Former Jefferson County Committee for Economic Opportunity Executive Director Sentenced to Two Years in Prison for Stealing from Non-Profit Community Agency

BIRMINGHAM—U.S. District Judge L. Scott Coogler today sentenced the former executive director of the Jefferson County Committee for Economic Opportunity (JCCEO) to two years in prison for stealing close to $500,000 from the non-profit organization, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein, Jr.
Ruth Gayle Cunningham, 64, was executive director of JCCEO for more than 20 years before resigning the job last March. She pleaded guilty in September to theft from a government program that received more than $10,000 in federal funding or assistance. Her daughter, Kelli E. Caulfield, 31, pleaded guilty last year to conspiring with her mother to defraud JCCEO. Cunningham paid $492,195 in restitution to JCCEO, which was part of her plea agreement with the government, before today’s sentencing. She must report to prison April 28.
JCCEO is a community action agency that administers programs, including Head Start, for low-income and disadvantaged residents. Between late 2008 and April 2010, while Cunningham and her daughter were running fake invoices through the agency and using agency funds to pay mortgages on personal investment properties, JCCEO was paying Cunningham a salary of as much as $150,000, plus bonuses, benefits, and retirement contributions.
“At the same time Cunningham was being showered with accolades, benefits, and praise for her work at the JCCEO, she was stealing funds which could have been used for community programs,” the government said in its sentencing memorandum.
“Gayle Cunningham was able to steal money intended to help some of the most vulnerable members of our community because she traded on her long tenure at JCCEO to receive broad discretionary powers from its board,” Vance said. “She and her daughter exploited that authority to steal nearly a half million dollars from the agency. As a result, training programs lagged, Head Start buses were not replaced, and classroom computers were running on obsolete, unsupported operating systems,” she said. “Prison is deserved for this type of abuse of trust and misuse of federal funds.”
“Today’s sentence should send the message that regardless of who you are or the position that you hold, you cannot abuse the public trust and steal federal funds,” Schwein said. “The public can expect that the FBI will continue to aggressively investigate public corruption at all levels.”
According to court records, Cunningham used JCCEO funds in 2009 and 2010 to make monthly mortgage payments on at least three residential properties she owned and at least five residential properties her daughter owned in Jefferson and Shelby Counties. Cunningham also used JCCEO funds to pay property taxes on one of those properties, a house in Chelsea that she bought in 2007 with a mortgage loan of more than $1 million.
Cunningham also paid $293,413 in JCCEO funds to companies her daughter owned and to other contractors for claimed repairs or renovations to the women’s properties. Caulfield created the invoices for repair services that never were performed, and she disguised her ownership in many of the companies, according to the government’s sentencing memorandum. The checks were drawn from the JCCEO operating account and allocated to the agency’s Housing Revitalization Program.
Caulfield crafted the invoices for amounts less than $5,000 to prevent the need for a second signature by a member of the JCCEO board. As executive director, her mother had check-signing authority up to $5,000.
The FBI discovered the fraud at JCCEO while investigating allegations of a mortgage fraud scheme. That investigation led to federal prosecutors’ charges against Cunningham and Caulfield, as well as to charges against a real estate investor and a mortgage broker of conspiracy to defraud federally insured financial institutions. Cunningham and Caulfield bought most of the properties that later became part of their scheme to defraud JCCEO from the investor, Robert Paul Hollman.
Hollman pleaded guilty in September and is scheduled for sentencing April 2.
The government’s sentencing memorandum argues that Cunningham and Caulfield have “improperly characterized themselves as victims in the real estate transactions with Hollman.” Cunningham has a history of buying real estate, and, on all the purchases from Hollman, the loan applications and mortgage documents show Cunningham and her daughter signed and willingly entered the contracts, the memo states.
It also challenges a claim in Cunningham’s own sentencing memorandum that, during meetings she had with JCCEO Board Chairman T.L. Lewis, it was suggested she use the agency’s Housing Revitalization Program funds to pay her personal mortgages.
Lewis told investigating agents that Cunningham and Caulfield never were authorized to use JCCEO money to pay personal mortgages.
“Cunningham’s statement that she had approval from the chairman of the board is a completely self-serving statement that is unsupported by the evidence,” the government memorandum states. “These attempts by Cunningham to legitimize her actions and mitigate the need for a custodial sentence by pointing the finger at Dr. Lewis are contrary to the facts and evidence and furthermore are contrary to her acceptance of responsibility,” it states.
The FBI investigated the case. Assistant U.S. Attorney Robin Beardsley Mark is prosecuting the case.

Charlotte Mayor Arrested on Federal Public Corruption Charges

CHARLOTTE, NC—Charlotte Mayor Patrick DeAngelo Cannon was arrested today by FBI agents for alleged violations of federal public corruption laws, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The federal criminal complaint filed in U.S. District Court charges Cannon, 47, of Charlotte, with theft and bribery concerning programs receiving federal funds, honest services wire fraud, and extortion under color of official right.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, joins U.S. Attorney Tompkins in making today’s announcement.
According to allegations contained in the charging document and the affidavit filed in support of the criminal complaint, during the course of a separate criminal investigation, the FBI received reliable information that Cannon was potentially involved in illegal activities associated with his position as an elected official and began an undercover investigation in or about August 2010. The complaint and affidavit allege that during the course of that investigation, Cannon allegedly solicited and accepted money bribes and things of value from undercover FBI agents, posing as commercial real estate developers and investors wishing to do business in Charlotte. As alleged in the filed documents, Cannon solicited and accepted such bribes and things of value in exchange for the use of his official position as Charlotte mayor, mayor pro tem, and/or as a city council member.
The complaint and law enforcement affidavit allege that Cannon accepted the bribes from the undercover FBI agents on five separate occasions. On the last occasion, on February 21, 2014, Cannon allegedly accepted $20,000 in cash in the mayor’s office. According to the complaint and the affidavit, between January 2013 and February 2014, Cannon allegedly accepted from the undercover agents more than $48,000 in cash, airline tickets, a hotel room, and use of a luxury apartment in exchange for the use of his official position.
Cannon had his initial appearance today and has been released on bond, pending indictment. The charge of theft and bribery concerning programs receiving federal funds carries a statutory maximum sentence of 10 years in prison and a $250,000 fine; the charge of honest services wire fraud carries a statutory maximum sentence of not more than 20 years in prison and a $1,000,000 fine; and the charge of extortion under color of official right carries a statutory maximum sentence of not more than 20 years in prison and a $250,000 fine.
The charges contained in the criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
The case is being prosecuted by Assistant United States Attorney Michael E. Savage of the U.S. Attorney’s Office for the Western District of North Carolina. The case is being investigated by the Federal Bureau of Investigation.

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

Former Army Sergeant First Class Sentenced on Government Theft Charges

RALEIGH—United States Attorney Thomas G. Walker announced that in federal court today United States District Judge Louise Wood Flanagan sentenced Mauricio Espinoza, 34, of Modesto, California, to 51 months of imprisonment and three years of supervised release. The court further ordered Espinoza to pay $114,034.80 in restitution and the forfeiture of criminal proceeds in the same amount.
After initially failing to appear for trial, Espinoza pled guilty to conspiring to commit mail fraud and wire fraud, to steal and convert monies belonging to the U.S. government, and to smuggle currency into the United States, as well as to theft and conversion of government property. Espinoza then failed to appear for his sentencing hearing originally scheduled for January 2014. He was subsequently arrested and placed in custody pending his hearing today.
According to the Indictment and information in the public record, between July 2009 and January 2010, while deployed to Afghanistan, former Sergeant First Class Espinoza, 34, and former-Staff Sergeant Philip Wooten, 36, (who previously pled guilty to the same offenses) stole federal money entrusted to them and that was earmarked for operational and reconstruction efforts.
Espinoza deployed to Afghanistan from July 2009 through July 2010 with a small detachment from the United States Army 7th Special Forces Group. Espinoza’s duties included that of paying agent. Wooten, who was assigned to the same detachment, was the field ordering officer (FOO). As the FOO, Wooten was responsible for contracting with local vendors for various operational and reconstruction efforts in Afghanistan. As the paying agent, Espinoza was responsible for making payments to the local vendors to whom Wooten awarded contracts and for properly accounting for the expenditure of federal funds under his control. Together, as the paying agent and the FOO, Espinoza and Wooten were entrusted with U.S. funds allocated for military operations and reconstruction efforts in Afghanistan. Before their deployment and thereafter, the two soldiers planned how they would steal those funds.
Beginning in or about July 2009, Espinoza signed for and withdrew U.S. funds in the form of Afghani currency from the U.S. Finance Office on the military installation known as Kandahar Air Field (KAF). The funds were meant to finance purchases (such as provisions for the Special Forces Team) and construction projects near the team’s forward operating base. Espinoza knew that he would have to periodically return to the United States Finance Office at KAF in Kandahar, Afghanistan, to review the status of the funds that he withdrew. In advance of each trip to the Finance Office, Espinoza and Wooten falsified receipts from Afghani vendors to reflect greater amounts than were actually paid for goods and services that the Afghans had provided. Espinoza then handed in the falsified, inflated receipts to the Finance Office and kept for himself and his co-conspirator the difference between the inflated numbers and the amounts actually paid. Thereafter, and while still at the military base in Kandahar, the conspirators arranged with an Afghani national to have the stolen funds converted into U.S. dollars.
Once in possession of the U.S. dollars, Espinoza and his co-conspirator then converted a portion of the stolen funds into U.S. postal money orders, $30,000 of which Espinoza shipped to the United States via an international carrier. Espinoza also purchased a Harley-Davidson motorcycle with some of the stolen funds.
In addition, Espinoza wired and caused to be wired some of the money electronically through Western Union to various locations in the United States and Peru. Espinoza directed at least one recipient of the wired money to transfer funds to his own bank account.
The total loss to the government exceeded $200,000.
In a letter to the court, Major General Edward M. Reeder, Jr., United States Army, reflected on the impact of the Espinoza’s conduct on the Special Forces’ mission overseas, noting that “the success of a Special Forces unit when dealing with the local Afghan populace is based on trust and respect. The majority of the Afghan population views the United States as one more in a long line of interlopers. When a person they regularly do business with, in this case Espinoza, is exposed as a thief and a liar, the established trust and respect is destroyed and can only be regained, if ever, through extraordinary efforts.”
Wooten plead guilty to a criminal information on December 13, 2011, which charged conspiring to commit mail fraud and wire fraud, to steal and convert money belonging to the U.S. government, and to smuggle currency into the United States along with aiding and abetting theft and conversion of government property. Wooten, who provided significant cooperation during the course of the investigation, was sentenced to 15 months’ imprisonment on October 3, 2013, for his role in this crime.
The case was investigated by the Defense Criminal Investigation Service, United States Postal Inspection Service, Office of the Special Inspector General for Afghanistan Reconstruction, United States Army Criminal Investigation Command, and the FBI from Fayetteville, North Carolina; Fort Walton Beach, Florida; and Panama City, Florida. Special assistance was provided by the U.S. Immigration and Customs Enforcement-Homeland Security Investigation. The case was prosecuted by Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina and Fraud Section Trial Attorney Wade Weems, on detail from the Special Inspector General for Afghanistan Reconstruction (SIGAR).

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

Former Director of Finance of New Jersey-Based Toll Global Forwarding Admits Stealing $1.3 Million from the Company

TRENTON, NJ—The former director of finance of the Middlesex County-based integrated logistic services company Toll Global Forwarding today admitted stealing more than $1.3 million from her former employer through an elaborate false invoicing scheme, U.S. Attorney Paul J. Fishman announced.
Karen Sipes, 40, of Brick, New Jersey, pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging her with wire fraud for her theft from the multi-national company based in Carteret, New Jersey. She was originally charged by complaint in November 2012.
According to documents filed in this case and statements made in court:
While Sipes was employed at Toll Global Forwarding (TGF)—from August 2010 through August 2012—she was responsible for entering vendor transactions and invoices into TGF’s accounts payable accounting system and paying those vendors by preparing checks from TGF. As a result, Sipes had access to and significant control over TGF’s accounts payable accounting and bill payment systems.
In the false invoicing scheme, Sipes identified vendors with a high number of transactions and invoices in TGF’s accounting system. She admitted she would then create and input fake transactions and invoices for them, preparing checks payable to herself.
Sipes also admitted that she identified legitimate vendor transactions and invoices and changed vendors’ names to her name, making those checks payable to herself. She also used TGF checks to pay the credit card bill of a family member and accessed TGF’s accounting system to remove any record of the fraudulent transactions.
The wire fraud count to which Sipes pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. As part of her guilty plea, Sipes is required to pay restitution of $1,335,698.93 to Toll Global Forwarding. Sentencing is scheduled for July 29, 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.
The government is represented by Assistant U.S. Attorney Courtney M. Oliva and Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office General Crimes Unit in Newark.

Plummer Man Sentenced for Theft of Tribal Property

COEUR D’ALENE—Larry James Wolfe, 34, of Plummer, Idaho, was sentenced today for theft from a tribal organization, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge ordered Wolfe to serve three years of probation, pay $1,387 in restitution, and perform 80 hours of community service.
According to court documents, on October 20, 2012, Wolfe drove into the Coeur d’Alene Tribal Facilities storage area and stole four tires and four rims valued at approximately $1,300. Wolfe did not have permission to take the property, which belonged to an Indian Tribal Organization.
The case was investigated by Coeur d’Alene Tribal Police and the Federal Bureau of Investigation.

Former District of Columbia Government Official Indicted on Charges Involving $110,000 Grant That Funded an Inaugural Ball

WASHINGTON—Neil S. Rodgers, a former District of Columbia government official, was indicted today on federal charges stemming from his role in channeling $110,000 in youth and drug prevention grant funds used to pay for an inaugural ball.
The indictment, returned by a grand jury in the U.S. District Court for the District of Columbia, was announced by U.S. Attorney Ronald C. Machen, Jr.; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation.
Rodgers, 61, of Washington, D.C., served as the committee director of the Council of the District of Columbia’s Committee on Libraries, Parks, Recreation, and Planning. He was indicted on three felony charges, including one count each of theft concerning programs receiving federal funds, wire fraud, and first-degree fraud. Rodgers faces a maximum sentence of 20 years of incarceration if convicted of all charges.
Six others have pled guilty to charges in the overall investigation into activities involving former Council Member Harry L. Thomas, Jr. Thomas pled guilty in January 2012 to charges stemming from a scheme in which he used more than $350,000 in taxpayers’ money that was earmarked for the arts, youth recreation, and summer programs for his own personal benefit, including paying for vehicles, clothing, and trips. He resigned in January 2012 as a condition of his plea agreement and is now serving a 38-month prison sentence.
The others who have pled guilty include James Garvin and Marshall D. Banks, leaders of one of the non-profits used in the scheme. Both men, from the Langston in the 21st Century Foundation, pled guilty to misprision of a felony, a charge holding them accountable for failing to report and concealing the misappropriation of $392,000 in government grants. Additionally, Danita C. Doleman, the president of Youth Technology Institute, pled guilty to filing a false tax return in connection with her assistance in funneling public money to pay for the 51st State Inaugural Ball. Millicent D. West, the former director and chief executive officer of a non-profit organization that promotes youth opportunities, pled guilty to a criminal tax charge for her role in channeling the youth grant funds to pay for the ball. Finally, Ayawna Webster, an aide who also worked as a chief of staff for Thomas, pled guilty to attempting to interfere with the administration of the Internal Revenue Service laws.
Garvin and Banks were sentenced to three years of supervised probation and 80 hours of community service and were ordered to pay full restitution. Doleman, West, and Webster are awaiting sentencing.
“Today’s indictment charges Neil Rodgers with stealing tax dollars meant for children to throw a $100,000 black-tie party for adults,” said U.S. Attorney Machen. “This prosecution is the final step in our investigation of the criminal activities of former D.C. Council member Harry Thomas, Jr., which has resulted in six guilty pleas. The results of this investigation are a reminder of the grave consequences for government employees and others who knowingly facilitate the illegal actions of corrupt elected officials.”
“Today’s indictment is an example of what happens when a public servant becomes complicit in corrupt behavior rather than standing up to it,” said Assistant Director in Charge Parlave. “Knowingly submitting false and misleading documents to support a larger scheme at the direction of a public official is illegal. The FBI will investigate allegations of corruption at all levels and hold those who allow it accountable for their actions.”
Before becoming Committee Director, Rodgers worked for many years at the District of Columbia Department of Parks and Recreation, serving as chief of staff and acting director.
Thomas, who took office in January 2007 as the Ward 5 representative, served during his first term as chair of the Council’s Committee on Libraries, Parks, Recreation, and Planning, which involved oversight responsibility for the D.C. Department of Parks and Recreation. In that role, he worked with a non-profit public-private partnership that provided resources and developed programs to benefit children and youth in the District of Columbia.
The partnership was primarily funded by the District of Columbia government through funds designated by the Mayor and Council for particular youth-related purposes. The partnership provided grants to organizations for programs tailored for children and youth.
The charges against Rodgers deal with his role in securing funds for the 51st State Inaugural Ball, held on January 20, 2009, in the Wilson Building. Thomas was closely involved in the planning the event. In addition to her work duties, Ayawna Webster was the president of a local chapter of a political organization. She and her political organization served as the host of the ball, and she then organized the event at Thomas’s direction.
Ticket sales and other contributions failed to raise enough money to pay the expenses associated with the 51st State Inaugural Ball. Following the ball, Webster’s political organization owed vendors approximately $100,000. According to the indictment, Rodgers participated in a scheme to channel money through a grant from the public-private partnership, meant for youths, to Webster’s political organization so that these expenses would be paid.
The plan hit an obstacle, however, when questions were raised about the legality of granting money to a political organization. The grant recipient was changed to the Youth Technology Institute, another non-profit organization. Even though Rodgers knew that this organization had no involvement with the ball, according to the indictment, he requested $120,000 in grant funds on its behalf. On February 5, 2009, based on the false grant paperwork submitted by Rodgers, the public-private partnership issued a check in the amount of $110,000 to the Youth Technology Institute, the indictment alleges.
In truth, after the grant was issued, the Youth Technology Institute immediately forwarded nearly the entire amount to Webster’s political organization, which paid expenses from the 51st State Inaugural Ball.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws, and every defendant is presumed innocent until, and unless, proven guilty.
This case is being investigated by the FBI’s Washington Field Office and IRS-CI. It is being prosecuted by Assistant U.S. Attorneys James E. Smith and David Johnson, of the Fraud and Public Corruption Section of the U.S. Attorney’s Office.

Philadelphia Man Charged with Theft of Social Security Benefits

An indictment was unsealed today charging Bernard Lopez, 57, of Philadelphia, with theft of government funds for allegedly taking, for his own benefit, the Social Security Administration benefits check issued to another person, announced United States Attorney Zane David Memeger.
If convicted, the defendant faces a statutory maximum sentence of 10 years in prison, a fine of up to $250,000, a $100 special assessment, and up to three years of supervised release.
The case was investigated by the Social Security Administration Office of Inspector General and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Richard Barrett.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

Preliminary charges again filed against Spain's Princess Cristina

 Spain's Princess Cristina for a second time by a judge investigating her husband for alleged diversion of public funds.
Judge Jose Castro is leading the investigation at a local court in Palma de Mallorca, in Spain's Balearic Islands.
The magistrate brought preliminary charges against the princess in April last year but they were dropped in May, after prosecutors appealed to a provincial court, citing insufficient evidence.
But Castro continued his investigation and has now decided to bring preliminary charges again. Prosecutors are once more opposing them.
A court spokeswoman confirmed to CNN on Tuesday that the conflict between Castro and the prosecution would automatically see the issue returned to the provincial court.

A panel of four judges will then decide whether to uphold the preliminary charges.
It is expected that the panel will make a decision ahead of the March 8 court date requested by Castro.
The princess's husband, Inaki Urdangarin, is accused of diverting, for private use, public funds earmarked for his nonprofit foundation.
Urdangarin, an Olympic medalist in handball, led a private foundation that secured contracts from regional governments to promote sports and tourism.
He has faced preliminary charges for more than a year. The preliminary charges could eventually be dropped, but a filing of indictments would set a trial in motion.
Through their lawyers, the princess and Urdangarin have denied any wrongdoing.
Urdangarin was granted the title of Duke of Palma when he married Princess Cristina, King Juan Carlos' youngest daughter, in 1997.
The fraud scandal has created unprecedented problems for Spain's popular royal family and kept the country riveted.
In April, the royal household revealed that it had asked the government in February to include the monarchy in a new law on transparency -- regarding financing and other activities.
The government approved the law in September.

High School Principal Accused of Stealing Nearly $800,000 From Teacher's Union

A 66-year-old assistant principal at a Westchester high school has been charged with siphoning nearly $800,000 over seven years from teacher's union funds he presided over as treasurer, prosecutors say.
Frank Gluberman, assistant principal at Woodlands High School in Hartsdale, was arraigned Wednesday on a charge of second-degree larceny.

Prosecutors allege Gluberman stole from the Greenburgh Teacher's Federation and the Greenburgh Teacher's Welfare Fund, which receives taxpayer money and pays for dental, optical, legal and other services for school teachers and administrators in the district, between 2006 to 2013, when he served as treasurer.

Gluberman allegedly wrote checks to himself from both accounts and forged the union president's signature, which he needed in order to release the payments. He's accused of stealing more than $778,995.


Prosecutors say the checks were made out to Gluberman and to his two daughters. Gluberman also allegedly used the union money to pay property taxes on two homes that he owns.

Authorities discovered the theft when Gluberman was promoted to assistant principal and had to give up his position as treasurer of the union funds. He was arrested Tuesday.

"His cynical raiding of the welfare fund of hundreds of thousands of dollars comes at a time of tight school budgets and dishonors the teachers and administrators who work diligently and professionally on a daily basis in the Greenburgh school system,” Westchester District Attorney Janet DiFiore said in a statement.

Bail for Gluberman was set at $50,000 cash. Information on an attorney for him wasn't immediately available.

Man tries to sell stolen brains on eBay, police say

This was not was your typical undercover sting.
For starters, it was happening at an Indiana Dairy Queen. And the target was brains. Yeah, a brain bandit.
The arrest last month of a 21-year-old suspect uncovered, police say, a macabre scheme to steal the brains of dead mental patients and sell them online. The suspect was peddling some 60 brains. And yes, amazingly there were customers. The arrest in this case also unearthed a few questions. We will try and answer them.
Where did the suspect get 60 brains?
Suspect David Charles allegedly stole more than 60 jars of brain and other human tissues in October from a warehouse space at the Indiana Medical History Museum, the Marion County prosecutor's office said in court papers Thursday. He is accused of breaking into the museum and taking jars of brains and tissue from autopsies performed on patients in the 1890s. Court documents said some jars were sold on the auction site eBay by a middleman, despite a company policy against listing "humans, the human body, or any human body parts or products."
Attempts to reach Charles by CNN on Thursday were unsuccessful. He declined to comment outside his Indianapolis home when approached by CNN affiliate WXIN.
What do you do with 60 brains?
Authorities allege that Charles was scheming to sell some of them, according to court documents. The alleged scheme began to unravel when the executive director of the museum, Mary Ellen Hennessey Nottage, received a call last month from a man in California who said he had purchased "six jars of brain matter" for $600 on eBay, according to court documents.
The man suspected the jars were stolen when he compared them to others on the museum website.
Nottage notified the police.
Charles was arrested December 16 after authorities organized an undercover sting. He was charged with felony theft and other charges.
He is to appear at an Indianapolis court this month in connection with the alleged theft of dozens of jars of preserved human brain tissue valued at about $4,800.
Is it common to purchase brains on eBay?
In the universe of bizarre items that Internet users sell on eBay, human organs are forbidden. To buy or sell them is a felony under federal law, and trading in illegal goods is a violation of eBay's rules.
The list of prohibited items includes Native American grave-related items such as skulls and skeletons intended for medical research, Tibetan prayer skulls, organs, bones, blood, waste products, body fluids and sperm.
Nottage said the California man who allegedly purchased the brains collected oddities.
"Apparently that's a trend that's building -- the macabre, the oddities," Nottage said. "The television reality show 'Oddities' illustrates that very well. I think it's indicative of people's collecting interests. It's definitely bizarre. It's infuriating that they do not have respect for the human remains."

Teens' Thievery Turns Tragic for Honduran Cop

Edwin Mejia didn't want to go out and steal that morning.

The $75 he and his buddy had made the day before from the stolen motorcycle felt like a fortune compared to the $5 a day he earned selling his mother's tortillas. The 15-year-old lay in bed inside the wooden one-room house he shared with his 10 brothers and sisters and told his partner, Eduardo Aguilera, that he wasn't in the mood.

"Hey, man, we have to go!" insisted Eduardo, also 15.

From yesterday's take, their first job, Edwin could buy a cellphone. If they did the same today, maybe Edwin could buy himself some sneakers. White Nikes were a favorite with the 18th Street gang members.

Edwin relented.

A few miles away, in downtown Tegucigalpa, Santos Arita was starting his 12-hour shift as a traffic cop. At 42, he'd spent most of his career working in small towns in the north. His new job in the capital made him nervous. He'd already been assaulted once by three gunmen on a bus. He was afraid, but nobody asked him if he felt like going to work that day.

With the highest murder rate in the world, Honduras is a dangerous country. Its capital is a city where people watch murders on YouTube, wake up to photos of the dead in the newspapers and drive by bodies dumped on the outskirts of town. It is a country where the disparaging concept of the "banana republic" was born, when U.S. fruit companies used the Honduran military to control labor, but it is not a nation that recovered from a legacy that favored the interests of the few over those of the many.

Honduras never developed the democratic institutions that would guarantee a rule of law. Instead, it is a largely lawless land where there are few choices for the poor, heroes are scarce, and violence is a given.

Edwin and Eduardo downed a breakfast of coffee and left their rough neighborhood, Sinai, one of many controlled by gangs where even the police did not venture without guns drawn or at least a warning that they were headed in.

It was almost lunchtime.

The boys would use the same strategy as the day before. Edwin would drive the motorcycle, Eduardo would ride behind him. When they found a target, Eduardo would hold up the mark, then drive away on the stolen bike. Easy.

The year before, Edwin had dropped out of school to help out his mother. Tortillas had to be sold before lunch, so he didn't have much choice. In a nation where 70 percent of people live in poverty, few could afford the luxury of school beyond sixth grade.

Many Hondurans had discovered that crime does pay, and the best way to commit one was with a motorcycle — for a fast getaway.

It was illegal, in fact, for two men to ride tandem on a motorcycle, a new law to cut down on drive-by shootings.

The boys ignored that law and made their way downtown. Oddly, amid the traffic chaos in one of the poorest cities on the continent and in a place where the law is rarely obeyed, what would bind the fates of Edwin and Eduardo with that of a humble traffic cop was a red light.

The boys stopped. They did not see Arita, helping a woman cross the street behind them. She carried an umbrella as a sunshade while Arita guided her through the traffic.

Arita had been reassigned to Tegucigalpa two months earlier and already had requested a transfer back home. He missed his family, and he talked with his wife every day by phone. His family lived in Ocotepeque, a seven- or eight-hour bus ride from the capital, but with his $400 monthly salary, Arita couldn't afford a ticket. He hitchhiked home every two weeks for just 24 hours — to see his wife and three children, go to church.

His home in Ocotepeque was not so different from Edwin's. It sat on a muddy street, a one-room with concrete floors, a tin roof that leaked and plywood walls. There was no running water, and the kitchen was just a wood stove. For furniture, they had two beds, a beaten sofa and a couple of tables with a bare bulb hanging from a wire.

It wasn't much, but it was paradise compared to the barracks he shared with dozens of other police officers when he was working in the capital. There was no running water for a shower, just a cup and a barrel. No heat for the chilly evenings, and, of course, no meals.

Arita had arrived in the city two days before that fateful afternoon at the intersection. He had come with $10 in his pocket after leaving $20 at home.

Many Hondurans, from the country's newly elected president to elementary school children, say the police are corrupt. The problem has reached such a crisis that Congress recently approved a plan to put the military on the streets while police ranks are cleaned up.

The problems are vast. Police have been accused of running death squads to eliminate gang members. The government does not know how many officers are on the National Police payroll — estimates range from 8,000 to 15,000.

One police general appeared on national television recently and accused another general of ordering the killing of his son. The boy was 17, ambushed along with his two special forces bodyguards in a restaurant shooting earlier this year.

On the street, many motorists are wary of the traffic police, who often stop them to extort money. It is hard to tell the difference between a bad cop, and a good one.

What happened on the afternoon of Aug. 7 was captured on a traffic camera, and on several others in the area.

As soon as Arita saw the two teenagers on their motorcycle, he left the woman with the umbrella and ran up to the boys.

He ordered the young men off the bike and, thanks to decades of experience, pulled out the bike's keys. He did not see Eduardo, dressed all in black, reaching for something tucked into his pants. A gun.

Eduardo fired off two shots before the policeman, miraculously unhurt, wrestled him to the ground and attempted to disarm him. Edwin, in a blue T-shirt, rushed to help his friend as he scuffled with the cop.

Drivers around them sped out of the way.

Although he would later insist that the day's plan marked only his second attempt at robbery, Edwin seemed skilled as he tried to grab the policeman's weapon. Eduardo managed to hand him the other gun. In the struggle, Arita fell down.

He was a middle-aged, paunchy man fighting with two tall and agile teenagers. As he tried to get up, Edwin shot him twice in the back of the head point-blank. Eduardo looked on. Arita collapsed, lifeless, on the pavement.

With an eerie calm, Edwin picked the bike keys up off the road, waited for Eduardo to climb back on, and sped off.

The entire exchange between the officer and the boys had lasted 42 seconds.

Later, the police would leak the CCTV video to a local paper.

What came next would last four hours.

The two teenagers, visibly nervous, ditched the bike and started running in the middle of a five-lane highway, desperately trying to stop anyone to give them a ride. They ran past a Clarion Hotel, a Burger King and a McDonald's. At one point, traffic video caught them trying to jump a moving bus, pointing their gun at the driver, who did not stop.

The fleeing pair was not such an unusual sight, running in broad daylight, in the middle of Tegucigalpa. Seasoned motorists knew to stay out of the way.

Two policemen finally caught the boys in a parking lot near the Marriott Hotel, in the same block as the presidential palace.

Police won't say what happened next, but according to public prosecutor Alexis Santos, 40, the police officers started beating both the boys, focusing on Eduardo, whom they thought had fired the gun.

"Immediately they started beating us, with their weapons, with their feet," Edwin said. "They'd hit me on the head with the back of the gun, and they kept telling us they were gonna kill us."

When officers realized people had gathered to watch, they took the young men, already badly hurt, to the headquarters of the transit police. The beatings continued — again in a parking lot — for three hours. At the time, Santos said, neither boy had been officially detained, which would have alerted a prosecutor.

Edwin doesn't know how many policemen took part in the beating. Santos later said soldiers were also there.

"One of the cops would grab me by the hair and hold me, while another one punched and kicked me," Edwin said.

The cops took pictures with their cellphones, something Honduran policemen often do when they catch a suspect. Graphic photographs of the beaten, the tortured and the dead are typically sent to reporters for publication — including to The Associated Press. La Tribuna published photos of the boys, showing Eduardo lying on the ground, shirtless, unconscious and covered in blood. Edwin slumped stunned against a wall, handcuffed, his left eye swollen.

He couldn't see past the blood in his eyes, and then he passed out.

Eduardo was taken to Hospital Escuela, a medical school. He died four days later.

The autopsy indicated the cause of death was more than 20 blows to the base of the skull with a blunt object — a gun, prosecutors say.

Santos calls the incident a crime, a public lynching. The charges were clear: illegal detention, torture leading to death, dereliction of public duty and a cover-up.

Accusations that police commit extrajudicial killings are nothing new here. At least seven times in the last few months, members of a street gang were killed or went missing after run-ins with police, the AP has reported, feeding charges that they were victims of federal death squads.

There is some justice in Honduras, but not much — 82 percent of the complaints filed to a prosecutor never reach trial. An attorney general testified before Congress in June that nine out of 10 crimes went unpunished. He was fired shortly thereafter.

People who talked to Santos about the case were mystified that he was frustrated by his inability to corral a chaotic criminal justice system.

"People say, 'Why are you going after the police, if the one they caught has killed a policeman?'" Santos said.

The video of Arita's killing and the boys' escape went viral after it was broadcast by the media, triggering hundreds of responses on newspaper websites.

But rather than demands for justice, the crime epidemic has created an "eye for an eye" culture.

"They are too dangerous to be allowed to live, these people should die," read a comment left on a local newspaper's website.

"Too bad the thugs didn't kill each other. I hope he gets raped and killed in prison," said another.

And a third one: "One less scumbag in the world."

Santos thinks the images of the policeman's killing were released to justify what happened afterward. Eduardo's death was a sort of "social cleansing."

The surveillance video of the beating in the parking lot was never released to the public.

Santos doesn't expect to find evidence that will indict the police. When he asked for the names of the agents who participated in the beatings, he was given more than 100 names. None of them are compelled to testify. The crime will just top his mountain of some 600 open cases — the average for a federal prosecutor.

The case was as good as closed since Santos had no assistant and no car to conduct investigations — or even a motorcycle.

Police director Juan Carlos Bonilla told the AP in an interview in September that "you should not have the slightest doubt that we will act according to the law, and we will do it fast."

Four months later, there were still no arrests. Bonilla was removed from his post. Santos was fired shortly after landing Edwin's case.

At the correctional center for minors outside Tegucigalpa, Edwin is awaiting trial.

His mother rarely visits. She can't afford the trip.

"If she comes, she can't sell tortillas, and if she doesn't sell tortillas, there's no money for food."

Why did he shoot Arita? He didn't really mean to, he insists. He panicked and went after the gun. "I regret it; of course I regret it."

Edwin faces eight to 15 years in jail. But he will be lucky if he lives that long. In September, he was admitted to a hospital for more injuries from a second police beating, this one in jail. During his first meeting with an AP reporter, he could not walk on his own.

One of the guards says that in Honduras, someone who kills a policeman "is carrying four planks of wood on his shoulder" — a dead man walking.

But Edwin has left his own legacy.

In the town of Ocotepeque, the son of the murdered traffic cop has a new set of dreams.

Joaquin, the oldest at 15, dropped out of school to sell paintings for $5 a day, to help the family make ends meet after his father's death. He is nurturing a slow vengeance. When he grows up, he said, "I want to be a policeman and kill those gang members."

Bail Revoked for Mass. Lab Chemist in Drug Case

A former chemist charged with stealing drugs from the state crime lab in western Massachusetts where she worked is spending Christmas in jail after a judge revoked her bail.

Hampshire Superior Court Judge Mary-Lou Rup on Monday granted the prosecution's request to revoke Sonja Farak's bail after cocaine was found in her system during a random drug test.

Farak, after initially denying taking any drugs, ackowledged snorting "a few lines" of cocaine at a party last week, Assistant District Attorney Beth Lux told the judge. Attending the party may have also violated the curfew provision in the conditions of Farak's release, according to Probation Department officials.

Defense attorney Elaine Pourinski asked Rup to stiffen Farak's probation conditions rather than revoking bail.

Farak had gone to the party last week after an Alcoholics Anonymous meeting and did not know drugs would be present, the attorney said. It was her first violation after nearly a year of pre-trial release, she pointed out.

"This is a clear indication that she still has lots of work to do," Pourinski said, adding her client is under "extreme pressure."

Farak, 35, of Northampton, had been free on $5,000 bail.

She pleaded not guilty in January to tampering with evidence and stealing and possessing drugs. She removed drug samples from the Amherst lab, then replaced them with other substances while keeping the narcotics for her personal use, the prosecutor said.

More than 200 drug cases were dismissed from district and superior courts because Farak could not testify about the results of her drug testing, prsoecutors say.

Farak's case is not connected to that of Annie Dookhan, who worked at a state drug lab in Boston. Dookhan was sentenced to three to five years in prison after pleading guilty last month to 27 counts.

Third City of Buffalo Employee Guilty of Stealing Thousands of Dollars from Parking Meters

BUFFALO, NY—U.S. Attorney William J. Hochul, Jr. announced today that Francis Tronolone, 33, of Buffalo, New York, pleaded guilty to stealing thousands of dollars from the City of Buffalo, a governmental agency that receives federal funding. The charge carries a maximum penalty of 10 years in prison, a fine of $250,000, or both.
“Today’s developments mean that three different employees of the same city department have now been convicted of collectively stealing hundreds of thousands of dollars from the residents of this area,” said U.S. Attorney Hochul. “These crimes occurred day in and day out over many months and years. This office will continue to pursue this investigation until all who may have abused their positions are identified and caught.”
Assistant U.S. Attorney Maura K. O'Donnell, who is handling the case, stated that from November 2003 to the present, the defendant was employed as a coin collector and later a parking meter mechanic in the City of Buffalo Department of Parking Enforcement. In this capacity, Tronolone was responsible for collecting coins deposited into parking meters and repairing malfunctioning meters.
During the period of his employment, the defendant stole approximately $9,000 in coins from city parking meters, money that was supposed to be deposited into the city treasury. Some of the money was stolen from parking meters that had been rigged by other parking meter mechanics. Tronolone kept a small cooler in the back of his vehicle where he would conceal the stolen coins.
Tronolone is the third employee of the Department of Parking Enforcement to be convicted in this case. James Bagarozzo was convicted of stealing over $200,000 from Buffalo parking meters and sentenced to 30 months in prison on August 16, 2013. Bagarozzo was also ordered to pay $210,000 in restitution. Lawrence Charles has also been convicted of stealing over $10,000 from Buffalo parking meters and was sentenced to six months and prison and ordered to pay $15,000 in restitution. A fourth employee, Franklin Lopez, is charged also charged with stealing thousands of dollars from the City of Buffalo, a governmental agency that receives federal funding. 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.

Developer Sentenced to 30 Months on Theft of Government Funds and Conspiracy Charges

Praveen Kailas, age 30, a resident of New Orleans, Louisiana, was sentenced to 30 months in prison by the Honorable Sarah S. Vance after pleading guilty in August to a bill of information charging him with one count of conspiracy to commit theft of government funds (18 U.S.C. § 371) and one count of theft of government funds (18 U.S.C. § 641), announced the U.S. Attorney’s Office today.
Kailas’ charges stem from his company, Lago Construction LLC, overbilling its construction monitoring subcontract for the Louisiana Road Home’s Small Rental Property Program (SRPP). The Department of Housing and Urban Development (HUD) funds the SRPP, which provides monetary assistance to property owners to repair their small-scale rental properties damaged by Hurricanes Katrina or Rita. In order to receive the grant, a small rental property owner has to agree to make the renovated rental units available to moderate to low-income tenants for a period of years. HUD provided the state of Louisiana Office of Community Development with federal funds to administer the SRPP. The state of Louisiana in turn subcontracted with private entities to oversee the administration of the SRPP, including the renovation of the properties.
Starting on June 6, 2011, Lago Construction LLC began its subcontract performing construction monitoring of the renovations of SRPP funded properties. Kailas’ theft of federal funds designated for SRPP administration began from the inception of Lago Construction LLC's subcontract when Kailas was billed for working on the subcontract 40 hours each week but did not spend 40 hours each week performing SRPP construction monitoring services or any other administrative services.
Kailas admitted that he and other stakeholders of Lago Construction LLC solicited monitors to work on the construction of a home they owned in New Orleans, Louisiana and/or to work at other companies owned and operated by them. Hours that these monitors spent on other projects for Kailas and other stakeholders of Lago Construction LLC were not deducted from the hours that were billed to the SRPP contract nor were the monitors paid separately for the work they performed on other projects. Kailas and Lago Construction LLC were paid from federal dollars for these monitors as if they had spent all the hours they billed each week performing services related to the SRPP.
The court found Kailas overbilled $236,000 and ordered him to pay restitution to HUD in the amount of $67,524 because the entity dispersing the HUD funds previously withheld $168,476 fromKailas’s invoices. Kailas will be on three years’ supervised release following his release from prison.
The case was investigated by the Department of Housing and Urban Development-OIG and the Federal Bureau of Investigation, with assistance from the Department of Homeland Security-OIG. The case was prosecuted by Assistant United States Attorney Emily K. Greenfield.

Members of Multi-State Theft Scheme Sentenced in New Jersey for Conspiracy to Sell Stolen Pharmaceuticals

NEWARK—Three Florida men were sentenced today in New Jersey federal court for their roles in conspiring to possess and sell prescription medication taken from stolen tractor trailers, New Jersey U.S. Attorney Paul J. Fishman announced.
Ernesto Romero-Vidal a/k/a “Bemba,” 48, was sentenced to 80 months in prison; Rocke R. Lopez-Batista a/k/a “El Nino,” 28, was sentenced to 40 months in prison; and Ariel Garcia, 40, was sentenced to 18 months in prison.
All three defendants previously pleaded guilty before U.S. District Judge William J. Martini to separate informations charging them with conspiracy to possess stolen prescription medicine. Romero-Vidal also pleaded guilty to three additional counts of conspiring to receive and sell stolen goods, including pharmaceuticals belonging to drugmakers Bayer, Perrigo, and Sandoz Inc.
According to documents filed in this case and statements made in court:
During their guilty plea proceedings, Romero-Vidal, Lopez-Batista, and Garcia admitted that from September 2009 through October 2009, they conspired with others to possess prescription respiratory medicine manufactured by Mylan Inc. that was taken from a stolen tractor trailer in Tampa, Florida, on September 8, 2009.
On October 20, 2009, Tapanes and a conspirator delivered samples of the stolen prescription medicine to a confidential source in Elizabeth, New Jersey. Nine days later, Tapanes and Garcia delivered a tractor trailer containing the stolen medicine to a confidential source. Later that same day, Tapanes, Lopez-Batista, and Garcia were present at a meeting in Garcia’s home during which the confidential source provided them with a cash payment of $140,000 for the stolen medicine. Romero-Vidal received a payment of $4,000 from the confidential source in connection with his role for brokering this sale.
Romero-Vidal also admitted he received approximately $3,500 for brokering the sale of medication stolen from a Bayer product distribution center in Olive Branch, Mississippi, on March 23, 2009, and $5,000 as partial payment towards the delivery of stolen Perrigo products—stolen along with a tractor trailer in Dallas on March 3, 2010—to New Jersey.
He also admitted participating in the sale of Sandoz Inc. prescription respiratory medicine to two separate groups of buyers. The Sandoz products were stolen along with another tractor trailer in Chambersburg, Pennsylvania, on December 2, 2009.
In addition to the prison term, Judge Martini sentenced each defendant to pay $264,900 in restitution. The judge also ordered Garcia to serve three years of supervised release and Lopez-Batista and Romero-Batista each to serve a year of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and detectives of the North Bergen Police Department, under the direction of Chief Robert J. Dowd, with the investigation.
The government is represented by Senior Litigation Counsel Leslie Faye Schwartz and Assistant U.S. Attorney Jane H. Yoon of the U.S. Attorney’s Office Criminal Division in Newark.

New Jersey Turnpike Authority Employee Admits Stealing at Least $1.5 Million

NEWARK—A former claims manager for the New Jersey Turnpike Authority today admitted devising a scheme that led to the theft of at least $1.5 million from the authority and various insurance companies, U.S. Paul J. Fishman announced.
Gerardo A. Blasi, 55, of Clifton, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with using the mails as part of a scheme to defraud the Turnpike Authority and certain insurance companies and to obtain money and property by false and fraudulent pretenses, representations, and promises.
According to the documents filed in this case and statements made in court:
From May 2009 until June 2013, while working as the claims manager for the New Jersey Turnpike Authority (NJTA), it was Blasi’s job to negotiate and recover the costs of repairs from insurance companies of motorists who caused damage to property belonging to the NJTA. With the assistance of representatives from two New Jersey-based insurance claims adjusting companies, Blasi inflated the costs to repair the damages done to NJTA property by insured motorists. The inflated claims were submitted to the motorists’ insurance companies and payment was directed through the mail to the one of the New Jersey-based claims adjusting companies instead of to the NJTA. Payments for actual costs were passed on to the NJTA, and Blasi and his conspirators shared the difference between the inflated costs and the payments for actual costs sent to the NJTA.
Despite a NJTA policy of not attempting to recover on damages caused by motorists who died from accidents on the Turnpike, Blasi continued to process those claims. Because the NJTA was unaware that Blasi had processed the claims, he was able to share the entire payment sent by the insurance company between himself and one of his conspirators. Blasi and others defrauded the NJTA and various insurance companies of at least $1.5 million.
The charge to which Blasi pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for March 19, 2014.
U.S. Attorney Fishman credited special agents from the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s plea. He also thanked the New Jersey Turnpike Authority, under the direction of Executive Director Veronique Hakim, for its cooperation during the investigation.
The government is represented by Assistant U.S. Attorney David L. Foster of the U.S. Attorney’s Office, Special Prosecution’s Division.

Sea-Tac Airport Copper Thief Pleads Guilty to Theft of Public Property

A repeat offender who stole thousands of feet of copper wire from runway light towers at Seattle-Tacoma International Airport pleaded guilty October 17, 2013, to theft of public property, announced U.S. Attorney Jenny A. Durkan. Timothy Lynch, 50, faces up to 10 years in prison when sentenced by U.S. District Judge James L. Robart on January 13, 2014.
According to records file in the case, the theft was discovered on February 12, 2013, when a Port of Seattle employee noticed damage to the fence surrounding the runway light structures near South 188th Street and Des Moines Memorial Drive. In total, approximately 7,200 feet of copper cable was stolen from Federal Aviation Administration towers, rendering them inoperable and potentially posing a threat to airline safety. Lynch admits that he entered a secured area of Sea-Tac airport and removed copper cable connected to the light towers. Replacing the copper wire and repairs to damages cost the FAA more than $30,000.
Under the terms of the plea agreement, the parties will recommend that the court sentence Lynch to 30 months in prison.
The case is being investigated by the FBI Safe Streets Task Force, which includes officers from the Port of Seattle Police Department, the Seattle Police Department, and the King County Sheriff’s Department. The case is being prosecuted by Executive Assistant United States Attorney Thomas Bates.
Press contact for the U.S. Attorney’s Office is Emily Langlie at (206) 553-4110 or Emily.Langlie@usdoj.gov.

Former Social Security Administrator Pleads Guilty to Aggravated Identity Theft, Mail Fraud, Unauthorized Sale of Stolen Stocks, Tax Charges

PROVIDENCE, RI—Randolph Hurst, 50, of West Warwick Rhode Island, a former assistant district manager for the Social Security Administration in Rhode Island, pled guilty in U.S. District Court in Providence on October 9, 2013, to stealing the identity of a Coventry man and using the victim’s identity to fraudulently sell more than $160,000 worth of stock certificates belonging to the victim. Hurst also pled guilty to failing to pay $61,999 in taxes owed to the IRS.
Appearing before U.S. District Court Judge William E. Smith, Hurst pled guilty to one count each of aggravated identity theft, transportation of stolen securities, and tax evasion; two counts of mail fraud; and three counts of filing a false tax return. Hurst faces up to 45 years in federal prison and a fine of up to $1.4 million when he is sentenced on January 10, 2014.
A co-defendant in this matter, Justin Silveira, 29, of Coventry, pled guilty on October 9, 2013, to two counts of perjury and one count of obstruction of justice. Silveira admitted to the court that he lied to a grand jury that was investigating this matter. At sentencing on January, 10, 2014, Silveira faces up to 20 years in federal prison and a fine of up to $750,000.
The guilty pleas were announced by United States Attorney Peter F. Neronha; Vincent B. Lisi, Special Agent in Charge of the Boston Field Office of the FBI; Cheryl Garcia, Acting Special Agent in Charge of the New York region of the U.S. Department of Labor, Office of Labor Racketeering and Fraud Investigations; John Collins, Acting Special Agent in Charge of the Boston Office of the Internal Revenue Service, Criminal Investigation; and Scott E. Antolik, Special Agent in Charge of the Boston Field Office of the Social Security Administration, Office of the Inspector General/Office of Investigations.
At the time of his guilty plea, Hurst admitted to the court that in September 2010, he stole personal identifying information belonging to the victim and used it to open a joint account at Summit Brokerage Services in Providence in his name and in the name of the victim, without the victim’s permission. Hurst admitted that two days after opening the account, he provided documentation to Summit purportedly authored and signed by the victim, requesting the deposit of two stock certificates owned by the victim. The victim never authorized the deposit of the stock certificates and was unaware that an account had been opened in his name.
Hurst admitted to the court that in October 2010, without the victim’s knowledge, he requested that Summit sell the stocks and issue a check in his name and in the victim’s name for $157,747.49, which represented a portion of the proceeds of the sale of the stocks. The check was sent by courier to the Coventry address of Justin Silveira. On October 22, 2010, the check was deposited into a bank account owned jointly by Hurst and his wife. Hurst admitted to the court that on the same date the check was deposited he requested a second check from Summit in the amount of $3,980.46, in his name and in the victim’s name, for the remaining proceeds from the sale of the stock and that it be sent to the same address in Coventry. On November 8, 2010, the check was deposited into a bank account owned jointly by Hurst and his wife.
Hurst admitted to the court that he and his wife spent the proceeds of the sale of the stock, $161,727.95, on personal items and expenses.
The cases are being prosecuted by Assistant U.S. Attorney Dulce Donovan.
The matter was investigated by federal agents from the FBI; U.S. Department of Labor Office of Labor Racketeering and Fraud Investigations; Internal Revenue Service-Criminal Investigation; and Social Security Administration, Office of the Inspector General/Office of Investigations.
This law enforcement action 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.