FROM: U.S. DEPARTMENT OF JUSTICE
WASHINGTON –Two former soldiers pleaded guilty to participating in a conspiracy to defraud the U.S. military and its contractor of at least approximately $244,000 in fraudulent recruiting bonuses, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Former Army Specialist Paul Escobar, 32, and current Army Specialist Richard Garcia Jr., 28, both of San Antonio, Texas, were indicted on Sept. 13, 2011, in the U.S. District Court for the Western District of Texas in San Antonio. Escobar entered his guilty plea on July 19, 2012, and Garcia entered his plea on July 26, 2012.
Former Specialist Xavier Aves, 40, of San Antonio; Corporal Christopher Castro, 30, of San Antonio; former Staff Sergeant Grant E. Bibb, 40, of Eagle Pass, Texas; and Sergeant First Class Jesus Torres-Alvarez, 31, of El Paso, Texas, were also indicted along with Escobar and Garcia.
According to court documents, between approximately 2005 and 2008, the U.S. Army, the U.S. Army Reserves and the National Guard Bureau entered into contracts with Document and Packaging Broker Inc. to administer recruiting programs designed to offer monetary incentives to U.S. soldiers who referred civilians to join the Army, the Army Reserves and the Army National Guard. In addition, the Army managed its own recruiting referral programs to offer bonuses to soldiers who referred other individuals to join the Army or the Army Reserves.
Through these recruiting bonus programs, participating soldiers could receive up to $2,000 in bonus payments for civilians whom they referred to join the U.S. military. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payments in the form of direct deposits and pre-paid debit card payments. To participate, soldiers needed to set up online sponsor or recruiting assistant accounts.
According to court documents, Escobar enlisted in the U.S. Army in approximately November 2007, and served until approximately January 2010. Escobar admitted that in approximately July 2008, he and co-conspirator Aves agreed to use a recruiting assistant account in Escobar’s name to claim that Escobar was responsible for referring certain potential soldiers to join the U.S. Army, when in fact Escobar had not referred those soldiers. Through these fraudulent representations, Escobar and Aves received a total of approximately $6,000 in fraudulent recruiting bonuses.
According to court documents, Garcia enlisted in the U.S. Army in approximately November 2005. Garcia admitted that in approximately May 2008, he and co-conspirator Aves agreed to use a recruiting assistant account in Garcia’s name to claim that Garcia was responsible for referring certain potential soldiers to join the U.S. Army, when in fact Escobar had not referred those soldiers. Through these fraudulent representations, Garcia and Aves received a total of approximately $13,000 in fraudulent recruiting bonuses.
According to court documents, Escobar, Garcia, Aves and their co-conspirators collected, in total, approximately $244,000 in fraudulent recruiting bonus payments from the various recruiting programs.
The charge of conspiracy to commit wire fraud carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the gain or loss. Sentencing for Escobar and Garcia has been scheduled for Nov. 2, 2012, before Chief U.S. District Judge Fred Biery in San Antonio.
The case against Escobar and Garcia arises from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio area engaged in a wide-ranging scheme to obtain fraudulent recruiting bonuses. To date, the investigation has led to charges against eight people, all of whom have pleaded guilty. The investigation is ongoing.
On May 31, 2012, former Sergeant and National Guard recruiter Rafael L. Acosta, 39, of San Antonio, pleaded guilty to conspiracy to commit bribery and wire fraud for organizing and leading a conspiracy to obtain more than $90,000 in fraudulent recruiting bonuses. He is scheduled to be sentenced on Nov. 2, 2012.
On February 3, 2012, Aves pleaded guilty to one count of conspiracy to commit wire fraud, and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years. On Jan. 30, 2012, Bibb pleaded guilty to one count of conspiracy to commit wire fraud. On Jan. 26, 2012, Torres-Alvarez pleaded guilty to one count of conspiracy to commit wire fraud. According to court documents, Torres-Alvarez, an active duty recruiter, admitted that he sold the names and Social Security numbers of potential soldiers to Aves and others involved in the scheme. Aves, Bibb and Torres-Alvarez are scheduled for sentencing on Nov. 2, 2012.
On Nov. 3, 2011, Castro pleaded guilty to one count of conspiracy to commit wire fraud for his role in the scheme. On June 29, 2012, Castro was sentenced to one year and a day in prison and ordered to pay $244,000 in restitution, jointly and severally.
On Jan. 28, 2010, Sergeant Ernest Gonzales, 50, of San Antonio, pleaded guilty to a one-count criminal information charging him with conspiracy to commit wire fraud for his role in the scheme. Gonzales assisted the government by providing helpful information concerning Aves, Bibb and Castro. On June 29, 2012, Gonzales was sentenced to five years probation and ordered to pay $244,000 in restitution, jointly and severally.
This investigation is being prosecuted by Trial Attorneys Edward J. Loya Jr. and Brian A. Lichter of the Criminal Division’s Public Integrity Section. The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command.
Tuesday, July 31, 2012
Monday, July 30, 2012
FORMER PUERTO RICO POLICE OFFICER GETS 40 YEARS FOR GUARDING DRUG TRANSACTIONS
FROM: U.S. DEPARTMENT OF JUSTICE
Former Police Officer of Puerto Rico Sentenced to 40 Years in Prison for Role in Providing Security for Drug Transactions
A former police officer of Puerto Rico was sentenced today in San Juan to 40 years in prison for his role in providing security for drug transactions, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Special Agent in Charge Joseph S. Campbell of the FBI’s San Juan Division.
Javier A. Diaz Castro, 30, was sentenced by U.S. District Judge Gustavo A. Gelpi for the District of Puerto Rico.
Diaz was convicted on Dec. 12, 2011, of two counts of conspiracy to possess with intent to distribute more than five kilograms of cocaine, two counts of attempting to possess with the intent to distribute more than five kilograms of cocaine, and two counts of possession of a firearm in furtherance of a drug transaction. Diaz was charged in an indictment unsealed on Oct. 6, 2010, along with 88 other law enforcement officers in Puerto Rico and 44 other individuals, as part of the FBI undercover operation known as Guard Shack. To date, 128 of the charged defendants have pleaded guilty or have been convicted at trial, including Diaz.
According to the evidence presented in court, on at least two occasions in 2010, Diaz provided security for what he believed were a series of illegal drug deals, but which in fact were part of the undercover FBI operation. Diaz, a 10-year veteran of the police force, was assigned to the frauds unit at the time of the transactions. According to information presented at trial, Diaz was brought into the scheme by another police officer of Puerto Rico.
In return for the security he provided, based on his departmental training and using his service weapon, Diaz received cash payments of $2,000 per transaction.
The case was prosecuted by Trial Attorneys Eric L. Gibson and Barak Cohen of the Public Integrity Section in the Justice Department’s Criminal Division. The case was investigated by the FBI. The U.S. Attorney’s Office for the District of Puerto Rico also participated in the investigation and prosecution of this case.
Former Police Officer of Puerto Rico Sentenced to 40 Years in Prison for Role in Providing Security for Drug Transactions
A former police officer of Puerto Rico was sentenced today in San Juan to 40 years in prison for his role in providing security for drug transactions, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Special Agent in Charge Joseph S. Campbell of the FBI’s San Juan Division.
Javier A. Diaz Castro, 30, was sentenced by U.S. District Judge Gustavo A. Gelpi for the District of Puerto Rico.
Diaz was convicted on Dec. 12, 2011, of two counts of conspiracy to possess with intent to distribute more than five kilograms of cocaine, two counts of attempting to possess with the intent to distribute more than five kilograms of cocaine, and two counts of possession of a firearm in furtherance of a drug transaction. Diaz was charged in an indictment unsealed on Oct. 6, 2010, along with 88 other law enforcement officers in Puerto Rico and 44 other individuals, as part of the FBI undercover operation known as Guard Shack. To date, 128 of the charged defendants have pleaded guilty or have been convicted at trial, including Diaz.
According to the evidence presented in court, on at least two occasions in 2010, Diaz provided security for what he believed were a series of illegal drug deals, but which in fact were part of the undercover FBI operation. Diaz, a 10-year veteran of the police force, was assigned to the frauds unit at the time of the transactions. According to information presented at trial, Diaz was brought into the scheme by another police officer of Puerto Rico.
In return for the security he provided, based on his departmental training and using his service weapon, Diaz received cash payments of $2,000 per transaction.
The case was prosecuted by Trial Attorneys Eric L. Gibson and Barak Cohen of the Public Integrity Section in the Justice Department’s Criminal Division. The case was investigated by the FBI. The U.S. Attorney’s Office for the District of Puerto Rico also participated in the investigation and prosecution of this case.
Sunday, July 29, 2012
PRESIDENT/VICE PRESIDENT OF DEVILS DICIPLES MOTORCYCLE GANG INDICTED ALONG WITH OTHERS
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, July 13, 2012
National President, National Vice President and 39 Members and Associates of the Devils Diciples Motorcycle Gang Indicted
An indictment unsealed Friday, July 13, 2012 in the Eastern District of Michigan charges 41 members and associates of the Devils Diciples Motorcycle Gang, including National President Jeff Garvin Smith and National Vice President Paul Anthony Darrah, for their alleged participation in a variety of criminal offenses, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Barbara McQuade for the Eastern District of Michigan and FBI Acting Assistant Director Valerie Parlave.
Thirty-one defendants were arrested today in Michigan and Alabama and five defendants were previously in custody. More than 60 firearms and more than 6,000 rounds of ammunition were seized during this investigation. In addition, eight methamphetamine manufacturing laboratories were dismantled during the investigation.
The indictment alleges that the 41 Devils Diciples members and associates, including Smith and Darrah, participated in various criminal acts, including violent crimes in aid of racketeering, drug trafficking, illegal firearms offenses, obstruction of justice, illegal gambling and other federal offenses. Eighteen of the defendants, including Smith and Darrah, are charged with violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act by conducting their illegal enterprise through a pattern of racketeering activity which included murder, robbery, extortion, drug trafficking, obstruction of justice and other federal and state offenses.
"For years, according to the indictment, the Devils Diciples have spread fear in cities throughout Michigan and around the country," said Assistant Attorney General Breuer. "This violent criminal enterprise allegedly profits from drug trafficking and illegal gambling, and uses intimidation and violence to silence its adversaries and maintain control over its members. Today’s arrests of the Devils Diciples’ top leaders and 39 of the gang’s members and associates are an important step in our efforts to dismantle violent criminal enterprises across the country."
"Removing violent criminal organizations from our community is essential to attaining the quality of life we expect and deserve," said U.S. Attorney McQuade. "Federal law enforcement is using all legal tools available to prosecute violent criminal enterprises like this one."
"Today’s law enforcement action takes violence off the streets," said FBI Acting Assistant Director Valerie Parlave. "The FBI appreciates the strong law enforcement partnerships leading to this activity and will continue its commitment to state and local communities to address this violent, and often brutal, criminal threat across the U.S."
According to the indictment, the Devils Diciples is a criminal enterprise with its national headquarters in Clinton Township, Mich. The Devils Diciples operates regional chapters located in cities throughout Michigan, Alabama, Arizona, California, Illinois, Indiana, Ohio and elsewhere. The Devils Diciples engage in criminal activities for financial gain, including distribution of narcotics, theft, transportation and sale of stolen motorcycles, conducting illegal gambling businesses, robbery, extortion and acts of violence.
According to the indictment, membership in the Devils Diciples is based in part on successfully completing a probationary period, followed by formal approval by one or more members or leaders. Members are required to own Harley Davidson motorcycles and are commonly referred to as "full patched members." Full patched members are identified by a club name or nickname for the express purpose of concealing their identity and thwarting identification by law enforcement. Members are required to follow orders from leadership, including orders to assault or use threats and intimidation against others, to transport or distribute drugs, to lie to law enforcement or to hide or destroy evidence. Members are also required to follow the Devils Diciples by-laws and attend regular meetings referred to as "church."
The indictment alleges that the Devils Diciples committed acts involving attempted murder, robbery, extortion, assault and threats of violence to maintain the territory of the organization and to protect the organization and its members from detection and prosecution by law enforcement authorities.
The indictment charges the 41 Devils Diciples members and associates with a variety of criminal offenses including violent crimes in aid of racketeering, drug trafficking, illegal firearms offenses, obstruction of justice and other federal offenses.
Specifically, the indictment alleges that in August 2003, Vincent John Witort and multiple other Devils Diciples members robbed, kidnapped and attempted to murder other members of the Arizona Chapter for violating Devils Diciples rules.
The indictment alleges that in 2004, Smith possessed state and federal law enforcement manuals regarding outlaw motorcycle gangs marked "For Official Use Only" and "Law Enforcement Sensitive" and numerous documents related to criminal matters involving members of the Devils Diciples, including police reports, search warrants, affidavits, indictments and witness interview transcripts.
Smith allegedly assaulted another individual in August 2008, for the purpose of maintaining and increasing position in the Devils Diciples enterprise. The indictment also alleges that in late 2008, Smith, Paul Anthony Darrah and Cary Dale Vandiver assaulted Scott Thomas Perkins with a metal pipe.
According to the indictment, in February 2009, Ronald Raymond Roberts, Christopher Raymond Cook and Wayne Russell Werth allegedly assaulted Danny Russell Burby Jr. with a box cutter and a bottle, after various Devils Diciples members circulated flyers containing a photograph of Burby and stating that Burby was a "snitch."
The indictment also alleges that in January 2012, David Randy Drozdowski and Smiley Villa assaulted an individual they believed was a member of a rival motorcycle club for being present in Devils Diciples territory.
Sixteen of the members and associates named in the indictment are charged with conspiracy to conduct an illegal gambling business. The defendants operated slot machines located in several Devils Diciples clubhouses in Michigan, Arizona and Alabama to generate income for the criminal enterprise and its members.
An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case was investigated by the FBI, the Michigan State Police, the Macomb County Sheriff’s Office, and the County of Macomb Enforcement Team (COMET), with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the St. Clair County Sheriff’s Office. The case is being prosecuted by the Organized Crime and Gang Section of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Eastern District of Michigan.
Friday, July 13, 2012
National President, National Vice President and 39 Members and Associates of the Devils Diciples Motorcycle Gang Indicted
An indictment unsealed Friday, July 13, 2012 in the Eastern District of Michigan charges 41 members and associates of the Devils Diciples Motorcycle Gang, including National President Jeff Garvin Smith and National Vice President Paul Anthony Darrah, for their alleged participation in a variety of criminal offenses, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Barbara McQuade for the Eastern District of Michigan and FBI Acting Assistant Director Valerie Parlave.
Thirty-one defendants were arrested today in Michigan and Alabama and five defendants were previously in custody. More than 60 firearms and more than 6,000 rounds of ammunition were seized during this investigation. In addition, eight methamphetamine manufacturing laboratories were dismantled during the investigation.
The indictment alleges that the 41 Devils Diciples members and associates, including Smith and Darrah, participated in various criminal acts, including violent crimes in aid of racketeering, drug trafficking, illegal firearms offenses, obstruction of justice, illegal gambling and other federal offenses. Eighteen of the defendants, including Smith and Darrah, are charged with violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act by conducting their illegal enterprise through a pattern of racketeering activity which included murder, robbery, extortion, drug trafficking, obstruction of justice and other federal and state offenses.
"For years, according to the indictment, the Devils Diciples have spread fear in cities throughout Michigan and around the country," said Assistant Attorney General Breuer. "This violent criminal enterprise allegedly profits from drug trafficking and illegal gambling, and uses intimidation and violence to silence its adversaries and maintain control over its members. Today’s arrests of the Devils Diciples’ top leaders and 39 of the gang’s members and associates are an important step in our efforts to dismantle violent criminal enterprises across the country."
"Removing violent criminal organizations from our community is essential to attaining the quality of life we expect and deserve," said U.S. Attorney McQuade. "Federal law enforcement is using all legal tools available to prosecute violent criminal enterprises like this one."
"Today’s law enforcement action takes violence off the streets," said FBI Acting Assistant Director Valerie Parlave. "The FBI appreciates the strong law enforcement partnerships leading to this activity and will continue its commitment to state and local communities to address this violent, and often brutal, criminal threat across the U.S."
According to the indictment, the Devils Diciples is a criminal enterprise with its national headquarters in Clinton Township, Mich. The Devils Diciples operates regional chapters located in cities throughout Michigan, Alabama, Arizona, California, Illinois, Indiana, Ohio and elsewhere. The Devils Diciples engage in criminal activities for financial gain, including distribution of narcotics, theft, transportation and sale of stolen motorcycles, conducting illegal gambling businesses, robbery, extortion and acts of violence.
According to the indictment, membership in the Devils Diciples is based in part on successfully completing a probationary period, followed by formal approval by one or more members or leaders. Members are required to own Harley Davidson motorcycles and are commonly referred to as "full patched members." Full patched members are identified by a club name or nickname for the express purpose of concealing their identity and thwarting identification by law enforcement. Members are required to follow orders from leadership, including orders to assault or use threats and intimidation against others, to transport or distribute drugs, to lie to law enforcement or to hide or destroy evidence. Members are also required to follow the Devils Diciples by-laws and attend regular meetings referred to as "church."
The indictment alleges that the Devils Diciples committed acts involving attempted murder, robbery, extortion, assault and threats of violence to maintain the territory of the organization and to protect the organization and its members from detection and prosecution by law enforcement authorities.
The indictment charges the 41 Devils Diciples members and associates with a variety of criminal offenses including violent crimes in aid of racketeering, drug trafficking, illegal firearms offenses, obstruction of justice and other federal offenses.
Specifically, the indictment alleges that in August 2003, Vincent John Witort and multiple other Devils Diciples members robbed, kidnapped and attempted to murder other members of the Arizona Chapter for violating Devils Diciples rules.
The indictment alleges that in 2004, Smith possessed state and federal law enforcement manuals regarding outlaw motorcycle gangs marked "For Official Use Only" and "Law Enforcement Sensitive" and numerous documents related to criminal matters involving members of the Devils Diciples, including police reports, search warrants, affidavits, indictments and witness interview transcripts.
Smith allegedly assaulted another individual in August 2008, for the purpose of maintaining and increasing position in the Devils Diciples enterprise. The indictment also alleges that in late 2008, Smith, Paul Anthony Darrah and Cary Dale Vandiver assaulted Scott Thomas Perkins with a metal pipe.
According to the indictment, in February 2009, Ronald Raymond Roberts, Christopher Raymond Cook and Wayne Russell Werth allegedly assaulted Danny Russell Burby Jr. with a box cutter and a bottle, after various Devils Diciples members circulated flyers containing a photograph of Burby and stating that Burby was a "snitch."
The indictment also alleges that in January 2012, David Randy Drozdowski and Smiley Villa assaulted an individual they believed was a member of a rival motorcycle club for being present in Devils Diciples territory.
Sixteen of the members and associates named in the indictment are charged with conspiracy to conduct an illegal gambling business. The defendants operated slot machines located in several Devils Diciples clubhouses in Michigan, Arizona and Alabama to generate income for the criminal enterprise and its members.
An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case was investigated by the FBI, the Michigan State Police, the Macomb County Sheriff’s Office, and the County of Macomb Enforcement Team (COMET), with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the St. Clair County Sheriff’s Office. The case is being prosecuted by the Organized Crime and Gang Section of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Eastern District of Michigan.
Saturday, July 28, 2012
MAN SENTENCED TO PRISON FOR ROLE IN HOBBS ACT EXTORTION CONSPIRACY
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, July 26, 2012
Admitted Associate of New England La Cosa Nostra Sentenced to Prison for Participation in Hobbs Act Extortion Conspiracy
Albino Folcarelli is 7th Defendant to Plead Guilty and be Sentenced to Federal Prison for Alleged Extortion of Protection Payments from Rhode Island Businesses and Individuals by Organized Crime
Albino "Albie" Folcarelli, 54, of Johnston, R.I., an admitted associate of the New England La Cosa Nostra (NELCN), was sentenced in U.S. District Court in Providence, R.I., today to serve 84 months in federal prison for his participation in an extortion conspiracy to extort $25,000 from a Rhode Island individual by using implied threats of violence, including visits to the individual’s place of employment and home.
U.S. District Court Judge William E. Smith also sentenced Folcarelli to serve three years of supervised release upon completion of his prison term and to pay $25,000 in restitution to be paid jointly and severally with co-defendants Raymond R. "Scarface" Jenkins and Edward "Eddy" Lato. Folcarelli pleaded guilty on May 4, 2012, to one count of Hobbs Act extortion.
Folcarelli admitted to participating in an extortion conspiracy with Lato, 65, an admitted NELCN capo, and Jenkins, 47. Lato, who also pleaded guilty to participating in a conspiracy to shakedown Rhode Island adult entertainment business for protection money, is serving a sentence of 108 months in federal prison. Jenkins is serving a sentence of 37 months in prison.
Folcarelli’s sentence was announced by Peter F. Neronha, United States Attorney for the District of Rhode Island; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Richard Deslauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; and Providence Public Safety Commissioner Steven M. Pare.
Folcarelli, Lato and Jenkins are among seven Rhode Island men convicted and sentenced for crimes involving racketeering and extortion, which allegedly extorted protection payments from several adult entertainment businesses and individuals in Rhode Island during the past two decades. Admitted NELCN crime boss Luigi "Louie" Manocchio, 85, is currently serving a 66 month sentence in federal prison; Alfred "Chippy" Scivola, 72, an admitted NELCN member, is serving a 46 month sentence in prison; Richard Bonifiglia, 58, an admitted NELCN associate, is serving an 84 month sentence in prison; and Thomas Iafrate, an admitted NELCN associate, is currently serving a 30 month sentence in prison.
An eighth defendant named in a second superseding indictment, Theodore Cardillo, 69, has entered a plea of not guilty to three counts each of RICO conspiracy and extortion conspiracy. He is detained while awaiting trial.
A third superseding indictment returned in this matter returned on April 24, 2012, charges Anthony L. Dinunzio, 53, of East Boston, Mass., the alleged acting leader of the NELCN, with one count each of racketeering and extortion, and five counts of travel in aid of racketeering. A not guilty plea was entered on April 25, 2012. Dinunzio is detained while awaiting trial.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Thursday, July 26, 2012
Admitted Associate of New England La Cosa Nostra Sentenced to Prison for Participation in Hobbs Act Extortion Conspiracy
Albino Folcarelli is 7th Defendant to Plead Guilty and be Sentenced to Federal Prison for Alleged Extortion of Protection Payments from Rhode Island Businesses and Individuals by Organized Crime
Albino "Albie" Folcarelli, 54, of Johnston, R.I., an admitted associate of the New England La Cosa Nostra (NELCN), was sentenced in U.S. District Court in Providence, R.I., today to serve 84 months in federal prison for his participation in an extortion conspiracy to extort $25,000 from a Rhode Island individual by using implied threats of violence, including visits to the individual’s place of employment and home.
U.S. District Court Judge William E. Smith also sentenced Folcarelli to serve three years of supervised release upon completion of his prison term and to pay $25,000 in restitution to be paid jointly and severally with co-defendants Raymond R. "Scarface" Jenkins and Edward "Eddy" Lato. Folcarelli pleaded guilty on May 4, 2012, to one count of Hobbs Act extortion.
Folcarelli admitted to participating in an extortion conspiracy with Lato, 65, an admitted NELCN capo, and Jenkins, 47. Lato, who also pleaded guilty to participating in a conspiracy to shakedown Rhode Island adult entertainment business for protection money, is serving a sentence of 108 months in federal prison. Jenkins is serving a sentence of 37 months in prison.
Folcarelli’s sentence was announced by Peter F. Neronha, United States Attorney for the District of Rhode Island; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Richard Deslauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; and Providence Public Safety Commissioner Steven M. Pare.
Folcarelli, Lato and Jenkins are among seven Rhode Island men convicted and sentenced for crimes involving racketeering and extortion, which allegedly extorted protection payments from several adult entertainment businesses and individuals in Rhode Island during the past two decades. Admitted NELCN crime boss Luigi "Louie" Manocchio, 85, is currently serving a 66 month sentence in federal prison; Alfred "Chippy" Scivola, 72, an admitted NELCN member, is serving a 46 month sentence in prison; Richard Bonifiglia, 58, an admitted NELCN associate, is serving an 84 month sentence in prison; and Thomas Iafrate, an admitted NELCN associate, is currently serving a 30 month sentence in prison.
An eighth defendant named in a second superseding indictment, Theodore Cardillo, 69, has entered a plea of not guilty to three counts each of RICO conspiracy and extortion conspiracy. He is detained while awaiting trial.
A third superseding indictment returned in this matter returned on April 24, 2012, charges Anthony L. Dinunzio, 53, of East Boston, Mass., the alleged acting leader of the NELCN, with one count each of racketeering and extortion, and five counts of travel in aid of racketeering. A not guilty plea was entered on April 25, 2012. Dinunzio is detained while awaiting trial.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Friday, July 27, 2012
INSULATION SERVICES COMPANY OWNER PLEADS GUILTY TO BID-RIGGING
FROM: U.S. DEPARTMENT OF JUSTICE
WASHINGTON — The owner of a former New York City insulation service company pleaded guilty today to a three-count indictment charging him with conspiring to rig bids on contracts for re-insulation services to New York Presbyterian Hospital (NYPH), conspiring to defraud the Internal Revenue Service (IRS) and filing a false tax return, the Department of Justice announced.
David Porath pleaded guilty in the U.S. District Court in Manhattan to charges originally filed under seal on Feb. 18, 2010. At the time of the indictment, Porath was living in Israel. He was extradited and returned to the United States on Feb. 16, 2012. According to the indictment, between early 2000 and March 2005, Porath and his co-conspirators engaged in a bid-rigging conspiracy whereby they created the illusion of a competitive bidding process at NYPH by preparing and submitting fictitious, intentionally high bids so that Porath’s company would be awarded the contracts for re-insulation services for having the "low" bid.
"By submitting intentionally high, non-competitive bids, the co-conspirators deceived NYPH and distorted the competitive market," said Acting Assistant Attorney General Joseph Wayland in charge of the Department of Justice’s Antitrust Division. "The division will continue to apprehend and bring to justice those who rig bids and thereby deprive the public of the benefits afforded by a truly competitive bidding process."
The indictment further charged that between October 2000 and February 2005, Porath conspired with Andrzej Gosek, the owner of a Pennsylvania-based asbestos abatement company, and others, to defraud the IRS and to subscribe to false tax returns. Porath gave Gosek checks made out to companies in Brooklyn, purportedly for work done at NYPH by the Brooklyn companies as sub-contractors to Porath’s company. However, the companies had not performed the work. The checks totaled approximately $229,100 in 2000; $1.19 million in 2001; $760,000 in 2002; $50,000 in 2003; and $125,000 in 2004.
The Brooklyn companies cashed the checks and Gosek delivered the cash, less approximately five percent, back to Porath. Based upon these checks to the Brooklyn companies, Porath took false deductions on his company’s and his personal federal tax returns, allowing Porath to fraudulently reduce his taxable income. The indictment also charged Porath with filing a false federal tax return on or about Feb. 17, 2005, which substantially understated his income.
The bid-rigging charge carries a maximum penalty of 10 years in prison and a $1 million fine. The tax fraud conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine. The false subscription charge carries a maximum penalty of three years in prison and a $100,000 fine. The maximum fine for each of these charges may be increased to twice the gain derived from the crimes or twice the loss suffered by the victims of the crimes, if either of those amounts is greater than the statutory maximum fine.
Including Porath and Gosek, who pleaded guilty in November 2010, 15 individuals and six companies have been convicted of or pleaded guilty to charges arising out of this federal antitrust investigation of bid rigging, fraud, bribery and tax-related offenses relating to the award of contracts by the facilities operations department of NYPH.
WASHINGTON — The owner of a former New York City insulation service company pleaded guilty today to a three-count indictment charging him with conspiring to rig bids on contracts for re-insulation services to New York Presbyterian Hospital (NYPH), conspiring to defraud the Internal Revenue Service (IRS) and filing a false tax return, the Department of Justice announced.
David Porath pleaded guilty in the U.S. District Court in Manhattan to charges originally filed under seal on Feb. 18, 2010. At the time of the indictment, Porath was living in Israel. He was extradited and returned to the United States on Feb. 16, 2012. According to the indictment, between early 2000 and March 2005, Porath and his co-conspirators engaged in a bid-rigging conspiracy whereby they created the illusion of a competitive bidding process at NYPH by preparing and submitting fictitious, intentionally high bids so that Porath’s company would be awarded the contracts for re-insulation services for having the "low" bid.
"By submitting intentionally high, non-competitive bids, the co-conspirators deceived NYPH and distorted the competitive market," said Acting Assistant Attorney General Joseph Wayland in charge of the Department of Justice’s Antitrust Division. "The division will continue to apprehend and bring to justice those who rig bids and thereby deprive the public of the benefits afforded by a truly competitive bidding process."
The indictment further charged that between October 2000 and February 2005, Porath conspired with Andrzej Gosek, the owner of a Pennsylvania-based asbestos abatement company, and others, to defraud the IRS and to subscribe to false tax returns. Porath gave Gosek checks made out to companies in Brooklyn, purportedly for work done at NYPH by the Brooklyn companies as sub-contractors to Porath’s company. However, the companies had not performed the work. The checks totaled approximately $229,100 in 2000; $1.19 million in 2001; $760,000 in 2002; $50,000 in 2003; and $125,000 in 2004.
The Brooklyn companies cashed the checks and Gosek delivered the cash, less approximately five percent, back to Porath. Based upon these checks to the Brooklyn companies, Porath took false deductions on his company’s and his personal federal tax returns, allowing Porath to fraudulently reduce his taxable income. The indictment also charged Porath with filing a false federal tax return on or about Feb. 17, 2005, which substantially understated his income.
The bid-rigging charge carries a maximum penalty of 10 years in prison and a $1 million fine. The tax fraud conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine. The false subscription charge carries a maximum penalty of three years in prison and a $100,000 fine. The maximum fine for each of these charges may be increased to twice the gain derived from the crimes or twice the loss suffered by the victims of the crimes, if either of those amounts is greater than the statutory maximum fine.
Including Porath and Gosek, who pleaded guilty in November 2010, 15 individuals and six companies have been convicted of or pleaded guilty to charges arising out of this federal antitrust investigation of bid rigging, fraud, bribery and tax-related offenses relating to the award of contracts by the facilities operations department of NYPH.
Thursday, July 26, 2012
SEC CHARGES AIDER AND ABETTOR OF PENNY STOCK COMPANY’S DISCLOSURE OF FAKE INVESTMENT
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today filed a complaint in the United States District Court for the Southern District of New York alleging that Ronald Feldstein aided and abetted the filing of a false press release that announced a fictitious $6 million investment in a penny stock company, Interlink-US-Network, Ltd.
The Commission’s complaint alleges that Interlink’s management paid Feldstein to play the role of a prospective investor in Interlink. Feldstein, pretending to be the President of LED Capital Corp., entered into an investment agreement with Interlink. Feldstein, however, had no position at, or affiliation with, LED. In this investment agreement, Feldstein purported to commit LED to pay $6 million for a minority block of Interlink shares that, at the time, had a market value of under $1.2 million.According to the Commission’s complaint, when Interlink sought to inform the market of this remarkable news, Feldstein again offered crucial assistance by reviewing and contributing to a draft Form 8-K disclosing the purported agreement. Interlink filed a version of the Form 8-K that reflected Feldstein’s comments on December 14, 2010.
The Commission previously has brought a civil injunctive action against Interlink and its management alleging, among other things, that the Form 8-K they filed disclosing the purported investment was false and misleading. The name of this previously-filed action is SEC v. Aronson, et al., No. 11 Civ. 7033 (S.D.N.Y.).
In its civil injunctive action against Feldstein, the Commission’s complaint charges Feldstein with aiding and abetting violations by Interlink and its President of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder as well as violations by Interlink of Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-11 thereunder. The Commission seeks injunctions from future violations of these provisions, disgorgement of ill-gotten gains, and a civil monetary penalty.
The SEC acknowledges the assistance of the U.S. Attorney’s Office for the Eastern District of New York and the Securities Fraud Squad of the Federal Bureau of Investigation in connection with this matter.
Wednesday, July 25, 2012
TWO INDIVIDUALS SENTENCED TO PRISON FOR PARTICIPATING IN KICKBACK SCHEME
FROM: U.S. DEPARTMENT OF JUSTICE
A Pennsylvania Company and Two New York Companies Sentenced to Pay a Total of $3 Million in Criminal FinesWASHINGTON — Two individuals and three corporations were sentenced in the U.S. District Court in Manhattan by Judge George B. Daniels to serve time in prison and to pay criminal fines for their participation in an eight-year conspiracy involving kickbacks in excess of $2.3 million to defraud New York Presbyterian Hospital (NYPH), the Department of Justice announced. The individuals and the corporations were convicted after a four-week trial in February 2012.
Michael Yaron, the owner of two of the companies convicted for their roles in the conspiracy—Cambridge Environmental & Construction Corp, doing business as National Environmental Associates (Cambridge/NEA) and Oxford Construction & Development Corp.—was sentenced to serve 60 months in jail, and to pay a $500,000 criminal fine. Cambridge/NEA and Oxford Construction were each sentenced to pay a $1 million criminal fine.
Moshe Buchnik, the president of an asbestos abatement company that also did business at NYPH, was sentenced to serve 48 months in jail, and to pay a $500,000 criminal fine for his role in the conspiracy.
Artech Corp., a company owned by a relative of Santo Saglimbeni, a former vice president of facilities operations at NYPH, was also sentenced to pay a $1 million criminal fine.
Two additional charged co-conspirators, Saglimbeni and Emilio "Tony" Figueroa, a former director of facilities operations at NYPH, who were convicted along with Yaron, Buchnick, Cambridge/NEA, Oxford Construction and Artech, are scheduled to appear in court on July 31, 2012.
"The sentences imposed today are consistent with the seriousness of the crimes for which the individuals and companies were found guilty," said Acting Assistant Attorney General Joseph Wayland in charge of the Department of Justice’s Antitrust Division. "Today’s sentences hold accountable the unlawful conduct of those involved in illegal kickback conspiracies."
The department said the scheme to defraud NYPH centered on Saglimbeni, who with the assistance of Figueroa, awarded asbestos abatement, air monitoring and general construction contracts to Yaron, Buchnik and their companies in return for more than $2.3 million in kickbacks. The kickbacks were funneled by Yaron to Saglimbeni through Artech Corp., a sham company Saglimbeni created in his mother’s name in order to conceal the kickbacks.
Yaron, Buchnik, Saglimbeni, Figueroa, Cambridge/ NEA, Oxford Construction and Artech, were each convicted of conspiracy to defraud NYPH. Additionally, Yaron, his companies, Buchnik, Saglimbeni and Artech were also convicted of a substantive wire fraud violation.
The sentences announced today resulted from a federal antitrust investigation of bid rigging, fraud, bribery and tax-related offenses in the award of construction, maintenance and service contracts to the facilities operations department of NYPH. Including today’s sentencings, 14 individuals and six companies have been convicted of or pleaded guilty to charges arising out of this investigation.
A Pennsylvania Company and Two New York Companies Sentenced to Pay a Total of $3 Million in Criminal FinesWASHINGTON — Two individuals and three corporations were sentenced in the U.S. District Court in Manhattan by Judge George B. Daniels to serve time in prison and to pay criminal fines for their participation in an eight-year conspiracy involving kickbacks in excess of $2.3 million to defraud New York Presbyterian Hospital (NYPH), the Department of Justice announced. The individuals and the corporations were convicted after a four-week trial in February 2012.
Michael Yaron, the owner of two of the companies convicted for their roles in the conspiracy—Cambridge Environmental & Construction Corp, doing business as National Environmental Associates (Cambridge/NEA) and Oxford Construction & Development Corp.—was sentenced to serve 60 months in jail, and to pay a $500,000 criminal fine. Cambridge/NEA and Oxford Construction were each sentenced to pay a $1 million criminal fine.
Moshe Buchnik, the president of an asbestos abatement company that also did business at NYPH, was sentenced to serve 48 months in jail, and to pay a $500,000 criminal fine for his role in the conspiracy.
Artech Corp., a company owned by a relative of Santo Saglimbeni, a former vice president of facilities operations at NYPH, was also sentenced to pay a $1 million criminal fine.
Two additional charged co-conspirators, Saglimbeni and Emilio "Tony" Figueroa, a former director of facilities operations at NYPH, who were convicted along with Yaron, Buchnick, Cambridge/NEA, Oxford Construction and Artech, are scheduled to appear in court on July 31, 2012.
"The sentences imposed today are consistent with the seriousness of the crimes for which the individuals and companies were found guilty," said Acting Assistant Attorney General Joseph Wayland in charge of the Department of Justice’s Antitrust Division. "Today’s sentences hold accountable the unlawful conduct of those involved in illegal kickback conspiracies."
The department said the scheme to defraud NYPH centered on Saglimbeni, who with the assistance of Figueroa, awarded asbestos abatement, air monitoring and general construction contracts to Yaron, Buchnik and their companies in return for more than $2.3 million in kickbacks. The kickbacks were funneled by Yaron to Saglimbeni through Artech Corp., a sham company Saglimbeni created in his mother’s name in order to conceal the kickbacks.
Yaron, Buchnik, Saglimbeni, Figueroa, Cambridge/ NEA, Oxford Construction and Artech, were each convicted of conspiracy to defraud NYPH. Additionally, Yaron, his companies, Buchnik, Saglimbeni and Artech were also convicted of a substantive wire fraud violation.
The sentences announced today resulted from a federal antitrust investigation of bid rigging, fraud, bribery and tax-related offenses in the award of construction, maintenance and service contracts to the facilities operations department of NYPH. Including today’s sentencings, 14 individuals and six companies have been convicted of or pleaded guilty to charges arising out of this investigation.
Tuesday, July 24, 2012
FLORIDA RESIDENT PLEADS GUILTY TO TRANSPROTING CHILD PORN
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, July 20, 2012
Florida Man Pleads Guilty to Transportation of Child Pornography
WASHINGTON – Anthony Mangione, 51, of Parkland, Fla., pleaded guilty today to one count of transportation of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, Acting Special Agent in Charge Jeffrey C. Mazanec of the FBI’s Miami Field Office and Sheriff Al Lamberti of the Broward County, Fla., Sheriff’s Office.
Mangione pleaded guilty today before U.S. Magistrate Judge James M. Hopkins in U.S. District Court in West Palm Beach, Fla. He was taken into custody pending sentencing.
According to court documents, between March 2010 and September 2010, Mangione transported visual depictions of minors engaging in sexually explicit conduct.
Mangione faces a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison. Mangione also faces a term of supervised release of five years to life following his prison sentence, and will be required to register as a sex offender in any jurisdiction in which he lives, works or attends school. Sentencing has been scheduled for Oct. 5, 2012.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as to identify and rescue victims.
Friday, July 20, 2012
Florida Man Pleads Guilty to Transportation of Child Pornography
WASHINGTON – Anthony Mangione, 51, of Parkland, Fla., pleaded guilty today to one count of transportation of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, Acting Special Agent in Charge Jeffrey C. Mazanec of the FBI’s Miami Field Office and Sheriff Al Lamberti of the Broward County, Fla., Sheriff’s Office.
Mangione pleaded guilty today before U.S. Magistrate Judge James M. Hopkins in U.S. District Court in West Palm Beach, Fla. He was taken into custody pending sentencing.
According to court documents, between March 2010 and September 2010, Mangione transported visual depictions of minors engaging in sexually explicit conduct.
Mangione faces a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison. Mangione also faces a term of supervised release of five years to life following his prison sentence, and will be required to register as a sex offender in any jurisdiction in which he lives, works or attends school. Sentencing has been scheduled for Oct. 5, 2012.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as to identify and rescue victims.
Monday, July 23, 2012
INMATE SENTENCED FOR CONSPIRING WITH JAIL GUARD TO BEAT FELLOW INMATE
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, July 19, 2012
Oklahoma Inmate Sentenced for Conspiring with Jailer to Assault Another Inmate Phillip Oliver, 46, an inmate at the Muskogee County Jail (MCJ) was sentenced today in U.S. District Court in Muskogee, Okla., to one year and a day followed by one year of supervised release for one count of conspiracy related to the orchestrated beating of a fellow inmate at the behest of a jailer on duty.
"Excessive force by individuals sworn to uphold the law will not be tolerated," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department will continue to investigate and prosecute criminal civil rights violations whether committed directly by the hands of law enforcement or by inmates at the behest of law enforcement."
Oliver pleaded guilty earlier this year and in so doing admitted that on Oct. 6, 2011, he conspired with a jailer on duty to violate the civil rights of the victim, a fellow inmate, by assaulting him. Specifically, Oliver and the jailer agreed to use physical violence to punish the victim because the victim, who was restrained in a separate cell, was making verbal comments. According to court documents, although Oliver was concerned about getting into trouble if he assaulted the victim, the jailer assured Oliver that he would cover for Oliver. Thereafter, the jailer remotely popped open the victim’s locked cell door so that Oliver could gain access. Oliver then punched the victim in the face, all at a time when the victim was not posing a threat to anyone.
This case was investigated by the Muskogee Resident Agency of the Oklahoma City Division of the FBI and was prosecuted by Trial Attorney Fara Gold of the Civil Rights Division of the U.S. Department of Justice and Assistant U.S. Attorney Ryan M. Roberts for the Eastern District of Oklahoma.
Thursday, July 19, 2012
Oklahoma Inmate Sentenced for Conspiring with Jailer to Assault Another Inmate Phillip Oliver, 46, an inmate at the Muskogee County Jail (MCJ) was sentenced today in U.S. District Court in Muskogee, Okla., to one year and a day followed by one year of supervised release for one count of conspiracy related to the orchestrated beating of a fellow inmate at the behest of a jailer on duty.
"Excessive force by individuals sworn to uphold the law will not be tolerated," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department will continue to investigate and prosecute criminal civil rights violations whether committed directly by the hands of law enforcement or by inmates at the behest of law enforcement."
Oliver pleaded guilty earlier this year and in so doing admitted that on Oct. 6, 2011, he conspired with a jailer on duty to violate the civil rights of the victim, a fellow inmate, by assaulting him. Specifically, Oliver and the jailer agreed to use physical violence to punish the victim because the victim, who was restrained in a separate cell, was making verbal comments. According to court documents, although Oliver was concerned about getting into trouble if he assaulted the victim, the jailer assured Oliver that he would cover for Oliver. Thereafter, the jailer remotely popped open the victim’s locked cell door so that Oliver could gain access. Oliver then punched the victim in the face, all at a time when the victim was not posing a threat to anyone.
This case was investigated by the Muskogee Resident Agency of the Oklahoma City Division of the FBI and was prosecuted by Trial Attorney Fara Gold of the Civil Rights Division of the U.S. Department of Justice and Assistant U.S. Attorney Ryan M. Roberts for the Eastern District of Oklahoma.
Sunday, July 22, 2012
NURSING HOME COMPANY EMPLOYEE SENTENCED FOR KICKBACKS AND TAX EVASION
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, July 19, 2012
Former Employee of Nursing Home Company Operating in North Carolina and Virginia Sentenced to Serve 63 Months in Prison for Kickback Schemes and Tax Evasion
WASHINGTON – The former director of corporate maintenance and renovations at Medical Facilities of America Inc. (MFA) was today sentenced to serve 63 months in prison for accepting kickbacks from contractors and evading federal income taxes, the Department of Justice announced. MFA operates health care and nursing home facilities throughout Virginia and North Carolina.
John D. Henderson, of Colonial Heights, Va., was sentenced in U.S. District Court in Roanoke, Va., by Judge Samuel G. Wilson. In addition to his prison sentence, Henderson was ordered to pay a total of $698,088 in restitution and additional taxes, penalties and interest to the Internal Revenue Service for his participation in two separate conspiracies. The conspiracies involved steering contracts for the repair, maintenance and renovation at MFA health care and nursing home facilities. One of the conspiracies took place from about June 1998 until at least December 2006, and the other conspiracy took place from about July 2005 until at least December 2006. Henderson pleaded guilty on March 14, 2012, to two counts of conspiracy to commit mail and honest services fraud for the kickback schemes and to two counts for failing to include the kickbacks and other income he received on his federal income tax returns for years 2005 and 2006.
According to the four-count felony charge, Henderson oversaw the bidding process for repair, maintenance and renovation contracts at MFA facilities. To facilitate the conspiracies, Henderson steered contracts to several venders in return for kickbacks; created fictitious competitor bids that were higher than the quotes submitted by the venders who paid him, in order to create the appearance of competition; and directed subordinates to solicit quotes only from vendors who paid him. Henderson received more than $560,000 in kickbacks and had at least $101,000 more paid to a co-conspirator, and in return steered MFA contracts totaling more than $5 million.
“Through this kickback scheme, Henderson and his co-conspirators deprived MFA of competitive pricing to its financial detriment,” said Acting Assistant Attorney General Joseph Wayland in charge of the Antitrust Division. “Today’s sentencing demonstrates the division’s commitment to holding executives accountable for disrupting the competitive bidding process for service contracts.”
Henderson is the fifth individual to plead guilty in the department's fraud investigation into the award of repair, maintenance and renovation contracts at facilities owned by MFA. On Oct. 18, 2011, both Donald R. Holland and Larry R. Sumpter pleaded guilty in U.S. District Court in Roanoke to participating in the scheme. On Jan. 31, 2012, Holland and Sumpter were each sentenced by Judge Samuel G. Wilson to serve two years of probation and were fined $50,000 and $15,000, respectively. On April 4, 2011, Edward T. Fodrey pleaded guilty in U.S. District Court in Norfolk, Va., and was sentenced by Judge Mark S. Davis on Jan. 31, 2012, to serve 37 months in prison and was ordered to pay $326,799 in restitution. Gary L. Johns pleaded guilty on Dec. 12, 2011, in U.S. District Court in Roanoke and was sentenced by Judge Wilson on March 14, 2012 to serve three years of probation and to pay $169,341 in restitution.
Wednesday, July 11, 2012
VIRGINIA RESIDENT INDICTED FOR TAX CRIMES
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, July 10, 2012
Virginia Man Charged with Tax Crimes
A Newport News, Va., federal grand jury has indicted Jeffrey Charles for conspiring with his daughter and son-in-law to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today. Charles is charged with one count of conspiracy, three counts of aiding and assisting in the preparation of false tax returns and one count of filing a false tax return. The court has not yet set a trial date.
According to the indictment, Charles conspired with his daughter and son-in-law to impair and impede the IRS in ascertaining, computing, assessing and collecting federal income taxes. The indictment also alleges that Charles aided and assisted in the preparation of three false tax returns in his daughter’s name for tax years 2000, 2001 and 2005, and attached false documents to each tax return. As alleged in the indictment, Charles also filed a false tax return in his own name for tax year 2006 in which he allegedly falsely reported earning $0.00 income.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Charles faces a maximum of 17 years in federal prison and a maximum fine of $1.25 million.
The case is being investigated by IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Brian Samuels of the Eastern District of Virginia and Trial Attorney Justin K. Gelfand of the Justice Department’s Tax Division.
Tuesday, July 10, 2012
FIVE CHARGED IN CONNECTION WITH MURDER OF BORDER PATROL AGENT
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, July 9, 2012
Five Individuals Charged in Connection with Death of a Customs and Border Protection Border Patrol Agent, $1 Million FBI Reward Announced Individuals Charged Are Allegedly Responsible for Death of Agent Brian Terry
An indictment charging five individuals involved in the death of U.S. Border Patrol Agent Brian Terry was unsealed today in Tucson, and a reward of up to $1 million from the FBI for information leading to the arrest of four fugitives, was announced by Department of Justice officials.
According to the indictment, Manuel Osorio-Arellanes, Jesus Rosario Favela-Astorga, Ivan Soto-Barraza, Heraclio Osorio-Arellanes and Lionel Portillo-Meza are charged with crimes including first degree murder, second degree murder, conspiracy to interfere with commerce by robbery, attempted interference with commerce by robbery, use and carrying a firearm during a crime of violence, assault on a federal officer and possession of a firearm by a prohibited person. A sixth defendant, Rito Osorio-Arellanes, is charged only with conspiracy to interfere with commerce by robbery.
The 11-count third superseding indictment, which was handed up by a federal grand jury in the District of Arizona on Nov. 7, 2011, alleges that on Dec. 14, 2010, five of the defendants (Manuel Osorio-Arellanes, Jesus Rosario Favela-Astorga, Ivan Soto-Barraza, Heraclio Osorio-Arellanes and Lionel Portillo-Meza) engaged in a firefight with Border Patrol agents. During the exchange of gunfire, Agent Terry was shot and killed. The indictment alleges that the defendants had illegally entered the United States from Mexico for the purpose of robbing drug traffickers of their contraband. In addition to the murder of Agent Terry, the indictment also alleges that the five defendants assaulted Border Patrol Agents William Castano, Gabriel Fragoza and Timothy Keller, who were with Agent Terry during the firefight.
“Agent Terry served his country honorably and made the ultimate sacrifice in trying to protect it from harm, and we will stop at nothing to bring those responsible for his murder to justice,” said Attorney General Eric Holder. “This investigation has previously resulted in one defendant being charged with Agent Terry’s murder and taken into custody, and today’s announcement reflects the department’s unrelenting commitment to finding and arresting the other individuals responsible for this horrific tragedy so that Agent Terry’s family, friends and fellow law enforcement agents receive the justice they deserve.”
U.S. Attorney for the Southern District of California Laura E. Duffy said, “ Agent Terry died in the line of duty while protecting his country. But he was more than a federal agent – he was a son, a brother, a co-worker and a friend to many. The indictment unsealed today reflects the progress our dedicated law enforcement team has made piecing together this complex murder case. But there is more work to be done and we will not rest until we bring justice to the family of Brian Terry.”
“U.S. Border Patrol Agent Brian Terry made the ultimate sacrifice in December of 2010, while protecting our border,” stated James L. Turgal Jr., FBI Special Agent in Charge, Phoenix Division. “Today’s announcement is an important step forward in the pursuit of justice for Border Patrol Agent Terry and his family. It is our hope that the publicity surrounding this case will lead to information concerning the whereabouts of the remaining four fugitives. The FBI and our law enforcement partners will continue to pursue those individuals responsible for the murder of Border Patrol Agent Brian Terry.”
Manuel Osorio-Arellanes has been in custody since his arrest the night of the shooting. Rito Osorio-Arellanes has been in custody since Dec. 12, 2010, when he was arrested by Border Patrol agents on immigration charges. The indictment is being unsealed today in order to seek the public’s assistance in locating the fugitive defendants.
This case is being prosecuted in federal court in Tucson by attorneys from the Southern District of California, Special Attorneys Todd W. Robinson, David D. Leshner, and Fred A. Sheppard. The U.S. Attorney’s Office for the District of Arizona is recused. This case is being investigated by the FBI.
An indictment is a formal charging document and defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.
Anyone with information concerning the whereabouts of the fugitives should contact the FBI's Phoenix field office at (623) 466-1999. You may also contact your local FBI office or the nearest American Embassy or Consulate.
Monday, July 9, 2012
ATTORNEY GENERAL HOLDER SPEAKS TO LA RAZA
FROM: U.S. DEPARTMENT OF JUSTICE
Attorney General Eric Holder Speaks at the National Council of La Raza Annual Conference Las Vegas ~ Saturday, July 7, 2012
Thank you, Daniel, for those kind words – and for your extraordinary service that you provided as Chair of the Board of Directors. I’d also like to thank President MurguÃa for her friendship, her outstanding leadership – and her unwavering commitment – to strengthening the legacy, and the record of achievement, that has been the hallmark of the National Council of La Raza for decades.
It is a pleasure to join you in celebrating, and working to extend, this tradition. And it is an honor to be included in the litany of policymakers, elected and appointed officials, and leaders from all across the nation – and the political spectrum – who have attended this conference to speak with and learn from the largest national Latino civil rights and advocacy organization in the country. I also have to admit that it’s particularly nice to be outside of Washington today – and to be among so many friends. And I want you to know that, in addition to your friendship, I am grateful for your partnership – and for the outstanding work that you are doing, in communities nationwide, to advance our nation’s long and ongoing struggle to ensure equality, opportunity, and justice for all.
In a very real sense, you are now on the front lines of this fight – the same fight that, more than four decades ago, inspired Herman Gallegos, Dr. Julian Samora, and Dr. Ernesto Galarza to create the Southwest Council of La Raza. They were united by shared concerns and frustrations, but also by a common vision and a collective optimism. As I look around this room today, it’s clear that their passion for righting wrongs; their dedication to assisting and empowering the Latino community; and their determination to build a more fair, more free, and more just society – remain as vibrant as ever before. And it’s obvious that these qualities continue to guide this organization’s efforts not only to safeguard the progress that has always defined America’s history – but to build upon it.
Through programs like the Lideres Initiative – and campaigns like Home for Good, We Can Stop the Hate, and Mobilize to Vote – NCLR has established itself as an influential voice in protecting the civil rights of everyone in this nation; encouraging community engagement; inspiring future generations of leaders and activists; and ensuring equality in our law enforcement activities, immigration policies, housing and financial markets, school systems, workplaces, and voting booths.
Time and again, you have proven your ability to give voice to the challenges facing the most vulnerable among us, and to shine a light on the promises our nation must fulfill. And, especially this week, as we celebrate the birth of our nation – and the rich diversity that has always driven America’s strength and success – this conference presents an important opportunity: to renew our commitment to the founding principles – and enduring ideals – of fairness, inclusion, and opportunity; and to reclaim, for ourselves and our children, the singular, animating force that – more than half a century ago – a young United States Senator named John F. Kennedy called the great “secret of America”: that this country is comprised of people “with the fresh memory of old traditions who dared to explore new frontiers – people eager to build lives for themselves in a spacious society that did not restrict their freedom of choice and action.”
Of course, each one of us has benefited from this remarkable – and uniquely American – spirit. Like many of you, I was raised in a family – and community – of immigrants. And like all of you, I have enjoyed the blessings of freedom, and the opportunities that – for more than two centuries – have been available to those who dared to set out for, and seek a better life upon, America’s shores. But I also understand that – despite the truth and transformative power of the American Dream; and despite all the progress we’ve made over the last 236 years – our nation’s struggle to overcome injustice and eliminate disparities remains far from over.
Many of you know this firsthand – and have felt the impact of division, and even discrimination, in your own lives. And I’m encouraged that all of you have chosen to respond by leading the way forward; by speaking out about the fact that we have further to travel on the road to equality; and by working to make certain that the hard-won progress of the Civil Rights era is protected. Today, unfortunately, some of these gains have come under renewed threat. And there can be no doubt that our nation now faces a moment of great consequence. But this also is a time of remarkable opportunity. And as you continue to lead national efforts to confront the obstacles that lie ahead and to uphold the values that have always defined who we are as Americans – I want to assure you that, in the fight to protect the civil rights of all – this organization will never have a more committed partner than the United States Department of Justice.
For my colleagues – and for me – our civil rights enforcement efforts are, and will remain, a top priority. And under the leadership of my good friend, and your good friend, Assistant Attorney General Tom Perez – I’m proud to report that the Department’s civil rights enforcement efforts have never been stronger or more effective.
Over the past three years, our Civil Rights Division has filed more criminal civil rights cases than during any other period in its history – including record numbers of human trafficking, hate crimes, and police misconduct cases. Through our reinvigorated partnerships with state, local, and international authorities – particularly Mexican leaders – and thanks to a number of anti-trafficking training programs that the Department has helped to create, and to expand – we’ve seen a rise of more than 30 percent in the number of forced labor and adult sex trafficking prosecutions.
These actions have sent an unmistakable message to those who would deprive others of their dignity, their freedom, and their essential civil rights – that we will find you, stop you, and bring you to justice. They underscore our determination to secure severe penalties against those who violate our civil rights laws. And they prove our commitment to protecting and empowering each and every victim we can reach.
Nowhere is this commitment more clear than in our work to combat hate crimes. Since 2009, the Justice Department has prosecuted 35 percent more hate crime cases than during the preceding three-year period. Today, we’re vigorously enforcing the landmark Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act – which President Obama signed into law in 2009, after NCLR, and so many other civil rights organizations, worked tirelessly to advance this critical legislation. As the Department’s record clearly shows, we will not hesitate to use it – and every other available tool – to hold offenders accountable, and to protect your rights.
In fact, one of the first cases the Department brought under this law involved five Latino victims who were pursued along a highway – and brutally attacked – simply because of their ethnicity. In this and other instances, the Shepard-Byrd Act helped us to achieve convictions – and stiff penalties – befitting the horrific nature of these crimes. You saw further proof of this last year, when the Justice Department secured a conviction – and a prison sentence totaling more than four years – against an individual who sent a series of racist, threatening messages to the National Council of La Raza and four other Latino civil rights organizations. But our dedication to ensuring fair and equal treatment – and our resolve to move aggressively in enforcing civil rights protections and ending discrimination – also extends far beyond our efforts to seek justice against those who commit, or threaten to commit, violent crimes.
In recent years, it has also driven the implementation of a series of new initiatives and enforcement actions that the Department has taken in order to eliminate predatory and discriminatory practices in America’s housing and lending markets – while establishing important protections for communities of color, military service members, veterans, and others who have been targeted. In 2011 alone, the Civil Rights Division – through its new Fair Lending Unit – settled or filed a record number of cases to hold financial institutions accountable for discriminatory practices directed at African Americans and Latinos. Among these was the largest residential fair lending settlement in history, totaling more than $335 million and involving more than 200,000 victims of discrimination – roughly two thirds of whom were Latinos.
Fighting against such practices – and working to eliminate bias and combat intimidation – constitutes a key area of focus for those who are engaged in civil rights work across every sector of our society. This focus is particularly important when it comes to ensuring the integrity and professionalism of every member of our nation’s law enforcement community.
As many of you know, nearly two months ago – after a lengthy investigation into the Maricopa County Sheriff’s Office, in Arizona – and following numerous attempts to work with the Sheriff there and his colleagues to address the concerns that our investigation raised – the Department was forced to take an unusual, and extremely rare, action. The Civil Rights Division had no choice but to file suit against Sheriff Arpaio, the Sheriff’s Office, and the County for discriminatory police and incarceration practices that violate the constitutional rights of Latinos in Maricopa County. These policies simply have no place in responsible and effective law enforcement. And they must not – and simply will not – be tolerated.
In another recent case that NCLR members – and millions of others across the country – have followed with great interest, the Justice Department also challenged the constitutionality of an Arizona law that would have effectively criminalized unlawful status. And, of course, last Monday, the U.S. Supreme Court struck down major provisions of this law – confirming the federal government’s exclusive authority to regulate with regard to immigration issues.
The Court’s action marked an important step forward – which will help to ensure that our nation speaks with one voice on the critical, and complex, issue of immigration. Yet I remain seriously concerned – as many of you do – about the potential impact of other sections of the law, including the requirement for law enforcement officials to verify the immigration status of anyone who is lawfully stopped or detained when there is any reason to suspect that the person is here unlawfully.
Let me assure you: the Justice Department will monitor the impact of this and other measures to make certain that they do not conflict with federal civil rights or immigration laws. We’ll work to ensure – as the Court affirmed – that such laws cannot be seen as a license to engage in racial profiling. And we’ll continue to enforce federal prohibitions against racial and ethnic discrimination, in order – as President Obama has promised – to “uphold our tradition as a nation of laws and a nation of immigrants.”
In line with this promise, just last month, the Department of Homeland Security announced a new policy that will help to focus limited law enforcement resources, protect public safety, and make our immigration enforcement efforts not only more efficient and cost-effective – but also more just. Soon, certain young people – who may have been brought to this country illegally by their parents, but who pose no risk to national security or public safety – may receive temporary relief from removal and the chance to apply for work authorization.
There’s no question that this action represents a significant – and long-overdue – improvement to our nation’s immigration policy. And we all can be encouraged that President Obama and other members of his Administration, including me, will keep working with Congressional leaders – from both parties – to advance the passage of critical legislation like the DREAM Act, and comprehensive immigration reform, in order to bring about fair and lasting updates to our immigration system so that it meets our 21st century economic and national security needs while continuing to honor our rich traditions and diversity.
In this work – as in the Justice Department’s civil rights enforcement efforts – my colleagues and I will continue to be guided by the legacy that organizations like NCLR have helped to shape. We’ll draw inspiration from – and remain dedicated to – the sacred values that have always set this country apart, and made America an example of strength – and a beacon of hope – for all the world. And we’ll do everything in our power to stand vigilant against any and all measures that threaten to undermine the effectiveness and integrity of our elections systems – and to infringe on the single most important right of American citizenship: the right to vote.
As part of this commitment, over the last 18 months – in response to a number of proposed changes that could make it more difficult for many eligible voters to cast their ballots – the Justice Department has initiated careful, thorough, and independent reviews of redistricting plans, photo identification requirements, and changes affecting third party registration organizations. In each of the jurisdictions where proposed changes can be shown to have no discriminatory purpose or effect, we’ll follow the law and approve the change. Where jurisdictions cannot meet this threshold, we will object – under the Voting Rights Act of 1965 and other laws – in order to guarantee that all eligible citizens have unrestricted access to the ballot box.
We also will move aggressively to protect the voting rights of citizens with disabilities, Americans living and serving abroad – particularly service members and their families – and the 19 million voting-age citizens who are covered by protections for language minorities. Over the last year and a half, I’m proud to report that we’ve resolved eight different cases to protect the rights of Spanish-speaking, Chinese-speaking, and Native American voters in communities all around the country. Today, we’re taking additional steps to review nationwide compliance.
And as my colleagues and I keep working to build on this progress – and strive to take all of our efforts to a new level – know that we’ll continue to rely on organizations like this one to help lead the way forward. And know also that we’re depending on you to help us ensure that – in our workplaces and military bases; in our housing and lending markets; in our schools and places of worship; at the ballot box and in our immigrant communities – the rights of everyone in this country are protected.
As the advocates and activists in this room know all too well, this never has been, and never will be, easy work. And although we can be proud of the great strides our nation has made in the decades since NCLR was founded – and since the day John F. Kennedy laid out his vision for an inclusive, “spacious society” – the harsh reality is that much remains to be done, and the road ahead remains far from certain.
So as we gather this afternoon – to look toward the brighter future we seek, and that, together, we must build – I urge you to keep rallying new partners to this work. Seek new ways to expand – and extend – the promise that has always given shape to our highest aspirations. Demand that policymakers move beyond partisan gridlock and political gamesmanship. And call upon leaders in Washington – and in communities across the country – to reach for practical solutions to the difficult problems facing the American people.
As a result of your committed leadership, we’ve already come a long way. Pero solamente juntos podemos lograr un future mejor. But only together can we achieve a better future. Thanks to your continued engagement, as I look around this crowd, I can’t help but feel optimistic about where our joint efforts can – and will – lead us from here.
Once again, thank you for all that you do – and keep up the great work. Si se puede.
Saturday, July 7, 2012
CEO OF AXIUS INC. INDICTED FOR TRYING TO BRIBE STOCK BROKERS AND MANIPULATE STOCK PRICES
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, July 5, 2012
CEO of Axius Inc. and Finance Professional Indicted for Alleged Roles in Scheme to Bribe Stock Brokers and Manipulate Stock Prices
WASHINGTON – The chief executive officer (CEO) of Axius Inc., a Nevada corporation, and a finance professional were indicted today on multiple charges for their alleged roles in a scheme to bribe stock brokers and manipulate the share price of Axius stock, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Loretta E. Lynch for the Eastern District of New York.
Roland Kaufmann, a Swiss citizen and the CEO of Axius, and Jean-Pierre Neuhaus, a Swiss citizen and finance professional, were each charged in an indictment filed today in the Eastern District of New York with one count of conspiracy to commit securities fraud and to violate the Travel Act, one count of securities fraud, one count of wire fraud, one count of violating the Travel Act, one count of conspiracy to commit money laundering and one count of money laundering. According to court documents, Axius is incorporated in Nevada and its principal offices are in Dubai, United Arab Emirates. Axius is a “holding company and business incubator” that develops other businesses.
“As CEO of Axius, Mr. Kaufmann allegedly conspired with Mr. Neuhaus to fraudulently manipulate the value of his company’s stock,” said Assistant Attorney General Breuer. “According to today’s indictment, he attempted to bribe stock brokers into artificially propping up the value of Axius stock. With our partners in the U.S. Attorneys’ Offices, the Criminal Division’s Fraud Section is pursuing a nationwide effort to investigate and prosecute fraudulent conduct in our securities markets.”
“Rather than rely on the market to set the true value of Axius’ stock, the defendants allegedly sought to buy the best price possible through bribery and deception,” said U.S. Attorney Lynch. “Their scheme stood to enrich themselves at the expense of the investing public. We will vigorously investigate and prosecute any such corruption in the securities markets.”
“Conspiring to inflate the price of Axius shares artificially was likely to result in unjust enrichment for the defendants and undeserved losses for investors,” said Assistant Director-in-Charge Janice K. Fedarcyk of the FBI in New York. “Market-driven fluctuations in share prices are risks investors have to accept. Illegal manipulations become the subject of FBI investigations.”
The indictment alleges that Kaufmann, 60, agreed with Neuhaus, 55, to defraud investors in Axius common stock by bribing stock brokers and manipulating the share price. As part of the scheme, they enlisted the assistance of an individual they believed to have access to a group of corrupt stock brokers; this individual was in fact an undercover law enforcement agent. Kaufmann and Neuhaus believed that the undercover agent controlled a network of stockbrokers in the United States with discretionary authority to trade stocks on behalf of their clients.
The indictment alleges that Kaufmann and Neuhaus instructed the undercover agent to direct brokers to purchase Axius shares that were owned or controlled by Kaufmann in return for a secret kickback of approximately 26 to 28 percent of the share price. Kaufmann and Neuhaus allegedly instructed the undercover agent as to the price the brokers should pay for the stock, and Kaufmann specifically instructed the undercover agent that the brokers would have to pay gradually higher prices for the shares they were buying. The indictment alleges that Kaufmann and Neuhaus directed the undercover agent that the brokers were to refrain from selling the Axius shares they purchased on behalf of their clients for a one-year period. By preventing sales of Axius stock, Kaufmann and Neuhaus allegedly intended to maintain the fraudulently inflated share price for Axius stock.
Kaufmann and Neuhaus were originally charged in a criminal complaint filed in the Eastern District of New York on March 8, 2012. They were arrested on March 8, 2012. No investors were actually defrauded in the undercover operation.
In a related action, the Securities and Exchange Commission (SEC) today filed a civil enforcement action against Kaufmann and Neuhaus in the Eastern District of New York. The department thanks the SEC for its cooperation in this matter.
This case is being prosecuted by Trial Attorney Justin Goodyear of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York. The case was investigated by the FBI and the Internal Revenue Service.
Friday, July 6, 2012
DEFENDANT PLEADS GUILTY IN STOLEN IDENTITY TAX FRAUD CASE
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, July 5, 2012
Alabama Woman Pleads Guilty in Stolen Identity Tax Refund Fraud Case
Jacqueline Slaton pleaded guilty today in the Middle District of Alabama to one count of filing a false tax return and one count of aggravated identity theft, the Department of Justice and the Internal Revenue Service (IRS) announced. Slaton was indicted in April 2012.
According to her plea agreement, between December 2011 and March 2012, Slaton filed at least 102 fraudulent federal and state income tax returns using stolen identities, claiming a total of $154,904 in fraudulent income tax refunds. Slaton had the tax refunds directed to prepaid debit cards and had the cards mailed to various addresses on a U.S. carrier’s route. A postal employee agreed to collect the prepaid debit cards for a fee.
Sentencing has not yet been scheduled. Slaton faces a mandatory minimum of two years in prison, and a maximum potential sentence of seven years in prison, up to three years of supervised release, mandatory restitution and a fine of up to $500,000 or twice the loss caused by her offenses.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Michael Boteler and Assistant United States Attorney Jared Morris, who prosecuted the case.
Thursday, July 5, 2012
MAN CONVICTED FOR POSSESSION AND DISTRIBUTION OF CHILD PORNOGRAPHY
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, July 2, 2012
Florida Man Convicted in Child Pornography Case
WASHINGTON – James E. Price III, 42, of Plantation, Fla., was convicted on June 29, 2012, by a federal jury on one count each of distribution and possession of child pornography, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, announced today.
According to court documents and three days of testimony during the trial, the case originated from a South Florida Internet Crimes Against Children Task Force (ICAC) investigation into an individual suspected of possessing and trading child pornography using a peer to peer file sharing network. The individual was later identified as Price. A search warrant was executed on Price’s residence, where agents discovered a hard drive hidden behind boxes in the home. Subsequent examination revealed that the hard drive was protected by encryption and contained hundreds of images and videos of child pornography.
Price faces a maximum term of 10 years in prison for the possession of child pornography charge and 15 years in prison for the distribution charge, a maximum fine of $250,000 on each count, and the possibility of lifetime supervised release. Price is scheduled to be sentenced on Oct. 10, 2012, at 10:00 a.m before U.S. District Judge Kathleen M. Williams.
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 (CEOS), 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. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being prosecuted by Assistant U.S. Attorneys Marc Anton and Mark Dispoto of the Southern District of Florida and by Trial Attorney Thomas Franzinger of CEOS in the Justice Department’s Criminal Division. The case was investigated by the South Florida ICAC, including the Martin County, Fla., Sherriff’s Office; the Broward County, Fla., Sherriff’s Office; and the Fort Lauderdale Police Department, with assistance from the CEOS High Technology Investigative Unit.
Wednesday, July 4, 2012
WOMAN PLEADS GUILTY TO HAVING MADE FALSE AND INFLATED TAX DEDUCTIONS
FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, July 3, 2012
Alabama Woman Pleads Guilty to Tax Fraud
Wanda Davis pleaded guilty in the Middle District of Alabama today to one count of filing a false tax return, the Justice Department and the Internal Revenue Service (IRS) announced.
According to court documents, from 2007 to 2011, Davis prepared false tax returns for clients while working at Davis Fast Tax and Davis Tax Service in Montgomery, Ala. Davis included false and inflated deductions as well as fictitious businesses on her clients’ tax returns resulting in inflated refunds to which the client was not entitled. By her actions, Davis sought over $200,000 in false tax refunds.
Sentencing has not yet been scheduled. Davis faces a maximum potential sentence of three years in prison, up to three years of supervised release, mandatory restitution and a fine of up to $250,000 or twice the loss caused by her offenses.
This case was investigated by special agents of IRS – Criminal Investigation. Trial Attorneys Michael Boteler and Jason Poole of the Justice Department’s Tax Division are prosecuting the case with the assistance of the U.S. Attorney’s Office in the Middle District of Alabama.
Tuesday, July 3, 2012
ALLEGEDLY AMBULANCE PROVIDER BILKED MEDICARE OUT OF $5.4 MILLION
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, June 29, 2012 Pennsylvania Man Charged with Fraud in Ambulance Scheme
A Churchville, Pa., man was arrested today on charges contained in a 23-count indictment for his alleged role in a scheme to defraud Medicare by billing for fraudulent ambulance services, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Zane D. Memeger.
An indictment unsealed today charges William V. Hlushmanuk, aka “Bill Le,” 35, of Churchville, Pa., with 21 counts of health care fraud, one count of conspiring to commit health care fraud and one count of aiding and abetting in a false statement relating to a health care matter.
The indictment alleges that between 2006 and April 2011, Hlushmanuk and others devised a scheme to defraud Medicare of more than $5.4 million dollars. According to the indictment, Hlushmanuk used a straw owner to fraudulently open Starcare Ambulance because he was otherwise ineligible to own the company. Starcare primarily transported dialysis patients and fraudulently billed Medicare for patient transport for patients who could walk and whose transportation by Medicare was not medically required. The scheme involved transports in vans and fraudulent representations to Medicare’s administrative contractor, Highmark Medicare Services, to induce them to pay for these services. The indictment seeks forfeiture of $5,443, 315, as well as a 2006 Hummer.
If convicted of all charges, Hlushmanuk faces a statutory maximum sentence of 10 years in prison on each of the health care fraud and conspiracy counts, five years for aiding and abetting in false statements relating to health care fraud, a three year term of supervised release, and a fine of up to $250,000.
The case was investigated by the FBI and the U.S. Department of Health and Human Services Office of Inspector General. It is being prosecuted by Trial Attorney Sam G. Nazzaro of the Organized Crime and Gang Section in the Justice Department’s Criminal Division.
An indictment contains charges and defendants are innocent until proven guilty beyond a reasonable doubt.
Monday, July 2, 2012
BARIO AZTECA LEADER SENTENCED TO LIFE IN PRISON
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, June 29, 2012
Barrio Azteca Leader Sentenced to Life in Prison and Two Barrio Azteca Soldiers Sentenced to 20 and 30 Years in PrisonTotal of 24 Barrio Azteca Members and Associates Convicted to Date
WASHINGTON – A leader and two soldiers in the Barrio Azteca (BA), a transnational border gang allied with the Juarez Cartel, were sentenced in El Paso, Texas, to life, 30 and 20 years in prison, respectively, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Robert Pitman for the Western District of Texas, FBI Special Agent in Charge Mark Morgan of the FBI’s El Paso Office and Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration (DEA).
Hector Galindo, 38, aka “Silent,” of El Paso, currently serving a 25-year Texas state sentence for murder, was sentenced to life prison. Ricardo Gonzales, 44, aka “Cuate,” of Anthony, N.M., was sentenced to 30 years in prison, and Adam Garcia, 35, aka “Bad Boy,” of El Paso, was sentenced to 20 years in prison. Galindo, Gonzales and Garcia were charged in a 12-count third superseding indictment unsealed in March 2011. They were sentenced yesterday in the Western District of Texas. Galindo, Gonzales and Garcia pleaded guilty to conspiracy to commit racketeering (RICO) on Jan. 26, 2012, Jan. 18, 2012, and Jan. 29, 2012, respectively.
According to court documents and information presented in court, Galindo was a top Lieutenant in the BA. While incarcerated in the Texas Department of Corrections, he served as the right hand man to BA Captain Manuel Cardoza. In that role, Galindo maintained communication with other BA Captains and Lieutenants in the United States and Mexico and was specifically in charge of BA operations in Texas. Evidence was presented that Gonzales and Garcia were BA soldiers, whose duties included distributing drugs, picking up money from dealers and enforcement operations within their area of responsibility.
“As members of the Barrio Azteca gang, Hector Galindo, Ricardo Gonzales and Adam Garcia participated in a brutal criminal enterprise dedicated to spreading fear and violence on both sides of the border,” said Assistant Attorney General Breuer. “These prison sentences send a strong message that even the most powerful and ruthless gangs cannot evade justice. Our prosecution of the Barrio Azteca gang, including for the U.S. Consulate-related murders in Juarez, Mexico, in 2010, has led to convictions against 24 gang members and leaders. We will continue aggressively to pursue the Barrio Azteca and other gangs so that communities in the United States and Mexico can live free from the violence and destruction of organized crime.”
“These sentences represent the FBI’s commitment to the aggressive pursuit of criminal enterprises such as the Barrio Aztecas whose presence pose a significant risk to citizens on both sides of the border,” said FBI Special Agent in Charge Morgan. “Through the ongoing and joint efforts of the law enforcement community we will continue the fight to bring to justice predators such as Galindo, Gonzales and Garcia.”
“This investigation highlights an unfortunate reality: leaders within growing trans-national prison and street gangs like the Barrio Azteca continue to promote violence and manage their drug trafficking activities even after the cell door closes,” said DEA Administrator Leonhart. “However, the successful prosecutions of Galindo, Gonzales and Garcia, and the conviction of other Barrio Azteca members reinforce another reality: that wherever these dangerous organizations operate, DEA and its partners will aggressively follow, investigate and prosecute.”
A total of 35 BA members and associates based in the United States and Mexico were charged in the third superseding indictment for allegedly committing various criminal acts, including racketeering, narcotics distribution and importation, retaliation against persons providing information to U.S. law enforcement, extortion, money laundering, obstruction of justice and murder, including the 2010 Juarez consulate murders. Of the 35 defendants charged, 33 have been apprehended, including April Cardoza, who was found in Juarez, Mexico, last week. Twenty-four of those defendants have pleaded guilty, one defendant committed suicide while imprisoned during his trial and six others are pending extradition from Mexico. U.S. and Mexican law enforcement are actively seeking to apprehend the two remaining fugitives in this case, including Luis Mendez and Eduardo Ravelo, an FBI Top Ten Most Wanted Fugitive.
Today’s sentencing by U.S. District Judge Kathleen Cardone of the Western District Court of Texas marks the closure of the case against the U.S.-based defendants charged in the superseding indictment. Twenty-one of 22 U.S.-based defendants have pleaded guilty and have been sentenced, including another BA Lieutenant Roberto Angel Cardona, who was also sentenced to life by Judge Cardone on Feb. 17, 2012. The remaining U.S.-based defendant, Ramon Renteria, aka “Spooky,” took his own life while in prison during his trial. Witnesses testified that Renteria was a BA Captain, the highest rank of the Barrio Azteca, and the only U.S.-based Captain not currently serving a life sentence in prison.
According to court documents and information presented in court throughout this case, the Barrio Azteca is a violent street and prison gang that began in the late 1980s and expanded into a transnational criminal organization. In the 2000s, the BA formed an alliance in Mexico with “La Linea,” which is part of the Juarez Drug Cartel (also known as the Vincente Carrillo Fuentes Drug Cartel or “VCF”). The purpose of the BA-La Linea alliance was to battle the Chapo Guzman Cartel and its allies for control of the drug trafficking routes through Juarez and Chihuahua. The drug routes through Juarez, known as the Juarez Plaza, are important to drug trafficking organizations because they are a principal illicit drug trafficking conduit into the United States.
According to evidence presented in court, witnesses testified to the brutality of the BA. Inside and outside of prison, the gang thrives on violence – from gang beatings to drive-by shootings to murder – all in order to discipline its own members or fight against rivals. Testimony also indicated that the BA is well-organized and militaristic in structure. Its members, or “soldiers,” are governed by captains, various lieutenants and numerous sergeants in the United States and Mexico.
Witnesses also testified that the sale of illegal drugs is the life-blood of the BA. Evidence was presented that since 2003 the BA has trafficked hundreds of kilograms of cocaine and heroin. Because of the BA’s alliance with the Juarez Drug Cartel, the gang receives illegal drugs at low cost and profits on its importation, sale and distribution within the United States.
Witnesses also testified to the Barrio Azteca’s practice of extorting “quota” or taxes on non-BA drug dealers who sold illegal narcotics in El Paso and the greater West Texas and Eastern New Mexico area. Specifically, during today’s hearing, one witness recalled an instance in which Gonzales tried to collect an extortion fee from a New Mexico drug dealer, and when the dealer refused to pay, Gonzalez pulled a gun, put it to dealer’s head, and threatened to kill him.
When quota is collected by the BA, members and leaders deposit the money into the commissary accounts of incarcerated BA leaders, often using fake names or female associates to send the money by wire transfer. Galindo was one of the ranking members of the BA who would receive laundered funds and disperse it within the Texas State prison system to further the criminal goals of the enterprise.
Witnesses also testified to the extensive communication web of the BA, including utilizing coded letters, contraband cell phones within state and federal prison facilities, and distribution of membership rosters and hit lists. Witnesses specifically implicated Galindo, then incarcerated in the Coffield Unit of the Texas Department of Criminal Justice, as the central leader within the organization who kept track of membership records, hit lists and gang treaties for the BA. To update those lists, members and other leaders would contact Galindo on his contraband prison cell phone to verify the status of persons claiming to be BA members and ensure that they were in good standing with the criminal organization. Those not in good standing were targeted by the BA for assault or murder.
The case is being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, Trial Attorney Brian Skaret of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney George Leal of the Western District of Texas - El Paso Division. The U.S. Attorney’s Office for the District of New Mexico provided significant assistance in this case, including by Assistant U.S. Attorney Sarah Davenport. Valuable assistance was provided by the Criminal Division’s Offices of International Affairs and Enforcement Operations.
The case was investigated by the FBI’s El Paso Field Office, Albuquerque Field Office (Las Cruces Resident Agency), DEA Juarez and DEA El Paso. Special assistance was provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Immigration and Customs Enforcement; the U.S. Marshals Service; U.S. Customs and Border Protection; Federal Bureau of Prisons; U.S. Diplomatic Security Service; the Texas Department of Public Safety; the Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; New Mexico State Police; Dona Ana County, N.M., Sheriff’s Office; Las Cruces, N.M., Police Department; Southern New Mexico Correctional Facility and Otero County Prison Facility New Mexico.
Sunday, July 1, 2012
TWO REAL ESTATE INVESTORS INDICTED FOR ALLEGED BID RIGGING AT REAL ESTATE FORECLOSURE AUCTIONS
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, June 28, 2012
Two Alabama Real Estate Investors and Their Company Indicted for Conspiracies to Rig Bids and Commit Mail Fraud for the Purchase of Real Estate at Public Foreclosure Auctions
WASHINGTON – A federal grand jury in Mobile, Ala., returned an indictment today against two real estate investors and their company, charging them with participating in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions held in southern Alabama, the Department of Justice announced today.
The department said the father and son real estate investors, Robert M. Brannon of Laurel, Miss., and Jason R. Brannon of Mobile, respectively, and their Mobile-based company, J & R Properties LLC, conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. The indictment, returned in the U.S. District Court for the Southern District of Alabama, charges that after a designated bidder bought a property at a public auction, which typically takes place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret, second auction won the property.
The Brannons and J & R Properties were also charged with conspiring to use the U.S. mail to carry out a scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices, to make and receive payoffs to co-conspirators, and to cause financial institutions, homeowners and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties. Jason Brannon, Robert Brannon and J & R Properties are charged with participating in the bid-rigging and mail fraud schemes from as early as October 2004 until at least August 2007.
“Today’s indictment underscores the commitment of the Antitrust Division to prosecute those who illegally profit on the real estate market at the expense of distressed homeowners,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program. “The division will pursue vigorously those who engage in collusive schemes to eliminate competition in the marketplace.”
FBI Acting Special Agent in Charge Patrick Kiernan reaffirmed his commitment to pursuing these complex economic investigations stating, “This investigation has sent a strong message to the community at large, and the real estate community specifically, that abuses within the real estate industry will not be tolerated. Fraud related to home mortgage investments can have financial implications both locally and nationally, and the integrity of the system must be vigilantly maintained.”
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals, and a $100 million fine for companies. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the statutory maximum fine. Each count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine of $250,000 for individuals, and a fine of $500,000 for companies. The fine may be increased to twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.
The investigation into fraud and bid rigging at certain real estate foreclosure auctions in southern Alabama is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Mobile Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. To date, five individuals—Harold H. Buchman, Allen K. French, Bobby Threlkeld Jr., Steven J. Cox and Lawrence B. Stacy—and one company—M & B Builders LLC— have pleaded guilty in the U.S. District Court for the Southern District of Alabama in connection with the investigation. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.
Today’s charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
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