Rockland Woman Pleads Guilty to Bank Fraud

PORTLAND, ME—United States Attorney Thomas E. Delahanty II announced that Shauna Quinn, 44, of Rockland, Maine, pled guilty today in United States District Court before Judge George Z. Singal to a bank fraud charge.
According to court records, the defendant worked at Rockland Savings Bank in Rockland, Maine, as a collections manager. Between July 2008 and June 2011, she created home equity lines of credit and a share loan in the names of her family members and had more than $400,000 in funds improperly withdrawn from those loans.
A forensic review by the Federal Bureau of Investigation (FBI) of the unauthorized activity posted under defendant’s teller ID number for the period from July 2008 to June 2011 revealed that the defendant misappropriated more than $400,000 through improper advances on loans and lines of credit that were not authorized by the bank and agreed to by the borrower. The defendant perpetrated the scheme by increasing the authorized amounts of lines of credit without approval, changing customers’ mail addresses without consent, improperly posting transactions, and creating fictitious loan documents. The fraud was concealed by the defendant who used loan advances to make payments on other loans in order to keep them current.
Quinn faces a sentence of up to 30 years of imprisonment and a fine of up to twice the gain or loss. She will be sentenced after the completion of a presentence investigation report by the United States Probation Office.
The investigation was conducted by the FBI.

Surry Man Pleads Guilty to Federal Kidnapping and Firearm Charges

PORTLAND, ME—United States Attorney Thomas E. Delahanty, II announced that Travis R. Landry, 29, of Surry, pled guilty today in United States District Court before Judge Nancy Torresen to charges of interstate kidnapping and brandishing a firearm in relation to the kidnapping.
According to court records, in mid-April 2013, Landry responded to an advertisement in Craigslist for the sale of a BMW automobile. On the evening of April 24, Landry met with the BMW’s owner at a location on Riverside Street in Portland and the two took the car for a test drive. After the test drive, Landry told the victim to get into the trunk of the car. The victim complied when Landry displayed a Glock .45 caliber handgun. Landry then drove the BMW, with the victim locked inside the trunk, south out of Maine for about eight hours. When he reached Newark, Delaware, Landry stopped the car in a secluded wooded area and released the victim, who ran away and called local police. On May 7, 2013, sheriff deputies in Granville County, North Carolina, arrested Landry, who was driving the BMW, after a high-speed chase. The Glock handgun was seized from the glove compartment of the BMW.
On the interstate kidnapping charge, Landry faces imprisonment of up to life and a fine of up to $250,000. For brandishing the firearm in connection with the kidnapping, Landry faces a minimum mandatory consecutive sentence of seven years’ imprisonment. He will be sentenced after completion of a pre-sentence report by the United States Probation Office.
The investigation was conducted by the Federal Bureau of Investigation; the Portland (Maine), Gorham, Killeen (Texas), and Newark (Delaware) Police Departments; and the Granville County (North Carolina) Sheriff’s Office.

South Portland Man Pleads Guilty to Federal Armed Robbery and Firearms Charges

PORTLAND, ME—United States Attorney Thomas E. Delahanty, II announced today that Joseph Morrill, 23, of South Portland, Maine, pled guilty Monday in U.S. District Court in Portland before Judge D. Brock Hornby to federal armed robbery and firearms charges.
According to court records and evidence introduced at the plea hearing, on September 21, 2012, a Glock pistol and a badge belonging to a law enforcement detective were stolen from a motor vehicle in South Portland. On April 17, 2013, Morrill used the pistol to rob a Cumberland Farms store in South Portland absconding with $182 in cash. On April 22, 2013, Morrill used the pistol to rob a TD Bank branch in South Portland absconding with $5,612 in cash. On June 14, 2013, agents seized the handgun during the execution of a federal search warrant at a residence in South Portland.
Morrill faces up to 30 years’ imprisonment and a $250,000 fine for robbing Cumberland Farms, up to 25 years’ imprisonment, and a $250,000 fine for robbing TD Bank, a consecutive sentence of between seven years and life imprisonment for using the stolen pistol during and in relation to the TD Bank robbery and up to 10 years for possessing the stolen firearm.
He will be sentenced after completion of a pre-sentence investigation report by the United States Probation Office.
The investigation was conducted by the South Portland Police Department and the Federal Bureau of Investigation.

Man Sentenced to More Than Six Years in Federal Prison for Sexual Abuse on the Umatilla Indian Reservation

PORTLAND, OR—U.S. District Judge Anna J. Brown sentenced Thomas Lee Bear, 31, of Lewiston, Idaho, yesterday to 78 months in federal prison, to be followed by 10 years of supervised release. In January 2013, Bear pled guilty before Judge Brown to sexual abuse of a minor. After Bear completes his prison term, he will be required to register as a sex offender and undergo sex offender treatment. Bear has been in the custody of the U.S. Marshals Service since his arrest in this case in July 2012.
“It is absolutely repugnant for grown men to use the Internet to prey upon teenage girls,” said U.S. Attorney Amanda Marshall. “The rate of sexual abuse against girls in Indian Country is tragically high. The prison sentence in this case should serve as a warning to anyone who would do harm to the children of Tribal Nations.”
Bear admitted to having sexual intercourse with a girl on the Umatilla Indian Reservation in the fall of 2011. The victim, who was 14 years old at the time the sex abuse began, is an enrolled member of the Confederated Tribes of the Umatilla Indian Reservation. Bear further admitted that he used a social networking website to persuade, induce, entice, and coerce the victim into having sexual intercourse.
This case was investigated by the Umatilla Tribal Police Department and the FBI’s Office in Pendleton, Oregon. The case was prosecuted by Assistant U.S. Attorney Craig Gabriel.

Madison Attorney Sentenced in Bankruptcy Fraud Scheme

JACKSON, MI—Michael E. Earwood, 61, an attorney from Madison, Mississippi, was sentenced today in U.S. District Court to 46 months in prison, followed by three years of supervised release, for bankruptcy fraud, announced U.S. Attorney Gregory K. Davis, Acting U.S. Trustee Henry G. Hobbs, Jr. of Region 5, FBI Special Agent in Charge Daniel McMullen, and Jon T. Rymer, Inspector General of the FDIC. Earwood was also ordered to pay restitution in the amount of $792,228.53.
Earwood previously pled guilty to devising and executing a scheme to obtain money from a business partner by falsely representing that the money would be used to maintain real property owned by Kinwood Capitol Group. He admitted transferring title to the real property assets of the business without the knowledge and consent of his business partner, who held a majority interest in the assets of the business. Earwood admitted that he transferred these assets to his own company named Northlake Development. He then used that property as collateral for bank loans to Northlake Development but still continued to solicit money from the business partner for a period of time. Earwood admitted that when the bank attempted to foreclose on the Northlake Development loan, he placed Northlake Development into bankruptcy and continued to conceal the unauthorized transactions from his business partner and the banks from which he had obtained loans.
This case was prosecuted by First Assistant U.S. Attorney Harold Brittain, Assistant U.S. Attorney Carla J. Clark, and Special Assistant U.S. Attorney Sammye S. Tharp. The investigation was conducted by the Federal Deposit Insurance Corporation-Office of Inspector General (FDIC-OIG) and the Federal Bureau of Investigation, assisted by the Office of the U.S. Bankruptcy Trustee, Region 5.

Prosecutors Charge Former JCCEO Official and Her Daughter with Theft of Nearly $500,000 from Agency

BIRMINGHAM—The U.S. Attorney’s Office has charged the former executive director of the Jefferson County Committee for Economic Opportunity and her daughter in connection with the theft of close to $500,000 from the non-profit organization, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein, Jr.
In separate informations filed in U.S. District Court, federal prosecutors charged Ruth Gayle Cunningham, 63, with theft from a government program that had received more than $10,000 in federal funding or assistance and charged her daughter, Kelli E. Caulfield, 31, with conspiracy in the scheme to defraud JCCEO.
Cunningham was executive director of JCCEO for more than 20 years before resigning the job in March. The organization employed Caulfield from May 2009 to January 2013. JCCEO is a community action agency that administers programs, including Head Start, for low-income and disadvantaged residents.
"JCCEO is an organization with 50 years of history helping some of our poorest citizens become part of the American Dream with education and assistance funded in part by federal taxpayer dollars," Vance said. "Cunningham abused the trust and discretion she was given to use this money wisely to benefit those in our community who are struggling. She used the agency’s government funds as a personal piggy bank so that she and her daughter could line their pockets with hundreds of thousands of dollars intended to lift others out of poverty," Vance said. "As a community, we have to demand better from those who are charged with using public money for the benefit of all. I encourage anyone aware of this type of abuse of the public trust to contact the U.S. Attorney Office or the FBI."
“Serving the public is a privilege, not an opportunity for unjust personal enrichment," Schwein said. "Those who are entrusted to administer public programs, such as Ms. Cunningham, are expected to serve with integrity and honor. Greed and self-interest have no place in service to the community, and the FBI will continue to root out public corruption wherever we find it and at whatever level we find it,” he said.
Cunningham and her daughter, both of Birmingham, have signed agreements with the government to plead guilty to the charges against them. Jointly, Cunningham and Caulfield are responsible for repaying $492,195 to JCCEO, according to their plea agreements. Cunningham agrees to pay that full amount to JCCEO. Caulfield’s plea agreement cites her responsibility to repay $253,499 to JCCEO.
Cunningham acknowledges in her plea agreement that, between March 2009 and April 2010, she used JCCEO funds to make monthly mortgage payments on at least three residential properties she owned and at least five residential properties her daughter owned in Jefferson and Shelby Counties. Cunningham also used JCCEO funds to pay property taxes on one of those properties, a house in Chelsea that she bought in 2007 with a mortgage loan of more than $1 million, according to court records.
Cunningham also paid $293,413 in JCCEO funds to companies owned by her daughter and to other contractors for claimed repairs or renovations to the women’s properties, according to their plea agreements.
As part of Caulfield’s conspiracy, she acknowledges in her plea agreement that she created invoices citing repair or improvement work on the private properties and gave them to her mother, who submitted the invoices and corresponding check requests to the JCCEO finance director.
As executive director of JCCEO, Cunningham had check-signing authority up to $5,000. All the invoices Caulfield prepared for her mother to submit for payment by JCCEO were below $5,000 and, therefore, required no second signature from a JCCEO board member on the agency’s checks.
The maximum penalty for theft from a federally funded program is 10 years in prison and a $250,000 fine. The maximum penalty for conspiracy to defraud a federally funded program is five years in prison and a $250,000 fine.
The FBI discovered the fraud at JCCEO while it was investigating allegations of a mortgage fraud scheme. That investigation led to federal prosecutors' charges against Cunningham and Caulfield, as well as to charges of conspiracy to defraud federally insured financial institutions against a real estate investor now living in Atlanta and a Hoover mortgage broker. Cunningham and Caulfield bought most of the properties that later became part of their scheme to defraud JCCEO from the Atlanta investor.
The federal charges and associated plea agreements in all four cases were unsealed today in federal court in Birmingham.
The investor, the Rev. Robert Paul Hollman, 48, formerly of Dothan, and mortgage broker Brad A. Bozeman, 34, of Hoover, are charged with conspiracy to defraud a federally insured financial institution by either making or transmitting false statements and reports intended to influence a financial institution in connection with the sale of residential properties.
Hollman agrees to pay $393,440 in restitution to banks affected by his scheme, and Bozeman agrees to pay restitution of $41,460.
According to Hollman’s and Bozeman’s plea agreements, their mortgage fraud conspiracy took place as follows:
Hollman bought multiple residential properties in Jefferson and Shelby counties and, beginning about 2007, solicited people to buy the properties from him. He would agree, in advance of closing on the sales, to pay all or a portion of the down payments on the property and, afterward, to pay the monthly mortgage payments until the properties resold. Once Hollman had an agreement with a purchaser, or "borrower," he referred them to Bozeman to arrange a mortgage loan.
Hollman profited from the transactions because his debt on the properties was satisfied at closing and, in most of the transactions, he also received a cash payment from the sales. After a period of time, he would stop providing the borrowers money for the monthly mortgage payments and most of the properties ended up in foreclosure.
Hollman made false statements on mortgage documents by failing to disclose that he, not the borrower, was making the down payment or part of the down payment on the property. Bozeman made false statements on loan applications by including false income or not revealing all debts and liabilities of the purchasers and transmitting that information as true and accurate.
The maximum sentence for conspiracy to defraud a federally insured financial institution is five years in prison and a $250,000 fine.
The FBI investigated the cases, which Assistant U.S. Attorney Robin Beardsley Mark is prosecuting

Businessman Pleads Guilty in Fraud Scheme

PITTSBURGH—A Pittsburgh-area businessman has pleaded guilty in federal court to charges of conspiracy, bribery of agent of an organization receiving federal funds, and mail fraud, United States Attorney David J. Hickton announced today.
Arthur J. Bedway, Jr., 63, pleaded guilty to three counts before United States District Judge Cathy Bissoon.
In connection with the guilty plea, the court was advised that Bedway owned Victory Security. In order to obtain a contract with the city of Pittsburgh to install radios and mobile data terminals (MDTs) in city police cars, Bedway created Alpha Outfitters, which he falsely represented to the city as a Women's Business Enterprise (WBE). He conspired with a city employee, Christine Ann Kebr, and others to obtain the MDT contract for Alpha Outfitters. Bedway paid Kebr for her assistance in obtaining the MDT contract.
Judge Bissoon scheduled sentencing for November 20, 2013 at 10:00 a.m. The law provides for a total sentence of 35 years in prison, a fine of $750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Pending sentencing, the court continued bond.
Assistant United States Attorneys Robert S. Cessar and Lee J. Karl are prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation conducted the investigation that led to the prosecution of Bedway.

Judge Sentences Johnstown Felon to More Than Seven Years in Prison for Possessing Weapon

JOHNSTOWN, PA—A resident of Johnstown, Pennsylvania has been sentenced in federal court to 92 months’ incarceration and three years of supervised release on his conviction of unlawful possession of a firearm by a convicted felon, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Rogelin M. Lopez, 26, of Johnstown, Pennsylvania.
According to information presented to the court, on December 24, 2009, Lopez, who had been convicted in 2006 in Cambria County, Pennsylvania of delivery of a controlled substance, unlawfully possessed a Smith & Wesson pistol. Federal law prohibits persons who have been convicted of a crime punishable by imprisonment for more than one year from possessing ammunition or firearms. Delivery of a controlled substance is such a crime.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Johnstown Police Department and the Laurel Highlands Resident Agency of the Federal Bureau of Investigation for the investigation leading to the successful prosecution of Lopez.
According to Mr. Hickton, Lopez was prosecuted as part of Project Safe Neighborhoods, a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent, deter, and prosecute gun crime.

Indictment Charges Serial Bank Robber in New Heists

PHILADELPHIA—Carl Anthony Goodwin, 28, of Philadelphia, Pennsylvania, was charged today by indictment in several robberies in Philadelphia, one of which was committed while he was a resident of a halfway house, announced United States Attorney Zane David Memeger. Goodwin is charged with five robberies, one attempted robbery, and escape from the residential reentry center.
Goodwin had been released to the Kintock Residential Reentry Center at 301 East Erie Avenue (“Kintock”) after completing a 30-month prison sentence for two attempted robberies on banks in Philadelphia. According to the indictment, on June 17, 2013, Goodwin robbed the Dunkin Donuts store at 3705 Germantown Avenue. It is further alleged that on June 19, 2013, Goodwin escaped from confinement at the Kintock Residential Reentry Center. It is further alleged that on June 20, 2013 and July 2, 2013, Goodwin robbed the Citizens Bank branch, at 6324 Stenton Avenue, and that on June 21, 2013, Goodwin attempted to rob the Bank of America branch located at 3705 Aramingo Avenue. Goodwin is also charged with the June 24, 2013 robbery of the Beneficial Bank branch at 5301 Chew Avenue and the July 7, 2013 robbery of the Wells Fargo Bank branch at 861 East Allegheny Avenue.
If convicted of all charges, Goodwin faces a maximum possible sentence of 125 years in prison, a fine of up to $1.75 million, three years of supervised release, and a $700 special assessment.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Paul G. Shapiro.

Cameron County Man Convicted on Charges Related to Armed Carjacking

The United States Attorney’s Office for the Middle District of Pennsylvania announced that following a three-day trial before U.S. District Court Judge Christopher C. Conner, an Emporium, Pennsylvania man was convicted late Wednesday on charges of carjacking, brandishing a gun during a crime of violence, and receiving a stolen firearm stemming from an armed carjacking.
According to United States Attorney Peter J. Smith, on August 8, 2012, Thomas Edward Smith, age 58, pretended to be working on a car parked along a street in Emporium and flagged down an employee of Citizens & Northern Bank. Smith entered the vehicle and pulled out a handgun. Smith then directed the victim to drive to the Citizens & Northern Bank branch in Emporium. Smith told the victim this would be “the worst day of her life,” that the victim and the bank had taken his house away from him in a bank foreclosure, and that the victim and another bank employee were now “going to pay for it.” The victim jumped out of the vehicle to escape from Smith, who then also fled from the vehicle.
Smith was indicted in September 2012.
Sentencing is scheduled for November 15, 2013.
The case was investigated by the Emporium Borough Police Department, the Pennsylvania State Police, and the Federal Bureau of Investigation. Prosecution was handled by Assistant United States Attorney George J. Rocktashel.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.

Lebanon County Man Pleads Guilty to Stealing $60,000 from Credit Union

The United States Attorney’s Office for the Middle District of Pennsylvania announced that Brian G. Zimmerman, age 68, of Lebanon, Pennsylvania, pleaded guilty to credit union larceny before U.S. District Court Judge Sylvia H. Rambo. As a result of the guilty plea, Zimmerman faces up to 10 years’ imprisonment, $250,000 in fines, and mandatory restitution. No date has been set for sentencing.
According to United States Attorney Peter J. Smith, Zimmerman was the former manager and treasurer of the LEBCO Educators Federal Credit Union located in Lebanon, Pennsylvania. Zimmerman admitted that he stole $60,000 from the credit union by taking money from the vault and making direct deposits to his personal account from credit union funds between 2004 and 2009. Zimmerman was terminated from his position in 2010.
A sentencing following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this particular case, the maximum penalty under the federal statute is 10 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
The case was investigated by the FBI and is assigned to Senior Litigation Counsel Bruce Brandler for prosecution.

Serial Bank Robber Pleads Guilty

PHILADELPHIA—Tarik Hooks, 35, of Philadelphia, pleaded guilty today to robbing six banks and attempting to rob three others between February 2, 2013 and February 21, 2013. Hooks admitted that on February 2, 2013, he robbed the Citizen’s Bank branch located inside the Acme supermarket at 121 East City Avenue, in Bala Cynwyd, Pennsylvania; on February 8, 2013, he robbed the Wells Fargo Bank branch at 65 West Baltimore Avenue in Lansdowne, Pennsylvania; on February 12, 2013, he robbed the TD Bank at 401 West Lancaster Avenue in Haverford, Pennsylvania; on February 14, 2013, Hooks robbed the Sovereign Bank at 1 Belmont Avenue in Bala Cynwyd, Pennsylvania; on February 17, 2013, he robbed the TD Bank at 5501 Ridge Avenue in Philadelphia, Pennsylvania; and on February 21, 2013, he robbed the TD Bank at 2200 Garrett Road in Drexel Hill, Pennsylvania.
Hooks also pleaded guilty to unsuccessful robberies at the Citizen’s Bank branch inside the Giant supermarket, at 543 North Oak Avenue in Clifton Heights, Pennsylvania, on February 7, 2013; the Citizen’s Bank branch, at 543 North Oak Avenue in Clifton Heights, Pennsylvania, on February 9, 2013; the TD Bank branch, at 5501 Ridge Avenue, in Philadelphia, Pennsylvania, on February 14, 2013.
In addition to the nine counts of the indictment, the defendant also admitted today to robbing a Citizen’s Bank located inside an Acme market at 2084 Naamans Road, in Wilmington, Delaware, on February 10, 2013, at approximately 11:20 a.m. The defendant has agreed that, for purposes of calculating his Sentencing Guideline range and restitution, the February 10 bank robbery shall be treated as if the defendant had been convicted of the offense.
Hooks faces a maximum possible sentence of 180 years in prison, a fine of up to $2.25 million, and $900 in special assessments when sentenced on November 12, 2013.
The case was investigated by agents from the Federal Bureau of Investigation, the Philadelphia Police Department, the Lower Merion Township Police Department, Landsdowne Police Department, and Aldan Police Department and is being prosecuted by Special Assistant United States Attorney Pedro de la Torre.

Philadelphia Man Charged with Duping Gold Buyers

Hashim Sharif, 39, of Philadelphia, Pennsylvania, was charged today by information with one count of wire fraud in connection with a scheme that, collectively, defrauded victims out of approximately $1 million, announced United States Attorney Zane David Memeger.
Sharif, who also went by the name “Adam Ford,” operated a website (phoniexgoldllc.com) where he advertised gold and other precious metal products for sale. After receiving money from customers, Sharif did not send the purchased products and spent the money on luxury vehicles, real estate, and other goods.
If convicted, the defendant faces a maximum possible sentence of 20 years’ imprisonment, three years’ supervised release, a $250,000 fine, and a $100 special assessment.
The case was investigated by the Federal Bureau of Investigation and Philadelphia Police Department, and it is being prosecuted by Assistant United States Attorney David L. Axelrod.
An indictment or information is an accusation. A defendant is presumed innocent unless and until proven guilty.

Closing Agent Admits Participating in Large-Scale Mortgage Fraud Scheme

NEWARK, NJ—A paralegal today admitted participating in a long-running, large-scale mortgage fraud scheme that defrauded financial institutions of at least $2 million, U.S. Attorney Paul J. Fishman announced.
Linda Cohen, 55, of Orange, New Jersey, pleaded guilty before U.S. District Judge Esther Salas to an information charging her with one count of conspiring to commit bank fraud and one count of transacting in criminal proceeds.
According to documents filed in this case and statements made in court:
Cohen worked as a paralegal who handled real estate closing for S.B., an attorney licensed in New Jersey. Cohen acted as the settlement agent for fraudulent mortgage loans brokered by conspirator Klary Arcentales, 45, of Lyndhurst, New Jersey, on behalf of Premier Mortgage Services. As closing agent, Cohen furthered the scheme by convening closings, receiving funds from lenders, and preparing HUD-1 reports that purported to reflect the sources and destinations of funds for mortgages on subject properties. Those HUD-1s were neither true nor accurate. Cohen routinely certified HUD-1s in which she purported to have received a down payment from the buyer when no down payment had been made. At or following the closings, Cohen disbursed mortgage loan proceeds directly to Premier Mortgage Services, Arcentales, and other conspirators. Cohen created shell bank accounts into which she funneled the proceeds of her fraudulent activity.
The count of conspiracy to commit bank fraud to which Cohen pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine, and the count of transacting in criminal proceeds is punishable by a maximum penalty of 10 years in prison and a fine of $250,000 or twice the gross amount of any gain or loss. Sentencing is scheduled for November 18, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s guilty plea. He also thanked the Social Security Administration-Office of Inspector General, under the direction of Special Agent in Charge Edward Ryan, for its role in the investigation.
The government is represented by Assistant U.S. Attorneys Zach Intrater and Rahul Agarwal of the Newark office.
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’s 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.
Defense counsel: Brian Daly Esq., Middletown, N.J.

Man Sentenced to 50 Years in Prison, Two Others Plead Guilty to Child Pornography Charges

LAKE CHARLES, LA—United States Attorney Stephanie A. Finley announced that one man was sentenced and two pleaded guilty Thursday to various child pornography-related charges. The sentencing and guilty pleas were held before U.S. District Judge Patricia Minaldi.
Kansas Man Sentenced to 50 Years for Producing Child Pornography
Lonnie Allen Truitt, 27, of Coffeyville, Kansas, was sentenced to 50 years in prison and a lifetime of supervised release for production of child pornography. According to evidence presented at the guilty plea, the defendant began text messaging a 15-year-old girl in East Texas on November 1, 2011. Truitt convinced the girl to provide him with sexually explicit images. Between November 15 and 30, 2011, the defendant traveled to Texas to meet with the girl. Truitt and the girl then traveled to a camp in Lake Charles, where they engaged in sex acts. Truitt was arrested when camp staff members became suspicious and called law enforcement authorities. He pleaded guilty on April 11, 2013.
“Today’s sentencing shows that Homeland Security Investigations (HSI) and its law enforcement partners will identify and seek prosecution of sexual predators everywhere regardless of where they may travel to flee from justice,” said HSI New Orleans Special Agent in Charge Raymond R. Parmer Jr. Parmer.
Ex-Tugboat Captain Pleads Guilty to Transporting Child Pornography
Former tugboat captain Kenneth Dwight Dickey, 57, of Foley, Alabama, pleaded guilty to transporting child pornography. According to evidence presented at the guilty plea, law enforcement authorities detected Dickey downloading child pornography using peer-to-peer software. Those using peer-to-peer software usually take a file and place it in a shared folder on a computer for the purpose of distribution with other individuals on the internet. A search of the defendant’s computer and phone on October 15, 2012 showed that Dickey was in possession of child pornography. He also admitted to transporting child pornography from Mississippi to the Western District of Louisiana. The child pornography on the computer was sadistic in nature.
Dickey faces up to 20 years in prison, five years to life of supervised release, and a $250,000 fine, for transporting child pornography.
Westlake Man Pleads Guilty to Possessing Child Pornography
Michael Sonnier, 31, of Westlake, Louisiana, pleaded guilty to possession of child pornography. According to evidence presented at the guilty plea, law enforcement authorities detected Sonnier downloading child pornography using file-sharing software. A search of the defendant’s computer and phone on October 18, 2012 showed that he had downloaded more than 26 movies of hardcore child pornography, which included sadistic material depicting prepubescent children.
Sonnier faces up to 10 years in prison, five years to life of supervised release, and a $250,000 fine for possession of child pornography.
“The defendants in these cases are child predators who participated or facilitated the abuse of children,” Finley stated. “The public should be aware that these criminals use cell phones, computers, and other technology to connect with minors or to download images of children being sexually abused. This office will continue to prosecute these cases to the fullest extent of the law in order to protect the children of this community.”
Homeland Security Investigations investigated the cases. Assistant U.S. Attorney John Luke Walker is prosecuting the cases.
All of the cases were brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Attorney’s Office and the U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online at www.ice.gov/exec/forms/hsi-tips/tips.asp and to the FBI at tips.fbi.gov. Tips may be submitted anonymously. The Lake Charles FBI office number is (337) 433-6353.

Robbery of Liberty Bank Branch in New Orleans

On August 6, 2013 at approximately 1:52 p.m., a robbery occurred at the Liberty Bank branch located at 3002 Gentilly Boulevard, New Orleans.
The suspect entered the location, approached a teller window, and demanded money via a note. He left the bank with an undetermined amount of money.
The suspect is described as a black male between the ages of 45-55, slim build, light complexion, approximately 5’9”-6’0” tall. He was observed wearing a long-sleeved gray shirt over a white shirt and a baseball cap with the word Chevy in block letters. He left the bank on foot and was last observed walking east on Gentilly Boulevard toward Elysian Fields Avenue.
Anyone who has information is asked to contact the FBI at (504) 816-3000 or Crimestoppers at (504) 822-1111. The Metropolitan Orleans Bank Security Association is offering a reward of up to $5,000 for information leading to the arrest and indictment of this bank robber. The public can visit bankrobbers.fbi.gov for further information on suspects wanted for bank robbery.
A photo of the suspect is below.

Henderson Man Guilty in Multiple Bank Robberies

OWENSBORO, KY—A Henderson, Kentucky man pleaded guilty last week in United States District Court before Magistrate Judge Dave Whalin to robbing six financial institutions and to money laundering, announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to the plea agreement, James Allen Morris, age 54, admitted to using force, violence, and intimidation when he robbed six financial institutions, whose deposits were then insured by the Federal Deposit Insurance Corporation and the National Credit Union Administration, located in Henderson County, Kentucky, between July 23, 2010 and January 17, 2013.
Specifically, Morris admitted on Friday, July 26, 2013, to robbing the following financial institutions: on January 17, 2013, Green River Credit Union, located at 902 Second Street, Henderson, Kentucky, of $32,414; on August 22, 2012, Independence Bank, located at 2610 Zion road, Henderson, Kentucky, of $10,400; on August 22, 2012, Bank of Henderson, 2003 Stapp Drive, Henderson, Kentucky, of $11,559; on July 11, 2012, Green River Credit Union, 902 Second Street, Henderson, Kentucky, of $1,596; on May 24, 2011, U.S. Bank, 501 Barrett Boulevard, Henderson, Kentucky, of $6,000; and on July 23, 2010, Integra Bank, 9720 U.S. HWY 41 N., Poole, Kentucky, of $2,770.
Further, Morris admitted to one count of money laundering for knowingly depositing the proceeds of bank robbery at three separate branches of the same bank located in Henderson, Kentucky. The separate deposits were designed to conceal the fact that the deposits were bank robbery proceeds taken from the Green River Credit Union.
Further, Morris agreed in court to an order of restitution to be determined at sentencing. The amount owed to victims includes the total loss to the banks listed in the plea agreement including an undetermined amount to Old National Bank and $4,485 to Green River Credit Union at 902 St. Henderson, Kentucky, as $29,524 was recovered.
At sentencing Morris faces a combined maximum term of 140 years in prison, a maximum fine of $1,750,000, restitution, and a three-year term of supervised release.
Sentencing is scheduled for September 21, 2013, at 10:30 a.m. in Owensboro, before Chief Judge Josepha H. McKinley, Jr.
This case is being prosecuted by Assistant United States Attorney Joshua Judd and is being investigated by the Henderson Police Department and the Federal Bureau of Investigation.

Barren County Sheriff Sentenced on Two Counts of Obstructing Justice

WASHINGTON—Barren County (Kentucky) Sheriff Christopher Brian Eaton, 42, of Glasgow, Kentucky, was sentenced today by U.S. District Judge Joseph H. McKinley, Jr. to serve an 18-month prison term followed by two years of supervised release, after a jury convicted him on May 9, 2013 of two counts of obstructing justice during a federal criminal civil rights investigation conducted by the FBI. Eaton was convicted of corruptly persuading two of his deputies to write false reports regarding an alleged unreasonable use of force against a man arrested by Eaton and several of his deputies outside a church on February 24, 2010.
Eaton was convicted of directing the first deputy, who did not participate in the arrest, to write a report which falsely stated that Eaton and the deputy had walked back to the area where the individual had been arrested and located a knife lying on the ground. Eaton was convicted of directing the second deputy, who had participated in the arrest, to falsify reports and testify falsely in state court proceedings that that the victim had pulled a knife on Eaton during the victim’s arrest, when Eaton and his deputy fully knew this not to be true.
“Obstruction of justice by law enforcement officers strikes at the heart of the fundamental right of every citizen accused of a crime to due process of the law,” said Acting Assistant Attorney General Jocelyn Samuels of the Civil Rights Division of the U.S. Department of Justice. “As the trial, verdict, and sentence in this case demonstrate, the Department of Justice and the Civil Rights Division will vigorously prosecute law enforcement officers who violate their sworn duty to respect and enforce the constitutional rights of every person.”
This case was investigated by the Louisville Division of the FBI and was prosecuted by Trial Attorneys Roy Conn and Sanjay Patel of the Department of Justice Civil Right Division.

Insurance Agents and Attorneys Charged in $50 Million Insurance Fraud Scheme

SAN DIEGO, CA—United States Attorney Laura E. Duffy announced today that insurance brokers Byron Frisch and Kristian Giordano and attorneys Kasra Sadr and Brenda Barrera Merriles were arraigned today on a variety of charges related to their fraudulently causing life insurance companies to issue more than $50 million worth of policies to unqualified applicants who had no intention of paying the policy premiums. In return, the defendants obtained more than $1.6 million and the ability to sell the fraudulently obtained life insurance policies to investors.
According to the indictment, the defendants employed multiple means to deceive the insurance companies. Initially, the defendants recruited elderly individuals to apply for “free” life insurance policies with million-dollar death benefits. They then submitted fraudulent applications to the life insurance companies by intentionally omitting or falsifying the applicant’s net worth, income, or source of premium payments. In addition, the conspirators concealed that they were paying all or part of the policy premiums and intended to sell the policies on the secondary market for large profits.
Frisch and Giordano were licensed insurance agents who conducted business from their La Jolla, California offices. Sadr and Brenda were San Diego attorneys who secretly funded the policy premiums, acted as trustees for policy applicants, and controlled sales of the policies on the secondary market.
The defendants will next appear before United States District Judge Janis L. Sammartino for a motion hearing on September 6, 2013, at 1:30 p.m.
Defendants
Byron Arthur Frisch, 36, Carlsbad, California
Kristian Marcus Giordano, 36, Temecula, California
Kasra Sadr, 43, San Diego, California
Brenda N. Barrera Merriles, 43, San Diego, California
Summary of Charges in Criminal Case No. 13cr2774-JLS
Count one: Title 18, United States Code, Section 371—conspiracy to commit mail fraud, wire fraud—all defendants
Maximum penalties: five years of imprisonment; $250,000 fine; $100 special assessment; three years of supervised release
Counts two to nine: Title 18, United States Code, Section 1341—mail fraud—all defendants
Maximum penalties per count: 20 years of imprisonment; $250,000 fine or twice the gross pecuniary gain or twice the pecuniary loss (whichever is greatest), $100 special assessment; three years of supervised release
Counts 10-23: Title 18 United States Code, Section 1343—wire fraud—all defendants
Maximum penalties per count: 20 years of imprisonment; $250,000 fine or twice the gross pecuniary gain or twice the pecuniary loss (whichever is greatest), $100 special assessment; three years of supervised release
Investigating Agencies
Internal Revenue Service-Criminal Investigation
Federal Bureau of Investigation
An indictment itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.

CEO Pleads Guilty to $2.5 Million Fraud Involving Florida Software Company

SAN DIEGO, CA—United States Attorney Laura E. Duffy announced today that John G. Rizzo, the CEO of iTrackr Systems, has admitted defrauding investors in connection with millions of shares of his Florida-based company.
As set forth in his plea agreement, in early 2006, Rizzo agreed to raise money for a Florida software company called iTracker, which developed software to track the inventories and availability of electronics, e.g., Xboxes. In approximately late 2008, Rizzo and his co-conspirators used the services of offshore “boiler rooms” to solicit investments for the company’s “penny stock.” Unknown to investors, the boiler rooms failed to disclose that only 20 percent of each investment would go to iTracker, with the remainder being paid to the boiler rooms as commission.
As part of that scheme, Rizzo utilized his shell company in the British Virgin Islands (BVI) and the company’s bank account in Belize. Rizzo sold millions of shares of iTrackr stock through his BVI company in order to avoid U.S. securities registration requirements and disguise the fact that almost all the investor funds were being diverted to the boiler rooms. In addition, Rizzo used a complex array of different entities to conceal the fact that he was selling the shares, not independent third party investors. During 2009 alone, approximately 120 different individuals in the United Kingdom invested a total of $2.5 million in iTrackr through this scheme.
United States Attorney Laura Duffy once again cautioned the public that they need to be vigilant against all forms of illegal stock manipulation, especially in the penny stock markets. Duffy praised the hard work of the agents from the Federal Bureau of Investigation and the Internal Revenue Service for their efforts, and the continuing support of the Securities and Exchange Commission for their expertise and guidance.
FBI Special Agent in Charge, Daphne Hearn, commented, “This investigation highlights the need for investors to do their own homework before investing their money in schemes such as the one perpetrated by Mr. Rizzo. If something seems too good to be true, it almost always is. The FBI will continue to lend our expertise and resources to these types of cases and work with our partners, so that others do not fall prey to such fraudulent investment schemes.”
Rizzo is scheduled to be sentenced on October 28, 2013 at 9:30 a.m. before U.S. District Court Judge Larry A. Burns.
Case Number: 13cr2716-JAH
Defendant:
JOHN G. RIZZO
Age: 51 Boca Raton, Florida
Summary of Charge:
Title 18, United States Code, Section 1349-Conspiracy to Commit Wire Fraud. Maximum penalties: 20 years in prison, $250,000 fine, term of supervised release of three years, restitution, forfeiture, and $100 special assessment.
Participating Agencies:
Federal Bureau of Investigation
Internal Revenue Service

FBI and San Diego Police Department Seek Public’s Assistance to Identify Navy Federal Credit Union Robber

The FBI and San Diego Police Department are seeking the public’s assistance to identify the unknown male responsible for robbing the Navy Federal Credit Union located at 555 Saturn Boulevard, San Diego, California, on Friday, August 2, 2013, at approximately 4:47 p.m..
According to witnesses, the robber entered the bank and waited in line until summoned by a teller. Once at the teller station, the robber made a verbal demand for cash. After receiving a sum of money, the robber walked out of the bank. No injuries were reported.
Witnesses describe the robber as follows:

• Sex: Male
• Race: White
• Height: Approximately 5’4” tall
• Build: Medium
• Clothing: Black baseball cap, black long-sleeve sweatshirt, blue jeans, black sunglasses, and chain wallet

Bank surveillance photographs of the robbery suspect are below.

Anyone with information concerning this robbery is asked to contact the FBI at telephone number (858) 320-1800 or Crime Stoppers at (888) 580-8477.

Former Northwest Arkansas Business Developer Pleads Guilty to Three Federal Criminal Charges

FORT SMITH, AR—Conner Eldridge, United States Attorney for the Western District of Arkansas; Christopher A. Henry, Special Agent in Charge, IRS Criminal Investigation, Nashville Field Office; Glen Perciful, IRS-Criminal Investigation Supervisory Special Agent; and Randall C. Coleman, FBI Special Agent in Charge, announced today that Brandon Lynn Barber, 37, of New York, New York, pleaded guilty to three federal criminal charges: (1) conspiracy to commit bankruptcy fraud; (2) conspiracy to commit bank fraud; and (3) money laundering. The Honorable P. K. Holmes accepted the pleas in United States District Court in Fort Smith.
U.S. Attorney Eldridge commented, “This is a significant step in bringing several individuals involved in committing fraud, including fraud on the federal bankruptcy court, to justice. This case indicates that we are serious about identifying, investigating, and prosecuting those who perpetuate fraud, swindle others out of money, and engage in financial crimes.”
Special Agent in Charge Henry stated, “This investigation is another example of the success that can be achieved when law enforcement agencies join forces. IRS Criminal Investigation, along with our law enforcement partners, plays a very important role in the successful investigation and prosecution of these types of financial crimes.”
“The number of creditors whom Mr. Barber defrauded through his illegal activities—as well as the number of banks who were threatened by his actions—is just staggering,” stated FBI Special Agent in Charge Randall C. Coleman. “In the end, Mr. Barber could not escape the mess he made by moving to New York. He ultimately had to come back to Northwest Arkansas and be held accountable for his actions. I commend the special agents and prosecutors for their important roles in this investigation.”
According to court documents and information discussed in court, the following facts were agreed to by Barber and the United States:
(1) Conspiracy to Commit Bankruptcy Fraud
Beginning in April 2008 and continuing through November 9, 2010, Barber reached an agreement with K. Vaughn Knight and James Van Doren to conceal and disguise income and funds belonging to Barber in order to hide those funds from creditors. The assets were concealed by transferring those funds into and through accounts belonging to Knight and Van Doren. In order to execute and conceal the scheme to defraud creditors, Barber filed a petition for bankruptcy under Title 11. That petition failed to disclose several transfers of funds to Knight and Van Doren. Barber, who was advised by Knight, his attorney of record for the bankruptcy proceedings, also made false and fraudulent representations in relation to his petition and the bankruptcy proceeding. Five groups of transactions were part of the fraud:

• Around April 2, 2008, Barber received $688,937 from a real estate transaction known as the Outfield Development. To conceal this money, Barber instructed the closing agent to wire the money to Knight’s IOLTA account under the false pretense that the money was to pay off Epsilon Investment LLC, a company owned in part by Van Doren. However, the majority of the funds sent to Knight’s IOLTA account were used to pay expenses on behalf of Barber and only $152,735 of the funds were actually paid to Van Doren or Epsilon LLC. None of these funds were disclosed to the bankruptcy court as income.
• On or about September 29, 2008, Barber endorsed a check for $64,000 over to Van Doren to hide the money from his creditors. Van Doren then used those funds to pay for Barber’s living expenses, and Barber did not disclose these funds to the bankruptcy court.
• Between July 2008 and 2009, Barber delivered a briefcase containing $30,000 in cash to Van Doren to hide from his creditors so that Barber could use the money for his personal expenses.
• On about August 12, 2008, Barber transferred $191,000 into an account owned by the Knight Law Firm. On August 13, $151,000 of those funds was transferred to Knight’s IOLTA account. On August 15, funds from the IOLTA account were used to purchase a $95,000 cashier’s check payable to Barber, and those funds were then transferred into an account controlled by Barber. An additional $95,230.03 was also wired from the IOLTA account to make a payment on Barber’s credit card account.
• On about October 7, 2008, Barber was involved in several real estate transactions, collectively known as the Executive Plaza transactions (detailed below). On about October 31, 2008, Barber received $314,000 for his involvement in these transactions, which was paid by Jeff Whorton. In order to conceal this money from his creditors, Barber and Whorton agreed with Knight to have the money wired into Knight’s IOLTA account. On November 14, 2008, approximately $150,000 was transferred by Knight to Epsilon LLC and subsequently funneled back to Barber so that the money could be used by Barber for personal use. None of these funds were disclosed to the bankruptcy court.

(2) Conspiracy to Commit Bank Fraud
From around August 2008 to around December 2008, Barber conspired with Jeff Whorton, Brandon Rains, David Fisher, and others to defraud First Federal Bank. The parties falsely and fraudulently represented the purchase prices of certain lots known as Executive Plaza to be higher than the actual sales prices in order to obtain higher loans from First Federal Bank. Multi-party, multi-property real estate transactions involving the Executive Plaza lots were then structured and closed in a way that excess funds were obtained from the total First Federal Bank loan. Fisher prepared an agreement that divided the excess funds. Whorton disbursed the excess funds, transferring $314,000 to Barber, $100,000 to Rains, and $550,000 to an unnamed co-conspirator.
(3) Money Laundering
Barber engaged in money laundering when he conducted monetary transaction of criminally derived property through a financial institution. As stated above, Barber had agreed with Van Doren and Knight to conceal certain income and transactions from the bankruptcy court. The money laundering occurred when Barber directed Knight to wire funds from Knight’s IOLTA account to Van Doren’s Epsilon LLC bank account and Van Doren’s personal account and then had those funds transferred back to his own bank account. Specifically, these transactions occurred on November 14, 2008, when $150,000 was transferred from Knight’s IOLTA account to a Van Doren controlled Epsilon LLC account at Citibank and on March 16, 2009, when $20,000 was wired from the Epsilon LLC Citibank account to a Barber controlled bank account with First Security Bank in Fayetteville, Arkansas, under the name NWARE Investments, LLC.
Barber and codefendants were originally indicted earlier this year. On January 16, 2013, Barber, Rains, and Whorton were charged in a three-count indictment. David Fisher was added to this indictment on June 5, 2013. On March 6, 2013, Barber, Knight, and Van Doren were charged in a 27-count indictment.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including prior criminal record (if any), role in the offense, other relevant conduct, and the characteristics of the violations. The sentence will not exceed the statutory maximum and in most cases it will be less than the maximum. In this case, Barber faces the following maximum penalties for each count: (1) conspiracy to commit bankruptcy fraud—five years in prison and a $250,000 fine; (2) money laundering—10 years in prison and a $250,000 fine; and (3) conspiracy to commit bank fraud—30 years in prison and a $1 million fine.
This case was investigated by the Internal Revenue Service Criminal Investigation Division and the Federal Bureau of Investigation. United States Attorney Conner Eldridge, First Assistant United States Attorney Wendy Johnson, and Assistant United States Attorneys Glen Hines and Benjamin Wulff are prosecuting the case for the United States.
Some of the individuals mentioned in this release have been charged with similar crimes but have not pleaded guilty. They are presumed innocent unless or until they are proven guilty beyond a reasonable doubt in a court of law.

Former Campaign Worker and Policy Analyst for the Arizona House of Representatives Found Guilty of Wire Fraud

PHOENIX—John Rowland Mills, 49, of Glendale, Arizona, a former policy analyst for the Arizona House of Representatives, was found guilty of nine counts of wire fraud by a federal jury in Phoenix. The case was tried before U.S. District Judge James A. Teilborg from July 9 through July 23, 2013. Sentencing is set before Judge Teilborg on Tuesday, October 8, 2013.
“The theft and misuse of approximately $133,000 of campaign funds, consisting primarily of contributions from individuals, is a serious offense. My office stands ready to assist the people of Arizona in guaranteeing that campaign workers are not tempted to steal or misuse such funds in the future,” said John S. Leonardo, U.S. Attorney, District of Arizona.
FBI Special Agent in Charge Douglas G. Price, Phoenix Division, stated “Whenever an individual utilizes their position to defraud the public for their own personal gain by taking campaign contributions, it tarnishes our political process. John Rowland Mills’ actions were fostered by greed. The voice of justice has spoken with a jury of his peers holding him accountable for defrauding the public. The FBI and the United States Attorney’s Office are committed to investigating and prosecuting those who choose to line their pockets with public funds.”
The evidence at trial showed that from December 2006 through January 2009, Mills embezzled approximately $133,000 from the James P. Weiers 2008 campaign account (which consisted primarily of contributions from individuals) and used the embezzled funds to make mortgage payments; to pay for personal items such as clothing, food, and credit card bills; and to make various investments, including investments via multiple E*Trade accounts. Mills also made a variety of false statements in an attempt to avoid detection, including forging the candidate’s signature on nine campaign account checks and filing six campaign finance reports with the Arizona Secretary of State that falsely overstated the amount of money in the campaign account. Finally, just before the 2008 election, Mills deposited money back into the campaign account in an attempt to avoid detection.
Each conviction for wire fraud carries a maximum penalty of 20 years, a maximum fine of $250,000, or both.
The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Frederick A. Battista, Assistant U.S. Attorney, District of Arizona, Phoenix.
Case Number: CR-12-1660-PHX-JAT (LOA)
Release Number: 2013-059_Mills

Tucson Man Sentenced to 135 Months for Defrauding More Than 1,600 People

TUCSON, AZ—On July 23, 2013, Anthony Mark Boscarino, 47, of Tucson, Arizona, was sentenced by U.S. District Judge Cindy K. Jorgenson to 135 months. Boscarino pleaded guilty January 23 and February 27, 2013, to 43 crimes including fraud, money laundering, and tax evasion.
Boscarino was involved in multiple frauds using his Internet sports handicapping site that operated under several names, including Mike’s Lock Club. He solicited victims to invest in gambling junkets to Las Vegas, in an oil well project in Louisiana, in collateralized mortgage obligations and several other scams. He was ordered to pay restitution of $6.5 million to the 1,685 victims of his fraudulent activity and $1.3 million in unpaid taxes for 2009. The court also ordered a $4.8 million money judgment against him and forfeited several of his cars and bank accounts.
The investigation in this case was conducted by Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigations Division. The prosecution was handled by Wallace H. Kleindienst and John R. Evans, Assistant U.S. Attorney, District of Arizona, Tucson.

Self-Proclaimed President of Sovereign Citizen Group Sentenced to Federal Prison for Promoting Tax Fraud Scheme

WASHINGTON—The Justice Department, the Internal Revenue Service (IRS), and the FBI announced today that James Timothy Turner, also known as Tim Turner, was sentenced to serve 18 years in federal prison for conspiracy to defraud the United States, attempting to pay taxes with fictitious financial instruments, attempting to obstruct and impede the IRS, failing to file a 2009 federal income tax return, and falsely testifying under oath in a bankruptcy proceeding.
In March 2013, following a five-day jury trial, Turner was convicted on 10 counts in the U.S. District Court for the Middle District of Alabama. Based on the evidence introduced at trial and in court filings, Turner, the self-proclaimed “president” of the sovereign citizen group Republic for the united States of America (RuSA), traveled the country in 2008 and 2009 conducting seminars teaching attendees how to defraud the IRS by preparing and submitting fictitious bonds to the U.S. government in payment of federal taxes, mortgages, and other debt. The evidence at trial revealed the bonds are fictitious, and witnesses testified that Turner used special paper, financial terminology, and elaborate borders in an effort to make them look authentic and more likely to succeed in defrauding the recipient. Turner was convicted of sending a $300 million fictitious bond in his own name and of aiding and abetting others in sending 15 other fictitious bonds to the Treasury Department to pay taxes and other debts.
The evidence at trial also established that Turner taught people how to file retaliatory liens against government officials who interfered with the processing of fictitious bonds. Turner filed a purported $17.6 billion maritime lien in Montgomery County, Alabama Probate Court against another individual. This investigation began after Turner and three other self-proclaimed “Guardian Elders” sent demands to all 50 governors in the United States in March 2010 ordering each governor to resign within three days to be replaced by a “sovereign” leader or be “removed.” The FBI immediately began investigating Turner and IRS- Criminal Investigation (IRS-CI) joined the investigation soon thereafter.
“This lengthy prison sentence shows that tax defiers like Turner who use bogus tax schemes and file retaliatory liens against government officials will be punished,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “The Justice Department will continue to work with law enforcement to investigate and prosecute those who attempt to defraud the government.”
“This sentence should send a message that if you attempt to use retaliatory tax liens and fraudulent tax schemes as weapons against the United States and its citizens you will be punished,” stated acting U.S. Attorney Sandra J. Stewart for the Middle District of Alabama. “We cannot and will not tolerate those who violate the law for financial gain. I would like to thank the law enforcement officers who worked vigilantly on this case to bring this criminal to justice.”
“Turner influenced others with his false ideology by aggressively promoting obstruction of the IRS,” stated Richard Weber, Chief, IRS-Criminal Investigation. “In truth, Turner’s own defiance of IRS and his attempts to lead others through the same labyrinth of lies and distortions led to his downfall as shown by the significant sentence he must now serve. Today’s sentence should also send a strong message to those who may follow in Turner’s footsteps and attempt to defy their tax obligations. The legality of our income tax laws has been challenged time and time again and the courts have consistently upheld them.”
“The FBI is committed to vigorously investigate individuals and groups who steal from the federal government for financial gain through schemes deigned to avoid payment on loans, taxes, and other obligations owed the federal government,” stated Stephen Richardson, Special Agent in Charge of the FBI, Mobile Division.
In addition to prison time, Turner was ordered to pay $26,021 in restitution to the IRS and to serve a five-year term of supervised release upon his release from prison.
This case was investigated by special agents of the FBI and IRS-CI and was prosecuted by Tax Division Trial Attorney Justin Gelfand and Middle District of Alabama Assistant U.S. Attorney Gray Borden.

Prosecutors Charge Former JCCEO Official and Her Daughter with Theft of Nearly $500,000 from Agency

BIRMINGHAM—The U.S. Attorney’s Office has charged the former executive director of the Jefferson County Committee for Economic Opportunity and her daughter in connection with the theft of close to $500,000 from the non-profit organization, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein, Jr.
In separate informations filed in U.S. District Court, federal prosecutors charged Ruth Gayle Cunningham, 63, with theft from a government program that had received more than $10,000 in federal funding or assistance and charged her daughter, Kelli E. Caulfield, 31, with conspiracy in the scheme to defraud JCCEO.
Cunningham was executive director of JCCEO for more than 20 years before resigning the job in March. The organization employed Caulfield from May 2009 to January 2013. JCCEO is a community action agency that administers programs, including Head Start, for low-income and disadvantaged residents.
"JCCEO is an organization with 50 years of history helping some of our poorest citizens become part of the American Dream with education and assistance funded in part by federal taxpayer dollars," Vance said. "Cunningham abused the trust and discretion she was given to use this money wisely to benefit those in our community who are struggling. She used the agency’s government funds as a personal piggy bank so that she and her daughter could line their pockets with hundreds of thousands of dollars intended to lift others out of poverty," Vance said. "As a community, we have to demand better from those who are charged with using public money for the benefit of all. I encourage anyone aware of this type of abuse of the public trust to contact the U.S. Attorney Office or the FBI."
“Serving the public is a privilege, not an opportunity for unjust personal enrichment," Schwein said. "Those who are entrusted to administer public programs, such as Ms. Cunningham, are expected to serve with integrity and honor. Greed and self-interest have no place in service to the community, and the FBI will continue to root out public corruption wherever we find it and at whatever level we find it,” he said.
Cunningham and her daughter, both of Birmingham, have signed agreements with the government to plead guilty to the charges against them. Jointly, Cunningham and Caulfield are responsible for repaying $492,195 to JCCEO, according to their plea agreements. Cunningham agrees to pay that full amount to JCCEO. Caulfield’s plea agreement cites her responsibility to repay $253,499 to JCCEO.
Cunningham acknowledges in her plea agreement that, between March 2009 and April 2010, she used JCCEO funds to make monthly mortgage payments on at least three residential properties she owned and at least five residential properties her daughter owned in Jefferson and Shelby Counties. Cunningham also used JCCEO funds to pay property taxes on one of those properties, a house in Chelsea that she bought in 2007 with a mortgage loan of more than $1 million, according to court records.
Cunningham also paid $293,413 in JCCEO funds to companies owned by her daughter and to other contractors for claimed repairs or renovations to the women’s properties, according to their plea agreements.
As part of Caulfield’s conspiracy, she acknowledges in her plea agreement that she created invoices citing repair or improvement work on the private properties and gave them to her mother, who submitted the invoices and corresponding check requests to the JCCEO finance director.
As executive director of JCCEO, Cunningham had check-signing authority up to $5,000. All the invoices Caulfield prepared for her mother to submit for payment by JCCEO were below $5,000 and, therefore, required no second signature from a JCCEO board member on the agency’s checks.
The maximum penalty for theft from a federally funded program is 10 years in prison and a $250,000 fine. The maximum penalty for conspiracy to defraud a federally funded program is five years in prison and a $250,000 fine.
The FBI discovered the fraud at JCCEO while it was investigating allegations of a mortgage fraud scheme. That investigation led to federal prosecutors' charges against Cunningham and Caulfield, as well as to charges of conspiracy to defraud federally insured financial institutions against a real estate investor now living in Atlanta and a Hoover mortgage broker. Cunningham and Caulfield bought most of the properties that later became part of their scheme to defraud JCCEO from the Atlanta investor.
The federal charges and associated plea agreements in all four cases were unsealed today in federal court in Birmingham.
The investor, the Rev. Robert Paul Hollman, 48, formerly of Dothan, and mortgage broker Brad A. Bozeman, 34, of Hoover, are charged with conspiracy to defraud a federally insured financial institution by either making or transmitting false statements and reports intended to influence a financial institution in connection with the sale of residential properties.
Hollman agrees to pay $393,440 in restitution to banks affected by his scheme, and Bozeman agrees to pay restitution of $41,460.
According to Hollman’s and Bozeman’s plea agreements, their mortgage fraud conspiracy took place as follows:
Hollman bought multiple residential properties in Jefferson and Shelby counties and, beginning about 2007, solicited people to buy the properties from him. He would agree, in advance of closing on the sales, to pay all or a portion of the down payments on the property and, afterward, to pay the monthly mortgage payments until the properties resold. Once Hollman had an agreement with a purchaser, or "borrower," he referred them to Bozeman to arrange a mortgage loan.
Hollman profited from the transactions because his debt on the properties was satisfied at closing and, in most of the transactions, he also received a cash payment from the sales. After a period of time, he would stop providing the borrowers money for the monthly mortgage payments and most of the properties ended up in foreclosure.
Hollman made false statements on mortgage documents by failing to disclose that he, not the borrower, was making the down payment or part of the down payment on the property. Bozeman made false statements on loan applications by including false income or not revealing all debts and liabilities of the purchasers and transmitting that information as true and accurate.
The maximum sentence for conspiracy to defraud a federally insured financial institution is five years in prison and a $250,000 fine.
The FBI investigated the cases, which Assistant U.S. Attorney Robin Beardsley Mark is prosecuting.

Oakland Man Indicted for Robbing Five Banks and Attempting to Rob Two Banks in the East Bay

OAKLAND, CA—A federal grand jury in Oakland indicted Amanuel Moreno today with five counts of bank robbery and two counts of attempted bank robbery, announced United States Attorney Melinda Haag.
The superseding indictment alleges that Moreno, 20, of Oakland, robbed or attempted to rob the following banks:

Date	Bank	Location	Amount Stolen
June 29, 2012	Bank of the West	24299 Southland Drive, Hayward	$25
December 6, 2012	Bank of the West	4900 Telegraph Avenue, Oakland	$506
December 6, 2012	Chase Bank	2270 Otis Drive, Alameda	Attempt
December 13, 2012	Wells Fargo Bank	950 South Holland Drive, Hayward	$1,541
December 18, 2012	Chase Bank	32101 Union Landing, Union City	Attempt
December 18, 2013	U.S. Bank	1585 East 14th Street, San Leandro	$724
January 16, 2013	Bank of the West	4900 Telegraph Avenue, Oakland	$3,321

Moreno was arrested on January 25, 2013, by local law enforcement and remained in local custody pursuant to a probation violation. He was originally charged by criminal complaint on a single count of bank robbery on February 22, 2013, and he was indicted on that same count on July 11, 2013. Moreno made his initial appearance in federal court in Oakland on July 5, 2013, and he is currently in federal custody. His next scheduled appearance is at 2:00 p.m. on September 5, 2013, for a status hearing before U.S. District Judge Yvonne Gonzalez Rogers.
The maximum statutory penalty for each count of bank robbery and attempted bank robbery, in violation of 18 U.S.C. § 2113(a), is 20 years in prison. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Brian C. Lewis is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Janice Pagsanjan. The prosecution is the result of an investigation by the Federal Bureau of Investigation, the Oakland Police Department, the Hayward Police Department, the Alameda Police Department, the Union City Police Department, and the San Leandro Police Department.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Moreno must be presumed innocent unless and until proven guilty.