Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci9oZWxlbmEtbWFuLWFkbWl0cy1iYW5rLWZyYXVkLXNjaGVtZS0xLW1pbGxpb24tY292aWQtMTktcmVsaWVmLWxvYW5z
  Press Releases:
GREAT FALLS — A Helena man admitted to crimes today stemming from a scheme to defraud a bank of more than $1 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and to using the funds instead for his personal benefit, U.S. Attorney Leif M. Johnson said today.

Trevor Gene Lanius-McLeod, 48, also known as Trevor Gene McLeod, pleaded guilty to bank fraud and to engaging in monetary transactions in property derived from specified unlawful activity. Lanius-McLeod faces a maximum of 30 years in prison, a $250,000 fine and three years of supervised release on the bank fraud crime.

In a plea agreement filed in the case, the parties agreed that if the court accepts the plea agreement at sentencing, the government will seek dismissal of nine other counts charged in an indictment.

Chief U.S. District Judge Brian M. Morris presided. Chief Judge Morris set sentencing for April 21. Lanius-McLeod was released pending further proceedings.

The government alleged in court documents that in April 2021, Lanius-McLeod applied for four PPP loans through Valley Bank of Helena, a division of Glacier Bank, and lied on the applications and accompanying documentation. As a result, Lanius-McLeod received $1,043,000 in fraudulent funds from the four loans. The PPP program provided emergency assistance to small businesses for job retention and certain other expenses.

As part of the scheme, Lanius-McLeod applied for and received a PPP loan for $340,000 on behalf of Renovated Montana Properties LLP, an entity he controlled. Without several false statements, Lanius-McLeod would not have qualified for this loan. Lanius-McLeod falsely stated that the company had paid payroll taxes and had 25 employees. The company had never paid payroll taxes and did not have employees besides Lanius-McLeod, although it sometimes employed independent contractors. Lanius-McLeod agreed in a promissory note to use the loan for payroll costs and other business-related expenses. None of the loan was used for these purposes. Instead, Lanius-McLeod used the loan for personal expenses, including to pay the mortgage on his personal residence.

Co-defendant Kasey Jones Wilson of Laurel pleaded guilty to bank fraud and is awaiting sentencing.

Assistant U.S. Attorney Colin M. Rubich is prosecuting the case, which was investigated by the IRS-Criminal Investigation and FBI, with assistance from the U.S. Treasury Inspector General for Tax Administration and U.S. Secret Service.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

XXX

 

 

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci9mYWlyZmllbGQtbWFuLXdoby1kZWZyYXVkZWQtZmFtaWx5LW1vcmUtNzAwMDAwLXNlbnRlbmNlZC1wcmlzb24
  Press Releases:
GREAT FALLS—A Fairfield man who admitted posing as a financial services manager to steal more than $700,000 from a family and then spent the money for his own benefit was sentenced today to 28 months in prison followed by three years of supervised release and ordered to pay restitution, U.S. Attorney Kurt Alme said.

Michael Lee Van Auken, 41, pleaded guilty in January to wire fraud, money laundering and filing a false tax return.

Chief U.S. District Judge Brian M. Morris presided and allowed Van Auken to self-surrender. Judge Morris ordered Van Auken to pay $719,340 restitution to the family and $165,195 restitution to the IRS.

 "Montanans have a tradition of trust when it comes to doing business with one another. We’re also raised to pay our taxes. When someone violates that trust to embezzle a family's money for his own gain and avoids paying income taxes, he will be caught and prosecuted," U.S. Attorney Alme said.

 “Special Agents pride themselves on untangling complex financial transactions created by fraudsters such as Van Auken,” said IRS-Criminal Investigation Special Agent in Charge Andy Tsui.  “Along with protecting the integrity of our nation’s tax system, IRS-Criminal Investigation seeks to help individuals and entities who suffer financial harm at the hands of swindlers and bring them to justice.”

"Not only did the family suffer a devastating financial loss, but they are also left to deal with the consequences of Mr. Van Auken's misrepresented tax services," said Paul Haertel, special agent in charge of the Salt Lake City FBI.  "The case should serve as a reminder that the FBI and our law enforcement partners will go after unscrupulous individuals who deceive and defraud unwitting people of their hard-earned money.  We also encourage the public to do their due diligence and research when looking to invest and to immediately report any fraud to police or the FBI."

In court documents filed in the case, the prosecution said Van Auken formed various business entities to hide his embezzlement from a Montana family. Van Auken offered to provide the family various financial services, including investment opportunities, filing of personal and business taxes and the creation of wealth management plans.

Investigators found that Van Auken failed to provide the services as promised. Instead, Van Auken used the money for personal expenses and invested in foreign currency trading to try to recover amounts owed, none of which the victims authorized. Van Auken defrauded the victims of approximately $719,340.

As part of the scheme, Van Auken misrepresented his background to gain the victims' trust by claiming he had received a law degree and an accounting degree. Van Auken further misrepresented the value of the "investments" to the victims by creating fraudulent documents and telling them the investments were doing well, when in fact, the investments did not exist and the money was not invested as claimed.

In addition, Van Auken created a wealth management plan that he claimed would double the victims' net worth in five years. The plan induced the victims to use Van Auken's services.  When the victims asked Van Auken return their funds, he failed to do so.

Van Auken claimed he would invest the victims' money in a new drill bit for oil drilling and fracking industries. Instead, Van Auken invested the money in foreign currency trading in an attempt to repay the funds owed and embezzled the money for his own personal expenses.

As part of the scheme, Van Auken laundered $210,000 he received from the victims for the drill bit investment by spending it on unauthorized expenditures and transferring $100,000 to a personal account.

Van Auken also filed a false tax return in 2018 for tax year 2014 in which he claimed a total income loss of $118,839, but did not claim $295,340 he received from defrauding the victims. The additional income resulted in $76,819 due in taxes. The investigation also showed that Van Auken owed $165,195 in taxes for the years 2013-2015.

Assistant U.S. Attorney Ryan Weldon prosecuted the case, which was investigated by the FBI and IRS.

XXX

 

 

 

 

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci9oZWxlbmEtbWFuLXNlbnRlbmNlZC1wcmlzb24tYmFuay1mcmF1ZC1jb3ZpZC0xOS1yZWxpZWYtc2NoZW1l
  Press Releases:
GREAT FALLS – A Helena man who admitted lying in a scheme to receive more than $400,000 in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) for coronavirus relief aid and using the money instead for personal benefit was sentenced on March 23 to one year and one day in prison, to be followed by three years of supervised release, U.S. Attorney Leif M. Johnson said.

Kasey Jones Wilson, 29, pleaded guilty in November 2021 to bank fraud and to engaging in monetary transactions in property derived from specified unlawful activity.

Chief U.S. District Judge Brian M. Morris presided. Chief Judge Morris also ordered $125,000 restitution.

“Wilson tried to line his own pockets at the expense of small businesses that needed this federal aid to help make payroll and cover other expenses during a deadly pandemic. Such fraudsters will be fully investigated and prosecuted. I want to thank Assistant U.S. Attorney Colin M. Rubich, IRS Criminal Investigation, the FBI and all of our law enforcement partners for their work on this case,” U.S. Attorney Johnson said.

“This sentencing is a victory for American citizens and the business owners the Paycheck Protection Program was designed to help,” said Andy Tsui, IRS Criminal Investigation Special Agent in Charge. “Through our partnership with the U.S. Attorney’s Office and our federal law enforcement partners, IRS Criminal Investigation agents will continue to aggressively pursue individuals who try to exploit federal relief programs for their personal gain.”

In court documents, the government alleged that on June 28, 2020, Wilson applied to Valley Bank of Helena for a Paycheck Protection Program loan seeking $416,400 on behalf of Step Above Management LLC, an entity he and codefendant, Trevor Lanius-McLeod, controlled. The loan was granted, and funds were sent to an account that Wilson controlled. Lanius-McLeod has pleaded guilty to charges and is pending sentencing.

The PPP program, which is part of the federal Coronavirus Aid, Relief and Economic Security (CARES) Act, provided emergency assistance to small businesses for job retention and certain other expenses.

Wilson and Lanius-McLeod made numerous false statements on the PPP loan application. Without the false statements, Wilson and Lanius-McLeod would not have qualified for a PPP loan. The defendants falsely stated that Step Above Management had paid payroll taxes and had 34 employees. The company never paid payroll taxes and had no employees besides Wilson and Lanius-McLeod. Wilson also represented on the loan application that he had not been convicted of a felony within the last five years, when he had been convicted of a felony in 2016.

The government further alleged that in a promissory note, the defendants agreed to use the funds for business-related expenses. None of the loan money was used for these purposes. Instead, the proceeds were spent on various personal expenses. Most of the loan funds went to Lanius-McLeod. Wilson purchased several cashier’s checks from Valley Bank of Helena payable to Lanius-McLeod.

Assistant U.S. Attorney Colin M. Rubich prosecuted the case, which was investigated by the IRS-Criminal Investigation and FBI, with assistance from the U.S. Treasury Inspector General for Tax Administration and U.S. Secret Service.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

XXX

 

 

 

 

Score:   0.5
Docket Number:   D-MT  1:18-cr-00149
Case Name:   USA v. Price Jr.
  Press Releases:
BILLINGS – The owners of Kisling Quality Builders today admitted they evaded paying more than $320,000 in taxes in a scheme in which they used the construction of a Billings mansion to avoid reporting more than $800,000 in profits, U.S. Attorney Kurt Alme said.

James Kisling, 51, and his wife, Timilynn Kisling, 44, of Billings, each pleaded guilty to an information charging them with two counts of tax evasion.  The Kislings face a maximum five years in prison, a $100,000 fine, costs of prosecution and three years of supervised release.

U.S. Magistrate Judge Timothy J. Cavan presided and will recommend the couple’s pleas be accepted by U.S. District Judge Susan P. Watters, who is hearing the case. The Kislings were released pending further proceedings. A sentencing date has not yet been set.

 Prosecutors said in court records that the Kislings, who own KQB, arranged with Larry Wayne Price, Jr., to hide income when Price hired the company in 2014 to build his house—one of the largest residential mansions every constructed in Billings. KQB agreed to construct the house at cost plus 9 percent, making KQB’s profit an additional 9 percent of the cost.

Price, a former vice president of Signal Peak Energy, a Montana coal company, is awaiting sentencing for his guilty pleas to wire fraud, money laundering and false statements for defrauding coal companies of about $20 million and lying to investigators about a fake abduction. Price’s Billings mansion is among properties to be forfeited at sentencing as part of an agreement with the government.

The Kislings committed tax fraud with Price’s cooperation and knowledge, prosecutors said in court documents. In 2014, the Kislings began building a home for themselves. Instead of paying for this house with their income, the Kislings arranged with Price to make it appear as if the cost of their personal house was part of construction costs of Price’s mansion. The Kislings referred to their house as the “Price Guest House” in work documents for the mansion, and they deducted construction costs for this house from the 9 percent profits they were supposed to receive from Price. Rather than pay the Kislings their profit for building the mansion, Price and the Kislings agreed that Price would simply not pay them approximately $526,132, which was the cost of constructing their personal home, but that the Kislings would still credit him for doing so.

Through this arrangement, the Kislings disguised $526,132 of profits on the Price mansion and deliberately did not report this income to the IRS on their 2014 tax return as required.

In 2015, a similar transaction occurred when the Kislings needed a $275,000 loan on a short time frame for a land transaction in Wyoming. Instead of going to a bank for financing, the Kislings asked Price for the money. Price agreed to the loan and provided the funds. And in an arrangement similar to the Kislings’ personal house construction, the repayment of this loan was disguised as expenses related to the “Price Guest House” and deducted from the 9 percent Price was supposed to pay the Kislings. As a result, the Kislings disguised $275,000 of profits for their work on the Price mansion. The Kislings deliberately did not report this income to the IRS on their 2015 tax return as required.

In an interview with Department of Justice representatives, the Kislings acknowledged that they knowingly and willfully omitted profits from their 2014 and 2015 tax returns and that they both participated in the scheme. The scheme enabled the Kislings to hide approximately $801,132 in income from the IRS.

The parties disagree on the amount of the government’s loss from the fraud but hope to resolve the difference before sentencing. The IRS has calculated the tax due and owning as $327,664, not including penalty and interest, while the Kislings’ accountant has calculated the tax due as $320,102, not including penalty and interest.

Assistant U.S. Attorneys Colin Rubich, Zeno Baucus and Tim Tatarka are prosecuting the case, which was investigated by the IRS and FBI.

XXX

 

 

 

 

 

 

 

BILLINGS – A Billings man who worked for Signal Peak Energy, a Montana coal mining company, admitted in federal court today to an embezzlement scheme that defrauded companies of more than $20 million and to lying to investigators about a false abduction, U.S. Attorney Kurt G. Alme said.

Larry Wayne Price, Jr., 38, pleaded guilty to three counts of wire fraud, conspiracy to commit money laundering and false official statement.

U.S. Magistrate Judge Timothy J. Cavan presided at the hearing and recommended Price’s pleas be accepted by U.S. District Judge Dana L. Christensen, who is assigned to the case. A sentencing date will be set. Price was released pending sentencing.

Price faces a maximum 20 years in prison, a $250,000 fine and three years of supervised release on the wire fraud and conspiracy counts. He faces a maximum five years in prison, a $250,000 fine and three years of supervised release on the official false statement count.

Price also faces the forfeiture of real and personal property derived from the crimes, including a $20,321,134 monetary judgment, two Billings residences located at 5650 Canyonwoods Drive and at 5875 Whispering Woods Drive, three properties in Virginia, a motorhome, boat trailers, watercrafts and jewelry.

The government agrees that forfeited property will be used for restitution for victims until all eligible victims have been made whole. Remaining property will be forfeited under the normal forfeiture procedures and will not exceed the money judgment of $20,321,134.

If the case had proceeded to trial, the government would have provided the following information as evidence:

From about October 2016 until April 2018, Price embezzled about $20,321,134 from three coal-related companies. During that time, Price was vice president of surface activities at Signal Peak Energy and also operated a private business called 3 Solutions, LLC, which was involved in coal mining but its primary purpose was to supply chemicals to Signal Peak Energy. 

The three companies Price defrauded were Ninety M, LLC, a Wyoming company of investors looking to invest large sums in coal mining projects; Three Blind Mice, LLC, another Wyoming company with investors seeking to invest in mining; and Signal Peak Energy.

Price had developed a reputation in Billings and elsewhere as a coal mining expert. Based on his reputation, he convinced Three Blind Mice to lend him $7.5 million, which he stole. Price maintained that 3 Solutions had secured a contract with a Pennsylvania coal company to install coal mining equipment. To complete the project, Price claimed he needed $7.5 million for expenses.

Price proposed that Three Blind Mice lend him the $7.5 million, and he would repay it $11 million on Jan. 31, 2018. Three Blind Mice agreed, signed an unsecured promissory note and wired 3 Solutions the funds. Price defaulted on the loan on Jan. 31, 2018.

An investigation found there was no contract between 3 Solutions and a Pennsylvania coal mine. Instead, Price spent the $7.5 million on unrelated expenses.

In another scheme, Price convinced Ninety M’s investors to appoint him as a representative of the company to help it buy and develop a coal mining property in Tazewell, VA, and to help develop other coal-related ventures. Price engaged in a series of five business deals with other companies on behalf of Ninety M in which he solicited about $13.5 million from the firm, of which $10,475,000 was fraudulently obtained.

Meanwhile, Price, while still employed by Signal Peak Energy, fraudulently induced Signal Peak Energy to buy coal-related equipment from a firm knowing that the firm would not actually provide the equipment. The firm funneled the money to Price through a bank account registered to 3 Solutions. The scheme defrauded Signal Peak Energy of about $2,396,134.

In April 2018, the Ninety M investors began to question some of the transactions involving Price and had confronted him on the phone. By April, Price was living in Virginia, where he was originally from.

On April 18, 2018, Price learned Ninety M was sending representatives to confront him about the fraudulent transactions and he decided to hide. Price contacted a woman he knew and agreed to hide at a house the woman had rented.

The same day, Price’s wife reported him missing to Virginia authorities and local law enforcement responded. Late that night, a driver spotted Price standing on the side of the road in Gratton, Va. Price was taken to a hospital for treatment and released.

Price was subsequently questioned by several law enforcement agencies. In those statements, Price falsely claimed he had been kidnapped by men who may have been associated with an outlaw motorcycle gang.

In statements to the FBI and IRS on April 20, 2018, Price said he had been approached by an unknown man who discussed possibly selling a motorcycle to Price. Price agreed to meet this man at a park and ride. When Price went to the meeting location, the unknown man arrived with a windowless van and was accompanied by another unknown man who pointed a gun at him. Price claimed the second man applied a rag with chemical on it to his face and that made him disoriented. Price said the men took him to an unknown location where he sat in a dark room on the floor for a period of time. The men applied the chemical rag to his face again. He then remembered the men threatening him and throwing him out of the moving van onto the side of the road.

Price knew that none of these statements to the FBI and IRS or to other law enforcement about his supposed abduction was true. Price was not kidnapped by anyone. The false statements cost the government significant investigative resources and hampered the investigation into Price’s own wrongdoing.

Assistant U.S. Attorneys Colin Rubich and Zeno Baucus are prosecuting the case, along with Assistant U.S. Attorney Randy Ramseyer, of the Western District of Virginia. The case was investigated by the FBI, IRS and the Montana State Auditor.

XXX

Docket (0 Docs):   https://docs.google.com/spreadsheets/d/1rYNgTmgm6l6EoPzOb0OtNN_yPCEPVETeXlEbVbAzc3I
  Last Updated: 2023-10-14 08:37:01 UTC
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY

Description: The code of the federal judicial circuit where the case was located
Format: A2

Description: The code of the federal judicial district where the case was located
Format: A2

Description: The code of the district office where the case was located
Format: A2

Description: Docket number assigned by the district to the case
Format: A7

Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3

Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3

Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5

Description: Case type associated with the current defendant record
Format: A2

Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18

Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15

Description: The status of the defendant as assigned by the AOUSC
Format: A2

Description: A code indicating the fugitive status of a defendant
Format: A1

Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD

Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD

Description: The date when a case was first docketed in the district court
Format: YYYYMMDD

Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD

Description: A code used to identify the nature of the proceeding
Format: N2

Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD

Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2

Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE1
Format: N2

Description: The four digit AO offense code associated with FTITLE1
Format: A4

Description: The four digit D2 offense code associated with FTITLE1
Format: A4

Description: A code indicating the severity associated with FTITLE1
Format: A3

Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5

Description: The date of the last action taken on the record
Format: YYYYMMDD

Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD

Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD

Description: The date upon which the case was closed
Format: YYYYMMDD

Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8

Description: A count of defendants filed including inter-district transfers
Format: N1

Description: A count of defendants filed excluding inter-district transfers
Format: N1

Description: A count of original proceedings commenced
Format: N1

Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants terminated including interdistrict transfers
Format: N1

Description: A count of defendants terminated excluding interdistrict transfers
Format: N1

Description: A count of original proceedings terminated
Format: N1

Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1

Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1

Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10

Description: A sequential number indicating the iteration of the defendant record
Format: N2

Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD

Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
Format: YYYY

Data imported from FJC Integrated Database
Score:   0.5
Docket Number:   D-MT  2:20-cr-00002
Case Name:   USA v. Niles
  Press Releases:
MISSOULA–A Bozeman woman who admitted embezzling more than $400,000 while working as a bookkeeper for several businesses today was sentenced to five years of probation and ordered to pay $423,245 restitution, U.S. Attorney Kurt Alme said.

Anna Michelle Niles, 47, pleaded guilty on June 3 to wire fraud.

U.S. District Judge Dana L. Christensen presided.

In a sentencing memo filed in the case, the prosecution recommended a sentence within the guideline range, which was 27 months to 33 months.

The prosecution said in court documents that from 2009 until 2018, Niles embezzled from Cresent Cross, LLP, Clair W. Daines, Inc., Genesis Partners, LLC, Bitterroot Turf Farm, Inc., and other related business entities while performing bookkeeping and accounting services. Niles defrauded the firms by diverting funds through checks, stealing cash, claiming leave she was not entitled to obtain, receiving unauthorized 401(k) loan payments and using business credit cards on personal expenses, none of which was authorized. The investigation found that Niles embezzled about $433,018 from the businesses. When interviewed by the FBI, Niles admitted to stealing from Cresent Cross, LLP, and writing checks from other businesses to cover up the fraud.

Assistant U.S. Attorney Ryan Weldon prosecuted the case, which was investigated by the FBI.

XXX

 

 

 

 

 

 

MISSOULA–A Bozeman woman who worked as a bookkeeper for several businesses admitted this week to embezzling about $433,018 from the companies, U.S. Attorney Kurt Alme said.

Anna Michelle Niles, 47, pleaded guilty on June 3 to wire fraud. Niles faces a maximum 20 years in prison, a $250,000 fine and three years of supervised release.

U.S. Magistrate Judge Kathleen L. DeSoto presided. Niles was released pending further proceedings.

The prosecution said in court documents that from 2009 until 2018, Niles embezzled from Cresent Cross, LLP, Clair W. Daines, Inc., Genesis Partners, LLC, Bitterroot Turf Farm, Inc., and other related business entities while performing bookkeeping and accounting services. Niles defrauded the firms by diverting funds through checks, stealing cash, claiming leave she was not entitled to obtain, receiving unauthorized 401(k) loan payments and using business credit cards on personal expenses, none of which was authorized. The investigation found that Niles embezzled about $433,018 from the businesses. When interviewed by the FBI, Niles admitted to stealing from Cresent Cross, LLP, and writing checks from other businesses to cover up the fraud.

Assistant U.S. Attorney Ryan Weldon is prosecuting the case, which was investigated by the FBI.

XXX

The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week before U.S. Magistrate judges on indictments handed down by the Grand Jury or on criminal complaints. The charging documents are merely accusations and defendants are presumed innocent until proven guilty:

Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan on a criminal complaint on Feb. 18 was:

Nicholas James Imhoff, 29, of Cape Floral, FL, on charges of possession with intent to distribute methamphetamine. If convicted of the most serious crime, Imhoff faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Imhoff was detained pending further proceedings. The Drug Enforcement Administration and the Montana Highway Patrol investigated the case. Pacer case reference. 20-13.

Appearing on Feb. 20 and pleading not guilty was:

Anfernee Jamal Limberhand, also known as Anfernee Jamal Whiteman, 21, of Lame Deer, on charges of assault resulting in substantial bodily injury to a dating or intimate partner. If convicted of the most serious crime, Limberhand faces a maximum five years in prison, a $250,000 fine and three years of supervised release. Limberhand was detained pending further proceedings. The FBI investigated the case. Pacer case reference. 20-11.

Appearing in Missoula before U.S. Magistrate Judge Kathleen L. DeSoto and pleading not guilty on Feb. 18 was:

Anna Michelle Niles, 47, of Bozeman, on charges of wire fraud. If convicted of the most serious crime, Niles faces a maximum 20 years in prison, a $250,000 fine and three years of supervised release. Niles was released pending further proceedings. The FBI investigated the case. Pacer case reference. 20-2.

Appearing in Great Falls before U.S. Magistrate Judge John T. Johnston and pleading not guilty on Feb. 18 was:

Dakota Black Elk Houle, 22, on charges of possession of unregistered firearm. If convicted of the most serious crime, Houle faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Houle was detained pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. 

This case is part of Project Guardian, a Department of Justice initiative launched in the fall of 2019 to reduce gun violence and enforce federal firearms laws. Through Project Guardian, the U.S. Attorney’s Office in the District of Montana is working to enhance coordination of its federal, state, tribal and local law enforcement partners in investigating and prosecuting gun crimes. In addition, Project Guardian supports information sharing and taking action when individuals are denied a firearm purchase by the National Instant Criminal Background Check System for mental health reasons or because they are a prohibited person. Pacer case reference. 19-25.

If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system.

To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.

 XXX

Docket (0 Docs):   https://docs.google.com/spreadsheets/d/1YnX4ELpZ2f2dVAhhVWs-wPMittbgQMgehz0_a7coimo
  Last Updated: 2023-10-23 20:14:15 UTC
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY

Description: The code of the federal judicial circuit where the case was located
Format: A2

Description: The code of the federal judicial district where the case was located
Format: A2

Description: The code of the district office where the case was located
Format: A2

Description: Docket number assigned by the district to the case
Format: A7

Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3

Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3

Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5

Description: Case type associated with the current defendant record
Format: A2

Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18

Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15

Description: The status of the defendant as assigned by the AOUSC
Format: A2

Description: A code indicating the fugitive status of a defendant
Format: A1

Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD

Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD

Description: The date when a case was first docketed in the district court
Format: YYYYMMDD

Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD

Description: A code used to identify the nature of the proceeding
Format: N2

Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD

Description: A code indicating the event by which a defendant appeared before a judicial officer in the district court where a charge was pending
Format: A2

Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2

Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE1
Format: N2

Description: The four digit AO offense code associated with FTITLE1
Format: A4

Description: The four digit D2 offense code associated with FTITLE1
Format: A4

Description: A code indicating the severity associated with FTITLE1
Format: A3

Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5

Description: The date of the last action taken on the record
Format: YYYYMMDD

Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD

Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD

Description: The date upon which the case was closed
Format: YYYYMMDD

Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8

Description: A count of defendants filed including inter-district transfers
Format: N1

Description: A count of defendants filed excluding inter-district transfers
Format: N1

Description: A count of original proceedings commenced
Format: N1

Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants terminated including interdistrict transfers
Format: N1

Description: A count of defendants terminated excluding interdistrict transfers
Format: N1

Description: A count of original proceedings terminated
Format: N1

Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1

Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1

Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10

Description: A sequential number indicating the iteration of the defendant record
Format: N2

Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD

Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
Format: YYYY

Data imported from FJC Integrated Database
Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci9ncmVhdC1mYWxscy1tYW4tc2VudGVuY2VkLWZyYXVkLW1vbmV5LWxhdW5kZXJpbmctc2NoZW1l
  Press Releases:
GREAT FALLS – Great Falls resident Jay Nash, who admitted defrauding four persons of more than $800,000 in real estate schemes, was sentenced on Tuesday to three and one-half years in prison and to three years of supervised release, U.S. Attorney Kurt Alme said today.

U.S. District Judge Brian M. Morris, who presided at sentencing, also ordered $842,729 in restitution.

Nash, 50, pleaded guilty in May 2018 to wire fraud and to money laundering.

Prosecutors said Nash took advantage of elderly persons, widows and friends, defrauding them and spending the money on boats, furniture and his mother’s house.

In one of the cases, Nash obtained a warranty deed in August 2011 on a house owned by one of the victims. The parties entered into a promissory note, which was secured by a mortgage on the property. The mortgage, however, was never filed with Cascade County. Four months later, without the victim’s knowledge, Nash took out two loans totaling more than $180,000 on the property. Nash then sold the property and did not give the proceeds to the victim.

As a result of the sale, $246,763 was wire transferred from Mann Mortgage. Nash then deposited $47,823, which represented the proceeds of the sale of the house after previous mortgages were paid.

Investigators determined that Nash spent the victim’s money from the two mortgages and ultimate sale of the house on boats, furniture, his mother’s house and other unrelated living expenses. None of the expenditures was approved by the victim.

The investigation also found that Nash had defrauded three other victims in similar schemes by entering promissory notes with the individuals and spending the money on unauthorized purchases.

Prosecutors said the fraud loss was more than $800,000.

U.S. Attorney Ryan Weldon prosecuted the case, which was investigated by the FBI and IRS.

XXX

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci9ncmVhdC1mYWxscy1idXNpbmVzc21hbi1wbGVhZHMtZ3VpbHR5LXdpcmUtZnJhdWQtYW5kLW1vbmV5LWxhdW5kZXJpbmc
  Press Releases:
GREAT FALLS - The United States Attorney’s Office announced that Jay Nash, 50, of Great Falls, Montana, pleaded guilty to Wire Fraud and Money Laundering during a federal court hearing on May 16, 2018, in Great Falls, Montana, before U.S. District Judge Brian M. Morris.  Nash faces a federal prison sentence of up to 30 years, a $500,000 fine, restitution of over $800,000, and a $200 special assessment.

In an Offer of Proof, Assistant U.S. Attorneys Ryan Weldon and Thomas Bartelson stated the Government would have proved Nash obtained a warranty deed on the property owned by a victim.  The parties entered into a Promissory Note, which outlined that Nash would pay the victim an amount equal to the value of the house.  The Promissory Note was secured by a mortgage, which was never filed with Cascade County.  Four months later, Nash took out mortgages on the property totaling over $180,000.  Nash ultimately sold the property and did not give the proceeds of the sale to the victim. 

As part of the investigation, agents tracked where Nash spent the victim’s money from the two mortgages and the ultimate sale of the house.  Agents discovered that Nash spent the money on boats, furniture, sex toys, his mother’s house, and other unrelated living expenses.  None of those expenditures were approved by the victim, nor was the money given for that purpose. 

The investigation also revealed three other victims.  Similarly, Nash entered into promissory notes with these additional victims and spent the money on unauthorized purchases, including ATVs, tax payments to the IRS, and a motorhome.  In one example, Nash spent over $430,000 of victim money in less than 120 days. 

Sentencing is set for September 27, 2018, at 10:00 a.m., at the Missouri River Courthouse, in Great Falls, Montana, before U.S. District Court Judge Brian M. Morris.                  

This case was investigated by the Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation, and local law enforcement.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci9ncmVhdC1mYWxscy1idXNpbmVzc3dvbWFuLXNlbnRlbmNlZC1wcmlzb24td2lyZS1mcmF1ZA
  Press Releases:
GREAT FALLS  — A Great Falls woman who admitted to embezzling over $600,000 from a local construction company was sentenced today to two and a half years in prison, to be followed by three years of supervised release, U.S. Attorney Jesse Laslovich said.  Additionally, the defendant was ordered to pay $611,665.22 in restitution.  Chief U.S. District Judge Brian M. Morris presided over the sentencing.

Nicole Ann Lopez, 37, previously pleaded guilty in March to wire fraud.

The government alleged in court documents that in 2013, M&D Construction hired Lopez as a bookkeeper/accountant for the business.  As part of her duties, Lopez was given access to M&D’s bank account and was given administrator permission over M&D’s Quick Books account.

Between January 2017 and January 2020, defendant Lopez charged over $600,000 on her personal credit card accounts. Her expenses focused mostly on consumer shopping and travel, and included over $80,000 on purchases from Amazon, over $115,000 on general retail purchases, over $46,000 on clothing, over $57,000 on travel, over $34,000 on restaurants, over $24,000 on beauty products, over $12,000 on furniture, and over $7,000 on plastic surgery. None of these purchases was related to M&D’s business operations.

To pay for her personal credit card expenses, Lopez embarked on a scheme to embezzle money from M&D by using her access to M&D’s bank account to direct payments from the M&D business account to her personal credit accounts without the knowledge of or authorization from M&D’s owners. Between January 2017 and January 2020, Lopez directed 72 payments from M&D to her personal credit accounts and embezzled approximately $632,362.65.

Lopez’s embezzlement scheme was discovered when she purchased a small boutique clothing store in downtown Great Falls called Sora & Co., and resigned her position at M&D. To replace her, M&D hired a new accounting firm and a review of M&D’s books determined that over $600,000 was missing. M&D’s accounting firm contacted their bank and learned that the missing funds were paid directly to Lopez’s credit card accounts

Assistant U.S. Attorney Jeffrey K. Starnes prosecuted the case, which was investigated by the Federal Bureau of Investigation. 

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci9lYXN0LWhlbGVuYS1tYW4tc2VudGVuY2VkLXByaXNvbi1iYW5rLWZyYXVkLWNvdmlkLTE5LXJlbGllZi1zY2hlbWU
  Press Releases:
GREAT FALLS – An East Helena man who admitted lying in a scheme to receive more than $1 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) for coronavirus relief aid and using the money instead for personal benefit was sentenced on June 7 to 30 months in prison, to be followed by three years of supervised release, U.S. Attorney Jesse Laslovich said.

Trevor Gene Lanius-McLeod, 48, pleaded guilty in December 2021 to bank fraud and to engaging in monetary transactions in property derived from specified unlawful activity.

Chief U.S. District Judge Brian M. Morris presided. Chief Judge Morris also ordered $1,000,043.00 restitution, $125,000 of which will be paid jointly with co-defendant Kasey Wilson who was sentenced in March 2022.

“During a trying time in our country’s history, Lanius-McLeod stole money from a government program designed to keep businesses afloat and lined his own pockets to the detriment of truly needy businesses.  Today, we send a strong message that such fraud will not go unpunished in the District of Montana.  I want to thank Assistant U.S. Attorney Colin M. Rubich, IRS Criminal Investigation, the FBI and all of our law enforcement partners for their work on this case,” U.S. Attorney Laslovich said.

“The sentence handed down today is a direct reflection of the seriousness of Mr. Lanius-McLeod’s crimes,” said Andy Tsui, Special Agent in Charge, IRS Criminal Investigation Denver Field Office. “Not only is Lanius-McLeod guilty of crimes against the federal government, but he also victimized individuals and businesses the Paycheck Protection Program was designed to protect. These actions will not be tolerated, and the judge’s ruling sends a clear message to others who try to defraud CARES Act programs that these crimes will not go unpunished.”

“Trevor Lanius-McLeod greedily robbed small businesses that depended on PPP funds to survive,” said Special Agent in Charge Dennis Rice of the Salt Lake City FBI. “His sentence should serve as a reminder that the FBI and our federal partners are vigilantly working to make sure federal assistance funds are used as intended, and that those who defraud such programs will be held accountable.”

The PPP program, which is part of the federal Coronavirus Aid, Relief and Economic Security (CARES) Act, provided emergency assistance to small businesses for job retention and certain other expenses.

In court documents, the government alleged that beginning in April 2020, Lanius-McLeod devised a scheme to fraudulently obtain money from the Paycheck Protection Program (PPP).  Lanius-McLeod applied for four PPP loans through Valley Bank of Helena.  In the applications, Lanius-McLeod made numerous false and material statements to obtain approximately $1,043,000 in fraudulent funds from the four loans.  Additionally, Lanius-McLeod applied for and received a PPP loan in the amount of $349,000 on behalf of Renovated Montana Properties LLP, an entity Lanius-McLeod controlled. 

Lanius-McLeod made numerous false statements on the PPP loan application. Without the false statements, Lanius-McLeod would not have qualified for a PPP loan. The defendant falsely stated that Renovated Montana Properties LLP had paid payroll taxes and had 25 employees. The company never paid payroll taxes and had no employees besides Lanius-McLeod.

The government further alleged that in a promissory note, the defendant agreed to use the funds for business-related expenses. None of the loan money was used for these purposes. Instead, the proceeds were spent on various personal expenses, including the mortgage on Lanius-McLeod’s personal residence.

Assistant U.S. Attorney Colin M. Rubich prosecuted the case, which was investigated by the IRS-Criminal Investigation and FBI, with assistance from the U.S. Treasury Inspector General for Tax Administration and U.S. Secret Service.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci9tb250YW5hLXVzLWF0dG9ybmV5LWFubm91bmNlcy1tb3JlLTY1LW1pbGxpb24tYXZhaWxhYmxlLWZpZ2h0LWh1bWFuLXRyYWZmaWNraW5nLWFuZC1oZWxw
  Press Releases:
BILLINGS – U.S. Attorney Kurt Alme today announced that more than $65 million in Department of Justice grants is available to help communities combat human trafficking and serve adults and children who are victimized in trafficking operations.

“Human trafficking is a reprehensible crime. Those responsible need to be held accountable and those victimized need help. We hope these funds can be used to accomplish both,” U.S. Attorney Alme said.

“Our nation is facing difficult challenges, none more pressing than the scourge of human trafficking. Human traffickers pose a dire threat to public safety and countering this threat remains one of the Administration’s top domestic priorities,” said Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs. “The Department of Justice is front and center in the fight against this insidious crime. OJP is making historic amounts of grant funding available to ensure that our communities have access to innovative and diverse solutions.”

The funding is available through OJP, the federal government’s leading source of public safety funding and crime victim assistance in state, local and tribal jurisdictions. OJP’s programs support a wide array of activities and services, including programs that support human trafficking task forces and services for human trafficking survivors. 

A number of funding opportunities are currently open, with several more opening in the near future. 

 

Missing and Exploited Children Training and Technical Assistance Program

https://ojjdp.ojp.gov/funding/opportunities/ojjdp-2020-17351

Total Available $1.8 million       

Deadline 4/6/2020 (Extended)

 

Multidisciplinary Task Force Program to Combat Human Trafficking

Total Available $22 million 

Opens week of 3/16/2020

 

Preventing Trafficking of Girls

Total Available $1.7 million

Opens week of 3/16/2020

 

Research and Evaluation on Trafficking in Persons

https://nij.ojp.gov/funding/opportunities/nij-2020-17324

Total Available $2.5 million

Deadline 4/20/2020                                                   

 

Services for Victims of Human Trafficking

Total Available $16.5 million

Opens week of 3/16/2020

 

Specialized Training and Technical Assistance on Housing for Victims of Human Trafficking

Total Available $2 million 

Oens week of 3/16/2020

 

Human Trafficking Training and Technical Assistance Program

Total Available $5 million

Opens week of 3/16/2020

 

Improving Outcomes for Child and Youth Victims of Human Trafficking                                                                     

Total Available $6 million  

Opens week of 3/16/2020

 

Integrated Services for Minor Victims of Labor Trafficking

Total Available $8 million 

Opens week of 3/16/2020

 

For more information regarding all OJP funding opportunities, visit https://www.ojp.gov/funding/explore/current-funding-opportunities

 

###

                                                                                                      

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci9jYXNjYWRlLXdvbWFuLWNoYXJnZWQtc3R1ZGVudC1sb2FuLWZyYXVkLXNjaGVtZQ
  Press Releases:
GREAT FALLS — A Cascade woman suspected of fraudulently obtaining federal student financial aid by using the names of other individuals to enroll at the Great Falls College and then using those identities to receive financial aid appeared on April 12 on conspiracy, fraud and identity theft crimes, U.S. Attorney Leif M. Johnson said.

Ricci Lea Castellanos, 34, also of Redding, California, pleaded not guilty during an arraignment to a 14-count indictment charging her with conspiracy to commit wire fraud, wire fraud, aggravated identity theft and student financial aid fraud. If convicted of the most serious crime, Castellanos faces a maximum of 20 years in prison, a $250,000 fine and three years of supervised release on the conspiracy and wire fraud crimes and two years in prison in addition to punishment for underlying felony, a $250,000 fine and one year of supervised release on the aggravated identity theft crime.

U.S. Magistrate Judge John T. Johnston presided. Castellanos was released pending further proceedings.

The indictment alleges that between January 2016 and December 2019, Castellanos enrolled unwitting family members and others in online classes at the Great Falls College, Montana State University. When doing so, Castellanos and others applied for and received Federal Student Aid totaling approximately $126,219, none of which was allowed. The indictment further alleges that Castellanos and others fraudulently used and submitted multiple American Indian Tuition Waivers. To support such applications, Castellanos and others created and used false tribal enrollment forms from Native American Tribes, all of which were designed to result in larger student living expense refunds, and which were then diverted by Castellanos and others.

An indictment is merely an accusation, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Assistant U.S. Attorney Ryan G. Weldon is prosecuting the case, which was investigated by the Department of Education Office of Inspector General.

PACER case reference. 22-17.

The progress of cases may be monitored through the U.S. District Court Calendar and the PACER system. To establish a PACER account, which provides electronic access to review documents filed in a case, please visit http://www.pacer.gov/register.html. To access the District Court’s calendar, please visit https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.

XXX

 

 

 

 

 

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci9leC1lYXN0LWhlbGVuYS1wb2xpY2UtY2hpZWYtc2VudGVuY2VkLW1vcmUtZml2ZS15ZWFycy1wcmlzb24tZGlzdHJpYnV0aW5nLWNoaWxk
  Press Releases:
GREAT FALLS  — East Helena’s former chief of police was sentenced today to five years and six months in prison, to be followed by five years of supervised release, for distributing child pornography using social media, U.S. Attorney Jesse Laslovich said.

William Daly Harrington, 43, of Helena, pleaded guilty in December 2021 to distribution of child pornography.

Chief U.S. District Judge Brian M. Morris presided. Chief Judge Morris also imposed $7,500 in fines. Harrington was ordered to self-report to the Bureau of Prisons.

“As a career police officer and then as chief of police, Harrington had a duty to protect children, and yet he distributed child pornography. His actions perpetuated the sexual exploitation of children and harm inflicted on vulnerable victims. This sentence holds Harrington accountable not only for his criminal conduct but also for his breach of the public’s trust. I want to thank Assistant U.S. Attorneys Cyndee L. Peterson and Wendy A. Johnson and all of our law enforcement partners for their work on this case,” U.S. Attorney Laslovich said.

"Crimes against children are horrific, and this case was aggravated by the fact that William Harrington took an oath to protect and serve," said Dennis Rice, Special Agent in Charge of the Salt Lake City FBI. "The FBI is committed to protecting society's most vulnerable and will hold those who prey on innocent children accountable."

“We appreciate the partnership of the Internet Crimes Against Children Task Force that the FBI leads. We appreciate the City of East Helena assistance with this investigation as well,” said Lewis and Clark County Sheriff and Coroner Leo C. Dutton.

The government alleged in court documents that in September 2020, a Lewis and Clark County Sheriff’s deputy, who is a member of the Montana Internet Crimes Against Children Task Force, investigated a tip that Facebook Messenger had reported one of its accounts distributed child pornography to another account. The investigation determined that the Facebook Messenger account distributing child pornography belonged to Harrington, who was the chief of police for East Helena. Account records showed that on Nov. 17, 2019, Harrington sent 11 images to another account. Some of the images depicted child pornography. Law enforcement served a search warrant on Harrington’s residence and seized his cellular phone. An analysis of the phone found it contained images and videos of child pornography. As part of his investigation, the ICAC detective consulted with a pediatrician who concluded that some of the images depicted prepubescent children or children under the age of 12 years old.

Harrington admitted that he owned and used the Facebook Messenger account that distributed child pornography.

The government further alleged that Harrington was a mandatory reporter of child abuse, and, during the same timeframe, he sought out sexually explicit images of children, saved them to his phone and then distributed them. As chief of police, Harrington attended Child Protection Team Meetings, knew the consequences to the children depicted and, nonetheless, pursued the images at the expense of child victims.

Assistant U.S. Attorneys Cyndee L. Peterson and Wendy A. Johnson prosecuted the case, which was investigated by the FBI’s Child Exploitation and Human Trafficking Task Force, Homeland Security Investigations, Montana Internet Crimes Against Children Task Force, Lewis and Clark County Sheriff’s Office and the Bozeman Police Department.

This case was initiated under the Department of Justice’s Project Safe Childhood initiative, which was launched in 2006 to combat the proliferation of technology-facilitated crimes involving the sexual exploitation of children. Through a network of federal, state and local law enforcement agencies and advocacy organizations, Project Safe Childhood attempts to protect children by investigating and prosecuting offenders involved in child sexual exploitation. It is implemented through partnerships including the Montana Internet Crimes Against Children Task Force. The ICAC Task Force Program was created to assist state and local law enforcement agencies by enhancing their investigative response to technology facilitated crimes against children.

XXX

 

 

 

 

 

 

 

 

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci9iZWxncmFkZS13b21hbi1hZG1pdHMtZW1iZXp6bGluZy1lbXBsb3llcg
  Press Releases:
MISSOULA — A Belgrade woman on May 3 admitted to allegations that she embezzled what the government calculated to be more than $800,000 from her employer while working as an accountant and controller, U.S. Attorney Leif M. Johnson said today.

Renae Swanson, 59, pleaded guilty to wire fraud. Swanson faces a maximum of 20 years in prison, a $250,000 fine and three years of supervised release.

U.S. Magistrate Judge Kathleen L. DeSoto presided. Sentencing was set for Aug. 23 before U.S. District Judge Dana L. Christensen. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Swanson was released pending further proceedings.

The government alleged in court documents that Swanson was an accountant and controller for Williams Plumbing & Heating. Swanson’s duties included uploading electronic payroll files to the bank for funding and processing payroll transactions to the company’s employees. From about December 2012 until May 2019, Swanson fraudulently altered that process, resulting in her increasing the amount of money she received from Williams Plumbing & Heating, none of which was authorized. The government calculated that Swanson embezzled approximately $805,013.

Assistant U.S. Attorney Ryan G. Weldon is prosecuting the case, which was investigated by the FBI.

XXX

 

 

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci9idXR0ZS13b21hbi1hZG1pdHMtc3RlYWxpbmctbW9yZS02MDAwMDAtdmljdGltLXVuZGVyLWhlci1ndWFyZGlhbnNoaXA
  Press Releases:
MISSOULA — A Butte woman accused of embezzling more than $600,000 from a woman who was under her guardianship and using the money to buy a house on Canyon Ferry, a vehicle and other items admitted to fraud charges today, U.S. Attorney Leif M. Johnson said.

Debra Gean Roeber, 66, pleaded guilty to wire fraud and to money laundering as charged in an information during an initial appearance hearing. Roeber faces a maximum of 20 years in prison, a $250,000 fine and three years of supervised release on the wire fraud count.

U.S. Magistrate Judge Kathleen L. DeSoto presided. A sentencing date was set for Aug. 10 before U.S. District Judge Dana L. Christensen. The court will determine a sentence after considering the U.S. Sentencing Guidelines and other sentencing factors. Roeber was released pending further proceedings.

The government alleged in court documents that Roeber was a guardian and had power of attorney for the victim, identified as Jane Doe, who was unable to care for herself or her financial needs without assistance because she was blind. Roeber served as a fiduciary for Jane Doe. From about January 2017 until June 2020, Roeber allegedly embezzled approximately $681,549 from Jane Doe. Bank records showed that Roeber used Jane Doe’s money to purchase a home and shop on Canyon Ferry, construction costs, vehicles, furniture and a pontoon boat, none of which was authorized. When interviewed by agents, Roeber admitted she took advantage of Jane Doe “a lot,” including lying to the victim about her finances, and that she stole from Jane Doe. Jane Doe is now deceased.

Assistant U.S. Attorney Ryan G. Weldon is prosecuting the case, which was investigated by the FBI and IRS Criminal Investigation.

XXX

 

Score:   0.5
Docket Number:   D-MT  1:18-cr-00106
Case Name:   United States v. Jones
  Press Releases:
BILLINGS—A Miles City man who admitted to making silencers pleaded guilty to four firearms violations during a federal court hearing on Monday, U.S. Attorney Kurt G. Alme said.

Brendan John Jones, 52, pleaded guilty to two counts of possession of a firearm not registered in the National Firearms Registration and Transfer Record and to two counts of possession of a firearm not identified by serial number.

U.S. Magistrate Judge Timothy J. Cavan presided. Sentencing is set for April 24, 2019. Jones is released.

Jones faces a maximum 10 years in prison, a $10,000 fine and three years supervised release.

If the case had gone to trial, the government would have presented the following information as evidence:

An investigation began in April 2018 when law enforcement received information that Jones was in possession of explosives and also making illegal silencers. Undercover agents met with Jones at his business, Jones Auto Detailing, and discussed explosives. Jones showed the agents dynamite that appeared to be old. The agents also asked about silencers for sale. Jones told the agents he made silencers out of Maglite flashlights and had made one from an aluminum baseball bat. The agents made preliminary arrangements to buy silencers and explosives.

On May 8, 2018, law enforcement executed a search warrant on Jones’ business. Officers found a shoe box labeled as containing dynamite, homemade explosive devices and other items on top of a soda machine. Officers also found two homemade silencers and a portion of another part used to make a silencer. One of the silencers appeared to be made from a baseball bat, while the other appeared to have been made from a bicycle part.

In an interview with law enforcement the same day, Jones confessed to possessing the explosives and silencers and to manufacturing the silencers. None of the silencers recorded contained serial numbers.

Assistant U.S. Attorney Zeno Baucus is prosecuting the case, which was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together federal, state, local and tribal law enforcement agencies and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.  The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals.

XXX

 

 

 

Docket (0 Docs):   https://docs.google.com/spreadsheets/d/1-sjG_z6A6YMR28Yt6bCZ-V7zjk3z3KtXyzUYBBnyugw
  Last Updated: 2023-10-12 16:41:48 UTC
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY

Description: The code of the federal judicial circuit where the case was located
Format: A2

Description: The code of the federal judicial district where the case was located
Format: A2

Description: The code of the district office where the case was located
Format: A2

Description: Docket number assigned by the district to the case
Format: A7

Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3

Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3

Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5

Description: Case type associated with the current defendant record
Format: A2

Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18

Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15

Description: The status of the defendant as assigned by the AOUSC
Format: A2

Description: A code indicating the fugitive status of a defendant
Format: A1

Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD

Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD

Description: The date when a case was first docketed in the district court
Format: YYYYMMDD

Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD

Description: A code used to identify the nature of the proceeding
Format: N2

Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD

Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2

Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE1
Format: N2

Description: The four digit AO offense code associated with FTITLE1
Format: A4

Description: The four digit D2 offense code associated with FTITLE1
Format: A4

Description: A code indicating the severity associated with FTITLE1
Format: A3

Description: The title and section of the U.S. Code applicable to the offense committed which carried the second highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE2
Format: N2

Description: The four digit AO offense code associated with FTITLE2
Format: A4

Description: The four digit D2 offense code associated with FTITLE2
Format: A4

Description: A code indicating the severity associated with FTITLE2
Format: A3

Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5

Description: The date of the last action taken on the record
Format: YYYYMMDD

Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD

Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD

Description: The date upon which the case was closed
Format: YYYYMMDD

Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8

Description: A count of defendants filed including inter-district transfers
Format: N1

Description: A count of defendants filed excluding inter-district transfers
Format: N1

Description: A count of original proceedings commenced
Format: N1

Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants terminated including interdistrict transfers
Format: N1

Description: A count of defendants terminated excluding interdistrict transfers
Format: N1

Description: A count of original proceedings terminated
Format: N1

Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1

Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1

Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10

Description: A sequential number indicating the iteration of the defendant record
Format: N2

Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD

Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
Format: YYYY

Data imported from FJC Integrated Database
Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci91cy1hdHRvcm5leS1yZWNvZ25pemVzLXBvbGljZS13ZWVrLW1vbnRhbmEtcGVhY2Utb2ZmaWNlcnMtbWVtb3JpYWwtZGF5LWhlbGVuYQ
  Press Releases:




Montana Department of Justice photo

Montana U.S. Attorney Kurt Alme recognized the service and sacrifice of law enformement officers at Montana Peace Officers Memorial Day in Helena. 







BILLINGS— U.S. Attorney Kurt Alme today recognized the service and sacrifice of federal, state, local, and tribal police officers on the occasion of National Police Week, which is being observed Sunday, May 12 to Saturday, May 18, 2019.

Speaking at the 2019 Montana Peace Officers Memorial Day at the Montana State Capitol, Alme said he was honored to pay respect to the sworn law enforcement officers across Montana and the country who put their lives at risk every day and night to keep the public and our communities safe.

In October 1962, President Kennedy proclaimed May 15 National Peace Officers Memorial Day and the week in which it falls National Police Week. Police Week recognizes the service and sacrifice of U.S. law enforcement officers and pays special recognition to those who have died in the line of duty for the safety and protection of others.

 “I want to acknowledge the work performed by our federal, state, local, and tribal law enforcement, who often face uncertain and dangerous situations without question and without expectation of thanks.  We want them to know they have our unwavering support and appreciation,” Attorney Alme said.

While 106 law enforcement officers were killed in the line of duty across America last year, none of the officers were from Montana, Alme said.

Each year, about 60,000 officers are assaulted, and 17,000 officers are injured.

In recent months, two Montana officers have been injured or assaulted while in the line of duty.  Montana Highway Patrol Trooper Wade Palmer, based in Missoula, was shot and severely wounded while pursuing an alleged shooter, and Park County Sheriff’s Deputy Brian Elliott-Pearson was injured in a head-on crash when an oncoming driver veered into his lane and hit him. Both officers have been undergone surgeries and are expected to survive.

“I want to join many across our state in thanking Trooper Palmer and Deputy Elliott-Pearson, and their families, for their sacrifice for our safety,” Attorney Alme said.

For more information about other National Police Week events, please visit www.policeweek.org.

# # #

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tdC9wci9tYW4tc2VudGVuY2VkLWZlZGVyYWwtcHJpc29uLWNvbmNlYWxpbmctYXNzZXRzLWR1cmluZy1oaXMtYmFua3J1cHRjeQ
  Press Releases:
MISSOULA - Randall Alan Franz, a 59-year-old resident of Sandpoint, Idaho, was sentenced on Thursday to 8 months in prison followed by three years of supervised release, and ordered to pay $205,084.79 in restitution after pleading guilty to concealing assets in bankruptcy. Chief U.S. District Judge Dana Christensen announced the sentence.

Franz’s mother passed away in 2009. Franz was appointed as personal representative of her estate in October, 2010, a responsibility he held until he was removed in September of 2015. Franz was to split his mother’s estate, ultimately valued at almost $600,000, equally between himself and his two brothers. While one brother received approximately $120,000, Franz made no distribution to his other brother.

In the meantime, Franz filed a chapter 11 bankruptcy in July 2010, which was converted to a chapter 7 bankruptcy in January 2013. During his bankruptcy, Franz liquidated assets from his mother’s estate and hid his share of the proceeds from his Chapter 7 Trustee. Though Franz withdrew more than $270,000 of probate estate funds between April and October of 2013, Franz’s bankruptcy trustee received none of it. Based on this deception, the United States Bankruptcy Court revoked Franz’s discharge on November 5, 2015, and Franz was referred for criminal prosecution.

“The bankruptcy system is an important safety net for all Americans.  People like the defendant who misuse it for their own personal gain threaten its integrity and will be prosecuted, ” said Kurt Alme, U.S. Attorney for the District of Montana.

The case was prosecuted by Assistant United States Attorneys Chad C. Spraker and Keith A. Jones, and investigated by the Federal Bureau of Investigation and the United States Trustee’s Office.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3Blbm5zeWx2YW5pYS1iaW9mdWVsLWNvbXBhbnktb3duZXJzLWNoYXJnZWQtZnJhdWR1bGVudGx5LWNsYWltaW5nLWZ1ZWwtdGF4LWNyZWRpdHM
  Press Releases:
Two owners of a Pennsylvania biofuel company were charged in a superseding indictment today with conspiring to defraud the Internal Revenue Service (IRS) and aiding and assisting in the preparation of a fraudulent fuel tax credit refund claim, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division and U.S. Attorney David J. Freed for the Middle District of Pennsylvania.

 

According to the superseding indictment, Ben Wootton, of Pennsylvania, and Race Miner, of Colorado owned and operated Keystone Biofuels Inc., located in Shiremanstown, Pennsylvania, and later in Camp Hill, Pennsylvania. Wootton, serving as President, and Miner, serving as Chief Executive Officer, are alleged to have participated in a conspiracy to defraud the IRS by, among other things, fraudulently claiming tax refunds based on the Biodiesel Mixture Credit – a federal excise tax credit for persons or businesses who mix biodiesel with diesel fuel and use or sell the mixture as a fuel.  Biodiesel is a type of renewable fuel that meets a set of specific requirements.  

 

According to the superseding indictment, the Biodiesel Mixture Credit was available only on fuel meeting those requirements that the claimant had mixed with diesel fuel.  Wootton and Miner allegedly caused Keystone to fraudulently seek tax refunds from the IRS by claiming the credit based on non-qualifying and, in at least some instances, non-existent or non-mixed fuel.  The indictment further alleges that Wootton and Miner created false books and records and supporting documents to account for the nonexistent fuel; engaged in a series of sham financial transactions to give the false books and records the appearance of legitimacy; and sought to obstruct an ongoing IRS investigation by providing false documentation to an IRS Special Agent.

 

These charges are in addition to those previously lodged against Wootton and Miner. In a May 2017 indictment, both men, along with Keystone Biofuels Inc., were charged with conspiring to make false statements to the Environmental Protection Agency (EPA) and making false statements to the EPA.

 

If convicted, Wootton and Miner face a statutory maximum sentence of five years in prison for conspiracy and three years in prison for aiding and assisting in the filing of a false refund claim.  They also face a period of supervised release, restitution, and monetary penalties.

 

An indictment merely alleges that crimes have been committed.  The defendants are presumed innocent until proven guilty beyond a reasonable doubt.

 

Principal Deputy Assistant Attorney General Zuckerman, Acting Assistant Attorney General Wood, and U.S. Attorney Freed praised special agents of IRS Criminal Investigation and the Environmental Protection Agency Criminal Investigation Division, who conducted the investigation, and Assistant U.S. Attorney Geoffrey MacArthur, Special Assistant U.S. Attorney David Lastra, Trial Attorneys Mark Kotila and Kimberly Ang of the Justice Department’s Tax Division and Senior Litigation Counsel Howard P. Stewart of the Justice Department’s Environmental and Natural Resources Division, Environmental Crimes Section, who are prosecuting the case.

 

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1ubS9wci9lc3Bhbm9sYS1tYW4tc2VudGVuY2VkLTkteWVhcnMtamFpbC1jYXJqYWNraW5n
  Press Releases:
ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, and Raul Bujanda, Special Agent in Charge of the Federal Bureau of Investigation’s Albuquerque Field Office, announced that Martin Lopez was sentenced to 9 years in prison. A federal jury convicted Lopez, 38, of Española, New Mexico, on Oct. 14, 2022, of one count each of carjacking and brandishing a firearm during and in relation to a crime of violence.

A federal grand jury indicted Lopez on March 12, 2021. According to court records, on Oct. 31, 2020, the victim, identified as Jane Doe 1, who had been dating Lopez, ended the relationship that morning. Later that same day, she and a friend, Jane Doe 2, attempted to deliver Lopez’s belongings to his friend who worked at an O’Reilly’s Auto Parts store in Española. As Jane Doe 1 was retrieving Lopez’s belongings from her vehicle, Lopez appeared, threatened both women with a gun, forced his way into the driver’s seat and drove away with the two Jane Does.

Lopez struck both victims with his gun as he drove to nearby apartment complex where he pushed Jane Doe 2 out of the moving vehicle. Lopez threatened to kill her if she called the police. Before being pushed out, Jane Doe 2 was able to dial 911. The 911 recording captured the victims’ terrified screams and was played for the jury at trial. Lopez continued to drive Jane Doe 1 to a secondary location for a period of time.  Later, New Mexico State Police were able to locate the car, Jane Doe 1, and Lopez. However, when law enforcement arrived, Lopez fled the area in Jane Doe 1’s vehicle.

Lopez has prior domestic violence related misdemeanor convictions from 2014, wherein he was given a suspended sentence and his probation was revoked three times. Lopez has been arrested on at least four other occasions for felony charges, none of which resulted in a conviction. Lopez’s sentencing guidelines were calculated at 154 to 177 months. The United States requested a sentence of 177 months. The court imposed a sentence of 108 months (9 years) imprisonment. 

The United States commends Jane Doe 2 and the other witnesses who testified in this case.

Upon his release from prison, Lopez will be subject to 3 years of supervised release.

The Federal Bureau of Investigation and the New Mexico State Police investigated this case. Assistant U.S. Attorneys Jaymie L. Roybal and Letitia Carroll Simms are prosecuting the case.

Anyone experiencing domestic violence or who knows someone experiencing domestic violence can reach an advocate at the National Domestic Violence Hotline at 1-800-799-SAFE (7233) or 1-800-787-3224 (TTY). In New Mexico, the Domestic Violence Resource Center is available by telephone at (505) 843-9123 or online at https://dvrcnm.org/.

# # #

23-161

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1uai9wci9maXZlLW1lbi1jaGFyZ2VkLXVzaW5nLW5ldy15b3JrLWRpYW1vbmQtZGlzdHJpY3QtY29tcGFuaWVzLWZyb250cy1pbGxlZ2FsbHktbW92ZS1tb3Jl
  Press Releases:
NEWARK, NJ. – Five men who work in New York City’s Diamond District were arrested today and charged with illegally processing more than $600 million through unlicensed money transmitting businesses, U.S. Attorney Philip R. Sellinger announced.

Raj Vaidya, 26; Rakesh Vaidya, 51; Shrey Vaidya, 23; and Neel Patel, 26, all of Edison, New Jersey; and Youssef Janfar, aka “Joe Rodeo,” 57, of Great Neck, New York, are each charged by complaint with one count of operating and aiding and abetting the operation of an unlicensed money transmitting business. The defendants appeared before U.S. Magistrate Judge Edward S. Kiel in Newark federal court and were released on unsecured bond.

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

Since 2019, Raj Vaidya, Rakesh Vaidya, Shrey Vaidya, and Patel have operated numerous purported diamond, gold, and jewelry companies in New York City’s Diamond District, including Arya Diamond Jewellery USA Inc., d/b/a “Karats & Carats,” Diamspark LGD LLC, Royal Diamonds LLC, Raj Gold and Diamond LLC, Royal Arya Jewellery Inc, and Raj Gold and Diamond Inc. Janfar also purportedly operated companies in the Diamond District, including Rodeo of NY, d/b/a “Sarah Jewels.” The defendants used these and other entities as fronts to conduct hundreds of millions of dollars in illegal financial transactions for customers – including converting cash to checks or wire transfers – in exchange for substantial fees. At times, they moved millions of dollars in cash in a single day. None of their companies were registered as money transmitting businesses with New York, New Jersey, or the Financial Crimes Enforcement Network (FinCEN).

The charge of operating and aiding and abetting the operation of an illegal money transmitting business carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross amount of any pecuniary gain that any persons derived from the offense or of any pecuniary loss sustained by any victims of the offense, whichever is greatest.

U.S. Attorney Sellinger credited special agents and task force officers of IRS - Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark; special agents and task force officers of the U.S. Drug Enforcement Administration, under the direction of Special Agent in Charge Cheryl Ortiz in Newark; and special agents of Homeland Security Investigations Newark, under the direction of Special Agent in Charge Ricky J. Patel; with the investigation leading to the charges. He also thanked the Justice Department’s Money Laundering and Asset Recovery Section (MLARS), the Parsippany-Troy Hills Police Department, the Morristown Police Department, the Federal Deposit Insurance Corporation – Office of Inspector General, and the New York City Police Department for their assistance in the investigation.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The government is represented by Assistant U.S. Attorneys Mark J. Pesce of the Economic Crimes Unit, Olta Bejleri of the Organized Crime/Gangs Unit, and Angelica Sinopole of the Health Care Fraud Unit in Newark.

The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 





vaidya.complaint.pdf

(170.43 KB)







Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZG55L3ByL3R3by1yb2NoZXN0ZXItbWVuLWFycmVzdGVkLWNoYXJnZWQtc2VsbGluZy1odW5kcmVkcy10aG91c2FuZHMtZG9sbGFycy13b3J0aC1zdG9sZW4
  Press Releases:
ROCHESTER, N.Y. - U.S. Attorney Trini E. Ross announced today that Mark Remein, 41, and Derek Verna, 44, both of Rochester, NY, were arrested and charged by criminal complaint with committing and conspiring to commit wire fraud, interstate transportation and sale of stolen property, and money laundering. The charges carry a maximum penalty of 20 years in prison.

Assistant U.S. Attorney Meghan K. McGuire, who is handling the case, stated that according to the complaint, Remein and Verna owned and/or operated West Ridge Connections, a pawn shop located on West Ridge Road in Rochester. Remein and Verna knowingly purchased stolen, new-in-box items from serial shoplifters for a fraction (approximately 30%) of the items’ retail value. Remein and Verna listed the items for sale on eBay and shipped them to buyers. The items were listed as “New” and priced below retail value. In total, between January 2020, and August 16, 2023, Remein and Verna purchased and re-sold on eBay approximately 8,100 “New” items and received approximately $497,842 for those sales. The money was deposited into bank accounts that were opened in the name of third parties to avoid detection.  

The investigation began in February 2022, after law enforcement received a complaint from Home Depot security personnel, who had followed a shoplifter from a Home Depot location to West Ridge Connections with recently stolen merchandise. A store  security manager entered West Ridge Connections and observed the stolen merchandise behind a table counter. None of the stolen merchandise was entered into LeadsOnline, an online database where secondhand dealers, like Remein and Verna, are required to report all purchases from other individuals. The investigation determined that individuals sold new-in-box items to West Ridge Connections on a regular basis. Some of the sellers were admitted opioid users, whom law enforcement observed attempting to buy drugs immediately after they sold new-in-box items to West Ridge Connections.

In December 2022, investigators made a controlled sale of three, new-in-box Google Nest thermostats to defendant Verna at West Ridge Connections. The combined retail value of the items was approximately $567.00. Verna paid $100.00 for all three items before listing them on eBay for $124.99 each. Between January and August of 2023, investigators conducted a total of 15 controlled sales, which included 37 items.

The complaint is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Thomas Fattorusso, Special Agent-in-Charge, and the Rochester Police Department, under the direction of Chief David Smith.

 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.      

# # # #

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1uai9wci9taWRkbGVzZXgtY291bnR5LWNvbnN0cnVjdGlvbi1jb21wYW55LWFkbWl0cy1jYXVzaW5nLWRlYXRoLWVtcGxveWVlLXdoby1mZWxsLXJvb2YtZHVyaW5n
  Press Releases:
NEWARK, N.J. – A construction company based in Old Bridge, New Jersey, admitted violating Occupational Safety and Health Administration (OSHA) standards, leading to the death of an employee, U.S. Attorney Philip R. Sellinger announced today.

Zona Roofing LLC (Zona Roofing), via its owner Yilbert Segura, pleaded guilty on Nov. 20, 2023, before U.S. Magistrate Judge José R. Almonte in Newark federal court to an information charging it with one count of willfully violating OSHA standards by failing to provide fall protection and fall protection training to employees engaged in the replacement of a residential roof, which caused the death of an employee. 

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

On Aug. 6, 2019, Segura and four employees began a roof replacement project on a residential home located in Haledon, New Jersey. Despite working more than 20 feet from the ground, employees for Zona Roofing were not equipped with any personal fall protection equipment, such as safety harnesses, lanyards, tie-off ropes, guard rails, safety nets, or other feasible means of fall protection. None of the employees had received fall protection training to recognize the hazards of falling or the procedures to be followed to minimize those hazards.

On Aug. 8, 2019, while working on the roof, one of Zona Roofing’s employees lost his balance and fell approximately 22 feet to the ground, sustaining blunt force injuries to his head that resulted in his death. The employee was not equipped with any fall protection gear, and he had not received any fall protection training. Zona Roofing was previously cited by Maryland OSHA in February 2019 for failing to provide fall protection to its employees.

If the court accepts the terms of the plea agreement, Zona Roofing will be sentenced to five years of probation and will pay restitution of $75,000 to the employee’s family members. Zona Roofing must also follow specified conditions, including providing training procedures to all its employees and a requirement to follow enhanced safety provisions for future construction jobs. Sentencing is scheduled for March 25, 2024.

U.S. Attorney Philip R. Sellinger credited special agents of the U.S. Department of Labor, Office of the Inspector General, Northeast Region, under the direction of Special Agent in Charge Jonathan Mellone; Daniel Hennefeld, Counsel for Occupational Safety and Health, Office of the Solicitor of Labor, Region 2, and OSHA Compliance Officers with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney Garrett Schuman of the Criminal Division in Newark.

 





zonaroofing.information.pdf

(90.24 KB)







Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3BoaWxhZGVscGhpYS1hcmVhLXBvbGl0aWNhbC1jb25zdWx0YW50LWFuZC1hdHRvcm5leS1zZW50ZW5jZWQtYWZ0ZXItY29udmljdGlvbi10d28tY2FtcGFpZ24
  Press Releases:
A long-time Philadelphia-area political consultant and attorney was sentenced today for his role in two criminal schemes to violate federal campaign finance laws announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania.

Kenneth Smukler, 57, of Villanova, Pennsylvania, was sentenced to 18 months in prison followed by one year of supervised release by the Honorable Jan E. DuBois.  In the 2012 Democratic primary election for Pennsylvania’s First Congressional District, Jimmie Moore, a former Philadelphia Municipal Court Judge, ran against the incumbent Congressman Bob Brady.  Assisted and directed by Smukler, Moore executed a corrupt deal in which he agreed to withdraw from the race in exchange for funds from the Bob Brady for Congress campaign (the Brady campaign) to be used to pay off Moore’s campaign debts.  Those debts included money that Jimmie Moore for Congress (the Moore campaign) owed to several vendors, to Moore himself and to Moore’s campaign manager, Carolyn Cavaness. On Feb. 29, 2012, Moore withdrew from the race and Cavaness had prepared a list of debts owed by the Moore campaign, which they provided to Smukler, a campaign consultant for the Brady campaign.  Smukler arranged for the Moore campaign to receive $90,000 from the Brady campaign through false documents and a series of concealing pass-throughs, including the consulting firm of another Brady associate and co-conspirator, D.A. Jones.  Smukler ensured that the Brady campaign reported none of the concealed payments, which exceeded the federal contribution limits, to the Federal Election Commission (FEC).  Rather, he executed the scheme by ensuring that the three installments were falsely and illegally disguised from the FEC and the public as payments for poll and consulting services.

Later, during the 2014 Democratic primary election for Pennsylvania’s Thirteenth Congressional District, Smukler again committed federal campaign finance offenses, this time for the benefit of another client, Marjorie Margolies, a former Member of the U.S. House of Representatives.  Smukler, a veteran of prior Margolies political campaigns, ran the Margolies campaign in 2014. 

In April 2014, during a close primary race, the Margolies campaign was running out of money that it could legally spend in the primary.  Smukler then caused the Margolies campaign to illegally spend general election funds in his attempt to win the primary election for his client.  He further lied about his illegal spending to the campaign’s lawyer.  That lawyer, in turn, unwittingly reported Smukler’s lies to the FEC in response to a complaint filed by another candidate. Additionally, Smukler caused excessive campaign contributions and illegal conduit contributions to the Margolies campaign, all of which were hidden or disguised from the campaign’s FEC filings.

“When political operatives like Kenneth Smukler engage in hidden illegal campaign finance schemes, they undermine the integrity of the electoral process,” said Assistant Attorney General Benczkowski.  “This is a just sentence that reflects the seriousness of these crimes.”

“In order to win at all costs, Smukler knowingly and purposefully undermined our democratic process by misusing campaign funds and lying about it,” said U.S. Attorney McSwain. “My Office will continue to prosecute public corruption wherever and whenever we uncover it. Now Smukler is headed to jail, and I am grateful that the Court imposed a just sentence reinforcing the fact that this kind of corruption will never be tolerated.”

On Dec. 3, 2018, a jury found Smukler guilty of one count of conspiracy, two counts of excessive campaign contributions, two counts of false statements, two counts of conduit contributions, one count of willfully causing a false statement to the FEC and one count of obstruction of justice.     

Former Public Integrity Section Trial Attorney Jonathan I. Kravis and the FBI investigated the case.  Richard C. Pilger, Director of the Election Crimes Branch of the Public Integrity Section, Trial Attorney Rebecca Moses of the Public Integrity Section and Assistant U.S. Attorney Eric L. Gibson of the Eastern District of Pennsylvania prosecuted the case.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2xhdHZpYW4tbmF0aW9uYWwtcGxlYWRzLWd1aWx0eS1zY2FyZXdhcmUtaGFja2luZy1zY2hlbWUtdGFyZ2V0ZWQtbWlubmVhcG9saXMtc3Rhci10cmlidW5l
  Press Releases:
A Latvian man pleaded guilty today in Minneapolis for participating in a lucrative “scareware” hacking scheme that targeted visitors to the Minneapolis Star Tribune’s website.  Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Gregory G. Brooker of the District of Minnesota and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Field Office made the announcement.

Peteris Sahurovs aka Piotrek and Sagade, 28, pleaded guilty to one count of conspiracy to commit wire fraud before District Judge Ann D. Montgomery of the District of Minnesota.  Sahurovs was arrested on a District of Minnesota indictment in Latvia in June of 2011, but was released by a Latvian court and later fled.  In November of 2016, Sahurovs was located in Poland and apprehended by Polish law enforcement and extradited to the United States in June 2017. Sahurovs was at one time the FBI’s fifth most wanted cybercriminal and a reward of up to $50,000 had been offered for information leading to his arrest and conviction.  He will be sentenced on June 6.

According to admissions made in connection with his plea, from at least May 2009 to June 2011, Sahurovs operated a “bullet-proof” web hosting service in Latvia, through which he leased server space to customers seeking to carry out criminal schemes without being identified or taken offline.  The defendant admitted that he knew his customers were using his servers to perpetrate criminal schemes, including the transmission of malware, fake anti-virus software, spam, and botnets to unwitting victims, and he received notices from Internet governance entities (such as Spamhaus) that his servers were hosting malicious activity.  Nonetheless, Sahurovs admitted he took steps to protect the criminal schemes from being discovered or disrupted, and hosted them on his servers for financial gain.

Sahurovs admitted that from in or about February 2010 to in or about September 2010, he registered domain names, provided bullet-proof hosting services, and gave technical support to a “scareware” scheme targeting visitors to the Minneapolis Star Tribune’s website.  On Feb. 19, 2010, the Minneapolis Star Tribune began hosting an online advertisement, purporting to be for Best Western hotels, on its website, startribune.com.  Two days later, however, the advertisement began causing the computers of visitors to the website to be infected with malware.  This malware, also known as “scareware,” caused visitors to experience slow system performance, unwanted pop-ups and total system failure.  Website visitors also received a fake “Windows Security Alert” pop-up informing them that their computer had been infected with a virus and another pop-up that falsely represented that they needed to purchase the “Antivirus Soft” computer program to fix their security issues, at a price of $49.95.

Website visitors who clicked the “Antivirus Soft” window were presented with an online order form to purchase a purported security program called “Antivirus Soft.”  Users who purchased “Antivirus Soft” would receive a file download that “unfroze” their computers and stopped the pop-ups and security notifications.  However, the defendant admitted, the file was not a real anti-virus product and did not perform legitimate computer security functions, and merely caused malware that members of the conspiracy had previously installed to cease operating.  Meanwhile, the defendant admitted, victim users who did not choose to purchase “Antivirus Soft” became immediately inundated with so many pop-ups containing fraudulent “security alerts” that all information, data, and files on their computers were rendered inaccessible.  Members of the conspiracy defrauded victims out of substantial amounts of money as a result of the scheme.  The defendant admitted that as a result of his participation, he made between $150,000 and $250,000 U.S. dollars.

This case was investigated by the FBI’s Minneapolis Field Office.  The Criminal Division’s Office of International Affairs, as well as the Polish National Police, the National Prosecutor’s Office, and the Ministry of Justice provided substantial assistance. Assistant U.S. Attorney Timothy C. Rank of the District of Minnesota and Trial Attorney Aaron R. Cooper of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case. The Department’s Office of International Affairs also provided substantial assistance in this matter.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1zZG55L3ByL2Zvcm1lci1jZW8tYW5kLWZvcm1lci1jZm8tdGVsZWNvbW11bmljYXRpb25zLWNvbXBhbnktY2hhcmdlZC1jb25uZWN0aW9uLW1hc3NpdmU
  Press Releases:
Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging Victor Bozzo, former Chief Executive Officer and former Chief Commercial Officer of Pareteum Corporation, and EDWARD O’DONNELL, Pareteum’s former Chief Financial Officer, with conspiracy, securities fraud, making false Securities and Exchange Commission (“SEC”) filings, and improperly influencing the conduct of audits for their roles in a scheme to overstate Pareteum’s revenue by tens of millions of dollars.  BOZZO and O’DONNELL were arrested earlier today and will be presented this afternoon before U.S. Magistrate Judge Ona T. Wang.  The case has been assigned to U.S. District Judge Arun Subramanian.

Also unsealed is the guilty plea of STANLEY STEFANSKI, Pareteum’s former Controller.  STEFANSKI pled guilty before U.S. District Judge Andrew L. Carter on September 14, 2023, to charges arising from his participation in the scheme to fraudulently inflate Pareteum’s revenue and related crimes, and he is cooperating with the Government.



U.S. Attorney Damian Williams said: “Victor Bozzo, the former CEO of Pareteum, and Edward O’Donnell, the former CFO, and their co-conspirators allegedly schemed to inflate the company’s revenue, thereby making the company appear more profitable than it was and allowing Bozzo and O’Donnell to obtain performance bonuses they had not earned.  To conceal their alleged fraud, Bozzo and O’Donnell then took steps to mislead the independent certified public accountants engaged to audit Pareteum’s financial statements.  With today’s Indictment, Bozzo and O’Donnell’s alleged deceit comes to an end.”



FBI Assistant Director in Charge James Smith said: “This indictment reflects the serious harm executives caused by deliberately misleading shareholders, auditors, and the general public about the financial strength of a public company.  The FBI remains committed to fighting white-collar crime, protecting investors, and holding fraudsters who degrade the integrity of our markets accountable.”

According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]

The defendants, and other senior executives at the company, engaged in a scheme to improperly and misleadingly recognize revenue at Pareteum, which owned and managed a mobile device network platform.  The defendants and their co-conspirators made the revenue appear to have been earned in its records based on aspirational, non-binding purchase orders that did not impose any obligation on customers to pay Pareteum.  The defendants, and other senior executives at Pareteum, knew that in many cases Pareteum was recognizing revenue before Pareteum had delivered any products or services to its customers.  In order to conceal Pareteum’s fraudulent accounting practices, BOZZO, O’DONNELL, and other senior executives at Pareteum took steps to mislead the independent certified public accountants engaged to audit Pareteum’s financial statements. 

Pareteum’s inflated revenue gave the appearance that Pareteum was meeting aggressive revenue and growth projections, which served the ultimate goal of increasing Pareteum’s share price.  In press releases accompanying Pareteum’s quarterly filings, Pareteum provided guidance on its expected revenue and revenue growth for the year.  During each period, Pareteum touted its quarter-over-quarter revenue and revenue growth.  Pareteum publicly identified revenue as the principal metric demonstrating its growth and touted its consistent record of quarter-over-quarter revenue growth and meeting or exceeding revenue guidance, which itself typically increased quarter-over-quarter.  However, this ostensible pace of revenue growth was only possible because of the fraud orchestrated by the defendants.

In order to carry out the fraud, the defendants and their co-conspirators improperly recognized revenue from customers based on non-binding contracts.  Specifically, Pareteum’s customers were cellular providers that paid to use Pareteum’s platform to monitor, meter, and bill their own individual customers, who were individual cellphone or connected device end users.  Typically, before a customer could use Pareteum’s platform, the customer and Pareteum would sign a Master Services Agreement, which set forth Pareteum’s obligations to provide the customer with SIM cards that provided cellphone users, who obtained cellphone service through Pareteum’s customer, access to Pareteum’s mobile network.  At this stage, the customer did not owe Pareteum any money and no revenue had been earned by Pareteum; instead, Pareteum had first to develop and implement a platform for the customer and ensure that it functioned such that the customer could go “live” on the Pareteum network.  Once the Pareteum customer was live on the network and sold a SIM card to an actual cellphone user, that user could put the SIM card into his or her phone and begin making calls or consuming mobile data.  It was only at that point that Pareteum’s customer would be required to pay Pareteum for the data usage. 

BOZZO and O’DONNELL understood that purchase orders were not sales contracts because, as they and others at Pareteum well knew, and Paretuem’s customers understood, the purchase orders did not reflect binding commitments.  Instead, purchase orders typically reflected anticipated future sales.  Purchase orders typically set forth the customer’s intention to purchase SIM cards from Pareteum and to generate usage fees if and when the customer was able to sell the SIMs to end users who then activated the SIM cards and used Pareteum’s platform.

However, in violation of Generally Accepted Accounting Principles, Pareteum executives, including VICTOR BOZZO and EDWARD O’DONNELL, caused Pareteum at times to recognize revenue at the time a purchase order was signed for the full projected value of the purchase order, even though they were aware that typically the relevant counterparties were obligated to pay that amount only if and when in the future all SIM cards in the purchase order had been shipped, were activated by Pareteum’s customers, and were used for one month on Pareteum’s network.  As BOZZO and O’DONNELL were also aware, in many cases, pervasive technical and operational issues meant that Pareteum was actually incapable of satisfying its performance obligations under the terms of its agreements with customers. 

As a result of this fraudulent revenue recognition practice, from at least in or about 2018 through the first half of 2019, Pareteum improperly recognized and reported to the investing public more than $40 million of revenue that it should not have. 

As to one customer, referred to in the Indictment as Customer-4, Pareteum recognized revenue totaling $4.4 million based on an unsigned, draft purchase order for €6.3 million, which Customer-4 had not accepted.  Instead, Customer-4 had signed a purchase order, which itself did not reflect a binding commitment but merely reflected anticipated future sales, for only €630,000 – in other words, one tenth of the draft €6.3 million purchase order and far less than the revenue Pareteum recognized.  Pareteum nonetheless recognized $4.4 million in revenue for Customer-4 in three tranches, and at the time it recognized each of those tranches, Customer-4’s platform was not yet live and so it could not yet use Pareteum’s services.

*                *                *

BOZZO, 54, of Ringoes, New Jersey, and O’DONNELL, 58, of East Atlantic Beach, New York, are each charged with one count of conspiracy to commit securities fraud, make false SEC filings, and improperly influence the conduct of audits, which carries a maximum penalty of five years in prison; one count of securities fraud under Title 15, which carries a maximum penalty of 20 years in prison; one count of false SEC filings, which carries a maximum sentence of 20 years in prison; and one count of improperly influencing the conduct of audits, which carries a maximum penalty of 20 years in prison.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding work of the FBI.  Mr. Williams further thanked the SEC, which today filed a parallel civil action against BOZZO and O’DONNELL and also announced settled charges against STEFANSKI.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Kiersten A. Fletcher, Margaret Graham, and Allison Nichols are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.





[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth in this release constitute only allegations, and every fact described should be treated as an allegation.





Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByLzU5LWNoYXJnZWQtaWxsZWdhbC10cmFmZmlja2luZy1wb3NzZXNzaW9uLWFuZC11c2UtZmlyZWFybXMtZHJ1Zy10cmFmZmlja2luZy1hbmQtY29uc3BpcmFjeQ
  Press Releases:
Federal, county, and local law enforcement officials today announced that 59 individuals were charged and arrested in connection with firearms-trafficking, narcotics, conspiracy, or other firearms offenses after a three month, violent-crime-reduction initiative in Cleveland this summer. The vast majority were charged in U.S. District Court, while the remaining individuals were charged in state court. These individuals were apprehended in a series of coordinated arrests made during the last two weeks. 

“The Justice Department’s work to disrupt and dismantle the criminal gun trafficking pipelines that flood our communities with illegal guns has never been more urgent than it is now,” said Attorney General Merrick B. Garland. “That is why our prosecutors and agents are working more closely than ever before with our local law enforcement partners to get illegal guns off of our streets and hold accountable those who put illegal guns in the hands of violent criminals.”

Indictments and complaints were recently unsealed in federal court. They detail a lengthy investigation, led by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), that focused on reducing firearms-related crime in several areas of Cleveland by studying data about areas with gun-crime violence, then identifying illegal firearms sellers to disrupt their trafficking. The investigation resulted in the seizure of over 240 firearms, 203 of which law enforcement purchased from illegal sellers and permanently removed from Cleveland’s streets. National Integrated Ballistic Information Network (NIBIN) data shows that a significant number of those firearms are connected to violent criminal activity, including homicides and felonious assaults, that took place in Cleveland and surrounding Northeast Ohio suburbs in 2022 and 2023. Of the purchased firearms, 17 are “ghost guns” – meaning, unserialized and untraceable firearms, typically assembled at home – and 28 are machinegun conversion devices or “switches” – a device that enables a firearm to fire in fully automatic mode.  

In one case, law enforcement purchased more than 50 firearms from a group of seven people working together to sell firearms on Cleveland’s streets, even though none of the involved individuals hold a federal firearms license. Those firearms included stolen firearms, firearms with obliterated serial numbers, “switches,” already-loaded firearms, assault rifles, and firearms that had been previously used to commit violent crimes. Sometimes, these individuals also sold controlled substances to law enforcement officers at the same time. In two additional cases, law enforcement purchased, respectively, 33 firearms (including “switches”) and 23 firearms (including “switches”) from two other individuals who do not hold a federal firearms license. Many of these sales took place in public parking lots of business establishments during business hours or in recreational areas while nearby uninvolved, law-abiding citizens were engaged in their day-to-day errands or engaged in recreational activities.

Also, during this investigation, the ATF identified five individuals who were actively engaged in a conspiracy to conduct a home invasion and rob, at gunpoint, what they believed to be a “stash house” containing several kilograms of cocaine. Law enforcement intervened before these individuals could carry out their plan. Additionally, during this investigation, law enforcement purchased or seized almost 1.5 kilograms of cocaine, 215 grams of cocaine base, almost three kilograms of methamphetamine, 686 fentanyl pills, almost 1.5 kilograms of heroin/fentanyl mix, and 1,144 MDMA pills (otherwise known as Molly or Ecstasy). 

Some defendants were charged together, but several others were charged individually. In all cases, however, the charges stemmed from the extensive, targeted, and sustained effort this past summer, led by the ATF and assisted by other federal, state, and local law enforcement partners, to clamp down on the illegal firearms trafficking, use, and possession, as well as the associated distribution of drugs, in Cleveland. 

The following is a breakdown of the charges in U.S. District Court, according to court documents:





Malachi Berry, 21; Darvell Jackson, 20; and Steven Armstrong, 19, all of Cleveland, were charged together with conspiracy to possess a machinegun. Jackson and Armstrong were further charged with illegal possession of a machinegun. In the same indictment, these individuals, along with Nimar Linder, 21, of Cleveland, were also charged with conspiracy to engage in the business of dealing firearms without a federal firearms license. Armstrong and Linder were charged as felons in possession of a firearm.





Carlos Dupree, 43, of Cleveland; Dominique Goldsby, 32, of Cleveland; Jesse Mcdade, 41, of Cleveland; Norman Young, 37, of Cleveland; Martin Goodson, 41, of Cleveland; Lajuan Erwin, 25, of Mayfield Heights; Chevez Moorer, 23, of Cleveland; Aaron Wimbley, 22, of Garfield Heights; Alexander Duncan, 19, of Cleveland; Damien Body, 39, of Cleveland; Derrick Donald, 41, of Cleveland; Nahum Holmes, 31, of Brook Park; Akil Edmonds, 39, of Cleveland; Willie C. Jackson, 36, of Cleveland; and Deandre Smith, 36, of Cleveland, were indicted on distribution of drugs charges.





Josean Ortiz-Stuart, 34, and Jesus Vega, 29, both of Cleveland, were indicted together and both charged with distribution of drugs. Also named in that indictment was Gerald Matos, 38, of Cleveland, who was charged with being a felon in possession of a firearm.





Elias Pagan, 32, Ivan Santana, 26, and Angel Santiago, 46, all of Cleveland, were indicted together. Pagan faces numerous charges for distribution of drugs, as well being a felon in possession of firearms, and both Pagan and Santana were also charged with engaging in the business of importing, manufacturing, or dealing in firearms without a federal firearms license. Santiago is also charged with distribution of drugs.





Ambray Underwood, 25, of Euclid, was charged in an indictment for conspiracy to distribute drugs, and drug distribution.





Willie Earl Jackson, 26, of Cleveland, and Shane Plats, 31, of Ashtabula, were charged in the same indictment with engaging in the business of dealing firearms without a federal firearms license. Wiilie Earl Jackson was also charged in that indictment with trafficking in firearms.





Deshonn Brown, 19, and Demarius Jefferson, 18, both of Cleveland, were both charged with illegal possession of machineguns.





Jacob Plumb, 40, of Parma, was charged with distribution of drugs and possession of a firearm in furtherance of a drug trafficking crime.





Isaiah Overton, 23, of Cleveland, and Charles Morris, 33, of East Cleveland, were charged in a single indictment with distribution of drugs. Additionally, Overton was charged with using and carrying a firearm during and in relation to a drug trafficking Crime.





Corte’z Buggs, 29, of Cleveland, was charged in an indictment with distribution of Drugs and receipt of firearm while under felony indictment.





Michael Mcpherran, 38, of Parma, was charged with conspiracy to distribute drugs and distribution of drugs.





Harold Pearl, 39, of Cleveland, was charged with distribution of drugs and being a felon in possession of a firearm.





Alante Heard, 33, of Cleveland; Antonio Sweeney, 24, of Cleveland; Maurice Commons, 22, of North Randall; and Markus Williams, 33, of Cleveland, were charged by complaint with conspiracy to possess with intent to distribute drugs and possession of a firearm in furtherance of a drug trafficking crime.





Marquis Henson, 38; Deon Brown, 19; and Clarence Payne, 38, all of Cleveland, were charged with being a felon in possession of a firearm.





Kenneth Smith, 23, of East Cleveland, was charged with engaging in the business of dealing firearms without a federal firearms license, illegal possession of a machinegun, and being a felon in possession of firearms.





Andre Lewis, 35, of Cleveland, was charged with distribution of drugs and using and carrying a firearm during and in relation to a drug trafficking crime.





Devaunty Lewis, 31, and Nicholas Johnson, 33, both of Cleveland, were charged jointly in an indictment with conspiracy to engage in the business of importing, manufacturing, or dealing in firearms without a federal firearms license, and conspiracy to engage in firearms trafficking. Both were individually charged with engaging business in dealing with firearms without a license and trafficking in firearms. Lewis was also charged with being a felon in possession of a firearm. Johnson was also charged with engaging in the business of importing, manufacturing, or dealing in firearms without a federal firearms license.





Maurice Sterett, 39, of Cleveland; Antonio Cross, 22, of Cleveland; Marvell Roach, 43, of Willoughby; Kenneth Timberlake, 30, of Cleveland; and Travis Williams, 46, of Cleveland, were charged in an indictment with conspiracy to engage in the business of importing, manufacturing, or dealing in firearms without a federal firearms license. Sterett, Cross, Timberlake, and Williams were further charged, individually, with engaging in the business of importing, manufacturing, or dealing in firearms without a federal firearms license. Sterett, Cross, Roach, Timberlake, and Williams were also charged with conspiracy to engage in firearms trafficking and individual counts of firearms trafficking. Sterett, Timberlake, Travis Williams, and Roach were also charged with being a felon in possession of firearms. Sterett was further charged with distribution of drugs. Cross was also charged with illegal transfer of a machinegun.





Darion Shelton, 20, of Cleveland, was charged with engaging in the business of dealing firearms without a federal firearms license, and trafficking in firearms in connection with machinegun conversation devices or “switches.” He has also been charged with illegal possession of a machinegun.





The following is a breakdown of the charges in the Cuyahoga County Court of Common Pleas, according to court documents:





Marcel Battle, 30, of Canton: drug trafficking;





Avant Wilson, 22, of Cleveland: receiving stolen property (motor vehicle);





Nathan Roby, 44, of Cleveland: drug trafficking;





Raymond Callahan, 34, of Cleveland: drug trafficking;





Raphael Deen, 30, of Cleveland: drug trafficking;





Terry Lyons, 33, of Cleveland: drug trafficking;





If convicted, a federal district court judge will determine any penalty after considering the U.S. Sentencing Guidelines and other statutory factors.

Attorney General Garland and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio made the announcement. ATF Director Steven M. Dettelbach, U.S. Marshal Peter J. Elliott, and Cleveland Mayor Justin M. Bibb provided additional details relating to the initiative, as well as regarding larger firearms enforcement and violence-prevention efforts.

ATF investigated these cases, with assistance from the Cleveland Division of Police, U.S. Marshals Service, the Drug Enforcement Administration, FBI, Homeland Security Investigations, Ohio Bureau of Criminal Investigation, the Ohio Adult Parole Authority, Ohio Investigative Unit, Customs and Border Patrol, Air and Marine Division, Ohio State Highway Patrol, and the Cuyahoga County Sheriff’s Office.  

Assistant U.S. Attorney Kelly Galvin and other Assistant U.S. Attorneys for the Northern District of Ohio and the Cuyahoga County Prosecutor’s Office are prosecuting the cases.

An indictment or complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1uai9wci9wZW5uc3lsdmFuaWEtbWFuLWFkbWl0cy00OC1taWxsaW9uLWNhcmVzLWFjdC1sb2FuLWZyYXVkLXNjaGVtZQ
  Press Releases:
TRENTON, N.J. – A Pennsylvania man admitted to his role in a scheme to fraudulently obtain over $4.8 million in federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) for himself and others, U.S. Attorney Philip R. Sellinger announced today.

Darryl Duanne Young, aka “Darryl Duanne Isom Young,” 60, of Kingston, Pennsylvania, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court on Nov. 14, 2023, to an information charging him with one count of conspiracy to commit bank fraud and one count of money laundering.





“This defendant admitted taking advantage of government programs that were specifically designed to provide needed financial assistance to Americans during the COVID-19 pandemic. Combatting pandemic fraud in all of its forms is a top priority for this office and our law enforcement partners. Together, we will continue to root out those who have exploited the suffering of others to line their own pockets, and bring them to justice.”



U.S. Attorney Philip R. Sellinger



“IRS Criminal Investigation special agents are specially equipped to follow the complex financial trail left by criminals,” Tammy Tomlins, Special Agent in Charge of IRS – Criminal Investigation Newark Field Office. “Let today’s plea serve as a proof of the commitment of IRS-CI and our law enforcement partners dedication to vigorously pursue those who took advantage of government programs intended to provide financial assistance to Americans in need during the COVID-19 pandemic.”

 “The CARES Act was created to assist to American citizens and businesses that were impacted financially by the COVID-19 Pandemic,” Christopher A. Nielsen, Inspector in Charge, Philadelphia Division, said. “However, as alleged, Darryl Young, and his co-conspirators, manipulated this critical lifeline through a sophisticated scheme that fraudulently obtained millions of dollars in Paycheck Protection Program (PPP) loans.  Postal Inspectors will continue to work with the U.S. Attorney’s Office, and our law enforcement partners, to identify and hold accountable, those individuals who steal pandemic relief to fulfill their own greed.” 

“Mr. Young admittedly obtained money from the Paycheck Protection Programs intended to assist those with critical needs during the pandemic,” Gail S. Ennis,  Social Security Administration Inspector General, said. “His criminal actions allowed him and his fellow conspirators to selfishly profit. We will continue to collaborate with our law enforcement partners to hold those accountable who misuse Social Security numbers, falsify documents, and fraudulently obtain access to federal benefit programs. I appreciate the collective efforts of the investigating agencies and the U.S. Attorney’s Office for prosecuting this case.”    

“Today’s guilty plea sends a clear message that those who fraudulently obtained funds from COVID-19 relief programs will be held accountable,” Special Agent in Charge Patricia Tarasca of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG) said. “The FDIC OIG remains committed to working with our law enforcement partners to investigate and bring to justice those who participate in fraudulent schemes and threaten to undermine the integrity of our Nation’s banking system.”

“Today, Darryl Duanne Young admitted his role in stealing nearly $5 million in relief funds intended to support small businesses impacted by the COVID-19 global pandemic,” Homeland Security Investigations (HSI) Newark acting Special Agent in Charge Michael Alfonso said. “This is an egregious case of an individual taking advantage of an unprecedented public health crisis for personal gain. HSI Newark and our law enforcement partners will aggressively pursue those who perpetrate these illicit schemes and see that they are brought to justice.”

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

Young engaged in a scheme to illegally obtain for himself and his conspirators over $4.8 million in loans authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Young submitted and directed others to submit fraudulent PPP and EIDL loan applications, which fabricated numbers of employees and misrepresented company information, to induce lenders to approve the loan applications that they otherwise would not have approved. Among other things, Young submitted falsified tax documents and bank statements to a victim lender in support of PPP loan applications. Young personally received over $230,000 in PPP loans for businesses he controlled and received a percentage of loan proceeds for assisting in submitting fraudulent applications on behalf of others.

The applications Young submitted each allegedly contained fraudulent representations to the lender – including a victim lender that was a member bank of the Federal Home Loan Bank system – including bogus federal tax documents. According to IRS records, none of the purported tax documents that Young submitted in support of the loan applications were ever in fact filed with the IRS. Based on Young’s misrepresentations, loan applications for his purported businesses and the purported businesses of other applicants were approved for approximately $4.8 million in federal COVID-19 emergency relief funds meant for distressed small businesses.

The charge of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest. The charge of money laundering carries a maximum potential penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest. As part of his guilty plea, Young agreed to make restitution to the victim lenders for the full amount of the fraudulent PPP and EIDL loans.  Sentencing is scheduled for March 18, 2024.

U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Tomlins; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Nielsen Philadelphia Division; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney; special agents of the Board of Governors of the Federal Reserve System Consumer Financial Protection Bureau, Office of Inspector General, under the direction of Special Agent in Charge Brian Tucker; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Alfonso, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Katherine M. Romano and David E. Dauenheimer of the U.S. Attorney’s Office’s Health Care Fraud Unit in Newark.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2ZlZGVyYWwtYWdlbnRzLXNlaXplLTYzLWRvZ3Mtc3VzcGVjdGVkLWRvZy1maWdodGluZy1yaW5n
  Press Releases:
On March 23, 2018, the United States filed a civil forfeiture complaint seeking the possession of 63 pit bull-type dogs that were allegedly involved in a dog fighting venture in violation of the federal Animal Welfare Act. Pursuant to a federal warrant, the animals were seized on March 19, 2018, in Eastman, Georgia, by United States Department of Agriculture, Office of Inspector General (USDA-OIG) special agents working with the United States Marshals Service, Georgia Bureau of Investigation, Georgia State Patrol (GSP), Oconee Drug Task Force, Dodge County Sheriff’s Office, and Georgia Department of Natural Resources.

According to the complaint filed last week in federal court, the animals were seized after GSP troopers conducted a traffic stop involving a vehicle inside of which an injured dog was found. The operator of the vehicle admitted to having been present at a dog fight in Eastman, Georgia, and provided law enforcement with the location of the fight. At the reported location, agents discovered a disassembled dog fighting “pit” and more than 60 pit bull-type dogs staked to the ground by heavy chains. The condition of a majority of the dogs, including scarring and aggression towards other dogs, was consistent with dog fighting and related training.

After obtaining a search warrant, agents found numerous indications of dog fighting at the Eastman property, including a treadmill with a rope attached to the front part of the machine, antibiotics and other injectable veterinary medications, and a jenny mill, which is used to develop a dog’s endurance and musculature by enticing the animal to run on a circular track. From four grave areas, agents unearthed the remains of seven dogs, five of which had scarring consistent with dog fighting and one of which had a broken leg. During the search, agents noted that none of the live animals had access to food, and most did not have access to water.

Following the seizure, the United States Marshals Service took custody of the animals. K2 Solutions, Inc. and the Humane Society of the United States are assisting with the care of the dogs, at least some of which are pregnant.

“The Justice Department’s Environment and Natural Resources Division is pleased to have partnered with the U.S. Attorney’s Office, the U.S. Marshals Service, and federal and state law enforcement in this joint effort to remove these animals from harm’s way, pursuant to federal law, as quickly as possible,” said Acting Assistant Attorney General Jeffrey H. Wood for the Justice Department’s Environment and Natural Resources Division. “We applaud the agents and attorneys who worked tirelessly and acted on very little notice to achieve this successful outcome.”

“Dog fighting is a barbaric spectacle that has no place in any civilized society, and it will enjoy no quarter in the Southern District of Georgia,” said United States Attorney Bobby L. Christine. “We know that animal fighting ventures often entail other forms of illegal activity involving drugs, firearms, and gambling, and this Office will continue to work with its law enforcement partners at all levels to investigate and successfully prosecute those who contribute to the proliferation of crime and seek to profit off the abuse and suffering of helpless animals.”

“The United States Department of Agriculture, Office of Inspector General-Investigations, actively investigates allegations of animal abuse,” said Special Agent in Charge Karen Citizen-Wilcox for USDA-OIG. “This agency has made animal fighting a high priority in order to demonstrate that these blatant acts of cruelty to animals will no longer be tolerated. We would like to thank United States Attorney’s Office for aggressively prosecuting perpetrators of animal fighting.”

Dog fighting is a violent contest in which two dogs that are bred and conditioned for fighting are released by their owners or handlers in a controlled environment to attack each other and fight for purposes of entertainment or gambling. Fights usually end when one dog withdraws, when a handler “picks up” his dog and forfeits the match, or when one or both dogs die. Persons engaged in dog fighting typically use “pit bull”-type dogs, which dog fighters prefer for their compact muscular build, short coat, and the aggression that some display toward other dogs.

The federal Animal Welfare Act makes it a felony punishable by up to five years in prison to fight dogs or to possess, train, sell, buy, deliver, receive, or transport them for that purpose. The statute further authorizes the seizure and forfeiture of animals involved in dog fighting. Once the dogs are forfeited or surrendered to federal authorities, they can be evaluated and placed for adoption. Although federal funds will be used to pay for the care of the dogs while they remain in law enforcement custody, the Animal Welfare Act empowers the government to recover those costs from the dogs’ owners.

Assistant United States Attorneys Theodore S. Hertzberg and Xavier A. Cunningham are pursuing the forfeiture of the dogs on behalf of the United States. USDA-OIG is leading the related federal investigation. For any questions, please contact the United States Attorney’s Office at (912) 652-4422.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2Zvcm1lci1jaGF0dGFub29nYS1wb2xpY2Utb2ZmaWNlci1wbGVhZHMtZ3VpbHR5LXNleHVhbC1hc3NhdWx0
  Press Releases:
Desmond Logan, 38, formerly an officer with the Chattanooga Police Department (CPD), pleaded guilty today in federal court in the Eastern District of Tennessee to two counts of violating the civil rights of victims while performing his duties as a law enforcement officer. Specifically, the defendant sexually assaulted one woman and, in a separate incident, entered the car of another victim and refused to let her out, causing her to fear for her physical safety.

According to court documents filed in connection with the guilty plea, the defendant, while on duty on June 12, 2018, handcuffed and arrested K.B.V. Rather than transporting K.B.V. directly to the Hamilton County Jail, the defendant drove K.B.V. in his squad car to an empty and isolated parking lot. There, Logan sexually assaulted K.B.V. Additionally, on Jan. 2, 2016, in the evening hours, the defendant, while working on a security detail at the University of Tennessee in Chattanooga, got in the passenger seat of D.H.’s car and claimed he needed a ride to his car, which he maintained was parked in a different lot. The defendant intentionally directed D.H. to a secluded parking lot with no people. There, the defendant took out his taser and pressed it against D.H.’s leg, causing D.H. to fear that he would cause her physical harm. When D.H. tried to escape, Logan prevented her from getting out of the car.

In addition to these two victims, the defendant admitted as part of his guilty plea that he also sexually assaulted two more female victims who were in his custody. In each of these two incidents, the defendant drove the victim in his squad car to a deserted area where he sexually assaulted them. None of these victims consented to having sexual contact with the defendant.

“The Department of Justice is committed to prosecuting officers who violate their oath by sexually assaulting and unlawfully seizing persons while on duty,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “We will continue to send the strong message that the federal government will not tolerate such egregious abuses of power.”

“This case exhibits our continued efforts to prosecute those who would use their power to commit acts of violence and injustice against members of our community,” said U.S. Attorney J. Douglas Overbey of the Eastern District of Tennessee. “Our office will continue to stand by and protect the victims of such crimes.”

"Civil Rights violations, particularly when they involve a member of law enforcement, are of tremendous concern,” said Special Agent in Charge Joe Carrico of the FBI’s Knoxville Field Office. “The entire law enforcement profession is tarnished when an officer betrays the oath to protect and serve. The FBI will vigorously investigate any officer or agent of the law who is breaking the rules that he or she is sworn to uphold or is violating the civil rights of others."

With his guilty plea, the defendant faces a maximum sentence of 20 years in prison. In addition to the sentence that the Court ultimately imposes, the defendant must forfeit his law enforcement certification.

A sentencing date has been set for Feb. 10, 2020.

This case was investigated by the Knoxville Division of the FBI, with the support of the Hamilton County Sheriff's Office. Assistant United States Attorney James Brooks of the Eastern District of Tennessee and Special Litigation Counsel Fara Gold and Trial Attorney Olimpia Michel of the Criminal Section of the Civil Rights Division of the U.S. Department of Justice are prosecuting the case.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2dlb3JnaWEtbWFuLWFycmVzdGVkLWF0dGVtcHRpbmctZGVmcmF1ZC1kZXBhcnRtZW50LXZldGVyYW5zLWFmZmFpcnMtbXVsdGltaWxsaW9uLWRvbGxhci1jb3ZpZA
  Press Releases:
Christopher Parris, a 39-year-old Atlanta, Georgia resident, was arrested today and charged in federal court in the District of Columbia with fraud for attempting to sell millions of nonexistent respirator masks to the Department of Veterans Affairs in exchange for large upfront payments, the Justice Department announced.

The criminal complaint charges Parris with wire fraud.  It alleges that he made and caused to be made a series of fraudulent misrepresentations in an attempt to secure orders from the Department of Veterans Affairs for 125 million face masks and other personal protective equipment (PPE) that would have totaled over $750 million.  For example, the complaint alleges that Parris promised that he could obtain millions of genuine 3M masks from domestic factories when he knew that fulfilling the orders would not be possible.  Parris also allegedly made similar false representations to other entities in an effort to enter into other fraudulent agreements to sell PPE to state governments.

“We will vigorously pursue fraudsters who exploit the COVID-19 pandemic to make money,” said Attorney General William Barr.  “As this case demonstrates, even beyond the typical costs associated with unlawful behavior, COVID-19 scams divert government time and resources and risk preventing front-line responders and consumers from obtaining the equipment they need to combat this pandemic.  The Department of Justice will not tolerate this conduct, especially when it involves this kind of egregious attempt to target and defraud our nation’s treasures – our veterans.”

After arrest, Parris appeared before Chief United States Magistrate Judge Alan J. Baverman in the United States District Court for the Northern District of Georgia, where he was ordered detained.  Parris will be extradited to the District of Columbia.

“During this time of crisis, fraud or attempted fraud impacting services for veterans, who have selflessly served this country, is unconscionable,” said U.S. Attorney Timothy Shea for the District of Columbia.  “My office will devote whatever resources are necessary to stop scams aimed at exploiting Americans during this unprecedented pandemic.”

“We are committed to protecting the integrity of taxpayer funds and ensuring the delivery of medical supplies necessary to provide quality healthcare to our nation’s veterans, and any attempt to exploit the current global COVID-19 pandemic for personal gain will be dealt with swiftly,” said Inspector General Michael J. Missal for the Department of Veterans Affairs.  “Today’s charges are the direct result of the expeditious and tireless efforts of special agents of the Department of Veterans Affairs, Office of Inspector General, working in tandem with our law enforcement partners at the Department of Justice and Homeland Security Investigations.”

“Homeland Security Investigations special agents have sworn an oath to protect the American public, particularly during this health crisis, from opportunistic individuals who seek to deliberately harm and deceive others for their own profit," said Special Agent in Charge Jere T. Miles, Homeland Security Investigations – New Orleans.  “Today, our special agents have shown their commitment to that promise.”

A criminal complaint is an accusation by a federal law enforcement agent, and defendants are entitled to the presumption of innocence unless proven guilty.  Upon conviction for the wire fraud charge, the maximum statutory penalty is 20 years’ imprisonment and a $250,000 fine.

The Department of Veterans Affairs, Office of the Inspector General and Homeland Security Investigations investigated the case.  Trial Attorney Patrick Runkle of the Department of Justice’s Consumer Protection Branch and Assistant U.S. Attorneys Peter Lallas and Zia Faruqui of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case.  Assistant U.S. Attorneys Alison Prout and Theodore S. Hertzberg of the U.S. Attorney’s Office for the Northern District of Georgia provided substantial assistance.

Information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the District of Columbia, visit its website at https://www.justice.gov/usao-dc.  

The public is urged to report suspected fraud schemes related to COVID-19 (the Coronavirus) by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or by e-mailing the NCDF at disaster@leo.gov.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2ZlZGVyYWwtanVyeS1jb252aWN0cy1waGFybWFjeS1vd25lci1yb2xlLTE3NC1taWxsaW9uLXRlbGVtZWRpY2luZS1waGFybWFjeS1mcmF1ZC1zY2hlbWU
  Press Releases:
On Dec. 2, a federal jury in Greeneville, Tennessee, convicted Peter Bolos, 44, of Tampa, Florida, of 22 counts of mail fraud, conspiracy to commit health care fraud and introduction of a misbranded drug into interstate commerce, following a month-long trial.

According to court documents and evidence presented at trial, Bolos and his co-conspirators, Andrew Assad, Michael Palso, Maikel Bolos, Larry Smith, Scott Roix, HealthRight LLC, Mihir Taneja, Arun Kapoor, and Sterling Knight Pharmaceuticals, as well as various other companies owned by them, deceived pharmacy benefit managers (PBMs), such as Express Scripts and CVS Caremark, regarding tens of thousands of prescriptions. The PBMs processed and approved claims for prescription drugs on behalf of insurance companies. Bolos and his co-conspirators defrauded the PBMs into authorizing claims worth more than $174 million that private insurers such as Blue Cross Blue Shield of Tennessee, and public insurers such as Medicaid and TRICARE, paid to pharmacies controlled by the co-conspirators.

Court documents and evidence at trial established that Bolos, Assad and Palso owned and operated Synergy Pharmacy in Palm Harbor, Florida. Under their direction, Synergy agreed with Scott Roix, a Florida telemarketer operating under the name HealthRight, to generate prescriptions for Synergy and the other pharmacies involved in the scheme. The prescriptions were typically for drugs such as pain creams, scar creams and vitamins. To obtain the prescriptions, evidence showed Roix used HealthRight’s telemarketing platform as a telemedicine service, calling consumers and deceiving them into agreeing to accept the drugs and to provide their personal insurance information. HealthRight then paid doctors to authorize the prescriptions through its telemedicine platform, even though the doctors never communicated directly with the patients and relied solely on the telemarketers’ screening process as the basis for their authorizations. Because this faulty and fraudulent process made the prescriptions invalid, the drugs were misbranded under the Food, Drug and Cosmetic Act. Synergy and the other pharmacies nonetheless dispensed the drugs to consumers as part of the scheme, so that Bolos could submit fraudulent reimbursement claims.

Court documents and evidence at trial established that during the conspiracy, which lasted from May 2015 through April 2018, Bolos paid Roix more than $30 million to buy at least 60,000 invalid prescriptions generated by HealthRight. Evidence showed Bolos selected specific medications for the prescriptions that he could submit for highly profitable reimbursements. In addition, Bolos used illegal means to hide his activity from the PBMs so that he could remain undetected. Evidence showed that Bolos was responsible for at least $89 million out of the total $174 million in fraudulently paid billings.

“The defendants deceived consumers in order to facilitate the distribution of drugs without proper medical oversight, and overbilled insurers for illegal prescriptions,” said Deputy Assistant Attorney General Arun G. Rao of the Justice Department’s Civil Division. “The Department will continue to investigate and prosecute individuals who use telemedicine to advance fraudulent schemes that violate the Food, Drug, and Cosmetic Act.”

“The United States Attorney’s Office for the Eastern District of Tennessee applauds the unwavering efforts of the multiple agencies involved in this collaborative investigation to bring this extensive healthcare fraud and misbranding scheme to justice,” said Acting U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee. “The scope and nature of this fraud and misbranding scheme shock the conscience. Patients were given medications that they neither requested nor wanted, and the trial proof demonstrated that the prescriptions were specifically chosen by Bolos to maximize the fraudulent scheme’s profits, rather than for the patients’ healthcare needs. The guilty verdict against Bolos and the guilty pleas obtained from his co-defendants should send a strong message that the Department of Justice will aggressively prosecute fraud against health insurance providers.”

“Healthcare fraud is an egregious crime problem that impacts every American,” said Special Agent in Charge Joseph E. Carrico of the FBI’s Knoxville Field Office. “The guilty verdict was a result of a multi-agency investigation into a complex health care fraud scheme that required substantial investigative resources. Along with its law enforcement partners, the FBI remains committed to investigate these crimes and prosecute all those that are intent in defrauding the American public." 

“Distributing misbranded prescription drugs in the U.S. marketplace places patients’ health at risk,” said Special Agent in Charge Justin C. Fielder of the FDA Office of Criminal Investigations Miami Field Office. “We will continue to pursue and bring to justice those who put profits ahead of public health.”

“Bolos and his co-conspirators used their pharmacies to fraudulently bill insurance companies hundreds of millions of dollars, and that type of health care fraud impacts everyone,” said Special Agent in Charge John Condon of Homeland Security Investigations (HSI) Tampa. “HSI will continue to work with our law enforcement partners at the federal, state and local level to investigate all fraud and bring those responsible to justice.”

“Bolos and his co-conspirators sought to increase their profits by executing a comprehensive health care fraud scheme involving innocent patients,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services, Office of Inspector General. “This conviction should serve as a warning to individuals who wish to deceive the government and steal from taxpayers. Alongside our law enforcement partners, we will continue to pursue medical professionals who engage in fraudulent activity.”

“The verdict in this case sends a clear message that these types of schemes will not be tolerated,” said Special Agent in Charge Matthew Modafferi of the U.S. Postal Service Office of Inspector General in the Northeast Area Field Office. “The Special Agents of the U.S. Postal Service Office of Inspector General will continue to work closely with the U.S. Attorney’s Office and our law enforcement partners to bring to justice those who commit these kinds of offenses.”

Roix, Assad, Palso, Smith, Maikel Bolos and various associated business entities previously pleaded guilty to their roles in the conspiracy. Taneja, Kapoor, and Sterling Knight pleaded guilty to felony misbranding in a conspiracy with Bolos. U.S. District Judge J. Ronnie Greer set sentencing for Bolos for May 19, 2022, in the United States District Court for the Eastern District of Tennessee at Greeneville. Sentencings for the other defendants will be set for dates in 2022.

The trial and plea agreements resulted from a multi-year investigation conducted by the U.S. Department of Health & Human Services Office of Inspector General (Nashville); Food and Drug Administration Office of Criminal Investigations (Nashville); U.S. Postal Service, Office of Inspector General (Buffalo); Federal Bureau of Investigation (Knoxville and Johnson City, Tennessee); Office of Personnel Management Office of Inspector General (Atlanta); and the Department of Homeland Security, Homeland Security Investigations (Tampa). The U.S. Marshals Service also assisted in the investigation and the forfeiture of assets.

Assistant U.S. Attorneys TJ Harker and Mac Heavener for the Eastern District of Tennessee and Trial Attorney David Gunn of the Department of Justice Civil Division’s Consumer Protection Branch in Washington, and a former Assistant U.S. Attorney in Knoxville, prosecuted and tried the case. They were assisted by Barbra Pemberton, Bryan Brandenburg and April Denard from the U.S. Attorney’s office. 

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3VuaXRlZC1zdGF0ZXMtaW50ZXJ2ZW5lcy1mYWxzZS1jbGFpbXMtYWN0LWxhd3N1aXQtYWdhaW5zdC1jaXR5LWxvcy1hbmdlbGVzLWFuZC1jcmFsYQ
  Press Releases:
The United States has intervened in a lawsuit against the City of Los Angeles and the CRA/LA (formerly the Community Redevelopment Agency of the City of Los Angeles) alleging that they falsely certified compliance with federal accessibility laws in connection with claims submitted to the U.S. Department of Housing and Urban Development (HUD) for housing grants, the Department of Justice announced today. The accessibility laws allegedly violated include Section 504 of the Rehabilitation Act, the Fair Housing Act, and the duty to affirmatively further fair housing, which are meant to ensure that people with disabilities have fair and equal access to public housing.

 

The lawsuit alleges that the City applied for and received from HUD millions of dollars in federal housing funds, a portion of which it provided to the CRA/LA, to develop affordable housing that was accessible for people with disabilities. As recipients of HUD funds, the City and the CRA/LA must comply with the accessibility laws allegedly violated. Among other things, these laws require that five percent of all units in certain federally-assisted multifamily housing be accessible for people with mobility impairments, and an additional two percent be accessible for people with visual and auditory impairments. They also require that the City and the CRA/LA maintain a publicly available list of accessible units and their accessibility features. Likewise, they require that the City and the CRA/LA have a monitoring program in place to ensure people with disabilities are not excluded from participation in, denied the benefits of, or otherwise subjected to discrimination in, federally-assisted housing programs and activities solely on the basis of a disability.

 

The City annually had to certify compliance with Section 504, the Fair Housing Act, and the duty to affirmatively further fair housing as a precondition for receiving HUD funds. The lawsuit alleges that none of the HUD-assisted multifamily housing supported by the CRA/LA, or other developers, met the minimum number of accessible units. The lawsuit also alleges that the City and the CRA/LA neither monitored sub-recipients of HUD funds for compliance with federal accessibility laws nor maintained a publicly-available list of accessible units and their accessibility features.

 

“Recipients of federal housing funds must honor their commitments to accommodate people with disabilities,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Denying people with disabilities equal access to public housing deprives one of the most disadvantaged groups in society of fair housing opportunities.”

 

“This case alleges that the City of Los Angeles repeatedly violated the law by falsely certifying that millions of federal dollars were being used to build housing that included units accessible to people with disabilities,” said Acting U.S. Attorney Sandra R. Brown for the Central District of California. “While people with disabilities struggled to find accessible housing, the city and its agents denied them equal access to housing while falsely certifying the availability of such housing to keep the dollars flowing. The conduct alleged in this case is very troubling because of the impact on people who did not have access to housing that met their needs.”

 

“This case demonstrates the important role whistleblowers play in the process of uncovering waste, fraud, and abuse,” said HUD Inspector General David A. Montoya. “It further displays our commitment to fully pursue allegations that are brought to our attention.”

 

The lawsuit, United States ex rel. Ling, et al. v. City of Los Angeles, et al., No. CV11-00974 (PG), was filed in the U.S. District Court in Los Angeles by Mei Ling, a resident of Los Angeles who uses a wheelchair, and the Fair Housing Council of San Fernando Valley, a nonprofit civil rights advocacy group. The lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the United States when they believe that a party has submitted false claims for government funds, and to receive a share of any recovery. The False Claims Act permits the government to intervene in such a lawsuit, as it has done in this case.

 

These matters were investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Central District of California, and the HUD Office of Inspector General.

 

The claims asserted against the City of Los Angeles and the CRA/LA are allegations only; there has been no determination of liability.

 

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZG5jL3ByL3RocmVlLWluZGljdGVkLTEtbWlsbGlvbi1jb3ZpZC0xOS1yZWxpZWYtZnJhdWQ
  Press Releases:
CHARLOTTE, N.C. – A federal grand jury in Charlotte has indicted three individuals for conspiring to fraudulently obtain more than $1 million in COVID-19 relief funds administered by the Small Business Administration (SBA) through the Paycheck Protection Program (PPP), announced Dena J. King, U.S. Attorney for the Western District of North Carolina.

Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service, which oversees Charlotte, and Mark H. Morini, Special Agent in Charge of the Treasury Inspector General for Tax Administration (TIGTA), Southeast Field Division, join U.S. Attorney King in making today’s announcement.

According to allegations in the federal indictment, between March and November 2021, Tamakia Elizabeth Harris, 43, Shavondra Michelle White, 39, and Cedric Lee Benton, 47, all of Charlotte, conspired with each other to fraudulently obtain more than $1 million in COVID-19 relief funds, by submitting fraudulent PPP loan applications to financial servicing companies outside North Carolina. The indictment alleges that the PPP loan applications contained false and misleading information and fraudulent supporting documentation, including fake federal tax filings and payroll reports.

As alleged in the indictment, Harris, who was employed by a nationally chartered bank in Charlotte, generally charged fees between $2,000 and $5,000 for her assistance in filing false and fraudulent PPP loans. Harris allegedly created counterfeit IRS forms for nonexistent businesses and inflated income to qualify the borrower for the highest amount of PPP loan. Harris then allegedly submitted the fraudulent PPP loan applications and supporting documents to the financial servicing companies. The indictment alleges that, in total, Harris assisted in creating and submitting over 30 fraudulent PPP loan applications totaling more than $900,000.

According to allegations in the indictment, White, who was also employed by a nationally chartered bank in Charlotte, electronically filed two PPP loans in her own name using forged and fictitious federal income tax documents prepared by Harris. arris The indictment alleges that White, Benton, and another individual received more than $100,000 in PPP loans that they were not entitled to receive.

The indictment further alleges that Benton, who is White’s boyfriend and has a prior criminal conviction, also submitted two fraudulent PPP loan applications with fictitious and forged IRS forms, or income he purportedly lost while in the custody of the Bureau of Prisons (BOP).

The defendants are each charged with one count of wire fraud conspiracy, which carries a maximum penalty of 20 years in prison. One or more of the defendants are also charged in 16 separate counts of wire fraud – each relating to a specific PPP loan – which also carry a maximum penalty of 20 years in prison per count.

The charges in the indictment are allegations. The defendants are innocent unless and until proven guilty beyond reasonable doubt in a court of law.

In making today’s announcement, U.S. Attorney King thanked the USPIS and TIGTA for their investigation of this case.

Assistant U.S. Attorney Michael E. Savage, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form. Members of the public in the Western District of North Carolina are also encouraged to call 704-344-6222 to reach their local Coronavirus Fraud Coordinator.

 

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2NydWlzZS1saW5lLW9yZGVyZWQtcGF5LTQwLW1pbGxpb24taWxsZWdhbC1kdW1waW5nLW9pbC1jb250YW1pbmF0ZWQtd2FzdGUtYW5kLWZhbHNpZnlpbmc
  Press Releases:
Princess Cruise Lines Ltd. (Princess) was sentenced to pay a $40 million penalty – the largest-ever for crimes involving deliberate vessel pollution – related to illegal dumping overboard of oil contaminated waste and falsification of official logs in order to conceal the discharges, announced Acting Assistant Attorney General Jeffrey H. Wood for the Department of Justice’s Environment and Natural Resources Division, and Acting U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida in Miami, Florida. The sentence was imposed today by U.S. District Judge Patricia A. Seitz in Miami.

 

Judge Seitz also ordered that $1 million be awarded to a British engineer, who first reported the illegal discharges to the British Maritime and Coastguard Agency (MCA), which in turn provided the evidence to the U.S. Coast Guard.  The newly hired engineer on the Caribbean Princess reported that a so-called “magic pipe” had been used on Aug. 23, 2013, to illegally discharge oily waste off the coast of England without the use of required pollution prevention equipment. The evidence gathered by the whistleblower, including photographs of the magic pipe, led to an inspection of the cruise ship both in England and then when it reached New York on Sept. 14, 2013. During each of the separate inspections certain crew members concealed the illegal activity by lying to the authorities in accordance with orders they had received from Caribbean Princess engineering officers.

 

The sentence imposed by Judge Seitz also requires that Princess remain on probation for a period of five years during which time all of the related Carnival cruise ship companies trading in the U.S. will be required to implement an environmental compliance plan that includes independent audits by an outside company and oversight by a court appointed monitor. As a result of the government’s investigation, Princess has already taken various corrective actions, including upgrading the oily water separators and oil content monitors on every ship in its fleet and instituting many new policies.

 

According to papers filed in court, the Caribbean Princess had been making illegal discharges through bypass equipment since 2005, one year after the ship began operations. The August 2013 discharge approximately 23-miles off the coast of England involved approximately 4,227 gallons within the country’s Exclusive Economic Zone. At the same time as the discharge, engineers ran clean seawater through the ship’s monitoring equipment in order to conceal the criminal conduct and create a false digital record for a legitimate discharge.

 

The case against Princess included illegal practices which were found to have taken place on five Princess ships – Caribbean Princess, Star Princess, Grand Princess, Coral Princess and Golden Princess. One practice was to open a salt water valve when bilge waste was being processed by the oily water separator and oil content monitor. The purpose was to prevent the oil content monitor from going into alarm mode and stopping the overboard discharge. This was done routinely on the Caribbean Princess in 2012 and 2013. The second practice involved discharges of oily bilge water originating from the overflow of graywater tanks into the machinery space bilges. This waste was pumped back into the graywater system rather than being processed as oily bilge waste, and then pumped overboard anytime the ship was more than four nautical miles from land. As a result, discharges within U.S. waters were likely. None of the discharges were recorded in the oil record books that are required to be maintained on board the ships. 

 

“These violations of law were serious, longstanding and designed to conceal illegal discharges,” said Acting Assistant Attorney General Wood. “The sentence in this case should ensure that these crimes do not take place in the future and should also send a strong message to others that illegally polluting U.S. waters will not be tolerated.”

 

“Today's large criminal penalty makes it clear that businesses that operate in our oceans will be held accountable for violating their obligation to safeguard the marine environment,” stated Acting U.S. Attorney Greenberg. “The U.S. Attorney’s Office for the Southern District of Florida and our maritime partners are committed to ensuring that all vessel operators adhere to recognized standards in order to protect our open seas and coasts. We will continue to use the U.S. courts to pursue those who circumvent the law for their own personal gain.”

 

“Without the courageous act of a junior crewmember to alert authorities to these criminal behaviors of deliberately dumping oil at sea, the global environmental damage caused by the Princess fleet could have been much worse,” said Rear Admiral Scott Buschman, Commander of the U.S. Coast Guard Seventh District. “The selflessness of this individual exposed five different ships that embraced a culture of shortcuts and I am pleased at this outcome.”

As set forth in papers filed in court, Princess admitted to the following:

 

After suspecting that the authorities had been informed, senior ship engineers dismantled the bypass pipe and instructed crew members to lie.

Following the MCA’s inquiry, the chief engineer held a sham meeting in the engine control room to pretend to look into the allegations while holding up a sign stating: “LA is listening.” The engineers present understood that anything said might be heard by those at the company’s headquarters in Los Angeles, California, because the engine control room contained a recording device intended to monitor conversations in the event of an incident.

A perceived motive for the crimes was financial – the chief engineer that ordered the dumping off the coast of England told subordinate engineers that it cost too much to properly offload the waste in port and that the shore-side superintendent who he reported to would not want to pay the expense.

Graywater tanks overflowed into the bilges on a routine basis and were pumped back into the graywater system and then improperly discharged overboard when they were required to be treated as oil contaminated bilge waste. The overflows took place when internal floats in the graywater collection tanks got stuck due to large amounts of fat, grease and food particles from the galley that drained into the graywater system. Graywater tanks overflowed at least once a month and, at times, as frequently as once per week. Princess had no written procedures or training for how internal gray water spills were supposed to be cleaned up and the problem remained uncorrected for many years.

 

Ten million of the $40 million criminal penalty imposed by the court is earmarked for community service projects to benefit the maritime environment; $3 million of the community service payments will go to environmental projects in South Florida; $1 million will go for projects to benefit the marine environment in United Kingdom waters. Additionally, $1 million of the criminal penalty will be deposited in the Abandon Seafarer's Fund, a fund established to provide a mechanism for the U.S. Coast Guard to offer humanitarian relief and support of seafarers who are abandoned in the United States and are witnesses to maritime-related crimes.

 

The investigation was conducted by the U.S. Coast Guard Investigative Service with assistance from the U.S. Coast Guard 7th District Legal Office, U.S. Coast Guard’s Office of Maritime and International Law and U.S. Coast Guard Office of Investigations and Analysis. In announcing the case, Acting Assistant Attorney General Wood and Acting U.S. Attorney Benjamin G. Greenberg expressed their appreciation to the U.S. Coast Guard and to the U.K.’s MCA. The case is being prosecuted by Richard A. Udell, Senior Litigation Counsel with the Environmental Crimes Section of the Department of Justice, Thomas Watts-FitzGerald, Deputy Chief, Economic & Environmental Crimes Section for the Southern District of Florida, and Special Assistant U.S. Attorney Lieutenant Commander Brendan Sullivan, U.S. Coast Guard.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3NlY29uZC10ZW5uZXNzZWUtY29ycmVjdGlvbmFsLW9mZmljZXItcGxlYWRzLWd1aWx0eS1mZWRlcmFsLWNpdmlsLXJpZ2h0cy1vZmZlbnNlLWJlYXRpbmc
  Press Releases:
Tanner Penwell, 22, pleaded guilty to using unlawful force on an inmate while Penwell was serving as a correctional officer with the Tennessee Department of Corrections.

“This type of behavior and violation of an inmate’s civil rights will not be tolerated,” said Assistant Attorney General Eric Dreiband of the Department of Justice’s Civil Rights Division. “The Department of Justice will continue to seek out justice on behalf of those who have had their civil rights violated.”

“Correctional officers must abide by and adhere to the same laws they take an oath to uphold and enforce. Instead of serving and protecting the public, this officer used physical force to violate the civil rights of an individual and will now be held accountable, vividly illustrating that no one is above the law,” said U.S. Attorney D. Michael Dunavant for the Western District of Tennessee.

“The FBI will vigorously investigate and bring to justice any law enforcement officer who crosses the line and engages in activity that violates the civil rights of those whose safety they are charged with,” said Bryan McCloskey, Acting Special Agent in Charge of the Memphis Field Office of the Federal Bureau of Investigation. “This plea should be a reminder that wearing a badge does not make one above the law.”

With his guilty plea, Penwell admitted that, on Feb. 1, he and several other correctional officers entered the cell of R.T., an inmate in the mental health unit at the Northwest County Correctional Complex in Tiptonville, Tennessee. Penwell and the other officers entered the cell because R.T. was a suicide risk. Inmate R.T. was already bleeding when the officers entered his cell, and R.T. flung blood toward the correctional officers.

Once inside, a correctional officer looked in the direction of the surveillance camera in the cell and said, “violate the camera.” Another correctional officer then covered the camera with his hand. The correctional officer who asked for the camera to be violated then repeatedly punched R.T. Penwell estimated that this officer hit R.T. more than 20 times. When the officer stopped hitting R.T., he looked back at Penwell and said, “get him.”  Penwell stepped up and punched R.T. multiple times in the head. After Penwell stopped punching R.T., a third correctional officer punched R.T. 

Throughout the time he was being punched by the correctional officers, inmate R.T. sat on the bench in the cell and only used his arms to cover his face in an apparent attempt to protect his face from the correctional officers’ punches. At no point did R.T. attempt to fight back. Penwell knew that punching R.T. was unlawful, but he did not step in to stop it. A supervisor and several correctional officers were in a position to watch as the three correctional officers punched inmate R.T., but none of them attempted to stop the officers from hitting R.T. After R.T. was punched by the officers, Penwell observed that R.T. was bleeding much more than when they had first entered the cell.

Once outside of the cell, Penwell spoke with several correctional officers and a supervisor. The supervisor said he needed to see if the camera inside the cell was working.  The supervisor and the first correctional officer who punched R.T. decided that all of the officers would falsely claim that R.T. injured himself while he was on suicide watch in the mental health unit.

The next morning, the first correctional officer who punched R.T. told Penwell that instead of falsely claiming that R.T. injured himself, as the supervisor had proposed the day before, they should both falsely blame the third correctional officer who punched R.T. for all of R.T.’s injuries. Over the next few days, the first officer who punched R.T. repeatedly told Penwell to stick to this new cover story.

With today’s guilty plea, Penwell admitted that he violated 18 U.S.C. § 242 when he repeatedly punched and injured inmate R.T. without legal justification. The maximum penalty for this civil rights offense is 10 years imprisonment.

In a related case, former Correctional Officer Nathaniel Griffin entered a guilty plea in federal court on Aug. 15. Sentencing is scheduled for Nov. 27. 

This case was investigated by the Memphis Division of the FBI with the support of the Tennessee Department of Corrections, and is being prosecuted by Trial Attorney Rebekah J. Bailey of the Justice Department’s Civil Rights Division and Assistant United States Attorney David Pritchard of the U.S. Attorney’s Office for the Western District of Tennessee.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3VuaXRlZC1zdGF0ZXMtZmlsZXMtY29tcGxhaW50LWZvcmZlaXQtMjgwLWNyeXB0b2N1cnJlbmN5LWFjY291bnRzLXRpZWQtaGFja3MtdHdvLWV4Y2hhbmdlcw
  Press Releases:
The Justice Department today filed a civil forfeiture complaint detailing two hacks of virtual currency exchanges by North Korean actors.  These actors stole millions of dollars’ worth of cryptocurrency and ultimately laundered the funds through Chinese over-the-counter (OTC) cryptocurrency traders.  The complaint follows related criminal and civil actions announced in March 2020 pertaining to the theft of $250 million in cryptocurrency through other exchange hacks by North Korean actors.

“Today’s action publicly exposes the ongoing connections between North Korea’s cyber-hacking program and a Chinese cryptocurrency money laundering network,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “This case underscores the department’s ongoing commitment to counter the threat presented by North Korean cyber hackers by exposing their criminal networks and tracing and seizing their ill-gotten gains.”

“Today, prosecutors and investigators have once again exemplified our commitment to attribute national security cyber threats, to impose costs on these actors, and bring some measure of relief to victims of malicious cyber activities,” said Assistant Attorney General John C. Demers of the Justice Department’s National Security Division.  “Although North Korea is unlikely to stop trying to pillage the international financial sector to fund a failed economic and political regime, actions like those today send a powerful message to the private sector and foreign governments regarding the benefits of working with us to counter this threat.”

“As part of our commitment to safeguarding national security, this office has been at the forefront of targeting North Korea’s criminal attacks on the financial system,” said Acting U.S. Attorney Michael R. Sherwin of the District of Columbia.  “This complaint reveals the incredible skill of our Cryptocurrency Strike Force in tracing and seizing virtual currency, which criminals previously thought to be impossible.”

“Despite the highly sophisticated laundering techniques used, IRS-CI’s Cybercrimes Unit was able to successfully trace stolen funds directly back to North Korean actors,” said Don Fort, Chief of IRS Criminal Investigation (IRS-CI). “IRS-CI will continue to collaborate with its law enforcement partners to combat foreign and domestic operations that threaten the United States financial system and national security.”

“FBI efforts to stop the flow of threat finance around the world are central to our strategy to address transnational crime,” said Assistant Director Calvin A. Shivers of the FBI’s Criminal Investigative Division.  “This strategy is strengthened by the skills and expertise we continue to develop in virtual asset investigations such as this, which enable the FBI and our partners to identify and seize illicit assets.”

“As North Korea becomes bolder and more desperate in their efforts to steal money using sophisticated money laundering techniques, HSI will continue to apply pressure by exposing their fraudulent transactions,” said Special Agent in Charge Steven Cagen of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Denver.  “We are committed to safeguarding the interest of the United States against the criminal elements in North Korea to protect the integrity of the cyber financial system.”

“At U.S. Cyber Command, we leverage a persistent engagement approach to challenge our adversaries’ actions in cyberspace,” said Brigadier General Joe Hartman, Commander of the Cyber National Mission Force. “This includes disrupting North Korean efforts to illicitly generate revenue. Department of Defense cyber operations do not occur in isolation. Persistent engagement includes acting through cyber-enabled operations as much as it does sharing information with our interagency partners to do the same.”

“Today’s complaint demonstrates that North Korean actors cannot hide their crimes within the anonymity of the internet.  International cryptocurrency laundering schemes undermine the integrity of our financial systems at a global level, and we will use every tool in our arsenal to investigate and disrupt these crimes,” said Special Agent in Charge Emmerson Buie Jr. of the FBI’s Chicago Field Office.  “The FBI will continue to impose risks and consequences on criminals who seek to undermine our national security interests.”

The forfeiture complaint filed today details two related hacks of virtual currency exchanges.

As alleged in the complaint, in July 2019, a virtual currency exchange was hacked by an actor tied to North Korea.  The hacker allegedly stole over $272,000 worth of alternative cryptocurrencies and tokens, including Proton Tokens, PlayGame tokens, and IHT Real Estate Protocol tokens.  Over the subsequent months, the funds were laundered through several intermediary addresses and other virtual currency exchanges.  In many instances, the actor converted the cryptocurrency into BTC, Tether, or other forms of cryptocurrency – a process known as “chain hopping” – in order to obfuscate the transaction path.  As detailed in the pleadings, law enforcement was nonetheless able to trace the funds, despite the sophisticated laundering techniques used.

As also alleged in the pleadings, in September 2019, a U.S.-based company was hacked in a related incident.  The North Korea-associated hacker gained access to the company’s virtual currency wallets, funds held by the company on other platforms, and funds held by the company’s partners.  The hacker stole nearly $2.5 million and laundered it through over 100 accounts at another virtual currency exchange.

The funds from both of the above hacks, as well as hacks previously detailed in a March 2020 forfeiture action (1:20-cv-00606-TJK), were all allegedly laundered by the same group of Chinese OTC actors.  The infrastructure and communication accounts used to further the intrusions and fund transfers were also tied to North Korea.

The claims made in this complaint are only allegations and do not constitute a determination of liability.  The burden to prove forfeitability in a civil forfeiture proceeding is upon the government. 

 The investigation was conducted by IRS-CI’s Washington, D.C. Cyber Crimes Unit, the FBI’s Chicago and Atlanta Field Offices, and HSI’s Colorado Springs Office with additional support from the FBI’s San Francisco Field Office.  Trial Attorney C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section, Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section and Assistant U.S. Attorneys Zia M. Faruqui, Jessi Camille Brooks, and Christopher Brown are prosecuting the case, with assistance from Supervisory Paralegal Specialist Elizabeth Swienc and Legal Assistant Jessica McCormick. 

Support to this effort was provided by FBI’s San Francisco Field Office and the U.S. Attorney’s Office of the Northern District of Georgia.

Support to this effort was also provided by United States Cyber Command.  More information about the command’s efforts to combat North Korean and other malware activity can be found on Twitter and VirusTotal.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3NoaXBwaW5nLWNvbXBhbnktZmluZWQtMTUtbWlsbGlvbi1vaWwtcmVjb3JkLWJvb2stb2ZmZW5zZQ
  Press Releases:
Clipper Shipping A.S. was convicted of violating the Act to Prevent Pollution from Ships and sentenced to pay a fine of $1.5 million. Clipper admitted that oily bilge water was discharged from the Motor Tanker (M/T) Clipper Saturn and the discharges were omitted from the Oil Record Book.    

On Sept. 27 and Oct. 1, 2021, while the M/T Clipper Saturn was anchored near Lome, Togo, the then-Chief Engineer directed that oily bilge water be transferred into the vessel’s gray water tank and then discharged directly overboard under the cover of darkness. In order to accomplish the discharge, the then-Chief Engineer ordered that a section of piping be removed and a hose installed onto the eductor system. This arrangement was used to discharge the gray water tank directly overboard. Personnel then re-installed and repainted the piping in the area in order to appear that none had been removed. During a Coast Guard inspection of the vessel in Houston, Texas, on Oct. 28, 2021, authorities learned about the discharges.

“We take seriously the crimes of illegally discharging oily bilge water at sea and falsifying records to obstruct the United States’ ability to investigate those discharges,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “The U.S. Coast Guard must be able to rely on truthful records on board ships and the Department of Justice will continue to ensure polluters are held fully accountable.”   

“Not only did this ship pollute waterways, but they tried to cover it up,” said U.S. Attorney Alamdar S. Hamdani of the Southern District of Texas (SDTX). “To put it simply, Clipper Saturn wanted to get rid of dirty oily water from their ship. Instead of filtering out the hazardous elements, as required, they decided to cut costs and just release the whole contaminated mess into the sea. Unfortunately for them, they got caught when they docked in Houston. The fine imposed today tells them that there is a bigger cost to endangering our citizens and the environment in which they live, and that the SDTX will seek to hold those who harm oceans and waterways accountable.”

“The Coast Guard is committed to protecting our oceans and waterways from those who deliberately jeopardize the well-being and safety of the environment and the public,” said Coast Guard Capt. Keith Donohue, Commander, Sector Houston-Galveston. “The intentional pollution of U.S. waters is a serious violation that we simply will not tolerate. We will continue to work with the Department of Justice and our federal, state, and local partners to hold accountable those who choose to endanger our natural resources.”

As part of the plea agreement, Clipper Shipping A.S. will implement an enhanced Environmental Compliance Plan (ECP) on nine vessels. The ECP requires independent auditing and monitoring of the vessels as well as imposing requirements to enhance the pollution prevention systems on the vessels.

This case was investigated by the U.S. Coast Guard Sector Houston-Galveston, and the U.S. Coast Guard Investigative Service.

Assistant U.S. Attorney Steven Schammal for the Southern District of Texas and Senior Trial Attorney Kenneth E. Nelson of the Environment and Natural Resources Division’s Environmental Crimes Section are prosecuting the case.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tZC9wci9mYXRoZXItYW5kLXNvbi1zZW50ZW5jZWQtbGF1bmRlcmluZy1kcnVnLXRyYWZmaWNraW5nLWJpdGNvaW4tcHJvY2VlZHMtaW50ZW5kZWQtZmVkZXJhbA
  Press Releases:
Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Joseph Farace, age 72, of Sparks, Maryland today to 19 months in federal prison, followed by two years of supervised release, for a money laundering conspiracy.  On January 5, 2023, Judge Griggsby sentenced his son, Ryan Farace, age 38, of Reisterstown, Maryland, a previously convicted felon, to 54 months in federal prison for the same charge. 

The sentences were announced by United States Attorney for the District of Maryland Erek L. Barron; Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division; Special Agent in Charge Jarod Forget of the Drug Enforcement Administration - Washington Division; Special Agent in Charge Kareem A. Carter of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Chief Robert McCullough of the Baltimore County Police Department; Chief Gregory Der of the Howard County Police Department; Anne Arundel County Police Chief Amal E. Awad; Carroll County Sheriff James DeWees; Washington County Sheriff Brian K. Albert; and Chief Teresa Walter of the Havre de Grace Police Department.

According to their guilty pleas and other court documents, in November 2018, Ryan Farace was convicted in U.S. District Court in Maryland for a scheme to manufacture and distribute alprazolam tablets (sold under the brand name “Xanax”) in exchange for Bitcoin through sales on darknet marketplaces.  Cryptocurrency tracing techniques established that, in all, wallets associated with R. Farace, and/or his vendor name “XANAXMAN,” received over 9,138 Bitcoins from addresses associated with darknet marketplaces. 

Prior to his sentencing for the 2018 crimes, R. Farace met with representatives of the United States Attorney’s Office and the Drug Enforcement Administration, for the purpose of helping the government gain access to R. Farace’s drug proceeds, particularly cryptocurrency and cash, which had not yet been seized.  R. Farace repeatedly stated that he did not recall the location or means by which he could access any additional Bitcoins about which the government was not already aware.  At R. Farace’s sentencing for the 2018 crimes, he argued that he had been cooperative with the government’s efforts to obtain his assets.  Nonetheless, after R. Farace was sentenced, the government recovered additional drug proceeds in the form of Bitcoin.  Specifically, in early 2020, law enforcement recovered over 24 Bitcoin.

As detailed in his guilty plea, despite R. Farace’s claims to the government that he could not access any other Bitcoin proceeds related to his 2018 drug trafficking conviction, from October 2019 to April 2021, while incarcerated for his 2018 crimes, R. Farace conspired with his father, J. Farace, and others to launder additional proceeds of crimes through a series of financial transactions.  For example, in 2019, R. Farace sent approximately 71 Bitcoin from digital wallets he controlled to online exchanges and retailers.  Financial records from one such retailer indicated that R. Farace used some of the drug proceeds to benefit his father, including sending $3,341.65 worth of gift cards.  R. Farace used a contraband cell phone in prison to communicate with J. Farace about these purchases, using an encrypted email service. 

In August 2020, while he was incarcerated, R. Farace asked J. Farace to transfer more than 2,874 Bitcoin to a third party, so that the funds could be moved into a foreign bank account.  R. Farace provided J. Farace with the wallet address by typing it into the back cover of a prison library book and mailing it to J. Farace.

As detailed in their plea agreements, R. Farace (while incarcerated) and J. Farace used email and phone calls to discuss the transfer of bitcoin using coded language.  In September 2020, J. Farace completed the transfer of over 2,874 Bitcoin to the third party, all of which were proceeds of R. Farace’s 2018 drug crimes. On February 10, 2021, federal agents seized all of the 2,874.90419597 Bitcoin that J. Farace had transferred, the market value of which was between $65 million and $150 million at the time of seizure.  On May 11, 2021, the government seized 58.742155166 Bitcoin that was also proceeds of R. Farace’s drug trafficking.  Both R. Farace and J. Farace must forfeit all of the Bitcoin seized during the investigation.

United States Attorney Erek L. Barron and Acting Assistant Attorney General Nicole M. Argentieri commended the DEA, the IRS-CI, the Baltimore County, Howard County, and Anne Arundel County Police Departments, the Carroll County Sheriff’s Office, the Washington County Narcotics Task Force, the Havre de Grace Police Department for their work in the investigation and thanked the United States Postal Inspection Service, Maryland Department of Public Safety and Correctional Services and the Federal Bureau of Prisons for their assistance.  Mr. Barron thanked Assistant U.S. Attorney Coreen Mao and Trial Attorney Emily Cohen of the Justice Department’s Money Laundering and Asset Recovery Section, who prosecuted the case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.

# # #

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1zZGluL3ByL2ZyYW5rbGluLW1hbi1zZW50ZW5jZWQtdHdvLXllYXJzLWZlZGVyYWwtcHJpc29uLTMtZC1wcmludGluZy1hbmQtdHJhZmZpY2tpbmctZmlyZWFybXM
  Press Releases:
INDIANAPOLIS- Alexander Clark, 28, of Franklin, Indiana, has been sentenced to two years in federal prison after pleading guilty to making a firearm in violation of the National Firearms Act, possession of an unregistered firearm, and possession of a machinegun.

According to court documents, the Bureau of Alcohol, Tobacco, Firearms and Explosives began to investigate Alexander Clark based on occasions in which he sold privately made firearms. Over a one-month period, Clark was observed selling five Glock style pistols that were made with use of a 3-D printer for the frames, a 3-D printed AR-15 rifle lower receiver, and two machinegun conversion devices.

Machinegun conversion devices, sometimes called “Glock switches” or “auto-sears” are devices that convert ordinary semiautomatic firearms into fully automatic machineguns. Machinegun conversion devices are themselves considered machineguns under federal law, even when not installed, and are illegal to possess or sell in almost all cases.

On August 22., 2022, ATF agents searched Clark’s home and located multiple firearms, machineguns, silencers, firearm accessories, and a 3-D printer with other electronic devices in aid of 3-D printing.

In total, Clark possessed seven machineguns, 27 machinegun conversion devices and seven silencers, none of which were legally registered.

“Machinegun conversion devices are an urgent public safety challenge—an ordinary pistol equipped with a conversion device and an extended magazine can fire 31 rounds in just two seconds,” said Zachary A. Myers, U.S. Attorney for the Southern District of Indiana. “Criminals like this defendant exploit modern technology to illegally manufacture deadly weapons and illegally arm others, including felons and juveniles. The serious federal prison sentence imposed here demonstrates that our office is committed to making our communities safer by getting these devices off our streets and holding illegal gun traffickers accountable.”

“Machine gun conversion devices, which convert semi-automatic firearms into fully automatic weapons, are one of the most serious challenges facing ATF and our law enforcement partners at the moment,” stated Daryl S. McCormick, Special Agent in Charge of ATF’s Columbus Field Division. “These conversion devices increase the lethality of a firearm, while also reducing the ability of the person firing the weapon to control where they shoot. This combination is deadly and random and represents a clear threat to our community. We will work with our partners to remove these devices, and those who are manufacturing and selling them, from our streets.”

The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this case. The sentence was imposed by Chief U.S. District Judge Tanya Walton Pratt. Chief Judge Pratt also ordered that Clark be supervised by the U.S. Probation Office for three years following his release from federal prison.

U.S. Attorney Myers thanked Assistant United States Attorney Jayson W. McGrath, who prosecuted this case.

###

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1lZG5jL3ByL3RyaWFuZ2xlLWNlby1wbGVhZHMtZ3VpbHR5LWZpbGluZy1mYWxzZS10YXgtcmV0dXJucw
  Press Releases:
RALEIGH, N.C. – Raleigh business owner Alton Perkins, pled guilty yesterday for failing to account for approximately three-million dollars diverted from his companies for his own personal use between 2015 and 2018.

“Hardworking, taxpaying Americans deserve to know that the government will hold accountable tax cheats who dodge paying their fair share,” said U.S. Attorney Michael Easley.  “This CEO tried to dodge paying his due by diverting company money to pay for vacations, expensive jewelry, and private school tuition.  Yesterday he paid full price with a guilty plea.”     

“People who create elaborate schemes that have no purpose other than to mislead others and defraud the IRS run the very high risk of prosecution" said Donald “Trey” Eakins, Internal Revenue Service (IRS) Criminal Investigation Special Agent in Charge of the Charlotte Field Office.

According to evidence summarized in court, Perkins moved large amounts of money from his business accounts into his personal bank accounts.  These funds were then used for personal expenditures. None of the approximately three million spent by Perkins on these personal items was accounted for in his taxes filed with the IRS.  

Perkins is the chairman and CEO of AmericaTowne, a company, according to its website, focused on increasing exports of American products to China.  AmericaTowne, which was funded by investor dollars, included a plan to build an American-style community in China that would include hotels, small businesses, and a theme park.  Perkins is currently involved in a civil lawsuit with the U.S. Securities and Exchange Commission (Case No. 5:19-CV-00243-FL) over the unregistered private placement offerings and the sale of securities for AmericaTowne and other business entities controlled by Perkins.   

In court, Perkins pled guilty to making and subscribing to false tax returns for his failure to account for his personal expenditures on his 2016 personal income tax return.  According to evidence presented in court, for tax year 2016, Perkins stated that his total income was $21,933.  However, banking records show that Perkins spent $1,208,394 that year on personal items including, a golf cart, a family trip to Hawaii, private high school tuition, and a Rolex – all with funds taken from Perkin’s corporate bank accounts.

Perkins pled guilty to one felony charge of Making and Subscribing a False Tax Return Under Penalty of Perjury, in violation of 26 U.S.C. § 7206(1).  He faces up to three years in prison.  According to the plea agreement, Perkins will make restitution in the amount of $520,344 to the IRS for taxes owed from 2015-2018. 

Michael Easley, U.S. Attorney for the Eastern District of North Carolina, made the announcement after Magistrate Judge Robert B. Jones Jr. accepted the plea.  The Internal Revenue Service Criminal Investigation investigated the case and Assistant U.S. Attorneys William M. Gilmore and Karen Haughton prosecuted the case.

Related court documents and information are located on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No 5:22-CR-00265-FL.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1jZGlsL3ByL3RocmVlLXBlb3JpYS1tZW4tc2VudGVuY2VkLXBheWNoZWNrLXByb3RlY3Rpb24tcHJvZ3JhbS1mcmF1ZA
  Press Releases:










PEORIA, Ill. – Three Peoria, Illinois, men were sentenced on September 5, 2023, by U.S. District Judge James E. Shadid for making false statements related to the federal Paycheck Protection Program (PPP). Two of the three were also held responsible for fraudulently obtaining unemployment insurance benefits from multiple states.

The PPP provided federal funds to small businesses that were directly affected by the COVID-19 pandemic to pay up to eight weeks of payroll costs, rent, utilities and mortgage interest. The program was implemented by the Small Business Administration and administered by third-party lenders. The PPP was enacted via the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, an economic bill that passed in March 2020 in response to the economic fallout caused by the pandemic.

The three men were indicted in October 2022. Kendall A. Mack, 26, pleaded guilty in May 2023 to one count of making a false statement in April 2021 to obtain a PPP loan. From April to September 2021, Mack fraudulently obtained PPP funds to which he was not entitled by submitting a fraudulent PPP application, as well as a fraudulent PPP loan forgiveness application. He was held responsible for losses to the Small Business Administration and Capital Plus Financial, LLC, in the amount of $39,239.08. Mack was sentenced to three years’ probation and imprisonment for a period of time served. Judge Shadid also ordered Mack to pay restitution in the amount of $39,239.08.

Rasheem McCree, 38, pleaded guilty in April 2023 to one count of making a false statement in March 2021 by submitting a false application for PPP funds. He also admitted to fraudulently obtaining unemployment benefits from five states, including the Nevada Department of Employment, Training and Rehabilitation; the Arizona Department of Economic Security; the Pennsylvania Department of Labor and Industry; the New York State Department of Labor; and the Illinois Department of Employment Security. McCree was sentenced to 27 months’ imprisonment, to be followed by three years of supervised release. Judge Shadid also ordered McCree to pay $89,981.34 in restitution to the SBA and the states.

Adrian Lamont Morris, 27, pleaded guilty in April 2023 to one count of making a false statement in March 2021 by submitting a false application for PPP funds. In addition to the PPP loan, Morris filed for unemployment benefits from Illinois, Louisiana, and Pennsylvania, for a loss to the SBA and those states of $60,642. Morris was sentenced to 24 months’ imprisonment, to be followed by three years of supervised release. Judge Shadid also ordered Morris to pay $60,642 restitution.

On their applications, each of the defendants claimed to be the sole proprietor of a barber shop. However, none of them had a registered barber shop, employees, a payroll, or business-related expenses. None were licensed barbers.

In sentencing McCree and Morris, Judge Shadid noted their significant criminal histories. McCree and Morris were ordered to report to the Bureau of Prisons on November 14, 2023.

The statutory penalties for false statements under 18 U.S.C. §1001(a)(3) are up to five years’ imprisonment, a possible $250,000 fine, and up to a three-year term of supervised release.

The Internal Revenue Service, Criminal Investigation, and the Federal Bureau of Investigation, Springfield Field Office, investigated the case. Criminal Chief Darilynn J. Knauss represented the government in the prosecution.











Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2p1c3RpY2UtZGVwYXJ0bWVudC1vYnRhaW5zLTgwMDAwLXNldHRsZW1lbnQtYWdhaW5zdC1zdWJwcmltZS1hdXRvLWxlbmRlci1vcmFuZ2UtY291bnR5
  Press Releases:
The Justice Department today announced that California Auto Finance, a subprime auto lending company based in Orange County, California, has agreed to enter into a court-enforceable consent order to resolve allegations that it illegally repossessed two servicemembers’ cars without court orders while they were on active duty. The Justice Department filed a lawsuit against California Auto Finance and a related entity called 3rd Generation Inc., on March 28, 2018, alleging that their repossession practices violated the Servicemembers Civil Relief Act (SCRA). Under the proposed consent order, which is still subject to approval by the United States District Court for the Central District of California, California Auto Finance must adopt new repossession policies, pay one servicemember $30,000, which is the highest amount ever recovered by the Department for a single servicemember in an automobile repossession case, and pay a $50,000 civil penalty to the United States.

“This case sends a message to financial institutions, large and small, that they must live up to their obligations to our servicemembers,” said Assistant Attorney General Eric Dreiband. “We will continue to vigorously pursue lenders who fail to take the simple steps necessary to determine, before repossessing a car, whether it belongs to a servicemember. Servicemembers who are going through basic training or another kind of military service should not have to worry that their cars will be repossessed with no court supervision during their time of service to our country.”

“Individuals who take up the call to protect our nation by serving in the armed forces make an enormous sacrifice for us all,” said United States Attorney Nicola T. Hanna. “We have a legal and moral duty to safeguard the rights of our men and women in uniform.  California Auto Finance failed to uphold this duty through its repossession practices. Today’s consent order demonstrates that we will tolerate no abuses of servicemembers’ rights in our district.”

The Justice Department initiated its investigation of California Auto Finance after receiving a complaint in November 2016 from United States Army Private Andrea Starks. The United States alleges that in April 2016, Private Starks notified California Auto Finance that she would be entering the military the following month. Despite this advance notice, California Auto Finance repossessed Private Starks’ vehicle without a court order on May 9, 2016, her first day of military training duty at Fort Leonard Wood, Missouri. At the time of repossession, the vehicle was parked at the home of Private Starks’ grandmother in Cedar Rapids, Iowa.  

The Justice Department’s investigation corroborated Private Starks’ complaint, found that California Auto Finance had no policies related to SCRA compliance, and revealed that California Auto Finance had also violated the SCRA rights of U.S. Army Specialist Omar Martinez. The United States alleges that Specialist Martinez informed California Auto Finance that he would be entering the military, and that he would have limited means of communication during basic training. Nonetheless, California Auto Finance repossessed Specialist Martinez’s vehicle during his first month of military service. The repossession severely damaged Specialist Martinez’s credit, and, as a result, he was unable to purchase a new car. For over a year while living on base at Fort Benning, Georgia, Specialist Martinez had to rely on rideshares and taxis to buy groceries and take care of other personal needs. In March 2018, Specialist Martinez deployed to Afghanistan, where he served until November 2018.   

The proposed consent order requires California Auto Finance to pay $30,000 in compensation to Specialist Martinez, and to take steps to repair his credit. In addition, the proposed consent order requires California Auto Finance to take steps to ensure it does not repossess servicemembers’ cars without court orders in the future. Private Starks reached a private settlement with California Auto Finance before the proposed consent order was filed.

The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, California Auto Finance prevented servicemembers from obtaining a court’s review of whether their repossessions should have been delayed or adjusted to account for their military service.

The Justice Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section, often in partnership with United States Attorney’s Offices. Housing and Civil Enforcement Section attorneys worked jointly with the Civil Rights Section within the Civil Division of the United States Attorney’s Office in this action. Since 2011, the Justice Department has obtained over $469 million in monetary relief for over 119,000 servicemembers through its enforcement of the SCRA. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance, and income tax payments. For more information about the Justice Department’s SCRA enforcement, please visit www.servicemembers.gov.

Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2FyY2hkaW9jZXNlLW5ldy1vcmxlYW5zLWFncmVlcy1wYXktbW9yZS0xLW1pbGxpb24tcmVzb2x2ZS1odXJyaWNhbmUta2F0cmluYS1yZWxhdGVkLWZhbHNl
  Press Releases:
The Roman Catholic Archdiocese of New Orleans (Archdiocese of New Orleans) has agreed to pay more than $1 million to resolve allegations that it violated the False Claims Act by knowingly submitting false claims for payment to the Federal Emergency Management Agency (FEMA) for the repair or replacement of certain facilities damaged by Hurricane Katrina. The settlement, which is based on the Archdiocese of New Orleans’ financial condition, required final approval of the U.S. Bankruptcy Court for the Eastern District of Louisiana, which approved the settlement on Oct. 26. 

“FEMA offers critical financial support when natural disasters strike,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that these taxpayer funds are properly spent to help disaster victims rebuild their communities.”  

The settlement resolves allegations that, from 2007 through 2013, the Archdiocese of New Orleans knowingly signed certifications for FEMA funding that contained false or fraudulent damage descriptions and repair estimates that were prepared by AECOM, an architecture and engineering firm based in Los Angeles. Among other things, the alleged false descriptions included purported damage to a nonexistent central air conditioning unit and misstated a facility’s square footage. 

“Federal disaster funds are an instrumental component in the effort to assist disaster victims with their recovery,” said the U.S. Attorney’s Office for the Eastern District of Louisiana. “The favorable resolution of this False Claims Act matter illustrates the collaborative efforts and firm commitment by our federal partners to use all available remedies to address signs of fraud, waste and abuse.”

“Funds fraudulently obtained from FEMA deprive deserving recipients and communities truly in need,” said Inspector General Dr. Joseph V. Cuffari for Department of Homeland Security Office of Inspector General (DHS OIG). “We appreciate the support of our law enforcement partners, and this outcome is another example of the continuing successful partnership between the Department of Homeland Security Office of Inspector General, the Department of Justice’s Civil Litigation Branch in Washington, DC and the Eastern District of Louisiana’s U.S. Attorney’s Office.”

The settlement resolved allegations originally filed in a lawsuit brought under the qui tam or whistleblower provisions of the False Claims Act by Robert Romero, an AECOM Project Specialist. The False Claims Act permits private parties to file suit on behalf of the United States for false claims and to share in any recovery. The False Claims Act also permits the United States to intervene in such an action, as it did in this case, in part, against AECOM, the Archdiocese of New Orleans, and other disaster relief applicants in June 2020. One of those applicants, Xavier University of Louisiana, previously agreed to pay the United States $12 million to resolve its alleged role in the submission of false and misleading repair estimates prepared on its behalf by AECOM. The lawsuit against AECOM and another disaster relief applicant remains ongoing. As part of its settlement, the Archdiocese of New Orleans agreed to cooperate in the litigation.       

The whistleblower lawsuit is captioned United States ex rel. Robert Romero v. AECOM, Inc., et al., No. 16-cv-15092 (E.D. La.). As part of the settlement with the Archdiocese of New Orleans, Mr. Romero received approximately $199,500. 

The False Claims Act lawsuit is being handled by the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Eastern District of Louisiana, with assistance from FEMA’s Office of Chief Counsel. Investigative support is being provided by DHS OIG, through its Major Fraud and Corruption Unit and New Orleans Resident Office. 

The claims alleged in the lawsuit, including those resolved by the Archdiocese of New Orleans, are allegations only, and there has been no determination of liability.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2FsZXJlLXBheS11cy0zMzItbWlsbGlvbi1zZXR0bGUtZmFsc2UtY2xhaW1zLWFjdC1hbGxlZ2F0aW9ucy1yZWxhdGluZy11bnJlbGlhYmxlLWRpYWdub3N0aWM
  Press Releases:
Massachusetts-based medical device manufacturer Alere Inc. and its subsidiary Alere San Diego (Alere) have agreed to pay the United States $33.2 million to resolve allegations that Alere caused hospitals to submit false claims to Medicare, Medicaid, and other federal healthcare programs by knowingly selling materially unreliable point-of-care diagnostic testing devices, the Justice Department announced today.

       

“The United States is fortunate that innovative healthcare companies regularly develop medical devices that improve patients’ lives, often in remarkable ways,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division.  “But the Department will hold medical device manufacturers accountable if they knowingly sell defective products that waste taxpayer dollars and adversely impact patient care.”   

 

The United States alleged that between January 2006 and March 2012, Alere knowingly sold materially unreliable rapid point-of-care testing devices marketed under the trade name Triage®.  The Triage® devices aided in the diagnosis of acute coronary syndromes, heart failure, drug overdose, and other serious conditions, and the devices were frequently used in emergency departments where timely decisions are critical to ensuring proper patient care.  According to the government’s allegations, Alere received customer complaints that put it on notice that certain devices it sold produced erroneous results that had the potential to create false positives and false negatives that adversely affected clinical decision-making.  Nonetheless, the company failed to take appropriate corrective actions until FDA inspections prompted a nationwide product recall in 2012.  Of the $33.2 million to be paid by Alere, $28,378,893 will be returned to the federal government and a total of $4,860,779 will be returned to individual states, which jointly funded claims for Triage devices submitted to state Medicaid programs.        

 

“Physicians who work to treat patients with suspected myocardial infarctions rely upon devices such as Alere’s Triage Cardiac products for quick and accurate readings," said Stephen M. Schenning, Acting United States Attorney for the District of Maryland.  "When manufacturers such as Alere make changes to the specifications that affect the product’s reliability without informing physicians or the FDA, patient care is put at substantial risk.”

 

“Congress passed the False Claims Act on March 2, 1863 to protect taxpayer dollars from fraud and abuse and to allow private citizens to join the effort,” said Maureen R. Dixon, Special Agent in Charge for the U.S. Department of Health and Human Services Office of Inspector General in Philadelphia.   “We will continue to work with concerned citizens, the Department of Justice and our investigative partners to ensure the federal government only pays for honest, high quality, health care products and services.”

 

The settlement with Alere resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.  The civil lawsuit was filed by Amanda Wu, who formerly worked for Alere as a senior quality control analyst.  As part of today’s resolution, Ms. Wu will receive approximately $5.6 million.

 

The settlement with Alere was the result of a coordinated effort among the U.S. Attorney’s Office for the District of Maryland, the Commercial Litigation Branch of the Justice Department’s Civil Division, and the National Association of Medicaid Fraud Control Units, with assistance from the FDA’s Office of Chief Counsel, and HHS’ Office of Counsel to the Inspector General. The investigation was conducted by HHS-OIG, FDA’s Office of Criminal Investigations, and the Department of Defense Criminal Investigative Services.

 

The claims resolved by this settlement are allegations only, and there has been no determination of liability.  The lawsuit is captioned United States ex rel. Amanda Wu v. Alere San Diego, et al., No. GLR-11-CV-1808. 

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tZHRuL3ByL2NsYXJrc3ZpbGxlLWhvbWUtYnVzaW5lc3Mtb3duZXItY29udmljdGVkLWZpbGluZy1mYWxzZS10YXgtcmV0dXJucw
  Press Releases:
NASHVILLE – A federal jury yesterday convicted a Clarksville, Tennessee man of filing false tax returns that omitted income he earned from his business, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

According to court documents and evidence presented at trial, David Haley, 65, of Clarksville, owned Haley & Associates Mechanical Contractors, a heating and plumbing business. From 2014 through 2017, Haley & Associates was hired as the subcontractor on commercial projects in middle Tennessee and was paid more than $1,000,000 for each year. Generally, the contractors that hired Haley & Associates paid via check and reported the payments to the IRS via Forms 1099-MISC as non-employee compensation. Even though Haley personally received a portion of the company’s earnings as business income and nonemployee compensation, Haley reported earning no income on his 2014-2017 tax returns.  Haley’s failure to report that income on his tax returns for tax years 2015 through 2017 caused the IRS a loss of approximately $186,290.

Haley was convicted of three counts of filing false tax returns for tax years 2015, 2016, and 2017.  The jury acquitted Haley of one count of filing a false tax return relating to his 2014 tax filing.

Haley will be sentenced at a later date. He faces a maximum penalty of three years in prison for each count of filing false tax returns. U.S. District Judge William L. Campbell, Jr. will determine any sentence after consideration of  the U.S. Sentencing Guidelines and other statutory factors.

IRS-Criminal Investigation investigated the case.

Assistant U.S. Attorney Kathryn W. Booth and Trial Attorney Mitchell T. Galloway of the Justice Department’s Tax Division are prosecuting the case.

# # # # #

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1uai9wci9sZWFkZXItcmVhbC1lc3RhdGUtaW52ZXN0bWVudC1maXJtLWFkbWl0cy1yb2xlLTY1OC1taWxsaW9uLXBvbnppLXNjaGVtZS1hbmQtbXVsdGltaWxsaW9u
  Press Releases:
NEWARK, N.J. – The shadow chief executive officer of National Realty Investment Advisors LLC (NRIA) today admitted orchestrating a scheme to defraud more than 2,000 investors in a $658 million Ponzi scheme and conspiring to evade millions of dollars in tax liabilities, U.S. Attorney Philip R. Sellinger announced.

Thomas Nicholas Salzano, aka “Nicholas Salzano,” 65, of Secaucus, New Jersey, pleaded guilty before U.S. District Judge Evelyn Padin in Newark federal court to securities fraud, conspiracy to commit wire fraud, and conspiracy to defraud the United States. Salzano admitted he made numerous misrepresentations to investors while he secretly ran NRIA behind the scenes. He also admitted to misappropriating millions of dollars from investors to enrich himself and his family and friends. 



“For years, Salzano told lie after lie to investors, continuously deceived them, and operated his business as a Ponzi scheme, through which he stole money from thousands of investors. His greed and flagrant disregard for the law caused staggering losses in excess of $650 million. This office will continue to prioritize prosecuting individuals, like Salzano, to ensure that those who engage in rampant fraud are punished with long jail sentences and are ordered to make their victims whole.”



U.S. Attorney Philip R. Sellinger“Many people who decide to invest have to put a lot of faith in so-called financial experts, hoping their money grows and doesn’t one day disappear,” FBI – Newark Special Agent in Charge James E. Dennehy said. “Salzano admits he played a role in a scam that cost investors $658 million. History has shown over and over and over again, Ponzi schemes don't ever pay out, yet criminals keep trying to beat the system. FBI Newark and our law enforcement partners are doing all we can to help the victims in this case. We want others who may have faced a similar situation to contact us so we can help you as well.”

“Salzano not only victimized thousands of investors, but he also defrauded honest taxpayers by concealing his income from the IRS and evading his tax liability to the tune of millions of dollars,” IRS – Criminal Investigation Special Agent in Charge Harry T. Chavis Jr., Boston Field Office, said. “Today’s guilty plea by Salzano demonstrates how IRS – Criminal Investigation will continue to use their financial expertise to identify and investigate these types of investor fraud schemes with our law enforcement partners.”

As part of his plea agreement, Salzano has agreed to a prison term of eight to 12 years, a forfeiture money judgment in the amount of $8.52 million, and he has agreed to pay full restitution of $507.4 million to the victims of his offenses.

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

From February 2018 through January 2022, Salzano and others defrauded investors and potential investors of NRIA Partners Portfolio Fund I LLC (the “Fund”), a real estate fund operated by NRIA, of $650 million through lies, deception, misleading statements, and material omissions. These included the financial position of NRIA, the manner in which the defendants and their conspirators used Fund investor money, and Salzano’s managerial role at NRIA and his history of fraud.

The defendants executed their scheme through an aggressive multiyear, nationwide marketing campaign that involved thousands of emails to investors; advertisements on billboards, television, and radio; and meetings and presentations to investors. Salzano led and directed the marketing campaign, which employed deception, material misrepresentations and omissions, and falsified documents to manipulate investors, which were intended to mislead Fund investors into believing that NRIA was a solvent business that generated significant profits. In reality, NRIA generated little to no profits and operated as a Ponzi scheme, which was kept afloat by new investors. Despite investing almost none of their own capital into the business, the defendants misappropriated millions of dollars of investor money to support their lavish lifestyles, including expensive dinners, extravagant birthday parties, and payments to family and associates who did not work at NRIA.

Salzano concealed his true managerial role at NRIA in an effort to avoid scrutiny from investors of Salzano’s history of fraud at a large telecommunications company. In addition to defrauding investors, Salzano orchestrated a separate conspiracy to obstruct, impede, and impair the IRS in its effort to collect millions of dollars in outstanding taxes Salzano owed to the U.S. Treasury by, among other things, lying to the IRS, using a web of nominees, opening bank accounts in the names of phony entities, and using false and fraudulent company documents. 

Conspiring to defraud the United States carries a maximum penalty of five years in prison and a $250,000 fine. The securities fraud count and the wire fraud conspiracy count are both punishable by a maximum penalty of 20 years in prison and a $250,000 fine. Pursuant to the terms of his plea agreement, the maximum prison term that can be imposed on Salzano is 12 years. Sentencing is scheduled for Aug. 6, 2024.

U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Chavis in Boston; and special agents of the FBI, under the direction of Special Agent in Charge Dennehy in Newark, with the investigation, with assistance from FBI Headquarters Criminal Investigative Division and the Department of Justice Tax Division.

The government is represented by Assistant U.S. Attorneys Jonathan Fayer, Lauren E. Repole, and John Mezzanotte, all of the U.S. Attorney’s Office’s Criminal Division, with assistance from Trial Attorney Samuel B. Bean of the U.S. Department of Justice, Tax Division.

 





salzano.indictment.pdf





Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2RldXRzY2hlLWJhbmstYWdyZWVzLXBheS03Mi1iaWxsaW9uLW1pc2xlYWRpbmctaW52ZXN0b3JzLWl0cy1zYWxlLXJlc2lkZW50aWFsLW1vcnRnYWdlLWJhY2tlZA
  Press Releases:
The Justice Department, along with federal partners, announced today a $7.2 billion settlement with Deutsche Bank resolving federal civil claims that Deutsche Bank misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2006 and 2007.  This $7.2 billion agreement represents the single largest RMBS resolution for the conduct of a single entity.  The settlement requires Deutsche Bank to pay a $3.1 billion civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).  Under the settlement, Deutsche Bank will also provide $4.1 billion in relief to underwater homeowners, distressed borrowers and affected communities.

“This resolution holds Deutsche Bank accountable for its illegal conduct and irresponsible lending practices, which caused serious and lasting damage to investors and the American public,” said Attorney General Loretta E. Lynch.  “Deutsche Bank did not merely mislead investors: it contributed directly to an international financial crisis.  The cost of this misconduct is significant: Deutsche Bank will pay a $3.1 billion civil penalty, and provide an additional $4.1 billion in relief to homeowners, borrowers, and communities harmed by its practices.  Our settlement today makes clear that institutions like Deutsche Bank cannot evade responsibility for the great cost exacted by their conduct.”

“This $7.2 billion resolution – the largest of its kind – recognizes the immense breadth of Deutsche Bank’s unlawful scheme by demanding a painful penalty from the bank, along with billions of dollars of relief to the communities and homeowners that continue to struggle because of Wall Street’s greed,” said Principal Deputy Associate Attorney General Bill Baer.  “The Department will remain relentless in holding financial institutions accountable for the harm their misconduct inflicted on investors, our economy and American consumers.” 

“In the Statement of Facts accompanying this settlement, Deutsche Bank admits making false representations and omitting material information from disclosures to investors about the loans included in RMBS securities sold by the Bank.  This misconduct, combined with that of the other banks we have already settled with, hurt our economy and threatened the banking system,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “To make matters worse, the Bank’s conduct encouraged shoddy mortgage underwriting and improvident lending that caused borrowers to lose their homes because they couldn’t pay their loans.  Today’s settlement shows once again that the Department will aggressively pursue misconduct that hurts the American public.”

“Investors who bought RMBS from Deutsche Bank, and who suffered catastrophic losses as a result, included individuals and institutions that form the backbone of our community,” said U.S. Attorney Robert L. Capers for the Eastern District of New York.  “Deutsche Bank repeatedly assured investors that its RMBS were safe investments.  Instead of ensuring that its representations to investors were accurate and transparent, so that investors could make properly informed investment decisions, Deutsche Bank repeatedly misled investors and withheld critical information about the loans it securitized.  Time and again, the bank put investors at risk in pursuit of profit.  Deutsche Bank has now been held accountable.”  

“Deutsche Bank knowingly securitized billions of dollars of defective mortgages and subsequently made false representations to investors about the quality of the underlying loans,” said Special Agent In Charge Steven Perez of the Federal Housing Finance Agency, Office of the Inspector General. “Its actions resulted in enormous losses to investors to whom Deutsche Bank sold these defective Residential Mortgage-Backed Securities. Today’s announcement reaffirms our commitment to working with our law enforcement partners to hold accountable those who deceived investors in pursuit of profits, and contributed to our nation’s financial crisis.  We are proud to have worked with the U.S. Department of Justice and the U.S Attorney’s Office for the Eastern District of New York.”

As part of the settlement, Deutsche Bank agreed to a detailed Statement of Facts.  That statement describes how Deutsche Bank knowingly made false and misleading representations to investors about the characteristics of the mortgage loans it securitized in RMBS worth billions of dollars issued by the bank between 2006 and 2007.  For example:

Deutsche Bank represented to investors that loans securitized in its RMBS were originated generally in accordance with mortgage loan originators’ underwriting guidelines.  But as Deutsche Bank now acknowledges, the bank’s own reviews confirmed that “aggressive” revisions to the loan originators’ underwriting guidelines allowed for loans to be underwritten to anyone with “half a pulse.”  More generally, Deutsche Bank knew, based on the results of due diligence, that for some securitized loan pools, more than 50 percent of the loans subjected to due diligence did not meet loan originators’ guidelines.

 

Deutsche Bank also knowingly misrepresented that loans had been reviewed to ensure the ability of borrowers to repay their loans.  As Deutsche Bank acknowledges, the bank’s own employees recognized that Deutsche Bank would “tolerate misrepresentation” with “misdirected lending practices” as to borrower ability to pay, accepting even blocked-out borrower pay stubs that concealed borrowers’ actual incomes.  As a Deutsche Bank employee stated, “What goes around will eventually come around; when performance (default) begins affecting profits and/or the investors who purchase the securities, only then will Wall St. take notice.  For now, the buying continues.”

 

Deutsche Bank concealed from investors that significant numbers of borrowers had second liens on their properties. In one instance, a supervisory Deutsche Bank trader specifically instructed his team that if investors asked about second liens, “‘[t]ell them verbally . . . [b]ut don’t put in the prospectus.’”  Deutsche Bank knew that these second liens increased the likelihood that a borrower would default on his or her loan.

 

Deutsche Bank purchased and securitized loans with substantial defects to provide “flexibility” to the mortgage originators on whom Deutsche Bank’s RMBS program depended for a continued supply of loans.  Indeed, after the president of a large mortgage originator told Deutsche Bank he was “very upset with the rejection percentage,” Deutsche Bank’s diligence team was instructed, on three separate occasions, to clear loans it previously determined should be rejected.  

 

While Deutsche Bank conducted due diligence on samples of loans it securitized in RMBS, Deutsche Bank knew that the size and composition of these loan samples frequently failed to capture loans that did not meet its representations to investors.  In fact, Deutsche Bank knew “the more you sample, the more you reject.”

 

Deutsche Bank knowingly and intentionally securitized loans originated based on unsupported and fraudulent appraisals.  Deutsche Bank knew that mortgage originators were “‘giving’ appraisers the value they want[ed]” and expecting the resulting appraisals to meet the originators’ desired value, regardless of the actual value of the property.  Deutsche Bank concealed its knowledge of pervasive and consistent appraisal fraud, instead representing to investors home valuation metrics based on appraisals it knew to be fraudulent.  Deutsche Bank misrepresented to investors the value of the properties securing the loans securitized in its RMBS and concealed from investors that it knew that the value of the properties securing the loans was far below the value reflected by the originator’s appraisal. 

 

By May 2007, Deutsche Bank knew that there was an increasing trend of overvalued properties being sold to Deutsche Bank for securitization.  As one employee noted, “We are finding ourselves going back quite often and clearing large numbers of loans [with inflated appraisals] to bring down the deletion percentages.”  Deutsche Bank nonetheless purchased and securitized such loans because it received favorable prices on the fraudulent loans.  Ultimately, Deutsche Bank enriched itself by paying reduced prices for risky loans while representing to investors valuation metrics based on appraisals the Bank knew to be inflated.

 

Deutsche Bank represented to investors that disclosed borrower FICO scores were accurate as of the “cut-off date” of the RMBS issuance.  However, Deutsche Bank knowingly represented borrowers’ FICO scores as of the time of the origination of their loans despite the bank’s knowledge that these scores had often declined materially by the cut-off date.

Assistant U.S. Attorneys Edward K. Newman, Matthew R. Belz, Jeremy Turk, and Ryan M. Wilson of the U.S. Attorney’s Office for the Eastern District of New York investigated Deutsche Bank’s conduct in connection with the issuance and sale of RMBS between 2006 and 2007. The investigation was conducted with the Office of the Inspector General for the Federal Housing Finance Agency.

The $3.1 billion civil monetary penalty resolves claims under FIRREA, which authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud.  It is one of the largest FIRREA penalties ever paid.  The settlement does not release any individuals from potential criminal or civil liability.  As part of the settlement, Deutsche Bank has agreed to fully cooperate with investigations related to the conduct covered by the agreement.

Deutsche Bank will also provide $4.1 billion in the form of relief to aid consumers harmed by its unlawful conduct.  Specifically, Deutsche Bank will provide loan modifications, including loan forgiveness and forbearance, to distressed and underwater homeowners throughout the country.  It will also provide financing for affordable rental and for-sale housing throughout the country. Deutsche Bank’s provision of consumer relief will be overseen by an independent monitor who will have authority to approve the selection of any third party used by Deutsche Bank to provide consumer relief.

To report RMBS fraud, go to: http://www.stopfraud.gov/rmbs.html.

About the RMBS Working Group:

The RMBS Working Group, part of the Financial Fraud Enforcement Task Force, was established by the Attorney General in late January 2012.  The Working Group has been dedicated to initiating, organizing, and advancing new and existing investigations by federal and state authorities into fraud and abuse in the RMBS market that helped precipitate the 2008 Financial Crisis.  The Working Group’s efforts to date have resulted in settlements providing for tens of billions of dollars in civil penalties and consumer relief from banks and other entities that are alleged to have committed fraud in connection with the issuance of RMBS.

# # #

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1kYy9wci90ZXhhcy1tYW4tc2VudGVuY2VkLXByaXNvbi1hc3NhdWx0aW5nLWxhdy1lbmZvcmNlbWVudC1kdXJpbmctamFuLTYtY2FwaXRvbC1icmVhY2g
  Press Releases:
            WASHINGTON – A Texas man was sentenced to prison today for assaulting law enforcement during the breach of the U.S. Capitol on Jan. 6, 2021. His actions and the actions of others disrupted a joint session of the U.S. Congress convened to ascertain and count the electoral votes related to the 2020 presidential election.

            Jason Farris, 45, of Arlington, Texas, was sentenced to 18 months in prison and 24 months of supervised release by U.S. District Judge Amy Berman Jackson. Farris pleaded guilty to one count of assaulting, resisting, or impeding certain officers on Oct. 27, 2023.

            According to court documents, Farris traveled from Dallas, Texas, to Washington, D.C., to attend the ‘Stop the Steal” rally at the Ellipse. After the rally, Farris marched with a group of protestors to the U.S. Capitol building and made his way to the Lower West Plaza on the Capitol grounds. Here, Farris advanced to the front of a mob of rioters and directly confronted a group of police officers assembled in a line. Farris approached the officers and stated to the police officers, “I bet your family is proud of you, f— f— ass. You ain’t shit. Ain’t none of you shit.” As he said this, Farris hit the baton held by one of the police officers.

            Moments later, other rioters grabbed one of the metal bicycle racks being used by the police and attempted to pull it away. Several police officers held onto the bicycle rack to prevent it from being taken by rioters. Farris then approached an officer from behind and shoved him with two hands, knocking him to the ground. The officer fell and released the bicycle rack barricade, allowing rioters to remove it into the crowd. After the officer was helped to their feet, moments later, a rioter in the crowd threw a large wooden beam, which struck the officer in the head. The impact of the object knocked the officer to the ground and caused them to lose consciousness briefly. Two days later, the officer was diagnosed with a concussion.

            After Farris assisted the other rioters to remove the bike rack barrier, this created a gap in the police line, which officers attempted to fill with their bodies. But despite the officers’ efforts, rioters succeeded in overwhelming the police and surged through the gap that Farris had helped to create, flooding into the West Plaza of the Capitol. The police line then retreated, and many of these rioters subsequently entered the Capitol building.

            Farris advanced deeper into the Capitol grounds with the mob, climbed up the external stairs, and joined a mob on the Upper West Terrace. Here, Farris mounted a mechanical window-washing platform that was suspended from the roof of the West side of the Capitol building. Farris and two other men caused the platform to ascend the side of the building while members of the crowd below cheered. While on the window-washing platform, Farris used a flagpole to hit a window of the Capitol building several times in an apparent effort to break it.

            Farris later entered the Capitol and remained a short while before leaving.

            The FBI arrested Farris on Feb. 6, 2023, in Arlington.

            The U.S. Attorney’s Office for the District of Columbia and the Department of Justice National Security Division’s Counterterrorism Section prosecuted this case. The U.S. Attorney’s Office for the Northern District of Texas provided valuable assistance.

             The FBI’s Dallas and Washington Field Offices investigated this case. The Metropolitan Police Department and the U.S. Capitol Police provided valuable assistance.

            In the 37 months since Jan. 6, 2021, more than 1,313 individuals have been charged in nearly all 50 states for crimes related to the breach of the U.S. Capitol, including more than 469 individuals charged with assaulting or impeding law enforcement, a felony. The investigation remains ongoing.

            Anyone with tips can call 1-800-CALL-FBI (800-225-5324) or visit tips.fbi.gov.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1zZG55L3ByL2Zvcm1lci1zZWN1cml0eS1lbmdpbmVlci1pbnRlcm5hdGlvbmFsLXRlY2hub2xvZ3ktY29tcGFueS1hcnJlc3RlZC1kZWZyYXVkaW5n
  Press Releases:
Damian Williams, the United States Attorney for the Southern District of New York, Chad Plantz, the Special Agent in Charge of the San Diego Field Office of Homeland Security Investigations (“HSI”), and Tyler Hatcher, the Special Agent in Charge of the Los Angeles Field Office of the Internal Revenue Service - Criminal Investigation (“IRS-CI”), announced the unsealing of an Indictment charging SHAKEEB AHMED with wire fraud and money laundering in connection with his attack on a decentralized cryptocurrency exchange (the “Crypto Exchange”).  AHMED was arrested this morning in New York, New York, and will be presented this afternoon before U.S. Magistrate Judge Robert W. Lehrburger. 



U.S. Attorney Damian Williams said: “This is the second case we are announcing this week to shed light on fraud in the cryptocurrency and digital asset ecosystem.  As alleged in the indictment, Shakeeb Ahmed, who was a senior security engineer at an international technology company, used his expertise to defraud the exchange and its users and steal approximately $9 million in cryptocurrency.  We also allege that he then laundered the stolen funds through a series of complex transfers on the blockchain where he swapped cryptocurrencies, hopped across different crypto blockchains, and used overseas crypto exchanges.  But none of those actions covered the defendant’s tracks or fooled law enforcement, and they certainly didn’t stop my Office or our law enforcement partners from following the money.” 



HSI Special Agent in Charge Chad Plantz said: “Financial crime strikes at the core of our national and economic banking security.  With an attack of this magnitude, it’s crucial we ensure continued consumer confidence in our financial system.  Ruthless and reckless attempts aimed to sabotage legitimate commerce for greed must be stopped.  It’s cases like these that demonstrate HSI’s commitment and ability to work with a coalition of the willing to dismantle these complicated and technical fraud schemes and identify those responsible regardless of where they operate.”

IRS-CI Special Agent in Charge Tyler Hatcher said: “As alleged, Mr. Ahmed used his skills as a computer security engineer to steal millions of dollars.  He then allegedly tried to hide the stolen funds, but his skills were no match for IRS Criminal Investigation's Cyber Crimes Unit.  We, along with our partners at HSI and the Department of Justice, are at the forefront of cyber investigations and will track these fraudsters anywhere they try to hide and hold them accountable.”

As alleged in the Indictment:[1]

The Crypto Exchange was incorporated overseas and operates on the Solana blockchain.  At all relevant times, the Crypto Exchange allowed users to exchange different kinds of cryptocurrencies and paid fees to users who deposited cryptocurrency to provide liquidity on the Crypto Exchange. 

In July 2022, AHMED carried out an attack on the Crypto Exchange by exploiting a vulnerability in one of the Crypto Exchange’s smart contracts and inserting fake pricing data to fraudulently cause that smart contract to generate approximately $9 million dollars’ worth of inflated fees that AHMED did not legitimately earn, which fees AHMED was able to withdraw from the Crypto Exchange in the form of cryptocurrency.  This conduct defrauded the Crypto Exchange and its users, whose cryptocurrency AHMED had fraudulently obtained.  Additional details regarding the attack, including AHMED’s use of cryptocurrency “flash loans” to further defraud the Crypto Exchange, are described in the Indictment publicly filed today.  

After he stole the fees he never legitimately earned, AHMED had communications with the Crypto Exchange in which he decided to return all of the stolen funds except for $1.5 million if the Crypto Exchange agreed not to refer the attack to law enforcement.  

At the time of the attack, AHMED was a senior security engineer for an international technology company whose resume reflected skills in, among other things, reverse engineering smart contracts and blockchain audits, which are some of the specialized skills AHMED used to execute the attack.  

AHMED laundered the millions in fees that he stole from the Crypto Exchange to conceal their source and ownership, including through (i) conducting token-swap transactions, (ii) “bridging” fraud proceeds from the Solana blockchain over to the Ethereum blockchain, (iii) exchanging fraud proceeds into Monero, an anonymized and particularly difficult cryptocurrency to trace, and (iv) using overseas cryptocurrency exchanges.

After the attack, AHMED searched online for information about the attack, his own criminal liability, criminal defense attorneys with expertise in similar cases, law enforcement’s ability to successfully investigate the attack, and fleeing the United States to avoid criminal charges.  For example, approximately two days after the attack, AHMED conducted an internet search for the term “defi hack,” read several news articles about the hack of the Crypto Exchange, and visited several pages on the Crypto Exchange’s website.  As another example, AHMED conducted internet searches or visited websites related to the charges in the indictment, including by searching for the term “wire fraud” and for the term “evidence laundering.”  Finally, AHMED also conducted internet searches or visited websites related to his ability to flee the United States, avoid extradition, and keep his stolen cryptocurrency: he searched for the terms “can I cross border with crypto,” “how to stop federal government from seizing assets,” and “buying citizenship”; and he visited a website titled “16 Countries Where Your Investments Can Buy Citizenship . . .”

*                *                *

AHMED, 34, of New York, New York, is charged with wire fraud and money laundering, each of which carry a maximum sentence of 20 years in prison.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding work of HSI and IRS-CI.  Mr. Williams also thanked the U.S. Attorney’s Office for the Southern District of California for their assistance in the investigation.

The case is being prosecuted by the Office’s Money Laundering and Transnational Criminal Enterprises Unit and Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys David R. Felton and Kevin Mead are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.





[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described therein should be treated as an allegation.





U.S. v. Ahmed Indictment









F U C K I N G P E D O S R E E E E E E E E E E E E E E E E E E E E