedly failed to set up a brokerage account for one of the hedge fund investors, the manager of the hedge fund investor sent him a text message stating, “I want my money back. What did you do to it anyway? Are you going to tell me or do you want the SEC to find out?” Konior responded with a text message, stating, “We have your funds in our acct. Where else would they be?” At the time Konior wrote the message, he had already used that hedge fund’s investment to pay off other investors and his own expenses.

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Konior, 39, of New York, New York, pled guilty to one count of wire fraud, which carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. He is scheduled to be sentenced by Judge Hellerstein on November 8, 2013, at 11:00 a.m.
Mr. Bharara praised the work of the Federal Bureau of Investigation and the Securities and Exchange Commission.
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. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud.
Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys John T. Zach and Jason H. Cowley are in charge of the prosecution.

Canadian Citizen Sentenced in Manhattan Federal Court to 20 Years in Prison in Connection with $7 Million Advance-Fee Fraud Scheme

Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (FBI), announced today that David “Jim” Norman was sentenced in Manhattan federal court to 20 years in prison for his role in a scheme to defraud victims across the country out of millions of dollars. As part of the scheme, Norman promised victims huge guaranteed returns on investments to be paid out of overseas bank accounts that in reality did not exist. Following his extradition from Canada in November 2011, Norman was convicted of conspiracy to commit wire fraud in January 2013, after a six-day jury trial. U.S. District Judge Katherine B. Forrest presided over the trial and sentenced Norman today.
Manhattan U.S. Attorney Preet Bharara said, “By promising huge returns on their investments, Jim Norman induced scores of victims from around the country to give him millions of dollars. As proven at trial, his promise was nothing more than a shameless scheme to steal hard earned money from the victims, some of whom lost their entire life savings and even their homes. With today’s sentence, Norman will pay the price for his fraud and the suffering that he has caused his victims.”
FBI Assistant Director in Charge George Venizelos said, “As the jury found, Jim Norman used fast talk and the lure of easy profits to separate credulous investors from their money. The promissory notes he issued were as fraudulent as the rest of his scheme. The immediate results were ill-gotten gains for Norman and devastating losses for his victims. The endgame for Norman is a lengthy prison term.”
According to the evidence presented at trial, beginning in 2004 through his arrest in Canada in December 2009, Norman told victims that, as part of the “Jim Norman Program,” he was seeking investors to help pay fees to secure the release of hundreds of millions of dollars held in bank accounts in Spain and Switzerland. Norman, along with his co-conspirators in the United States who helped lure victims into the scheme, stole at least $7 million from more than 100 victims by promising them huge returns on their investments—that would be paid in a matter of days or weeks at most—and by giving victims official-looking, but worthless, “promissory notes” that purportedly guaranteed their investments and return. In reality, there were no overseas accounts, and Norman and his co-conspirators spent the victims’ money on themselves by making large retail purchases and withdrawing hundreds of thousands of dollars in cash. As a result of the fraudulent scheme perpetrated by Norman, some victims lost all their assets, others lost their homes, and others lost their businesses.

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In addition to the prison term, Judge Forrest sentenced Norman, 64, of Toronto, Canada, to three years of supervised release. Norman was also ordered to forfeit $2,197,637 and pay $1,731,805 in restitution, in addition to a $100 special assessment fee.
Mr. Bharara praised the FBI for its outstanding work on this case.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Andrew Goldstein and Andrea Surratt are in charge of the prosecution.

Kimberly Wilde Pleads Guilty to Embezzling from Brattleboro Law Firm

The Office of the United States Attorney for the District of Vermont announced that Kimberly Wilde, 49, of Guilford, pleaded guilty today in United States District Court in Rutland to a charge of wire fraud. Chief Judge Christina Reiss released Wilde on conditions pending sentencing in mid-November. An exact sentencing date has not yet been set.
On June 24, 2013, the United States Attorney filed a one- count information charging Wilde with wire fraud. This is the charge to which she pled guilty today. According to the information, until January 2013, Wilde was employed by the Potter Stewart Law Offices in Brattleboro. Her duties at the firm included managing the firm’s finances. She had access to the firm’s check stock, its bank statements, and its credit cards. The information alleges that beginning no later than 2007 and continuing until this past January when her employment ended, Wilde embezzled hundreds of thousands of dollars from the law offices. Wilde did this by fraudulently causing the firm to issue company checks which benefitted her, including payments for personal expenses; by causing electronic transfers of firm funds to pay personal bills; and by misusing firm credit cards. In an effort to conceal her misappropriation, Wilde falsified and altered bank statements and other financial records.
Wilde faces up to 20 years of imprisonment and a fine of up to $250,000. The actual sentence will be determined with reference fo federal sentencing guidelines.
This case was investigated by the Brattleboro Police Department and the Federal Bureau of Investigation.
Wilde is represented by Thomas Costello. The prosecutor is Assistant U.S. Attorney Gregory Waples.

Thoreau Man Pleads Guilty to Unlawful Possession of Unregistered Sawed-Off Shotgun

ALBUQUERQUE—Joe Herrera, Jr., 43, an enrolled member of the Navajo Nation who resides in Thoreau, New Mexico, pleaded guilty this morning to unlawfully possessing a sawed-off shotgun that was not registered to him under a plea agreement with the U.S. Attorney’s Office.
Herrera was indicted in February 2013 on the charge to which he pleaded guilty this morning. According to the indictment, Herrera unlawfully possessed the unregistered sawed off shotgun on August 16, 2011, in McKinley County, New Mexico. Herrera admitted committing the offense when he entered his guilty plea this morning.
At sentencing, Herrera faces a maximum possible penalty of 10 years in federal prison. He remains on conditions of release under pretrial supervision pending his sentencing hearing, which has yet to be scheduled.
The case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, with assistance from the Gallup Resident Agency of the FBI and the Crownpoint Office of the Navajo Nation Division of Public Safety. Assistant U.S. Attorney Novaline D. Wilson is prosecuting the case.

Federal Jury Finds Shiprock Man Guilty on Involuntary Manslaughter, Assault, and Firearms Charges

ALBUQUERQUE—A federal jury sitting in Albuquerque, New Mexico, returned a guilty verdict this afternoon against Clay O’Brien Mann, 28, an enrolled member of the Navajo Nation who resides in Shiprock, New Mexico, on involuntary manslaughter, assault, and firearms charges after a five-day trial. The guilty verdict was announced by U.S. Attorney Kenneth J. Gonzales; Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI; and John Billison, Director of the Navajo Nation Division of Public Safety.
Mann was arrested in July 2010 on a criminal complaint alleging that he killed a Navajo man and assaulted another Navajo man and a Navajo woman with a dangerous weapon on the Navajo Indian Reservation on July 24, 2010. Mann subsequently was indicted and charged with first-degree murder, two counts of assault with a dangerous weapon with intent to do bodily injury, two counts of assault resulting in serious bodily injury, and three counts of discharging a firearm in furtherance of an act of violence. Proceedings in the case were delayed by competency proceedings.
Trial of the case began on July 8, 2013, and concluded earlier this afternoon when the jury returned a verdict finding Mann not guilty on the first-degree murder charge but guilty on the lesser included charge of involuntary manslaughter. The jury also found Mann guilty on two counts of assault resulting in serious bodily injury and two counts of discharging a firearm in furtherance of an act of violence. It acquitted Mann on two counts of assault with a dangerous weapon with intent to do bodily injury and the third firearms charge.
The evidence at trial established that, at approximately 4:00 a.m. on July 24, 2010, an inebriated Mann drove his car to his neighbor’s property and launched an artillery shell into the neighbor’s property where the neighbor and his friends were socializing. When Ames Joseph Jim and another man and a woman walked over to see what was going on, Mann fired a semi-automatic rifle at them, shooting Mr. Jim in the face and heart, the other man in the face and the woman in the neck. Mr. Jim died as a result of his injuries, and the other two victims sustained serious bodily injury.
Mann has been in federal custody since his arrest in July 2010 and remains detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Mann faces a maximum eight years in prison on the involuntary manslaughter charge and a maximum 10 years in prison on each of the two assault charges. Mann also faces a mandatory 35 years in prison on the two firearms charges, which must be served consecutive to any prison sentence imposed on the involuntary manslaughter and assault charges.
This case was investigated by the Farmington Resident Agency of the FBI and the Shiprock Office of the Navajo Nation Division of Public Safety and is being prosecuted by Assistant U.S. Attorney Presiliano A. Torrez.

Federal Grand Jury Indicts Oregon and Pennsylvania Men for Allegedly Defrauding New Mexico-Based Company

ALBUQUERQUE—A federal grand jury sitting in Albuquerque, New Mexico, has returned a 38-count indictment charging Johannes Jarvis, 40, of Portland, Oregon, and John Hope, 65, of Huntingdon Valley, Pennsylvania, with conspiracy, wire fraud, and money laundering charges, announced U.S. Attorney Kenneth J. Gonzales; Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI; and Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of IRS-Criminal Investigation.
The indictment charges Jarvis and Hope with a wire fraud conspiracy count, 21 counts of wire fraud, and 16 counts of money laundering. The indictment alleges that from late 2007 through April 2010, Jarvis and Hope conspired to defraud Kinesio USA LLC, a New Mexico Company that sells therapeutic elastic tape and related products, and its related company, Kinesio Holding Corporation (together, “Kinesio”), of approximately $4.3 million, at least $1.2 million of which Jarvis and Hope retained as profits.
At all times relevant to the indictment, Jarvis was the director of Marketing for Kinesio, and Hope owned a printing business that operated in China that had been hired to produce marketing materials for Kinesio. According to the indictment, in late 2007 or early 2008, Kinesio directed Jarvis to locate a new manufacturer for its therapeutic elastic tape and Jarvis allegedly suggested searching for a manufacturer in China. Thereafter, Jarvis allegedly reported that he had located a suitable manufacturer in China but that Kinesio would have to work through a broker to coordinate the business relationship. In April 2008, Jarvis and Hope allegedly incorporated Grace International (HK) Limited (“Grace International”) in Hong Kong, of which they were the sole owners. Thereafter, Jarvis allegedly represented to Kinesio that Grace International would broker the relationship between Kinesio and the tape manufacturer while concealing Jarvis’s and Hope’s ownership of and involvement in the company.
The indictment alleges that relying on Jarvis’ misrepresentations, Kinesio entered into a contract with Grace International pursuant to which Kinesio paid Grace International more than $4.3 million for therapeutic elastic tape between July 2008 and January 2010. It further alleges that Jarvis and Hope defrauded Kinesio by having Grace International charge Kinesio a significant undisclosed markup above the manufacturer’s price for the tape and that Jarvis and Hope shared the profits generated by the markup.
The indictment alleges that Jarvis and Hope facilitated 16 wire transfers of money, ranging from $23,490 to $657,120, from Kinesio to Grace International between July 2008 and January 2010, in addition to other wire communications that were transited to perpetuate their unlawful scheme to defraud Kinesio. It also charges Jarvis and Hope with laundering the proceeds of their unlawful scheme by depositing the money into various bank accounts. The indictment also seeks forfeiture of assets which constitute or are derived from the unlawful scheme, including residences in Portland, Oregon, and Huntingdon Valley, Pennsylvania, and a money judgment against Jarvis and Hope in the amount of $1,270,075.99.
If convicted, Jarvis and Hope each face a maximum possible penalty of 20 years in prison and a $250,000 fine on the wire fraud conspiracy and each of the 16 wire fraud charges. Each also faces a maximum possible penalty of 10 years in prison and a fine of either $250,000 or twice the amount involved for each of the 16 money laundering charges.
Jarvis and Hope will be summoned to appear in federal court in Albuquerque to be arraigned on the indictment on Augusut 8, 2013. Charges in indictments are merely accusations. Defendants are presumed innocent unless found guilty beyond a reasonable doubt in a court of law.
This case was investigated by the Albuquerque Field Office of the FBI and IRS-Criminal Investigation in Albuquerque and is being prosecuted by Assistant U.S. Attorney C. Paige Messec.

Las Vegas Man Pleads Guilty to Federal Stolen Goods Charges

LAS VEGAS—A man pleaded guilty today to federal charges that he stole over $300,000 in expensive jewelry from persons at golf courses in multiple states, including Nevada, and sold it at trade shows, jewelry stores, and pawn shops, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Jeffrey Cochran, 47, of Las Vegas, pleaded guilty before U.S. District Judge Gloria M. Navarro to two counts of possession and sale of stolen goods, and he is scheduled to be sentenced on October 18, 2013, at 9:00 a.m. Cochran faces up to 10 years in prison and a $250,000 fine on each count.
According to the plea agreement, from about September 15, 2010 to March 10, 2012, Cochran stole jewelry, including Tag Heuer and Rolex watches, from individuals at golf courses in other states and transported the goods to Las Vegas for sale at jewelry and pawn stores. Cochran also stole jewelry from individuals at golf courses in Las Vegas and transported the stolen jewelry to other states to sell at trade shows and jewelry and pawn stores. The plea agreement states that the government and defendant agree that the readily provable loss associated with Cochran’s theft is $300,895.
The case was investigated by the FBI and the Las Vegas Metropolitan Police Department Special Investigations Section and was part of a federal and local law enforcement effort to combat organized retail theft. The case is being prosecuted by Assistant United States Attorney Christina M. Brown.

Las Vegas Agent Convicted in Mortgage Fraud Scheme

WASHINGTON—A Las Vegas mortgage agent has been convicted for his role in a “cash back at closing” mortgage fraud scheme that netted $1.43 million in fraudulent mortgage loans, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada, and Acting Special Agent in Charge William C. Woerner of the FBI’s Las Vegas Field Office.
After a three-day trial before U.S. District Judge Larry Hicks in the District of Nevada, a federal jury convicted Jawad “Joe” Quassani, 42, on July 10, 2013, of one count of conspiracy to commit wire fraud and mail fraud, two counts of wire fraud, and two counts of mail fraud.
According to court documents and evidence presented at trial, Quassani participated in a scheme in which the prices of two homes were falsely inflated, mortgage loans were obtained through the submission of loan applications containing false and fraudulent information about the buyer’s income and intent to occupy the homes as primary residences, a portion of the loan proceeds was diverted at the close of escrow to the defendant’s co-conspirators, and commissions on the fraudulent loans were paid to Quassani and his co-conspirator. Evidence at trial established that Quassani, a licensed mortgage agent at Rapid Funding Group, conceived the scheme together with two of his co-conspirators, prepared one of the loan applications and arranged for the preparation of the other, and shared in the commissions generated by transactions that had no purpose other than to generate profits for the co-conspirators.
Co-conspirators Anita Mathur and Shirjil “Sean” Qureshi previously pleaded guilty in related cases in Las Vegas to one count of conspiracy to commit bank fraud, wire fraud and mail fraud. Both are awaiting sentencing.
This case was investigated by the FBI. Trial Attorneys Stephen J. Spiegelhalter and Gary A. Winters of the Criminal Division’s Fraud Section are prosecuting the case.
Today’s conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state, and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

Chillicothe Woman Indicted for Embezzling $4 Million from Employer

KANSAS CITY, MO—Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Chillicothe, Missouri woman has been indicted by a federal grand jury for a wire fraud scheme in which she embezzled nearly $4 million from her employer, Burdg, Dunham, & Associates Construction Corp. in Hamilton, Missouri.
Donna M. Preszler, 60, of Chillicothe, was charged in a 20-count indictment returned under seal by a federal grand jury on June 20, 2013. That indictment was unsealed and made public today upon Preszler’s arrest and initial court appearance.
Preszler was employed at Burdg, Dunham, & Associates (BDA) from 2001 until June 2012, working as an accounting manager since 2004. BDA is a general contractor specializing in retail construction of malls, strip centers, family life centers, and other stand-alone projects. BDA serves customers in all 50 states, Puerto Rico, and Canada, primarily building for national retail organizations.
The indictment alleges that Preszler embezzled $3,912,000 in a wire fraud scheme from June 30, 2006 through June 15, 2012. Preszler allegedly used her employer’s accounting software to create payroll data files that contained unauthorized false and fictitious payments to her bank accounts and others.
Preszler allegedly utilized her role as accounting manager to add false and fictitious non-taxable pay, such as expense reimbursements to herself. Over a six-year period, the indictment says, Preszler transferred approximately $3,912,000 in false and fictitious payments to herself and her family.
Preszler also added false and fictitious overtime hours and overtime pay to her weekly payroll, the indictment says. Preszler allegedly initiated approximately $76,000 in unauthorized overtime payments to herself from November 2004 through June 2006, which were subject to BDA withholding income taxes.
Preszler concealed her transfers by password protecting her payroll information, creating false and fictitious expense accounts, and otherwise manipulating BDA’s payroll and accounting records.
The federal indictment charges Preszler with six counts of wire fraud and 14 counts of money laundering.
The indictment also contains a forfeiture allegation, which would require Preszler to forfeit to the government any property derived from the proceeds of the alleged violations, including a money judgment of $3,912,000, and her residence on a 3.44-acre tract in Chillicothe, as well as three other residential properties, two 14kt diamond rings, 10 vehicles (a 2007 Ford Taurus, a 2007 Mazda CX-7, a 2011 Nissan Versa, a 2010 Nissan 370Z, a 2007 Nissan Altima, a 2011 Ford F150, a 2010 Ford F150, a 2010 Ford Escape, a 2012 Ford Explorer, and a 2012 Nissan Rogue), three 2011 Yamaha ATVs, and several bank accounts and funeral trust accounts. Most of those items have been seized by law enforcement agents.
Dickinson cautioned that the charges contained in this indictment are simply accusations and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jess E. Michaelsen. It was investigated by the FBI.

Columbia Woman Pleads Guilty in $576,000 Mortgage Fraud, Embezzlement Schemes

JEFFERSON CITY, MO—Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Columbia, Missouri woman pleaded guilty in federal court today to charges of bank fraud and money laundering, which were part of a $576,000 mortgage fraud and embezzlement scheme at the title company where she was employed.
Terri Lynn Johnson, 48, of Columbia, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to the charges contained in a December 13, 2012 federal indictment.
Johnson was hired for a clerical position with Guaranty Land Title Company in 2001 and was eventually promoted to become the branch manager of the Fulton, Missouri office after the company was acquired by Landchoice Company LLC. She remained in that position until her termination on December 4, 2008.
Johnson admitted that she engaged in a $300,000 mortgage fraud scheme while she was employed as the Fulton branch manager. Johnson refinanced the mortgage on her residence twice. As a result of the false and fraudulent information provided by Johnson, two banks approved mortgage loans for $175,000 in 2007 and for $125,000 in 2008. The combination of those two loans clearly exceeded the appraised value of Johnson’s residence, which was used to secure both loans.
Johnson also admitted that she embezzled $276,173 from Landchoice. Johnson diverted income checks from Landchoice into a bank account that had been opened for Guaranty Land Title Company and which her employer did not know existed. She also diverted escrow funds which had been obtained by Landchoice for loan closings into that account.
Johnson then wrote checks to herself that she deposited into her personal checking account. Johnson wrote checks totaling approximately $59,465 payable to herself or to cash. Johnson also wrote checks to Johnson Gardens (her personal business) totaling approximately $12,500. Johnson also wrote checks believed to be for her personal use totaling approximately $19,916. In addition, Johnson utilized a debit card issued for the account, which she used to access $184,292 from that account for her personal benefit. The total personal benefit realized by Johnson from this embezzlement scheme is estimated to be approximately $276,173.
Under federal statutes, Johnson is subject to a sentence of up to 40 years in federal prison without parole, plus a fine and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Lawrence E. Miller. It was investigated by the FBI; IRS-Criminal Investigation; the Fulton, Missouri Police Department; the Missouri State Highway Patrol; and the Missouri Department of Insurance.

Kansas City, Missouri Man Pleads Guilty to Bank Robbery

KANSAS CITY, KS—A Kansas City, Missouri man has pleaded guilty to bank robbery in Kansas, U.S. Attorney Barry Grissom said today.
Edward Davis, 31, Kansas City, Missouri, pleaded guilty to one count of bank robbery. In his plea, he admitted that on July 13, 2012, he and other accomplices robbed Bank Midwest, 3500 Rainbow Blvd., in Kansas City, Kansas. Brandishing a firearm, he yelled that a robbery was taking place and ordered bank customers and employees to the floor. He pointed his gun at a bank teller. After the robbery, investigators released surveillance photos of the defendant and his accomplice, resulting in information that led to Davis’ arrest.
Sentencing is set for October 7. The parties have agreed to recommend a sentence of 12 years in federal prison. Grissom commended the FBI, Assistant U.S. Attorney Jabari Wamble, and Special Assistant U.S. Attorney Trent Krug for their work on the case.

Boston-Area Pimp Charged with Murdering a Rival Pimp in the Bronx in Dispute Related to Criminal Prostitution Business

Preet Bharara, the United States Attorney for the Southern District of New York; George Venizelos, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (FBI); and Raymond W. Kelly, the Police Commissioner of the City of New York (NYPD), announced that Samuel L. Whiteside was presented today in Manhattan federal court on charges that he traveled interstate to Whiteside murder to further his prostitution business. Whiteside was arrested in Rockford, Illinois, on June 14, 2013, and initially presented in the Northern District of Illinois. He arrived in the Southern District of New York yesterday and was presented today before U.S. Magistrate Judge Debra Freeman.
Manhattan U.S. Attorney Preet Bharara said, “As alleged, Samuel Whiteside traveled to New York with the cold-blooded intent to murder a rival in the unlawful prostitution business. Thanks to the efforts of our law enforcement partners, he will now face justice in the Southern District of New York.”
FBI Assistant Director in Charge George Venizelos said, “As alleged, a business dispute between two men ended with one brutally murdering the other. Given that the business in question was the exploitation of women and trading them like livestock, it is not surprising that a dispute would be resolved by violence. While not surprising, it is intolerable.”
NYPD Commissioner Raymond W. Kelly said, “I commend the detectives of the NYPD’s Bronx Homicide squad and their counterparts in the 47th Precinct for helping return this pimp to face federal prosecution for murder.”
According to the allegations in the complaint filed in Manhattan federal court:
During the course of the evening of June 4, 2012, and early morning hours of June 5, 2012, Whiteside, a Boston-area pimp, had an argument over the telephone with Victor Martino (the victim). The victim, who at the time was staying at the Metro Motel in the Bronx, New York, was also a pimp, and the argument between Whiteside and the victim related to their respective prostitution businesses.
Specifically, Whiteside and the victim had a dispute about a woman who had worked for Whiteside as a prostitute. Whiteside believed that the victim owed Whiteside money related to that woman, who had been traded and sold between Whiteside and the victim. During a telephone conversation that evening, the victim told Whiteside that Whiteside could settle the dispute in person and provided Whiteside with the address of the Metro Motel.
During the course of that evening, Whiteside traveled from New England to the Metro Motel. When he arrived, Whiteside went to the motel room where the victim was staying and attacked and stabbed the victim with a knife, killing him.

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Whiteside, 30, of Dorchester, Massachusetts, is charged with one count of traveling interstate to commit murder to further his prostitution business. He faces a maximum sentence of life in prison.
Mr. Bharara praised the investigative work of the FBI and NYPD and stated that the investigation is ongoing.
This case is being prosecuted by the Office’s Violent Crimes Unit. Assistant United States Attorney Kan M. Nawaday is in charge of the prosecution.
The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Manhattan Business Owner Pleads Guilty in Manhattan Federal Court to Multi-Million-Dollar Ponzi Scheme

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that Jason Konior, the founder and manager of a number of related business entities in New York City, collectively referred to as “Absolute,” pled guilty today in Manhattan federal court in connection with his operation of a multi-million-dollar Ponzi scheme in which he stole at least $2.9 million from small hedge fund investors and used the funds to pay off prior investors and to pay himself. Konior was originally charged in February 2013 and pled guilty today before U.S. District Judge Alvin K. Hellerstein.
Manhattan U.S. Attorney Preet Bharara said, “In the space of less than a year, Jason Konior managed to take at least $2.9 million that he had solicited from his investors and then use it to settle up with previous investors and to pay himself. Today’s plea ensures that he will be punished for perpetrating this Ponzi scheme on his victims.”
According to the Information, statements made during today’s guilty plea proceeding, and a complaint previously unsealed in Manhattan federal court:
From late 2011 through May 2012, Konior organized and managed a Ponzi scheme in which he misappropriated at least $2.9 million in funds he had solicited from hedge fund investors. He represented to these investors that Absolute would provide additional trading funds of up to nine times the investment they made in Absolute. As part of Absolute’s “first loss” investment program, Konior claimed that he would place the combined funds—the investors’ funds and the additional funds to be provided by Absolute—in a brokerage account designated by Absolute. According to Konior, the hedge fund investors would then be able to trade securities utilizing that brokerage account. Under the arrangement, the hedge funds would be responsible for trading losses, and they would share any profits with Absolute.
Instead of establishing brokerage accounts for the victim hedge funds, however, Konior misappropriated the funds they provided by paying redemptions to prior investors, making payments to himself, and paying various personal and business expenses. In e-mails, text messages, and telephone conversations, Konior pretended that he was establishing brokerage accounts for the three hedge fund investors, when he had already stolen their money. For example, in one case, after Konior repeatedly failed to set up a brokerage account for one of the hedge fund investors, the manager of the hedge fund investor sent him a text message stating, “I want my money back. What did you do to it anyway? Are you going to tell me or do you want the SEC to find out?” Konior responded with a text message, stating, “We have your funds in our acct. Where else would they be?” At the time Konior wrote the message, he had already used that hedge fund’s investment to pay off other investors and his own expenses.

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Konior, 39, of New York, New York, pled guilty to one count of wire fraud, which carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. He is scheduled to be sentenced by Judge Hellerstein on November 8, 2013, at 11:00 a.m.
Mr. Bharara praised the work of the Federal Bureau of Investigation and the Securities and Exchange Commission.
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. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud.
Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys John T. Zach and Jason H. Cowley are in charge of the prosecution.

Former New Jersey Turnpike Authority Manager Charged with Stealing More Than $120,000

NEWARK, NJ—A former claims manager for the New Jersey Turnpike Authority was arrested today for allegedly stealing more than $120,000 from the authority, U.S. Attorney Paul J. Fishman announced.
Gerardo Blasi, 54, of Clifton, New Jersey, was arrested by special agents of the FBI and charged by complaint with mail fraud and defrauding a state agency that receives federal funds. He is scheduled to make his initial appearance later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to the complaint:
Blasi was a claims manager at the New Jersey Turnpike Authority, responsible for negotiating and collecting payments from insurance companies whose insured drivers caused damage to the Turnpike. From April 2011 to June 2013, Blasi allegedly stole more than $120,000 from the authority in several ways, including instructing insurance companies to issue checks payable to fraudulent repair companies. When the checks were mailed to Blasi at the authority, he would arrange to have them cashed and keep a portion of the money for himself.
The fraud count with which Blasi is charged carries a maximum potential penalty of up to 20 years in prison and a $250,000 fine. The theft from a state agency count is punishable by a maximum potential penalty of up to 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s charges. He also thanked the New Jersey Turnpike Authority for its cooperation in the investigation.
The government is represented by Assistant U.S. Attorney David L. Foster of the office’s Special Prosecutions Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.

Union County Businessman Admits Role in Tax Evasion Scheme

NEWARK, NJ—A Union County, New Jersey man who owns and operates a medical supply company that he runs out of his home admitted today to concealing $3,984,508 in business receipts and pleaded guilty to one count of tax evasion, U.S. Attorney Paul J. Fishman announced.
Yuxin Xie, 59, of Mountainside, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging one count of tax evasion for failing to report business receipts from his company, YX Enterprises.
According to documents filed in this case and statements made in court:
During the tax years in question—2006 through 2010—Xie purchased diabetic test strips from numerous suppliers. He re-packaged and sold them to wholesale pharmaceutical and medical products distribution companies. Customer payments that Xie received were deposited into 11 different bank accounts at three different financial institutions. YX Enterprises was not a registered corporation, and any income received by YX Enterprises should have been reported on Xie’s tax returns.
Xie’s tax returns for the five years in question failed to report millions of dollars in gross receipts received by YX Enterprises. For each of the tax years 2006, 2007, and 2008, Xie’s tax returns reported that YX Enterprises had gross receipts of less than $10,000; Xie’s 2009 and 2010 tax returns contained no reference at all to YX Enterprises. YX Enterprises had in fact received nearly $4 million in business receipts during this five-year period.
Although Xie pleaded guilty to only one count of tax evasion for the 2009 tax year, the plea agreement requires that Xie admit to evading income taxes for all five years, and the court will take into account at sentencing the tax loss for all five years. The tax loss is $200,000 to $400,000.
Xie faces a maximum potential penalty of five years in prison and a fine of $250,000 or twice his gain from the offense, together with the costs of prosecution. Xie also agreed to file true and accurate tax returns and to pay to the IRS all taxes and penalties owed. Sentencing is scheduled for October 23, 2013.
U.S. Attorney Fishman credited special agents with IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen in Newark; special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Joseph Mack of the U.S. Attorney’s Health Care and Government Fraud Unit.

Canadian National Pleads Guilty to Conspiring to Provide Material Support to the Tamil Tigers

Earlier today, defendant Suresh Sriskandarajah pleaded guilty in federal court in Brooklyn, New York, to conspiring to provide material support to a foreign terrorist organization, the Liberation Tigers of Tamil Eelam (LTTE), also known as the Tamil Tigers, in connection with his attempt to procure sophisticated military technology, including submarine and warship design software and night vision equipment, for the LTTE. Sriskandarajah faces a maximum term of 15 years’ imprisonment. Six of Sriskandarajah’s co-defendants were previously convicted of terrorism-related offenses in connection with their support for the LTTE.
Sriskandarajah’s guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office; Aaron T. Ford, Special Agent in Charge, Federal Bureau of Investigation, Newark Field Office; and Raymond W. Kelly, Commissioner of the New York City Police Department. The guilty plea was accepted by United States District Judge Raymond J. Dearie.
As detailed in court filings, between September 2004 and April 2006, Sriskandarajah and several co-conspirators assisted a principal LTTE procurement officer in researching and acquiring aviation equipment, submarine and warship design software, night vision equipment and communications technology. Sriskandarajah used students as couriers to smuggle prohibited items into territory in Sri Lanka that was controlled by the LTTE at that time. Additionally, Sriskandarajah helped the LTTE launder its proceeds in the United States and elsewhere. Following his indictment in the Eastern District of New York, Sriskandarajah, who is a Canadian citizen, was extradited to the United States from Canada, arriving in 2012.
The LTTE was founded in 1976 and uses illegal methods to raise money, acquire weapons and technology, and publicize its cause of establishing an independent Tamil state in northern Sri Lanka. The LTTE began its armed conflict against the Sri Lankan government in 1983 and utilizes a guerrilla strategy that often includes acts of terrorism. At its height, the LTTE controlled most of the northern and eastern coastal areas of Sri Lanka. Over the past 19 years, the LTTE has conducted approximately 200 suicide bombings, resulting in the deaths of hundreds of victims, and carried out numerous political assassinations, including the May 1991 assassination of former Indian Prime Minister Rajiv Gandhi; the 1993 assassination of the President of Sri Lanka Ranasinghe Premadasa, the July 1999 assassination of Neelan Thiruchelvam, a member of the Sri Lankan parliament; the June 2000 assassination of C.V. Goonaratne, the Sri Lankan Industry Minister; the August 2006 assassination of the Sri Lankan government’s peace secretariat Ketheshwaran Loganathan; the January 2008 assassination of Sri Lankan Minister for Nation Building D.M. Dassanayake; and the April 2008 assassination of Sri Lankan Highways Minister Jeyaraj Fernandopulle. In May 2009, the LTTE’s forces in Sri Lanka were defeated by the Sri Lankan government.
In 1997, the LTTE was designated by the U.S. State Department as a foreign terrorist organization, and the LTTE therefore may not legally raise money or procure equipment or materials in the United States.
“The defendant helped the LTTE, an organization that pioneered terrorist tactics and has killed numerous civilians in brutal terrorist attacks, obtain sophisticated military technology and equipment,” stated United States Attorney Lynch. “Claiming to fight for freedom, the LTTE instead created a climate of fear and bloodshed, systematically assassinating those who stood in the way of their terrorist goals. We will continue to locate and prosecute those who fund and support terrorist organizations, wherever they reside.” Ms. Lynch extended her grateful appreciation to the New York and Newark Field Offices of the FBI and the New York City Police Department.
The government’s case is being prosecuted by Assistant U.S. Attorney Alexander Solomon.
Defendant:
Name: Suresh Sriskandarajah
Age: 32

Woman Who Allegedly Mailed Threatening Letters to U.S. Supreme Court and Throughout New Jersey Arrested on Federal Charge

NEWARK, NJ—An Irvington, New Jersey woman was arrested at her home this morning by members of the FBI Joint Terrorism Task Force (JTTF) for allegedly mailing letters threatening bodily harm to the U.S. Supreme Court and recipients throughout New Jersey, U.S. Attorney Paul J. Fishman announced.
Karen Waller, 50, is charged in a federal criminal complaint with one count of mailing threatening communications. She is expected to appear to face the charge this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the criminal complaint unsealed today, Waller mailed more than 50 threatening letters in May and June 2013 to multiple entities and individuals, including a number in New Jersey. The recipients of those letters included the U.S. Supreme Court; the town hall in Woodbridge Township, New Jersey; Rutgers University; an insurance company; and the Millburn Township, New Jersey Police Department. The letters threatened to injure and kill unspecified individuals.
The charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents, detectives, and investigators assigned to the JTTF, under the direction of FBI Special Agent in Charge Aaron T. Ford in Newark, with the investigation. The JTTF comprises law enforcement officers from numerous federal, state, and local agencies throughout New Jersey.
The government is represented by Andrew Kogan, chief of the U.S. Attorney’s Office National Security Unit.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

President of New Jersey-Based Financial Services Firm Pleads Guilty in Multi-Million-Dollar Securities Fraud

CAMDEN, NJ—The president of an investment and financial services firm today admitted defrauding dozens of investors New Jersey, Pennsylvania, Texas, and elsewhere of $5 million and evading taxes, U.S. Attorney Paul J. Fishman announced.
Everett C. Miller, 43, of Marlton, New Jersey, pleaded guilty before U.S. District Judge Renee Marie Bumb in Camden federal court to an information charging him with one count of securities fraud and one count of tax evasion.
“The defendant in this case has admitted responsibility in a financial scheme that was both widespread and long-running,” U.S. Attorney Fishman said. “By preying on trusting investors around the country over a period of years, he was able to rob them of millions of dollars. He defrauded the public as well, by failing to pay taxes on his illegal proceeds. He will now face the punishment he deserves for his greed.”
Aaron T. Ford, special agent in charge of the FBI office in Newark, said, “Investment schemes such as that perpetrated by Mr. Miller prey on innocent investors and compromise our free market economy. Mr. Miller put his investors’ resources, pensions, and life savings at risk for his own gain. The FBI, together with its law enforcement and regulatory agency partners, will vigorously investigate these financial crimes and hold those responsible accountable.”
“Remember the old cliché: if it sounds too good to be true, it probably is,” Shantelle P. Kitchen, Special Agent in Charge, IRS-Criminal Investigation, Newark Field Office, said. “Mr. Miller preyed upon trusting investors and then stole their hard-earned money. Today’s plea should be a reminder for investors to exercise caution when pitched with an investment opportunity that promises unbelievable returns.”
According to documents filed in this case and statements made in court: Miller was the founder, chief executive officer, president, principal, and sole owner of Carr Miller Capital LLC (CMC), an investment and financial services firm based in Marlton. Miller and others solicited investments through the firm from individuals located in New Jersey, Pennsylvania, North Carolina, Arkansas, Texas, and elsewhere. CMC had more than 30 affiliates and related entities and more than 75 related bank accounts. Miller controlled the firm’s finances and established himself as synonymous with CMC. Prior to founding CMC in June 2006, Miller was a registered financial advisor at several financial institutions.
Miller admitted that from June 2006 through December 2010, he and others issued promissory notes to more than 190 investors across the United States, and Miller and CMC received $41.2 million from these investors. The notes were provided as “securities,” but Miller and CMC never registered the notes as securities with any federal or state agency nor were the notes exempt from such registration requirements. The notes had a term of nine months and promised the investors returns of seven to 20 percent per year and a return of the principal investment at the end of the nine-month period.
Miller and others falsely represented to the investors that their money would be invested in certain ways, but the investors were not provided with material information about their investments or were misled about the risks of their investments. Miller commingled and pooled the investors’ money into one of CMC’s 75 related bank accounts. Unbeknownst to the investors, Miller used some of the money in the following ways: (1) to repay prior investors, most in Ponzi scheme fashion, (2) to pay CMC and its related entities’ payrolls and operating expenses, and (3) to support Miller’s lifestyle. Miller’s purchases included luxury automobiles; home furnishings and electronic equipment; tickets to entertainment and sporting events; travel, lodging, and vacations; and meals, entertainment, retail shopping, and groceries.
On August 11, 2009, the Arkansas Securities Department (ASD) initiated an investigation of Miller, CMC, and others for selling unregistered securities to investors in the form of the promissory notes. Following the investigation, the ASD issued a cease-and-desist order against Miller, CMC, and others from selling the notes.
From August 2009 through December 2010, despite knowing about the ASD’s investigation of the promissory notes and CMC’s inability to pay either the interest or the principal on them, Miller and others continued to sell the notes as unregistered securities to investors. They issued notes to approximately 50 new investors but never returned any of the principal to the new investors.
Miller admitted that for calendar years 2007, 2008, and 2009, he intentionally failed to provide the IRS with any information regarding the proceeds that he personally received in connection with his fraudulent scheme. Miller failed to disclose $218,770, $244,879, and $199,507 for 2007, 2008 and 2009, respectively. In total, Miller admitted failing to report $663,156 in taxable income to the IRS, resulting in a tax loss to the government of $47,342.
At today’s plea proceeding, Judge Bumb entered a consent judgment and order of forfeiture in the amount of $4,999,400, which constitutes the proceeds Miller obtained as a result of the securities fraud.
The securities fraud count to which Miller pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of $5 million. The tax fraud count is punishable by a maximum potential penalty of five years in prison and a fine of up to $250,000. Sentencing is scheduled for October 18, 2013.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s guilty plea. He also thanked the Financial Industry Regulatory Authority-Criminal Prosecution Assistance Group and the U.S. Securities and Exchange Commission’s Philadelphia Office for its assistance with this investigation. He also thanked the New HerseySecurities Fraud Prosecution Section, the Arkansas Securities Department, and the Texas State Securities Board for their roles in the investigation.
The government is represented by Assistant U.S. Attorneys Aaron Mendelsohn of the Economic Crimes Unit and Evan Weitz of the Asset Forfeiture and Money Laundering Unit of the U.S. Attorney’s Office in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.