New York Man Admits Role in International $200 Million Credit Card Fraud Conspiracy

TRENTON, NJ—A New York man today admitted his role in one of the largest credit card fraud schemes ever charged by the Justice Department, U.S. Attorney Paul J. Fishman announced.

Khawaja Ikram, 41, of Staten Island, New York, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of conspiracy to commit bank fraud. Two co-defendants, Tarsem Lal, 73, of Iselin, New Jersey, and Azhar Ikram, 40, of Howard Beach, New York, pleaded guilty before Judge Thompson in Trenton on April 2, 2014, to informations charging them with conspiracy to commit bank fraud.

According to documents filed in this case and statements made in court:

Khawaja Ikram was originally charged in February 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Members of the conspiracy doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts—causing more than $200 million in confirmed losses to businesses and financial institutions.

The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus; pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus; and finally, run up large loans.

The scope of the criminal fraud enterprise required Ikram and his conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments, and post office boxes, which they used as the mailing addresses of the false identities.

Ikram admitted he helped obtain credit cards in the name of third parties—many of which were fictional—and then directed the credit cards to be mailed to addresses controlled by members of the conspiracy. He also admitted he knew the cards would be used fraudulently at businesses.

The charge to which Ikram pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for September 23, 2014. Azhar Ikram and Lal are scheduled to be sentenced September 17, 2014.

U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Aaron T. Ford; postal inspectors, under the direction of Postal Inspector in Charge Maria L. Kelokates; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola, for the investigation leading to today’s guilty plea. He also thanked the U.S. Social Security Administration for its role in the investigation.

The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit and Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit in Newark.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.

Member of Largest Counterfeit Goods Conspiracy Ever Charged Sentenced to 46 Months in Prison

NEWARK—A member of a massive, international counterfeit goods conspiracy was sentenced today to 46 months in prison for his role in the scheme, U.S. Attorney Paul J. Fishman announced.

Ming Zheng, a/k/a “Uncle Mi,” 48, of New York, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with a conspiracy to launder money. Judge Salas imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court:

From November 2009 through February 2012, Zheng’s co-defendants ran one of the largest counterfeit goods smuggling and distribution conspiracies ever charged by the Department of Justice. The defendants and others conspired to import hundreds of containers of counterfeit goods—primarily handbags, footwear, and perfume—from China into the United States in furtherance of the conspiracy. These goods, if legitimate, would have had a retail value of more than $300 million.

Zheng was a money launderer who was introduced to undercover special agents (collectively, the UCs) by co-defendants who were running the counterfeiting operation. Conspirators obtained cash from the UCs, purportedly the proceeds of gambling and other unlawful activities. These other conspirators then provided the money to Zheng. For every $50,000 in cash the UCs provided, Zheng and others would return approximately $42,500—via wire transfers from banks in China—into a bank account set up by the UCs. When other conspirators received money from the UCs to be laundered, one of the conspirators would then contact Zheng, who in turn contacted a Chinese-based conspirator, and transferred the money to locations in China. Then the money (less the laundering fee) was transferred from Fujian, China, to a bank in Guangzho, China, where it was subsequently withdrawn and physically transported via courier to a bank in Hong Kong. The final transfer was from the bank in Hong Kong to the UCs’ bank account. Zheng was therefore instrumental in each of the money laundering transactions—he received the cash from other conspirators and caused it to be transferred overseas in furtherance of the laundering process.

U.S. Attorney Fishman praised special agents of Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), under the direction of Special Agent in Charge Andrew M. McLees, and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Andrew Pak and Zach Intrater of the Computer Hacking and Intellectual Property section of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark and Nicholas Grippo of the U.S. Attorney’s Office in Trenton.

Enforcer for Atlantic City Dirty Block Gang Admits Participating in Heroin Trafficking Conspiracy

CAMDEN—An Atlantic City, New Jersey man admitted today to engaging in a conspiracy to distribute heroin with the Dirty Block criminal street gang that allegedly used threats, intimidation, and violence to maintain control of the illegal drug trade in Atlantic City.
Shaamel Spencer, a/k/a “Buck,” 30, pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute 100 grams or more of heroin and one count of being a previously convicted felon in possession of a firearm.
According to documents filed in this case and statements made in court:
During the period of the conspiracy Spencer acted as an “enforcer” on behalf of Mykal Derry, 33, of Atlantic City, helping Dirty Block to control the heroin trafficking trade in and around the public housing apartment complexes of Stanley Holmes, Carver Hall, Schoolhouse, Adams Court, and Cedar Court in Atlantic City. Spencer assisted in the distribution of heroin to Dirty Block customers.
Spencer was arrested on October 30, 2012, and found to be in possession of a firearm at the time of the arrest. On February 12, 2013, Spencer was charged federally with being a previously convicted felon in possession of a firearm and ammunition. A search warrant executed at Spencer’s residence at the time of his arrest revealed approximately $4,500 in suspected drug proceeds, as well as a 9mm semi-automatic handgun and approximately 44 rounds of 9mm ammunition.
Spencer and other members of the Dirty Block gang—a number of them previously convicted felons—travelled to a shooting range in Lakewood, New Jersey, where they were photographed firing handguns.
As part of his guilty plea, Spencer admitted to distributing heroin. He also admitted to being a previously convicted felon who possessed firearms and ammunition and that specifically, he took a handgun to an Atlantic City casino where he believed Derry was involved in a violent fight with his rivals. Spencer also agreed to forfeit the proceeds of his drug trafficking, as well as his firearms and ammunition.
The drug conspiracy charge carries a minimum penalty of five years in prison, a maximum potential penalty of 40 years in prison, and maximum $5 million fine. The felon-in-possession charge carries a maximum potential penalty of 10 years in prison and a maximum $250,000 fine. Sentencing is scheduled for July 22, 2014.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford; the Atlantic County Prosecutor’s Office, under the direction of Acting Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Police Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang Task Force, with the investigation.
The charges and allegations in the indictment charging Derry are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorneys Patrick C. Askin and Justin C. Danilewitz.

Member of Black P-Stones Gang Pleads Guilty to Racketeering Conspiracy and Firearm Charges

NORFOLK, VA—Enrique Omar Hinton, a.k.a. “Rico,” 26, of Newport News, pleaded guilty today to racketeering conspiracy, as well as possessing and discharging a firearm in furtherance of a crime of violence.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; David A. O’Neil, Acting Assistant Attorney General for the Justice Department’s Criminal Division; and Royce E. Curtin, Special Agent in Charge of the Federal Bureau of Investigation’s Norfolk Field Office, made the announcement after the plea was accepted by United States Magistrate Judge Tommy E. Miller.
Hinton was charged in a superseding indictment returned on December 9, 2013, with racketeering conspiracy, conspiracy to commit murder in aid of racketeering, attempted murder in aid of racketeering, possessing and discharging a firearm in furtherance of a crime of violence, and conspiracy to distribute and possess with intent to distribute marijuana. Hinton faces a maximum penalty of 20 years in prison on the racketeering conspiracy charge and a mandatory consecutive sentence of te10n years to life in prison on the firearm charge when he is sentenced on June 26, 2014, in Norfolk.
In a statement of facts filed with his plea agreement, Hinton admitted that he was a member of a violent street gang called the Black P-Stones, also referred to as the P-Stone Bloods and Cobra Stones, which operated as a criminal enterprise located primarily in the Beechmont, Courthouse Green, and Woodview neighborhoods in the Denbigh area of Newport News. The Black P-Stones engaged in various criminal activities including murders, robberies, illegal drug trafficking, and obstruction of justice. Hinton joined the gang in approximately 2005 and held the rank of “foot soldier.” As a foot soldier, Hinton sold marijuana for the gang, possessed firearms, attended gang meetings, and planned and participated in the gang’s criminal activities. On December 10, 2008, Hinton and co-conspirators participated in a shooting in Williamsburg to retaliate against a rival gang member who exhibited disrespect toward a co-conspirator’s girlfriend. During the shooting, approximately seven to eight bullets were fired at the rival gang member’s home, with bullets entering the home’s living room and front door while two people were inside. Hinton further admitted that on July 13, 2009, he testified falsely before a federal grand jury for the purpose of obstructing the grand jury’s investigation of the Black P-Stones and the December 10, 2008 shooting in which he and co-conspirators participated.
The investigation of this case was led by the FBI’s Safe Streets Peninsula Task Force, with the assistance of the Newport News Police Department and the James City County Police Department. Assistant United States Attorney Eric M. Hurt and Trial Attorney Louis A. Crisostomo of the Organized Crime and Gang Section in the Justice Department’s Criminal Division are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.

Fresno Police Department Detective and Fresno Marijuana Trafficker Indicted in Bribery Scheme

FRESNO, CA—A federal grand jury returned a four-count indictment today against Derik Carson Kumagai, 40, resident of Clovis, California, and Saykham Somphoune, a/k/a, “Oat,” 40, resident of Fresno, California, charging them with conspiracy, bribery, and extortion, United States Attorney Benjamin B. Wagner announced.
According to court documents, detective Kumagai accepted a $20,000 bribe from an individual who was under investigation for marijuana trafficking. In return for the bribe payment, Kumagai and co-conspirator Somphoune (who is not a law enforcement officer) promised the person under investigation that he would be signed up as a confidential informant for the Fresno Police Department. On November 6, 2013, the person under investigation paid Kumagai approximately $20,000 cash. A few hours later, the person under investigation completed purported documents regarding work as a confidential informant for the Fresno Police Department.
This case was the product of an investigation by the Drug Enforcement Administration, Federal Bureau of Investigation, and Internal Revenue Service-Criminal Investigation Division. The Department of Homeland Security-Homeland Security Investigations and the United States Postal Inspection Service also provided investigative assistance in this case. Assistant United States Attorneys Grant B. Rabenn and Kevin P. Rooney are prosecuting the case.
Derik Kumagai was released from pretrial custody on March 19, 2014. Saykham Somphoune is currently detained as a flight risk.
If convicted of conspiracy, the defendants face a maximum statutory penalty of five years in prison and a $250,000 fine. If convicted of bribery, they face a maximum statutory penalty of 10 years in prison and a $500,000 fine. If convicted of extortion or conspiracy to commit extortion, they face a maximum statutory penalty of 20 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

Six Individuals Associated with the Newspaper and Mail Deliverers’ Union Arrested

A criminal complaint was unsealed today in federal court in the Eastern District of New York charging Benjamin Castellazzo, Jr.; Rocco Giangregorio; Glenn LaChance, Rocco Miraglia, also known as “Irving,” and Anthony Turzio, also known as “the Irish Guy,” with conspiring to defraud the Newspaper and Mail Deliverers’ Union (NMDU) and Hudson News in order to obtain a union card and employment at Hudson News for Castellazzo, Jr.
In addition, a three-count indictment was unsealed today in United States District Court for the Eastern District of New York charging Thomas Leonessa, also known as “Tommy Stacks,” with wire fraud, wire fraud conspiracy, and theft and embezzlement from employee benefit plans in an unrelated scheme. The indictment was returned under seal by a federal grand jury sitting in Brooklyn, New York, on March 6, 2014, and relates to Leonessa’s alleged “no show” job as a delivery driver for the New York Post.
Castellazzo, Jr., Giangregorio, LaChance, Miraglia, Turzio, and Leonessa were arrested earlier today, and their initial appearances are scheduled for this afternoon before United States Magistrate Judge Robert M. Levy at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George C. Venizelos, Assistant Director in Charge, Federal Bureau of Investigation (FBI), New York Field Office.
As alleged in the complaint, the NMDU is an independent union that represents approximately 1,500 employees involved in the newspaper industry in New York, New Jersey, and Connecticut. NMDU members deliver newspapers for the New York Times, The Wall Street Journal, the New York Daily News, the New York Post, and El Diario. Hudson News, which also employs members of the NMDU, is a retail chain of newsstands mainly located in major transportation hubs, including airports and train stations.
Between June 2009 and October 2009, Miraglia, who was a foreman at the New York Daily News—as well as an alleged associate of the Colombo organized crime family of La Cosa Nostra and the son of a deceased soldier in the Colombo family—conspired with officials of the NMDU and with Turzio, who was an employee of El Diario, to get an NMDU union card for Castellazzo, Jr. and place him in a job at Hudson News. Castellazzo, Jr. is the son of Benjamin Castellazzo, the alleged underboss of the Colombo family. Giangregorio and LaChance, who were business agents for the NMDU, also are charged with participating in this scheme.
As alleged in the indictment, Leonessa was employed by the New York Post to deliver newspapers by truck from a New York Post warehouse in the Bronx, New York, to New Jersey. He was also a member of the NMDU, which maintained offices, including offices for its welfare and pension funds, in Queens, New York. From about December 2010 to about September 2011, Leonessa had a “no show” job at the New York Post, that is, a job for which he was paid wages and benefits but which he did not perform. When Leonessa did not complete his required deliveries, he was nevertheless, based on his fraudulent representations, paid wages by the New York Post and accorded benefits from employee pension and welfare funds managed by the NMDU.
“Today’s arrests indicate that the NMDU and the newspaper delivery industry are, sadly, still subject to the influence of organized crime,” stated United States Attorney Lynch. “We cannot tolerate corruption in that industry, which is relied on by newspaper readers throughout New York City and beyond. We will prosecute anyone who seeks to obtain employment—or to maintain “no show” employment—in that industry by trading on the power of organized crime. Such acts not only lead to ill-gotten gains, but they also displace innocent, hard-working union members and would-be union members from jobs they have rightfully earned. We thank our partners at the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, for their tremendous efforts to identify and root out these corrupt practices.” Ms. Lynch also extended her grateful appreciation to the New York City Police Department, the New York County District Attorney’s Office, and Waterfront Commission of New York Harbor for their assistance.
“As alleged, a paycheck in exchange for a hard day’s work was a foreign concept to these defendants. Instead, they engaged in a scheme to defraud the NMDU and Hudson News for easy money and personal gain. The FBI, along with its law enforcement partners, will continue to pursue allegations of corruption and fraud all levels,” stated FBI Assistant Director in Charge Venizelos.
The defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Robert M. Levy at the federal courthouse in Brooklyn. The charges in the complaint and indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant United States Attorneys Elizabeth A. Geddes and Allon Lifshitz and by Trial Attorney Joseph Wheatley of the Department of Justice’s Organized Crime and Gangs Section.
Defendants:
Benjamin Castellazzo, Jr.
Age: 48
Manahawkin, New Jersey
Rocco Giangregorio
Age: 39
Dumont, New Jersey
Glenn LaChance
Age: 50
Oceanside, New York
Rocco Miraglia
Age: 43
Staten Island, New York
Anthony Turzio
Age: 78
New York, New York
Thomas Leonessa
Age: 52
High Bridge, New Jersey

Member of Massive Counterfeit Goods Conspiracy Sentenced to 38 Months in Prison

NEWARK—A member of a massive, international counterfeit goods conspiracy was sentenced today to 38 months in prison for his role in the scheme, U.S. Attorney Paul J. Fishman announced.
Ning Guo, 40, of the People’s Republic of China, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of conspiracy to traffic in counterfeit goods and one count of money laundering conspiracy. Judge Salas imposed the sentence today in Newark federal court.
Two other conspirators have already been sentenced, and two await sentencing. Yi Jian Chen, 53, and Hui Huang, 33, both of Brooklyn, each previously pleaded guilty to one count of conspiracy to traffic in counterfeit goods and await sentencing. Jian Zhi Mo, 45, of Flushing, New York, and Yuan Feng Lai, 28, of New York City, each previously pleaded guilty to one count of conspiracy to traffic in counterfeit goods and were each sentenced to 14 months of home confinement.
According to documents filed in this case and statements made in court:
From August 2008 through February 2012, the defendants ran an international counterfeit goods smuggling and distribution conspiracy. The defendants and others imported more than 35 containers of counterfeit goods—primarily cigarettes, handbags, and sneakers—into the United States from China. These goods, if legitimate, would have had a retail value of more than $300 million.
The conspirators sought help in importing counterfeit goods into the United States and used a corporation to import the goods through Port Newark-Elizabeth Marine Terminal in Elizabeth, New Jersey. This corporation was actually a front company set up by law enforcement to act as an importer. The conspirators imported the counterfeit goods using fraudulent customs paperwork, which, among other things, falsely declared the goods within the containers.
Certain conspirators controlled the importation of the counterfeit goods into the United States. Some conspirators managed the distribution of counterfeit goods once they arrived in the United States. Others paid individuals they believed controlled an importation company with connections at the port. In fact, these individuals were undercover law enforcement agents.
Some conspirators acted as wholesalers for the counterfeit goods, supplying retailers who sold counterfeit goods to customers in the United States. A number of conspirators, including Guo, also engaged in a money laundering conspiracy to disguise and conceal the source of what they believed to be the profits of certain unlawful activity, moving this money through banks in the United States, China, and elsewhere to disguise the sources of the funds.
Law enforcement introduced several undercover special agents to the conspirators. These undercover agents purported to have connections at the port, which allowed them to obtain containers that were on hold, get them released, and pass them through to the conspirators. The conspirators paid the undercover agents more than $900,000 for these “services.”
Undercover agents recorded dozens of phone calls and in-person meetings with various conspirators. The investigation also utilized several court-authorized wiretaps of telephones and electronic communications.
Guo’s primary role was to transport and store imported counterfeit merchandise for the conspirators after it arrived at the port. He was also involved in the actual importation of the goods from China. Guo communicated with the undercover agents in numerous recorded calls and meetings about importing counterfeit goods from China and clearing the goods through customs. Guo was also involved in an international money laundering scheme through which he and others laundered the proceeds of the counterfeit goods smuggling scheme.
In addition to the prison term, Guo is subject to deportation.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and special agents of Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Andrew M. McLees, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Andrew Pak and Zach Intrater of the Computer Hacking and Intellectual Property section of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark and Nicholas Grippo of the U.S. Attorney’s Office in Trenton.

Federal Judge Sentences Manager of Heroin Conspiracy That Distributed Heroin Resulting in Death to 20 Years in Prison

PORTLAND, OR—On March 18, 2014, U.S. District Court Judge Marco Hernandez sentenced Samuel Navarrette-Aguilar, 41, a citizen of Mexico, to 240 months for his managerial role in a heroin trafficking conspiracy involving a kilogram or more of heroin. A federal jury found the defendant guilty of the conspiracy in June 2013. Judge Hernandez further found by a preponderance of evidence that heroin distributed by the defendant resulted in the death of Erin Freeman, 22, who overdosed on heroin in her Portland residence in June 2012. Judge Hernandez cited this and other factors to support his sentence, including the fact that the defendant committed this crime after escaping from a Washington state prison sentence for drug trafficking and having remained at large since 1999. Although the quantity of heroin subjected the defendant to a statutorily mandated minimum sentence of 20 years, Judge Hernandez indicated he would have pronounced the same sentence independent of the mandatory minimum requirement.
Reaching into the upper echelon of a trafficking conspiracy from the tragic scene of a young woman’s last failure against heroin addiction, required a fast-moving investigation led by the Portland Police Bureau Drugs and Vice Division, with support from the Federal Bureau of Investigation and the Drug Enforcement Administration.
“This sentence serves justice. In 2012, we lost 147 Oregonians to heroin, many of those, like Erin Freeman, were far too young,” said U.S. Attorney Amanda Marshall. “This defendant and other purveyors of this deadly drug face heavy penalties as Oregon and communities across the nation address the clear and present danger of this heroin epidemic.”
This case was prosecuted by Assistant U.S. Attorney Kathleen Bickers.

Newark Man Sentenced to 57 Months in Prison in Scheme to Steal Checks from Mail

NEWARK—A Newark man was sentenced today to 57 months in prison for his role in a scheme to steal personal checks from the U.S. mail and fraudulently endorse and deposit them into personal checking accounts, U.S. Attorney Paul J. Fishman announced.
Karron Hinton-Lovelace, 28, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to commit bank fraud. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Hinton-Lovelace and his conspirators stole blank checks that were sent via U.S. mail to 122 unsuspecting victims. The defendants fraudulently endorsed the blank checks for a certain sum and deposited those checks into legitimate bank accounts that they opened at the victim banks, which included TD Bank, Bank of America, Capital One Bank, Garden State Community Bank, Hudson City Savings Bank, PNC Bank, and Valley National Bank. Before the victims discovered the checks were stolen or the banks discovered the checks were fraudulent, Hinton-Lovelace and his co-conspirators had withdrawn the funds, either via ATMs or by entering the banks and filling out withdrawal slips. U.S. Postal Inspection Service and FBI agents obtained bank video surveillance, which captured many of the fraudulent deposits and withdrawals.
Hinton-Lovelace and his conspirators deposited $1,478,695 in fraudulent checks into 258 different bank accounts. Their conduct resulted in a $648,194 loss.
In addition to the prison term, Judge McNulty sentenced Hinton-Lovelace to five years of supervised release. As part of his plea agreement, Hinton-Lovelace agreed to pay $648,194 in restitution to the victims.
Several of Hinton-Lovelace’s conspirators have pleaded guilty to conspiracy to commit bank fraud and been sentenced to prison terms for their roles in the scheme. Four defendants were sentenced in April 2013. Constance Bowles, 23, of Newark, was sentenced to six months in prison and six months in a halfway house. Garnet Hinton, 24, Union, and Keonnah McLean, 24, Newark, were each sentenced to 23 months in prison. Martell Arline, 23, of Newark, was sentenced to 36 months in prison.
Kurtis Steele, 27, of Irvington, was sentenced to 46 months in prison on May 29, 2013, and Guy Hicks, 51, of Newark, was sentenced to 36 months in prison on October 9, 2013.
U.S. Attorney Fishman credited special agents of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; and special agents of the FBI under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the Organized Crime/Gangs Unit in Newark.

Four in Cleveland Area Charged with Food Stamp Fraud and WIC Fraud Conspiracy

Four men from Northeast Ohio were charged in a five-count indictment with engaging in a conspiracy to defraud the food stamp and Women, Infants, and Children (WIC) programs from a store on Detroit Avenue in Cleveland, law enforcement officials said.
Indicted are Bashir Mohammed, age 31, of Cleveland; Yusuf Maalin, 45, of Cleveland; Ali Shire Ahmed, 54, of North Olmsted, Ohio; and Farah Hasan Warsame, 27, of Cleveland.
The indictment alleges that Mohamed, Maalin, Ahmed, and Warsame conspired to illegally allow customers to redeem food stamp and WIC benefits at Bashir Market, 8401 Detroit Avenue, in exchange for cash, ineligible items, and credit towards overseas wire transfers.
Mohamed, Maalin, and Warsame allegedly worked at the market and redeemed the food stamp and WIC benefits for the cash, unauthorized items, or credit towards overseas funds transfers. The credit for overseas funds transfers was tracked on a ledger kept at the market, according to the indictment.
Mohamed or Maalin would then provide Ahmed with cash or a check that Ahmed would take to Columbus, Ohio to send overseas by wire transfer. The indictment alleges that the conspiracy involved the attempted redemption of approximately $670,612 in food stamp and WIC benefits, according to the indictment.
The conspiracy took place between 2008 and last year, according to the indictment.
In addition to the conspiracy charge, Mohamed, Maalin, Ahmed, and Warsame are also charged with counts of food stamp fraud, unlawful food stamp redemptions, and WIC fraud. Ahmed is charged with one count of money laundering.
The indictment results from an investigation conducted by the United States Department of Agriculture, Office of the Inspector General; the Federal Bureau of Investigation; and Department of Homeland Security, Homeland Security Investigations.
The case is being handled by Assistant United States Attorneys Matthew W. Shepherd and M. Kendra Klump.
If convicted, the defendants’ sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Businessman Pleads Guilty to Conspiring to Violate Federal and District of Columbia Campaign Finance and Tax Laws

WASHINGTON—Jeffrey E. Thompson pleaded guilty today to felony charges stemming from a scheme in which he and his companies secretly channeled more than $3.3 million in illegal contributions to at least 28 political candidates and their campaigns, including people running for the offices of president of the United States and mayor of the District of Columbia.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr.; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Richard Weber, Chief of the Internal Revenue Service-Criminal Investigation (IRS-CI).
Thompson, 58, of Washington, D.C., pleaded guilty in the U.S. District Court for the District of Columbia, to two conspiracy charges. One is a federal offense: conspiring to violate federal campaign finance laws and to submit false filings to the Internal Revenue Service. The other is a District of Columbia offense: conspiring to violate District of Columbia campaign finance laws by defrauding the District of Columbia’s Office of Campaign Finance.
The guilty plea calls for Thompson to cooperate fully in an ongoing investigation. The plea is contingent upon the approval of the Honorable Colleen Kollar-Kotelly. A sentencing date has not yet been set.
In his guilty plea, Thompson admitted, among other things, to secretly channeling more than $668,800 to pay for campaign activities for a person identified in court documents as “Mayoral Candidate A,” a candidate in the 2010 mayoral race in the District of Columbia. He also admitted secretly channeling $608,750 to pay for efforts on behalf of a candidate in the 2008 presidential primary. In addition, he admitted secretly supporting others through illegal corporate contributions, excessive and unreported contributions, and conduit contributions.

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“Election after election, Jeff Thompson huddled behind closed doors with corrupt candidates, political operatives, and businessmen, devising schemes to funnel millions of dollars of corporate money into local and federal elections,” said U.S. Attorney Machen. “Today’s guilty plea pulls back the curtain on years of widespread corruption. With Mr. Thompson’s cooperation, we have the opportunity to hold many wrongdoers accountable and to usher in a new era of honesty, integrity, and transparency in D.C. politics.”
“Today, Mr. Thompson took responsibility for organizing a lengthy conspiracy that illegally channeled more than $3 million into federal and local campaigns dating back to the 2006 election cycle,” said Assistant Director in Charge Parlave. “The message we are sending today is clear. While the temptation to undermine the election process may be strong, you will not get away with it. Together with our law enforcement partners, the FBI will be unwavering in combating corruption in the District of Columbia.”
“Jeffrey Thompson engaged in behavior that blatantly ignored and directly circumvented clearly established campaign financing laws, but his egregious behavior did not stop there. Thompson then directed TCBA, a company under his control, to file false corporate income tax returns and submit false documents to the IRS to cover his misdeeds” said IRS-CI Chief Weber. “Today’s actions involving Mr. Thompson serve as a strong reminder of the commitment of IRS Criminal Investigation and our law enforcement partners to aggressively pursue those attempting to undermine the public’s trust.”
“Jeffrey Thompson engaged in behavior that blatantly ignored and directly circumvented clearly established campaign financing laws, but his egregious behavior did not stop there. Thompson then directed TCBA, a company under his control, to file false corporate income tax returns and submit false documents to the IRS to cover his misdeeds” said IRS-CI Chief Weber. “Today’s actions involving Mr. Thompson serve as a strong reminder of the commitment of IRS Criminal Investigation and our law enforcement partners to aggressively pursue those attempting to undermine the public’s trust.”

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Thompson is the former chairman, chief executive officer, and majority owner of Thompson, Cobb, Bazilio and Associates (TCBA), a corporation that provided accounting, management, consulting, and tax services. He also is the former chairman, chief executive officer, and owner of D.C. Healthcare Systems, Inc. (DCHSI), an investment holding and for-profit corporation. In his guilty plea today, he admitted using funds from those corporations to secretly finance campaign contributions and activities from at least 2006 until 2012.
TCBA received millions of dollars under contracts with District of Columbia and federal government entities. DCHSI owned D.C. Chartered Health Plan, Inc. (Chartered), a corporation that contracted with the District of Columbia government to provide managed care services to a substantial number of District of Columbia residents. Chartered’s contract with the District of Columbia, paid primarily by the federal government, totaled about $300 million each year.
Five others have pleaded guilty since 2012 to charges involving Thompson’s illegal spending. Two others have pleaded guilty in a related investigation involving the 2010 mayoral election.
If accepted by the court, Thompson’s plea calls for a sentence of up to 18 months in prison on the federal offense and a sentence of up to six months of incarceration for the District of Columbia offense. If the government determines at the time of sentencing that Thompson has complied with his obligations under the plea agreement, the U.S. Attorney’s Office will request that the court dismiss the federal charge, leaving Thompson subject to up to six months in prison on the District of Columbia offense, to be followed by up to three years of supervised release.

***

According to a statement of offense signed by the government as well as the defendant, Thompson and others carried out a scheme to use TCBA and DCHSI to disburse excessive and unreported contributions to pay for campaign services and campaign materials in coordination with and in support of political candidates, such as get-out-the-vote efforts. The nature of these coordinated, or in-kind, contributions, also known as “shadow campaigns,” took several forms, including the distribution and dissemination of campaign materials in support of political candidates and their campaign committees.
Additionally, Thompson solicited individuals, including relatives, friends, employees, independent contractors, and the senior management of TCBA, to make conduit contributions in their names and the names of their relatives to campaign committees for federal and District of Columbia candidates, as well as a political action committee. He assured these individuals that he would arrange to pay for and otherwise reimburse the contributions. Thompson used personal and corporate money to advance funds and reimburse individuals for the political contributions that they made in their names and the names of their relatives.
In some cases, he authorized and directed TCBA to make payments variously designated as salary, bonus payments, advances on bonuses, and consultant fees, all designed to disguise the fact that the funds were actually reimbursements for contributions.
According to the statement of offense, Thompson and others took actions that caused TCBA to file false corporate income tax returns and submit false documents to the IRS. Thompson and a TCBA controller caused TCBA to wrongfully deduct TCBA’s reimbursements to conduit contributors on tax returns for the years 2007 through 2010. Also, he and two TCBA officers knowingly executed false promissory notes to conceal TCBA’s activities, and caused the false documents to be submitted to the IRS during an audit of the company.

***

District of Columbia Campaigns: More Than $2.29 Million
According to the statement of offense, from 2006 until 2011, Thompson secretly provided more than $1.3 million for the off-the-books, or “shadow campaigns,” on behalf of seven candidates seeking office in the District of Columbia. He also secretly spent more than $130,000 for a voter registration drive on behalf of one candidate and agreed to pay another candidate $200,000—along with other benefits—to withdraw from the 2006 mayoral race.
The largest such shadow campaign financed “Mayoral Candidate A” in the 2010 mayoral election. During the primary election cycle for mayor of the District of Columbia, from May 2010 through September 2010, Thompson used TCBA and DCHSI to funnel over $668,800 to pay for campaign services and materials in support of a shadow campaign for “Mayoral Candidate A,” who was challenging the incumbent mayor.
Most of this money went for a get-out-the-vote effort for the primary. For example, using funds provided by Thompson and in consultation with a volunteer advisor for the candidate, individuals were paid to manage field operations and transportation related to the shadow campaign. Among other things, these individuals worked directly with, shared canvassing information with, shared workspace with, and coordinated operations with employees and agents of the official campaign for “Mayoral Candidate A,” including those managing get-out-the-vote efforts.
The money also paid for expenses such as the hiring of the candidate’s official campaign driver; the leasing of a luxury sport utility vehicle to take the candidate to campaign-related and other events; and the purchase of posters, yard signs, T-shirts, and other campaign materials.
In addition to the 2010 mayoral race, the statement of offense says that Thompson funded shadow campaigns for candidates running in the 2006 mayoral election; the 2007 special election for the Ward 4 seat on the Council of the District of Columbia; the 2008 election for an At-Large seat on the D.C. Council; the 2010 elections for Ward 1 and Ward 6 of the D.C. Council, and the 2011 special election for an at-large seat on the D.C. Council.
According to the statement of offense, Thompson secretly spent about $278,000 for a shadow campaign for a person described as “Mayoral Candidate B,” a candidate in the 2006 mayoral primary. In that same race, according to the statement of offense, Thompson agreed to pay a competing candidate $200,000 to drop out and endorse “Mayoral Candidate B.” Thompson also entered into a $150,000 consulting agreement with the competing candidate on behalf of TCBA.
Also, between 2006 and 2011, Thompson utilized at least 75 conduits to make contributions to at least 15 mayoral and D.C. Council candidates in excess of $500,000.

***

Federal Campaigns: More Than $1 Million
From February 2008 through May 2008, according to the statement of offense, Thompson used TCBA and DCHSI to funnel about $608,750 to fund a shadow campaign for a candidate running for president of the United States.
The money was used for, among other things, the hiring of a marketing services company, as well as for street teams and canvassers who supplemented the campaign’s official activities in Texas, Pennsylvania, Indiana, North Carolina, and Puerto Rico.
The services included assembling and organizing paid street teams and canvassers to disseminate and distribute campaign materials prepared by the presidential campaign, including posters, lawn signs, pamphlets and stickers. The agreed-upon goal of these efforts was to raise the campaign’s visibility during the 2008 presidential primary election cycle.
Thompson also secretly provided $50,000 to help a civic organization pay for a lawsuit in Texas challenging the two-step voting process in that state, in which voters were allowed to vote twice, once in a primary and once in a caucus. He also provided $150,000 for a political demonstration organized by the civic organization in Washington, D.C. The funds for the lawsuit and the demonstration were to assist the campaign of the preferred presidential candidate.
However, there is no indication that the presidential candidate was personally aware of Thompson’s illicit activities.
Also, between 2006 and 2012, Thompson utilized at least 32 conduits to make contributions to at least 13 federal candidates and a political action committee of at least $250,000.

***

In announcing the plea, U.S. Attorney Machen, Assistant Director in Charge Parlave and Chief Weber commended the work of those who investigated the case from the FBI’s Washington Field Office and IRS-CI.
They also expressed appreciation for the work of Assistant U.S. Attorneys Michael K. Atkinson, Loyaan A. Egal, Ellen Chubin Epstein, Lionel André, Jonathan P. Hooks, Ephraim “Fry” Wernick and Ted Radway, of the Fraud and Public Corruption Section of the U.S. Attorney’s Office for the District of Columbia, who are prosecuting the case.

Ashland Couple Convicted of Labor Trafficking and Related Crimes

A federal jury convicted an Ashland couple of engaging in a labor trafficking conspiracy and other crimes related to them holding woman with cognitive disabilities and her child against their will and forcing the woman to perform manual labor for them, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Field Office.
Jordie L. Callahan, 27, and Jessica L. Hunt, 32, were convicted following a three-week trial before U.S. District Judge Benita Y. Pearson. Callahan and Hunt were both convicted on one count each of conspiracy to violate laws; forced labor; and acquiring a controlled substance by deception.
They are scheduled to be sentenced in July.
“These defendants inflicted unspeakable cruelty upon this mother and her child,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. “This case provides another stark reminder that human trafficking takes place all around us and that we need to be better neighbors to one another.”
“We are pleased with the guilty verdict delivered today for the incomprehensible treatment and involuntary servitude of another human being and her small child,” Anthony said. “The FBI will continue to partner with other law enforcement agencies to aggressively investigate and bring to justice those individuals that force others into unlawful labor or sex practices.”
Dezerah L. McGuire (formerly Silsby), 32, and Daniel J. Brown, 34, both of Ashland, previously pleaded guilty to crimes related to the conspiracy. Both are scheduled to be sentenced later this month.
Callahan and Hunt used a combination of violence, threats, sexual assaults, humiliation, deprivation, and monitoring to establish and continue a pattern of domination and control over their victims, identified only as S.E. and B.E., according to the court documents and trial testimony.
Their tactics included beating S.E., threats of beatings to S.E. and B.E., taunting and threatening the victims with pit bulls and snakes, causing the victims to sleep in unsafe and unsanitary conditions, restricting B.E. and S.E.’s access to the bathroom, preventing them from eating regular and suitable meals, and forcing S.E. to eat dog food and crawl on the floor while wearing a dog collar, according to the court documents and trial testimony.
According to court documents and trail testimony:
Callahan pointed a firearm at S.E.’s head and threatened to kill her if she did not perform the labor and services he and other conspirators commanded. Callahan also forced S.E. on multiple occasions to engage in sex acts with him and threatened that he and Hunt would kill S.E. if she told anyone about the forced sexual acts.
The conspiracy between Callahan, Hunt, McGuire, and Brown took place between August 2010 and October 2012. The object of the conspiracy included holding S.E. in a condition of forced labor and involuntary servitude and intentionally causing painful injuries to S.E. so they could use the narcotic pain medications she was prescribed to satisfy their personal drug craving.
Callahan and Hunt recruited S.E. and B.E. to live with them in their two-bedroom apartment in Ashland, knowing that S.E. has a cognitive disability and that S.E. and B.E. received monthly public assistance payments.
In August 2011, McGuire, at the direction of Callahan and Hunt, smashed S.E.’s hand with a rock with such force that S.E. needed to go to the hospital emergency room. Callahan, Hunt, and McGuire then forced S.E. to give them the narcotic pain pills and prescription for narcotic pain pills she obtained after being treated at the emergency room.
In December 2011, Callahan and Hunt injured S.E.’s back with such force that she needed medical treatment. Again, Callahan and Hunt forced S.E. to give them the narcotic pain pills and prescription for narcotic pain pills she obtained after being treated.
In March 2012, Callahan kicked S.E. in the hip with such force that she needed medical treatment. Callahan and Hunt forced S.E. to give them the narcotic pain pills and prescription for narcotic pain pills she obtained after being treated.
On multiple occasions between August 2010 and October 2012, Callahan and Hunt threatened S.E. and B.E. with serious physical harm, including death, if S.E. did not clean up the apartment; care for their numerous pit bull dogs, snakes, and other reptiles;purchase items at the store; and perform other labor and services ordered by the conspirators.
Callahan and Hunt used a video camera to monitor S.E. and B.E.’s activities and conversations in the apartment. They often forced S.E. to walk to the store to buy groceries, cigarettes, dog food, and other items for Callahan, Hunt, and Hunt’s four sons and to pay for these purchases with her public assistance card. They allotted S.E. only a brief time period to complete the shopping and warned her she was not allowed to speak with anyone while she was out. They frequently required B.E. to remain with them at the apartment while S.E. was out and threatened physical harm to B.E. and S.E. if S.E. broke any of their rules.
Callahan and Hunt also threatened to contact Ashland County Job and Family Services and have B.E. taken away if S.E. purchased any items at the store other than those they ordered or if she told anyone about their unlawful conduct.
In June 2011, after S.E. and B.E. had attempted to flee the apartment, Callahan and Hunt ordered Brown and McGuire to find S.E. and B.E. and bring them back to the apartment. Brown and McGuire lured S.E. and B.E. into their vehicle by promising to take them to Dairy Queen, only to deposit them afterwards back at the apartment.
On multiple occasions, Callahan and Brown locked S.E. and B.E. in a room with a window that was nailed shut and a door that had been locked from the outside.
In October 2011, Callahan and Hunt forced S.E. to hit her child while they recorded a video, and threatened to inflict much greater physical harm on both S.E. and B.E. if S.E. did not comply.
One month later, Callahan and Hunt again forced S.E. to strike B.E. while they captured a video recording of the staged incident on Callahan’s cell phone. Callahan and Hunt repeatedly threatened have B.E. taken away by showing the videos to authorities in order to secure S.E.’s compliance to the conspirators’ commands.
The case was prosecuted by Assistant U.S. Attorneys Chelsea Rice and Thomas E. Getz following an investigation by the FBI and Ashland Police Department, with assistance from the Ashland County Prosecutor’s Office.

New York State Assemblyman William F. Boyland, Jr. Convicted on Bribery, Fraud, Extortion, Conspiracy, and Theft Charges

Earlier today, sitting New York State Assemblyman William F. Boyland, Jr. was convicted by a jury at the federal courthouse in Brooklyn, New York, of 21 felony counts, including federal programs bribery, conspiracy to commit federal programs bribery, conspiracy to violate the Travel Act and commit federal programs bribery, extortion, extortion conspiracy, honest services wire fraud, conspiracy to commit honest services wire fraud, federal programs theft, and conspiracy to commit mail fraud. Boyland committed each of these offenses by corruptly exploiting his public position representing the 55th Assembly District in Brooklyn, which is composed of Ocean Hill, Brownsville, Bedford-Stuyvesant, Crown Heights, and Bushwick. Upon his convictions, Boyland was automatically expelled from the Assembly. When sentenced, Boyland faces prison terms of up to 20 years on each of the extortion, extortion conspiracy, honest services wire fraud, honest services wire fraud conspiracy, and mail fraud conspiracy counts; up to 10 years on each of the federal programs bribery and federal programs theft counts; and up to five years on each of the other conspiracy counts. Following his convictions, the Honorable Sandra L. Townes, who presided over the trial, ordered Boyland remanded into custody pending his sentencing on June 30, 2014. Boyland is also subject to up to at least $250,000 in fines on each of the counts of conviction, as well as criminal forfeiture and mandatory restitution.
The convictions were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office.
“The breadth and pervasiveness of the corruption exposed by this prosecution is staggering. Wherever there was an opportunity for William Boyland to corruptly line his own pockets, he took it. By soliciting bribes, by stealing funds intended to help the elderly, and by defrauding New York State and the Assembly, Boyland cravenly pursued his own interest at the expense of his constituents. In doing so, Boyland not only broke the law but broke faith with the public he was elected to serve. Today’s verdict ensures that Boyland will be held accountable for his corrupt actions,” stated United States Attorney Lynch. “When our elected officials engage in self-dealing, when they abdicate their responsibilities, when they succumb to greed, the average citizen pays for it dearly, and our democratic system suffers on so many levels. The verdict sends a clear message that we and our partners in the FBI will vigorously investigate and prosecute any public official who trades on a position of power to line his own pocket.” United States Attorney Lynch praised the hard work and dedication of the FBI agents who investigated the case and expressed her thanks to the New York State Comptroller’s Office, the New York State Office of the Aging, the Internal Revenue Service Criminal Investigation Division, the New York State Assembly Department of Finance, and the New York City Department of Investigation for their assistance with the investigation.
The evidence admitted at trial proved that, beginning in January 2007 and continuing through December 2011, Boyland engaged in four separate corrupt schemes, ranging from soliciting and accepting over $250,000 in bribe payments, to submitting false travel vouchers to New York State, to stealing state funds intended for the elderly:
Carnival Scheme
Boyland extorted and accepted over $14,000 in bribes in exchange for undertaking official action to benefit a carnival promoter (the “promoter”) and an undercover FBI agent. Specifically, in August 2010, Boyland met with the Promoter and this undercover FBI agent (UC1) on multiple occasions in New York City and discussed the desire of the promoter and UC1 to hold carnivals in Boyland’s district, for which they needed government approvals. During those meetings, Boyland requested payments in exchange for assisting the promoter and UC1, and the promoter and UC1 agreed. Boyland also described various ways in which the bribes could be disguised to hide their true purpose. After these meetings, Boyland directed his Assembly staff to assist the promoter and UC1 in their efforts to gain government approvals. Boyland then represented to the promoter and UC1 that he and his staff (i) engaged in discussions with government agencies to assist the Promoter in obtaining carnival-related leases and permits and (ii) arranged for a non-profit organization to sponsor the Promoter’s carnivals. Boyland also directed his staff to give the promoter letters of support, on Boyland’s Assembly letterhead, that the promoter needed in order to operate carnivals in Boyland’s district. In exchange, UC1 paid Boyland three separate bribes: $7,000 in cash; a $3,000 check with the “payee” line left blank; and $3,800 worth of money orders that were deposited into Boyland’s campaign bank account. As was shown to the jury during the trial, Boyland was captured on videotape personally accepting the $7,000 cash bribe at his district office.
Real Estate Scheme
Boyland also accepted the $7,000 cash bribe described above in exchange for undertaking official action to benefit UC1 and a second undercover FBI agent (UC2) in a purported real estate venture in Boyland’s district. Specifically, Boyland proposed a brazen scheme in which UC1 and UC2 would purchase the former St. Mary’s Hospital in Boyland’s district for $8 million, obtain state grant money to renovate the hospital, and resell it for $15 million to a non-profit organization that Boyland claimed to control. Boyland assured UC1 and UC2 that he would use his influence as an assemblyman to secure state grant money for the project and handle any zoning issues that arose. After accepting the $7,000 cash bribe described above, Boyland was later recorded demanding an additional $250,000 bribe payment from UC1 and UC2 as a condition of using his official position to realize the real estate scheme he had proposed.
Recordings of meetings in hotel rooms in Atlantic City and New York City where Boyland discussed the real estate scheme revealed that he recognized the scheme’s corrupt and illegal nature and sought to conceal his own involvement. At the meeting in the hotel in Atlantic City, Boyland stated, “I got a middle guy by the way...I gotta stay clean...I got a bag man....” Boyland further explained that he did not want to talk on the telephone and preferred in-person meetings: “I stopped talking on the phone a while ago...I’m just saying there is no real conversation that you can have...especially with what we’re talking about.”
At the meeting in the hotel room in New York City, Boyland reiterated that he wanted UC1 and UC2 to pay him a $250,000 bribe in exchange for the St. Mary’s Hospital project. When UC2 instead countered Boyland’s demand by offering to pay Boyland $5,000 for introductions to other government officials who would be involved in the project, Boyland rejected the counter-proposal, stating that the people whom Boyland could introduce to UC1 and UC2 were worth more than $5,000: “I’m not talking about $5,000 folks. I’m talking about...people that can actually get these projects done.”
False Voucher Scheme
From January 2007 to December 2011, Boyland stole New York State funds by submitting false New York State Assembly Member Travel Vouchers (vouchers). Boyland submitted over two hundred fraudulent vouchers where he falsely claimed to be in Albany on legislative business when he in fact was not in Albany, including days when Boyland was in New York City meeting with the undercover FBI agents and demanding $250,000 in bribes; days when he was in North Carolina and Virginia visiting with family and friends; and for days when he was in Istanbul, Turkey. In reliance on Boyland’s false Vouchers, New York State paid Boyland more than $70,000 in fraudulent mileage expense reimbursements and per diem payments.
Theft of State Funds for the Elderly
From July 2007 to September 2010, Boyland conspired to defraud New York State and the New York State Office of the Aging (NYSOA). Boyland, a member of the Assembly’s Committee on the Aging, steered $200,000 of New York State “member item” funds to a Brooklyn-based non-profit organization whose mission, as described on its website, was to provide a “social setting that enable[s] elderly individuals to maintain their independence and remain at home in the community.” Notwithstanding his certification, in writing to the NYSOA that these state funds would not be used for any partisan or political purpose, Boyland directed that the majority of these $200,000 in state funds be used for the benefit of Boyland and his political campaigns by paying for community events that promoted Boyland such as a Senior Lunch Cruise on the Spirit of New York Cruise Line, a fireworks show, and a large end of the summer picnic held at a park in his district, as well as goods that promoted Boyland, such as “Team Boyland” T-shirts distributed at those community events.
The government’s case is being prosecuted by Assistant United States Attorneys Christina B. Dugger, Robert L. Capers and Lan X. Nguyen.
Defendant
Willia F. Boyland, Jr.
Age: 43
Residence: Brooklyn, New York

Liying Lin Found Guilty of Immigration Fraud Offenses Following One-Week Jury Trial in Manhattan Federal Court

Preet Bharara, the United States Attorney for the Southern District of New York, announced that Liying Lin, a/k/a “the Deacon,” was found guilty yesterday in Manhattan federal court of one count of conspiracy to commit immigration fraud and two counts of immigration fraud. Lin was convicted after a seven-day jury trial presided over by U.S. District Judge Robert P. Patterson, Jr. She was acquitted of one count of immigration fraud.
Manhattan U.S. Attorney Preet Bharara said, “As a unanimous jury decided, Liying Lin fraudulently exploited a program designed to provide a safe haven for actual victims of persecution. She coached asylum seekers on how to lie on their applications and in immigration proceedings, even signaling applicants when they deviated from her fraudulent script.”
According to the indictment filed in Manhattan federal court, other court documents, and the evidence admitted at trial:
Lin, a deacon at the Full Gospel Global Mission Church in Flushing, New York, trained applicants for political asylum on what questions about religious beliefs would be asked during these applicants’ asylum interviews and then coached the clients on how to answer. She conducted individual training sessions with certain applicants where she supplied the applicants with false details in support of their fraudulent asylum claims.
Lin also served as a translator during asylum interviews. Lin advised certain clients before their asylum interview that if they gave a wrong answer, she would kick them to alert them of their wrong answer.

* * *

Lin, 30, of Flushing, New York, faces a maximum sentence of five years in prison for the conspiracy count and a maximum sentence of 10 years in prison for each of the substantive immigration fraud counts; she is scheduled to be sentenced by Judge Patterson on June 2, 2014. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as the defendant’s sentence will be determined by the judge.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.
The case is being handled by the Office’s Organized Crime Unit. Assistant U.S. Attorneys Brian Blais and Rahul Mukhi are in charge of the prosecution.

Four Montgomery Residents Sentenced for Conspiracy to Defraud the United States Department of Education

MONTGOMERY, AL—On February 21, 2014, Bobbie Jean Chilsom, Shawn A. Johnson, Sharon Johnson, and Sara Chilsom, all from Montgomery, were sentenced by United States District Judge Myron S. Thompson for their involvement in a conspiracy to defraud the United States Department of Education and various colleges and universities of financial aid money, announced George L. Beck, Jr., U.S. Attorney for the Middle District of Alabama.
Bobbie Chilsom was sentenced to 24 months of imprisonment followed by three years’ supervised release for mail fraud and was ordered to pay $276,734.27 in restitution. Shawn A. Johnson was sentenced to five years of probation, 12 months home confinement, and 10 weekends in jail for mail fraud and was ordered to pay $222,068.41 in restitution. For her role in the conspiracy, Sharon Johnson was sentenced to five years of probation, 12 months home confinement, and three weekends in jail for conspiracy to commit to defraud the United States. She was also ordered to pay $397,963.22 in restitution. Finally, Sara Chilsom was sentenced to three years of probation for mail fraud and was also ordered to pay $10,845 in restitution.
As a part of this conspiracy, from September 2008 to September 2012, the defendants defrauded the United States Department of Education and colleges and universities of approximately $1,152,994 in Federal Student Assistance (FSA) money. FSA must be used by a student for tuition, fees charged by the institution, books, supplies, transportation, or other educational and living expenses.
The defendants, as well as other individuals they recruited for the scheme, applied for financial aid despite not having a high school diploma or a general education development (GED) certificate. To enable admission to the schools, a false diploma or GED certificate was provided during the enrollment process. As a result of the fraudulent applications for financial aid, the Department of Education paid tuition, enrollment fees, and living expenses for the defendants and other individuals that were not lawful.
Afterwards, the recruited individuals would pay the leaders of the conspiracy a percentage of the funds reserved for living expenses by mailing them debit refund cards or debit refund checks. Evidence further showed that the defendants or the recruited individuals would either not attend or would minimally attend their courses and would minimally participate in completing or would not complete their course work. Ultimately, the financial aid funds they received were used for non-educational purposes, such as the purchase of personal items or to pay for personal expenses.
Including the four defendants sentenced on February 21, 2014, a total of 13 defendants were involved in this conspiracy. Previously sentenced were, Telvin Brown, Sunquesha Gaston, Philanthia Roberts, Printice Johnson, Shirley Johnson, Samuella McMillian, Edmond Lewis Harris, Jr., and Richard Jamar Pinkston, Jr. for mail fraud. Dennis Coleman was sentenced for conspiring to defraud the United States. All defendants are from Montgomery.
The case was investigated by the Department of Education-Office of Inspector General, the United States Secret Service, and the FBI. The case was prosecuted by Assistant United States Attorney Denise O. Simpson.

Nineteen People Indicted for Conspiracy to Traffic Heroin, Crack Cocaine, and Pills in Marion, Ohio

Nineteen people were indicted in federal court for their roles in a conspiracy to traffic large amounts of heroin, crack cocaine, and prescription pills in Marion, Ohio.
The unsealing of the 72-count indictment was announced today by Steven M. Dettelbach, United States Attorney for the Northern District of Ohio; Ohio Attorney General Mike DeWine; Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Field Office; Marion Police Major William Collins; Marion County Sheriff Tim Bailey; and Marion County Prosecutor Brent Yager.
The indictment details a two-year conspiracy in which heroin, crack cocaine, Percocet, Ritalin, Xanaxm and Vicodin were brought from Detroit and Fort Wayne, Indiana to Marion, where the drugs were sold to dozens of people, including juveniles.
Indicted are: Allen Graves, 46, of Detroit; Martez Montgomery, 22, of Detroit; Terrance Lombard, 39, of Eastpoint, Michigan; Edward Hearn, 40, of Detroit; Darryl McFadden, 53, of Detroit; Jeronne White, 33, of Marion; Christopher Prince, 20, of Detroit; Danni Childers, 21, of Marion; DeCarlos Bates, 21, of Hamtramck, Michigan; DeVonta Adams, 21, of Detroit; Jason Graves, 22, of Detroit; Marniece Love, 22, of Hazel Park, Michigan; Brittany Payne, 19, of Marion; Marcus Benson, 34, of Harper Woods, Michigan; Greg Burkett, 56, of Marion; Darrell Jacobs, 38, of Caledonia, Ohio; Danielle Sullivan, 23, of Marion; Steven Lester, 48, of Marion, and Abbee Heine, 20, of Marion.
“Our state has been flooded with heroin and diverted prescription pills, which have been accompanied by a wave of death and addiction,” Dettelbach said. “These arrests represent a joint law enforcement effort to choke off the supply of drugs to our region.”
Anthony said: “This interstate drug trafficking organization brought danger and violence to the community through multiple shootings, overdoses and continued addiction for citizens in Marion. The FBI, along with the numerous agencies that brought this group to justice, will continue collaborative efforts to disrupt, dismantle, and prosecute drug traffickers.”
“MARMET’s battles with traffickers from Detroit have been well documented,” said Marion Police Major William Collins. “We want this to be an example for other trafficking organizations that if they choose Marion as the place to peddle their poison, they will do real prison time.”
“Drug abuse devastates lives and tears apart families, and the individuals who are now facing charges have played a direct role in fueling addiction,” said Attorney General DeWine. “We are proud to have assisted with this case through the work of our BCI crime lab, and we will continue to work together in the future to prevent drug abuse and trafficking in this state.”
Marion County Sheriff Tim Bailey said: “Drugs come into our community through many means and it takes and will continue to take resources from all agencies to continue the fight against the drug problem and other crimes in our community to help keep our residents and future residents of our community safe.”
Montgomery and Graves obtained heroin, crack cocaine, and prescription drugs from Lombard, Hearn, Benson, McFadden, and other suppliers in Detroit and Fort Wayne. They also recruited friends and family members in Detroit to travel to Marion to distribute the drugs, according to the indictment.
Montgomery and Graves, with the assistance of Heine, rented homes in Heine’s name at 438 1/2 North Prospect Street and 323 Mound Street in Marion for the purpose of distributing heroin, crack cocaine, and prescription drugs. Childers also rented the house at 238 Park Boulevard in Marion for the purpose of distributing the drugs, according to the indictment.
Lester, as part of the conspiracy, allowed Graves and Montgomery to register vehicles in his name to avoid suspicion of law enforcement. Lester also routinely drove Graves from Marion to Detroit and back to transport drugs and drug proceeds, according to the indictment.
Prince, White, Bates, Adams, Love, Jason Graves, a juvenile, and others also shared a “community telephone” which they all used to communicate with drug customers and suppliers, according to the indictment.
Prince, White, Bates, Adams, Love, Jason Graves, Lester, a juvenile, and others shared and used residences rented by Allen Graves, Montgomery, Heine, and Childers for the purpose of storing and distributing heroin, crack cocaine, and prescription drugs, according to the indictment.
The indictment goes on to detail scores of transactions, phone calls and other actions related to their sale and distribution of drugs.
This case is the result of an investigation by the Federal Bureau of Investigation’s Cleveland, Detroit, and Indianapolis Field Offices, the MARMET Drug Task Force (composed of members of the Marion Police Department, and Marion County Sheriff’s Office), the METRICH Drug Task Force, the Ohio Attorney General’s Office, the Marion County Prosecutor’s Office, the Drug Enforcement Administration, and the Ohio State Highway Patrol. It is being prosecuted by Assistant United States Attorneys Joseph M. Pinjuh and Alissa Sterling.
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Three Defendants Plead Guilty in Federal Student Aid Fraud Scheme

OAKLAND—Kyle Edward Moore, Cortio Detrice Wade, and Marcel Devon Bridges pleaded guilty on February 14, 2014, in federal court in Oakland to conspiracy to commit financial aid fraud and wire fraud, United States Attorney Melinda Haag announced.
In pleading guilty, Moore, Wade, and Bridges admitted to conspiring to obtain federal student aid funds offered under the Title IV Federal Student Assistance Program. Moore and his co-defendants obtained the aid by preparing and transmitting fraudulent Free Applications for Federal Student Aid (FAFSAs) to the U.S. Department of Education.
In carrying out the fraud scheme, Moore and his co-defendants recruited third-parties to serve as “straw students” and then assisted the straw students in preparing, signing, and transmitting fraudulent FAFSAs, knowing that many of the straw students were not eligible to obtain Title IV funds because, among other things, the straw students had not obtained high school diplomas or a recognized equivalent and had no intention of attending school or using the funds for educational purposes. After receiving the student loan funds, Moore and his co-defendants would share the fraudulently obtained funds among themselves and sometimes with the straw students.
Moore, Wade, and Bridges admitted to defrauding the Department of Education in the amounts of $771,268, $136,088, and $114,734, respectively.
Moore, Wade, and Bridges were indicted by a federal grand jury on August 15, 2013. They were charged with conspiracy to commit financial aid fraud in violation of 18 U.S.C. § 371 and with multiple counts of wire fraud in violation of 18 U.S.C. § 1343. Pursuant to their plea agreements, Moore pleaded guilty to two counts of conspiracy and one count of wire fraud; Bridges pleaded guilty to one count of conspiracy and one count of wire fraud; and Wade pleaded guilty to one count of conspiracy and four counts of wire fraud.
Moore, Wade, and Bridges were released on bonds.
Moore and Bridges have a sentencing hearing scheduled for August 22, 2014. Wade has a sentencing hearing scheduled for September 19, 2014. Both sentencing hearings will be held before the Honorable Jon S. Tigar, United States District Court Judge, in Oakland. The maximum statutory penalty for each count of conspiracy to commit financial aid fraud in violation of 18 U.S.C. § 371 is five years in prison, a fine of $250,000 or twice the gross gain or loss, whichever is greater, and restitution. The maximum penalty for each count of wire fraud in violation of 18 U.S.C. § 1343 is 20 years in prison; a fine of $250,000 or twice the gross gain or loss, whichever is greater; and restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
AUSA Wade M. Rhyne is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Janice Pagsanjan and Patty Lau. The prosecution is the result of an investigation by the U.S. Department of Education, Office of the Inspector General; the Federal Bureau of Investigation; and the U.S. Department of Housing and Urban Development, Office of the Inspector General.

Minnesota Man and Woman Sentenced for Participating in a Sex Trafficking Conspiracy

Today, the Justice Department announced that Andre James Hertzog, 29, was sentenced to serve 10 years in prison and eight years of supervised release for participating in a sex trafficking conspiracy. Hertzog’s co-defendant, Nicole Bramer, 29, was sentenced to serve 21 months in prison, to be followed by five years of supervised release. In addition, the defendants were each ordered to pay $6,100 in restitution to the victims of the offense. Hertzog and Bramer are both from St. Paul, Minnesota.
“The defendants preyed upon vulnerable young women by a variety of deplorable means,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Department of Justice is committed to prosecuting those who sexually exploit vulnerable women for financial benefit.”
“Working with victims of sex trafficking to attain a measure of justice is a serious responsibility,” said Special Agent in Charge Christopher Warrener for the FBI’s Minneapolis Field Office. “These sentences are the culmination of investigators and prosecutors effectively communicating with victims.”
Bramer pleaded guilty to participating in the sex trafficking conspiracy on May 29, 2013, and Hertzog pleaded guilty on July 2, 2013. During his plea hearing, Hertzog admitted that, from April 2011 to August 2012, he and Bramer engaged in a scheme to target and recruit young, vulnerable women, one of whom was a minor, and to compel them into performing commercial sex acts for their own financial gain. Hertzog and Bramer used coercive tactics, including physical violence and psychological coercion, to isolate the young women, control them, and cause them to perform acts of prostitution. As part of the trafficking scheme, the defendants transported the victims across state lines for the purpose of having them engage in prostitution, and the defendants routinely advertised the sexual services of the young women on the Internet website Backpage.com.
The case was investigated by the FBI and prosecuted jointly by Special Assistant U.S. Attorney Mark Kappelhoff for the District of Minnesota, Trial Attorney Christine M. Siscaretti, and former Trial Attorney Amanda Gregory for the Civil Rights Division’s Human Trafficking Prosecution Unit.

Former Bank of America Executive Pleads Guilty to Role in Conspiracy and Fraud Involving Investment Contracts for Municipal Bonds Proceeds

A former Bank of America executive pleaded guilty today to his participation in a conspiracy and scheme to defraud related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts, the Department of Justice announced.
Phillip D. Murphy, the former managing director of Bank of America’s municipal derivatives products desk from 1998 to 2002, pleaded guilty today before U.S. District Judge Max O. Cogburn, Jr. in the U.S. District Court for the Western District of North Carolina to participating in a fraud conspiracy and wire fraud scheme with employees of Rubin/Chambers, Dunhill Insurance Services Inc., also known as CDR Financial Products, a broker of municipal finance contracts, and others. Murphy also pleaded guilty to conspiring with others to make false entries in the reports and statements originating from his desk, which were sent to bank management.
Murphy was indicted by a grand jury on July 19, 2012. According to the indictment, Murphy participated in a wire fraud scheme and separate fraud conspiracies that began as early as 1998 and continued until 2006.
“By manipulating what was intended to be a competitive bidding process, the conspirators defrauded municipalities, public entities, and taxpayers across the country,” said Brent Snyder, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program. “Today’s guilty plea reaffirms the Antitrust Division’s continued efforts to hold accountable those who corrupt and subvert the competitive process in our financial markets.”
Public entities seek to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issue, to raise money for, among other things, public projects. Public entities typically hire a broker to conduct a competitive bidding process for the award of the investment agreements and often for other municipal finance contracts.
According to the charges, Murphy conspired with CDR and others to increase the number and profitability of investment agreements and other municipal finance contracts awarded to Bank of America. Murphy won investment agreements through CDR’s manipulation of the bidding process in obtaining losing bids from other providers, which is explicitly prohibited by U.S. Treasury regulations. As a result of the information, various providers won investment agreements and other municipal finance contracts at artificially determined prices. In exchange for this information, Murphy submitted intentionally losing bids for certain investment agreements and other contracts when requested and, on occasion, agreed to pay or arranged for kickbacks to be paid to CDR and other co-conspirator brokers.
Murphy and his co-conspirators misrepresented to municipal issuers that the bidding process was competitive and in compliance with U.S. Treasury regulations. This caused the municipal issuers to award investment agreements and other municipal finance contracts to providers that otherwise would not have been awarded the contracts if the issuers had true and accurate information regarding the bidding process. Such conduct placed the tax-exempt status of the underlying bonds in jeopardy.
“Mr. Murphy’s actions undermined the public’s trust when he conspired to manipulate a competitive bidding process,” said Richard Weber, Chief, IRS-Criminal Investigation (IRS-CI). “IRS-CI has experienced great success in unraveling significant and complex financial frauds as we work in close collaboration with our law enforcement partners.”
“Mr. Murphy ripped off hard working American taxpayers and cash-strapped municipalities all in pursuit of his own lucre,” said George Venizelos, Assistant Director in Charge of the FBI’s New York Field Office. “Let this serve as a reminder to others who are entrusted to act in the public’s best interest; your lack of candor won’t go without notice.”
Murphy pleaded guilty to two counts of conspiracy and one count of wire fraud. The fraud conspiracy carries a maximum penalty of five years in prison and a $250,000 fine. The wire fraud charge carries a maximum penalty of 30 years in prison and a $1 million fine. The false bank records conspiracy carries a maximum penalty of five years in prison and a $250,000 fine. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including Murphy, a total of 17 individuals have been convicted or pleaded guilty. Additionally, one company has pleaded guilty.
The prosecution is being handled by Steven Tugander, Richard Powers, Eric Hoffmann, Patricia Jannaco, and Stephanie Raney of the Antitrust Division. Assistant U.S. Attorneys Kurt Meyers, Michael Savage, and Mark Odulio of the U.S. Attorney’s Office for the Western District of North Carolina have also provided valuable assistance in this matter. The guilty plea announced today resulted from a wide-ranging investigation conducted by the Antitrust Division’s New York office, the FBI, and the IRS-CI. The division coordinated its investigation with the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency, and the Federal Reserve Bank of New York.
Today’s guilty plea 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. attorney’s 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.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-335-8000, the FBI at 212-384-5000, or IRS-CI at 212-436-1761, or visit www.justice.gov/atr/contact/newcase.htm.

Brooklyn Man Sentenced to Prison in Conspiracy to Steal Copper from Substations Throughout Northeast Ohio

A Brooklyn, Ohio man was sentenced to three years in prison for his role in a conspiracy to steal copper from two dozen substations in Northeast Ohio owned by First Energy or Cleveland Public Power, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Field Office.
Michael T. Butts, 33, was also ordered to pay more than $242,626 in restitution to First Energy Corp. by U.S. District Judge Benita Pearson.
Butts and six other men previously pleaded guilty to conspiracy to damage energy facilities. Previously sentenced are:

• William Bertini, 26, of Olmsted Falls, to two years in prison
• Christopher M. Butts, 27, of Cleveland, to four years and seven months in prison
• Jason B. Kauffman, 35, of Cleveland, to three years and one month in prison
• Julio Torres, 46, of Cleveland, to two year and three months in prison
• Jon T. Lefort, 26, of Cleveland, to one year and three months in prison
• keven Wenson, 22, of Lakewood, to two years of supervised release

“These sentences should send a message that the theft of copper and other scrap metal is a serious problem in our region, and the targeting of energy facilities additionally poses a significant threat to our national security infrastructure,” Dettelbach said.
“This is the last of a group of seven that chose to enrich themselves while risking lives and posing serious threats to our community,” Anthony said. “The FBI and our law enforcement partners will continue to bring to justice those individuals who place our community in harm’s way.”
The thefts took place between January and May 2013 and included substations in Brooklyn, Parma, Brecksville, Fairlawn, Medina, Cleveland, Wadsworth, Lakewood, Cuyahoga Heights, Independence, Vermillion, Lorain, Avon Lake, Westlake, and Valley View, according to court documents.
The 24 substations listed in the indictment have copper material around their bases that facilitated the transmission of electricity. Removal of the copper material from a substation causes a substantial risk of electrical blackouts, as well as possible injury or death to utility company employees responsible for maintaining, servicing, and repairing the substations, according to court documents.
Christopher and Michael Butts instructed Lefort, Bertini, Kauffman, Wenson, and Torres how to remove the copper material from the substation in a way that would minimize the risk of physical harm to the person cutting the wire or cable. The defendants used bolt cutters to cut fencing and/or locks protecting the substations, according to court records.
The defendants then unlawfully extracted the copper wire and materials from the substations, manually carrying it in garbage cans, duffel bags, contractor bags and other containers to “staging areas.” From there, the copper material was transported to scrap yards, where it was sold for cash, according to court documents.
Court documents detail 25 copper thefts and five attempted thefts. It also lists 53 instances where at least some of the defendants sold stolen copper to area scrap yards between January and April 2013.
The defendants collectively sold the stolen copper for more than $15,000. They have collectively been ordered to pay $242,626 to First Energy Corp. for the cost of repairs to the substations.
This case is being prosecuted by Assistant U.S. Attorneys Thomas E. Getz and M. Kendra Klump following an investigation by the Federal Bureau of Investigation, Avon Lake Police Department, Brecksville Police Department, Medina County Sheriff’s Office, Middleburgh Heights Police Department, Valley View Police Department, and Northeast Ohio Regional Fusion Center, with assistance from the Medina County Prosecutor’s Office.