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

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

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

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

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

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

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

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

Kimberly Wilde Pleads Guilty to Embezzling from Brattleboro Law Firm

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

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

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

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

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

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

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