FROM: COMMODITY FUTURES TRADING COMMISSION
March 24, 2014
Federal Court in North Carolina Orders Mitchell Brian Huffman to Pay $2.1 Million Penalty for Defrauding Customers of More than $3.2 Million in Commodity Pool Scheme
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court supplemental Consent Order requiring CFTC Defendant Mitchell Brian Huffman, of Charlotte, North Carolina, to pay a $2.1 million civil monetary penalty for operating a fraudulent commodity pool scheme that defrauded customers of more than $3.2 million in connection with exchange-traded commodity futures contracts (see CFTC Press Release 6183-12, February 17, 2012). In an separate Order as part of Huffman’s criminal sentencing, Huffman was ordered to pay $3.2 million in restitution to defrauded customers (see United States v. Mitchell Bran Huffman, Case Number 3:1-cr-00246 RJC filed in the U.S. District Court for the Western District of North Carolina).
The supplemental Order was entered on March 20, 2014, by Judge Graham Mullen of the U.S. District Court for the Western District of North Carolina and follows a Consent Order of permanent injunction entered on May 10, 2012, by Judge Mullen.
The Consent Order finds that Huffman operated a fraudulent commodity pool scheme that defrauded customers of more than $3.2 million in connection with exchange-traded commodity futures contracts. In agreeing to the entry of the Consent Order, Huffman admitted to the factual and legal allegations contained in the CFTC’s Complaint, and the findings of fact and conclusions of law in the Consent Order. The Consent Order also imposes permanent trading and registration bans against Huffman, prohibits him from violating federal commodities law, as charged, and requires him to pay restitution and a civil monetary penalty as provided for in the supplemental Order.
According to the CFTC’s Complaint, from at least August 2006 to March 11, 2011, Huffman solicited prospective and actual pool participants, mainly family and friends, via in-person and direct telephone solicitations, to allow him to buy and sell exchange-traded commodity futures contracts on their behalf. During the period, Huffman accepted at least $3.2 million from approximately 30 participants throughout the United States. Huffman entered into “sponsorship agreements” with pool participants wherein Huffman represented that he would pool participants’ funds to trade commodity futures contracts on their behalf. Huffman represented to participants that he utilized a “proprietary trading program” that generated “profits” of 100 percent to 150 percent per year. Huffman claimed to retain 20 percent of all profits purportedly made from the “proprietary trading program.”
All of these representations by Huffman were false, according to the Consent Order. Unknown to participants, Huffman misappropriated participants’ funds for a variety of personal uses, including but not limited to (1) purchasing multiple motor vehicles for his personal use, including two Land Rovers and a Smart Car, (2) at least $71,255 for purchases related to Huffman’s classic car collection, (3) approximately $188,583 on personal travel and luxury vacations, including Disney cruises and first-class airfare to Hawaii and Las Vegas, Nevada, and (4) approximately $51,540 in charitable contributions in Huffman’s name. The trip to Hawaii was a 25th wedding anniversary celebration for Huffman, and Huffman brought along several pool participants on the trip to Hawaii, purportedly at his own expense, according to the Consent Order. These participants were completely unaware that their funds were being used by Huffman to pay for the luxury vacation. When Huffman could no longer sustain his fraudulent scheme, he admitted to special agents of the Charlotte, North Carolina office of the Federal Bureau of Investigation the fraudulent scheme described above and his participation therein, the Consent Order finds.
The CFTC appreciates the assistance of the Office of the United States Attorney for the Western District of North Carolina and the Federal Bureau of Investigation, Charlotte Office.
CFTC Division of Enforcement staff members responsible for this case are Timothy J. Mulreany, Michael Amakor, and Paul Hayeck.
Monday, March 31, 2014
Sunday, March 30, 2014
PURPLE HEART AWARDED TO U.S. MARSHAL DEPUTY AND COUNTY SHERIFF'S DEPUTY INJURED IN LINE OF DUTY
| FROM: U.S. MARSHALS SERVICE U.S. Marshals Service Awards Purple Heart to Deputy U.S. Marshal and St. Lucie County Sheriff's Deputy Injured in the Line of Duty |
| Ft. Pierce, FL – A deputy U.S. marshal and a St. Lucie County sheriff’s deputy wounded in the line of duty received U.S. Marshals Service Purple Heart awards from Stacia A. Hylton, director of the U.S. Marshals Service (USMS), at a ceremony here today. Hylton presented Deputy U.S. Marshal Andy Deacon and St. Lucie County Sheriff’s Deputy Paul Pearson, who is also a USMS task force officer (TFO), with the Purple Heart Award, which recognizes law enforcement personnel who are wounded and injured in performance of their duties with the U.S. Marshals Service. The ceremony was held at the federal court house. DUSM Deacon and TFO Pearson teamed up Nov. 20, 2013, with members of the USMS Florida/Caribbean Regional Fugitive Task Force to execute arrest warrants on two fugitives wanted by the Drug Enforcement Administration and the Highlands County Sheriff’s Office on federal narcotics violations. Robin Jean Guillaume, 28, and Alex Guerrier, 29, were charged with possession with intent to distribute five or more kilograms of cocaine. The arrest team consisted of deputy U.S. marshals and TFOs from the Martin and St. Lucie County Sheriff’s Offices. After two pre-arrest briefings for this operation, a 12-member arrest team approached a Sebring, Fla., residence where the fugitives were located. Deputy marshals and TFOs knocked on the door and announced their presence. Deacon, holding a ballistic shield for protection, and Pearson were the first two law enforcement personnel in the stack formation to approach the door of the residence. Within seconds of announcing their presence, Pearson and Deacon were hit by gunshots through the front door. Pearson was shot in the shoulder and quickly moved to cover. Deacon was shot in his right hand, but continued to provide protection for his team with the use of his ballistic shield until law enforcement personnel moved to a point of cover. Pearson and Deacon were moved to a safe distance, and task force members apprehended the fugitives. A Highland County Sheriff’s Office tactical unit cleared the residence to make sure there were no other armed subjects inside. Three firearms were found during the search. Deacon and Pearson were transported to a local hospital for treatment. Deacon has not yet returned to duty; he has undergone four surgeries in the past four months and will need more. Pearson returned to full duty within a few days of his injury; he is back at work with the St. Lucie County Sheriff’s Office and the USMS fugitive task force. The U.S. Marshals Service established the Purple Heart Award in 2010 to honor USMS operational employees and task force officers injured in the line of duty as a direct result of criminal or hostile action. It is similar to the military Purple Heart Award given to members of the armed forces who have been injured or killed by enemy action. |
Saturday, March 29, 2014
MAN SENTENCED FOR USING INSTAGRAM TO THREATEN WITNESS AT MOTHER'S TRIAL
FROM: U.S. JUSTICE DEPARTMENT
Friday, March 21, 2014
Louisiana Man Sentenced to Prison for Threatening Witness in Federal Trial
Anthony Williams Used Instagram to Threaten Witness at His Mother’s Stolen Identity Refund Fraud Trial
Anthony Williams, of Baton Rouge, La., was sentenced to serve 24 months in prison followed by two years of supervised release, the Justice Department, the Internal Revenue Service (IRS) and the Treasury Inspector General for Tax Administration (TIGTA) announced today. Williams previously pleaded guilty to threatening to retaliate against a witness by causing bodily injury.
According to court documents, Williams is the son of Angela Myers, who was tried in federal court in Baton Rouge in March 2013 for filing fraudulent tax returns with stolen identities. One of the witnesses at Myers’ trial was an individual who testified on March 6, 2013, and the next day Williams used Instagram, a popular social media platform, to make a threat against this witness. Williams described the witness as a “rat” and threatened bodily injury against him in retaliation for his testimony. As explained in court documents and court proceedings, federal law enforcement took steps to ensure the safety of the witness and to prevent the threat from being carried out. On March 7, 2013, a jury found Myers guilty on 21 felony counts and she was later sentenced to serve 11 years in prison . Williams was indicted in July 2013 and pleaded guilty to making the threat in October 2013.
“Our legal system depends on witnesses testifying without the fear of retribution,” said Assistant Attorney General Kathryn Keneally for the Tax Division. “This prosecution shows that the Justice Department will take action when someone threatens a witness.”
“Threatening or intimidating a witness in a federal criminal matter is a quick way to find yourself in federal prison,” said U.S. Attorney J. Walter Green for the Middle District of Louisiana. “Our office will continue to have zero tolerance for such conduct and will continue to devote the necessary resources to aggressively pursue those who engage in such conduct. No one should fear speaking the truth about possible federal criminal activity.”
“It is extremely important for witnesses who provide testimony in criminal matters to know that our justice system protects them from retaliation,” said Special Agent in Charge of IRS-Criminal Investigation Gabriel L. Grehan. “It is also appropriate for Anthony Williams to suffer the consequences of his actions to threaten a witness in a criminal proceeding. IRS-CI would like to thank the Department of Justice and our federal law enforcement partners for pursuing this case to its foreseeable end.”
Assistant Attorney General Keneally and U.S. Attorney Green commended the efforts of special agents of IRS - Criminal Investigation and TIGTA, who investigated the case, and of Tax Division Trial Attorney Jason Poole and Assistant U.S. Attorney Alan Stevens, who prosecuted the case.
Friday, March 21, 2014
Louisiana Man Sentenced to Prison for Threatening Witness in Federal Trial
Anthony Williams Used Instagram to Threaten Witness at His Mother’s Stolen Identity Refund Fraud Trial
Anthony Williams, of Baton Rouge, La., was sentenced to serve 24 months in prison followed by two years of supervised release, the Justice Department, the Internal Revenue Service (IRS) and the Treasury Inspector General for Tax Administration (TIGTA) announced today. Williams previously pleaded guilty to threatening to retaliate against a witness by causing bodily injury.
According to court documents, Williams is the son of Angela Myers, who was tried in federal court in Baton Rouge in March 2013 for filing fraudulent tax returns with stolen identities. One of the witnesses at Myers’ trial was an individual who testified on March 6, 2013, and the next day Williams used Instagram, a popular social media platform, to make a threat against this witness. Williams described the witness as a “rat” and threatened bodily injury against him in retaliation for his testimony. As explained in court documents and court proceedings, federal law enforcement took steps to ensure the safety of the witness and to prevent the threat from being carried out. On March 7, 2013, a jury found Myers guilty on 21 felony counts and she was later sentenced to serve 11 years in prison . Williams was indicted in July 2013 and pleaded guilty to making the threat in October 2013.
“Our legal system depends on witnesses testifying without the fear of retribution,” said Assistant Attorney General Kathryn Keneally for the Tax Division. “This prosecution shows that the Justice Department will take action when someone threatens a witness.”
“Threatening or intimidating a witness in a federal criminal matter is a quick way to find yourself in federal prison,” said U.S. Attorney J. Walter Green for the Middle District of Louisiana. “Our office will continue to have zero tolerance for such conduct and will continue to devote the necessary resources to aggressively pursue those who engage in such conduct. No one should fear speaking the truth about possible federal criminal activity.”
“It is extremely important for witnesses who provide testimony in criminal matters to know that our justice system protects them from retaliation,” said Special Agent in Charge of IRS-Criminal Investigation Gabriel L. Grehan. “It is also appropriate for Anthony Williams to suffer the consequences of his actions to threaten a witness in a criminal proceeding. IRS-CI would like to thank the Department of Justice and our federal law enforcement partners for pursuing this case to its foreseeable end.”
Assistant Attorney General Keneally and U.S. Attorney Green commended the efforts of special agents of IRS - Criminal Investigation and TIGTA, who investigated the case, and of Tax Division Trial Attorney Jason Poole and Assistant U.S. Attorney Alan Stevens, who prosecuted the case.
Friday, March 28, 2014
COURT SHUTS DOWN TAX PREPARER ACCUSED OF OVERSTATING REFUNDS THROUGH FICTITIOUS REPORTING
FROM: U.S. JUSTICE DEPARTMENT
Friday, March 21, 2014
Federal Court Shuts Down Florida Tax Return Preparer
Return Preparer in Plantation, Fla., Allegedly Overstated Refunds Through Fictitious or Inflated Income, Filing Statuses, Exemptions and Tax Credits
A federal court in Fort Lauderdale, Fla., permanently barred Keisha Stewart, a tax preparer in Plantation, Fla., from preparing federal tax returns for others, the Justice Department announced today. Stewart agreed to the civil injunction order, and a stipulated final judgment of permanent injunction was entered against her by the court on March 20, 2014.
The complaint alleged that Stewart prepared federal income tax returns for customers that inflated income or included fictitious income to qualify her customers to receive or to maximize the earned income tax credit; claimed false tax credits that are refundable or decrease the amount of tax on her customers' returns, including phony education credits (American Opportunity Credit) and residential energy credits; falsely claimed head of household status on behalf of customers who did not qualify in order to improperly decrease their reported tax liabilities; and claimed false dependents on behalf of customers and also claimed the child and additional child tax credits on their behalf.
Return preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2013 .
Friday, March 21, 2014
Federal Court Shuts Down Florida Tax Return Preparer
Return Preparer in Plantation, Fla., Allegedly Overstated Refunds Through Fictitious or Inflated Income, Filing Statuses, Exemptions and Tax Credits
A federal court in Fort Lauderdale, Fla., permanently barred Keisha Stewart, a tax preparer in Plantation, Fla., from preparing federal tax returns for others, the Justice Department announced today. Stewart agreed to the civil injunction order, and a stipulated final judgment of permanent injunction was entered against her by the court on March 20, 2014.
The complaint alleged that Stewart prepared federal income tax returns for customers that inflated income or included fictitious income to qualify her customers to receive or to maximize the earned income tax credit; claimed false tax credits that are refundable or decrease the amount of tax on her customers' returns, including phony education credits (American Opportunity Credit) and residential energy credits; falsely claimed head of household status on behalf of customers who did not qualify in order to improperly decrease their reported tax liabilities; and claimed false dependents on behalf of customers and also claimed the child and additional child tax credits on their behalf.
Return preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2013 .
Thursday, March 27, 2014
TEXAS FUGITIVE ARRESTED IN OHIO
FROM: U.S. MARSHALS SERVICE
Fugitive from Jacksonville, TX Arrested in Ohio
Tyler, TX – Kevin Ray Morris, 49, of Jacksonville, Texas was arrested by the U.S. Marshals Task Force in Cleveland, Ohio. Morris has been wanted since October 2013 on sexual offense warrants out of Jacksonville.
The Tyler division of the U.S. Marshals Joint East Texas Fugitive Task Force adopted this fugitive investigation last week. Deputy Marshals from East Texas developed information indicating Morris left the East Texas area and was living in Orwell, Ohio. The U.S. Marshals Service (USMS) Task Force in Ohio was contacted and they developed a plan to arrest Morris at his residence.
Morris attempted to evade arrest by riding an ATV into a heavily wooded area, but was quickly apprehended. Morris is now waiting to be extradited back to East Texas to face his charges.
The agencies of the U.S. Marshals Joint East Texas Fugitive Task Force (Tyler Division) that assisted in this investigation include the Tyler Police Department, Texas Department of Criminal Justice - Office of the Inspector General, Smith County District Attorney’s Office, and the USMS.
The primary mission of the Task Force is to arrest violent offenders and sexual predators. In 2013, the Joint East Texas Fugitive Task Force cleared 2,441 cases throughout the Eastern District of Texas.
Additional information about the U.S. Marshals Service can be found at http://www.usmarshals.gov.
Fugitive from Jacksonville, TX Arrested in Ohio
Tyler, TX – Kevin Ray Morris, 49, of Jacksonville, Texas was arrested by the U.S. Marshals Task Force in Cleveland, Ohio. Morris has been wanted since October 2013 on sexual offense warrants out of Jacksonville.
The Tyler division of the U.S. Marshals Joint East Texas Fugitive Task Force adopted this fugitive investigation last week. Deputy Marshals from East Texas developed information indicating Morris left the East Texas area and was living in Orwell, Ohio. The U.S. Marshals Service (USMS) Task Force in Ohio was contacted and they developed a plan to arrest Morris at his residence.
Morris attempted to evade arrest by riding an ATV into a heavily wooded area, but was quickly apprehended. Morris is now waiting to be extradited back to East Texas to face his charges.
The agencies of the U.S. Marshals Joint East Texas Fugitive Task Force (Tyler Division) that assisted in this investigation include the Tyler Police Department, Texas Department of Criminal Justice - Office of the Inspector General, Smith County District Attorney’s Office, and the USMS.
The primary mission of the Task Force is to arrest violent offenders and sexual predators. In 2013, the Joint East Texas Fugitive Task Force cleared 2,441 cases throughout the Eastern District of Texas.
Additional information about the U.S. Marshals Service can be found at http://www.usmarshals.gov.
Wednesday, March 26, 2014
U.S. MARSHALS FIND SUSPECT IN MURDER CASE
FROM: U.S. MARSHALS
U.S. Marshals Task Force Tracks Down Murder Suspect
Memphis, TN - A first degree murder suspect was arrested in Memphis, Tenn., today by the U.S. Marshals Gulf Coast Regional Fugitive Task Force.
Rodney “Big Head” Jennings was wanted out of Chattanooga, Tenn., on a First Degree Murder Warrant. On January 28 Jennings allegedly shot a Rapheal White to death in Chattanooga. Jennings was added to the Tennessee Bureau of Investigation (TBI) Ten Most Wanted list.
The Chattanooga Police, TBI, the U.S. Marshals Smokey Mountain Fugitive Task Force, and the U.S. Marshal’s office in Abingdon, Virginia, worked in conjunction for weeks to try to locate the fugitive. Information was developed that the fugitive was in the Memphis area. At this point the Gulf Coast Regional Task Force was brought in to assist.
The fugitive was tracked to the Oak Court apartments in south Memphis. Once agents had surrounded the apartment he was hiding in he surrendered without incident. An Uzi style gun was seized at the apartment as well. (See attached picture.) At this time it is not known if it is involved in any crimes.
At the time of this report Jennings is in the Shelby County Jail awaiting extradition.
The U.S. Marshals Gulf Coast Regional Fugitive Task Force is a multi-agency task force with divisions in Tennessee, Alabama, Mississippi and Louisiana. The Western Tennessee Division of the GCRFTF has offices in Memphis and Jackson, and its membership is primarily composed of Deputy U.S. Marshals, Shelby County Sheriff’s Deputies, Memphis Police Officers, Madison County Sheriff’s Deputies, Jackson Police Officers, and the Tennessee Department of Corrections Special Agents. The primary mission of the Task Force is to arrest violent offenders and sexual predators.
U.S. Marshals Task Force Tracks Down Murder Suspect
Memphis, TN - A first degree murder suspect was arrested in Memphis, Tenn., today by the U.S. Marshals Gulf Coast Regional Fugitive Task Force.
Rodney “Big Head” Jennings was wanted out of Chattanooga, Tenn., on a First Degree Murder Warrant. On January 28 Jennings allegedly shot a Rapheal White to death in Chattanooga. Jennings was added to the Tennessee Bureau of Investigation (TBI) Ten Most Wanted list.
The Chattanooga Police, TBI, the U.S. Marshals Smokey Mountain Fugitive Task Force, and the U.S. Marshal’s office in Abingdon, Virginia, worked in conjunction for weeks to try to locate the fugitive. Information was developed that the fugitive was in the Memphis area. At this point the Gulf Coast Regional Task Force was brought in to assist.
The fugitive was tracked to the Oak Court apartments in south Memphis. Once agents had surrounded the apartment he was hiding in he surrendered without incident. An Uzi style gun was seized at the apartment as well. (See attached picture.) At this time it is not known if it is involved in any crimes.
At the time of this report Jennings is in the Shelby County Jail awaiting extradition.
The U.S. Marshals Gulf Coast Regional Fugitive Task Force is a multi-agency task force with divisions in Tennessee, Alabama, Mississippi and Louisiana. The Western Tennessee Division of the GCRFTF has offices in Memphis and Jackson, and its membership is primarily composed of Deputy U.S. Marshals, Shelby County Sheriff’s Deputies, Memphis Police Officers, Madison County Sheriff’s Deputies, Jackson Police Officers, and the Tennessee Department of Corrections Special Agents. The primary mission of the Task Force is to arrest violent offenders and sexual predators.
Tuesday, March 25, 2014
AMERICAN, TWO CANADIANS CHARGED WITH USING OFFSHORE ACCOUNTS TO LAUNDER MONEY
FROM: U.S. JUSTICE DEPARTMENT
Monday, March 24, 2014
U.S. and Canadian Citizens Charged with Using Offshore Accounts and Foreign Nominee Entities to Launder $200,000
Three Caribbean-Based Defendants Charged with Laundering $200,000 of Purported Bank Fraud Proceeds in Undercover Sting
Joshua Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, were indicted for conspiracy to launder monetary instruments, the Department of Justice and Internal Revenue Service (IRS) announced today. The indictment alleges that Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud. The Caribbean-based defendants allegedly assisted undercover law enforcement agents, posing as U.S. clients, in laundering purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds’ owners. Vandyk and St-Cyr invested the laundered funds on the clients’ behalf and represented the funds would not be reported to the U.S. government.
The indictment was returned in the Eastern District of Virginia on March 6, 2014, and unsealed on March 12, 2014, when all three defendants were arrested in Miami, Fla. In addition to the conspiracy charge, Vandyk, St-Cyr and Poulin were each charged with two counts of money laundering.
“These charges result from an extensive investigation and are the latest demonstration of the Department’s resolve to find and prosecute those who aid money laundering and tax fraud globally," said Deputy Attorney General James M. Cole.
According to the indictment, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based in the Cayman Islands. St-Cyr was the founder and head of the investment firm, whose clientele included numerous U.S. citizens. Poulin, an attorney at a law firm based in Turks and Caicos, worked and resided in Canada and in the Turks and Caicos. His clientele also included numerous U.S. citizens.
According to the indictment, Vandyk, St-Cyr and Poulin solicited U.S. citizens to use their services to hide assets from the U.S. government. Vandyk and St-Cyr directed the undercover agents posing as U.S. clients to create offshore foundations with the assistance of Poulin and others because they and the investment firm did not want to appear to deal with U.S. clients. Vandyk and St-Cyr used the offshore entities to move money into the Cayman Islands and used foreign attorneys as intermediaries for such transactions.
According to the indictment, Poulin established an offshore foundation for the undercover agents posing as U.S. clients and served as a nominal board member in lieu of the clients. Poulin transferred wire payments from the offshore foundations to the Cayman Islands, where Vandyk and St-Cyr invested those funds outside the United States in the name of the offshore foundation. The investment firm represented that it would neither disclose the investments or any investment gains to the U.S. government, nor would it provide monthly statements or other investment statements to the clients. Clients were able to monitor their investments online through the use of anonymous, numeric passcodes. Upon request from the U.S. client, Vandyk and St-Cyr would liquidate investments and transfer money, through Poulin, back to the United States. According to Vandyk and St-Cyr, the investment firm would charge clients higher fees to launder criminal proceeds than to assist them in tax evasion.
“I commend IRS Criminal Investigation and the Division’s prosecutors for the extraordinary work that they have done over many months in this investigation,” said Assistant Attorney General Kathryn Keneally for the Tax Division. “In particular, it is important to note that the IRS’s voluntary disclosure policy excludes disclosures after the government has received information about taxpayers’ identities. If the investigation team now has the names of account holders who have not yet come forward, time has run out for them.”
“As alleged in the indictment, these defendants were in the business of creating layers of transactions so their US clients could launder criminal proceeds,” said Chief of IRS-Criminal Investigation Richard Weber. “IRS Criminal Investigation is committed to unraveling complex financial and money laundering schemes and holding those accountable for creating mechanisms to hide assets offshore and dodge the tax system.”
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, each defendant faces a maximum potential sentence of 20 years in prison for each count.
The case was investigated by special agents of the IRS-Criminal Investigation. Trial Attorneys Todd Ellinwood and Caryn Finley of the Department’s Tax Division and Assistant U.S. Attorney Kosta Stojilkovic of the U.S. Attorney’s Office for the Eastern District of Virginia are prosecuting the case.
Monday, March 24, 2014
U.S. and Canadian Citizens Charged with Using Offshore Accounts and Foreign Nominee Entities to Launder $200,000
Three Caribbean-Based Defendants Charged with Laundering $200,000 of Purported Bank Fraud Proceeds in Undercover Sting
Joshua Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, were indicted for conspiracy to launder monetary instruments, the Department of Justice and Internal Revenue Service (IRS) announced today. The indictment alleges that Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud. The Caribbean-based defendants allegedly assisted undercover law enforcement agents, posing as U.S. clients, in laundering purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds’ owners. Vandyk and St-Cyr invested the laundered funds on the clients’ behalf and represented the funds would not be reported to the U.S. government.
The indictment was returned in the Eastern District of Virginia on March 6, 2014, and unsealed on March 12, 2014, when all three defendants were arrested in Miami, Fla. In addition to the conspiracy charge, Vandyk, St-Cyr and Poulin were each charged with two counts of money laundering.
“These charges result from an extensive investigation and are the latest demonstration of the Department’s resolve to find and prosecute those who aid money laundering and tax fraud globally," said Deputy Attorney General James M. Cole.
According to the indictment, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based in the Cayman Islands. St-Cyr was the founder and head of the investment firm, whose clientele included numerous U.S. citizens. Poulin, an attorney at a law firm based in Turks and Caicos, worked and resided in Canada and in the Turks and Caicos. His clientele also included numerous U.S. citizens.
According to the indictment, Vandyk, St-Cyr and Poulin solicited U.S. citizens to use their services to hide assets from the U.S. government. Vandyk and St-Cyr directed the undercover agents posing as U.S. clients to create offshore foundations with the assistance of Poulin and others because they and the investment firm did not want to appear to deal with U.S. clients. Vandyk and St-Cyr used the offshore entities to move money into the Cayman Islands and used foreign attorneys as intermediaries for such transactions.
According to the indictment, Poulin established an offshore foundation for the undercover agents posing as U.S. clients and served as a nominal board member in lieu of the clients. Poulin transferred wire payments from the offshore foundations to the Cayman Islands, where Vandyk and St-Cyr invested those funds outside the United States in the name of the offshore foundation. The investment firm represented that it would neither disclose the investments or any investment gains to the U.S. government, nor would it provide monthly statements or other investment statements to the clients. Clients were able to monitor their investments online through the use of anonymous, numeric passcodes. Upon request from the U.S. client, Vandyk and St-Cyr would liquidate investments and transfer money, through Poulin, back to the United States. According to Vandyk and St-Cyr, the investment firm would charge clients higher fees to launder criminal proceeds than to assist them in tax evasion.
“I commend IRS Criminal Investigation and the Division’s prosecutors for the extraordinary work that they have done over many months in this investigation,” said Assistant Attorney General Kathryn Keneally for the Tax Division. “In particular, it is important to note that the IRS’s voluntary disclosure policy excludes disclosures after the government has received information about taxpayers’ identities. If the investigation team now has the names of account holders who have not yet come forward, time has run out for them.”
“As alleged in the indictment, these defendants were in the business of creating layers of transactions so their US clients could launder criminal proceeds,” said Chief of IRS-Criminal Investigation Richard Weber. “IRS Criminal Investigation is committed to unraveling complex financial and money laundering schemes and holding those accountable for creating mechanisms to hide assets offshore and dodge the tax system.”
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, each defendant faces a maximum potential sentence of 20 years in prison for each count.
The case was investigated by special agents of the IRS-Criminal Investigation. Trial Attorneys Todd Ellinwood and Caryn Finley of the Department’s Tax Division and Assistant U.S. Attorney Kosta Stojilkovic of the U.S. Attorney’s Office for the Eastern District of Virginia are prosecuting the case.
Monday, March 24, 2014
CONSTRUCTION CO. SETTLES ALLEGED FALSE CLAIMS CHARGES
FROM: U.S. JUSTICE DEPARTMENT
Friday, March 21, 2014
Utah Construction Company to Pay Government to Settle Alleged False Claims in Connection with Program for Small and Disadvantaged Businesses
Okland Construction Co. Inc. has agreed to pay the government $928,000 to resolve allegations that it made false statements and submitted false claims under the Small Business Administration’s (SBA) Section 8(a) Program for Small and Disadvantaged Businesses, the Justice Department announced today.
“The purpose of the 8(a) Program is to assist small and disadvantaged businesses to compete in the American economy,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Justice Department is committed to making sure that those who participate in 8(a) contracts do so honestly and fairly.”
Okland Construction, a large construction company, entered into a mentor-protégé agreement with Saiz Construction Co., a participant in the 8(a) Program. The mentor-protégé program allows a large business mentor to form an SBA-approved joint venture with a small business protégé to jointly bid on and perform 8(a) contracts, which are contracts awarded by federal agencies that are set aside solely for small businesses. Without a qualifying joint venture, the mentor and protégé cannot jointly bid on 8(a) contracts, and the mentor cannot perform the primary functions of the contract.
The government alleged that Okland Construction did not form a qualifying joint venture with Saiz Construction and thus was not eligible to jointly bid on or perform the primary functions of eight 8(a) contracts with Saiz Construction. Nevertheless, Okland Construction allegedly prepared the bids for the 8(a) contracts and its employees served as project managers, submitted invoices and performed payroll and other accounting functions. Furthermore, Okland Construction allegedly concealed its extensive involvement in performing the 8(a) contracts by misrepresenting to the government that its employees were employees of Saiz Construction.
The government also alleged that Okland Construction’s relationship with Saiz Construction violated the terms of an SBA set-aside contract awarded to Saiz Construction that required Saiz Construction to perform at least 15 percent of the labor on the contract minus the cost of materials.
“Large businesses must not be allowed to fraudulently obtain access to contracts set aside for small businesses,” said SBA Inspector General Peggy E. Gustafson. “The SBA mentor-protégé program enhances the capability of 8(a) participants to compete more successfully for federal contracts through a relationship with another successful business; however, this program must not be used as a vehicle to improperly benefit large, non-disadvantaged companies.”
“SBA’s contracting programs, including the 8(a) Business Development Program, provide small businesses with the opportunity to grow and create jobs,” said SBA General Counsel Sara D. Lipscomb. “But SBA has no tolerance for waste, fraud or abuse in any government contracting program and is committed to working with our federal partners to ensure the benefits of these programs flow to the intended recipients.”
The civil settlement resolves a lawsuit filed by Saiz Construction and its owner Abel Saiz under the whistleblower provision of the False Claims Act, which permits private parties, known as relators, to file suit on behalf of the government for false claims and to share in any recovery. The relators filed the lawsuit after Saiz Construction terminated its mentor-protégé agreement with Okland Construction. Saiz Construction and Saiz will receive a total of $148,480.
This settlement with Okland Construction was the result of a coordinated effort among the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the District of Utah, the SBA Office of Inspector General, the SBA Office of General Counsel, the Department of the Air Force and the Army Corps of Engineers.
The civil lawsuit was filed in the District of Utah and is captioned United States ex rel. Saiz Construction Co. Inc. and Abel Saiz v. Okland Construction Co. Inc., No. 2:11-cv-00362 (D. Utah). The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Friday, March 21, 2014
Utah Construction Company to Pay Government to Settle Alleged False Claims in Connection with Program for Small and Disadvantaged Businesses
Okland Construction Co. Inc. has agreed to pay the government $928,000 to resolve allegations that it made false statements and submitted false claims under the Small Business Administration’s (SBA) Section 8(a) Program for Small and Disadvantaged Businesses, the Justice Department announced today.
“The purpose of the 8(a) Program is to assist small and disadvantaged businesses to compete in the American economy,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Justice Department is committed to making sure that those who participate in 8(a) contracts do so honestly and fairly.”
Okland Construction, a large construction company, entered into a mentor-protégé agreement with Saiz Construction Co., a participant in the 8(a) Program. The mentor-protégé program allows a large business mentor to form an SBA-approved joint venture with a small business protégé to jointly bid on and perform 8(a) contracts, which are contracts awarded by federal agencies that are set aside solely for small businesses. Without a qualifying joint venture, the mentor and protégé cannot jointly bid on 8(a) contracts, and the mentor cannot perform the primary functions of the contract.
The government alleged that Okland Construction did not form a qualifying joint venture with Saiz Construction and thus was not eligible to jointly bid on or perform the primary functions of eight 8(a) contracts with Saiz Construction. Nevertheless, Okland Construction allegedly prepared the bids for the 8(a) contracts and its employees served as project managers, submitted invoices and performed payroll and other accounting functions. Furthermore, Okland Construction allegedly concealed its extensive involvement in performing the 8(a) contracts by misrepresenting to the government that its employees were employees of Saiz Construction.
The government also alleged that Okland Construction’s relationship with Saiz Construction violated the terms of an SBA set-aside contract awarded to Saiz Construction that required Saiz Construction to perform at least 15 percent of the labor on the contract minus the cost of materials.
“Large businesses must not be allowed to fraudulently obtain access to contracts set aside for small businesses,” said SBA Inspector General Peggy E. Gustafson. “The SBA mentor-protégé program enhances the capability of 8(a) participants to compete more successfully for federal contracts through a relationship with another successful business; however, this program must not be used as a vehicle to improperly benefit large, non-disadvantaged companies.”
“SBA’s contracting programs, including the 8(a) Business Development Program, provide small businesses with the opportunity to grow and create jobs,” said SBA General Counsel Sara D. Lipscomb. “But SBA has no tolerance for waste, fraud or abuse in any government contracting program and is committed to working with our federal partners to ensure the benefits of these programs flow to the intended recipients.”
The civil settlement resolves a lawsuit filed by Saiz Construction and its owner Abel Saiz under the whistleblower provision of the False Claims Act, which permits private parties, known as relators, to file suit on behalf of the government for false claims and to share in any recovery. The relators filed the lawsuit after Saiz Construction terminated its mentor-protégé agreement with Okland Construction. Saiz Construction and Saiz will receive a total of $148,480.
This settlement with Okland Construction was the result of a coordinated effort among the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the District of Utah, the SBA Office of Inspector General, the SBA Office of General Counsel, the Department of the Air Force and the Army Corps of Engineers.
The civil lawsuit was filed in the District of Utah and is captioned United States ex rel. Saiz Construction Co. Inc. and Abel Saiz v. Okland Construction Co. Inc., No. 2:11-cv-00362 (D. Utah). The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Saturday, March 22, 2014
MAN CONVICTED IN "VIOLENT SEX TRAFFICKING CONSPIRACY"
FROM: U.S. JUSTICE DEPARTMENT
Thursday, March 20, 2014
Maryland Man Convicted in Violent Sex Trafficking Conspiracy
A federal jury convicted Jean Claude Roy, aka Dredd the Don and Dreddy, age 31, of Germantown, Md., late yesterday of conspiracy to commit sex trafficking by force, fraud or coercion, three counts of interstate transportation for prostitution and witness and evidence tampering.
The verdict was announced by Acting Assistant Attorney General Jocelyn Samuels for the Department of Justice Civil Rights Division, U.S. Attorney Rod J. Rosenstein for the District of Maryland, Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and Chief J. Thomas Manger of the Montgomery County Police Department.
“This defendant preyed on vulnerable young women and exploited them for prostitution,” said Acting Assistant Attorney General Samuels. “The Civil Rights Division is committed to seeking justice on behalf of victims of human trafficking.”
“Protecting our communities from those who engage in human trafficking is a top priority for HSI,” said Special Agent in Charge Winter. “As a member of the Maryland Human Trafficking Task Force, HSI is committed to working with our law enforcement partners to investigate human trafficking, as well as working with our local non-governmental, community-based and faith-based organizations to identify, rescue and assist victims of trafficking.”
According to evidence presented during the two week trial, between August and September 2012, Roy transported a victim across state lines to engage in prostitution and forced the victim to engage in prostitution by taking the victim’s identity documents, keeping all of the victim’s money and bragging about beating murder charges.
In November 2012, Roy recruited co-defendant Brittney Creason to engage in prostitution at his direction. Thereafter, Creason helped Roy recruit and transport girls from Illinois and North Carolina to engage in prostitution. He continued to force women to engage in prostitution by bragging about beating murder charges, taking their identity documents and taking their money.
Trial evidence also showed that from Jan. 1 through Jan. 10, 2013, while Roy was in jail on related state charges, he called an individual several times and had that person access online accounts and storage services belonging to Roy and Creason in order to erase evidence related to these charges.
Roy faces a statutory maximum sentenced of life in prison for conspiracy to commit sex trafficking by force, fraud or coercion; a statutory maximum of 10 years in prison for each of three counts of interstate transportation for prostitution; and a statutory maximum of 20 years in prison for witness and evidence tampering. U.S. District Judge Paul W. Grimm scheduled sentencing for July 16, 2014.
The jury found Roy not guilty of sex trafficking and attempted sex trafficking by force, fraud and coercion; and possessing and brandishing a firearm during a crime of violence.
Creason, aka Kitty Amor, age 19, of Decatur, Ill., previously pleaded guilty to using a facility in interstate commerce for an illegal activity and awaits sentencing.
This case was investigated by the Maryland Human Trafficking Task Force, which was formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit this website.
Report suspected instances of human trafficking to HSI's tip line at 866-DHS-2ICE (1-866-347-2423) or by completing its online tip form. Both are staffed around the clock by investigators.
Acting Assistant Attorney General Samuels and U.S. Attorney Rosenstein commended HSI Baltimore and the Montgomery County Police Department for their work in the investigation. They also thanked Assistant U.S. Attorney Kristi N. O’Malley and Trial Attorney William E. Nolan of the Civil Rights Division's Human Trafficking Prosecution Unit, who are prosecuting the case.
Thursday, March 20, 2014
Maryland Man Convicted in Violent Sex Trafficking Conspiracy
A federal jury convicted Jean Claude Roy, aka Dredd the Don and Dreddy, age 31, of Germantown, Md., late yesterday of conspiracy to commit sex trafficking by force, fraud or coercion, three counts of interstate transportation for prostitution and witness and evidence tampering.
The verdict was announced by Acting Assistant Attorney General Jocelyn Samuels for the Department of Justice Civil Rights Division, U.S. Attorney Rod J. Rosenstein for the District of Maryland, Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and Chief J. Thomas Manger of the Montgomery County Police Department.
“This defendant preyed on vulnerable young women and exploited them for prostitution,” said Acting Assistant Attorney General Samuels. “The Civil Rights Division is committed to seeking justice on behalf of victims of human trafficking.”
“Protecting our communities from those who engage in human trafficking is a top priority for HSI,” said Special Agent in Charge Winter. “As a member of the Maryland Human Trafficking Task Force, HSI is committed to working with our law enforcement partners to investigate human trafficking, as well as working with our local non-governmental, community-based and faith-based organizations to identify, rescue and assist victims of trafficking.”
According to evidence presented during the two week trial, between August and September 2012, Roy transported a victim across state lines to engage in prostitution and forced the victim to engage in prostitution by taking the victim’s identity documents, keeping all of the victim’s money and bragging about beating murder charges.
In November 2012, Roy recruited co-defendant Brittney Creason to engage in prostitution at his direction. Thereafter, Creason helped Roy recruit and transport girls from Illinois and North Carolina to engage in prostitution. He continued to force women to engage in prostitution by bragging about beating murder charges, taking their identity documents and taking their money.
Trial evidence also showed that from Jan. 1 through Jan. 10, 2013, while Roy was in jail on related state charges, he called an individual several times and had that person access online accounts and storage services belonging to Roy and Creason in order to erase evidence related to these charges.
Roy faces a statutory maximum sentenced of life in prison for conspiracy to commit sex trafficking by force, fraud or coercion; a statutory maximum of 10 years in prison for each of three counts of interstate transportation for prostitution; and a statutory maximum of 20 years in prison for witness and evidence tampering. U.S. District Judge Paul W. Grimm scheduled sentencing for July 16, 2014.
The jury found Roy not guilty of sex trafficking and attempted sex trafficking by force, fraud and coercion; and possessing and brandishing a firearm during a crime of violence.
Creason, aka Kitty Amor, age 19, of Decatur, Ill., previously pleaded guilty to using a facility in interstate commerce for an illegal activity and awaits sentencing.
This case was investigated by the Maryland Human Trafficking Task Force, which was formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit this website.
Report suspected instances of human trafficking to HSI's tip line at 866-DHS-2ICE (1-866-347-2423) or by completing its online tip form. Both are staffed around the clock by investigators.
Acting Assistant Attorney General Samuels and U.S. Attorney Rosenstein commended HSI Baltimore and the Montgomery County Police Department for their work in the investigation. They also thanked Assistant U.S. Attorney Kristi N. O’Malley and Trial Attorney William E. Nolan of the Civil Rights Division's Human Trafficking Prosecution Unit, who are prosecuting the case.
Friday, March 21, 2014
COMMISSIONER FOR WEBB COUNTY TEXAS CHARGED WITH ACCEPTING BRIBES
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, March 19, 2014
Webb County Commissioner Charged with Accepting Bribes in Exchange for Official Acts
Kristopher Michael Montemayor, a county commissioner for Precinct 1 of the Webb County Commissioners Court in Texas, was arrested today on charges of bribery, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
A federal grand jury in the Southern District of Texas returned an indictment on March 18, 2014, that charges Montemayor, 36, of Laredo, Texas, with two counts of federal programs bribery. The indictment was unsealed following today’s arrest.
According to allegations in the indictment, while serving as a county commissioner, Montemayor solicited and accepted bribes in exchange for promising to perform various official acts. Montemayor allegedly accepted the use of a 2012 Ford truck, which cost approximately $37,015, in exchange for promising to provide government jobs to both the vehicle’s owner and his spouse.
The indictment further alleges that Montemayor, while serving as a county commissioner, solicited and accepted approximately $11,000 in cash as well as electronics equipment worth approximately $2,700 from a businessman who, unbeknownst to Montemayor, was an undercover law enforcement agent. The indictment alleges that Montemayor promised to take official action to promote the business interests of the undercover agent in exchange for cash and electronics.
If convicted, Montemayor faces a maximum potential penalty of 10 years in prison for each bribery charge. Each charge also carries a maximum $250,000 fine.
The case is being investigated by the FBI’s Laredo Resident Agency. The case is being prosecuted by Trial Attorneys Emily Rae Woods and Mark Cipolletti of the Criminal Division’s Public Integrity Section.
The charges and allegations contained in the indictment are merely accusations and the defendant is presumed innocent unless and until he is proven guilty.
Wednesday, March 19, 2014
Webb County Commissioner Charged with Accepting Bribes in Exchange for Official Acts
Kristopher Michael Montemayor, a county commissioner for Precinct 1 of the Webb County Commissioners Court in Texas, was arrested today on charges of bribery, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
A federal grand jury in the Southern District of Texas returned an indictment on March 18, 2014, that charges Montemayor, 36, of Laredo, Texas, with two counts of federal programs bribery. The indictment was unsealed following today’s arrest.
According to allegations in the indictment, while serving as a county commissioner, Montemayor solicited and accepted bribes in exchange for promising to perform various official acts. Montemayor allegedly accepted the use of a 2012 Ford truck, which cost approximately $37,015, in exchange for promising to provide government jobs to both the vehicle’s owner and his spouse.
The indictment further alleges that Montemayor, while serving as a county commissioner, solicited and accepted approximately $11,000 in cash as well as electronics equipment worth approximately $2,700 from a businessman who, unbeknownst to Montemayor, was an undercover law enforcement agent. The indictment alleges that Montemayor promised to take official action to promote the business interests of the undercover agent in exchange for cash and electronics.
If convicted, Montemayor faces a maximum potential penalty of 10 years in prison for each bribery charge. Each charge also carries a maximum $250,000 fine.
The case is being investigated by the FBI’s Laredo Resident Agency. The case is being prosecuted by Trial Attorneys Emily Rae Woods and Mark Cipolletti of the Criminal Division’s Public Integrity Section.
The charges and allegations contained in the indictment are merely accusations and the defendant is presumed innocent unless and until he is proven guilty.
Thursday, March 20, 2014
ATTORNEY SENTENCED IN SCHEME TO HIDE MILLIONS IN SWISS ACCOUNTS
FROM: U.S. JUSTICE DEPARTMENT SWISS ACCOUNTS
Tuesday, March 18, 2014
California Attorney Sentenced to Prison in Scheme to Hide Millions in Secret Swiss Accounts at UBS AG and Pictet & Cie
California attorney Christopher M. Rusch was sentenced to serve 10 months in prison for helping his clients Stephen M. Kerr and Michael Quiel, both businessmen from Phoenix, hide millions of dollars in secret offshore bank accounts at UBS AG and Pictet & Cie in Switzerland, the Justice Department and the Internal Revenue Service (IRS) announced today. U.S. District Judge James A. Teilborg also ordered Rusch to serve three years of supervised release following his prison sentence. On Feb. 6, 2013, Rusch pleaded guilty to conspiracy to defraud the government and failing to file a Report of Foreign Bank and Financial Accounts (FBAR). Kerr and Quiel were sentenced in September 2013 to each serve 10 months in prison after both were tried and convicted of filing false income tax returns for 2007 and 2008. The jury also convicted Kerr of failing to file FBARs for 2007 and 2008.
According to the evidence presented at trial, Kerr and Quiel, with the assistance of Rusch and others, including Swiss nationals, established nominee foreign entities and corresponding bank accounts in Switzerland to conceal Kerr and Quiel’s ownership and control of stock and income they deposited in these accounts. Rusch testified at trial, admitting that he and others caused the sale of the shares of stock through the undeclared accounts. Rusch further testified that, at Kerr and Quiel’s direction, he transferred some of the money in the secret accounts back to the United States through Rusch’s Interest on Lawyer’s Trust Account before dispersing the money for Kerr and Quiel’s benefit, including the purchase of a multi-million dollar golf course in Erie, Colo. According to court documents and evidence presented at trial, with Rusch’s assistance, Kerr and Quiel each failed to report more than $ 4,600,000 and $2,000,000 of income, respectively, during 2007 and 2008 which they hid in the undeclared accounts with Rusch’s assistance.
“We are getting more and more information all the time about offshore banking activities,” said Assistant Attorney General Kathryn Keneally for the Tax Division. “We are committed to investigating and prosecuting those who continue to evade taxes and reporting requirements. As these sentences show, those who fail to come into compliance risk high penalties and jail.”
“This prosecution serves notice that the Department of Justice will not tolerate fraudulent activity designed to undermine the integrity of our income tax system,” said U.S. Attorney John S. Leonardo for the District of Arizona.
“Today, Mr. Rusch has been held accountable for his actions in assisting wealthy individuals hide millions of dollars in secret offshore bank accounts and dodge the tax system,” said Chief of IRS-Criminal Investigation Richard Weber. "In addition, Mr. Rusch used his attorney trust account to funnel money from the secret offshore accounts back to Mr. Kerr and Mr. Quiel for their personal benefit, including the purchase of a multi-million dollar golf course. As the investigation into offshore tax evasion continues, Criminal Investigation will leave no financial stone unturned as we continue to vigorously pursue new leads."
The case was investigated by special agents of IRS-Criminal Investigation, and was prosecuted by Trial Attorney Timothy J. Stockwell for the Tax Division and Assistant U.S. Attorney Monica Edelstein for the District of Arizona.
Additional information about the Justice Department’s Tax Division and its enforcement efforts is available at the website.
Tuesday, March 18, 2014
California Attorney Sentenced to Prison in Scheme to Hide Millions in Secret Swiss Accounts at UBS AG and Pictet & Cie
California attorney Christopher M. Rusch was sentenced to serve 10 months in prison for helping his clients Stephen M. Kerr and Michael Quiel, both businessmen from Phoenix, hide millions of dollars in secret offshore bank accounts at UBS AG and Pictet & Cie in Switzerland, the Justice Department and the Internal Revenue Service (IRS) announced today. U.S. District Judge James A. Teilborg also ordered Rusch to serve three years of supervised release following his prison sentence. On Feb. 6, 2013, Rusch pleaded guilty to conspiracy to defraud the government and failing to file a Report of Foreign Bank and Financial Accounts (FBAR). Kerr and Quiel were sentenced in September 2013 to each serve 10 months in prison after both were tried and convicted of filing false income tax returns for 2007 and 2008. The jury also convicted Kerr of failing to file FBARs for 2007 and 2008.
According to the evidence presented at trial, Kerr and Quiel, with the assistance of Rusch and others, including Swiss nationals, established nominee foreign entities and corresponding bank accounts in Switzerland to conceal Kerr and Quiel’s ownership and control of stock and income they deposited in these accounts. Rusch testified at trial, admitting that he and others caused the sale of the shares of stock through the undeclared accounts. Rusch further testified that, at Kerr and Quiel’s direction, he transferred some of the money in the secret accounts back to the United States through Rusch’s Interest on Lawyer’s Trust Account before dispersing the money for Kerr and Quiel’s benefit, including the purchase of a multi-million dollar golf course in Erie, Colo. According to court documents and evidence presented at trial, with Rusch’s assistance, Kerr and Quiel each failed to report more than $ 4,600,000 and $2,000,000 of income, respectively, during 2007 and 2008 which they hid in the undeclared accounts with Rusch’s assistance.
“We are getting more and more information all the time about offshore banking activities,” said Assistant Attorney General Kathryn Keneally for the Tax Division. “We are committed to investigating and prosecuting those who continue to evade taxes and reporting requirements. As these sentences show, those who fail to come into compliance risk high penalties and jail.”
“This prosecution serves notice that the Department of Justice will not tolerate fraudulent activity designed to undermine the integrity of our income tax system,” said U.S. Attorney John S. Leonardo for the District of Arizona.
“Today, Mr. Rusch has been held accountable for his actions in assisting wealthy individuals hide millions of dollars in secret offshore bank accounts and dodge the tax system,” said Chief of IRS-Criminal Investigation Richard Weber. "In addition, Mr. Rusch used his attorney trust account to funnel money from the secret offshore accounts back to Mr. Kerr and Mr. Quiel for their personal benefit, including the purchase of a multi-million dollar golf course. As the investigation into offshore tax evasion continues, Criminal Investigation will leave no financial stone unturned as we continue to vigorously pursue new leads."
The case was investigated by special agents of IRS-Criminal Investigation, and was prosecuted by Trial Attorney Timothy J. Stockwell for the Tax Division and Assistant U.S. Attorney Monica Edelstein for the District of Arizona.
Additional information about the Justice Department’s Tax Division and its enforcement efforts is available at the website.
Wednesday, March 19, 2014
BUSINESS OWNER CONVICTED OF FILING FALSE CORPORATE TAX RETURNS
FROM: U.S. JUSTICE DEPARTMENT
Thursday, March 13, 2014
Construction Company Owner Convicted of Two Counts of Filing False Corporate Tax Returns
The Justice Department and Internal Revenue Service (IRS) announced today that construction company owner Tomas Olazabal, of Fresh Meadows, N.Y., was convicted of two counts of filing false corporate tax returns for his corporation, Tupac Construction Corporation. Olazabal was convicted by a jury sitting in the U.S. District Court for the Eastern District of New York.
According to the evidence admitted at trial, Olazabal was the sole owner and operator of Tupac Construction. Between 2006 and 2008, Olazabal cashed a large number of checks representing gross receipts to Tupac Construction at a commercial check cashing service. Olazabal did not tell his tax return preparer about the cashed checks and failed to report those gross receipts on Tupac Construction’s 2007 and 2008 corporate tax returns.
Olazabal faces a statutory maximum potential sentence of six years in prison and a fine of up to $500,000.
Assistant Attorney General Kathryn Keneally for the Tax Division commended the IRS-Criminal Investigation Special Agents who investigated the case, as well as Trial Attorneys Steve Descano and Mark Kotila of the Tax Division, who prosecuted the case.
Thursday, March 13, 2014
Construction Company Owner Convicted of Two Counts of Filing False Corporate Tax Returns
The Justice Department and Internal Revenue Service (IRS) announced today that construction company owner Tomas Olazabal, of Fresh Meadows, N.Y., was convicted of two counts of filing false corporate tax returns for his corporation, Tupac Construction Corporation. Olazabal was convicted by a jury sitting in the U.S. District Court for the Eastern District of New York.
According to the evidence admitted at trial, Olazabal was the sole owner and operator of Tupac Construction. Between 2006 and 2008, Olazabal cashed a large number of checks representing gross receipts to Tupac Construction at a commercial check cashing service. Olazabal did not tell his tax return preparer about the cashed checks and failed to report those gross receipts on Tupac Construction’s 2007 and 2008 corporate tax returns.
Olazabal faces a statutory maximum potential sentence of six years in prison and a fine of up to $500,000.
Assistant Attorney General Kathryn Keneally for the Tax Division commended the IRS-Criminal Investigation Special Agents who investigated the case, as well as Trial Attorneys Steve Descano and Mark Kotila of the Tax Division, who prosecuted the case.
Tuesday, March 18, 2014
LICENSED PSYCHIATRIST SENTENCED TO 18 MONTHS IN PRISON FOR MEDICARE FRAUD
FROM: U.S. JUSTICE DEPARTMENT
Thursday, March 13, 2014
Former Veterans Affairs Psychiatrist Sentenced for Medicare Fraud
A licensed psychiatrist formerly employed by the Department of Veterans Affairs (VA) was sentenced today to serve 18 months in prison for falsely claiming to provide at-home services to Medicare beneficiaries.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
Dr. Mikhail L. Presman, 56, of Brooklyn, N.Y., was sentenced by Judge I. Leo Glasser in the Eastern District of New York. Presman was sentenced to serve three years of supervised release following his prison term and ordered to forfeit $1.2 million and pay restitution to Medicare.
According to court documents, from Jan. 1, 2006, through May 10, 2013, Presman submitted approximately $4 million in Medicare claims for home treatment of Medicare beneficiaries notwithstanding his full-time salaried position as a psychiatrist at the VA hospital in Brooklyn. Presman did not provide any treatment to a substantial number of the beneficiaries he claimed to have treated. For example, Presman submitted claims to Medicare for home medical visits at locations within New York City even though he was physically located in China at the time of these purported home visits. Presman also submitted claims to Medicare for 55 home medical visits to beneficiaries who were hospitalized on the date of the purported visits.
The case was investigated by the HHS-OIG, with assistance from the VA Office of Inspector General, and brought as part of the Medicare Fraud Strike Force, under the supervision of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section. The case was prosecuted by Trial Attorney Bryan D. Fields of the Fraud Section and Assistant United States Attorney Patricia E. Notopoulos of the Eastern District of New York.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Thursday, March 13, 2014
Former Veterans Affairs Psychiatrist Sentenced for Medicare Fraud
A licensed psychiatrist formerly employed by the Department of Veterans Affairs (VA) was sentenced today to serve 18 months in prison for falsely claiming to provide at-home services to Medicare beneficiaries.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
Dr. Mikhail L. Presman, 56, of Brooklyn, N.Y., was sentenced by Judge I. Leo Glasser in the Eastern District of New York. Presman was sentenced to serve three years of supervised release following his prison term and ordered to forfeit $1.2 million and pay restitution to Medicare.
According to court documents, from Jan. 1, 2006, through May 10, 2013, Presman submitted approximately $4 million in Medicare claims for home treatment of Medicare beneficiaries notwithstanding his full-time salaried position as a psychiatrist at the VA hospital in Brooklyn. Presman did not provide any treatment to a substantial number of the beneficiaries he claimed to have treated. For example, Presman submitted claims to Medicare for home medical visits at locations within New York City even though he was physically located in China at the time of these purported home visits. Presman also submitted claims to Medicare for 55 home medical visits to beneficiaries who were hospitalized on the date of the purported visits.
The case was investigated by the HHS-OIG, with assistance from the VA Office of Inspector General, and brought as part of the Medicare Fraud Strike Force, under the supervision of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section. The case was prosecuted by Trial Attorney Bryan D. Fields of the Fraud Section and Assistant United States Attorney Patricia E. Notopoulos of the Eastern District of New York.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Monday, March 17, 2014
TWO PLEAD GUILTY TO RIGGING BIDS AT PUBLIC FORECLOSURE AUCTIONS
FROM: U.S. JUSTICE DEPARTMENT
TWO NORTHERN CALIFORNIA REAL ESTATE INVESTORS CHARGED WITH
BID RIGGING AT PUBLIC FORECLOSURE AUCTIONS
BID RIGGING AT PUBLIC FORECLOSURE AUCTIONS
Investigation Has Yielded 46 Plea Agreements to Date
WASHINGTON — Two Northern California real estate investors pleaded guilty for their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed on June 30, 2011, in the U.S. District Court for the Northern District of California in Oakland, against Grant Alvernaz, of Pleasant Hill, Calif., and Douglas Moore, of Walnut Creek, Calif. Alvernaz pleaded guilty to the charges on Sept. 7, 2011. Moore pleaded guilty to the charges on Aug. 24, 2011. The charges and the guilty pleas were unsealed yesterday. Including Alvernaz and Moore, a total of 46 individuals have pleaded guilty or agreed to plead guilty as a result of the department’s ongoing antitrust investigation into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, Alvernaz and Moore conspired with others not to bid against one another, and instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Contra Costa and Alameda counties, Calif. Alvernaz and Moore were also charged with conspiring to commit mail fraud by fraudulently acquiring title to selected Contra Costa and Alameda County properties sold at public auctions and making and receiving payoffs and diverting money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held. Alvernaz and Moore pleaded guilty to participating in the conspiracies in Contra Costa County beginning as early as February 2009 and continuing until in or about December 2010 and in Alameda County from as early as March 2009 and continuing until about November 2010.
“The integrity of real estate foreclosure markets depends on open and honest competition, which the perpetrators of these collusive schemes undermined,” said Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division. “The division will continue to pursue those who illegally enrich themselves at the expense of lenders and financially distressed homeowners.”
The department stated that the primary purpose of the conspiracies was to suppress and restrain competition in order to obtain selected real estate offered at Contra Costa and Alameda County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties and, in some cases, the defaulting homeowner.
“The unsealed court documents narrate the criminal actions taken as part of this real estate bid-rigging conspiracy in northern California,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The public should consider this an example of how a competitive marketplace can be taken advantage of by those who are shortsighted by greed.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
The charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, or call the FBI tip line at 415-553-7400.
Today’s cases were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants.
Saturday, March 15, 2014
INMATE PLEADS GUILTY TO MURDERING U.S. CORRECTIONAL OFFICER
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, March 11, 2014
Federal Inmate Pleads Guilty to Murder of United States Correctional Officer
A federal inmate pleaded guilty today for the murder of United States Correctional Officer Jose Rivera, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Benjamin Wagner for the Eastern District of California.
James Ninete Leon Guerrero, 48, of Guam, pleaded guilty before U.S. District Judge Phillip Pro to one count of murder by a federal prisoner serving a life sentence. According to court documents, Guerrero aided and abetted co-defendant Jose Cabrera Sablan in the stabbing death of Officer Rivera.
Court documents allege that on June 20, 2008, as Officer Rivera was on duty, conducting his daily count in the United States Penitentiary in Atwater, Calif., Sablan attacked him with an eight-inch homemade shank. Officer Rivera tried to flee, but he was knocked backwards by Sablan and tackled by Guerrero. Guerrero held Officer Rivera down as Sablan stabbed him with the shank more than 20 times. Officer Rivera was 22 years old at the time of his death and was a United States Navy veteran.
Sablan and Guerrero were indicted for murder on Aug. 14, 2008. As a result of Guerrero’s plea, he faces a mandatory sentence of life in prison. His sentencing has been scheduled for May 30, 2014, in the Eastern District of California.
Sablan’s case is set for trial on April 6, 2015. He is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The investigation was conducted by the Bureau of Prisons and the FBI. This case is being prosecuted by Trial Attorney Bonnie Hannan of the Criminal Division’s Capital Case Section and Assistant U.S. Attorney Duce Rice of the Eastern District of California.
Tuesday, March 11, 2014
Federal Inmate Pleads Guilty to Murder of United States Correctional Officer
A federal inmate pleaded guilty today for the murder of United States Correctional Officer Jose Rivera, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Benjamin Wagner for the Eastern District of California.
James Ninete Leon Guerrero, 48, of Guam, pleaded guilty before U.S. District Judge Phillip Pro to one count of murder by a federal prisoner serving a life sentence. According to court documents, Guerrero aided and abetted co-defendant Jose Cabrera Sablan in the stabbing death of Officer Rivera.
Court documents allege that on June 20, 2008, as Officer Rivera was on duty, conducting his daily count in the United States Penitentiary in Atwater, Calif., Sablan attacked him with an eight-inch homemade shank. Officer Rivera tried to flee, but he was knocked backwards by Sablan and tackled by Guerrero. Guerrero held Officer Rivera down as Sablan stabbed him with the shank more than 20 times. Officer Rivera was 22 years old at the time of his death and was a United States Navy veteran.
Sablan and Guerrero were indicted for murder on Aug. 14, 2008. As a result of Guerrero’s plea, he faces a mandatory sentence of life in prison. His sentencing has been scheduled for May 30, 2014, in the Eastern District of California.
Sablan’s case is set for trial on April 6, 2015. He is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The investigation was conducted by the Bureau of Prisons and the FBI. This case is being prosecuted by Trial Attorney Bonnie Hannan of the Criminal Division’s Capital Case Section and Assistant U.S. Attorney Duce Rice of the Eastern District of California.
Friday, March 14, 2014
U.S. MARSHALS SERVICE ANNOUNCES ARREST OF VIOLENT FUGITIVE
FROM: U.S. MARSHALS SERVICE
U.S. Marshals Arrest Violent Fugitive
Albuquerque, NM – On Thursday, March 06, 2014, the United States Marshals Service, South West Investigative Fugitive Team (SWIFT) task force arrested Jamaal Lee. Lee had an outstanding warrant for Armed Robbery, Aggravated Burglary, Aggravated Battery, Aggravated Assault, Felon in Possession of a Firearm, Aggravated Fleeing, Resisting Arrest, Tampering with Evidence, and several other felonies to total twenty felony crimes in all. The Marshals Service task force arrested Lee in the 1000 block of Madeira in Southeast Albuquerque, NM. The state of New Mexico issued the warrant for Lee’s arrest in December of 2013. Lee was arrested without incident and booked into the Metropolitan Detention Center.
U.S. Marshals Arrest Violent Fugitive
Albuquerque, NM – On Thursday, March 06, 2014, the United States Marshals Service, South West Investigative Fugitive Team (SWIFT) task force arrested Jamaal Lee. Lee had an outstanding warrant for Armed Robbery, Aggravated Burglary, Aggravated Battery, Aggravated Assault, Felon in Possession of a Firearm, Aggravated Fleeing, Resisting Arrest, Tampering with Evidence, and several other felonies to total twenty felony crimes in all. The Marshals Service task force arrested Lee in the 1000 block of Madeira in Southeast Albuquerque, NM. The state of New Mexico issued the warrant for Lee’s arrest in December of 2013. Lee was arrested without incident and booked into the Metropolitan Detention Center.
Thursday, March 13, 2014
U.S. MARSHALS FUGITIVE TASK FORCE ARRESTS BANK ROBBERY SUSPECT
FROM: U.S. MARSHALS SERVICE
U.S. Marshals Fugitive Task Force Arrests Kentucky Bank Robbery Suspect
Williamsport, PA – Today, U.S. Marshal Martin J. Pane announced that the United States Marshals Service (USMS) Fugitive Task Force arrested Daryl Ingram – a 44-year old man in Williamsport, Pennsylvania.
On April 20, 2009, the Lexington Police Department responded to a report of a bank robbery. The investigation revealed that the suspect was armed with a deadly weapon and threatened the use of immediate physical force to accomplish this crime. The suspect was later identified as Daryl Ingram.
On August 3rd, District Court Judge T. Bell issued an arrest warrant charging Ingram with the following crimes:
Robbery, 1st Degree
Possession of firearm by convicted felon
Theft of identity of another w/o consent
The case was adopted by the Central Kentucky Fugitive Task Force, which is led by US Marshals out of Lexington, KY. After exhausting leads in both Virginia and Georgia, Marshals in Kentucky believed that Ingram may have fled to the Williamsport, PA area and sent an investigative lead to the Middle District of Pennsylvania Fugitive Task Force.
On March 5th, Deputy U.S. Marshals and Task Force Officers arrested Ingram without incident in the 700 block of West Edwin Street in Williamsport. Ingram was taken before Judge Alan Page. Ingram was remanded after he failed to post the $350,000 bond issued by Judge Page. Ingram currently awaits his extradition back to Kentucky.
United States Marshal Martin J. Pane stated, “The U.S. Marshals Service Fugitive Task Force places a high priority on fugitive cases in which the use or threat of violence against innocent victims occurs. Robbery of a bank undermines our society and fugitives like Ingram deserve their day in court. We have given him that opportunity.”
The USMS worked jointly in this investigation with personnel from the Lycoming County Sheriff’s Office. This agency is a participating member of the USMS Fugitive Task Force in the Middle District of Pennsylvania.
U.S. Marshals Fugitive Task Force Arrests Kentucky Bank Robbery Suspect
Williamsport, PA – Today, U.S. Marshal Martin J. Pane announced that the United States Marshals Service (USMS) Fugitive Task Force arrested Daryl Ingram – a 44-year old man in Williamsport, Pennsylvania.
On April 20, 2009, the Lexington Police Department responded to a report of a bank robbery. The investigation revealed that the suspect was armed with a deadly weapon and threatened the use of immediate physical force to accomplish this crime. The suspect was later identified as Daryl Ingram.
On August 3rd, District Court Judge T. Bell issued an arrest warrant charging Ingram with the following crimes:
Robbery, 1st Degree
Possession of firearm by convicted felon
Theft of identity of another w/o consent
The case was adopted by the Central Kentucky Fugitive Task Force, which is led by US Marshals out of Lexington, KY. After exhausting leads in both Virginia and Georgia, Marshals in Kentucky believed that Ingram may have fled to the Williamsport, PA area and sent an investigative lead to the Middle District of Pennsylvania Fugitive Task Force.
On March 5th, Deputy U.S. Marshals and Task Force Officers arrested Ingram without incident in the 700 block of West Edwin Street in Williamsport. Ingram was taken before Judge Alan Page. Ingram was remanded after he failed to post the $350,000 bond issued by Judge Page. Ingram currently awaits his extradition back to Kentucky.
United States Marshal Martin J. Pane stated, “The U.S. Marshals Service Fugitive Task Force places a high priority on fugitive cases in which the use or threat of violence against innocent victims occurs. Robbery of a bank undermines our society and fugitives like Ingram deserve their day in court. We have given him that opportunity.”
The USMS worked jointly in this investigation with personnel from the Lycoming County Sheriff’s Office. This agency is a participating member of the USMS Fugitive Task Force in the Middle District of Pennsylvania.
Monday, March 10, 2014
2 SHIPPING COMPANIES TO PAY $3.4 MILLION TO SETTLE FIX FIXING GOVERNMENT CONTRACTS
FROM: U.S. JUSTICE DEPARTMENT
Friday, March 7, 2014
Two Ocean Shipping Companies to Pay $3.4 Million to Settle Claims of Price Fixing Government Cargo Transportation Contracts
Sea Star Line LLC and Horizon Lines LLC have agreed to resolve allegations that they violated the False Claims Act by fixing the price of government cargo transportation contracts between the continental United States and Puerto Rico, the Department of Justice announced today. Under the settlement agreements, Sea Star Line has agreed to pay $1.9 million, and Horizon Lines has agreed to pay $1.5 million.
“Today’s civil settlements demonstrate our continuing vigilance to ensure that those doing business with the government do not engage in anticompetitive conduct,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Government contractors who seek to profit at the expense of taxpayers will face serious consequences.”
The government alleged that former executives of the defendant ocean shippers used personal email accounts to communicate confidential bidding information, thereby enabling each of the shippers to know the transportation rates that its competitor intended to submit to federal agencies for specific routes. This information allowed the shippers to allocate specific routes between themselves at predetermined rates. Among the contracts affected were U.S. Postal Service contracts to transport mail and Department of Agriculture contracts to ship food. Both Sea Star Line and Horizon Lines previously pleaded guilty, in related criminal proceedings, to anticompetitive conduct in violation of the Sherman Act.
“Postal Service contractors must understand and know that actions that undermine the contracting process, such as conspiring to suppress and eliminate competition, will not be tolerated and will be aggressively investigated,” said Tom Frost, Special Agent in Charge of the Major Fraud Investigations Division (MFID) with the Postal Service Office of Inspector General. “MFID will continue to work with DOJ, both criminally and civilly, to bring those individuals and companies to justice.”
The civil settlements resolve allegations in a lawsuit filed in federal court in Jacksonville, Fla., by former Sea Star Line executive William B. Stallings. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Stallings will receive $512,719 of the recovered funds.
The settlements were the result of a coordinated effort by the Civil Division of the Department of Justice and the U.S. Postal Service Office of Inspector General.
The case is captioned United States ex rel. Stallings v. Sea Star Line LLC, et al., Case No. 3:13-cv-152-J-12JBT (M.D. Fla.). The claims resolved by the settlements are allegations only, except to the extent the conduct was admitted as part of the defendants’ prior guilty pleas, and there has been no determination of liability.
Friday, March 7, 2014
Two Ocean Shipping Companies to Pay $3.4 Million to Settle Claims of Price Fixing Government Cargo Transportation Contracts
Sea Star Line LLC and Horizon Lines LLC have agreed to resolve allegations that they violated the False Claims Act by fixing the price of government cargo transportation contracts between the continental United States and Puerto Rico, the Department of Justice announced today. Under the settlement agreements, Sea Star Line has agreed to pay $1.9 million, and Horizon Lines has agreed to pay $1.5 million.
“Today’s civil settlements demonstrate our continuing vigilance to ensure that those doing business with the government do not engage in anticompetitive conduct,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Government contractors who seek to profit at the expense of taxpayers will face serious consequences.”
The government alleged that former executives of the defendant ocean shippers used personal email accounts to communicate confidential bidding information, thereby enabling each of the shippers to know the transportation rates that its competitor intended to submit to federal agencies for specific routes. This information allowed the shippers to allocate specific routes between themselves at predetermined rates. Among the contracts affected were U.S. Postal Service contracts to transport mail and Department of Agriculture contracts to ship food. Both Sea Star Line and Horizon Lines previously pleaded guilty, in related criminal proceedings, to anticompetitive conduct in violation of the Sherman Act.
“Postal Service contractors must understand and know that actions that undermine the contracting process, such as conspiring to suppress and eliminate competition, will not be tolerated and will be aggressively investigated,” said Tom Frost, Special Agent in Charge of the Major Fraud Investigations Division (MFID) with the Postal Service Office of Inspector General. “MFID will continue to work with DOJ, both criminally and civilly, to bring those individuals and companies to justice.”
The civil settlements resolve allegations in a lawsuit filed in federal court in Jacksonville, Fla., by former Sea Star Line executive William B. Stallings. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Stallings will receive $512,719 of the recovered funds.
The settlements were the result of a coordinated effort by the Civil Division of the Department of Justice and the U.S. Postal Service Office of Inspector General.
The case is captioned United States ex rel. Stallings v. Sea Star Line LLC, et al., Case No. 3:13-cv-152-J-12JBT (M.D. Fla.). The claims resolved by the settlements are allegations only, except to the extent the conduct was admitted as part of the defendants’ prior guilty pleas, and there has been no determination of liability.
Sunday, March 9, 2014
IDENTITY THEFT RING LEADER SENTENCED TO 12 YEARS IN PRISON
FROM: U.S. JUSTICE DEPARTMENT
Friday, March 7, 2014
Leader of Identity Theft Ring Sentenced for Stealing More Than 600 Identities and Causing More Than $1 Million in Losses
The leader of an identity theft ring that stole more than 600 identities from U.S. government employees and others was sentenced today to serve 12 years in prison, followed by three years of supervised release.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting United States Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Kathy A. Michalko of the United States Secret Service’s Washington Field Office and Chief Edwin C. Roessler Jr. of the Fairfax County Police Department made the announcement.
Jenaro Blalock, 31, of Clinton, Md., pleaded guilty on Oct. 29, 2013, to access device fraud and aggravated identity theft and was sentenced by United States District Judge Claude M. Hilton. Blalock was also ordered to pay full restitution to victims.
According to court documents, between June 2011 and July 2013, Blalock and co-leader Christopher Bush recruited women with access to identity information through their employers to steal more than 600 identities, primarily belonging to employees of the U.S. Department of State, the U.S. Department of Defense and the U.S. Agency for International Development. Blalock provided blank driver’s licenses so that Bush could make fraudulent driver’s licenses bearing the victims’ real names, addresses and dates of birth. Blalock also made fraudulent credit cards bearing victims’ names. Members of the identity theft ring, including Blalock, used those fraudulent driver’s licenses and victims’ social security numbers to open instant credit lines at retailers and obtain rental cars, which were frequently sold on the black market with altered vehicle identification numbers. According to information provided at sentencing, the identity theft ring caused victim losses of between $1 million and $2.5 million.
On Jan. 17, 2014, Bush was sentenced to serve 10 years in prison for his role in the scheme.
This case was investigated by the United States Secret Service and the Fairfax County Police Department, with assistance from the City of Fairfax Police Department, Prince George’s County Washington Area Vehicle Enforcement, Prince George’s County Financial Crimes Section, the Metropolitan Washington Airport Authority, the Delaware State Police, the Maryland State Police, the D.C. Metropolitan Police Department, the U.S. Postal Inspection Service, the Office of the Inspector General of the U.S. Department of Agriculture and the Office of the Inspector General of the U.S. Department of State .
The case was prosecuted by Trial Attorney Peter Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Lindsay Kelly of the Eastern District of Virginia.
Friday, March 7, 2014
Leader of Identity Theft Ring Sentenced for Stealing More Than 600 Identities and Causing More Than $1 Million in Losses
The leader of an identity theft ring that stole more than 600 identities from U.S. government employees and others was sentenced today to serve 12 years in prison, followed by three years of supervised release.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting United States Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Kathy A. Michalko of the United States Secret Service’s Washington Field Office and Chief Edwin C. Roessler Jr. of the Fairfax County Police Department made the announcement.
Jenaro Blalock, 31, of Clinton, Md., pleaded guilty on Oct. 29, 2013, to access device fraud and aggravated identity theft and was sentenced by United States District Judge Claude M. Hilton. Blalock was also ordered to pay full restitution to victims.
According to court documents, between June 2011 and July 2013, Blalock and co-leader Christopher Bush recruited women with access to identity information through their employers to steal more than 600 identities, primarily belonging to employees of the U.S. Department of State, the U.S. Department of Defense and the U.S. Agency for International Development. Blalock provided blank driver’s licenses so that Bush could make fraudulent driver’s licenses bearing the victims’ real names, addresses and dates of birth. Blalock also made fraudulent credit cards bearing victims’ names. Members of the identity theft ring, including Blalock, used those fraudulent driver’s licenses and victims’ social security numbers to open instant credit lines at retailers and obtain rental cars, which were frequently sold on the black market with altered vehicle identification numbers. According to information provided at sentencing, the identity theft ring caused victim losses of between $1 million and $2.5 million.
On Jan. 17, 2014, Bush was sentenced to serve 10 years in prison for his role in the scheme.
This case was investigated by the United States Secret Service and the Fairfax County Police Department, with assistance from the City of Fairfax Police Department, Prince George’s County Washington Area Vehicle Enforcement, Prince George’s County Financial Crimes Section, the Metropolitan Washington Airport Authority, the Delaware State Police, the Maryland State Police, the D.C. Metropolitan Police Department, the U.S. Postal Inspection Service, the Office of the Inspector General of the U.S. Department of Agriculture and the Office of the Inspector General of the U.S. Department of State .
The case was prosecuted by Trial Attorney Peter Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Lindsay Kelly of the Eastern District of Virginia.
Saturday, March 8, 2014
JUSTICE SUES TO CLOSE DOWN TAX PREPARER, ALLEGING FRAUD
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, March 4, 2014
Justice Department Sues to Shut Down Dallas Tax Return Preparer
The United States has asked a federal court in Dallas, Texas, to permanently bar Ricia Daniels and her company, Ricia’s Convenience Tax Service, from preparing federal tax returns for others, the Justice Department announced today.
The complaint alleges that, through her business, Daniels understates her customers’ federal tax liabilities by reporting false or inflated personal and business expenses, reporting false or inflated education expenses and improperly claiming other tax credits. According to the complaint, an Internal Revenue Service (IRS) investigation revealed that 97 out of 98 income tax returns prepared by Daniels and audited by the IRS resulted in understatements of her customers’ tax liabilities. The government alleges that the tax harm caused by these understatements exceeds $500,000.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013 .
Tuesday, March 4, 2014
Justice Department Sues to Shut Down Dallas Tax Return Preparer
The United States has asked a federal court in Dallas, Texas, to permanently bar Ricia Daniels and her company, Ricia’s Convenience Tax Service, from preparing federal tax returns for others, the Justice Department announced today.
The complaint alleges that, through her business, Daniels understates her customers’ federal tax liabilities by reporting false or inflated personal and business expenses, reporting false or inflated education expenses and improperly claiming other tax credits. According to the complaint, an Internal Revenue Service (IRS) investigation revealed that 97 out of 98 income tax returns prepared by Daniels and audited by the IRS resulted in understatements of her customers’ tax liabilities. The government alleges that the tax harm caused by these understatements exceeds $500,000.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013 .
Friday, March 7, 2014
COUPLE CHARGED FOR ILLEGALY HARBORING DOMESTIC SERVANT IN THEIR HOME
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, March 5, 2014
Alexandria, Va., Couple Arrested on Immigration Charges for Harboring Domestic Servant in Their Home
The Department of Justice announced today that a federal criminal complaint has been filed in the Eastern District of Virginia charging defendants Abdelkader and Hnia Amal with immigration offenses in connection with allegations that they held a woman in their home as a domestic servant for three years. The defendants were each charged with one count of alien harboring for commercial advantage and private financial gain.
According to the complaint, the defendants, who are husband and wife, concealed, harbored and shielded from detection in their home in Alexandria, Va., a Moroccan national, identified in the complaint as Witness-1, from December 2007 until December 2010. The complaint also alleges that Hnia Amal had the Moroccan national work for her commercial cleaning company, cleaning various residential and commercial properties. As further alleged in the complaint, the defendants unlawfully brought the Moroccan national into the United States on a visa they procured based on false representations that the Moroccan national would be employed as a domestic servant for a different employer. According to the complaint, the defendants allegedly benefitted financially by paying the Moroccan national only $9,000 for over three years of full-time work in their home and for Hnia Amal’s commercial cleaning company.
If convicted, Abdelkader and Hnia Amal could face a statutory maximum sentence of 10 years in prison and a $250,000 fine. A complaint is merely an accusation, and the defendants are presumed innocent unless proven guilty.
This case is being investigated by the FBI – Washington Field Office and the U.S. Department of State’s Diplomatic Security Service. The case is being prosecuted by Special Assistant U.S. Attorney C. Alexandria Bogle of the Eastern District of Virginia and Trial Attorney Matthew Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Wednesday, March 5, 2014
Alexandria, Va., Couple Arrested on Immigration Charges for Harboring Domestic Servant in Their Home
The Department of Justice announced today that a federal criminal complaint has been filed in the Eastern District of Virginia charging defendants Abdelkader and Hnia Amal with immigration offenses in connection with allegations that they held a woman in their home as a domestic servant for three years. The defendants were each charged with one count of alien harboring for commercial advantage and private financial gain.
According to the complaint, the defendants, who are husband and wife, concealed, harbored and shielded from detection in their home in Alexandria, Va., a Moroccan national, identified in the complaint as Witness-1, from December 2007 until December 2010. The complaint also alleges that Hnia Amal had the Moroccan national work for her commercial cleaning company, cleaning various residential and commercial properties. As further alleged in the complaint, the defendants unlawfully brought the Moroccan national into the United States on a visa they procured based on false representations that the Moroccan national would be employed as a domestic servant for a different employer. According to the complaint, the defendants allegedly benefitted financially by paying the Moroccan national only $9,000 for over three years of full-time work in their home and for Hnia Amal’s commercial cleaning company.
If convicted, Abdelkader and Hnia Amal could face a statutory maximum sentence of 10 years in prison and a $250,000 fine. A complaint is merely an accusation, and the defendants are presumed innocent unless proven guilty.
This case is being investigated by the FBI – Washington Field Office and the U.S. Department of State’s Diplomatic Security Service. The case is being prosecuted by Special Assistant U.S. Attorney C. Alexandria Bogle of the Eastern District of Virginia and Trial Attorney Matthew Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Wednesday, March 5, 2014
DENTIST CHARGED WITH TRYING TO PULL TAX EVASION SCHEME
FROM: JUSTICE DEPARTMENT
Friday, February 28, 2014
Massachusetts Dentist Charged with Tax Evasion
A federal grand jury in Boston has indicted George Fenzell for tax evasion and corruptly endeavoring to obstruct the Internal Revenue Service (IRS), the Justice Department and the IRS announced today following the unsealing of the indictment. Fenzell, of Douglas, Mass., is a practicing dentist with offices in Shrewsbury, Mass., and Brookline, N.H.
According to the indictment, from 1999 through 2012, Fenzell engaged in conduct intended to obstruct the IRS from computing, assessing and collecting his income taxes. He stopped filing timely tax returns and allegedly tried to conceal his dental practice income in a variety of ways. The indictment alleges that Fenzell used nominee entities, including River Valley Dental and Brookline Dental Associates Trust, to conceal his dental practice receipts. The indictment also alleges that he used multiple bank accounts in three separate states, including commingled accounts maintained by third parties, to conceal his ownership of funds.
According to the indictment, Fenzell used nominees as trustees to make it appear as though other individuals owned and controlled his assets and income. Finally, Fenzell allegedly falsified his delinquent 2006 and 2007 tax returns and made extensive use of cash in order to conceal his fraud.
The indictment further alleges that in 2007, Fenzell, prompted in part by a Massachusetts Department of Revenue investigation, filed delinquent federal tax returns for tax years 2000 through 2005. Those returns allegedly reported that he owed approximately $129,000 in federal income taxes for these years, which resulted in a total of more than $300,000 including interest and penalties.
According to the indictment, between 2007 and 2012, Fenzell allegedly sought to evade IRS collection by making his business receipts payable to nominee entities and by using nominee bank accounts in Florida and Rhode Island to divert and hide collectible income and assets. The indictment also alleges that Fenzell failed to file his 2008 through 2011 tax returns at that time required by law, and used nominee entities and accounts in an effort to evade his taxes.
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. If convicted, Fenzell faces a statutory maximum potential sentence of five years in prison for each count of tax evasion and a statutory maximum potential sentence of three years in prison for the count of corruptly endeavoring to obstruct the IRS.
This case was investigated by IRS-Criminal Investigation Special Agents. It is being prosecuted by Assistant Chief John N. Kane Jr. and Trial Attorney Robert Kennedy of the Tax Division.
Friday, February 28, 2014
Massachusetts Dentist Charged with Tax Evasion
A federal grand jury in Boston has indicted George Fenzell for tax evasion and corruptly endeavoring to obstruct the Internal Revenue Service (IRS), the Justice Department and the IRS announced today following the unsealing of the indictment. Fenzell, of Douglas, Mass., is a practicing dentist with offices in Shrewsbury, Mass., and Brookline, N.H.
According to the indictment, from 1999 through 2012, Fenzell engaged in conduct intended to obstruct the IRS from computing, assessing and collecting his income taxes. He stopped filing timely tax returns and allegedly tried to conceal his dental practice income in a variety of ways. The indictment alleges that Fenzell used nominee entities, including River Valley Dental and Brookline Dental Associates Trust, to conceal his dental practice receipts. The indictment also alleges that he used multiple bank accounts in three separate states, including commingled accounts maintained by third parties, to conceal his ownership of funds.
According to the indictment, Fenzell used nominees as trustees to make it appear as though other individuals owned and controlled his assets and income. Finally, Fenzell allegedly falsified his delinquent 2006 and 2007 tax returns and made extensive use of cash in order to conceal his fraud.
The indictment further alleges that in 2007, Fenzell, prompted in part by a Massachusetts Department of Revenue investigation, filed delinquent federal tax returns for tax years 2000 through 2005. Those returns allegedly reported that he owed approximately $129,000 in federal income taxes for these years, which resulted in a total of more than $300,000 including interest and penalties.
According to the indictment, between 2007 and 2012, Fenzell allegedly sought to evade IRS collection by making his business receipts payable to nominee entities and by using nominee bank accounts in Florida and Rhode Island to divert and hide collectible income and assets. The indictment also alleges that Fenzell failed to file his 2008 through 2011 tax returns at that time required by law, and used nominee entities and accounts in an effort to evade his taxes.
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. If convicted, Fenzell faces a statutory maximum potential sentence of five years in prison for each count of tax evasion and a statutory maximum potential sentence of three years in prison for the count of corruptly endeavoring to obstruct the IRS.
This case was investigated by IRS-Criminal Investigation Special Agents. It is being prosecuted by Assistant Chief John N. Kane Jr. and Trial Attorney Robert Kennedy of the Tax Division.
Tuesday, March 4, 2014
INVESTOR PLEADS GUILTY TO RIGGING BIDS AT PUBLIC FORECLOSURE AUCTIONS
FROM: JUSTICE DEPARTMENT
NORTHERN CALIFORNIA REAL ESTATE INVESTOR AGREES TO PLEAD
GUILTY TO BID RIGGING AND FRAUD AT PUBLIC FORECLOSURE AUCTIONS
GUILTY TO BID RIGGING AND FRAUD AT PUBLIC FORECLOSURE AUCTIONS
Investigations Have Yielded 44 Plea Agreements to Date
WASHINGTON — A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Charles Gonzales, of Alamo, Calif. Including Gonzales, a total of 44 individuals have pleaded guilty or agreed to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, beginning as early as April 2009 until about October 2010, Gonzales conspired with others not to bid against one another, and instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, Calif. Gonzales was also charged with conspiring to commit mail fraud by fraudulently acquiring title to selected Alameda County properties sold at public auctions and making and receiving payoffs and diverting money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.
“The Antitrust Division’s ongoing investigation has resulted in charges against 44 individuals for their roles in schemes that defraud distressed homeowners and lenders,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will continue to work with its law enforcement partners to vigorously protect competition at the local level.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda County public foreclosure auctions at non-competitive prices. When real estate properties are sold at the auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, the conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
“The symbolism of holding illegitimate and fraudulent private auctions near a courthouse is deplorable,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The justice system will continue to prevail in this ongoing investigation pursuing bid rigging and fraud at public foreclosure auctions.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges 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 $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.
Monday, March 3, 2014
CIVILIAN EMPLOYEE CHARGED WITH STEALING $360,000 IN HOUSING BENEFITS
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, February 25, 2014
Civilian Navy Employee Charged With Stealing More Than $360,000 in Housing Benefits
A civilian employee of the U.S. Navy posted at the Capodichino Navy Base near Naples, Italy, was arraigned yesterday in Norfolk, Va., for allegedly obtaining more than $360,000 in housing benefits that he was not entitled to receive.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and United States Attorney Nicholas A. Klinefeldt of the Southern District of Iowa made the announcement.
Steven William Ashton, 41, was charged in a seven-count indictment returned by a grand jury in the Southern District of Iowa on Feb. 19, 2014. He is charged with theft of government funds for obtaining more than $360,000 in housing benefits, called Living Quarters Assistance (LQA), to which he was not entitled. He is also charged with presenting a falsified lease and making false statements in an effort to justify those benefits when confronted by a federal agent from the Naval Criminal Investigative Service (NCIS).
According to court documents, from April 2004 to the present, Ashton has been employed by the Navy as the NATO and Host Nation Programs Manager for the regions of Europe, Africa and Southwest Asia, managing contracts and agreements among the Navy and other countries to support the United States’ military efforts. Because he lived off-base, he was entitled to an LQA allowance to reimburse him for his payments for rent and other housing expenses. But when he allegedly moved in with his future wife and stopped paying rent in November 2005, he continued receiving the rental subsidies even though he was no longer eligible for them. When confronted by an NCIS agent investigating the matter, Ashton allegedly forged a lease in 2013 with his father-in-law – who had died in 2007 – and provided the lease along with false explanations to the NCIS agent.
Ashton is also charged with creating and submitting to the U.S. Navy various fraudulent documents to obtain other benefits. According to the indictment, Ashton created false documents to obtain a Foreigners’ Permit of Stay from the Italian government that allowed him to travel in and out of Italy without a visa and to be tax exempt for wages earned in Italy. He also allegedly created false documents to obtain a Permanent Logistic Support letter that gave Ashton Navy benefits such as purchasing tax-free gas at a savings of more than 50 percent, and a Civilian Access Card that provided him free access to U.S. military facilities world-wide, including use of the tax-free military shopping facilities. In addition, Ashton used fraudulent U.S. Coast Guard documentation purporting to show that Ashton had the licenses needed to moor a boat at discounted rates in the Bay of Naples, which saved him more than $28,000 in mooring fees.
Ashton was arrested on the Navy base in Italy and flown to Norfolk for his initial appearance. A preliminary hearing is scheduled for March 4, 2014 in the Southern District of Iowa.
Tuesday, February 25, 2014
Civilian Navy Employee Charged With Stealing More Than $360,000 in Housing Benefits
A civilian employee of the U.S. Navy posted at the Capodichino Navy Base near Naples, Italy, was arraigned yesterday in Norfolk, Va., for allegedly obtaining more than $360,000 in housing benefits that he was not entitled to receive.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and United States Attorney Nicholas A. Klinefeldt of the Southern District of Iowa made the announcement.
Steven William Ashton, 41, was charged in a seven-count indictment returned by a grand jury in the Southern District of Iowa on Feb. 19, 2014. He is charged with theft of government funds for obtaining more than $360,000 in housing benefits, called Living Quarters Assistance (LQA), to which he was not entitled. He is also charged with presenting a falsified lease and making false statements in an effort to justify those benefits when confronted by a federal agent from the Naval Criminal Investigative Service (NCIS).
According to court documents, from April 2004 to the present, Ashton has been employed by the Navy as the NATO and Host Nation Programs Manager for the regions of Europe, Africa and Southwest Asia, managing contracts and agreements among the Navy and other countries to support the United States’ military efforts. Because he lived off-base, he was entitled to an LQA allowance to reimburse him for his payments for rent and other housing expenses. But when he allegedly moved in with his future wife and stopped paying rent in November 2005, he continued receiving the rental subsidies even though he was no longer eligible for them. When confronted by an NCIS agent investigating the matter, Ashton allegedly forged a lease in 2013 with his father-in-law – who had died in 2007 – and provided the lease along with false explanations to the NCIS agent.
Ashton is also charged with creating and submitting to the U.S. Navy various fraudulent documents to obtain other benefits. According to the indictment, Ashton created false documents to obtain a Foreigners’ Permit of Stay from the Italian government that allowed him to travel in and out of Italy without a visa and to be tax exempt for wages earned in Italy. He also allegedly created false documents to obtain a Permanent Logistic Support letter that gave Ashton Navy benefits such as purchasing tax-free gas at a savings of more than 50 percent, and a Civilian Access Card that provided him free access to U.S. military facilities world-wide, including use of the tax-free military shopping facilities. In addition, Ashton used fraudulent U.S. Coast Guard documentation purporting to show that Ashton had the licenses needed to moor a boat at discounted rates in the Bay of Naples, which saved him more than $28,000 in mooring fees.
Ashton was arrested on the Navy base in Italy and flown to Norfolk for his initial appearance. A preliminary hearing is scheduled for March 4, 2014 in the Southern District of Iowa.
Sunday, March 2, 2014
WOMAN CONVICTED IN DEADLY FIREBOMBING CASE
FROM: U.S. JUSTICE DEPARTMENT
Friday, February 21, 2014
Philadelphia Woman Sentenced for Her Role in Deadly Firebombings
Kidada Savage, 31, of Philadelphia, was sentenced today to life in prison for her role in the Oct. 9, 2004, firebombing that killed six members of a federal witness’s family. Savage is the sister of Kaboni Savage, who ordered the firebombing and who was sentenced to death for 12 counts of murder in aid of racketeering.
Acting Assistant Attorney General Mythili Raman for the Justice Department’s Criminal Division, United States Attorney Zane David Memeger of the Eastern District of Pennsylvania and Special Agent in Charge Edward J. Hanko of the FBI’s Philadelphia Division made the announcement.
Kidada Savage was convicted on May 13, 2013, of six counts of murder in aid of racketeering, all related to the firebombing of Eugene Coleman’s family home. Coleman was a federal witness at the time. Six people, including four children, were killed in the arson. Kaboni and Kidada Savage were also convicted of conspiracy to commit murder in aid of racketeering, retaliating against a witness by murder and using fire to commit a felony.
Kidada Savage acted as a go-between for her brother, who was in federal custody awaiting a drug trial, and Lamont Lewis, who committed the firebombing. Lewis pleaded guilty and is awaiting sentencing. Robert Merritt and Steven Northington were also convicted in the case. Northington was sentenced to life; Merritt is awaiting sentencing.
The case was investigated by the FBI, the Internal Revenue Service – Criminal Investigation Division, the Philadelphia Police Department, the Philadelphia District Attorney’s Office and the Maple Shade Police Department in New Jersey. The United States Bureau of Prisons, United States Marshals Service and the Philadelphia / Camden High Intensity Drug Trafficking Area Task Force also assisted in the investigation.
The case was prosecuted by Trial Attorney Steve Mellin of the Criminal Division’s Capital Case Section and Assistant U.S. Attorneys David E. Troyer and John M. Gallagher.
Friday, February 21, 2014
Philadelphia Woman Sentenced for Her Role in Deadly Firebombings
Kidada Savage, 31, of Philadelphia, was sentenced today to life in prison for her role in the Oct. 9, 2004, firebombing that killed six members of a federal witness’s family. Savage is the sister of Kaboni Savage, who ordered the firebombing and who was sentenced to death for 12 counts of murder in aid of racketeering.
Acting Assistant Attorney General Mythili Raman for the Justice Department’s Criminal Division, United States Attorney Zane David Memeger of the Eastern District of Pennsylvania and Special Agent in Charge Edward J. Hanko of the FBI’s Philadelphia Division made the announcement.
Kidada Savage was convicted on May 13, 2013, of six counts of murder in aid of racketeering, all related to the firebombing of Eugene Coleman’s family home. Coleman was a federal witness at the time. Six people, including four children, were killed in the arson. Kaboni and Kidada Savage were also convicted of conspiracy to commit murder in aid of racketeering, retaliating against a witness by murder and using fire to commit a felony.
Kidada Savage acted as a go-between for her brother, who was in federal custody awaiting a drug trial, and Lamont Lewis, who committed the firebombing. Lewis pleaded guilty and is awaiting sentencing. Robert Merritt and Steven Northington were also convicted in the case. Northington was sentenced to life; Merritt is awaiting sentencing.
The case was investigated by the FBI, the Internal Revenue Service – Criminal Investigation Division, the Philadelphia Police Department, the Philadelphia District Attorney’s Office and the Maple Shade Police Department in New Jersey. The United States Bureau of Prisons, United States Marshals Service and the Philadelphia / Camden High Intensity Drug Trafficking Area Task Force also assisted in the investigation.
The case was prosecuted by Trial Attorney Steve Mellin of the Criminal Division’s Capital Case Section and Assistant U.S. Attorneys David E. Troyer and John M. Gallagher.
Saturday, March 1, 2014
ARYAN BROTHERHOOD OF TEXAS GANG LEADER PLEADS GUILTY TO RACKETEERING
FROM: U.S. JUSTICE DEPARTMENT
Friday, February 21, 2014
Reputed Aryan Brotherhood of Texas Gang Leader and a Fellow Gang Member Plead Guilty to Federal Racketeering Charges
An alleged general of the Aryan Brotherhood of Texas gang (ABT) and a fellow gang member pleaded guilty today to racketeering charges related to their membership in the ABT’s criminal enterprise, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
James Francis Sampsell, aka “Skitz,” 44, of Odessa, Texas, and Fredrick Michal Villarreal, aka, “Big Mike,” 35, of Houston, pleaded guilty before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity.
According to court documents, Sampsell, Villarreal and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang. Sampsell, Villarreal and numerous ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other activities.
By pleading guilty to racketeering charges, Sampsell and Villarreal admitted to being members of the ABT criminal enterprise.
According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to the superseding indictment, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT expanded its criminal enterprise to include illegal activities for profit.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violated the rules or posed a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
At sentencing, scheduled for Oct. 7, 2014, Sampsell and Villarreal each face a maximum penalty of life in prison.
Sampsell and Villarreal are two of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges. To date, 21 defendants have pleaded guilty.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite, Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.
Friday, February 21, 2014
Reputed Aryan Brotherhood of Texas Gang Leader and a Fellow Gang Member Plead Guilty to Federal Racketeering Charges
An alleged general of the Aryan Brotherhood of Texas gang (ABT) and a fellow gang member pleaded guilty today to racketeering charges related to their membership in the ABT’s criminal enterprise, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
James Francis Sampsell, aka “Skitz,” 44, of Odessa, Texas, and Fredrick Michal Villarreal, aka, “Big Mike,” 35, of Houston, pleaded guilty before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity.
According to court documents, Sampsell, Villarreal and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang. Sampsell, Villarreal and numerous ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other activities.
By pleading guilty to racketeering charges, Sampsell and Villarreal admitted to being members of the ABT criminal enterprise.
According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to the superseding indictment, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT expanded its criminal enterprise to include illegal activities for profit.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violated the rules or posed a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
At sentencing, scheduled for Oct. 7, 2014, Sampsell and Villarreal each face a maximum penalty of life in prison.
Sampsell and Villarreal are two of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges. To date, 21 defendants have pleaded guilty.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite, Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.
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