U.S. MAN CONVICTED FOR CHILD EXPLOITATION, ATTEMPTS TO ARRANGE TOURISM TRIP TO CAMBODIA

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, March 24, 2015

Alaskan Man Convicted of Sexually Exploiting Children in Cambodia

An Anchorage, Alaska, man was convicted yesterday for sexually exploiting children in Cambodia over the course of four years and attempting to arrange a child sex tourism trip for himself and others to Cambodia, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Karen L. Loeffler of the District of Alaska.

Jason Jayavarman, 45, was convicted of sexual exploitation of children and attempted travel with the intent to engage in illicit sexual conduct in a foreign place.  A sentencing hearing will take place before U.S. District Court Judge Sharon L. Gleason of the District of Alaska, and will be scheduled at a later date.  Jayavarman remains in custody pending sentencing.

The evidence presented at trial established that Jayavarman had produced multiple videos of himself engaging in sexual acts with a child in Cambodia over the course of 12 trips between 2010 and his arrest in 2013.  Jayavarman then transported the recordings back to the United States.

The evidence also detailed a trip that Jayavarman had planned for himself and others to Cambodia for the purpose of engaging in sexual activity with children as young as 12 years old.  Unbeknownst to Jayavarman, one of the individuals was an undercover FBI agent.  According to the evidence presented at trial, Jayavarman explained to the undercover agent how to groom a child for sex, how to avoid law enforcement and how to record high quality “mementos” of the sexual activity.

Jayavarman’s child exploitation activities came to light following a concerned citizen’s anonymous tip.

The case was investigated by the FBI and the Anchorage Police Department.  The case was prosecuted by Trial Attorney Ravi Sinha of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Audrey J. Renschen of the District of Alaska.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.

MI DOCTOR PLEADS GUILTY FOR ROLE IN MEDICARE FRAUD AND KICKBACK SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 

Monday, March 23, 2015

Michigan Physician Pleads Guilty for Role in $3.6 Million Medicare Fraud Scheme

A Detroit-area medical doctor who referred Medicare beneficiaries for home health services in exchange for illegal cash kickbacks as part of a $3.6 million home health care fraud scheme pleaded guilty today for his role in the scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.

Kutub Mesiwala, 64, of Bloomfield Hills, Michigan, pleaded guilty before U.S. District Judge George Caram Steeh of the Eastern District of Michigan to one count of conspiracy to commit health care fraud.  A sentencing hearing is set for Oct. 5, 2015.

According to admissions in his plea agreement, Mesiwala referred patients to Detroit-area home health agency Advance Home Health Care Services Inc. (Advance) and other home health care agencies in exchange for cash kickbacks.  Advance’s owner, Amer Ehsan, pleaded guilty on July 24, 2014, to fraudulently billing Medicare for $3.6 million in home health services that were not medically necessary or not provided through Advance.  Ehsan is awaiting sentencing.

Mesiwala admitted that Medicare paid a total of $770,668.31 to Advance and $118,375.81 to other home health care companies for fraudulent claims based on his referrals.

This case is being investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  This case is being prosecuted by Trial Attorney Katharine A. Wagner of the Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

FORMER POLICE OFFICER INDICTED ON CIVIL RIGHTS, OBSTRUCTION CHARGES

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, March 27, 2015

Former Independence, Missouri, Police Officer Indicted on Federal Civil Rights and Obstruction of Justice Charges

Acting Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division and U.S. Attorney Tammy Dickinson of the Western District of Missouri announced that a federal grand jury has returned a four-count indictment against former Independence, Missouri, police officer Timothy Runnels for violating the constitutional rights of a minor who was in his custody and obstructing the subsequent investigation into the incident.

According to the indictment, Runnels continuously deployed a Taser against the minor while the minor was on the ground and not posing a threat to Runnels or others.  The indictment also charges that Runnels deliberately dropped the minor headfirst onto the ground while the minor was restrained and not posing a threat to Runnels or others.  The indictment alleges that the minor sustained bodily injury as a result of Runnels’ actions and, with respect to the first count, that the offense involved the use of a dangerous weapon.  The indictment also charges Runnels with two counts of obstruction of justice for filing a false police report concerning the incident and for making a false statement to Independence Police Department investigators regarding the amount of force that he used against the minor.

If convicted, Runnels faces a statutory maximum sentence of 10 years in prison and a fine of $250,000 for each of two charged counts of civil rights violations, and a statutory maximum sentence of 20 years in prison and a fine of $250,000 for one count of obstruction of justice by submitting a false police report and one count of providing misleading information to Independence Police Department investigators.

An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.

This case is being investigated by the FBI’s Kansas City Division and is being prosecuted by Trial Attorney Shan Patel of the Civil Rights Division and First Assistant U.S. Attorney David Ketchmark of the Western District of Missouri.

OWNER HEALTH CARE COMPANIES PLEADS GUILTY FOR ROLE IN $12.6 MEDICARE FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, March 13, 2015

Owner of Detroit Home Health Care Companies Pleads Guilty to $12.6 Million Fraud Scheme

The owner of two home health care companies pleaded guilty to Medicare fraud and tax fraud charges in connection with his role in a scheme to fraudulently bill Medicare for $12.6 million in home health services that were not provided or were obtained through illegal kickbacks.  Ten other individuals have been convicted at trial or pleaded guilty in this case.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) Chicago Regional Office and Special Agent in Charge Jarod Koopman of the Internal Revenue Service Criminal Investigation (IRS-CI) Detroit Field Office made the announcement.

Mohammed Sadiq, 67, of Oakland County, Michigan, pleaded guilty today before U.S. District Judge Denise Page Hood of the Eastern District of Michigan to one count of health care fraud and one count of filing a false tax return.  A sentencing hearing is scheduled for June 18, 2015.

According to admissions in his plea agreement, Sadiq owned and directed operations at two home health care companies in Detroit.  Sadiq admitted that, working with co-conspirators, he created and operated the companies for the purpose of billing Medicare for home health services that he knew were not provided.  Sadiq also admitted to paying kickbacks to patient recruiters in order to obtain the information of Medicare beneficiaries, which he then used to bill Medicare for services that were not medically necessary or were not provided at all.

Sadiq further admitted that he created fake patient files to fool a Medicare auditor and make it appear as though home health services were provided and medically necessary.

Sadiq admitted that, as a result of the scheme, he received $12.6 million from Medicare.

Also according to Sadiq, he received proceeds of the fraud through bank accounts that he controlled, withdrew substantial sums for his personal use and failed to report these proceeds on his individual federal income tax return in 2008.  In total, Sadiq admitted that he currently owes approximately $1.5 million in taxes, interest and penalties for tax years 2008 through 2010.

This case was investigated by the FBI, HHS-OIG and IRS-CI, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan.  The case is being prosecuted by Trial Attorneys William Kanellis, Christopher Cestaro, Brooke Harper and Elizabeth Young of the Criminal Division’s Fraud Section, as well as Assistant U.S. Attorney Patrick Hurford of the Eastern District of Michigan.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

FUGITIVE WANTED FOR MURDER SINCE 2008 CAUGHT IN MEXICO

FROM:  U.S. MARSHALS SERVICE 

March 17, 2015 Yvette Soto, Deputy U.S. Marshal

Fugitive Wanted for 2008 Murder Apprehended in Mexico, Deported to U.S.

Allegedly left victim’s burned, bullet-riddled body in West Mesa

Las Cruces, NM - The U.S. Marshals Service South West Investigative Fugitive Team (SWIFT) task force took custody of one of New Mexico’s most wanted fugitives, U.S. citizen Mario Jerardo Talavera, on Friday, March 13.

In 2011, Talavera was featured on Fox’s America’s Most Wanted in connection with the gruesome 2008 murder of Danny Baca, a 53-year-old Albuquerque resident. Talavera and two associates allegedly killed Baca over a drug deal gone wrong, and left his burned, bullet-riddled body in the West Mesa where it was found by the Bernalillo County Sheriff’s Department.

“After the crime, Talavera allegedly fled,” said Conrad Candelaria, U.S. Marshal of the District of New Mexico. “We joined the manhunt for him soon after.”

The fugitive investigation gained momentum when U.S. Marshals determined Talavera had fled to Mexico. Further investigation by U.S. Marshals and Mexican authorities revealed that Talavera was located in the city of Cuauhtémoc, where he was then arrested by Mexican authorities. Talavera was deported to the United States and booked into the Otero County Prison Facility in New Mexico. He is facing charges for federal drug trafficking, murder and kidnapping.

“The final chapter of justice denied has been written,” said Candelaria. “This dangerous and violent fugitive will now be held accountable for the gruesome and unconscionable acts of violence committed.

“The U.S. Marshals worked closely with the local district attorney, the New Mexico Attorney General’s Office and many other agencies in the law enforcement community both local and international to ensure justice was served.”

U.S. Department of Homeland Security: Dominican, U.S. Authorities Rescue 29 Sex Trafficking Victims Including 20 Minors

U.S. Department of Homeland Security: Dominican, U.S. Authorities Rescue 29 Sex Trafficking Victims Including 20 Minors

MEDICAL EQUIPMENT SUPPLY COMPANY OWNER CONVINCED IN MEDICARE, MEDI-CAL FRAUD SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, March 20, 2015

Owner of Medical Equipment Supply Company Convicted for $3.5 Million Medicare and Medi-Cal Fraud Scheme

A jury in federal court in Los Angeles convicted the former owner of a durable medical equipment supply company of health care fraud charges in connection with a $3.5 million Medicare and Medi-Cal fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Stephanie Yonekura of the Central District of California, Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG) Los Angeles Region, Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Field Office, and Special Agent in Charge Joseph Fendrick of the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse made the announcement.

Sylvia Walter-Eze, 48, of Stevenson Ranch, California, was convicted of one count of conspiracy to commit health care fraud, four counts of health care fraud, and one count of conspiracy to pay and receive illegal kickbacks.  Sentencing is scheduled for June 15, 2015, before U.S. District Judge R. Gary Klausner of the Central District of California.

The evidence at trial demonstrated that Walter-Eze, the then-owner of Ezcor Medical Supply, paid illegal kickbacks to patient recruiters in exchange for patient referrals.  The evidence further showed that Walter-Eze paid kickbacks to physicians for fraudulent prescriptions, primarily for medically unnecessary—but expensive—power wheelchairs, that she then used to support her fraudulent bills to Medicare and Medi-Cal.

Between 2007 and 2012, Walter-Eze submitted $3,521,786 in claims to Medicare and Medi-Cal, and received $1,939,529 in reimbursement for those claims.

The case was investigated by the FBI, HHS-OIG’s Los Angeles Regional Office and the California Department of Justice, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.  The case was prosecuted by Trial Attorneys Blanca Quintero and Alexander F. Porter of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

TWO WOMEN PLEAD GUILTY FOR ROLES IN $4 MILLION STOLEN ID REFUND FRAUD

FROM:  U.S. JUSTICE DEPARTMENT

Friday, March 13, 2015

Alabama and Georgia Women Plead Guilty to Involvement in $4 Million Stolen Identity Refund Fraud Ring

Two Phenix City, Alabama, women and a Columbus, Georgia, woman pleaded guilty for their roles in a stolen identity refund fraud (SIRF) conspiracy, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama announced today.

Tamaica Hoskins, a resident of Phenix City, pleaded guilty today in U.S. District Court in the Middle District of Alabama to one count of conspiracy to commit wire fraud and one count of aggravated identity theft.  Roberta Pyatt, also of Phenix City, previously pleaded guilty on Feb. 25 to one count of conspiracy to commit wire fraud.  Lashelia Alexander, of Columbus, pleaded guilty to one count of conspiracy to commit wire fraud on Nov. 18, 2014.  According to court documents, between September 2011 and June 2014, Hoskins, Pyatt and others filed more than 1,000 false federal income tax returns using stolen identities and requested more than $4 million in tax refunds.  Hoskins obtained stolen identities from various sources, including the identities of employees from a Columbus company.

In order to file the false tax returns, Hoskins and Pyatt obtained two Electronic Filing Identification Numbers (EFINs) in the names of sham tax businesses.  The tax refunds claimed on the false returns were paid out via prepaid debit cards, U.S. Treasury checks and deposits to financial institutions connected to the business EFINs that allowed participants in the scheme to print refund checks and obtain prepaid debit cards.  Hoskins and Pyatt cashed fraudulent refund checks at several businesses located in Alabama and Georgia.

Lashelia Alexander worked for Walmart’s money center located in Columbus.  In January 2014, Alexander was approached about cashing fraudulent tax refund checks that were issued in the names of third parties.  In return for cashing the checks, Alexander would receive payment.  Alexander cashed more than $100,000 in fraudulently obtained third-party refund checks issued based on false tax returns that were filed by Hoskins and Pyatt.

At sentencing, the defendants face a statutory maximum sentence of 20 years in prison and a fine of $250,000 for wire fraud conspiracy.  Hoskins also faces a minimum mandatory consecutive sentence of two years in prison and a statutory maximum fine of $250,000 for aggravated identity theft.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck Jr. commended special agents of Internal Revenue Service – Criminal Investigation, who investigated the case, and Trial Attorneys Michael C. Boteler and Gregory P. Bailey of the Tax Division and Assistant U.S. Attorney Todd Brown of the Middle District of Alabama, who are prosecuting the case.

4 CONVICTED IN FRAUD SCHEME INVOLVING TAKEOVER OF HOMEOWNERS' ASSOCIATIONS

FROM:  U.S. JUSTICE DEPARTMENT
Wednesday, March 18, 2015
Las Vegas Attorney and Three Others Convicted for Their Roles in a Fraudulent Scheme to Take Over Homeowners’ Associations

Following a 14-day trial, a federal jury in Las Vegas returned guilty verdicts yesterday in a case against a Las Vegas attorney and three others for their roles in a scheme to fraudulently take control of homeowners’ associations (HOAs) for the purpose of directing the HOAs’ construction defect litigation and repair work to a law firm and construction company owned by other co-conspirators.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Laura A. Bucheit of the FBI’s Las Vegas Field Office, Special Agent in Charge John Collins of Internal Revenue Service Criminal Investigation’s (IRS-CI) Las Vegas Field Office and Sheriff Joseph Lombardo of the Las Vegas Metropolitan Police Department made the announcement.

Keith Gregory, 61, of Las Vegas, Salvatore Ruvolo, 86, of Henderson, Nevada, David Ball, 47, of Las Vegas, and Edith Gillespie, 54, of Las Vegas, were found guilty yesterday of conspiracy to commit wire and mail fraud.  Gregory and Ball were also convicted of two counts of wire fraud each, Ruvolo was convicted of three counts of wire fraud, and Gillespie was convicted of one count of wire fraud.  Ruvolo was found not guilty of one count of mail fraud.  Sentencing hearings are scheduled for June 17, 2015, before U.S. District Judge James C. Mahan of the District of Nevada.

According to the evidence presented at trial, from approximately August 2003 through February 2009, the defendants engaged in a complex scheme to direct construction defect litigation and construction repairs at more than 10 condominium complexes in the Las Vegas area to a law firm operated by a co-conspirator and a construction company, Silver Lining Construction, owned by Leon Benzer.  In order to accomplish the scheme, the defendants and their co-conspirators identified HOAs for condominium complexes that had potential construction issues that could result in construction defect litigation and require repair.  They then sought to take controlling interests on the identified HOAs’ boards by purchasing units in the condominium complexes and running for election to the boards.  

Specifically, the evidence at trial demonstrated that Benzer and others, including Gillespie, enlisted “straw purchasers” to use their names and credit to purchase condominiums in the identified complexes.  Ruvolo, Ball and Gillespie, among others, acted as straw purchasers, and the evidence demonstrated that Gillespie provided false information on her loan application in connection with the purchase of a condominium in furtherance of the scheme.

According to the evidence, Ruvolo and Ball then sought to be elected to HOA boards in the complexes where they had purchased condominiums.  Other straw purchasers were directed to transfer a partial interest in their condominiums to other co-conspirators to make them look like homeowners who could stand for election to the HOA boards.  To ensure that conspirators won the HOA elections, the defendants employed deceitful tactics, such as submitting fake and forged ballots, and hiring complicit attorneys to run the elections as “special election masters,” who presided over the elections and supervised the counting of ballots.

The evidence demonstrated that, once elected, the conspiring board members, including Ruvolo and Ball, met with Benzer and other co-conspirators in order to manipulate the selection of property managers, contractors, general counsel and construction defect attorneys to represent the HOAs.  Gregory, an attorney licensed in Nevada, agreed to become the general counsel for two HOAs and to take direction from Benzer.

At trial, the evidence showed that 33 of the 37 condominium units purchased as part of the scheme went into foreclosure.  Over the course of the scheme, more than $7 million in construction contracts were awarded to Benzer’s company from a single HOA.  Several million dollars in legal fees were also directed to another co-conspirator.  Benzer compensated each of the defendants for their participation in the fraud scheme.  For example, the evidence demonstrated that Ruvolo received monthly payments of approximately $2,000, and Ball received $5,000 per year, for acting as straw purchasers and board members.  Benzer also directed approximately $90,000 in HOA-related legal work to Gregory and paid him approximately $12,000 in kickbacks.

On Jan. 23, 2015, Benzer pleaded guilty to one count of conspiracy to commit mail and wire fraud, fourteen counts of wire fraud, two counts of mail fraud, and two counts of tax evasion.  He is awaiting sentencing.

The case was investigated by the FBI, IRS-CI and the Las Vegas Metropolitan Police Department, Criminal Intelligence Section.  The case is being prosecuted by Deputy Chief Charles La Bella and Trial Attorneys Thomas B.W. Hall and Alison L. Anderson of the Criminal Division’s Fraud Section.

U.S. ARMY SPECIALIST INDICTED FOR ACCEPTING BRIBES

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, March 12, 2015

Former U.S. Army Specialist Indicted for Taking Bribes While Deployed in Afghanistan

A former specialist with the U.S. Army has been indicted for accepting bribes from Afghan truck drivers at Forward Operating Base (FOB) in Gardez, Afghanistan, in exchange for allowing the drivers to take thousands of gallons of fuel from the base for resale on the black market.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia made the announcement after the indictment was unsealed today.

Anthony Don Tran, 28, of Stockton, California, was indicted on March 10, 2015, in the Middle District of Georgia for one count of conspiracy to commit bribery of a public official and one count of bribery of a public official.  Tran was arrested in Santa Clara, California, on March 11, 2015.

According to allegations in the indictment, from December 2012 to May 2013, Tran conspired with James Norris and Seneca Hampton, both sergeants in Tran’s unit, to solicit and accept cash bribes from local Afghan truck drivers in exchange for permitting the truck drivers to take thousands of gallons of fuel from the base.  The indictment specifically alleges that on Jan. 26, 2013, Tran accepted $20,000 in exchange for permitting an Afghan driver to leave FOB Gardez with nearly 13,000 gallons of fuel purchased by the U.S. government.  

The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

Norris and Hampton each pleaded guilty to one count of conspiracy to commit bribery of a public official and one count of money laundering on Feb. 11, 2015, and are scheduled to be sentenced on May 21, 2015.    

The case is being investigated by the U.S. Army Criminal Investigation Command, the Office of the Special Inspector General for Afghanistan Reconstruction, the Defense Criminal Investigative Service and the Defense Contract Audit Agency, Investigative Support Division.  The case is being prosecuted by Trial Attorney John Keller of the Criminal Division’s Public Integrity Section.

TWO BROTHERS INDICTED FOR ALLEGEDLY FILING 30 FRAUDULENT TAX RETURNS FOR $200 MILLION IN REFUNDS

FROM:  U.S. JUSTICE DEPARTMENT  

Tuesday, February 24, 2015

Superseding Indictment Charges Two Brothers with Filing 30 Fraudulent Tax Returns Seeking Refunds of More Than $200 Million

A federal grand jury has returned a superseding indictment against two brothers late yesterday, adding conspiracy to commit wire fraud, mail fraud, aggravated identity theft and money laundering charges arising from a scheme in which they filed 30 fraudulent tax returns seeking refunds of more than $204 million, announced U.S. Attorney Rod J. Rosenstein of the District of Maryland, Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service-Criminal Investigation (IRS-CI) Washington, D.C., Field Office.

“As millions of U.S. taxpayers prepare to honestly file their returns, the Tax Division, working with its law enforcement partners, remains committed to prosecuting those individuals who seek to abuse and manipulate our nation’s tax system for personal gain,” said Principal Deputy Assistant Attorney General Ciraolo.

“The IRS allegedly sent $16 million to two criminals who filed bogus tax returns claiming ‘refunds’ that were not owed,” said U.S. Attorney Rosenstein.  “Federal agents and prosecutors have a duty to pursue perpetrators of such fraud schemes and try to recover money stolen from the United States Treasury.”

“The American tax system is designed to fund vital government services to people in this country,” said Special Agent in Charge Kelly.  “It is not a slush fund for thieves and fraudsters.  Those who illegally target our nation’s tax dollars for personal financial gain could face criminal prosecution and lengthy prison sentences."

The six-count superseding indictment alleges that Sean Aude Gallman, 38, of Upper Marlboro, Maryland, and Eric Maurice Gallman, 41, of Huntersville, North Carolina, established trusts and business entities, and used mailboxes at numerous private commercial postal carrier stores in Maryland and North Carolina as the addresses for the trusts and business entities.  The defendants, acting as trustees and agents, mailed fraudulent tax returns to the IRS in the names of the trusts and businesses requesting refunds.

The indictment alleges that in January 2013, Sean Gallman mailed to the IRS a fraudulent 2012 tax return in the name of the Gallman Charitable Trust, requesting a refund of $8,218,930.  Also around this time, the defendants mailed to the IRS a fraudulent 2012 tax return in the name of LEA Group Holdings Trust, requesting a refund of $8,293,562.  The defendants knew that the trusts were not entitled to the tax refunds.  After receiving refund checks in these amounts, on Feb. 15 and March 11, 2013, the defendants deposited the two refunds in bank accounts they controlled.  To hide their receipt of these refunds, the defendants used cashier’s checks and other financial instruments to transfer a portion of the money to third parties and other bank accounts.

The indictment further alleges that from January 2013 to March 23, 2014, Sean Gallman filed an additional 19 fraudulent tax returns for 2012 or 2013, in the name of numerous purported trusts and business entities, seeking $200,924,949 in refunds.  On March 16, 2014, Eric Gallman filed a fraudulent tax return for 2013 in the name of a business entity, seeking a refund of $275,548.  And from February 2013 to March 2014, the defendants together filed eight fraudulent tax returns for 2012 or 2013 in the name of purported trusts and business entities, seeking $42,091,389 in refunds.

Altogether, the defendants are alleged to have filed a total of 30 fraudulent tax returns seeking refunds totaling $204,971,904, for which the IRS paid two refunds totaling $16,512,492.

The indictment seeks forfeiture of the two refunds paid by the IRS; $11,529,954 seized from numerous bank accounts; foreign currency and gold and silver coins seized from a residence in Upper Marlboro; nine residential properties located in Upper Marlboro and Laurel, Maryland, North Carolina and South Carolina; and two Mercedes-Benz vehicles and one Hyundai vehicle.

The defendants each face a statutory maximum sentence of 20 years in prison for each count of conspiring to commit mail and wire fraud, conspiring to commit money laundering, and mail fraud.  Sean Gallman also faces a statutory maximum sentence of 20 years in prison for an additional count for mail fraud and for money laundering, and a statutory mandatory minimum sentence of two years in prison consecutive to any other sentence imposed for aggravated identity theft.

An indictment is not a finding of guilt.  An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

U.S. Attorney Rosenstein praised the Tax Division and IRS-Criminal Investigation for its work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Thomas P. Windom and Trial Attorney Erin Pulice of the Department of Justice Tax Division, who are prosecuting the case.

U.S. MARSHALS SERVICE CLOSES COLD CASE FROM 1972

FROM:  U.S. MARSHALS SERVICE 

The United States Marshals Service Cold Case Unit Closes Case from 1972
Cleveland, OH – United States Marshal Pete Elliott and Adult Parole Director Todd Ishee announce the closure of one of Ohio’s oldest warrants.

In 1967, Perry Greathouse, was charged with 1st degree Murder and convicted of manslaughter in the beating and strangulation death of his 3 year old step-daughter in Hartville, OH. Greathouse was sentenced to 1-20 years on January 25, 1967 and was released on parole on January 11, 1972. After his release, Greathouse quickly fled the state and lived a life on the run under a new alias.

The investigation identified that Greathouse’s life on the run began when he changed his name to Gerald Kelly. Gerald Kelly’s life included arrests in Atlantic City, NJ in 1974 and 1976 for sex offenses, in 1983 in Norfolk, VA for misdemeanor concealment and repeated arrests from 1986 until 1989 for crimes such as intoxication, theft, battery and arson while being homeless in Baltimore, Maryland.

Investigators found that Perry Greathouse became sick in 1990 and his days ended in a nursing home in 1990 in Baltimore, MD.

U.S. Marshal Peter Elliott explained that “this is another example of thorough police work and great team work!” With the assistance of the United States Marshals Service Capital Area Regional Fugitive Task Force and the Ohio Adult Parole Authority “we were able to close one of our states oldest warrants.”

FUGITIVE PREDATOR PASTOR ARRESTED IN BRAZIL

 FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, March 3, 2015

Pastor, Alleged Sexual Predator on Marshals' 15 Most Wanted List Captured
After only three months on the U.S. Marshals 15 Most Wanted fugitive list, self-proclaimed pastor and accused sexual predator Victor Arden Barnard was arrested Friday, February 27, in Pipa, Brazil. Barnard, 53, is wanted by the Pine County Sheriff’s Office in Pine City, Minnesota, for 59 felony counts of criminal sexual assault stemming from allegations that he sexually abused young girls while acting as their pastor. The U.S. Marshals joined the manhunt for Barnard in April 2014.

The manhunt for Barnard gained momentum when U.S. Marshals developed significant information leading them to believe he was either in Brazil or receiving assistance from his followers there. After a lengthy and thorough investigation, Barnard was located and arrested by Brazilian law enforcement authorities.

The efforts of the Pine County Sheriff’s Office, U.S. Department of Justice, Office of International Affairs, the U.S. Department of State’s Diplomatic Security Service, Interpol Washington, and U.S. Marshals Service all contributed to the successful arrest of Barnard.

Barnard is being held in Brazil pending extradition back to the U.S.

3 MEN SENTENCED FOR RACIALLY MOTIVATED MURDER OF AFRICAN-AMERICAN MAN

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, February 25, 2015

Three Brandon, Mississippi, Men Sentenced for Their Roles In the Racially Motivated Assault and Murder of an African-American Man

Victim Died After Being Run Over by Truck

The Justice Department announced today that William Kirk Montgomery, 25, of Puckett, Mississippi, Jonathan Kyle Gaskamp, 22, and Joseph Paul Dominick, 23, both of Brandon, Mississippi, were sentenced today in U.S. District Court in Jackson for their roles in a federal hate crime conspiracy involving multiple racially motivated assaults, culminating in the death of James Craig Anderson, an African-American man, in the summer of 2011.  Montgomery was sentenced to 234 months; Gaskamp was sentenced to 48 months; and Dominick was sentenced to 48 months.

Montgomery had previously pleaded guilty to one count of conspiracy and one count of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act for his role in the death-resulting assault of Anderson, 47, of Jackson, Mississippi.  Gaskamp previously pleaded guilty to one count of conspiracy and one count of violating the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act for his role in the conspiracy and in a violent assault of an unidentified African-American man near a golf course in the spring of 2011.  Dominick pleaded guilty to one count of conspiracy for his role.  A restitution hearing will be set for a later date.

“The Justice Department will always fight to hold accountable those who commit racially motivated assaults,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “We hope that the prosecution of those responsible for this horrific crime will help provide some closure to the victim’s family and to the larger community affected by this heinous crime.”

“Violence fueled by hate spreads fear and intimidation throughout our community,” said U.S. Attorney Gregory K. Davis of the Southern District of Mississippi.  “The prison sentences today make clear that our community will not tolerate hate, and individuals who commit such despicable crimes will be brought to justice.”

“The guilty pleas and resulting sentences handed down today are the result of the tremendous efforts by men and women in law enforcement who worked on this case,” said Special Agent in Charge Donald Alway of the FBI in Mississippi.  “The FBI takes very seriously its responsibility to protect the civil rights of all Americans, and remains committed to its pursuit of justice for anyone who is deprived of those rights."

In prior court hearings, the defendants had admitted that beginning in the spring of 2011, they and others conspired with one another to harass and assault African Americans in and around Jackson.  On numerous occasions, the co-conspirators used dangerous weapons, including beer bottles, sling shots and motor vehicles, to cause, and attempt to cause, bodily injury to African Americans.  They would specifically target African Americans they believed to be homeless or under the influence of alcohol because they believed that such individuals would be less likely to report an assault.  The co-conspirators would often boast about these racially motivated assaults.

Montgomery admitted his presence and participation in numerous racially motivated assaults, including the beating and killing of James Craig Anderson.  Specifically, Montgomery admitted that in the early morning hours of June 26, 2011, he and six other co-conspirators agreed to carry out their plan to find, harass and assault African Americans.  At around 4:15 a.m., Montgomery and three co-conspirators drove to west Jackson in Montgomery’s white Jeep with the understanding that the other three co-conspirators would join them a short time later.  Montgomery and the three other occupants of the Jeep then drove around west Jackson and threw beer bottles from the moving vehicle at African-American pedestrians they encountered.

At approximately 5:00 a.m., Montgomery and the three other two occupants of the Jeep spotted Anderson in a motel parking lot off Ellis Avenue.  The occupants of the Jeep decided that Anderson would be a good target for an assault because he was African-American and appeared to be intoxicated.  Two of the co-conspirators got out of the Jeep to distract Anderson while they waited for the other three co-conspirators to arrive.  After the other three co-conspirators arrived in a Ford F250 truck, two of the co-conspirators physically assaulted Anderson.  After the assault, Montgomery and three co-conspirators left the motel parking lot in the Jeep.  The driver of the Ford F250 then deliberately used his truck to run over Anderson, causing injuries which resulted in Anderson’s death.  After Anderson’s death, a number of the co-conspirators including Montgomery agreed to, and did, give false statements to law enforcement officials about the nature of their interactions with Anderson.

Gaskamp admitted to participating in an assault-filled evening during which he and five co-conspirators drove to Jackson armed with Gaskamp’s handgun, struck multiple victims with large glass beer bottles hurled from the moving vehicle.  Gaskamp further admitted that they located a homeless African-American man near a golf course and that he and two of his co-defendants punched and kicked the man until he begged for his life.  Dominick admitted to participating in different assault-filled evening during which he and four co-conspirators also struck multiple victims with large glass beer bottles thrown from their moving vehicle, and to shooting multiple victims with metal ball bearings fired from a slingshot.

Three other defendants in related cases, Deryl Paul Dedmon, 22, John Aaron Rice, 22, and Dylan Wade Butler, 23, all of Brandon, Mississippi, were previously sentenced to 600 months, 220 months, and 78 months, respectively for their roles in the conspiracy.  Four other defendants involved in related cases,  Sarah Adelia Graves, 21, of Crystal Springs, Mississippi, Shelby Brooke Richards, 21, of Pearl, Mississippi, John Louis Blalack, 20, and Robert Henry Rice, 24, both of Brandon, Mississippi, are awaiting sentencing.

This case was the result of a cooperative effort among the Justice Department’s Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Mississippi and the Hinds County, Mississippi, District Attorney’s Office.  This case was investigated by the Jackson Division of the FBI and the Jackson Police Department.  It is being prosecuted by Trial Attorney Sheldon L. Beer and Deputy Chief Paige M. Fitzgerald of the Justice Department’s Civil Rights Division, and Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi.

FORMER BOA VP PLEADS GUILTY TO MISAPPLICATION OF BANK FUNDS

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, February 24, 2015

Former Bank of America Vice President in Las Vegas Pleads Guilty to Misapplication of Bank Funds

A former senior vice president of Bank of America (BOA) in Las Vegas pleaded guilty today to misapplication of bank funds in a scheme that led to over $6.4 million in losses to BOA on two business-related loans.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada, Special Agent in Charge Laura A. Bucheit of the FBI’s Las Vegas Office and Special Inspector General Christy L. Romero of the Troubled Asset Relief Program made the announcement.

Justin T. Brough, 39, of North Las Vegas, Nevada, pleaded guilty to one count of misapplication of bank funds before U.S. District Judge Andrew P. Gordon of the District of Nevada.  A sentencing hearing is scheduled for May 28, 2015.

According to his plea documents, Brough was a senior vice president at BOA in Las Vegas, serving as a business banking market executive.  Brough provided financial services to high-net-worth clients.

Brough admitted to misapplying bank funds in connection with two business loans: a $6.3 million short-term construction loan, and a $600,000 line of credit in connection with the acquisition of a business.  Brough admitted that neither borrower qualified for the loans, because they did not meet the bank’s underwriting requirements.  Brough further admitted that he falsified documents in order to help both borrowers get the loans, including forging signatures on loan papers.

According to Brough’s admissions, when the borrowers had difficulty making payments on the loans, Brough misused the bank’s general ledger fund to make a total of $436,676 in payments on the loans for the borrowers.  Brough admitted that he disguised those payments, among other ways, as “goodwill,” “miscellaneous adjustments” and refunds of various fees.  He also admitted that he kept each of the individual payments under $10,000 so he would not need additional approval within BOA.

Both borrowers ultimately defaulted on the loans.  According to Brough’s plea agreement, the aggregate loss to BOA was $6,468,767: $5,291,000 on the first loan, and $1,177,167 on the second loan.

BOA received a total of $45 billion in taxpayer funds from the Troubled Asset Relief Program (TARP) of the U.S. Department of the Treasury, which BOA repaid in full in December 2009.

The case was investigated by the FBI and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).  This case is being prosecuted by Senior Trial Attorney Nicholas Acker of the Criminal Division’s Fraud Section.

Conservation Connect Series: Law Enforcement

IMPERIAL GANGSTER LEADER CONVICTED IN FIVE MURDERS, OTHER CRIMES

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, March 6, 2015

Leader Of Imperial Gangsters Convicted in Five Murders, One Attempted Murder and Other Gang-Related Crimes

A leader of the Imperial Gangsters street gang was convicted by a federal jury in the Northern District of Indiana of five counts of murder in aid of racketeering, one count of attempted murder in aid of racketeering, one firearms count related to the attempted murder, one count of engaging in a RICO conspiracy, one count of engaging in a conspiracy to distribute narcotics, and related offenses.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David A. Capp of the Northern District of Indiana made the announcement.

Juan Briseno aka “Tito”, 25, of Hammond, Indiana, was part of a 24-defendant indictment alleging that members of the Imperial Gangsters committed 13 homicides in East Chicago, Hammond and Gary, Indiana.  The indictment also charged a decade-long racketeering conspiracy that involved 19 additional attempted murders and the large scale distribution of cocaine and marijuana.  Sentencing is scheduled for June 15, before Chief Judge Philip P. Simon of the Northern District of Indiana.

According to evidence presented at trial, the Imperial Gangsters had a standing rule to shoot on sight any rival gang member.  They also had a policy to shoot anyone selling drugs in their neighborhood without their permission.  Briseno was convicted of five murders, which the evidence demonstrated were committed pursuant to the gang’s policies and in furtherance of the 149 th Street Imperial Gangsters, a violent clique of the Imperial Gangsters based in East Chicago.

The evidence further demonstrated that Briseno exercised a leadership role in the gang, in which he supervised the “shorties, or prospective members of the 149th Street Imperial Gangsters.  Briseno expressed no remorse for his participation in various murders, and indeed bragged about killings and encouraged others to do the same.

With regard to the specific murders, the evidence at trial demonstrated that Briseno knocked on Luis Ortiz’s apartment door in Hammond, Indiana, on Sept. 26, 2007, and shot him dead in the doorway to the apartment.  Briseno targeted Ortiz because he was a member of the rival Latin King Street Gang.

Additionally, the evidence demonstrated that Briseno committed the double murder of Miguel Mejias, a Latin King living in Imperial Gangster territory, and Michael Sessum, an associate of Mejias, while they were unarmed and bringing takeout food to their pregnant girlfriends on June 3, 2008.  During that murder, multiple shots fired by Briseno entered Mejias’ residence, striking a female victim in the arm while she was holding her infant child.  Another pregnant female victim and multiple minor victims were also in the apartment at the time of the shooting.  According to testimony at trial, Mejias implored another individual to tell Briseno that he was no longer “gangbanging” and did not want any trouble.  In response to this message, Briseno said, “[explecetive] him, he was going to bring [Latin] Kings into our neighborhood.”

The evidence at trial also demonstrated that Briseno and his associates murdered rival Two-Six gang member, Miguel Colon, on Feb. 7, 2010, as Colon came out of a party.  In this incident, Briseno and Colon exchanged gunfire, endangering numerous innocent individuals who were in the vicinity.

Finally, the evidence at trial demonstrated that Briseno murdered Latroy Howard on June 19, 2010, for selling drugs in an Imperial Gangster-controlled neighborhood without the permission of the gang.  A video introduced at trial showed Briseno circling the block in his car and then walking up on foot and shooting the unarmed Howard twice in the head at point-blank range.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the FBI and the East Chicago Police Department, with assistance from the Gary Police Department, the Hammond Police Department and the Lake County High Intensity Drug Trafficking Area Program.  This case is being prosecuted by Assistant U.S. Attorney David J. Nozick of the Northern District of Indiana and Trial Attorney Bruce R. Hegyi of the Criminal Division’s Capital Case Section.

OWNER OF JEWELRY STORE PLEADS GUILTY TO SELLING JEWELRY FROM ARMED ROBBERIES

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, March 4, 2015

New York Jewelry Store Owner Pleaded Guilty for Purchasing and Reselling Jewelry Stolen in Armed Robberies

A New York jeweler pleaded guilty in federal court in Atlanta yesterday to two counts of interstate transportation of stolen property in connection with jewelry he purchased from an armed robbery ring and then sold in New York.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney John A. Horn of the Northern District of Georgia made the announcement.

Carlos Parra, 64, a resident of New Jersey, pleaded guilty before U.S. District Judge Steve C. Jones of the Northern District of Georgia.  Sentencing is scheduled for June 3, 2015.

Parra admitted in court that he was contacted by a member of an armed robbery crew that stole over $100,000 in jewelry from a courier on Jan. 31, 2013.  Parra flew from New York, where his jewelry business was based, to Atlanta to purchase the jewelry from the robbery crew for approximately $16,000.  Parra admitted that he had dealt with these robbers or their associates in the past and knew the jewelry was stolen.

Parra further admitted to purchasing jewelry from a robbery crew in Houston in August 2012.  In that instance, the robbery crew stole over $500,000 from a jewelry courier during an armed robbery on Aug. 27, 2012.  Parra admitted that he flew to Texas to purchase the stolen jewelry at a discounted rate because it was stolen.  He later sold the jewelry in New York to wholesalers for a profit.

This case was investigated by the FBI, Immigration and Customs Enforcement and the Gwinnett County Police Department, with assistance from the Dallas Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.  This case was prosecuted by Trial Attorney Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Kim Dammers of the Northern District of Georgia.

TWO CONVICTED FOR ROLES IN SCHEME TO BRIBE FBI AGENT

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, March 4, 2015

Two Connecticut Men Sentenced to Federal Prison for Scheme to Bribe FBI Agent in New York

Two Connecticut-area men were sentenced to federal prison today for their roles in a bribery scheme to obtain confidential, internal law enforcement documents and information from a former FBI Special Agent in White Plains, New York.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York and Justice Department Inspector General Michael E. Horowitz made the announcement.  The sentences were imposed by U.S. District Judge Vincent L. Briccetti of the Southern District of New York.

Rizve Ahmed, aka “Caesar,” 36, of Danbury, Connecticut, and Johannes Thaler, 51, of New Fairfield, Connecticut, were sentenced to 42 months in prison and 30 months in prison, respectively.  In October 2014, both defendants pleaded guilty to bribery and conspiracy to commit wire fraud and honest services fraud.

In pleading guilty, Thaler and Ahmed admitted that, from September 2011 through March 2012, Thaler and FBI Special Agent Robert Lustyik solicited payments from Ahmed, in exchange for Lustyik’s agreement to provide internal, confidential documents and other confidential information to which Lustyik had access by virtue of his position as an FBI Special Agent.  Thaler was Lustyik’s friend, and Ahmed, a native of Bangladesh, was an acquaintance of Thaler.  The confidential documents and information pertained to a prominent citizen of Bangladesh who was affiliated with a political party opposing Ahmed’s views.  Ahmed requested the confidential information to help him locate and harm his political rival and others associated with the intended victim.

As part of the scheme, Lustyik and Thaler exchanged text messages about how to pressure Ahmed to pay them additional money in exchange for confidential information.  For example, in text messages, Lustyik told Thaler, “we need to push [Ahmed] for this meeting and get that 40 gs quick . . . .  I will talk us into getting the cash . . . .  I will work my magic . . . .  We r sooooooo close.”  Thaler responded, “I know.  It’s all right there in front of us.  Pretty soon we’ll be having lunch in our oceanfront restaurant . . . .”

Additionally, in late January 2012, Lustyik learned that Ahmed was considering using a different source to obtain confidential information.  In response, Lustyik sent a text message to Thaler stating, “I want to kill C [Ahmed] . . . .  I hung my ass out the window n we got nothing? . . . .  Tell [Ahmed], I’ve got [the victim’s] number and I’m pissed. . . .  I will put a wire on n get [Ahmed and his associates] to admit they want [a Bangladeshi political figure] offed n we sell it to [the victim].”  Lustyik further stated, “So bottom line.  I need ten gs asap.  We gotta squeeze C.”

Lustyik pleaded guilty on Dec. 23, 2014, to all five counts against him in the indictment: conspiracy to engage in a bribery scheme; soliciting bribes by a public official; conspiracy to defraud the citizens of the U.S. and the FBI; theft of government property; and unauthorized disclosure of a Suspicious Activity Report.  He is scheduled to be sentenced by Judge Briccetti on April 30, 2015, at 9:30 a.m.

The case was investigated by the Department of Justice Office of the Inspector General, and prosecuted by Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Benjamin Allee of the Southern District of New York.

THREE FLORIDA RESIDENTS SENTENCED IN FRAUDULENT TAX REFUND SCHEME

FROM:  U.S. JUSTICE DEPARTMENT

Friday, February 27, 2015

Two Miami Tax Preparers and Client Sentenced in Fraudulent Refund Scheme
Three Miami residents were sentenced for their roles in a tax refund scheme, announced U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Special Agent in Charge Kelly R. Jackson of Internal Revenue Service-Criminal Investigation’s (IRS-CI) Miami Office.

According to the indictment and facts established at his sentencing hearing, Sean Anthony Lopez, 35, of Miami, submitted false personal federal income tax returns claiming $625,320 in fraudulent refunds.  Lopez received this refund in connection with his role as a client of an illicit tax preparation business located at 18710 SW 107th Street in Miami.  Lopez was sentenced today to serve 30 months in prison.  The court also ordered Lopez to pay restitution to the U.S. Treasury in the amount of $695,635.

Lopez’s co-defendants, Claudia Zuloaga, 43, and Sharon Elizabeth Angulo, 49, both of Miami, operated this South Miami-Dade County tax preparation business under the names Sterling Executive Associates Inc. and Sterling Executive (Sterling), and assisted Lopez in the preparation of his fraudulent tax returns, as well as numerous other similar false tax returns.

Angulo and Zuloaga were each previously sentenced to serve 60 months in prison.  The court also ordered Angulo and Zuloaga to each pay restitution to the U.S. Treasury in the amount of $1,539,873.

According to the indictment and facts established at sentencing, beginning in approximately September 2008 and continuing through September 2012, Zuloaga and Angulo recruited numerous clients, including Lopez, by falsely representing that they could eliminate a substantial portion of their debts by obtaining sizable tax refunds for them.  This would be accomplished through false and fraudulent tax returns prepared by Zuloaga and Angulo in exchange for a fee, usually amounting to 30 percent of the fraudulently obtained tax refund.  Zuloaga and Angulo were responsible for causing the submission of multiple fraudulent tax returns claiming refunds totaling in excess of $5.4 million.  As further established at their sentencing hearings, the IRS was fraudulently induced to issue refund checks in the aggregate amount of $2,305,081, a portion of which was disbursed to Lopez with respect to his fraudulent tax returns.

As further alleged in the indictment and established at their sentencing hearings, the tax returns prepared at Sterling by Zuloaga and Angulo falsely set forth that financial institutions at which the clients maintained accounts withheld sizable amounts of tax from falsely declared interest income, which was falsely claimed as having been earned by the clients.  Through this fraudulent mechanism, each return gave the appearance of entitling the client to a significant tax refund due to over-withholding of tax payments in connection with their claimed interest earnings.  In addition, in order to provide false substantiation for these fraudulent tax refund claims, the defendants caused fictitious IRS Forms 1099-OID to be created, which set forth the false interest and tax withholding amounts fraudulently reported upon their clients’ tax returns.

It was also established at sentencing hearings that Zuloaga and Angulo promoted the fictitious “redemption theory” to their clients as the purported justification for their fraudulent tax refund claims.  Through this promotion, clients were falsely informed that the submission of tax returns in this manner allowed their clients to legitimately access large amounts of money allegedly contained in certain non-existent “straw man” accounts which the defendants claimed were being maintained by the U.S. Treasury for each individual who possessed a social security number.

U.S. Attorney Ferrer and Principal Deputy Assistant Attorney General Ciraolo commended special agents of IRS – Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Peter B. Outerbridge of the Southern District of Florida and Trial Attorney Alexander Effendi of the Tax Division, who prosecuted the case.

DEA ISSUES STATEMENT ON ARREST OF ZETAS LEADER OMAR TREVINO MORALES

FROM:  U.S. DRUG ENFORCEMENT ADMINISTRATION 

Press Release

DEA Statement on Arrest of Omar Trevino Morales

DEA Administrator Michele M. Leonhart today issued the following statement on the arrest in Mexico of Zetas leader Omar Trevino Morales:

"The Drug Enforcement Administration proudly congratulates the Government of Mexico and their leadership in the arrest of Omar Trevino Morales, head of the Zetas cartel. The Zetas represent the worst in global organized crime: violence, intimidation, corruption, and brutal killings. Today’s arrest strikes at the heart of the leadership structure of the Zetas and should serve as yet another warning that no criminal is immune from arrest and prosecution. Omar Trevino Morales facilitated and oversaw huge drug shipments into the United States and elsewhere, and has been charged in several judicial districts. We are pleased that he will face justice for his crimes, and look forward to future successes with our Mexican partners.”

WOMAN CONVICTED OF FAILING TO PAY OVER $2.6 MILLION IN FEDERAL PAYROLL TAXES WITHHELD FROM EMPLOYEES

FROM:  U.S. JUSTICE DEPARTMENT
Thursday, February 26, 2015
Washington State Business Owner Convicted of Failing to Pay Employment Taxes

A Burbank, Washington, woman was convicted by a jury yesterday after a five-day trial in the U.S. District Court in the Eastern District of Washington located in Spokane, Washington, of willfully failing to pay more than approximately $2.6 million in federal payroll taxes withheld from her employees, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Michael C. Ormsby of the Eastern District of Washington.

“Employers who willfully fail to timely collect, account for and deposit employment taxes are, quite simply, stealing from their employees and the U.S. Treasury,” said Principal Deputy Assistant Attorney General Ciraolo.  “Yesterday’s verdict sends a clear message to those individuals who view this obligation as optional – you will be investigated and prosecuted to the fullest extent of the law.”

According to the evidence introduced at trial and other documents filed in the case, Maria Elizabeth Townsend was the president and majority owner of Townsend Controls Inc. (TCI), an electrical contractor in Pasco, Washington.  The majority of TCI’s employees were members of Local 112 of the International Brotherhood of Electrical Workers (Local 112).  From at least April 1, 2007, through Sept. 30, 2009, Townsend withheld employment taxes from the wages of the members of Local 112 that TCI employed as well as its other non-union employees.  She willfully failed, however, to pay those taxes to the Internal Revenue Service (IRS).  Instead of paying the withheld taxes, Townsend purchased several automobiles and made large disbursements of corporate funds to her family members.

Townsend faces a statutory maximum sentence of five years in prison and a $250,000 fine for each count of failing to pay over employment taxes.  Sentencing is scheduled for June 4.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Ormsby commended the special agents of IRS-Criminal Investigation who investigated the case, as well as Assistant U.S. Attorney George J. C. Jacobs III and Trial Attorney Lisa L. Bellamy of the Tax Division, who are prosecuting the case.

President Obama Meets with the Task Force on 21st Century Policing

A "SOVEREIGN CITIZEN" SENT TO PRISON IN CASE INVOLVING FILING FALSE LIENS AGAINST FEDERAL OFFICIALS

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, February 20, 2015

Nebraska “Sovereign Citizen” Sentenced for Obstructing Internal Revenue Service and Filing False Property Liens Against Federal Officials

A La Vista, Nebraska, woman was sentenced today in U.S. District Court for the District of Nebraska in Omaha to serve 36 months in prison and three years of supervised release for tax obstruction, filing a false claim and filing false retaliatory property liens, Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.

Donna Marie Kozak, a former college instructor, was convicted by a jury on Aug. 1, 2014, on all nine counts charged in the superseding indictment.  At trial, the evidence showed that in 1997, Kozak stopped filing income tax returns, and from 1997 through 2012, she obstructed the Internal Revenue Service (IRS) by hiding assets, applying for tax-exempt status for a sham entity, filing a false claim for a tax refund, sending harassing correspondence to IRS agents, and filing false liens against an IRS-Criminal Investigation special agent and others.

In about 2009, Kozak joined the “Republic for the united States of America,” a sovereign citizen group, and was the group’s designated “governor of Nebraska.”  In 2012 and 2013, Kozak and Georgia resident Randall Due conspired to file false liens in retaliation for the federal criminal tax prosecution and trial convictions of associates David and Bernita Kleensang. In furtherance of the conspiracy, Kozak and Due filed a false lien for $19 million on property located in Boyd County, Nebraska, that was owned by the federal U.S. District Court judge who presided over the Kleensang trial.  After Kozak was indicted by a federal grand jury for the criminal tax charges and while on pre-trial release, she filed five more false liens on properties owned by another federal U.S. District Court judge, the U.S. Attorney for the District of Nebraska, two Assistant U.S. Attorneys and an IRS-Criminal Investigation special agent. Due was tried and convicted in the District of Nebraska on related charges on Sept. 4, 2014.

Principal Deputy Assistant Attorney General Ciraolo commended the special agents of the FBI and IRS-Criminal Investigation who investigated the case and Trial Attorneys Brian Bailey and Matthew Hoffman of the Tax Division, who prosecuted the case.