An East St. Louis, Illinois man was indicted on November 20, 2013, by a federal grand jury in East St. Louis for the armed robbery of the Ferguson TV and Satellite shop located in Caseyville, Illinois, the United States Attorney for the Southern District of Illinois Stephen R. Wigginton announced today. This case, and others like it, are all part of the Metro East Armed Robbery Initiative announced a few months ago by United States Attorney Wigginton.
Phillip T. Smith, 28, was charged in count one of the indictment with Hobbs Act Robbery, which makes it a crime to obstruct, delay, or affect interstate commerce by robbery or to commit an act of violence against a person in furtherance of such a robbery. Robbery is defined in the statute as the “unlawful taking or obtaining of personal property from the person...of another, against his will, by means of actual or threatened force or violence, or fear of injury, immediate or future, to his person....” Additionally, Smith was charged in count two of the indictment with possessing, brandishing, and discharging a firearm in furtherance of a federal crime of violence—that is, the robbery charged in count one. Finally, Smith was charged in Count three of the indictment with possession of ammunition by a felon.
The indictment states that Smith, “while in the Ferguson TV and Satellite shop—a business engaged in interstate commerce—pointed a handgun at J.F., the owner of said shop, demanded money from her, and by means of a firearm, shot her as she delivered United States currency to him in response to his demand.”
An indictment is merely a statement of the charges. A defendant is presumed innocent of the charges until proven guilty beyond a reasonable doubt.
The maximum penalties that can be imposed for the robbery count are up to twenty years in prison, or a $250,000 fine, or both, three years of supervised release, and a $100 special assessment. The charge of possessing, brandishing, and discharging a firearm charge in furtherance of a federal crime of violence carries an additional minimum ten years in prison, which must run consecutively to any other sentence that the court may impose. The court may also impose a maximum fine on the firearms count of $250,000 and a special assessment of $100. The maximum penalties that can be imposed for the charge of possession of ammunition by a felon are 10 years in prison or a $250,000 fine, or both, and three years of supervised release, as well as a $100 special assessment.
Smith is in custody following an investigation by the Caseyville Police Department and the Federal Bureau of Investigation.
The case is being prosecuted by United States Attorney Stephen R. Wigginton and Assistant U.S. Attorney Stephen B. Clark.
Wednesday, November 27, 2013
Former Miami Securities Professional Pleads Guilty to Securities Fraud in Connection with Multi-State Investment Scheme
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; and Drew J. Breakspear, Commissioner, State of Florida’s Office of Financial Regulation, Bureau of Financial Investigations, announce that Daniel Paez, 27, of Miami, Florida, pled guilty today to one count of securities fraud before U.S. District Judge William P. Dimitrouleas, in connection with a scheme to defraud investors in Florida and several states. Paez faces a maximum of 20 years in prison and maximum $250,000 fine. Sentencing has been set for February 4, 2014 before Judge Dimitrouleas in Ft. Lauderdale.
According to court documents, Paez was the president of Fly High Investments, Inc., a Miami-Dade investment fund. From in or around September 2010 through in or around April 2012, Paez obtained more than $500,000 in funds from investors via telephone solicitations and through the Internet. Paez told investors that Fly High Investments was a hedge fund that managed more than $50 million, and he promised investors that their money would be invested in safe and secure investments. Paez also promised a fixed rate of return and that investors could withdraw their money whenever they wished. Instead, according to the information, Paez spent the bulk of the money raised from investors at casinos and also withdrew large amounts of cash for his personal benefit. Paez did invest certain investor monies in stocks and other securities, but often in high-risk investments or penny stocks that were materially different than the specific investments promised to investors during their sales pitch.
When investors contacted Fly High Investments and Paez to inquire about the status of their funds, Paez misled investors into believing their money was safe and had been invested profitably. Paez ultimately stopped returning calls and ignored requests for the return of investor funds. According to the Information, there were approximately 17 victim investors who were located in Florida and other states, including California, South Dakota, New Jersey, and Minnesota. None of these investors received any return on their investment and they lost all of the money they invested with Fly High Investments and Paez.
Mr. Ferrer commended the investigative efforts of the FBI and the State of Florida’s Office of Financial Regulation, Bureau of Financial Investigations. This case is being prosecuted by Assistant U.S. Attorney Jerrob Duffy.
According to court documents, Paez was the president of Fly High Investments, Inc., a Miami-Dade investment fund. From in or around September 2010 through in or around April 2012, Paez obtained more than $500,000 in funds from investors via telephone solicitations and through the Internet. Paez told investors that Fly High Investments was a hedge fund that managed more than $50 million, and he promised investors that their money would be invested in safe and secure investments. Paez also promised a fixed rate of return and that investors could withdraw their money whenever they wished. Instead, according to the information, Paez spent the bulk of the money raised from investors at casinos and also withdrew large amounts of cash for his personal benefit. Paez did invest certain investor monies in stocks and other securities, but often in high-risk investments or penny stocks that were materially different than the specific investments promised to investors during their sales pitch.
When investors contacted Fly High Investments and Paez to inquire about the status of their funds, Paez misled investors into believing their money was safe and had been invested profitably. Paez ultimately stopped returning calls and ignored requests for the return of investor funds. According to the Information, there were approximately 17 victim investors who were located in Florida and other states, including California, South Dakota, New Jersey, and Minnesota. None of these investors received any return on their investment and they lost all of the money they invested with Fly High Investments and Paez.
Mr. Ferrer commended the investigative efforts of the FBI and the State of Florida’s Office of Financial Regulation, Bureau of Financial Investigations. This case is being prosecuted by Assistant U.S. Attorney Jerrob Duffy.
Three Subsidiaries of Weatherford International Limited Agree to Plead Guilty to FCPA and Export Control Violations
WASHINGTON—Three subsidiaries of Weatherford International Limited (Weatherford International), a Swiss oil services company that trades on the New York Stock Exchange, have agreed to plead guilty to anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and export controls violations under the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA). Weatherford International and its subsidiaries have also agreed to pay more than $252 million in penalties and fines.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
Weatherford Services Limited (Weatherford Services), a subsidiary of Weatherford International, today agreed to plead guilty to violating the anti-bribery provisions of the FCPA. As part of a coordinated FCPA resolution, the department today also filed a criminal information in U.S. District Court for the Southern District of Texas charging Weatherford International with one count of violating the internal controls provisions of the FCPA. To resolve the charge, Weatherford International has agreed to pay an $87.2 million criminal penalty as part of a deferred prosecution agreement with the department.
“Effective internal accounting controls are not only good policy, they are required by law for publicly traded companies—and for good reason,” said Acting Assistant Attorney General Raman. “This case demonstrates how loose controls and an anemic compliance environment can foster foreign bribery and fraud by a company’s subsidiaries around the globe. Although Weatherford’s extensive remediation and its efforts to improve its compliance functions are positive signs, the corrupt conduct of Weatherford International’s subsidiaries allowed it to earn millions of dollars in illicit profits, for which it is now paying a significant price.”
“When business executives engage in bribery and pay-offs in order to obtain contracts, an uneven marketplace is created and honest competitor companies are put at a disadvantage,” said Assistant Director in Charge Parlave. “The FBI is committed to investigating corrupt backroom deals that influence contract procurement and threaten our global commerce.”
In a separate matter, Weatherford International and four of its subsidiaries today agreed to pay a combined $100 million to resolve a criminal and administrative export controls investigation conducted by the U.S. Attorney’s Office for the Southern District of Texas, the Department of Commerce’s Bureau of Industry and Security, and the Department of the Treasury’s Office of Foreign Assets Control. As part of the resolution of that investigation, Weatherford International has agreed to enter into a deferred prosecution agreement for a term of two years and two of its subsidiaries have agreed to plead guilty to export controls charges.
“The resolution today of these criminal charges represents the seriousness that our office and the Department of Justice puts on enforcing the export control and sanctions laws,” said U.S. Attorney Magidson.
In a related FCPA matter, the U.S. Securities and Exchange Commission (SEC) filed a settlement today in which Weatherford International consented to the entry of a permanent injunction against FCPA violations and agreed to pay $65,612,360 in disgorgement, prejudgment interest, and civil penalties. Weatherford International also agreed with the SEC to comply with certain undertakings regarding its FCPA compliance program, including the retention of an independent corporate compliance monitor.
The combined investigations resulted in the conviction of three Weatherford subsidiaries, the entry by Weatherford International into two deferred prosecution agreements and a civil settlement, and the payment of a total of $252,690,606 in penalties and fines.
FCPA Violations
According to court documents filed by the department, prior to 2008, Weatherford International knowingly failed to establish an effective system of internal accounting controls designed to detect and prevent corruption, including FCPA violations. The company failed to implement these internal controls despite operating in an industry with a substantial corruption risk profile and despite growing its global footprint in large part by purchasing existing companies, often themselves in countries with high corruption risks. As a result, a permissive and uncontrolled environment existed within which employees of certain of Weatherford International’s wholly owned subsidiaries in Africa and the Middle East were able to engage in corrupt conduct over the course of many years, including both bribery of foreign officials and fraudulent misuse of the United Nations’ Oil for Food Program.
Court documents state that Weatherford Services employees established and operated a joint venture in Africa with two local entities controlled by foreign officials and their relatives from 2004 through at least 2008. The foreign officials selected the entities with which Weatherford Services would partner, and Weatherford Services and Weatherford International employees knew that the members of the local entities included foreign officials’ relatives and associates. Notwithstanding the fact that the local entities did not contribute capital, expertise or labor to the joint venture, neither Weatherford Services nor Weatherford International investigated why the local entities were involved in the joint venture. The sole purpose of those local entities, in fact, was to serve as conduits through which Weatherford Services funneled hundreds of thousands of dollars in payments to the foreign officials controlling them. In exchange for the payments they received from Weatherford Services through the joint venture, the foreign officials awarded the joint venture lucrative contracts, gave Weatherford Services inside information about competitors’ pricing, and took contracts away from Weatherford Services’ competitors and awarded them to the joint venture.
Additionally, Weatherford Services employees in Africa bribed a foreign official so that he would approve the renewal of an oil services contract, according to court documents. Weatherford Services funneled bribery payments to the foreign official through a freight forwarding agent it retained via a consultancy agreement in July 2006. Weatherford Services generated sham purchase orders for consulting services the freight forwarding agent never performed, and the freight forwarding agent, in turn, generated sham invoices for those same nonexistent services. When paid for those invoices, the freight forwarding agent passed at least some of those monies on to the foreign official with the authority to approve Weatherford Services’ contract renewal. In exchange for these payments, the foreign official awarded the renewal contract to Weatherford Services in 2006.
Further, according to court documents, in a third scheme in the Middle East, from 2005 through 2011, employees of Weatherford Oil Tools Middle East Limited (WOTME), another Weatherford International subsidiary, awarded improper “volume discounts” to a distributor who supplied Weatherford International products to a government-owned national oil company, believing that those discounts were being used to create a slush fund with which to make bribe payments to decision-makers at the national oil company. Between 2005 and 2011, WOTME paid approximately $15 million in volume discounts to the distributor.
Weatherford International’s failure to implement effective internal accounting controls also permitted corrupt conduct relating to the United Nations’ Oil for Food Program to occur, according to court documents. Between in or about February 2002 and in or about July 2002, WOTME paid approximately $1,470,128 in kickbacks to the government of Iraq on nine contracts with Iraq’s Ministry of Oil, as well as other ministries, to provide oil drilling and refining equipment. WOTME falsely recorded these kickbacks as other, seemingly legitimate, types of costs and fees. Further, WOTME concealed the kickbacks from the U.N. by inflating contract prices by 10 percent.
According to court documents, these corrupt transactions in Africa and the Middle East earned Weatherford International profits of $54,486,410, which were included in the consolidated financial statements that Weatherford International filed with the SEC.
In addition to the guilty plea by Weatherford Services, the deferred prosecution agreement entered into by Weatherford International and the Department requires the company to cooperate with law enforcement, retain an independent corporate compliance monitor for at least 18 months, and continue to implement an enhanced compliance program and internal controls designed to prevent and detect future FCPA violations. The agreement acknowledges Weatherford International’s cooperation in this matter, including conducting a thorough internal investigation into bribery and related misconduct, and its extensive remediation and compliance improvement efforts.
Export Control Violations
According to court documents filed today in a separate matter, between 1998 and 2007, Weatherford International and some its subsidiaries engaged in conduct that violated various U.S. export control and sanctions laws by exporting or re-exporting oil and gas drilling equipment to, and conducting Weatherford business operations in, sanctioned countries without the required U.S. government authorization. In addition to the involvement of employees of several Weatherford International subsidiaries, some Weatherford International executives, managers, or employees on multiple occasions participated in, directed, approved, and facilitated the transactions and the conduct of its various subsidiaries.
This conduct involved persons within the U.S.-based management structure of Weatherford International participating in conduct by Weatherford International foreign subsidiaries, and the unlicensed export or re-export of U.S.-origin goods to Cuba, Iran, Sudan, and Syria. Weatherford subsidiaries Precision Energy Services Colombia Ltd. (PESC) and Precision Energy Services Ltd. (PESL), both headquartered in Canada, conducted business in the country of Cuba. Weatherford’s subsidiary Weatherford Oil Tools Middle East (WOTME), headquartered in the United Arab Emirates (UAE), conducted business in the countries of Iran, Sudan, and Syria. Weatherford’s subsidiary Weatherford Production Optimisation f/k/a eProduction Solutions U.K. Ltd. (eProd-U.K.), headquartered in the United Kingdom, conducted business in the country of Iran. Weatherford generated approximately $110 million in revenue from its illegal transactions in Cuba, Iran, Syria and Sudan.
To resolve these charges, Weatherford and its subsidiaries will pay a total penalty of $100 million, with a $48 million monetary penalty paid pursuant to a deferred prosecution agreement, $2 million paid in criminal fines pursuant to the two guilty pleas, and a $50 million civil penalty paid pursuant to a Department of Commerce settlement agreement to resolve 174 violations charged by Commerce’s Bureau of Industry and Security. Weatherford International and certain of its affiliates are also signing a $91 million settlement agreement with the Department of the Treasury to resolve their civil liability arising out of the same underlying course of conduct, which will be deemed satisfied by the payments above.
The FCPA case was investigated by the FBI’s Washington Field Office and its team of special agents dedicated to the investigation of foreign bribery cases. The case is being prosecuted by Trial Attorney Jason Linder of the Criminal Division’s Fraud Section, with the assistance of Assistant U.S. Attorney Mark McIntyre of the Southern District of Texas. The case was previously investigated by Fraud Section Trial Attorneys Kathleen Hamann and Allan Medina, with assistance from the Criminal Division’s Asset Forfeiture and Money Laundering Section. The Justice Department also acknowledges and expresses its appreciation for the significant assistance provided by the SEC’s FCPA Unit.
The export case was investigated by the Department of Commerce’s Bureau of Industry and Security, Office of Export Enforcement, and the Department of the Treasury’s Office of Foreign Assets Control. The case is being prosecuted by Assistant U.S. Attorney S. Mark McIntyre and was previously investigated by Assistant U.S. Attorney Jeff Vaden.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
Weatherford Services Limited (Weatherford Services), a subsidiary of Weatherford International, today agreed to plead guilty to violating the anti-bribery provisions of the FCPA. As part of a coordinated FCPA resolution, the department today also filed a criminal information in U.S. District Court for the Southern District of Texas charging Weatherford International with one count of violating the internal controls provisions of the FCPA. To resolve the charge, Weatherford International has agreed to pay an $87.2 million criminal penalty as part of a deferred prosecution agreement with the department.
“Effective internal accounting controls are not only good policy, they are required by law for publicly traded companies—and for good reason,” said Acting Assistant Attorney General Raman. “This case demonstrates how loose controls and an anemic compliance environment can foster foreign bribery and fraud by a company’s subsidiaries around the globe. Although Weatherford’s extensive remediation and its efforts to improve its compliance functions are positive signs, the corrupt conduct of Weatherford International’s subsidiaries allowed it to earn millions of dollars in illicit profits, for which it is now paying a significant price.”
“When business executives engage in bribery and pay-offs in order to obtain contracts, an uneven marketplace is created and honest competitor companies are put at a disadvantage,” said Assistant Director in Charge Parlave. “The FBI is committed to investigating corrupt backroom deals that influence contract procurement and threaten our global commerce.”
In a separate matter, Weatherford International and four of its subsidiaries today agreed to pay a combined $100 million to resolve a criminal and administrative export controls investigation conducted by the U.S. Attorney’s Office for the Southern District of Texas, the Department of Commerce’s Bureau of Industry and Security, and the Department of the Treasury’s Office of Foreign Assets Control. As part of the resolution of that investigation, Weatherford International has agreed to enter into a deferred prosecution agreement for a term of two years and two of its subsidiaries have agreed to plead guilty to export controls charges.
“The resolution today of these criminal charges represents the seriousness that our office and the Department of Justice puts on enforcing the export control and sanctions laws,” said U.S. Attorney Magidson.
In a related FCPA matter, the U.S. Securities and Exchange Commission (SEC) filed a settlement today in which Weatherford International consented to the entry of a permanent injunction against FCPA violations and agreed to pay $65,612,360 in disgorgement, prejudgment interest, and civil penalties. Weatherford International also agreed with the SEC to comply with certain undertakings regarding its FCPA compliance program, including the retention of an independent corporate compliance monitor.
The combined investigations resulted in the conviction of three Weatherford subsidiaries, the entry by Weatherford International into two deferred prosecution agreements and a civil settlement, and the payment of a total of $252,690,606 in penalties and fines.
FCPA Violations
According to court documents filed by the department, prior to 2008, Weatherford International knowingly failed to establish an effective system of internal accounting controls designed to detect and prevent corruption, including FCPA violations. The company failed to implement these internal controls despite operating in an industry with a substantial corruption risk profile and despite growing its global footprint in large part by purchasing existing companies, often themselves in countries with high corruption risks. As a result, a permissive and uncontrolled environment existed within which employees of certain of Weatherford International’s wholly owned subsidiaries in Africa and the Middle East were able to engage in corrupt conduct over the course of many years, including both bribery of foreign officials and fraudulent misuse of the United Nations’ Oil for Food Program.
Court documents state that Weatherford Services employees established and operated a joint venture in Africa with two local entities controlled by foreign officials and their relatives from 2004 through at least 2008. The foreign officials selected the entities with which Weatherford Services would partner, and Weatherford Services and Weatherford International employees knew that the members of the local entities included foreign officials’ relatives and associates. Notwithstanding the fact that the local entities did not contribute capital, expertise or labor to the joint venture, neither Weatherford Services nor Weatherford International investigated why the local entities were involved in the joint venture. The sole purpose of those local entities, in fact, was to serve as conduits through which Weatherford Services funneled hundreds of thousands of dollars in payments to the foreign officials controlling them. In exchange for the payments they received from Weatherford Services through the joint venture, the foreign officials awarded the joint venture lucrative contracts, gave Weatherford Services inside information about competitors’ pricing, and took contracts away from Weatherford Services’ competitors and awarded them to the joint venture.
Additionally, Weatherford Services employees in Africa bribed a foreign official so that he would approve the renewal of an oil services contract, according to court documents. Weatherford Services funneled bribery payments to the foreign official through a freight forwarding agent it retained via a consultancy agreement in July 2006. Weatherford Services generated sham purchase orders for consulting services the freight forwarding agent never performed, and the freight forwarding agent, in turn, generated sham invoices for those same nonexistent services. When paid for those invoices, the freight forwarding agent passed at least some of those monies on to the foreign official with the authority to approve Weatherford Services’ contract renewal. In exchange for these payments, the foreign official awarded the renewal contract to Weatherford Services in 2006.
Further, according to court documents, in a third scheme in the Middle East, from 2005 through 2011, employees of Weatherford Oil Tools Middle East Limited (WOTME), another Weatherford International subsidiary, awarded improper “volume discounts” to a distributor who supplied Weatherford International products to a government-owned national oil company, believing that those discounts were being used to create a slush fund with which to make bribe payments to decision-makers at the national oil company. Between 2005 and 2011, WOTME paid approximately $15 million in volume discounts to the distributor.
Weatherford International’s failure to implement effective internal accounting controls also permitted corrupt conduct relating to the United Nations’ Oil for Food Program to occur, according to court documents. Between in or about February 2002 and in or about July 2002, WOTME paid approximately $1,470,128 in kickbacks to the government of Iraq on nine contracts with Iraq’s Ministry of Oil, as well as other ministries, to provide oil drilling and refining equipment. WOTME falsely recorded these kickbacks as other, seemingly legitimate, types of costs and fees. Further, WOTME concealed the kickbacks from the U.N. by inflating contract prices by 10 percent.
According to court documents, these corrupt transactions in Africa and the Middle East earned Weatherford International profits of $54,486,410, which were included in the consolidated financial statements that Weatherford International filed with the SEC.
In addition to the guilty plea by Weatherford Services, the deferred prosecution agreement entered into by Weatherford International and the Department requires the company to cooperate with law enforcement, retain an independent corporate compliance monitor for at least 18 months, and continue to implement an enhanced compliance program and internal controls designed to prevent and detect future FCPA violations. The agreement acknowledges Weatherford International’s cooperation in this matter, including conducting a thorough internal investigation into bribery and related misconduct, and its extensive remediation and compliance improvement efforts.
Export Control Violations
According to court documents filed today in a separate matter, between 1998 and 2007, Weatherford International and some its subsidiaries engaged in conduct that violated various U.S. export control and sanctions laws by exporting or re-exporting oil and gas drilling equipment to, and conducting Weatherford business operations in, sanctioned countries without the required U.S. government authorization. In addition to the involvement of employees of several Weatherford International subsidiaries, some Weatherford International executives, managers, or employees on multiple occasions participated in, directed, approved, and facilitated the transactions and the conduct of its various subsidiaries.
This conduct involved persons within the U.S.-based management structure of Weatherford International participating in conduct by Weatherford International foreign subsidiaries, and the unlicensed export or re-export of U.S.-origin goods to Cuba, Iran, Sudan, and Syria. Weatherford subsidiaries Precision Energy Services Colombia Ltd. (PESC) and Precision Energy Services Ltd. (PESL), both headquartered in Canada, conducted business in the country of Cuba. Weatherford’s subsidiary Weatherford Oil Tools Middle East (WOTME), headquartered in the United Arab Emirates (UAE), conducted business in the countries of Iran, Sudan, and Syria. Weatherford’s subsidiary Weatherford Production Optimisation f/k/a eProduction Solutions U.K. Ltd. (eProd-U.K.), headquartered in the United Kingdom, conducted business in the country of Iran. Weatherford generated approximately $110 million in revenue from its illegal transactions in Cuba, Iran, Syria and Sudan.
To resolve these charges, Weatherford and its subsidiaries will pay a total penalty of $100 million, with a $48 million monetary penalty paid pursuant to a deferred prosecution agreement, $2 million paid in criminal fines pursuant to the two guilty pleas, and a $50 million civil penalty paid pursuant to a Department of Commerce settlement agreement to resolve 174 violations charged by Commerce’s Bureau of Industry and Security. Weatherford International and certain of its affiliates are also signing a $91 million settlement agreement with the Department of the Treasury to resolve their civil liability arising out of the same underlying course of conduct, which will be deemed satisfied by the payments above.
The FCPA case was investigated by the FBI’s Washington Field Office and its team of special agents dedicated to the investigation of foreign bribery cases. The case is being prosecuted by Trial Attorney Jason Linder of the Criminal Division’s Fraud Section, with the assistance of Assistant U.S. Attorney Mark McIntyre of the Southern District of Texas. The case was previously investigated by Fraud Section Trial Attorneys Kathleen Hamann and Allan Medina, with assistance from the Criminal Division’s Asset Forfeiture and Money Laundering Section. The Justice Department also acknowledges and expresses its appreciation for the significant assistance provided by the SEC’s FCPA Unit.
The export case was investigated by the Department of Commerce’s Bureau of Industry and Security, Office of Export Enforcement, and the Department of the Treasury’s Office of Foreign Assets Control. The case is being prosecuted by Assistant U.S. Attorney S. Mark McIntyre and was previously investigated by Assistant U.S. Attorney Jeff Vaden.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Founder and Leader of Newburgh Latin Kings Sentenced to Life Plus 85 Years in Prison for Murder, Racketeering, Drug Distribution, and Other Crimes
Preet Bharara, the United States Attorney for the Southern District of New York, announced that WILSON PAGAN, 27, the founder and top leader of the Latin Kings gang in Newburgh, New York (the Newburgh Latin Kings), was sentenced today by U.S. District Judge Cathy Seibel in White Plains federal court to life plus 85 years in prison. PAGAN was convicted of murder; racketeering; conspiracy to distribute crack, cocaine, and heroin; assault; and using and carrying firearms in connection with violent crimes. PAGAN is one of 35 members and associates of the gang who were charged in the case, all of whom have been convicted, 28 of whom have thus far been sentenced.
U.S. Attorney Preet Bharara stated: “Mr. Pagan was a gang leader, and what he led his followers to was a gang member’s life filled with death, blood, guns, drugs, and jail—and for him the gangster life in the street has become the inmate’s life in prison, forever. Gang leaders, members, associates, and wannabes in Newburgh and throughout the Hudson Valley need to understand—we will not tolerate gang violence. You will go to prison for it, potentially for the rest of your life.”
According to the indictment and evidence presented at trial:
PAGAN founded the Newburgh Latin Kings, and grew the gang from roughly a dozen members in 2008 to more than 50 members and associates by early 2010. On May 6, 2008, PAGAN ordered aspiring gang members to go on a so-called mission, during which they committed a drive-by shooting and killed, mistakenly, Jeffrey Zachary, a 15-year old boy who was an innocent bystander. PAGAN sold crack and heroin and helped other members and associates of his gang sell drugs, including at spots the Latin Kings controlled, such as the corner of Benkard Avenue and William Street in Newburgh. PAGAN also assaulted rivals of his gang and carried guns and instructed others to carry guns to protect PAGAN and the Newburgh Latin Kings’ drug turf. In leading the gang, PAGAN recruited and inducted new members, instructed the members how to behave in order to protect and conceal the gang’s criminal activities, and issued orders to gang members to shoot and assault others. PAGAN organized and led gang meetings for this purpose. During one such meeting, according to papers filed with the court, PAGAN told more than 20 assembled gang members: “[W]e don’t even live by rules of society... .”
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Benjamin Allee, Abigail Kurland, and Nicholas McQuaid are in charge of the prosecution.
U.S. Attorney Preet Bharara stated: “Mr. Pagan was a gang leader, and what he led his followers to was a gang member’s life filled with death, blood, guns, drugs, and jail—and for him the gangster life in the street has become the inmate’s life in prison, forever. Gang leaders, members, associates, and wannabes in Newburgh and throughout the Hudson Valley need to understand—we will not tolerate gang violence. You will go to prison for it, potentially for the rest of your life.”
According to the indictment and evidence presented at trial:
PAGAN founded the Newburgh Latin Kings, and grew the gang from roughly a dozen members in 2008 to more than 50 members and associates by early 2010. On May 6, 2008, PAGAN ordered aspiring gang members to go on a so-called mission, during which they committed a drive-by shooting and killed, mistakenly, Jeffrey Zachary, a 15-year old boy who was an innocent bystander. PAGAN sold crack and heroin and helped other members and associates of his gang sell drugs, including at spots the Latin Kings controlled, such as the corner of Benkard Avenue and William Street in Newburgh. PAGAN also assaulted rivals of his gang and carried guns and instructed others to carry guns to protect PAGAN and the Newburgh Latin Kings’ drug turf. In leading the gang, PAGAN recruited and inducted new members, instructed the members how to behave in order to protect and conceal the gang’s criminal activities, and issued orders to gang members to shoot and assault others. PAGAN organized and led gang meetings for this purpose. During one such meeting, according to papers filed with the court, PAGAN told more than 20 assembled gang members: “[W]e don’t even live by rules of society... .”
***
Mr. Bharara thanked the Hudson Valley Safe Streets Task Force for their work on the Latin Kings investigation. The Task Force is led by the Federal Bureau of Investigation (FBI), and combines the resources of dozens of law enforcement officers from federal, state, and local agencies and departments, including agents and officers of the FBI; the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; the City of Newburgh Police Department; Immigration and Customs Enforcement’s Homeland Security Investigations; the Middletown Police Department; the Orange County Sheriff’s Office, and the New York State Police.The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Benjamin Allee, Abigail Kurland, and Nicholas McQuaid are in charge of the prosecution.
Buffalo Pair Indicted for Sex Trafficking
BUFFALO, NY—U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Buffalo has returned a nine-count indictment charging Kenneth White, 37, of Buffalo, New York, with conspiracy to commit sex trafficking, sex trafficking by force, fraud or coercion and sex trafficking of a minor, and interstate transportation for commercial sex. The charges carry a maximum penalty of life in prison, a fine of $250,000, or both. In addition, Caitlin Connelly, 29, also of Buffalo, was charged with conspiring with White to engage in sex trafficking.
Assistant U.S. Attorney John E. Rogowski, who is handling the case, stated that the according to the indictment, between 2004 and December, 2012, White and Connelly conspired to cause five victims to engage in commercial sex acts, knowing and in reckless disregard of the fact that means of force, threats of force, fraud and coercion and a combination of such means would be used to cause the five victims to engage in those commercial sex acts. White also was charged with sex trafficking of a minor victim. In addition, White was charged transporting some of the victims out of New York State to engage in commercial sex acts.
Kenneth White was arraigned this afternoon before U.S. Magistrate Judge H. Kenneth Schroeder. He is being held pending a detention hearing on November 26 at 3:15 p.m. Caitlyn Connelly will be arraigned on November 26 at 2:00 p.m.
The indictment is the result of an investigation on the part of special agents of the Federal Bureau of Investigation, under the direction of Brian P. Boetig, Special Agent in Charge of the Buffalo Office, and the Internal Revenue Service, Criminal Investigations Division, under the direction of Special Agent in Charge Toni M. Weirauch.
The fact that a defendant has been charged with a crime is merely an accusation, and the defendant is presumed innocent until and unless proven guilty.
Assistant U.S. Attorney John E. Rogowski, who is handling the case, stated that the according to the indictment, between 2004 and December, 2012, White and Connelly conspired to cause five victims to engage in commercial sex acts, knowing and in reckless disregard of the fact that means of force, threats of force, fraud and coercion and a combination of such means would be used to cause the five victims to engage in those commercial sex acts. White also was charged with sex trafficking of a minor victim. In addition, White was charged transporting some of the victims out of New York State to engage in commercial sex acts.
Kenneth White was arraigned this afternoon before U.S. Magistrate Judge H. Kenneth Schroeder. He is being held pending a detention hearing on November 26 at 3:15 p.m. Caitlyn Connelly will be arraigned on November 26 at 2:00 p.m.
The indictment is the result of an investigation on the part of special agents of the Federal Bureau of Investigation, under the direction of Brian P. Boetig, Special Agent in Charge of the Buffalo Office, and the Internal Revenue Service, Criminal Investigations Division, under the direction of Special Agent in Charge Toni M. Weirauch.
The fact that a defendant has been charged with a crime is merely an accusation, and the defendant is presumed innocent until and unless proven guilty.
Former Lewiston Attorney Sentenced to Federal Prison for Fraud
BUFFALO, NY—The United States Attorney’s Office announced today that Timothy Toohey, 66, of Lewiston, New York, who was convicted of receiving money stolen from an Indian Tribal Organization and filing a false tax return, was sentenced to 33 months in prison by U.S. District Judge Richard J. Arcara. In addition, the defendant was ordered to pay restitution in the amount of $540,000 to the Seneca Nation of Indians and $62,821 to the Internal Revenue Service.
First Assistant U.S. Attorney James P. Kennedy, Jr., who handled the case, stated that Toohey’s convictions arose as a result of the disbarred attorney’s involvement in an effort to build a golf course in the Town of Lewiston. According to Kennedy, in April of 2002, Old Creek Development (OCD) was formed as a Limited Liability Corporation (LLC) by attorney Michael Dowd. Dowd was partners in OCD with two other individuals who together owned vacant land in the Town of Lewiston, and the primary reason that the LLC was formed was to develop a golf course on that land. While OCD initially sought to enter into an agreement with the Town of Lewiston to develop a municipal golf course, that effort did not succeed. At that point, the defendant decided to become involved by offering to bring together OCD (as seller) and the Seneca Nation of Indians (SNI) (as the purchaser) of the golf course site. To that end, Toohey contacted, inter alia, both Dowd (who was acting on behalf of OCD) and Bergal Mitchell, who was then the Vice Chairman of the Seneca Gaming Corporation (SGC) Board of Directors. The SGC is an entity which is wholly owned by the SNI. On February 19, 2005, the Tribal Council of the SNI passed a resolution related to the purchase of the land in Lewiston for a golf course. That resolution authorized the Seneca Niagara Falls Gaming Corporation (SNFGC), an entity wholly owned by the SGC, to acquire the land for the golf course for a purchase price which was "not to exceed $2.1 million."
In pleading guilty, Toohey admitted that during the course of the negotiations leading up to the sale of the property from OCD to the SNFGC, he and Bergal Mitchell entered into an unlawful agreement whereby each would, unbeknownst to SNI, receive a portion of the sale proceeds received by OCD from SNI. The defendant further admitted that both he and Bergal Mitchell undertook affirmative measures to conceal from members of the SNI Tribal Council, SGC and/or the SNFGC their interest in the transaction, including the fact that they were each personally going to receive a portion the sale proceeds.
According to Kennedy, the investigation revealed that after paying its expenses, OCD, on February 15, 2006, paid a total of roughly $1,400,000 for the six total parcels it obtained from the two property owners and the Town of Lewiston. On that same day, OCD conveyed title to the six parcels it had obtained to the SNFGC in exchange for $2,100,000. Of the sales proceeds received by OCD, Toohey, during 2006, received approximately $202,000, while Bergal Mitchell received approximately $248,000. In addition, Mitchell’s wife Rachel received an additional $90,000. The tax conviction against Toohey resulted from his failure to report the $202,000 he received in the transaction as income on his 2006 tax return.
Immediately prior to sentencing Toohey, Judge Arcara set a date of June 17, 2014, for trial of the pending Indictment against Mitchell for his role in the transaction.
The conviction was the culmination of an investigation on the part of special agents of the Federal Bureau of Investigation, under the direction of Brian P. Boetig, Special Agent in Charge, and the Internal Revenue Service, Criminal Investigation Division, under the direction of Toni M. Weirauch, Special Agent in Charge.
First Assistant U.S. Attorney James P. Kennedy, Jr., who handled the case, stated that Toohey’s convictions arose as a result of the disbarred attorney’s involvement in an effort to build a golf course in the Town of Lewiston. According to Kennedy, in April of 2002, Old Creek Development (OCD) was formed as a Limited Liability Corporation (LLC) by attorney Michael Dowd. Dowd was partners in OCD with two other individuals who together owned vacant land in the Town of Lewiston, and the primary reason that the LLC was formed was to develop a golf course on that land. While OCD initially sought to enter into an agreement with the Town of Lewiston to develop a municipal golf course, that effort did not succeed. At that point, the defendant decided to become involved by offering to bring together OCD (as seller) and the Seneca Nation of Indians (SNI) (as the purchaser) of the golf course site. To that end, Toohey contacted, inter alia, both Dowd (who was acting on behalf of OCD) and Bergal Mitchell, who was then the Vice Chairman of the Seneca Gaming Corporation (SGC) Board of Directors. The SGC is an entity which is wholly owned by the SNI. On February 19, 2005, the Tribal Council of the SNI passed a resolution related to the purchase of the land in Lewiston for a golf course. That resolution authorized the Seneca Niagara Falls Gaming Corporation (SNFGC), an entity wholly owned by the SGC, to acquire the land for the golf course for a purchase price which was "not to exceed $2.1 million."
In pleading guilty, Toohey admitted that during the course of the negotiations leading up to the sale of the property from OCD to the SNFGC, he and Bergal Mitchell entered into an unlawful agreement whereby each would, unbeknownst to SNI, receive a portion of the sale proceeds received by OCD from SNI. The defendant further admitted that both he and Bergal Mitchell undertook affirmative measures to conceal from members of the SNI Tribal Council, SGC and/or the SNFGC their interest in the transaction, including the fact that they were each personally going to receive a portion the sale proceeds.
According to Kennedy, the investigation revealed that after paying its expenses, OCD, on February 15, 2006, paid a total of roughly $1,400,000 for the six total parcels it obtained from the two property owners and the Town of Lewiston. On that same day, OCD conveyed title to the six parcels it had obtained to the SNFGC in exchange for $2,100,000. Of the sales proceeds received by OCD, Toohey, during 2006, received approximately $202,000, while Bergal Mitchell received approximately $248,000. In addition, Mitchell’s wife Rachel received an additional $90,000. The tax conviction against Toohey resulted from his failure to report the $202,000 he received in the transaction as income on his 2006 tax return.
Immediately prior to sentencing Toohey, Judge Arcara set a date of June 17, 2014, for trial of the pending Indictment against Mitchell for his role in the transaction.
The conviction was the culmination of an investigation on the part of special agents of the Federal Bureau of Investigation, under the direction of Brian P. Boetig, Special Agent in Charge, and the Internal Revenue Service, Criminal Investigation Division, under the direction of Toni M. Weirauch, Special Agent in Charge.
Former New Jersey Man Charged in $18 Million Ponzi Scheme
TRENTON, NJ—A former Monmouth County, New Jersey man was arrested today on a charge that he operated an $18 million Ponzi scheme involving victims from New Jersey, U.S. Attorney Paul J. Fishman announced.
Louis J. Spina, 56, formerly of Colts Neck, New Jersey, and now living in Miami, Florida, was charged by complaint with one count of wire fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Lois H. Goodman in Trenton federal court for an initial appearance.
According to the complaint:
Between August 2010 and November 2013, Spina collected $18 million from 28 investors. Spina allegedly represented to the investors that he would invest their funds through his business, LJS Trading LLC, using algorithmic computer software, and that the investors would receive guaranteed monthly rates of return ranging from 9 to 14 percent. Spina commingled all of the investor funds together in one bank account. He only transferred $8 million of the investor funds to a trading account, which he then lost in unsuccessful trading. He allegedly used the remaining $10 million to pay the investors’ monthly interest payments, to return portions of some investors’ principals, and to pay for his own personal expenses, including car purchases/payments, luxury apartment rental payments, and a $400,000 donation to a private university.
The wire fraud count with which Spina is charged is punishable by 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.
U.S. Attorney Fishman credited the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and U.S. Secret Service, under the direction of Special Agent in Charge James Mottola, for the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Sarah M. Wolfe of the U.S. Attorney’s Office Criminal Division in Trenton.
Louis J. Spina, 56, formerly of Colts Neck, New Jersey, and now living in Miami, Florida, was charged by complaint with one count of wire fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Lois H. Goodman in Trenton federal court for an initial appearance.
According to the complaint:
Between August 2010 and November 2013, Spina collected $18 million from 28 investors. Spina allegedly represented to the investors that he would invest their funds through his business, LJS Trading LLC, using algorithmic computer software, and that the investors would receive guaranteed monthly rates of return ranging from 9 to 14 percent. Spina commingled all of the investor funds together in one bank account. He only transferred $8 million of the investor funds to a trading account, which he then lost in unsuccessful trading. He allegedly used the remaining $10 million to pay the investors’ monthly interest payments, to return portions of some investors’ principals, and to pay for his own personal expenses, including car purchases/payments, luxury apartment rental payments, and a $400,000 donation to a private university.
The wire fraud count with which Spina is charged is punishable by 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.
U.S. Attorney Fishman credited the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and U.S. Secret Service, under the direction of Special Agent in Charge James Mottola, for the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Sarah M. Wolfe of the U.S. Attorney’s Office Criminal Division in Trenton.
Tuesday, November 26, 2013
Former United Airlines Flight Attendant Sentenced to Federal Prison for Making Bogus Bomb Threats Aimed at His Former Employer
LOS ANGELES—A German national who used to work for United Airlines was sentenced today to 18 months in federal prison for making false bomb threats against flights operated by the international air carrier.
Patrick Cau, who is also known as Patrick Kaiser, 40, of Dallas, was sentenced by United States District Judge Otis D. Wright, II.
Cau pleaded guilty in August to one count of false information and hoaxes. While Cau pleaded guilty to one felony count, in a plea agreement filed in federal court, he admitted making eight bomb threats against United from October 2012 through January 2013.
In the first phone call, on October 4, 2012, Cau used a pay phone near his home to call an internal United crew scheduling number and state that a United flight from London to Los Angeles would be bombed later that day. Cau made the subsequent calls to 911 from pay phones in Los Angeles, New York City, Las Vegas, and Seattle, with all the calls stating that a specific United flight would be bombed.
As a result of the hoaxes, multiple law enforcement agencies were forced to respond to the bomb threats made by Cau. These law enforcement responses included evacuating people from the targeted airplanes; towing the aircraft to a safe area; searching and re-screening passengers, baggage, and cargo; and searching the aircraft by human, canine, and other detection methods.
As a direct result of Cau’s threats, United experienced substantial disruption to its business operations and services, including cancellation of and delays to flights, transfer of aircraft, and significant inconveniences to United passengers. Judge Wright today ordered Cau to pay $304,495 in restitution to United and $8,838 to reimburse the Los Angeles Police Department for expenses incurred as a result its response to the bomb threats.
The case against Cau was investigated by the Federal Bureau of Investigation; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and the Los Angeles Airport Police.
Patrick Cau, who is also known as Patrick Kaiser, 40, of Dallas, was sentenced by United States District Judge Otis D. Wright, II.
Cau pleaded guilty in August to one count of false information and hoaxes. While Cau pleaded guilty to one felony count, in a plea agreement filed in federal court, he admitted making eight bomb threats against United from October 2012 through January 2013.
In the first phone call, on October 4, 2012, Cau used a pay phone near his home to call an internal United crew scheduling number and state that a United flight from London to Los Angeles would be bombed later that day. Cau made the subsequent calls to 911 from pay phones in Los Angeles, New York City, Las Vegas, and Seattle, with all the calls stating that a specific United flight would be bombed.
As a result of the hoaxes, multiple law enforcement agencies were forced to respond to the bomb threats made by Cau. These law enforcement responses included evacuating people from the targeted airplanes; towing the aircraft to a safe area; searching and re-screening passengers, baggage, and cargo; and searching the aircraft by human, canine, and other detection methods.
As a direct result of Cau’s threats, United experienced substantial disruption to its business operations and services, including cancellation of and delays to flights, transfer of aircraft, and significant inconveniences to United passengers. Judge Wright today ordered Cau to pay $304,495 in restitution to United and $8,838 to reimburse the Los Angeles Police Department for expenses incurred as a result its response to the bomb threats.
The case against Cau was investigated by the Federal Bureau of Investigation; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and the Los Angeles Airport Police.
Alabama Sheriff’s Investigator Indicted for Unlawfully Detaining and Assaulting Handcuffed Man at County Jail
WASHINGTON—The Department of Justice announced today that a federal grand jury in the Middle District of Alabama has returned an indictment against J. Keith McCray, a criminal investigator with the Macon County, Alabama Sheriff’s Office for violating the rights of a man he unlawfully seized and assaulted.
McCray, 41, is charged with two counts of deprivation of rights under color of law and one count of witness tampering. On July 4, 2013, the victim was going door-to-door in McCray’s neighborhood attempting to sell alarm systems. According to the indictment, McCray unlawfully seized the victim using a firearm and then brought the victim to the county jail. The indictment alleges that at the jail, McCray struck the victim while he was handcuffed, which resulted in bodily injury. The indictment further alleges that McCray engaged in witness tampering when he intimidated the victim and corruptly persuaded him not to file a complaint for the assault.
If convicted, McCray could face a statutory maximum sentence of 10 years in prison and a $250,000 fine for each deprivation of rights count. He could face a statutory maximum sentence of 20 years in prison and a $250,000 fine for the witness tampering charge.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
This case is being investigated by the Federal Bureau of Investigation and the Alabama Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Jerusha T. Adams of the Middle District of Alabama and Trial Attorney Chiraag Bains of the department’s Civil Rights Division.
McCray, 41, is charged with two counts of deprivation of rights under color of law and one count of witness tampering. On July 4, 2013, the victim was going door-to-door in McCray’s neighborhood attempting to sell alarm systems. According to the indictment, McCray unlawfully seized the victim using a firearm and then brought the victim to the county jail. The indictment alleges that at the jail, McCray struck the victim while he was handcuffed, which resulted in bodily injury. The indictment further alleges that McCray engaged in witness tampering when he intimidated the victim and corruptly persuaded him not to file a complaint for the assault.
If convicted, McCray could face a statutory maximum sentence of 10 years in prison and a $250,000 fine for each deprivation of rights count. He could face a statutory maximum sentence of 20 years in prison and a $250,000 fine for the witness tampering charge.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
This case is being investigated by the Federal Bureau of Investigation and the Alabama Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Jerusha T. Adams of the Middle District of Alabama and Trial Attorney Chiraag Bains of the department’s Civil Rights Division.
Bank Robber Ordered to Prison
HOUSTON—The third of four convicted in the armed bank robbery of a Wells Fargo Bank in September 2012 has been ordered to federal prison, announced United States Attorney Kenneth Magidson. Stanley Snowden, 40, of Houston, pleaded guilty June 28, 2013.
Today, U.S. District Judge Melinda Harmon sentenced Snowden to 87 months for his role in the aggravated bank robbery, as well as an additional 84 months for brandishing a firearm during commission of the crime. The sentences are to be served consecutively for a total of 171 months in federal prison.
On September 26, 2012, at approximately 9:45 a.m., the Wells Fargo Bank on Fulton Street in Houston was robbed by Snowden and two others—David Wilson Holiday, 35, of Houston, and Alvin Theotis Snowden, 41, of Houston—wearing masks and bandanas. Stanley Snowden and Alvin Snowden were armed with semiautomatic pistols.
Holiday and Alvin Snowden jumped over the teller counter demanded that the bank employees lay down on the ground, while Alvin Snowden pointed his weapon at them. Alvin Snowden took the bank manager to the vault and demanded money, and Holiday took one of the bank employees to her teller drawer.
Stanley Snowden controlled the lobby area, during which time he assaulted an elderly female customer by throwing her to the ground and pointing his pistol directly at her as she lay on the floor of the bank.
After the robbery, the three men exited the bank and entered a Chevrolet Impala, driven by Anthony D. Brown, 40, of Houston, who drove the others to the bank prior to the robbery. All were apprehended a short time later, at which time a .32 caliber pistol, a 9mm pistol, and money stolen from the bank were recovered from the vehicle.
The three others also pleaded guilty. Alvin Snowden received a total sentence of 319 months, while Brown will serve 92 months in federal prison. Holiday will be sentenced next month.
The investigation was conducted by the FBI Bank Robbery Task Force, which is composed of personnel from the FBI, Houston Police Department, and Harris County Sheriff’s Office. Assistant United States Attorney Jennie Basile is prosecuting the case.
Today, U.S. District Judge Melinda Harmon sentenced Snowden to 87 months for his role in the aggravated bank robbery, as well as an additional 84 months for brandishing a firearm during commission of the crime. The sentences are to be served consecutively for a total of 171 months in federal prison.
On September 26, 2012, at approximately 9:45 a.m., the Wells Fargo Bank on Fulton Street in Houston was robbed by Snowden and two others—David Wilson Holiday, 35, of Houston, and Alvin Theotis Snowden, 41, of Houston—wearing masks and bandanas. Stanley Snowden and Alvin Snowden were armed with semiautomatic pistols.
Holiday and Alvin Snowden jumped over the teller counter demanded that the bank employees lay down on the ground, while Alvin Snowden pointed his weapon at them. Alvin Snowden took the bank manager to the vault and demanded money, and Holiday took one of the bank employees to her teller drawer.
Stanley Snowden controlled the lobby area, during which time he assaulted an elderly female customer by throwing her to the ground and pointing his pistol directly at her as she lay on the floor of the bank.
After the robbery, the three men exited the bank and entered a Chevrolet Impala, driven by Anthony D. Brown, 40, of Houston, who drove the others to the bank prior to the robbery. All were apprehended a short time later, at which time a .32 caliber pistol, a 9mm pistol, and money stolen from the bank were recovered from the vehicle.
The three others also pleaded guilty. Alvin Snowden received a total sentence of 319 months, while Brown will serve 92 months in federal prison. Holiday will be sentenced next month.
The investigation was conducted by the FBI Bank Robbery Task Force, which is composed of personnel from the FBI, Houston Police Department, and Harris County Sheriff’s Office. Assistant United States Attorney Jennie Basile is prosecuting the case.
Monday, November 25, 2013
La Plant Couple Charged with Involuntary Manslaughter, Child Abuse, and False Statement
United States Attorney Brendan V. Johnson announced that a couple from La Plant, South Dakota has been indicted by a federal grand jury.
Rochelle Breckbill, a/k/a Rochelle LeBeau, age 25, and Henry Chase Alone, age 30, were indicted on November 14, 2013, for involuntary manslaughter, child abuse, and false statement. They appeared before U.S. Magistrate Judge Mark A. Moreno on November 19, 2013, and pled not guilty to the indictment.
The maximum penalty upon conviction for each person is 15 years of imprisonment and/or a $250,000 fine, three years of supervised release, an additional two years of supervised release upon revocation, and a mandatory $100 special assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges are merely accusations, and Breckbill and Chase Alone are presumed innocent until and unless proven guilty.
The three-count indictment alleges that between September 29, 2013 and October 1, 2013, Breckbill and Chase Alone unlawfully killed a human being, without malice. The indictment also alleges that they abused, exposed, tortured, tormented, and cruelly punished a child who had not attained the age of seven years. Following those acts, it is alleged that Breckbill and Chase Alone lied to the Federal Bureau of Investigation.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Jay P. Miller is prosecuting the case.
Breckbill and Chase Alone were released on bond pending trial which has not been set.
Rochelle Breckbill, a/k/a Rochelle LeBeau, age 25, and Henry Chase Alone, age 30, were indicted on November 14, 2013, for involuntary manslaughter, child abuse, and false statement. They appeared before U.S. Magistrate Judge Mark A. Moreno on November 19, 2013, and pled not guilty to the indictment.
The maximum penalty upon conviction for each person is 15 years of imprisonment and/or a $250,000 fine, three years of supervised release, an additional two years of supervised release upon revocation, and a mandatory $100 special assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges are merely accusations, and Breckbill and Chase Alone are presumed innocent until and unless proven guilty.
The three-count indictment alleges that between September 29, 2013 and October 1, 2013, Breckbill and Chase Alone unlawfully killed a human being, without malice. The indictment also alleges that they abused, exposed, tortured, tormented, and cruelly punished a child who had not attained the age of seven years. Following those acts, it is alleged that Breckbill and Chase Alone lied to the Federal Bureau of Investigation.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Jay P. Miller is prosecuting the case.
Breckbill and Chase Alone were released on bond pending trial which has not been set.
Ft. Thompson Man Sentenced for Assaulting, Resisting, and Impeding a Federal Officer
United States Attorney Brendan V. Johnson announced that a Ft. Thompson, South Dakota man convicted of assaulting, resisting, and impeding a federal officer was sentenced on November 20, 2013, by U.S. District Judge Roberto A. Lange.
Patrick Wind, a/k/a Patrick Azure, age 21, was sentenced to 13 months of imprisonment, 18 months of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Wind was indicted for the above charge by a federal grand jury on June 12, 2013, and he pled guilty on August 28, 2013.
The conviction stems from an incident on June 4, 2013, wherein a Bureau of Indian Affairs (BIA) officer was dispatched to a home in Lower Brule, responding to a report of a passed out male on the front porch of a residence. The officer made contact with the male, later identified as Wind. Wind was placed under arrest for public intoxication and Wind became noncompliant.
Once handcuffed, Wind lunged at the officer, kicking and swearing at the officer who attempted to put him in the car. Two additional BIA officers arrived on scene, and as one of them was attempting to put leg restraints on Wind, he continued to resist by spitting and kicking at the officers. Wind continued to resist the entire time.
The investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Wind was immediately turned over to the custody of the U.S. Marshals Service.
Patrick Wind, a/k/a Patrick Azure, age 21, was sentenced to 13 months of imprisonment, 18 months of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Wind was indicted for the above charge by a federal grand jury on June 12, 2013, and he pled guilty on August 28, 2013.
The conviction stems from an incident on June 4, 2013, wherein a Bureau of Indian Affairs (BIA) officer was dispatched to a home in Lower Brule, responding to a report of a passed out male on the front porch of a residence. The officer made contact with the male, later identified as Wind. Wind was placed under arrest for public intoxication and Wind became noncompliant.
Once handcuffed, Wind lunged at the officer, kicking and swearing at the officer who attempted to put him in the car. Two additional BIA officers arrived on scene, and as one of them was attempting to put leg restraints on Wind, he continued to resist by spitting and kicking at the officers. Wind continued to resist the entire time.
The investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Wind was immediately turned over to the custody of the U.S. Marshals Service.
West Haven Woman Admits Making Bomb Threats Against Connecticut Courthouses
Deirdre Daly, Acting United States Attorney for the District of Connecticut, announced that Jennifer Chirico, 31, of West Haven, pleaded guilty today before U.S. District Judge Janet C. Hall in New Haven to making bomb threats against courthouses in Connecticut.
According to court documents and statements made in court, on the morning of March 8, 2013, Chirico and another individual placed a total of seven anonymous threat calls to courthouses, law enforcement agencies, and media outlets, all claiming that bombs had been deployed and were going to explode that morning at one or more courthouses in Connecticut. All seven calls mentioned or described the Waterbury Superior Court as either the one location or as one of multiple locations where bombs were about to explode.
The investigation, which included analysis of the originating phone numbers of the calls and previous police reports associated with the phone numbers, pointed to Chirico as a suspect. A review of the Waterbury court docket records for March 8, 2013, disclosed that Chirico had been scheduled to appear at a hearing that day in a pending criminal case. Investigating agents then located and interviewed Chirico, who confessed to making the bomb threat calls and explained that she had done so to cause court delays and thereby avoid being late for her own court appearance.
Chirico was arrested on May 17, 2013. Today, she pleaded guilty to one count of maliciously conveying false information.
Judge Hall has scheduled sentencing for February 19, 2014, at which time Chirico faces a maximum term of imprisonment of 10 years.
This matter is being investigated by the Federal Bureau of Investigation’s Joint Terrorism Task Force, the U.S. Marshals Service, and the Connecticut State Police. The case is being prosecuted by Assistant U.S. Attorney Henry K. Kopel.
According to court documents and statements made in court, on the morning of March 8, 2013, Chirico and another individual placed a total of seven anonymous threat calls to courthouses, law enforcement agencies, and media outlets, all claiming that bombs had been deployed and were going to explode that morning at one or more courthouses in Connecticut. All seven calls mentioned or described the Waterbury Superior Court as either the one location or as one of multiple locations where bombs were about to explode.
The investigation, which included analysis of the originating phone numbers of the calls and previous police reports associated with the phone numbers, pointed to Chirico as a suspect. A review of the Waterbury court docket records for March 8, 2013, disclosed that Chirico had been scheduled to appear at a hearing that day in a pending criminal case. Investigating agents then located and interviewed Chirico, who confessed to making the bomb threat calls and explained that she had done so to cause court delays and thereby avoid being late for her own court appearance.
Chirico was arrested on May 17, 2013. Today, she pleaded guilty to one count of maliciously conveying false information.
Judge Hall has scheduled sentencing for February 19, 2014, at which time Chirico faces a maximum term of imprisonment of 10 years.
This matter is being investigated by the Federal Bureau of Investigation’s Joint Terrorism Task Force, the U.S. Marshals Service, and the Connecticut State Police. The case is being prosecuted by Assistant U.S. Attorney Henry K. Kopel.
Wyoming Woman Charged with Assault on a Federal Officer
U.S. Attorney for the District of Wyoming Christopher A. Crofts announced that on October 21, 2013, Marion Joyce Kills Enemy, a 24-year-old Northern Arapaho Tribal member, was charged in an information with one count of assaulting a federal officer in violation of 18 U.S.C. § 111(a)(1).
The charge against Ms. Kills Enemy stemmed from an incident that occurred on August 2, 2012, on the Wind River Indian Reservation. Ms. Kills Enemy is facing a potential of up to one year of imprisonment and could be ordered to pay restitution, a fine, and special assessment.
This case was investigated by the Federal Bureau of Investigation with the assistance of the Bureau of Indian of Affairs.
The charge against Ms. Kills Enemy stemmed from an incident that occurred on August 2, 2012, on the Wind River Indian Reservation. Ms. Kills Enemy is facing a potential of up to one year of imprisonment and could be ordered to pay restitution, a fine, and special assessment.
This case was investigated by the Federal Bureau of Investigation with the assistance of the Bureau of Indian of Affairs.
FBI, Partners Help Clean Up Community Following Gang-Related Arrests
The FBI and Los Angeles Police Department, working with multiple other agencies and non-profit organizations, are cleaning up approximately 50 alleys in South Los Angeles where gang-related arrests were carried out earlier this year. The multi-agency teams are removing graffiti, trash, discarded furniture, and other bulky items, as well as overgrown brush. The area being cleaned is located between Crenshaw Boulevard, Normandie Avenue, Jefferson Boulevard, and Martin L. King Jr. Boulevard. There is an organization on hand to assist with any homeless encampments.
Law enforcement efforts to investigate and dismantle criminal street gangs whose members are committing serious crimes within the city of Los Angeles aim to reduce the fear of crime experienced by citizens who reside in crime-ridden neighborhoods where investigations take place. The results are achieved mostly through the state and federal arrests of shot callers and leaders of the gang, coupled with the implementation of the city’s abatement process. Some examples of recent operations include Operations Stone Cold and Red Dawn and Operation Thumbs Down.
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Clean-up in progress | Select photo to download high res image
Today’s clean-up is aimed at implementing preventive measures beyond suppression efforts. The community impact initiative was established to help residents in gang-ridden communities in an effort to prevent new gang members from replacing those sent to prison. This initiative is designed to assist the community and educate youth by introducing them to productive alternatives to lives of violence and delinquency. |
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Gasport Man, Lockport Man Convicted on Drug Conspiracy Charges
BUFFALO, NY—U.S. Attorney William J. Hochul, Jr. announced today that James Dolly, 48, of Gasport, New York, who was convicted of conspiracy to possess with intent to distribute and to distribute cocaine and crack cocaine, was sentenced to eight months home confinement and three-years’ supervised release by U.S. District Chief Judge William M. Skretny.
Also, Rodney McGilverly, a/k/a “Patches,” a/k/a “Cliff,” 37, of Lockport, New York, pleaded guilty before U.S. Magistrate Judge Leslie G. Foschio to conspiracy to possess with intent to distribute and to distribute cocaine, which carries a maximum penalty of 20 years in prison, a $1,000,000 fine, or both.
Assistant U.S. Attorney Mary Catherine Baumgarten, who is handling the case, stated that Dolly distributed cocaine and cocaine base in the Gasport area from June 2009 through August 2010, which was supplied to him by co-defendant Damian Ard. Ard was convicted of conspiracy to possess with intent to distribute cocaine base, and is scheduled to be sentenced on January 6, 2014, at 9:00 a.m. From March 2010 through August 2010, McGilverly distributed cocaine in the Lockport, which was supplied to him by co-defendant Eric Williams. On September 10, 2013, Williams was sentenced to five years in prison.
Dolly and McGilverly are two of 21 defendants convicted as a result of this drug investigation.
The sentencing and plea are the culmination of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge Brian R. Crowell, New York Field Division; the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig; and the Niagara County Drug Task Force, under the direction of Sheriff James Votour.
Also, Rodney McGilverly, a/k/a “Patches,” a/k/a “Cliff,” 37, of Lockport, New York, pleaded guilty before U.S. Magistrate Judge Leslie G. Foschio to conspiracy to possess with intent to distribute and to distribute cocaine, which carries a maximum penalty of 20 years in prison, a $1,000,000 fine, or both.
Assistant U.S. Attorney Mary Catherine Baumgarten, who is handling the case, stated that Dolly distributed cocaine and cocaine base in the Gasport area from June 2009 through August 2010, which was supplied to him by co-defendant Damian Ard. Ard was convicted of conspiracy to possess with intent to distribute cocaine base, and is scheduled to be sentenced on January 6, 2014, at 9:00 a.m. From March 2010 through August 2010, McGilverly distributed cocaine in the Lockport, which was supplied to him by co-defendant Eric Williams. On September 10, 2013, Williams was sentenced to five years in prison.
Dolly and McGilverly are two of 21 defendants convicted as a result of this drug investigation.
The sentencing and plea are the culmination of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge Brian R. Crowell, New York Field Division; the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig; and the Niagara County Drug Task Force, under the direction of Sheriff James Votour.
Newark Man Pleads Guilty to 17 Armed Robberies, an Armed Carjacking, and a Shooting
NEWARK, NJ—A Newark, New Jersey man today admitted committing 17 armed robberies of commercial establishments throughout Union, Essex, and Bergen counties, U.S. Attorney Paul J. Fishman announced.
Bobby Dawson, 30, pleaded guilty before U.S. District Judge William H. Walls to a three-count information charging him with committing an armed carjacking, conspiring to commit Hobbs Act robberies, and discharging a firearm during the commission of one of those robberies.
According to the documents filed in this case and statements made in court:
Dawson conspired with others to rob commercial establishments as follows:
Dawson and his conspirators robbed each of these establishments at gunpoint, stealing cash, cigarettes, and other items. In 15 of the 17 robberies, Dawson and his conspirators used zipties or duct tape to restrain their victims.
In the MS&K robbery on April 1, 2013, Dawson threatened the clerk of the store with a .380 caliber semi-automatic handgun. When the clerk resisted, Dawson fired his gun at the clerk, ordered the clerk to lie down, and then stole $9,000 from the cash register.
In the robbery of Krauszers in West Orange on April 24, 2013, Dawson and his conspirator tied up three individuals in the store with zipties before stealing approximately $600 and several cartons of cigarettes. Dawson injured a store employee by hitting the victim in the head with his firearm. The armed carjacking to which Dawson pleaded guilty is punishable by a maximum potential penalty of 15 years in prison. The Hobbs Act conspiracy to which Dawson pleaded guilty is punishable by a maximum potential penalty of 20 years in prison. The charge of discharging a firearm during a crime of violence is punishable by a maximum penalty of life in prison and a mandatory minimum sentence of 10 years in prison, which must run consecutively to any other prison term. Each count also carries a maximum fine of $250,000 or twice the gross gain or loss arising out of the offense. Sentencing is scheduled for March 11, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea. He also thanked the Belleville, Bloomfield, Kearny, Linden, Maplewood, Newark, Paramus, Verona, and West Orange Police Departments, along with the New Jersey State Police and the Essex County Prosecutor’s Office for their work on this case. The government is represented by Assistant U.S. Attorneys Jamari Buxton and Rahul Agarwal of the U.S. Attorney’s Office Criminal Division in Newark.
Bobby Dawson, 30, pleaded guilty before U.S. District Judge William H. Walls to a three-count information charging him with committing an armed carjacking, conspiring to commit Hobbs Act robberies, and discharging a firearm during the commission of one of those robberies.
According to the documents filed in this case and statements made in court:
Dawson conspired with others to rob commercial establishments as follows:
| Business | Location | Date |
|---|---|---|
| Pao Da Terra | Newark | December 29, 2012 |
| Lukoil | Newark | January 20, 2013 |
| Newark Community Pharmacy | Newark | January 24, 2013 |
| Linden Stationary | Linden | February 1, 2013 |
| Delta Gas Station | Newark | February 1, 2013 |
| Shoppers Express | Belleville | February 2, 2013 |
| Krauszers | Kearny | February 10, 2013 |
| Krauszers | Bloomfield | February 13, 2013 |
| Pat’s Deli | Newark | February 19, 2013 |
| Smashburger | Paramus | March 16, 2013 |
| Krauszers | Bloomfield | March 29, 2013 |
| MS&K Confectionery | Maplewood | April 1, 2013 |
| Belleville News and Food | Belleville | April 17, 2013 |
| South Wood Discount Liquor | Linden | April 17, 2013 |
| Krauszers | West Orange | April 24, 2013 |
| Newark Community Pharmacy | Newark | May 1, 2013 |
| Subway Restaurant | Verona | May 20, 2013 |
In the MS&K robbery on April 1, 2013, Dawson threatened the clerk of the store with a .380 caliber semi-automatic handgun. When the clerk resisted, Dawson fired his gun at the clerk, ordered the clerk to lie down, and then stole $9,000 from the cash register.
In the robbery of Krauszers in West Orange on April 24, 2013, Dawson and his conspirator tied up three individuals in the store with zipties before stealing approximately $600 and several cartons of cigarettes. Dawson injured a store employee by hitting the victim in the head with his firearm. The armed carjacking to which Dawson pleaded guilty is punishable by a maximum potential penalty of 15 years in prison. The Hobbs Act conspiracy to which Dawson pleaded guilty is punishable by a maximum potential penalty of 20 years in prison. The charge of discharging a firearm during a crime of violence is punishable by a maximum penalty of life in prison and a mandatory minimum sentence of 10 years in prison, which must run consecutively to any other prison term. Each count also carries a maximum fine of $250,000 or twice the gross gain or loss arising out of the offense. Sentencing is scheduled for March 11, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea. He also thanked the Belleville, Bloomfield, Kearny, Linden, Maplewood, Newark, Paramus, Verona, and West Orange Police Departments, along with the New Jersey State Police and the Essex County Prosecutor’s Office for their work on this case. The government is represented by Assistant U.S. Attorneys Jamari Buxton and Rahul Agarwal of the U.S. Attorney’s Office Criminal Division in Newark.
Friday, November 22, 2013
Three More Eagle Pass Businessmen Indicted in Connection with Maverick County Bribery, Kickback, and Bid-Rigging Scheme
In Eagle Pass this morning, Federal Bureau of Investigation agents, along with Texas Department of Public Safety investigators, arrested 64-year-old Saul Lombrana, owner and operator of Fiesta Contractors based in Eagle Pass, in connection with an alleged bribery, kickback, and bid-rigging scheme, announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.
Lombrana is charged by a federal grand jury indictment returned yesterday with one count of paying a bribe to an agent of an organization receiving federal funds. According to the indictment, in March 2011, Lombrana submitted a $14,500 bid to construct 155 linear feet of concrete drain swell on Rafael Street in Precinct 1. Lombrana was awarded the contract. The indictment alleges that Lombrana never constructed the concrete drain swell but requested and received full payment for the project. The indictment also alleges that in exchange for being awarded the contract, Lombrana paid a monetary bribe to a Maverick County employee.
In addition to indicting Lombrana, the federal grand jury sitting in Del Rio returned separate indictments against 46–year-old Alejandro Wheeler, owner and operator of TVAW, a media outlet based in Eagle Pass, and 55– year-old Marcelo Alvarez, a surveyor and consultant in Maverick County. Alvarez surrendered to federal authorities this morning. Authorities are still looking for Wheeler.
Wheeler is charged with one count of aiding and abetting paying a bribe to an agent of an organization receiving federal funds and one count of aiding and abetting theft concerning programs receiving federal funds. According to his indictment, in 2010 and 2011, Wheeler and Maverick County commissioners devised a scheme to have two contractors awarded Maverick County construction contracts. As part of the scheme, Wheeler allegedly received money from the contractors and the commissioners received bribes from the construction funds, as well as discounted campaign advertising and media time.
Alvarez is charged with one count of paying a bribe to an agent of an organization receiving federal funds. According to his indictment, from 2010 to 2012, Alvarez corruptly paid money to Maverick County officials, including two county commissioners, in order to guarantee that engineering, project management and consulting services contracts valued at approximately $800,000 were awarded to a specific company. Alvarez, in turn, was designated as the Resident Project Representative on those projects and received payment for his services.
Upon conviction each charge calls for up to 10 years in federal prison and a maximum $250,000 fine.
This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety. Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741. Assistant United States Attorneys Michael Galdo and Bryan Reeves are prosecuting this case on behalf of the government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Lombrana is charged by a federal grand jury indictment returned yesterday with one count of paying a bribe to an agent of an organization receiving federal funds. According to the indictment, in March 2011, Lombrana submitted a $14,500 bid to construct 155 linear feet of concrete drain swell on Rafael Street in Precinct 1. Lombrana was awarded the contract. The indictment alleges that Lombrana never constructed the concrete drain swell but requested and received full payment for the project. The indictment also alleges that in exchange for being awarded the contract, Lombrana paid a monetary bribe to a Maverick County employee.
In addition to indicting Lombrana, the federal grand jury sitting in Del Rio returned separate indictments against 46–year-old Alejandro Wheeler, owner and operator of TVAW, a media outlet based in Eagle Pass, and 55– year-old Marcelo Alvarez, a surveyor and consultant in Maverick County. Alvarez surrendered to federal authorities this morning. Authorities are still looking for Wheeler.
Wheeler is charged with one count of aiding and abetting paying a bribe to an agent of an organization receiving federal funds and one count of aiding and abetting theft concerning programs receiving federal funds. According to his indictment, in 2010 and 2011, Wheeler and Maverick County commissioners devised a scheme to have two contractors awarded Maverick County construction contracts. As part of the scheme, Wheeler allegedly received money from the contractors and the commissioners received bribes from the construction funds, as well as discounted campaign advertising and media time.
Alvarez is charged with one count of paying a bribe to an agent of an organization receiving federal funds. According to his indictment, from 2010 to 2012, Alvarez corruptly paid money to Maverick County officials, including two county commissioners, in order to guarantee that engineering, project management and consulting services contracts valued at approximately $800,000 were awarded to a specific company. Alvarez, in turn, was designated as the Resident Project Representative on those projects and received payment for his services.
Upon conviction each charge calls for up to 10 years in federal prison and a maximum $250,000 fine.
This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety. Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741. Assistant United States Attorneys Michael Galdo and Bryan Reeves are prosecuting this case on behalf of the government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
San Antonio Businessman Pleads Guilty to Role in $133 Million Real Dollar Loss Fraud and Tax Case
In San Antonio this morning, 61-year-old businessman Charles Pircher pleaded guilty to his role in what is believed to be the largest real dollar loss fraud and tax related case ever prosecuted in the Western District of Texas, announced United States Attorney Robert Pitman, FBI Special Agent in Charge Armando Fernandez and IRS-Criminal Investigation Special Agent in Charge Steve McCullough.
“This was a wide ranging and complex scheme, whose simple purpose was to steal money from company payroll by diverting tax and insurance payments all for personal enrichment. Pircher cheated clients and the taxpayers for years,” stated United States Attorney Robert Pitman.
Appearing before United States Chief District Judge Fred Biery, Pircher pleaded guilty to a Klein tax fraud conspiracy charge and a mail fraud conspiracy charge. According to the factual basis filed in this case, from 2002 to 2008, Pircher managed a series of professional employer organizations (PEOs) based in San Antonio, including Service Professionals, which entered into staff leasing agreements with various client companies to manage their payroll and insurance programs. By pleading guilty, Pircher admitted that he and other co-conspirators stole more than $133 million directly from their client companies’ programs.
Pircher faces up to 20 years in federal prison on the mail fraud conspiracy charge and up to five years in federal prison on the Kline tax fraud conspiracy charge. Sentencing has yet to be scheduled.
This investigation, conducted by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation, has resulted in guilty pleas by five defendants—Pircher; John D. Walker, II; John Bean; Mike Solis; and Pat Mire. A sixth defendant, San Antonio businessman Larry W. Kimes, is scheduled for jury selection and trial on January 23, 2014. Kimes is charged by federal grand jury indictment with one count of Klein tax fraud conspiracy, two counts of mail fraud conspiracy, one count of money laundering conspiracy, and one substantive count of money laundering.
Assistant United States Attorney Thomas J. McHugh is prosecuting this case on behalf of the government.
“This was a wide ranging and complex scheme, whose simple purpose was to steal money from company payroll by diverting tax and insurance payments all for personal enrichment. Pircher cheated clients and the taxpayers for years,” stated United States Attorney Robert Pitman.
Appearing before United States Chief District Judge Fred Biery, Pircher pleaded guilty to a Klein tax fraud conspiracy charge and a mail fraud conspiracy charge. According to the factual basis filed in this case, from 2002 to 2008, Pircher managed a series of professional employer organizations (PEOs) based in San Antonio, including Service Professionals, which entered into staff leasing agreements with various client companies to manage their payroll and insurance programs. By pleading guilty, Pircher admitted that he and other co-conspirators stole more than $133 million directly from their client companies’ programs.
Pircher faces up to 20 years in federal prison on the mail fraud conspiracy charge and up to five years in federal prison on the Kline tax fraud conspiracy charge. Sentencing has yet to be scheduled.
This investigation, conducted by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation, has resulted in guilty pleas by five defendants—Pircher; John D. Walker, II; John Bean; Mike Solis; and Pat Mire. A sixth defendant, San Antonio businessman Larry W. Kimes, is scheduled for jury selection and trial on January 23, 2014. Kimes is charged by federal grand jury indictment with one count of Klein tax fraud conspiracy, two counts of mail fraud conspiracy, one count of money laundering conspiracy, and one substantive count of money laundering.
Assistant United States Attorney Thomas J. McHugh is prosecuting this case on behalf of the government.
Three Aryan Brotherhood of Texas Gang Members Plead Guilty to Federal Racketeering Charges
HOUSTON—Three members of the Aryan Brotherhood of Texas gang (ABT) pleaded guilty to racketeering charges related to their membership in the ABT’s criminal enterprise, announced United States Attorney Kenneth Magidson and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Sammy Keith Shipman, aka “Stubby,” 31, of Houston, pleaded guilty today before U.S. Judge Sim Lake to one count of conspiracy to participating in racketeering activity.
William David Maynard, aka “Baby Huey,” 43, of Houston, pleaded guilty November 20, 2013. Dustin Lee Harris, aka “Lightning,” 29, of Dallas, pleaded guilty November 19, 2013. Each defendant pleaded guilty to one count of conspiracy to participating in racketeering activity.
According to court documents, Shipman, Maynard, Harris, and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping, and narcotics trafficking on behalf of the ABT gang. The defendants and numerous other ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things.
By pleading guilty to racketeering charges, Shipman, Maynard, and Harris admitted to being members of the ABT criminal enterprise and committing multiple acts of violence and/or narcotics trafficking on behalf of the ABT.
According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to the superseding indictment, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT expanded its criminal enterprise to include illegal activities for profit.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects, and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery, and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
At sentencing, scheduled for February 20, 2014, Shipman, Maynard, and Harris each face a maximum penalty of life in prison.
Shipman, Maynard, and Harris are four of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges. To date, 18 defendants have pleaded guilty.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice-Office of Inspector General; sheriff’s offices in Harris, Tarrant, Atascosa, Orange, and Waller Counties; police departments in Alvin, Carrollton, and Mesquite Texas; and the Montgomery and Atascosa County District Attorney’s Offices.
The case is being prosecuted by the U.S. Attorney’s Office of the Southern District of Texas and the Criminal Division’s Organized Crime and Gang Section.
Sammy Keith Shipman, aka “Stubby,” 31, of Houston, pleaded guilty today before U.S. Judge Sim Lake to one count of conspiracy to participating in racketeering activity.
William David Maynard, aka “Baby Huey,” 43, of Houston, pleaded guilty November 20, 2013. Dustin Lee Harris, aka “Lightning,” 29, of Dallas, pleaded guilty November 19, 2013. Each defendant pleaded guilty to one count of conspiracy to participating in racketeering activity.
According to court documents, Shipman, Maynard, Harris, and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping, and narcotics trafficking on behalf of the ABT gang. The defendants and numerous other ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things.
By pleading guilty to racketeering charges, Shipman, Maynard, and Harris admitted to being members of the ABT criminal enterprise and committing multiple acts of violence and/or narcotics trafficking on behalf of the ABT.
According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to the superseding indictment, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT expanded its criminal enterprise to include illegal activities for profit.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects, and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery, and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
At sentencing, scheduled for February 20, 2014, Shipman, Maynard, and Harris each face a maximum penalty of life in prison.
Shipman, Maynard, and Harris are four of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges. To date, 18 defendants have pleaded guilty.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice-Office of Inspector General; sheriff’s offices in Harris, Tarrant, Atascosa, Orange, and Waller Counties; police departments in Alvin, Carrollton, and Mesquite Texas; and the Montgomery and Atascosa County District Attorney’s Offices.
The case is being prosecuted by the U.S. Attorney’s Office of the Southern District of Texas and the Criminal Division’s Organized Crime and Gang Section.
Leader Sentenced to More Than 23 Years in Prison in Scheme to Steal Nearly $1.4 Million from Housing Authority of Baltimore City Account
BALTIMORE—U.S. District Judge William D. Quarles, Jr. sentenced Daren Kareem Gadsden, aka “D,” age 36, of Upper Marlboro, Maryland, to 286 months in prison, followed by five years of supervised release, for a conspiracy to steal almost $1.4 million from a Housing Authority of Baltimore City bank account. Judge Quarles also ordered Gadsden to forfeit $1,399,700.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief James W. Johnson of the Baltimore County Police Department.
“This heavy sentence punishes Daren Gadsden for a brazen scheme to steal $1.4 million directly from the Baltimore City Housing Authority’s bank account,” said U.S. Attorney Rod J. Rosenstein. “Mr. Gadsden identified a vulnerability in the Housing Authority’s payment system and exploited it to steal taxpayer money intended to provide housing for low-income citizens.”
According to information presented at his six-day trial, in 2009, Gadsden owned a property in Baltimore that was rented to a low income individual, whose rental payments were paid by the Housing Authority of Baltimore City, from its account directly to Gadsden’s bank account. Witnesses testified that in late 2009 and 2010, Gadsden made a series of inquiries to another bank where he had an account about how to use his computer to make electronic transfers to and from his account at that bank. In early 2010, the Housing Authority lost a few thousand dollars when a series of unauthorized electronic transfers debited funds out of the Housing Authority’s account and into Gadsden’s bank account. After being confronted by Housing Authority officials, Gadsden denied any wrongdoing but paid the Housing Authority $1,400 to cover some of its losses.
Trial evidence showed that, at this point, Gadsden already had embarked on the second stage of his scheme, stealing during the spring of 2010 a marginally larger amount of Housing Authority funds—less than $8,000—this time not depositing into his own account but rather into an account in the name of a bogus entity Gadsden had created using another individual’s stolen identifiers. Gadsden effected the unauthorized electronic debits out of the Housing Authority’s bank account by using fake authorization forms and other fraudulent documents.
The evidence showed that from early 2010 until at least September 17, 2010, Gadsden and several co-defendants then conspired to execute a larger scheme to defraud the Housing Authority. Specifically, Gadsden contacted Tyeast Brown to plan the fraud. Brown, in turn, contacted William Alvin Darden and Keith Eugene Daughtry, securing from Daughtry his Social Security card and birth certificate, which she provided to Darden. On May 19, 2010, Darden obtained a Maryland driver’s license with his photograph, but in Daughtry’s name, using Daughtry’s Social Security card and birth certificate as proof of identity. Darden then used the fraudulent license to open a bank account in the name of Keith Daughtry Contracting LLC. Gadsden had registered the entity with the state of Maryland, only a few days before, under a different, misspelled name. Darden also provided a mailing address for the company that was actually a mailbox rented by the conspirators at a commercial mailing store.
According to witness testimony, beginning in July 2010, Gadsden and his co-conspirators electronically transferred nearly $1.4 million in funds from the Housing Authority’s bank account and into the Keith Daughtry Contracting LLC account. The conspirators then drained the stolen Housing Authority funds from the Keith Daughtry Contracting account by electronic transfers into accounts at other banks, in-person cash withdrawals, and from automated teller machines. In addition, the conspirators electronically transferred funds from the Keith Daughtry Contracting account onto debit cards in the names of other individuals. For example, Gadsden opened a debit account in the name of another individual, using that person’s identity information without their knowledge or permission.
The evidence showed that Gadsden also tampered with evidence, deleting the contents of at least two e-mail accounts after he was contacted by an FBI special agent. The accounts were provided as the points of contact for certain debit cards Gadsden opened using stolen identity information.
Judge Quarles also sentenced William Alvin Darden, age 46, of Washington, D.C., today to 30 months in prison, followed by three years of supervised release. Darden, who previously pleaded guilty to his role in the scheme, was also ordered to pay restitution of $1,399,700.
Tyeast Brown, aka “Peaches,” age 42, of Suitland, Maryland; and Keith Eugene Daughtry, age 52, of Washington, D.C., also pleaded guilty and were sentenced to 36 months and 41 months in prison, respectively, and each was ordered to pay restitution of $1,399,700. Another co-conspirator, Marvin Moss, also pled guilty to his role in the scheme and was sentenced to 15 months in prison.
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 thanked the FBI and Baltimore County Police Department for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorney Sujit Raman, who prosecuted the case.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief James W. Johnson of the Baltimore County Police Department.
“This heavy sentence punishes Daren Gadsden for a brazen scheme to steal $1.4 million directly from the Baltimore City Housing Authority’s bank account,” said U.S. Attorney Rod J. Rosenstein. “Mr. Gadsden identified a vulnerability in the Housing Authority’s payment system and exploited it to steal taxpayer money intended to provide housing for low-income citizens.”
According to information presented at his six-day trial, in 2009, Gadsden owned a property in Baltimore that was rented to a low income individual, whose rental payments were paid by the Housing Authority of Baltimore City, from its account directly to Gadsden’s bank account. Witnesses testified that in late 2009 and 2010, Gadsden made a series of inquiries to another bank where he had an account about how to use his computer to make electronic transfers to and from his account at that bank. In early 2010, the Housing Authority lost a few thousand dollars when a series of unauthorized electronic transfers debited funds out of the Housing Authority’s account and into Gadsden’s bank account. After being confronted by Housing Authority officials, Gadsden denied any wrongdoing but paid the Housing Authority $1,400 to cover some of its losses.
Trial evidence showed that, at this point, Gadsden already had embarked on the second stage of his scheme, stealing during the spring of 2010 a marginally larger amount of Housing Authority funds—less than $8,000—this time not depositing into his own account but rather into an account in the name of a bogus entity Gadsden had created using another individual’s stolen identifiers. Gadsden effected the unauthorized electronic debits out of the Housing Authority’s bank account by using fake authorization forms and other fraudulent documents.
The evidence showed that from early 2010 until at least September 17, 2010, Gadsden and several co-defendants then conspired to execute a larger scheme to defraud the Housing Authority. Specifically, Gadsden contacted Tyeast Brown to plan the fraud. Brown, in turn, contacted William Alvin Darden and Keith Eugene Daughtry, securing from Daughtry his Social Security card and birth certificate, which she provided to Darden. On May 19, 2010, Darden obtained a Maryland driver’s license with his photograph, but in Daughtry’s name, using Daughtry’s Social Security card and birth certificate as proof of identity. Darden then used the fraudulent license to open a bank account in the name of Keith Daughtry Contracting LLC. Gadsden had registered the entity with the state of Maryland, only a few days before, under a different, misspelled name. Darden also provided a mailing address for the company that was actually a mailbox rented by the conspirators at a commercial mailing store.
According to witness testimony, beginning in July 2010, Gadsden and his co-conspirators electronically transferred nearly $1.4 million in funds from the Housing Authority’s bank account and into the Keith Daughtry Contracting LLC account. The conspirators then drained the stolen Housing Authority funds from the Keith Daughtry Contracting account by electronic transfers into accounts at other banks, in-person cash withdrawals, and from automated teller machines. In addition, the conspirators electronically transferred funds from the Keith Daughtry Contracting account onto debit cards in the names of other individuals. For example, Gadsden opened a debit account in the name of another individual, using that person’s identity information without their knowledge or permission.
The evidence showed that Gadsden also tampered with evidence, deleting the contents of at least two e-mail accounts after he was contacted by an FBI special agent. The accounts were provided as the points of contact for certain debit cards Gadsden opened using stolen identity information.
Judge Quarles also sentenced William Alvin Darden, age 46, of Washington, D.C., today to 30 months in prison, followed by three years of supervised release. Darden, who previously pleaded guilty to his role in the scheme, was also ordered to pay restitution of $1,399,700.
Tyeast Brown, aka “Peaches,” age 42, of Suitland, Maryland; and Keith Eugene Daughtry, age 52, of Washington, D.C., also pleaded guilty and were sentenced to 36 months and 41 months in prison, respectively, and each was ordered to pay restitution of $1,399,700. Another co-conspirator, Marvin Moss, also pled guilty to his role in the scheme and was sentenced to 15 months in prison.
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 thanked the FBI and Baltimore County Police Department for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorney Sujit Raman, who prosecuted the case.
Nineteen New Defendants, Including 14 Correctional Officers, Indicted on Charges of Federal Racketeering in Baltimore City Jail Investigation
BALTIMORE—United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Secretary Gary D. Maynard of the Maryland Department of Public Safety and Correctional Services; Baltimore City State’s Attorney Gregg Bernstein; Baltimore Police Commissioner Anthony W. Batts; and Prince George’s County Police Chief Mark A. Magaw announced that a federal superseding indictment was unsealed today charging 19 additional defendants, including 14 former and current correctional officers with the Maryland Department of Public Safety and Correctional Services, with conspiring to operate the Black Guerilla Family (BGF) gang inside correctional facilities. All 19 defendants also are charged with conspiracy to distribute and possession with intent to distribute drugs; and six are charged with money laundering conspiracy.
This brings to 44 the total number of alleged BGF gang members and associates charged in the case, including 27 correctional officers. Sixteen of the 25 defendants in the original indictment in April 2013 have pleaded guilty to racketeering conspiracy, including nine correctional officers, four inmates, and three drug suppliers. One defendant is deceased. Eight defendants charged with racketeering in April 2013 remain in the superseding indictment.
This case was developed as a result of the efforts of the Maryland Prison Task Force, formed in 2011 with the Maryland Department of Public Safety and Correctional Services; local, state, and federal law enforcement agencies; and prosecutors. The task force has met regularly for almost three years, generating recommendations to reform prison procedures and producing leads that have been pursued by state, local, and federal criminal investigators.
“The new charges focus on criminal conduct that occurred prior to April 2013, adding 19 new defendants as a result of additional evidence that came to light during the ongoing investigation,” said U.S. Attorney Rod J. Rosenstein. “I want to thank Secretary Maynard and the many law-abiding employees of the Department of Public Safety and Correctional Services who have assisted in this investigation and are working to eliminate corruption in state correctional facilities.”
“We are grateful to our federal law enforcement partners for their responsiveness, their good work, and their ongoing willingness to work with us as we root out corruption, improve security, and promote integrity at Maryland correctional institutions,” DPSCS Secretary Gary Maynard said. “While our work continues, those indicted out of the task force’s efforts do not represent the overwhelming majority of honest and hardworking correctional officers working every day to keep our institutions safe.”
The superseding indictment and a search warrant affidavit were unsealed today upon the arrests of the defendants and the execution of 15 search warrants. Approximately 150 agents and officers assisted in the arrests and search warrants. The superseding indictment was returned on November 5, 2013, and remained under seal until after the warrants were executed this morning.
The defendants charged in the superseding indictment are alleged to be members or associates of the BGF, a gang active in prisons throughout the United States. According to the indictment, BGF has been the dominant gang at the Baltimore City Detention Center (BCDC), and in several connected facilities, especially the Baltimore Central Booking Intake Center, the Women’s Detention Center (which houses many men), and in the Jail Industries Building.
According to the affidavit, the BGF inmates and correctional officers operated a criminal organization within the prison facility, enabling them to make large amounts of money through drug trafficking, robbery, assault, extortion, bribery, witness retaliation, money laundering, and obstruction of justice. “Green Dot” cash cards routinely were used to transfer money. BGF members and associates used the money to bribe correctional officers and other employees at BCDC and related prison facilities to smuggle drugs, cell phones, and other contraband. Correctional officers arranged favored treatment and privileges for imprisoned BGF gang members, thwarted interdiction and law enforcement efforts against BGF inmates, and facilitated attacks on inmates in furtherance of BGF objectives. Gang members and associates extorted protection money from inmates who were non-members, often paid by relatives outside the jail.
The correctional officers allegedly hid drugs and other contraband beneath clothing and inside body cavities when they entered the prison. The correctional officers also smuggled items in their shoes or in sandwiches they brought into the prison. BGF leaders used contraband cell phones to order drugs and other contraband and to coordinate gang activities.
Court documents allege that BGF members recruited correctional officers through personal and often sexual relationships as well as bribes, and that some officers traded sex for money. Officers believed it was unlikely that they would be fired or face significant discipline even if they were caught smuggling contraband or fraternizing with inmates.
The defendants face a maximum sentence of 20 years in prison on the racketeering and drug conspiracies. Thirteen of the defendants face a maximum sentence of 20 years in prison as well for conspiracy to commit money laundering. James Yarborough also faces five years in prison for possession with intent to distribute marijuana.
Most of the defendants are expected to have initial appearances in U.S. District Court in Baltimore this afternoon.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
The U.S. Attorney praised the FBI, the Maryland Department of Public Safety and Correctional Services, the Baltimore Police Department, the Prince George’s County Police Department, the Maryland Prison Task Force, and the Baltimore City State’s Attorney’ Office for their work on the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Robert R. Harding and Ayn B. Ducao, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
The U.S. Attorney also thanked the leaders of other agencies that have assisted the Maryland Prison Task Force, including Colonel Marcus L. Brown, Superintendent of the Maryland State Police; United States Marshal Johnny Hughes; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration-Washington Field Division; Tom Carr, Director of the Washington-Baltimore High Intensity Drug Trafficking Area; and Dave Engel, Executive Director of the Maryland Coordination and Analysis Center.
The following 19 defendants are newly charged in the superseding indictment unsealed today.
Inmates:
Inmates:
Inmates:
This brings to 44 the total number of alleged BGF gang members and associates charged in the case, including 27 correctional officers. Sixteen of the 25 defendants in the original indictment in April 2013 have pleaded guilty to racketeering conspiracy, including nine correctional officers, four inmates, and three drug suppliers. One defendant is deceased. Eight defendants charged with racketeering in April 2013 remain in the superseding indictment.
This case was developed as a result of the efforts of the Maryland Prison Task Force, formed in 2011 with the Maryland Department of Public Safety and Correctional Services; local, state, and federal law enforcement agencies; and prosecutors. The task force has met regularly for almost three years, generating recommendations to reform prison procedures and producing leads that have been pursued by state, local, and federal criminal investigators.
“The new charges focus on criminal conduct that occurred prior to April 2013, adding 19 new defendants as a result of additional evidence that came to light during the ongoing investigation,” said U.S. Attorney Rod J. Rosenstein. “I want to thank Secretary Maynard and the many law-abiding employees of the Department of Public Safety and Correctional Services who have assisted in this investigation and are working to eliminate corruption in state correctional facilities.”
“We are grateful to our federal law enforcement partners for their responsiveness, their good work, and their ongoing willingness to work with us as we root out corruption, improve security, and promote integrity at Maryland correctional institutions,” DPSCS Secretary Gary Maynard said. “While our work continues, those indicted out of the task force’s efforts do not represent the overwhelming majority of honest and hardworking correctional officers working every day to keep our institutions safe.”
The superseding indictment and a search warrant affidavit were unsealed today upon the arrests of the defendants and the execution of 15 search warrants. Approximately 150 agents and officers assisted in the arrests and search warrants. The superseding indictment was returned on November 5, 2013, and remained under seal until after the warrants were executed this morning.
The defendants charged in the superseding indictment are alleged to be members or associates of the BGF, a gang active in prisons throughout the United States. According to the indictment, BGF has been the dominant gang at the Baltimore City Detention Center (BCDC), and in several connected facilities, especially the Baltimore Central Booking Intake Center, the Women’s Detention Center (which houses many men), and in the Jail Industries Building.
According to the affidavit, the BGF inmates and correctional officers operated a criminal organization within the prison facility, enabling them to make large amounts of money through drug trafficking, robbery, assault, extortion, bribery, witness retaliation, money laundering, and obstruction of justice. “Green Dot” cash cards routinely were used to transfer money. BGF members and associates used the money to bribe correctional officers and other employees at BCDC and related prison facilities to smuggle drugs, cell phones, and other contraband. Correctional officers arranged favored treatment and privileges for imprisoned BGF gang members, thwarted interdiction and law enforcement efforts against BGF inmates, and facilitated attacks on inmates in furtherance of BGF objectives. Gang members and associates extorted protection money from inmates who were non-members, often paid by relatives outside the jail.
The correctional officers allegedly hid drugs and other contraband beneath clothing and inside body cavities when they entered the prison. The correctional officers also smuggled items in their shoes or in sandwiches they brought into the prison. BGF leaders used contraband cell phones to order drugs and other contraband and to coordinate gang activities.
Court documents allege that BGF members recruited correctional officers through personal and often sexual relationships as well as bribes, and that some officers traded sex for money. Officers believed it was unlikely that they would be fired or face significant discipline even if they were caught smuggling contraband or fraternizing with inmates.
The defendants face a maximum sentence of 20 years in prison on the racketeering and drug conspiracies. Thirteen of the defendants face a maximum sentence of 20 years in prison as well for conspiracy to commit money laundering. James Yarborough also faces five years in prison for possession with intent to distribute marijuana.
Most of the defendants are expected to have initial appearances in U.S. District Court in Baltimore this afternoon.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
The U.S. Attorney praised the FBI, the Maryland Department of Public Safety and Correctional Services, the Baltimore Police Department, the Prince George’s County Police Department, the Maryland Prison Task Force, and the Baltimore City State’s Attorney’ Office for their work on the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Robert R. Harding and Ayn B. Ducao, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
The U.S. Attorney also thanked the leaders of other agencies that have assisted the Maryland Prison Task Force, including Colonel Marcus L. Brown, Superintendent of the Maryland State Police; United States Marshal Johnny Hughes; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration-Washington Field Division; Tom Carr, Director of the Washington-Baltimore High Intensity Drug Trafficking Area; and Dave Engel, Executive Director of the Maryland Coordination and Analysis Center.
The following 19 defendants are newly charged in the superseding indictment unsealed today.
Inmates:
- Russell Carrington, a/k/ Rutt, age 33
- Frederick Morrison, a/k/a Fry, age 29
- Kevin Armstrong, age 26, of Gwynn Oak, Maryland
- Clarissa Clayton, age 24, of Brooklyn Park, Maryland
- Tanierdra Finch, age 26, of Baltimore
- Danielle Forrest, age 26
- Aisha Fraction, age 25, Brooklyn
- Sean Graves, age 47, of Windsor Mill, Maryland
- Ricolle Hall, age 26, of Glen Burnie, Maryland
- Angela Johnson, age 34, of Baltimore
- Derrick Jones, age 41, of Aberdeen, Maryland
- Javonne Lunkin, age 28, of Baltimore
- Ashley Newton, age 30, Baltimore
- Travis Paylor, age 26, Baltimore
- Milshenna Peoples, age 29, of Baltimore
- Michelle Ricks, age 43, Edgewood, Maryland
- Michelle McNair, age 22, Baltimore
- Raylanair Reese, age 31
- Linnard Wortham, a/k/a Stu, age 29, of Glen Burnie, Maryland
Inmates:
- Jamar Anderson, a/k/a Hammer and Hamma Head, age 24, of Baltimore
- Derius Duncan, a/k/a D or Lil D, age 24, of Baltimore
- Joseph Young, a/k/a Monster, age 30, of Baltimore
- Antonia Allison, age 27; of Baltimore
- Ebonee Braswell, age 27; of Baltimore
- Chania Brooks, age 28, of Baltimore
- Tiffany Linder, age 27, of Baltimore
- James Yarborough, a/k/a J.Y., age 27, of Baltimore
Inmates:
- Tavon White, age 36, of Baltimore
- Steven Loney, age 24, of Baltimore
- Kenneth Parham, age 24, of Baltimore
- Jermaine McFadden, age 25, of Baltimore.
- Kimberly Dennis, age 26, of Baltimore
- Jasmin Jones, a/k/a/ J.J., age 25, of Baltimore
- Taryn Kirkland, age 23, of Baltimore
- Katrina Laprade, a/k/a Katrina Lyons, age 31, of Baltimore
- Vivian Matthews, age 26, of Essex, Maryland
- Jennifer Owens, a/k/a/ O and J.O., age 31, of Randallstown
- Adrena Rice, age 25, of Baltimore
- Katera Stevenson, a/k/a KK, age 25, of Baltimore
- Jasmine Thornton, a/k/a J.T., age 26, of Glen Burnie
- Tyesha Mayo, age 30; of Baltimore
- Tyrone Thompson, age 36, of Baltimore
- Teshawn Pinder, age 24, of Baltimore
Owner and Salesman Convicted in Timeshare Telemarketing Fraud
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Pasquale Pappalardo, 60, of Coral Springs, Florida, and Audwin Lovinsky, 35, of Tamarac, Florida, were both convicted yesterday in federal court in Fort Lauderdale of conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 1349. Pappalardo was also convicted of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956. After the verdicts, defendants were remanded to the custody of the Bureau of Prisons. Defendants are scheduled to be sentenced on January 29, 2014.
In all, 41 defendants were charged for their involvement with a time-share resale telemarketing room called Timeshare Mega Media and Marketing Group Inc. (TMMMG). The other defendants were charged in Case Nos. 11-60190-Cr-Cohn, 11-60247-Cr-Marra, 11-60268-Cr-Hurley, 12-60019-Cr-Scola, 13-60049-Cr-Dimitrouleas, 12-60149-Cr-Scola, 13-60154-Cr-Scola, and 13-60155-Cr-Dimitrouleas. Aside from the two defendants who were found guilty yesterday, 36 defendants previously pled guilty, two remain fugitives, and one is deceased.
According to the evidence presented at trial, in February 2009, Pasquale Pappalardo, also known to the witnesses as “Patsy Ubatz” and “Posh,” and Joseph Crapella, also known to witnesses as “Joey Cigars,” started a branch office of Time Share Market Pro (TMP), a timeshare resale business. The testimony at trial was that they knew each other from a previous stint in federal prison. In June 2009, at the direction of Pappalardo and Crapella, their associates took customer files and the electronic database of TMP, among other items, without the knowledge of the owner of TMP.
Pappalardo and Crapella then took the employees and the documents seized from TMP and formed a second time share resale company called TMMMG. In November 2009 and January 2010, TMMMG hired salesmen who worked for other fraudulent telemarketing resale companies, including defendant Lovinsky, who used the phone name of Edwin Lovins. Among the lies they would tell timeshare unit owners was that they had sold their timeshare units and that they needed to pay a refundable fee to secure the sales. The salesmen would then ask the timeshare unit owners for a fee of at least $1,996 and as much as $10,000. At no time were there any buyers for the timeshare units. The testimony at trial was that both Pappalardo and Crapella were told about the lies being told by the salesmen, but Pappalardo and Crapella would not do anything to stop the salespeople from lying.
During the 10 months that TMMMG was in business, it fraudulently obtained approximately $5,000,000 from about 3,000 customers. Pappalardo received at least $300,000 in checks and hundreds of thousands of dollars in cash from the money sent by victims of TMMMG.
Pappalardo faces a maximum sentence of 40 years in prison and a fine of up to the greater of $750,000 or twice the gross gain or twice the gross loss. Lovinsky faces a maximum sentence of 20 years in prison and a fine of up to the greater of $250,000 or twice the gross gain or twice the gross loss.
Mr. Ferrer commended the investigative efforts of the FBI in connection with the investigation of this matter. Mr. Ferrer would also like to recognize the assistance provided by the Fort Lauderdale Police Department, the Federal Trade Commission, and the Broward Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.
In all, 41 defendants were charged for their involvement with a time-share resale telemarketing room called Timeshare Mega Media and Marketing Group Inc. (TMMMG). The other defendants were charged in Case Nos. 11-60190-Cr-Cohn, 11-60247-Cr-Marra, 11-60268-Cr-Hurley, 12-60019-Cr-Scola, 13-60049-Cr-Dimitrouleas, 12-60149-Cr-Scola, 13-60154-Cr-Scola, and 13-60155-Cr-Dimitrouleas. Aside from the two defendants who were found guilty yesterday, 36 defendants previously pled guilty, two remain fugitives, and one is deceased.
According to the evidence presented at trial, in February 2009, Pasquale Pappalardo, also known to the witnesses as “Patsy Ubatz” and “Posh,” and Joseph Crapella, also known to witnesses as “Joey Cigars,” started a branch office of Time Share Market Pro (TMP), a timeshare resale business. The testimony at trial was that they knew each other from a previous stint in federal prison. In June 2009, at the direction of Pappalardo and Crapella, their associates took customer files and the electronic database of TMP, among other items, without the knowledge of the owner of TMP.
Pappalardo and Crapella then took the employees and the documents seized from TMP and formed a second time share resale company called TMMMG. In November 2009 and January 2010, TMMMG hired salesmen who worked for other fraudulent telemarketing resale companies, including defendant Lovinsky, who used the phone name of Edwin Lovins. Among the lies they would tell timeshare unit owners was that they had sold their timeshare units and that they needed to pay a refundable fee to secure the sales. The salesmen would then ask the timeshare unit owners for a fee of at least $1,996 and as much as $10,000. At no time were there any buyers for the timeshare units. The testimony at trial was that both Pappalardo and Crapella were told about the lies being told by the salesmen, but Pappalardo and Crapella would not do anything to stop the salespeople from lying.
During the 10 months that TMMMG was in business, it fraudulently obtained approximately $5,000,000 from about 3,000 customers. Pappalardo received at least $300,000 in checks and hundreds of thousands of dollars in cash from the money sent by victims of TMMMG.
Pappalardo faces a maximum sentence of 40 years in prison and a fine of up to the greater of $750,000 or twice the gross gain or twice the gross loss. Lovinsky faces a maximum sentence of 20 years in prison and a fine of up to the greater of $250,000 or twice the gross gain or twice the gross loss.
Mr. Ferrer commended the investigative efforts of the FBI in connection with the investigation of this matter. Mr. Ferrer would also like to recognize the assistance provided by the Fort Lauderdale Police Department, the Federal Trade Commission, and the Broward Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.
Hungarian Woman Sentenced to One Year in Prison for Her Role in International Internet-Based Fraud Scheme
WASHINGTON—Beata Edina Wagnerne Abonyi, 55, of Budapest, Hungary, has been sentenced to a year in prison on a federal charge stemming from her participation in an international Internet-based fraud scheme that obtained more than $350,000 from people who thought they were buying cars, trucks, and motor homes.
The sentence was announced by U.S. Attorney Ronald C. Machen, Jr.; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Niall Meehan, Special Agent in Charge of the Washington Field Office of the U.S. State Department’s Diplomatic Security Service.
Abonyi pled guilty on August 28, 2013, to one count of conspiracy to commit bank fraud, wire fraud and false use of a passport. She was sentenced on November 19, 2013, by the Honorable Reggie B. Walton. The judge also ordered Abonyi to pay $355,107 in restitution and ordered her to forfeit $1,245 and a $395,485 money judgment, which represents the proceeds she obtained through the scheme. Upon completion of her prison term, Abonyi will be placed on three years of supervised release.
According to a statement of offense signed by the defendant, Abonyi and others conspired to carry out the scheme from on or about late February 2013 through the beginning of May 2013. Members of the conspiracy falsely advertised and purported to sell motor vehicles, trucks, and motor homes on websites, targeting buyers located mainly in the United States. With assistance from her co-conspirators, Abonyi used false passports and false driver’s licenses to open bank accounts at four different financial institutions in Virginia. During the course of the scheme, Abonyi came to understand that buyers were being induced to wire money and funds into these accounts for the intended purpose of purchasing the vehicles. She fraudulently withdrew funds from the accounts before the buyers, financial institutions, and law enforcement detected the scheme. Abonyi then wired the falsely obtained funds to co-conspirators here in the United States and overseas. Abonyi admitted that the bank accounts she fraudulently opened received over $350,000 from victims.
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge Parlave, and Special Agent in Charge Meehan praised those who investigated the case from the FBI’s Washington Field Office and the Department of State’s Bureau of Diplomatic Security. They also commended the efforts of Paralegal Specialists Lenisse Edloe, Tasha Harris, and C. Rosalind Pressley of the U.S. Attorney’s Office. Finally, they acknowledged the work of Assistant U.S. Attorneys Michael K. Atkinson and Diane Lucas, who prosecuted the case.
The sentence was announced by U.S. Attorney Ronald C. Machen, Jr.; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Niall Meehan, Special Agent in Charge of the Washington Field Office of the U.S. State Department’s Diplomatic Security Service.
Abonyi pled guilty on August 28, 2013, to one count of conspiracy to commit bank fraud, wire fraud and false use of a passport. She was sentenced on November 19, 2013, by the Honorable Reggie B. Walton. The judge also ordered Abonyi to pay $355,107 in restitution and ordered her to forfeit $1,245 and a $395,485 money judgment, which represents the proceeds she obtained through the scheme. Upon completion of her prison term, Abonyi will be placed on three years of supervised release.
According to a statement of offense signed by the defendant, Abonyi and others conspired to carry out the scheme from on or about late February 2013 through the beginning of May 2013. Members of the conspiracy falsely advertised and purported to sell motor vehicles, trucks, and motor homes on websites, targeting buyers located mainly in the United States. With assistance from her co-conspirators, Abonyi used false passports and false driver’s licenses to open bank accounts at four different financial institutions in Virginia. During the course of the scheme, Abonyi came to understand that buyers were being induced to wire money and funds into these accounts for the intended purpose of purchasing the vehicles. She fraudulently withdrew funds from the accounts before the buyers, financial institutions, and law enforcement detected the scheme. Abonyi then wired the falsely obtained funds to co-conspirators here in the United States and overseas. Abonyi admitted that the bank accounts she fraudulently opened received over $350,000 from victims.
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge Parlave, and Special Agent in Charge Meehan praised those who investigated the case from the FBI’s Washington Field Office and the Department of State’s Bureau of Diplomatic Security. They also commended the efforts of Paralegal Specialists Lenisse Edloe, Tasha Harris, and C. Rosalind Pressley of the U.S. Attorney’s Office. Finally, they acknowledged the work of Assistant U.S. Attorneys Michael K. Atkinson and Diane Lucas, who prosecuted the case.
Sells Man Sentenced to More Than Six Years in Prison for Voluntary Manslaughter
TUCSON, AZ—Alrick Michael Escalante, 21, of Sells, Arizona, and a member of the Tohono O’odham Nation, was sentenced to six-and-a-half years prison on Monday, November 18, 2013, following a guilty plea to voluntary manslaughter, by U.S. District Judge David C. Bury. Escalante pled guilty to voluntary manslaughter on May 16, 2013.
As part of the plea agreement, Escalante admitted that in the early morning hours of July 24, 2011, in Sells, Arizona, on the Tohono O’odham Indian Nation, he stabbed the 22-year-old victim, who died from a single stab wound.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Tohono O’odham Nation Police Department. The prosecution was handled by Raquel Arellano, Assistant U.S. Attorney, District of Arizona, Tucson.
As part of the plea agreement, Escalante admitted that in the early morning hours of July 24, 2011, in Sells, Arizona, on the Tohono O’odham Indian Nation, he stabbed the 22-year-old victim, who died from a single stab wound.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Tohono O’odham Nation Police Department. The prosecution was handled by Raquel Arellano, Assistant U.S. Attorney, District of Arizona, Tucson.
Gadsden Man Sentenced to More Than 17 Years in Prison for 2008 Bank Robbery
BIRMINGHAM—A federal judge today sentenced a Gadsden man to 17 years and six months in prison for his role in the 2008 robbery of the Wachovia Bank in Lenlock, Alabama, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein, Jr.
A federal jury in July convicted Marcus Tyshun Porter, 33, of joining in a conspiracy and acting as a lookout during the July 16, 2008, Wachovia Bank robbery. U.S. District Judge Abdul K. Kallon sentenced Porter to prison and ordered him to pay $277,773 restitution to the bank.
Two of Porter’s co-conspirators, Willis Leach, 32, of Gadsden, and Jesse Key, 43, of Birmingham, pleaded guilty to robbery charges in June. Key also pleaded guilty to carjacking. A third man, Gabriel Rice, 25, of Gadsden, was charged and pleaded guilty to the robbery and carjacking in 2008.
Immediately after robbing the bank, Key and Rice forced two women at gunpoint to drive them back to Gadsden, where they met Porter and split proceeds of the robbery.
In October, Judge Kallon sentenced Key to 14 years, six months in prison, and Leach to five years and 10 months in prison. In 2009, U.S. District Judge Sharon Lovelace Blackburn sentenced Rice to 17 years in prison.
“The last of the men responsible for these violent crimes is finally on his way to prison," Vance said. “This case is part of a larger investigation involving a string of bank robberies occurring in Gadsden and the surrounding area since 2007. The FBI and the entire Etowah County law enforcement community have continued to work over the past five years to solve these crimes,” she said.
The FBI investigated the case, and Assistant U.S. Attorney L. James Weil, Jr. and Special Assistant U.S. Attorney E. Wilson Hunter prosecuted it.
A federal jury in July convicted Marcus Tyshun Porter, 33, of joining in a conspiracy and acting as a lookout during the July 16, 2008, Wachovia Bank robbery. U.S. District Judge Abdul K. Kallon sentenced Porter to prison and ordered him to pay $277,773 restitution to the bank.
Two of Porter’s co-conspirators, Willis Leach, 32, of Gadsden, and Jesse Key, 43, of Birmingham, pleaded guilty to robbery charges in June. Key also pleaded guilty to carjacking. A third man, Gabriel Rice, 25, of Gadsden, was charged and pleaded guilty to the robbery and carjacking in 2008.
Immediately after robbing the bank, Key and Rice forced two women at gunpoint to drive them back to Gadsden, where they met Porter and split proceeds of the robbery.
In October, Judge Kallon sentenced Key to 14 years, six months in prison, and Leach to five years and 10 months in prison. In 2009, U.S. District Judge Sharon Lovelace Blackburn sentenced Rice to 17 years in prison.
“The last of the men responsible for these violent crimes is finally on his way to prison," Vance said. “This case is part of a larger investigation involving a string of bank robberies occurring in Gadsden and the surrounding area since 2007. The FBI and the entire Etowah County law enforcement community have continued to work over the past five years to solve these crimes,” she said.
The FBI investigated the case, and Assistant U.S. Attorney L. James Weil, Jr. and Special Assistant U.S. Attorney E. Wilson Hunter prosecuted it.
Man Who Targeted FBI and Jefferson County Computer Systems Sentenced in New York
Jeremy Hammond, a/k/a “Anarchaos,” was sentenced on Friday in a New York federal court to 10 years in prison in connection with his role in, among other hacks, the October 2011 hack of computer systems used by the Jefferson County, Alabama Sheriff’s Office and the June 2011 hack of computer systems used by the Federal Bureau of Investigation’s Virtual Academy, a web-based training system.
FBI Birmingham Special Agent in Charge (SAC) Richard D. Schwein, Jr. and Jefferson County Sheriff Mike Hale issued the following statements in response to the sentencing:
“I hope this serves notice that we are serious about prosecuting these kind of criminals that believe they can do their damage and hide in the cyber world. We will track you down. Working with our federal partners, we have shown that we can and will be a force to be reckoned with in these type cases. This criminal chose to do damage to law enforcement officers personally and law enforcement agencies collectively. We take great pride in the fact that he was caught; he isn’t as bright as he thought he was, and justice has been served. We want to give a heartfelt thank you to all of the agencies that worked to right this wrong, most especially the FBI,” said Sheriff Hale.
“Mr. Hammond’s password has expired, and he now pays the consequences for his crimes. The FBI continues to work closely with our state, local, and international law enforcement partners and others to mitigate these cyber threats. Because of these partnerships, our ability to unmask and prosecute the anonymous perpetrators of cyber crimes has never been stronger,” said SAC Schwein.
FBI Birmingham Special Agent in Charge (SAC) Richard D. Schwein, Jr. and Jefferson County Sheriff Mike Hale issued the following statements in response to the sentencing:
“I hope this serves notice that we are serious about prosecuting these kind of criminals that believe they can do their damage and hide in the cyber world. We will track you down. Working with our federal partners, we have shown that we can and will be a force to be reckoned with in these type cases. This criminal chose to do damage to law enforcement officers personally and law enforcement agencies collectively. We take great pride in the fact that he was caught; he isn’t as bright as he thought he was, and justice has been served. We want to give a heartfelt thank you to all of the agencies that worked to right this wrong, most especially the FBI,” said Sheriff Hale.
“Mr. Hammond’s password has expired, and he now pays the consequences for his crimes. The FBI continues to work closely with our state, local, and international law enforcement partners and others to mitigate these cyber threats. Because of these partnerships, our ability to unmask and prosecute the anonymous perpetrators of cyber crimes has never been stronger,” said SAC Schwein.
Hueytown Man Sentenced to 18 Years for Armed Pharmacy Robberies
BIRMINGHAM—A federal judge today sentenced a Hueytown man to 18 years in prison for a series of armed pharmacy robberies in 2011 and 2012, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein, Jr.
U.S. District Judge Abdul K. Kallon sentenced Anthony Young, 22, in accordance with a binding plea agreement Young entered with the government. The agreement specified an 18-year prison sentence for Young’s pleas of guilty to three pharmacy robberies in the Birmingham metro area and to brandishing a firearm during one of the robberies. Cash and controlled substances, including narcotic painkillers, were taken in all three robberies.
Brandishing a firearm during a crime of violence carries a minimum sentence of seven years in prison and a maximum of life, and the sentence must be served after completion of any other sentence imposed for the crime. Judge Kallon sentenced Young to 11 years in prison for the pharmacy robberies, followed by seven years for brandishing the gun during a robbery.
Young pleaded guilty in August to robbing Moore’s Pharmacy on Ensley Avenue in Birmingham on July 30, 2011; Campbell’s Pharmacy on Veterans Memorial Drive in Adamsville on August 27, 2011; and Helena Hometown Pharmacy on Alabama Highway 17 in Helena on March 13, 2012. He admitted to brandishing a gun during the Helena robbery.
Two co-defendants in the case, Birmingham cousins Willie and Sterling Edwards, pleaded guilty earlier this year to their roles in the pharmacy robberies. Willie Edwards, 40, pleaded guilty to robbing Moore’s Pharmacy and to brandishing a gun during the robbery. Judge Kallon sentenced him in April to 20 years and one month in prison.
Sterling Edwards, 21, pleaded guilty to the Helena Hometown Pharmacy robbery and to a second robbery at Campbell’s Pharmacy on October 13, 2011. He also pleaded guilty to brandishing a gun during the Helena robbery. Judge Kallon sentenced Sterling Edwards in July to 11 years and nine months in prison.
The robbers in all four crimes entered the pharmacies and demanded the narcotics Lortab or Oxycontin, according to court documents.
The FBI and Birmingham, Adamsville, and Helena Police Departments investigated the case. Assistant U.S. Attorneys Joseph P. Montminy and Robin B. Mark prosecuted the case.
U.S. District Judge Abdul K. Kallon sentenced Anthony Young, 22, in accordance with a binding plea agreement Young entered with the government. The agreement specified an 18-year prison sentence for Young’s pleas of guilty to three pharmacy robberies in the Birmingham metro area and to brandishing a firearm during one of the robberies. Cash and controlled substances, including narcotic painkillers, were taken in all three robberies.
Brandishing a firearm during a crime of violence carries a minimum sentence of seven years in prison and a maximum of life, and the sentence must be served after completion of any other sentence imposed for the crime. Judge Kallon sentenced Young to 11 years in prison for the pharmacy robberies, followed by seven years for brandishing the gun during a robbery.
Young pleaded guilty in August to robbing Moore’s Pharmacy on Ensley Avenue in Birmingham on July 30, 2011; Campbell’s Pharmacy on Veterans Memorial Drive in Adamsville on August 27, 2011; and Helena Hometown Pharmacy on Alabama Highway 17 in Helena on March 13, 2012. He admitted to brandishing a gun during the Helena robbery.
Two co-defendants in the case, Birmingham cousins Willie and Sterling Edwards, pleaded guilty earlier this year to their roles in the pharmacy robberies. Willie Edwards, 40, pleaded guilty to robbing Moore’s Pharmacy and to brandishing a gun during the robbery. Judge Kallon sentenced him in April to 20 years and one month in prison.
Sterling Edwards, 21, pleaded guilty to the Helena Hometown Pharmacy robbery and to a second robbery at Campbell’s Pharmacy on October 13, 2011. He also pleaded guilty to brandishing a gun during the Helena robbery. Judge Kallon sentenced Sterling Edwards in July to 11 years and nine months in prison.
The robbers in all four crimes entered the pharmacies and demanded the narcotics Lortab or Oxycontin, according to court documents.
The FBI and Birmingham, Adamsville, and Helena Police Departments investigated the case. Assistant U.S. Attorneys Joseph P. Montminy and Robin B. Mark prosecuted the case.
MS-13 Gang Leader Sentenced to Life in Prison
Earlier today, Carlos Ortega, also known as “Silencio,” a former leader of the Sitios Locos Salvatruchas clique of La Mara Salvatrucha, also known as the MS-13 street gang, was sentenced to life in prison at the federal courthouse in Central Islip, New York. Ortega was convicted, on March 21, 2013, following a six-week trial on all counts of the trial indictment, including racketeering, racketeering cnspiracy, murder, assault with dangerous weapons, and related firearms and conspiracy offenses.
The sentence 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; and Thomas V. Dale, Commissioner of the Nassau County Police Department.
“Ortega’s journey to federal prison began in El Salvador when he joined MS-13 and continued when he illegally entered the U.S. and chose to maintain his allegiance to the gang. Ortega committed heinous acts of violence in the name of MS-13, cutting a swath of murder from Brentwood to Far Rockaway, all within the span of a few weeks,” stated U.S. Attorney Lynch. “From a suspected rival gang member, to an MS-13 gang member who was not violent enough, there was no room for mercy in the gang’s code of enforcing respect through murder. Today’s life sentence is a fitting end to Ortega’s reign of terror. He will now have the rest of his life to contemplate the just results of his allegiance to the killing machine known as MS-13.” Ms. Lynch extended her grateful appreciation to each of the law enforcement agencies for their assistance in this case.
FBI Assistant Director in Charge Venizelos stated, “The victims were robbed of their futures by the defendant’s senseless killing spree. His cowardly acts have earned him a life sentence. The defendant’s imprisonment should be a reminder to all those who participate in gang activity that violence and victimization of the public will not be tolerated and will be met with the full force of the FBI. The FBI’s Long Island Gang Task Force is committed to ridding the streets of these violent criminals. Our resolve is strong, and we will not stop until every last gang member is brought to justice.”
At trial, the government proved that Ortega, along with his fellow MS-13 gang members, committed two murders and one attempted murder in February and March 2010. First, Ortega was convicted in connection with the murder of 21-year-old David Sandler and the attempted murder of 20-year-old Aaron Galan in Brentwood, New York, on February 17, 2010. Ortega and his fellow MS-13 gang members lured Sandler, whom the MS-13 believed was a member of the rival Latin Kings street gang, to Timberline Drive in Brentwood under the pretext of buying marijuana from him. Once Sandler arrived, Ortega shot him in the face at close range, killing him. Ortega also shot Sandler’s close friend, Galan, who was with Sandler at the time, in the face. Miraculously, Galan survived.
At trial, Ortega was also convicted of the March 17, 2010 murder of Mario Alberto Canton Quijada in Far Rockaway, New York. Quijada, who was a fellow member of the MS-13, was killed because of his reluctance to “put in work,” or attack rival gang members on behalf of the MS-13. On March 17, 2010, Quijada was lured to the beach in Far Rockaway under the guise of attacking rival gang members. Once alone on the beach, the MS-13 gang members tried to shoot Quijada in the head with a semi-automatic handgun, which had been used in several other murders committed by the MS-13, including the murders of a young woman and her 2-year-old son. However, the gun jammed. Undeterred, Ortega and the other MS-13 members set upon Quijada with knifes and machetes and hacked him to death.
Ortega’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international street gang composed primarily of immigrants from El Salvador, Honduras, and Guatemala. With numerous branches, or “cliques,” the MS-13 is the largest street gang on Long Island. Since 2002, more than 200 MS-13 members, including more than two dozen clique leaders, have been convicted on federal felony charges in the Eastern District of New York. More than 100 of those MS-13 members have been convicted on federal racketeering charges. Since 2010 alone, this office has convicted more than 30 members of the MS-13 on charges relating to their participation in one or more murders. These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, composed of agents and officers of the FBI, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, Rockville Centre Police Department, and Suffolk County Police Department.
The life sentence was imposed by United States District Judge Joseph F. Bianco.
The government’s case was prosecuted by Assistant United States Attorneys John J. Durham, Raymond A. Tierney, and Carrie N. Capwell.
Defendant:
Carlos Ortega, also known as “Silencio” and “Silent” Brentwood, New York
Age: 24
The sentence 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; and Thomas V. Dale, Commissioner of the Nassau County Police Department.
“Ortega’s journey to federal prison began in El Salvador when he joined MS-13 and continued when he illegally entered the U.S. and chose to maintain his allegiance to the gang. Ortega committed heinous acts of violence in the name of MS-13, cutting a swath of murder from Brentwood to Far Rockaway, all within the span of a few weeks,” stated U.S. Attorney Lynch. “From a suspected rival gang member, to an MS-13 gang member who was not violent enough, there was no room for mercy in the gang’s code of enforcing respect through murder. Today’s life sentence is a fitting end to Ortega’s reign of terror. He will now have the rest of his life to contemplate the just results of his allegiance to the killing machine known as MS-13.” Ms. Lynch extended her grateful appreciation to each of the law enforcement agencies for their assistance in this case.
FBI Assistant Director in Charge Venizelos stated, “The victims were robbed of their futures by the defendant’s senseless killing spree. His cowardly acts have earned him a life sentence. The defendant’s imprisonment should be a reminder to all those who participate in gang activity that violence and victimization of the public will not be tolerated and will be met with the full force of the FBI. The FBI’s Long Island Gang Task Force is committed to ridding the streets of these violent criminals. Our resolve is strong, and we will not stop until every last gang member is brought to justice.”
At trial, the government proved that Ortega, along with his fellow MS-13 gang members, committed two murders and one attempted murder in February and March 2010. First, Ortega was convicted in connection with the murder of 21-year-old David Sandler and the attempted murder of 20-year-old Aaron Galan in Brentwood, New York, on February 17, 2010. Ortega and his fellow MS-13 gang members lured Sandler, whom the MS-13 believed was a member of the rival Latin Kings street gang, to Timberline Drive in Brentwood under the pretext of buying marijuana from him. Once Sandler arrived, Ortega shot him in the face at close range, killing him. Ortega also shot Sandler’s close friend, Galan, who was with Sandler at the time, in the face. Miraculously, Galan survived.
At trial, Ortega was also convicted of the March 17, 2010 murder of Mario Alberto Canton Quijada in Far Rockaway, New York. Quijada, who was a fellow member of the MS-13, was killed because of his reluctance to “put in work,” or attack rival gang members on behalf of the MS-13. On March 17, 2010, Quijada was lured to the beach in Far Rockaway under the guise of attacking rival gang members. Once alone on the beach, the MS-13 gang members tried to shoot Quijada in the head with a semi-automatic handgun, which had been used in several other murders committed by the MS-13, including the murders of a young woman and her 2-year-old son. However, the gun jammed. Undeterred, Ortega and the other MS-13 members set upon Quijada with knifes and machetes and hacked him to death.
Ortega’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international street gang composed primarily of immigrants from El Salvador, Honduras, and Guatemala. With numerous branches, or “cliques,” the MS-13 is the largest street gang on Long Island. Since 2002, more than 200 MS-13 members, including more than two dozen clique leaders, have been convicted on federal felony charges in the Eastern District of New York. More than 100 of those MS-13 members have been convicted on federal racketeering charges. Since 2010 alone, this office has convicted more than 30 members of the MS-13 on charges relating to their participation in one or more murders. These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, composed of agents and officers of the FBI, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, Rockville Centre Police Department, and Suffolk County Police Department.
The life sentence was imposed by United States District Judge Joseph F. Bianco.
The government’s case was prosecuted by Assistant United States Attorneys John J. Durham, Raymond A. Tierney, and Carrie N. Capwell.
Defendant:
Carlos Ortega, also known as “Silencio” and “Silent” Brentwood, New York
Age: 24
Bergen County Couple Convicted of Bank Fraud, Conspiracy to Commit Wire Fraud in Connection with Mortgage Fraud Scheme
NEWARK, NJ—A husband and wife from Bergen County, New Jersey were both convicted today of one count each of bank fraud and conspiracy to commit wire fraud, U.S. Attorney Paul J. Fishman announced.
Linda Yarleque, 44, and her husband, Fabio Moreno Vargas, 46, of Westwood, New Jersey, were convicted following a one-week trial before U.S. District Judge William H. Walls in Newark federal court. The jury deliberated two hours before returning the guilty verdicts.
According to documents filed in this case and the evidence at trial:
Yarleque and Moreno obtained 10 fraudulent loans over a period of three years. They falsified their employment and income, failed to disclose their debts and other properties that they owned, and lied about where they lived. They fraudulently obtained a total of $3.4 million in mortgages this way and personally pocketed approximately $269,000, through “cash out” refinancings that they directed to their own bank accounts. They then spent that money on vacations, cars, and to buy more properties.
The defendants made up a phony business where Moreno was supposedly employed (My Limousine). They then obtained a phone line in the name of My Limousine and had it forwarded to their personal cell phones. When mortgage lenders called to verify Moreno’s employment, the defendants lied, posing as fictitious employees, using names such as “Janet Alvarez” and “Casandra Sterling.”
Each count upon which the defendants were convicted is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for March 11, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today's convictions. He also thanked IRS-Criminal Investigation for its role in the case.
The government is represented by Assistant U.S. Attorney J. Jamari Buxton of the general crimes unit and Rachael A. Honig, counsel to the U.S. Attorney.
Linda Yarleque, 44, and her husband, Fabio Moreno Vargas, 46, of Westwood, New Jersey, were convicted following a one-week trial before U.S. District Judge William H. Walls in Newark federal court. The jury deliberated two hours before returning the guilty verdicts.
According to documents filed in this case and the evidence at trial:
Yarleque and Moreno obtained 10 fraudulent loans over a period of three years. They falsified their employment and income, failed to disclose their debts and other properties that they owned, and lied about where they lived. They fraudulently obtained a total of $3.4 million in mortgages this way and personally pocketed approximately $269,000, through “cash out” refinancings that they directed to their own bank accounts. They then spent that money on vacations, cars, and to buy more properties.
The defendants made up a phony business where Moreno was supposedly employed (My Limousine). They then obtained a phone line in the name of My Limousine and had it forwarded to their personal cell phones. When mortgage lenders called to verify Moreno’s employment, the defendants lied, posing as fictitious employees, using names such as “Janet Alvarez” and “Casandra Sterling.”
Each count upon which the defendants were convicted is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for March 11, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today's convictions. He also thanked IRS-Criminal Investigation for its role in the case.
The government is represented by Assistant U.S. Attorney J. Jamari Buxton of the general crimes unit and Rachael A. Honig, counsel to the U.S. Attorney.
Former New Jersey Transit Official Charged with Agreeing to Accept $8,000 Bribe
NEWARK, NJ—A former New Jersey (NJ) Transit official appeared in court today on charges she agreed to accept an $8,000 bribe in connection with a snow removal contract, U.S. Attorney Paul J. Fishman announced.
Donna Schiereck, 56, of Jackson, New Jersey, is charged by complaint with one count of agreeing to accept a bribe. Schiereck appeared this afternoon before U.S. Magistrate Judge James B. Clark, III in Newark federal court for an initial appearance.
According to the complaint unsealed today:
From September 2012 to December 2012, Schiereck was a supervisor at NJ Transit. During that same time period, Schiereck agreed to accept $8,000 in exchange for her assistance with securing a snow removal contract for a Lakewood, New Jersey company.
The charge is punishable by a maximum potential penalty of 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; and the New Jersey State Police, under the direction of Col. Joseph R. Fuentes, superintendent, for the investigation leading to today’s charge. He thanked the New Jersey Attorney General’s Office, under the direction of Acting Attorney General John Hoffman; and Elie Honig, director of the New Jersey Division of Criminal Justice, for their roles in this investigation.
The government is represented by Assistant U.S. Attorney Amy Luria of the U.S. Attorney’s Office Special Prosecutions Division in Newark and Special Assistant U.S. Attorney Michael A. Monahan, the Deputy Chief of the Corruption Bureau, Division of Criminal Justice, in the New Jersey Office of the Attorney General.
Donna Schiereck, 56, of Jackson, New Jersey, is charged by complaint with one count of agreeing to accept a bribe. Schiereck appeared this afternoon before U.S. Magistrate Judge James B. Clark, III in Newark federal court for an initial appearance.
According to the complaint unsealed today:
From September 2012 to December 2012, Schiereck was a supervisor at NJ Transit. During that same time period, Schiereck agreed to accept $8,000 in exchange for her assistance with securing a snow removal contract for a Lakewood, New Jersey company.
The charge is punishable by a maximum potential penalty of 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; and the New Jersey State Police, under the direction of Col. Joseph R. Fuentes, superintendent, for the investigation leading to today’s charge. He thanked the New Jersey Attorney General’s Office, under the direction of Acting Attorney General John Hoffman; and Elie Honig, director of the New Jersey Division of Criminal Justice, for their roles in this investigation.
The government is represented by Assistant U.S. Attorney Amy Luria of the U.S. Attorney’s Office Special Prosecutions Division in Newark and Special Assistant U.S. Attorney Michael A. Monahan, the Deputy Chief of the Corruption Bureau, Division of Criminal Justice, in the New Jersey Office of the Attorney General.
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