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Tuesday, June 30, 2015

FORMER AMERICAN SAMOA GOVERNMENT OFFICIAL SENT TO PRISON FOR FRAUD AND BRIBERY

FROM:  U.S. JUSTICE DEPARTMENT
Friday, June 26, 2015

Former American Samoa Government Official Sentenced to 22 Months in Prison
Evelyn Langford 49, of Copperas Cove, Texas, was sentenced today to 22 months in prison and ordered to pay $260,000 in restitution for her convictions for wire fraud and bribery, announced U.S. Attorney Melinda Haag of the Northern District of California, Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division and Special Agent in Charge Paul Delacourt of the FBI’s Honolulu Division.

Langford pleaded guilty on March 20, 2015, to one count of wire fraud and one count of bribery.  According to the plea agreement, Langford admitted that in 2012 she was the Director of the Department of Human Resources of the Government of American Samoa (ASG), a territory of the United States located in the South Pacific Ocean.  As part of her duties, she was charged with partial oversight of a $24.8 million U.S. Department of Labor (DOL) National Emergency Grant (NEG).  The grant was awarded to American Samoa in the wake of a September 2009 tsunami that caused significant damage in American Samoa.  Langford admitted that while administering the funds, she accepted payments from a contractor.  She then provided that contractor favorable official action.

In February 2012, a company known as the Native Hawaiian Holding Company Inc. (NHHC) entered into a service contract with the ASG.  Under this contract, NHHC received approximately $4.7 million of the NEG funds to develop a “contact center” (or call center) industry in American Samoa.  The NEG service contract was signed by an NHHC representative, Quin Rudin, and by Langford and other ASG representatives.  The contract also contained provisions generally prohibiting employees of the ASG from soliciting or receiving gratuities from NHHC.

Notwithstanding the prohibition from soliciting gratuities, Langford nevertheless requested that Rudin extend her a “loan,” which Rudin agreed to do.  Langford received a $10,000 payment from Rudin in April 2012 and a $250,000 payment in May 2012.  After receiving the funds, Langford provided favorable official action on behalf of Rudin and NHHC.  For example, Langford admitted making arrangements to have NHHC representatives, including Rudin, meet with the Governor of American Samoa for the purpose of “pitching” business ideas to him, including proposals regarding transportation and medical development projects.  In addition, Langford concealed the true nature and scope of her dealings with Rudin and NHHC, including by failing to advise other employees of the ASG and employees of the DOL in San Francisco that she had received gifts and payments from NHHC and Rudin and from companies associated with him.  Langford, waived indictment and was charged in an information on Jan. 15, 2015.  She was charged with wire fraud and bribery concerning programs receiving federal funds in violation.

The individual who made the payments to Langford, Rudin, has been prosecuted separately for a scheme to defraud Cisco Systems Inc., and its subsidiary Cisco Systems Capital Corporation, related to the lease of Cisco equipment.  Rudin’s case is pending in the Northern District of California.

The sentence was handed down by District Judge Jon S. Tigar of the Northern District of California, following the guilty plea.  Judge Tigar also sentenced the defendant to a three year period of supervised release and ordered her to pay $260,000 in restitution to the ASG.  The defendant will begin serving the sentence on Sept. 25, 2015.

The prosecution is the result of a two-year investigation by agents of the FBI’sHonolulu and San Francisco Divisions.  The case is being prosecuted by Assistant U.S. Attorneys Kyle F. Waldinger and Hallie Mitchell Hoffman of the Northern District of California, with the assistance of Bridget Kilkenny, Jessica Meegan, Mary Mallory and Allen Williams.

Monday, June 29, 2015

A "DANGEROUS DOZEN" FUGITIVE CAUGHT IN CLEVELAND VIA TIP

FROM:  U.S. MARSHALS SERVICE 
06/22/2015

U.S. Marshals Capture "Dangerous Dozen" Fugitive Hiding in East Cleveland
Cleveland, OH – Earlier today, at approximately 11:30 a.m., the U.S. Marshals Northern Ohio Violent Fugitive Task Force (NOVFTF) apprehended fugitive Raymell Easter, age 19, at an apartment on Nelacrest Rd. in East Cleveland. Easter was wanted by the Cleveland Police Department for homicide stemming from an incident in March 2015 near E. 106th St. and Ashbury Ave. in Cleveland, in which he is suspected of shooting and killing a 17 year old male after attempting to rob the victim.

The NOVFTF was referred the fugitive investigation and began searching for Easter immediately. The NOVFTF added Easter to the most wanted “Dangerous Dozen” list in April and also profiled Easter as a “Fugitive of the Week” in local media.

Within the last two weeks, the NOVFTF received a tip that ultimately led them to East Cleveland where the team was able to locate and safely apprehend Easter today. Easter was transported to the Cleveland City Jail after arrest.

U.S. Marshal Pete Elliott stated, “Our task force has been relentless on these dangerous fugitive cases. We will continue to work with our law enforcement partners and do all that we can to bring justice to the victims of these horrendous crimes.”

Sunday, June 28, 2015

DOJ STATEMENT ON U.S. CITIZENS TAKEN HOSTAGE

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, June 24, 2015

Department of Justice Statement on U.S. Citizens Taken Hostage Abroad
The Department of Justice released the following statement regarding U.S. citizens who are taken hostage abroad:

When a U.S. citizen is taken hostage, the Department of Justice’s top priority is the safe return of the hostage.  The families who have been affected by hostage-takings have endured extraordinarily difficult circumstances.  In light of recent hostage-takings perpetrated by terrorist groups, some families have expressed concerns that their efforts to retrieve their loved one could lead to potential prosecutions under the statute prohibiting the provision of material support to designated foreign terrorist organizations.  In the face of their loved ones being held captive indefinitely by terrorist groups, families have understandably explored every option to secure their loved ones’ safe recovery.

In these cases, the department has focused on helping the families, consistent with the government’s no-concessions policy, and will continue to focus on exploring all appropriate options.  The department does not intend to add to families’ pain in such cases by suggesting that they could face criminal prosecution.  Perhaps the best indication of how the department will exercise its prosecutorial discretion in enforcing the material support statute is the department’s past record of prosecuting cases under the statute.  The department has never used the material support statute to prosecute a hostage’s family or friends for paying a ransom for the safe return of their loved one.

Saturday, June 27, 2015

USMS ANNOUNCES AFTER 12 YEARS, FUGITIVE APPREHENDED

FROM:  U.S. MARSHALS SERVICE  
Fugitive's Run Comes to an End After Nearly 12 Years

Sioux City, IA – A fugitive who fled after violating conditions of his pre-trial release was arrested Friday by the Pacific Northwest Violent Offender Task Force in Tacoma Washington.

Somsock Senlouangrat, age 45 was released Sep. 14, 2003, on pre-trial release pending his trial after being arrested for conspiracy to distribute methamphetamine, and possession of a firearm in furtherance of drug trafficking. Senlouangrat was being supervised by a United States Probation Officer in Minneapolis, Minnesota where he resided until November of 2003 when he stopped contacting his probation officer. A warrant was issued for Senlouangrat in December of 2003; however there was no trace of Senlouangrat and very few leads to follow.

Senlouangrat continued to go undetected until 2014 when Deputy United States Marshal Brandon Johnson found a link to Senlouangrat in the Tacoma Washington area, which eventually led to the arrest of Senlouangrat last Friday.

“I cannot say enough about the outstanding and diligent investigation conducted by Deputy Johnson in an effort to locate Senlouangrat; it exemplifies the high standards set by Deputy United States Marshals” said United States Marshal Kenneth Runde.

The Marshals Service assumes custody of individuals arrested by all federal agencies and is responsible for the housing and transportation of prisoners from the time they are brought into federal custody until they are either acquitted or incarcerated.

Friday, June 26, 2015

THREE MS-13 GANG LEADERS SENTENCED FOR RACKETEERING, RELATED CHARGES FOR MURDERS AND ATTACKS

FROM:  U.S. JUSTICE DEPARTMENT 
Tuesday, June 23, 2015
Three MS-13 Leaders Sentenced for Racketeering and Related Charges for Multiple Murders and Attacks
Twelve Others Have Pleaded Guilty in the Case

Three leaders of MS-13 in Washington, D.C., were sentenced today to federal prison for conspiring to participate in racketeering activity and other charges stemming from their roles in murders, extortion and other violent crimes.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia, Special Agent in Charge Clark E. Settles of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) Washington D.C. Field Office and Chief Cathy L. Lanier of the Metropolitan Police Department (MPD) made the announcement.

Noe Machado-Erazo aka Gallo, 32, of Wheaton, Maryland, was sentenced to life in prison plus 10 years in prison.  Jose Martinez-Amaya, aka Crimen, 28, of Brentwood, Maryland, was sentenced to life in prison plus 10 years in prison.  Yester Ayala, aka Freeway or Daddy Yankee, 24, of Washington, D.C., was sentenced to 30 years in prison.  Senior U.S. District Court Judge Royce C. Lamberth of the District of Columbia imposed the sentences.

“MS-13 is a brutally violent gang that has plagued communities in many parts of this country, including Washington, D.C.,” said Assistant Attorney General Caldwell.  “The lengthy sentences imposed on the MS-13 leaders convicted in this case reflect the vicious and calculated nature of the murders they committed and the gang they led.”

“This prosecution shows our commitment to purging MS-13’s bloody brand of violence from the District of Columbia,” said Acting U.S. Attorney Cohen.  “These killers brought lawless vengeance to our community and left a 14-year-old boy dead.  These gang members will now have decades in prison to reflect on their heinous crimes.”

“HSI continuously targets transnational gangs that wreak havoc on our American communities,” said Special Agent in Charge Settles.  “Today’s sentences are testament to the strong investigative work of our HSI special agents and the Metropolitan Police Department.”

“The action by the courts today further exemplifies our message to persons engaging in criminal gang activity: you will find no place for your activities here in Washington, D.C.,” said Chief Lanier.  “We will work as long as necessary to ensure this city, and the capital area, are free from the violence and harm gang activity brings into our communities.  The agents, officers, and attorneys have done a tremendous job bringing this case to a successful end.”

In August 2013, following a month-long trial, Machado-Erazo and Martinez-Amaya were found guilty of conspiracy to participate in racketeering activity, murder in aid of racketeering and possession of a firearm during a crime of violence.  Ayala was found guilty of conspiracy to participate in racketeering activity, two counts of murder in aid of racketeering, first-degree premeditated murder and second-degree murder.

MS-13 is a large gang that operates in the United States and Central America.  Members engage in racketeering activity including murder, narcotics distribution, extortion, robberies, obstruction of justice and other crimes.

According to evidence presented at trial, a number of small MS-13 groups, or cliques, operate in the Washington, D.C., area.  The evidence showed that the cliques have frequent contact with MS-13 leadership in El Salvador, and that they act in accordance with the MS-13’s international strictures, including the requirement that members remain unfailingly loyal to the gang.

The evidence presented at trial showed that both Machado-Erazo and Martinez-Amaya were members of the Normandie clique, and that Martinez-Amaya held a leadership position in the group; and that Ayala was a leader of the Sailors, another clique.  The evidence also showed that Machado-Erazo coordinated the activities of local MS-13 cliques.

At trial, the government presented evidence that Ayala helped carry out orders to murder Louis Alberto Membreno-Zelaya, a fellow MS-13 member who had removed his gang tattoos.  Membreno-Zelaya’s body was found on Nov. 6, 2008, in Northwest Washington, D.C.  He had been stabbed at least 20 times.

According to evidence presented at trial, Ayala also participated in the Dec. 12, 2008, murder of 14-year-old Giovanni Sanchez near the Columbia Heights Metro station in Washington D.C.  Giovanni was stabbed 11 times.

The evidence at trial also demonstrated that Machado-Erazo and Martinez-Amaya took part in the killing of Felipe Enriquez, an MS-13 member whose body was found on March 31, 2010, in Montgomery County, Maryland.  The government presented evidence that Enriquez was lured to a remote park where he was fatally shot by Martinez-Amaya.  Evidence presented during the trial showed that Machado-Erazo provided the gun used in the shooting.

The three defendants sentenced today are among numerous individuals charged in a 2010 indictment alleging criminal acts committed between 2008 and 2010 in the District of Columbia, Maryland, Virginia and other states, as well as in El Salvador.  Twelve defendants have pleaded guilty to charges in the case.

The case was investigated by ICE-HSI and the MPD.  Assistance was provided by the Montgomery County, Prince George’s County and Riverdale Park, Maryland, Police Departments; the Fairfax County, Virginia, Police Department; the State’s Attorney’s Office of Montgomery County; the U.S. Attorney’s Office of the District of Maryland and the U.S. Attorney’s Office of the Eastern District of Virginia.  Assistance also was provided by the Organized Crime Drug Enforcement Task Force.

This case was prosecuted by Trial Attorney Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Nihar Mohanty of the District of Columbia.

Thursday, June 25, 2015

DOJ ANNOUNCES GLOBAL CYBERCRIME ALLEGED MASTERMIND EXTRADITED TO U.S.

FROM:  U.S. JUSTICE DEPARTMENT
Wednesday, June 24, 2015
Alleged Mastermind of Global Cybercrime Campaigns Extradited to the United States to Face Charges

Earlier today, an indictment was unsealed in a Brooklyn, New York federal court charging Ercan Findikoglu, a Turkish citizen also known as “Segate,” with organizing three worldwide cyberattacks that inflicted $55 million in losses on the global financial system in a matter of hours.  The defendant’s organization used sophisticated intrusion techniques to hack into the systems of global financial institutions, steal prepaid debit card data and eliminate withdrawal limits.  The stolen card data was then disseminated worldwide and used in making fraudulent ATM withdrawals on a massive scale across the globe.  The charges announced today follow charges previously brought against other members of the organization, including members of a New York City cell charged in May 2013 in connection with their roles in two of the attacks.  The defendant is scheduled to be arraigned at 11 a.m. today before U.S. Magistrate Judge Lois Bloom at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges were announced by Acting U.S. Attorney Kelly T. Currie for the Eastern District of New York and Special Agent in Charge Robert J. Sica of the U.S. Secret Service New York Field Office.

“Cybercriminals, and especially hackers as this defendant is alleged to be, wreak havoc and steal millions of dollars by breaching our information systems and networks with clicks and keystrokes from the perceived anonymity of their computers at locations all over the globe,” said Acting U.S. Attorney Currie.  “However, in doing so they leave traces in digital space that allow law enforcement to identify, apprehend and ultimately hold them accountable for their crimes.”

Acting U.S. Attorney Currie praised the extraordinary efforts of the Secret Service in investigating these complex network intrusions and thanked the authorities in Germany for their assistance in effecting the defendant’s extradition.  

“For the past twenty years, Special Agents assigned to the Secret Service New York Electronic Crimes Task Force have worked closely with our law enforcement partners, the business community and our partners in academia to pursue cybercriminals who have taken aim at our homeland’s financial infrastructure.  Today, we recognize our international law enforcement partners who were instrumental in the extradition of Ercan Findikoglu,” said Special Agent in Charge Sica.  “The significance of this case cannot be understated as Findikoglu is the alleged mastermind behind the global ATM cashout operations which plagued the financial services sector from 2010 until his capture in late 2013.  The Secret Service and its international partners remain committed to solving complex financial crimes as well as tracking down and bringing to justice significant cybercriminals who pose a threat to payment systems worldwide.”

As detailed in the indictment and other court filings, Findikoglu gained unauthorized access to, or “hacked,” the computer networks of at least three payment processors for various types of credit and debit card transactions (the Victim Processors).  He then targeted Visa and MasterCard prepaid debit cards serviced by the Victim Processors, breached the security protocols that enforce withdrawal limits on those cards, and then dramatically increased the account balances on those cards to allow withdrawals far in excess of the legitimate card balances.

Findikoglu allegedly managed a trusted group of co-conspirators who disseminated the stolen debit card information to leaders of “cashing crews” around the world; they, in turn, used the stolen information to conduct tens of thousands of fraudulent ATM withdrawals.  During these operations, Findikoglu allegedly maintained access to the computer networks of the Victim Processors in order to monitor the withdrawals.  These coordinated, calculated cyberattacks are known in the cyber-underworld as “Unlimited Operations,” because the manipulation of withdrawal limits enables the withdrawal of literally unlimited amounts of cash until the operation is shut down.

In one operation on Feb. 27 and 28, 2011, cashing crews withdrew approximately $10 million through approximately 15,000 fraudulent ATM withdrawals in at least 18 countries.  In a second operation on Dec. 22, 2012, cashing crews withdrew approximately $5 million through more than 4,500 ATM in approximately 20 countries.  In a third operation on Feb. 19 and 20, 2013, cashing cells in 24 countries executed approximately 36,000 transactions and withdrew approximately $40 million from ATMs.  During this third operation, in New York City alone, cashing crews withdrew approximately $2.4 million in nearly 3,000 ATM withdrawals over the course of less than 11 hours.

Once the funds were extracted, Findikoglu and high-ranking members of the conspiracy allegedly received the proceeds from other co-conspirators in various forms, including by wire transfer, electronic currency and the personal delivery of U.S. and foreign currency.  On one occasion, members of a New York City cashing crew transported approximately $100,000 to co-conspirators in Romania.  Findikoglu directed a co-conspirator to destroy evidence of their criminal activities after learning that a member of a New York cashing crew had been arrested.

On Dec. 18, 2013, Findikoglu was arrested in Frankfurt, Germany, and yesterday was extradited to the United States.                      

The government’s case is being handled by the U.S. Attorney’s Office of the Eastern District of New York’s National Security & Cybercrime Section.  Assistant U.S. Attorneys Hilary Jager, Douglas M. Pravda, Richard M. Tucker and Saritha Komatireddy are in charge of the prosecution.  Assistant U.S. Attorney Brian Morris of the Office’s Civil Division is responsible for the forfeiture of assets.  Additional assistance was provided by Marcus Busch and Cristina M. Posa of the Justice Department’s Office of International Affairs.

Wednesday, June 24, 2015

FORMER DETENTION OFFICER CHARGED WITH USING EXCESSIVE FORCE

FROM:  U.S. JUSTICE DEPARTMENT
Thursday, June 18, 2015
Former DeKalb Detention Officer Charged with Using Excessive Force on County Inmates
Hamilton Allegedly Tased Inmates Without Justification and Wrote False Reports to Cover Up Abuse

Dwight Hamilton, 51, of Atlanta, Georgia, a former sergeant with the DeKalb County Sheriff's Office, was arraigned today on charges of using excessive force against inmates at the DeKalb County Jail and for writing false reports about the incidents, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division, U.S. Attorney John Horn of the Northern District of Georgia and Special Agent in Charge Britt Johnson of the Federal Bureau of Investigation (FBI).

According to the indictment and other information presented in court, Hamilton worked as a supervisory officer at the DeKalb County jail from 2005 to 2012, where, on two separate dates in January 2012, he used his taser multiple times on inmates without justification.  The indictment charges that in both instances, Hamilton’s use of excessive force violated the inmates’ constitutional rights and resulted in bodily injury.  The indictment also alleges that, following each of the tasing incidents, Hamilton wrote a false report with the intent to impede an investigation.

Hamilton was arraigned before Magistrate Judge Janet F. King.

Members of the public are reminded that the indictment only contains charges.  The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.

This case is being investigated by the FBI and is being prosecuted by Trial Attorney Christopher Perras of the Civil Rights Division and Assistant U.S. Attorney Brent Alan Gray.

Tuesday, June 23, 2015

CHIROPRACTOR PLEADS GUILTY IN TAX CRIME CASE

FROM:  U.S. JUSTICE DEPARTMENT
Monday, June 22, 2015
Arkansas Chiropractor Pleads Guilty to Federal Tax Crime

An Arkansas chiropractor pleaded guilty today in the U.S. District Court in the Western District of Arkansas to corruptly endeavoring to obstruct and impede the Internal Revenue Service (IRS), announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Conner Eldridge of the Western District of Arkansas.  He was previously convicted of federal tax crimes and sentenced to prison.

According to court documents, Philip Roberts, 60, of Fort Smith, Arkansas, filed a series of false and fraudulent documents with the IRS in an effort to obstruct or impede the due administration of the internal revenue laws, including filing false financial instruments that claimed millions of dollars of transactions with both the Secretary of the Treasury and the IRS Commissioner, and filing IRS forms that falsely reported payments.  In 2000, after a jury trial, Roberts was convicted of two counts of willfully failing to file federal income tax returns and sentenced to serve 16 months in federal prison.

Roberts’ sentencing hearing has not been scheduled yet before the Honorable U.S. District Judge Timothy L. Brooks of the Western District of Arkansas.  Roberts faces a statutory maximum sentence of three years in prison, one year of supervised release and a $250,000 fine for obstructing and impeding the IRS.  

Acting Assistant Attorney General Ciraolo and U.S. Attorney Eldridge commended special agents of the IRS and the Treasury Inspector General for Tax Administration, who investigated the case, as well as Trial Attorneys Robert Kemins and David Zisserson of the Tax Division and Assistant U.S. Attorney Kimberly Davis of the Western District of Arkansas, who are prosecuting the case.

Sunday, June 21, 2015

REAL ESTATE BUSINESSMAN INDICTED FOR NOT FILING INCOME TAX RETURNS

FROM:  U.S. JUSTICE DEPARTMENT
Friday, June 19, 2015
Maryland Real Estate Businessman Indicted for Failing to File Income Tax Returns

A Berwyn Heights, Maryland, resident was indicted by a grand jury sitting in Greenbelt, Maryland, on four counts of failure to file federal individual and corporate federal income tax returns, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced today.

David J. Simard purchased and sold real estate in the Maryland and Virginia areas, according to the superseding indictment filed in the District of Maryland.  Simard failed to file income tax returns for tax years 2006 and 2009, and failed to file corporate tax returns for tax years 2009 and 2010.  According to the superseding indictment, Simard was the owner, operator and president of Pegasus Home Corporation.  From 2009 through 2010, Pegasus sold more than 100 real estate properties.

If convicted, Simard faces a statutory maximum penalty of one year in prison and a $100,000 fine for each count.

Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Christopher O’Donnell and Michael Vasiliadis of the Tax Division, who are prosecuting the case.

An indictment merely alleges that crimes have been committed.  A defendant is presumed innocent until proven guilty beyond a reasonable doubt.

Friday, June 19, 2015

U.S. CITIZEN PLEADS GUILTY TO SMUGGLING ELECTRONIC COMPONENTS TO RUSSIA

FROM:  U.S. JUSTICE DEPARTMENT 
Thursday, June 11, 2015
New Jersey, Man Admits Smuggling $65 Million in Sensitive Electronic Components to Russia’s Ministry of Defense, Federal Security Service

A Mountainside, New Jersey, man admitted his role in an international procurement network that obtained and smuggled more than $65 million worth of electronics from the United States to Russia in violation of export control laws, U.S. Attorney Paul J. Fishman of the District of New Jersey announced.

Alexander Brazhnikov Jr., 36, a naturalized U.S. citizen born in Moscow, pleaded guilty before U.S. District Court Judge William J. Martini of the District of New Jersey, to an information charging him with one count of conspiracy to commit money laundering, one count of conspiracy to smuggle electronics from the United States and one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA).

“As he admitted in court, Brazhnikov was responsible for nearly 2,000 illegal shipments of regulated, sensitive electronics components, many of which wound up in the hands of Russian military and security forces,” said U.S. Attorney Fishman.  “He also admitted going to extraordinary lengths to conceal the nature and destination of the shipments, as well to hide the tens of millions of dollars in illegal proceeds generated by the scheme.  Shutting down schemes like this keep all of us safer.”

“Alexander Brazhnikov Jr. significantly undermined the national security of the U.S. by procuring sophisticated, high-tech electronic components and smuggling them into Russia, thereby enhancing the capabilities of the Russian Intelligence Service and contributing to the modernization of both the Russian Military Service and the Russian Nuclear Weapons Program,” said Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division.  “Now, Brazhnikov must face the consequences of his actions and the full power of U.S.  jurisprudence.”

Brazhnikov Jr. was arrested at his home on June 26, 2014, following a joint investigation by the FBI, the U.S. Department of Commerce (DOC) and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI).  From January 2008 through June 2014, he was the owner, chief executive officer and principal operator of four New Jersey microelectronics export companies, each of which were used in the various conspiracies uncovered by the investigation.  Following his arrest, special agents seized $4,075,237 in proceeds related to the charged offenses, as well as real property and other assets valued at more than $600,000.

“Today's plea represents a collaborative effort among law enforcement agencies,” said Special Agent in Charge Sidney Simon of the DOC, Bureau of Industry and Security, Office of Export Enforcement’s New York Field Office.  “I commend our colleagues at the FBI and Homeland Security Investigations for their efforts.  The Office of Export Enforcement will continue to pursue violators of our export control laws by leveraging our unique authorities to protect national security.”

“HSI will use all the resources at its disposal to prevent sensitive and restricted technology from being exported illegally,” said Acting Special Agent in Charge Kevin Kelly of HSI’s Newark Field Office.  “HSI will do all in its power as the principal enforcer of export controls to ensure that sensitive technology doesn’t fall into the wrong hands.”

According to documents filed in this case and statements made in court: Brazhnikov Jr. and his companies are part of a sophisticated procurement network that has surreptitiously acquired large quantities of license-controlled electronic components from American manufacturers and vendors and exported those items to Russia on behalf of Russian business entities that were authorized to supply them to the Ministry of Defense of the Russian Federation, the Federal Security Service of the Russian Federation  (FSB) and Russian entities involved in the design of nuclear warheads, weapons and tactical platforms.

The defendant conspired with his father, Alexander Brazhnikov Sr., owner of a Moscow-based procurement firm whose agents helped initiate the purchase of electronics components from United States vendors and manufacturers on behalf of the conspirators’ clients in Russia.  Brazhnikov Jr. finalized the purchase and acquisition of the requested components from the various distributors, then repackaged and shipped them to Moscow.  He routinely falsified the true identity of the end-user of the components and the true value of the components in order to avoid filling out required export control forms.  Brazhnikov Jr. purposefully concealed the true destination of the parts that were exported by directing that the shipments be sent to various “shell” addresses in Russia – some of which have been identified as vacant storefronts and apartments – which were established and controlled by the Moscow-based network.  All shipments initially directed to the shell addresses were redirected to a central warehouse controlled by the conspirators’ Moscow-based network.

The funds for the network’s illicit transactions were obtained from the various Russian purchases and initially deposited into one of the conspirators’ primary Russia-based accounts.  Disbursements for purchases were made from that primary Russian account through one or more foreign accounts held by shell corporations  in the British Virgin Islands, Latvia, Marshall Islands, Panama, Ireland, England, United Arab Emirates and Belize and ultimately into one of the defendant’s U.S.-based accounts.  The network’s creation and use of dozens of bank accounts and shell companies abroad was intended to conceal the true sources of funds in Russia, as well as the identities of the various Russian defense contracting firms receiving U.S. electronics components.

The money laundering conspiracy charge to which Brazhnikov Jr. pleaded guilty carries a maximum potential penalty of 20 years in prison and a $500,000 fine.  The smuggling and IEEPA conspiracy charges carry a maximum potential penalty, per count, of five years in prison and a $250,000 fine.  Sentencing is scheduled for Sept. 15, 2015.  Brazhnikov Jr. also agreed to the entry of a forfeiture money judgment of $65 million.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Frankel in Newark; the DOC, under the direction of Special Agent in Charge Simon, New York Field Office; special agents of ICE-HSI, under the direction of Acting Special Agent in Charge Kelly.  He also thanked officers from the Union County, New Jersey, Police Department, under the direction of Captain Chris Debbie; and officers of the Mountainside Police Department, under the direction of Police Chief Allan Attanasio, for their important contributions to the investigation.  The U.S. Justice Department’s Office of International Affairs provided assistance with this case.

The government is represented by Assistant U.S. Attorneys Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit, and Peter Gaeta of the office’s Asset Forfeiture and Money Laundering Unit in Newark.

Wednesday, June 17, 2015

PHILADELPHIA LOAN SHARK RINGLEADERS SENTENCED TO PRISON

FROM:  U.S. JUSTICE DEPARTMENT 
Thursday, June 11, 2015
Leaders of Violent Loan Sharking Ring Sentenced to 168 Months and 147 Months in Prison

The leaders of a violent loan sharking and illegal gambling ring that operated out of several Philadelphia businesses were sentenced to serve 168 months and 147 months in prison, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.

Ylli Gjeli, 49, and Fatimir Mustafaraj, also known as Tony, 42, both of Philadelphia, were previously convicted following a six-week jury trial of engaging in a racketeering conspiracy, collection of unlawful debts, extortion and illegal gambling.  Two other defendants were convicted of various related charges in the same trial and are scheduled to be sentenced at a later date.  Gjeli and Mustafaraj were sentenced today by U.S. District Court Judge William H. Yohn Jr. of the Eastern District of Pennsylvania.

According to evidence presented at trial, the defendants’ enterprise used businesses in Philadelphia, including the Lion Bar & Grill, Blackbird CafĂ© and Ylli’s 2 Brothers, to conduct the illegal loan sharking and gambling activities.  The enterprise generated money by making and collecting on loans with usurious rates of interest, and making loans to customers whose debts were incurred through the enterprise’s illegal gambling business.  The evidence established that from October 2011 to 2013 alone, the enterprise extended 125 usurious loans totaling $1.78 million with annual interest rates ranging from 104 percent to 395 percent.  Further, the evidence established that from February 2007 to August 2013, the organization’s online sports betting website contributed more than $2.9 million in gross profits.

The evidence showed that members and associates of the enterprise cultivated their reputations within the organization by threatening customers with dangerous weapons such as firearms and a hatchet, threatening to kill, assault or “break the legs” of delinquent customers if they did not pay their debts, and physically assaulting subordinate members and associates who stole from the organization.

According to the evidence presented at trial, Gjeli was a “boss” of the multi-million dollar criminal organization.  Mustafaraj served as “muscle” to forcefully collect debts owed to the organization.  Both defendants directed the other members in the loan sharking activities and illegal gambling business, financed loans and the gambling operation, used intimidation and threats of violence against customers to collect loan payments, and physically assaulted subordinate members and associates who stole from the organization.

The evidence also demonstrated that the defendants attempted to conceal the existence and operations of the enterprise from law enforcement by limiting their discussions of criminal activities when on the phone, using cryptic and coded language to describe criminal activities, conducting pat-downs and body searches of customers to check for weapons and recording devices, and conducting the enterprise’s transactions primarily in cash.

Five co-defendants who previously pleaded guilty are awaiting sentencing.

The case was investigated by the FBI, Internal Revenue Service-Criminal Investigation, the Pennsylvania State Police, Montgomery County, Pennsylvania, Detectives and the New Jersey State Police.  The case is being prosecuted by Trial Attorney Margaret Vierbuchen of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Salvatore L. Astolfi and Jerome Maiatico of the Eastern District of Pennsylvania.

Tuesday, June 16, 2015

MAN CHARGED FOR ROLE IN OBSTRUCTING NATIONAL SECURITY INVESTIGATION

FROM:  U.S. JUSTICE DEPARTMENT
Wednesday, June 3, 2015
Massachusetts Man Charged with Conspiring to Obstruct National Security Investigation

This afternoon a federal conspiracy charge was filed against David Wright, aka Dawud Sharif Wright, aka Dawud Sharif Abdul Khaliq, 24, of Everett, Massachusetts, who has been associated with a plot to kill an unnamed target in another state.  Wright was arrested last night by federal authorities and had an initial appearance today in U.S. District Court in Boston.  His detention hearing is scheduled for June 19, 2015 at 2:00 p.m.

Wright is charged in a one count complaint which alleges that he conspired with now-deceased Ussamah Abdullah Rahim, 26, to obstruct a federal investigation by destroying electronic evidence on Rahim’s smartphone.  Rahim was shot and killed yesterday morning after he attacked Boston Police Officers and FBI agents seeking to question him.  

As alleged in the complaint affidavit, Rahim, a private security officer, was planning to engage in a violent attack in the United States, and had purchased three military-style fighting knives and a sharpener in furtherance of this plan.  In intercepted calls between Wright and Rahim, the men discussed a knife attack on an unnamed individual, and suggested that the target was to be beheaded and have his/her head placed on his/her chest.  According to the complaint, such beheadings are a tactic of some foreign terrorist organizations which use such killings in propaganda videos.

The affidavit also alleges that Wright and Rahim met with a third person on a beach in Rhode Island on May 31, 2015, to discuss the planned beheading.

At approximately 5:00 a.m. on June 2, 2015, law enforcement intercepted a call between Wright and Rahim, in which Rahim insisted that he could no longer wait to take action.  Instead of carrying on with his plan to behead the planned out-of-state target, Rahim declared that he was going to, “go after” the “boys in blue,” here in Massachusetts, because, “it’s the easiest target.”  Rather than discourage Rahim, Wright supported the plan, telling Rahim to prepare his will and to leave his possessions to a named individual.  After discussing Rahim’s plan to attack police officers in Massachusetts, Wright advised Rahim to destroy his phone and all of the evidence it contained to prevent “CSI” at “the scene” from obtaining incriminating information.

According to the complaint affidavit, on June 2, 2015, law enforcement officers met with Wright after Rahim attacked officers in Boston and was shot.  Wright told officers of a recent rendezvous with Rahim on a beach in Rhode Island, and of Rahim’s intention to behead a specified individual in another state.  Wright indicated he agreed with Rahim’s plan and supported it.

The charging statute provides a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

This investigation is being conducted by the FBI’s Boston Field Division, Boston Police Department, Massachusetts State Police, and member agencies of the Boston Joint Terrorism Task Force, including the Bureau of Alcohol, Tobacco, Firearms and Explosives, Homeland Security Investigations, U.S. Marshals Service and others.  In addition, the Everett Police Department played a critical role in the response.

This case is being prosecuted by the U.S. Attorney’s Office of the District of Massachusetts in coordination with the Justice Department’s National Security Division.

Monday, June 15, 2015

MAN SENT TO PRISON FOR ROLE IN AIDING ILLEGAL ENTRY OF INDIAN NATIONALS INTO U.S.

FROM:  U.S. JUSTICE DEPARTMENT 
Tuesday, June 2, 2015
New Jersey Man Sentenced to 30 Months for Role in Illegal Immigration Scheme

A New Jersey man was sentenced to 30 months in prison for orchestrating an eight-year scheme to falsify employment certifications to facilitate the illegal entry of Indian nationals into the United States and for filing a false tax return.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey, Chief Richard Weber of the Internal Revenue Service–Criminal Investigation (IRS-CI) and Director Bill A. Miller of the State Department’s Diplomatic Security Service (DSS) made the announcement.

Sandipkumar Patel, 42, of Edison, New Jersey, was sentenced by U.S. District Court Judge William H. Walls of the District of New Jersey.  The court also ordered Patel to pay a fine of $50,000, and restitution in the amount of $423,452 to the IRS.

On Sept. 4, 2014, Patel pleaded guilty to a two-count information charging him with conspiring to defraud the United States and subscribing to a false federal income tax return.

According to court documents filed in connection with his plea, from 2001 until 2009, Patel sponsored the visa applications of Indian nationals by falsely claiming that he would provide employment for them in the United States.  Patel falsely certified on the visa applications that he would employ the migrants in various technical fields at several New Jersey companies, thereby facilitating their illegal entry into the United States.  Over the course of the scheme, migrants paid Patel tens of thousands of dollars for the false certifications.  To disguise the scheme, Patel issued payroll checks and other payroll forms.  Patel required the migrants to return the proceeds of the payroll checks to him and to further reimburse him for the payroll tax expenses he incurred.  Patel used the fraudulent pay stubs and payroll checks to support false applications to extend the visas, and charged the migrants fees for the visa extensions.

As a result of falsely carrying the migrant employees on his payrolls, Patel overstated his payroll expenses on his federal income tax returns by more than $1.4 million over four years, and thereby underreported his tax obligation by over $400,000 for those years.

This case was investigated by the IRS-CI and DSS.  The case is being prosecuted by Senior Trial Attorney Hope S. Olds of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Michael Robertson of the District of New Jersey, with assistance from the Criminal Division’s Asset Forfeiture and Money Laundering Section.

Sunday, June 14, 2015

SISTERS SENTENCED FOR ROLES TO MANIPULATE TAX RETURNS

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, June 10, 2015
Two Georgia Sisters-in-Law and Former Tax Return Preparers Sentenced to Prison for Conspiring to Defraud the United States

Two Georgia sisters-in-law were sentenced today in the U.S. District Court in Macon, Georgia, for their involvement in a conspiracy to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.

Angela Miller, 48, of Milledgeville, Georgia, and Lee Lynwood, 47, of Eatonton, Georgia, were each sentenced to serve 12 months and one day in prison to be followed by one year of supervised release, and ordered to pay restitution in the amount of $44,214.62.  On Feb. 10, Miller and Lynwood pleaded guilty to conspiracy to defraud the United States.

According to court documents, from at least January 2008 through at least March 2010, Miller and Lynwood operated a tax return preparation business and conspired to inflate their clients’ federal tax refunds by manipulating the tax returns to reflect false business income or loss amounts and to claim deductions and credits, such as the First-Time Homebuyer Credit, that the clients were not entitled to receive.

Miller and Lynwood also took steps to continue their scheme by impeding the Internal Revenue Service’s (IRS) efforts to shut down their ability to electronically file tax returns.  In May 2008, the IRS notified Miller and Lynwood that their Electronic Filing Number (EFIN) for filing electronic returns at their tax preparation business, A&L Tax Services, was being revoked.  Miller and Lynwood then had an acquaintance apply for another EFIN in her name, which Miller and Lynwood used to continue to file fraudulent tax returns and conceal their preparation from the IRS.  Further, Miller and Lynwood changed the name of their business to B&F Tax Services and caused a bank account for the B&F Tax Services to be opened in the acquaintance’s name as a nominee.

Acting Assistant Attorney General Ciraolo commended special agents of IRS–Criminal Investigation, who investigated the case, and thanked the U.S. Attorney’s Office of the Middle District of Georgia for their assistance, as well as Trial Attorneys Alexander R. Effendi and Hayden M. Brockett of the Tax Division, who prosecuted the case.

Saturday, June 13, 2015

DEPUTY SHERIFF CONVICTED FOR WITHHOLDING EVIDENCE

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, June 10, 2015
Deputy Sheriff Convicted for Withholding Evidence Favorable to a Defendant
Three Deputies Also Convicted of Obstructing Justice by Covering Up a Fellow Officer’s Use of Force

A federal jury in Albany, Georgia, today convicted three sheriff’s deputies on various federal offenses related to the cover-up of a 2012 incident in which a fourth deputy used force during the arrest of a civilian.  The charges against Decatur County Captain Elizabeth Croley, Decatur County Deputy Christopher Kines and Decatur County Deputy Robert Wade Umbach related to a September 2012 incident in which former Grady County Deputy Sheriff Wiley Griffin, IV—who is the son of Decatur County Sheriff Wiley Griffin, III— used force against Aaron Parrish during an arrest at the Bainbridge BikeFest.  The jury found that Croley, Kines and Umbach obstructed justice when they later helped cover up defendant Griffin’s actions.  Specifically, the jury convicted Croley of obstructing justice by writing a false report and convicted Kines and Umbach of engaging in misleading conduct by lying to an FBI agent about the incident.  Croley was also convicted of violating Aaron Parrish’s constitutionally protected right to a fair trial by intentionally withholding material exculpatory evidence from the District Attorney’s Office, and, in turn from Aaron Parrish’s criminal defense attorney, during a criminal prosecution of Parrish arising out of the same BikeFest incident.

Croley, Kines and Umbach will be sentenced by the Honorable W. Louis Sands, Senior U.S.District Court Judge for the Middle District of Georgia, at a later date to be set by the court.

The same jury that convicted the three Decatur County officers of obstruction acquitted Griffin on a civil rights count charging him with having used excessive force against Parrish and acquitted Kines and Umbach of obstructing justice by writing false reports.

During a trial that lasted more than two weeks, the jury heard evidence that Griffin struck Parrish in the eye with a metal flashlight while Parrish was being restrained on the ground by other deputies, including Kines and Umbach.  The government presented evidence that Captain Croley and Deputies Kines and Umbach then helped cover up the incident by, among other things, Croley writing a false report and Kines and Umbach misleading the FBI by stating that they did not see Griffin at the scene.

The government also presented evidence that, after Parrish complained to the Decatur County Sheriff’s Office about the abuse he had suffered at BikeFest, the Sheriff’s Office opened a criminal investigation led by Croley that eventually resulted in felony criminal charges against Parrish.  During that investigation, Croley took a witness statement from a civilian eyewitness who provided information that would have been materially helpful to Parrish’s defense.  However, rather than providing that statement to the District Attorney so that it could then be provided to Parrish’s defense attorney for use at trial, Croley intentionally removed the exculpatory statement from the case file.  This conduct formed the basis of the civil rights charge on which defendant Croley was convicted.

At sentencing, Croley will face a maximum sentence of 20 years for her false report and one year for the civil rights violation involving hiding exculpatory evidence.  Kines and Umbach face maximum sentences of 20 years for making misleading statements to the FBI.

“As the jury recognized through its verdict, there are serious consequences when law enforcement officers lie to cover up the misconduct of a fellow officer and when an officer intentionally stacks the deck against an accused person by hiding evidence that could show the person’s innocence,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “When officers engage in this type of outrageous behavior, the Department of Justice stands ready to enforce the law and protect the civil rights of all Americans.”

“This case reflects that the rule of law applies to all and that the FBI will present for prosecution the facts as it finds them,” said Special Agent in Charge J. Britt Johnson of the FBI Atlanta Field Office.  “Today's verdicts conclude an extensive investigation and prosecution that needed to be heard and the FBI is satisfied that it was."

This case was investigated by the Federal Bureau of Investigation and was prosecuted by Trial Attorneys Christine M. Siscaretti and Risa Berkower of the Justice Department’s Civil Rights Division, with support from the U.S. Attorney’s Office for the Middle District of Georgia.

Friday, June 12, 2015

USMS COMPLETES ANOTHER PHASE TO ARREST VIOLENT FUGITIVES IN NEW MEXICO

FROM:  U.S. MARSHALS SERVICE
June 08, 2015
Operation Desert Snow: U.S. Marshals Complete Phase 3 of 5

New Mexico - The United States Marshals Service has been diligently working with state and local law enforcement officers to arrest violent fugitives in all 33 counties in New Mexico. Operation Desert Snow has five phases which have already been implemented throughout the entire state of New Mexico. The operation is building partnerships between state, county, local and tribal agencies in order to develop an emergency response strategy throughout the entire state. The first 3 phases have already been completed. Phases IV and V will be implemented on an established schedule throughout 2015. District of New Mexico, United States Marshal Conrad Candelaria stated,” this past weekend and within 48 hours, a law enforcement unity of effort swept the counties in Southeastern New Mexico, resulting in the arrest of many that for too long absconded justice or violated the rules of their probation. The combined and successful efforts from many law enforcement agencies and jurisdictions will result in safer communities for all of our citizens”.

Phase I began in the Farmington, New Mexico Four-Corners Area which extends to the Arizona border and encompasses the Navajo Nation. From December 11-14, 2014 the Marshals Service and several of its law enforcement partners began serving warrants in this region. During the two-day operation, law enforcement officers endeavored to serve more than 60 warrants. They were successful in arresting 22 fugitives. All of these fugitive cases targeted violent fugitives.

Phase II of the operation continued February 19-22, 2015, in the Southwest corner of the state, which includes Luna County, Sierra County, Dona Ana County, Otero County and Lincoln County. The Marshals Service and combined local law enforcement task force members endeavored to serve over 100 warrants. They were successful in arresting 24 violent fugitives and clearing 33 warrants in this two- day operation.

Phase III was conducted on June 5 -6, 2015, and focused on 6 counties in the southeastern part of New Mexico, which included Chaves, Eddy, Curry, Lea, Lincoln and Roosevelt counties. This operation cleared a total of 111 warrants and a total of 60 arrests were made, ranging from drug trafficking to aggravated assault.

These operations are essential, so that area law enforcement can work as one to apprehend violent offenders, which will help make the area safer by protecting the public from repeat offenders. Cumulatively, Operation Desert Snow has resulted in over 250 arrests/warrants cleared.

Significant Arrests for Phase III of Operation Desert Snow:

Aggravated Assaults/Aggravates Battery – 4
Assaults/ Battery – 2
Burglary – 4
Probation Violation- 23
Robbery- 1
Trafficking /drugs/ Narcotics- 15
Weapons – 3
Robbery -1
Other arrests include, child support, DUI’s , fleeing, larceny, failure to appear in court,
resisting arrest and traffic citations.
Team agencies assisting the U.S. Marshals Service and Task Force Officers:

Wednesday, June 10, 2015

TWO PLEAD GUILTY IN CONSUMER DEBT RELIEF FRAUD CASE

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, June 1, 2015
Two Individuals Plead Guilty to Conspiring to Defraud Consumers through Fraudulent Debt Relief Services Firms

Two individuals pleaded guilty for their roles at fraudulent debt relief services companies that offered to settle credit card debts but instead took victims’ payments as undisclosed up-front fees, the Justice Department and U.S. Postal Inspection Service (USPIS) announced.

Athena Maldonado, 30, and Christopher Harati, 31, both of Orange County, California, pleaded guilty to a one-count information alleging conspiracy in connection with debt relief companies known as Nelson Gamble & Associates (Nelson Gamble) and Jackson Hunter Morris & Knight LLP (Jackson Hunter).  According to the information filed in the case, the defendants and their co-conspirators portrayed the debt relief companies as law firms and attorney-based companies that would negotiate favorable settlements with creditors.  Clients made monthly payments expecting the money to go toward settlements.  The companies instead took an amount equal to at least 15 percent of clients’ total debt as company fees, with the first six months of payments going almost entirely toward undisclosed up-front fees.

“Debt relief service scams prey on vulnerable consumers trying to climb out of tough financial situations,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “The Justice Department will aggressively pursue the criminals who operate these schemes.”

Maldonado admitted that she acted as the “legal department” for both companies, and used multiple aliases when responding to complaints submitted by state attorney general offices, the Better Business Bureau and private attorneys.  Maldonado admitted that, after Nelson Gamble changed its name to Jackson Hunter, she responded to consumer complaints by falsely stating, among other things, that the two companies were not related and that Jackson Hunter could not refund money paid to Nelson Gamble.

Harati admitted that he worked as a client relations manager for the companies and handled complaint calls from clients.  He admitted he told customers that Nelson Gamble and Jackson Hunter were separate companies, falsely stated that Jackson Hunter was a nationwide law firm with years of experience and made other misrepresentations designed to convince customers to stay with the company.

The defendants each face a statutory maximum sentence of five years in prison and a $250,000 fine, or an alternate fine of twice the loss or twice the gain, whichever is greater, along with mandatory restitution.  Their sentencing dates have not been set.

On Dec. 3, 2014, a grand jury in Santa Ana, California, returned a 22-count indictment charging Jeremy Nelson, Elias Ponce and John Vartanian, all of Orange County, for mail fraud, wire fraud, and conspiracy to commit mail and wire fraud in the same fraudulent scheme.  The trial in that case is scheduled to begin on Feb. 16, 2016, in Los Angeles.

The Federal Trade Commission (FTC) brought a civil case against Nelson Gamble, Jackson Hunter and other defendants in September 2012, alleging that the defendants falsely claimed they would reduce consumers’ unsecured debt by 50 percent or more, made unauthorized charges to their bank accounts and called phone numbers listed on the National Do Not Call Registry.  For more information about debt relief firms, the FTC encourages consumers to review this page on their website.

Principal Deputy Assistant Attorney General Mizer commended the USPIS team assigned to the Civil Division’s Consumer Protection Branch for their investigative efforts, and thanked the U.S. Attorney’s Office of the Central District of California for their contributions to the case.  The case is being prosecuted by Trial Attorney Alan Phelps of the Consumer Protection Branch.

Friday, June 5, 2015

MEDICAL SUPPLY COMPANY OWNER SENTENCED FOR $3.3 MILLION MEDICARE FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 
Tuesday, May 26, 2015
Owner of Los Angeles Medical Supply Company Sentenced to Seven Years in Prison for $3.3 Million Medicare Fraud Scheme

The former owner of a Los Angeles-based medical supply company was sentenced today to seven years in prison for his role in a fraud scheme that resulted in $3.3 million in fraudulent claims to Medicare.

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 and Assistant Director in Charge David L. Bowdich of the FBI’s Los Angeles Field Office made the announcement.

Hakop Gambaryan, 55, of East Hollywood, California, was convicted following a jury trial on March 20, 2015, of four counts of health care fraud.  In addition to the prison sentence, U.S. District Court Judge Otis D. Wright II of the Central District of California ordered Gambaryan to pay $1,740,009 in restitution.

At trial, the evidence showed that Gambaryan, the former owner of a durable medical equipment supply company, fraudulently billed more than $3 million to Medicare for durable medical equipment, such as expensive power wheel chairs, that was not medically necessary.  Medicare paid approximately $1.7 million on those fraudulent claims.

The evidence demonstrated that between March 2006 and December 2012, Gambaryan paid cash kickbacks to medical clinics for fraudulent prescriptions for durable medical equipment, which the patients did not need.  Gambaryan then used these prescriptions to bill Medicare for the unnecessary equipment.

According to evidence presented at trial, Gambaryan personally delivered power wheelchairs to many beneficiaries who were able to walk without assistance.  In one instance, Gambaryan carried a power wheelchair up a flight of stairs for a woman who lived in a second floor apartment with no elevator.  In another instance, the power wheelchair would not fit inside the beneficiary’s home, so Gambaryan put it in the beneficiary’s garage.

The evidence also demonstrated that Gambaryan generated false documentation to support the fraudulent claims, including fake home assessments when no home assessments actually occurred.  In addition, Gambaryan photocopied beneficiaries’ signatures hundreds of times to create the appearance that the beneficiaries consented to ongoing equipment rentals, when they did not.  Indeed, at least two of the beneficiaries had passed away prior to the date they supposedly signed the rental agreements.

The case was 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 of the Central District of California.  The case was prosecuted by Trial Attorneys Fred Medick and Ritesh Srivastava 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, 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.

Wednesday, June 3, 2015

COLOMBIAN NATIONAL PLEADS GUILTY IN MONEY LAUNDERING CASE

FROM:  U.S. JUSTICE DEPARTMENT 
Tuesday, May 26, 2015

Colombian National Pleads Guilty to Conspiracy to Commit Money Laundering
A Colombian national who recently was extradited from Mexico, pleaded guilty today in federal district court in Dallas, to conspiracy to launder monetary instruments, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting Administrator Chuck Rosenberg of the Drug Enforcement Administration.

Tito Miller Parra-Isaza, 45, a Colombian national, entered his guilty plea before U.S. Magistrate Judge Renee H. Toliver of the Northern District of Texas.  He will be sentenced at a later date.

According to a factual stipulation filed with the court, Parra-Isaza’s role in the conspiracy was to coordinate the deposit of bulk cash, which he knew to be the proceeds of drug smuggling, into financial institutions in Mexico and elsewhere.  In furtherance of the conspiracy, this bulk cash was later wire transferred to bank accounts in Dallas.  The funds then were  transported to Panama and elsewhere to distribute to individuals involved in drug smuggling.

Two other defendants charged in this case previously entered guilty pleas.  Of the remaining charged defendants, one is in Mexican custody, two are fugitives and one is deceased.

This case is being investigated by the DEA.  The case is being prosecuted by Trial Attorneys Mark Irish and Nicole Grosnoff of the Criminal Division’s Asset Forfeiture and Money Laundering Section.  The Criminal Division’s Office of International Affairs also has provided substantial assistance.

Monday, June 1, 2015

MAN SENTENCED FOR FILING $1.5 MILLION IN FALSE CLAIMS FOR TAX REFUNDS

FROM:  U.S. JUSTICE DEPARTMENT 
Tuesday, May 26, 2015
Utah Man Sentenced to Prison for Filing $1.5 Million in False Claims for Tax Refunds and Presenting Fictitious Financial Instruments to the U.S. Government

A Sandy, Utah, resident was sentenced today in U.S. District Court in Salt Lake City, Utah, to serve two years in prison for tax evasion, filing false claims for federal income tax refunds, and filing fictitious financial obligations with the U.S. government, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

Paul Ben Zaccardi was also ordered to pay restitution to the Internal Revenue Service (IRS) and to serve a four-year term of supervised release upon his release from prison.

“Pursuing and prosecuting individuals who refuse to comply with our nation’s tax laws and take affirmative steps to evade their obligations remains a top priority of the Tax Division,” said Acting Assistant Attorney General Ciraolo.  “Today’s sentence reflects what awaits those who engage in such criminal conduct.”

“Today’s sentencing of Paul Zaccardi again emphasizes the Internal Revenue Service and DOJ Tax Division’s aggressive pursuit of those who use fraudulent methods in an attempt to corrupt our nation’s tax system,” said Special Agent in Charge John Collins of the IRS Criminal Investigation’s Las Vegas Field Office.  “Honest taxpayers have been reassured today that no one is above the law–especially when the integrity of the tax administration is at stake.”

On Oct. 29, 2014, Zaccardi pleaded guilty to the offenses charged in the superseding indictment, including one count of tax evasion, five counts of filing false claims for income tax refunds and three counts of filing fictitious obligations.  According to the superseding indictment and court documents, in April 2004, Zaccardi embarked on a scheme to evade the payment of his federal income taxes.  As part of that scheme and to avoid federal tax levies, Zaccardi transferred title to his residence to a nominee entity that he formed called Saved by Grace Christian Fellowship and caused his business receipts to be deposited into his wife’s bank account.

Zaccardi also presented five separate false tax returns to the IRS falsely claiming tax refunds totaling more than $1.5 million.  In addition, from June 2008 to October 2011, Zaccardi presented three separate fictitious financial instruments to the IRS, U.S. Department of the Treasury and the U.S. District Court of the District of Utah for a combined total of $605 million, to purportedly pay his federal income tax liabilities.

Acting Assistant Attorney General Ciraolo commended the special agents of IRS Criminal Investigation, who investigated the case, and Trial Attorneys Stuart Wexler and Ryan Raybould of the Tax Division, who prosecuted the case.  She also thanked the U.S. Attorney’s Office of the District of Utah for their substantial assistance.
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