BANKER SENT TO PRISON FOR ROLE IN FRAUD CASE INVOLVING TARP MONEY

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, February 25, 2016

Former President and CEO of Georgia-Based Bank Sentenced to 84 Months in Prison for Role in Bank Fraud Conspiracy

A former president and CEO of a Georgia-based bank was sentenced today to 84 months in prison for his role in a conspiracy to commit bank fraud and major fraud against the United States.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney G.F. Peterman III of the Middle District of Georgia made the announcement.

Gary Patton Hall Jr., 50, of Tifton, Georgia, was sentenced by Senior U.S. District Judge Hugh Lawson of the Middle District of Georgia.  In addition to imposing the prison term, Judge Lawson ordered Hall to pay $3,931,018 in restitution to the bank and federal agencies for losses suffered.  In December 2015, Hall pleaded guilty to one count of conspiracy to commit bank fraud and one count of conspiracy to commit major fraud against the United States.

According to court documents, Hall was the president and CEO of Tifton Banking Company (TBC) from August 2005 until June 2010.  As part of his guilty plea, Hall admitted that he engaged in a scheme to mislead the bank and its loan committee about loans that TBC made to local individuals and businesses.  Hall hid past-due loans from the Federal Deposit Insurance Corporation (FDIC) and the TBC loan committee, which resulted in the bank continuing to approve and renew delinquent loans and loans for which the collateral was lacking, he admitted.   Several of the borrowers eventually defaulted on the loans, resulting in millions of dollars in losses to TBC and others.

At his plea hearing, Hall admitted that in certain transactions in which he exercised approval authority, he made false representations about the loans to TBC’s loan committee and hid his personal and business interests, including approving loans to the buyer of a condominium in Panama City Beach, Florida, owned by Hall himself.  Hall admitted that he hid the loans from the FDIC and state regulators when the buyer’s payments became delinquent, and that he received $50,000 profit from the sale of his condo.  The buyer eventually declared bankruptcy, resulting in a loss of more than $400,000 to TBC.

Hall also admitted to making fraudulent representations that led to commercial loan guarantees being issued by the U.S. Small Business Administration (SBA) and the U.S. Department of Agriculture (USDA) on two other loan transactions.  The loans were made by TBC and guaranteed by the government agencies to refinance earlier non-performing commercial loans made by TBC as part of the scheme to mislead bank regulators and hide the bank’s true financial condition.  Those guaranteed loans resulted in more than $2 million in losses to the bank and the agencies.

In November 2010, the Georgia Department of Banking and Finance closed TBC because of its poor financial condition.  At that time, TBC had not repaid the $3.8 million it received from the Department of Treasury’s Troubled Asset Relief Program (TARP).

The FBI, the Special Inspector General for TARP, the SBA’s Office of the Inspector General, the FDIC Office of the Inspector General, the USDA’s Office of Inspector General and the Tifton County Sheriff’s Office investigated the case.  Senior Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Robert McCullers of the Middle District of Georgia prosecuted the case.

GROCERY STORE OWNER SENTENCED TO PRISON FOR THEFT OF GOVERNMENT FUNDS

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, February 23, 2016

North Carolina Grocery Store Owner Sentenced to Prison for Conspiracy

A Wendell, North Carolina, man was sentenced to 20 months in prison today following his plea of guilty to commit theft of government funds, Acting Assistant Attorney General Caroline D. Ciraolo of the Department of the Justice’s Tax Division and Acting U.S. Attorney John Stuart Bruce of the Eastern District of North Carolina announced.

According to court documents, Jose Alfonso Rodriguez Collado, 54, operated two grocery stores in Middlesex and Siler City, North Carolina.  In 2012, co-conspirators brought Rodriguez fraudulently obtained U.S. Treasury checks, which Rodriguez cashed without receiving identification for the individuals listed on the checks, or any other source of authority for the co-conspirators to cash the checks.  Rodriguez initially was not a licensed check casher, but one co-conspirator gave him $50,000 to qualify for a check-cashing license.  In exchange for cashing the fraudulently obtained U.S. Treasury checks, Rodriguez was paid a fee for cashing the checks in excess of that allowed for under North Carolina law.  In addition, Rodriguez cashed checks in excess of $10,000 and failed to file Currency Transaction Reports as required by law.  The conspiracy caused a loss to the government of $2,502,348.

In addition to the prison term, U.S. District Court Judge Louise W. Flanagan of the Eastern District of North Carolina ordered Rodriguez to serve three years of supervised release following his prison term, and pay restitution to the IRS in the amount of $2,502,348.

Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Bruce commended special agents of Internal Revenue Service Criminal Investigation who investigated the case and Trial Attorneys Lauren Castaldi and Nathan Brooks of the Tax Division, who prosecuted the case.

THREE RECEIVE LIFE SENTENCES IN DELAWARE IN COURTHOUSE MURDER CONSPIRACY CASE

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, February 19, 2016

Three Family Members Receive Life Sentences for Courthouse Murder Conspiracy

David T. Matusiewicz, Lenore Matusiewicz and Amy Gonzalez were sentenced yesterday in federal court in Delaware to life in prison for the February 2013 murder of David Matusiewicz’s ex-wife and a friend at the New Castle County Courthouse, announced Acting U.S. Attorney David C. Weiss for the District of Delaware, Special Agent in Charge Kevin L. Perkins for the Federal Bureau of Investigation’s (FBI) Baltimore Division and Colonel Nathaniel McQueen Jr. for the Delaware State Police.

Following a five week jury trial this past summer, the defendants were convicted of conspiracy, interstate stalking resulting in death and cyberstalking resulting in death.  This was the first case in the nation where defendants were convicted of cyberstalking resulting in death.

After a lengthy sentencing hearing in Delaware, Judge McHugh concluded that David Matusiewicz and his father, Thomas Matusiewicz, acted with premeditated intent in the Feb. 11, 2013, murder of his ex-wife, Christine Belford, at the New Castle County Courthouse.  Thomas Matusiewicz also shot and killed Laura “Beth” Mulford, who accompanied Belford to the courthouse that morning.  Judge McHugh determined that, based on defendant’s repeated criminal conduct and the serious nature of the offense, which included “contempt for the law,” only a life sentence would protect the community and Belford’s children.

Lenore Matusiewicz and Gonzalez likewise received life sentences from Judge McHugh.  Lenore Matusiewicz was sentenced at her bedside last week at Jefferson Medical Center in Philadelphia, Pennsylvania.   Gonzalez was sentenced after her brother’s sentence was imposed.   Judge McHugh concluded that Gonzalez’s overall stalking conduct was inextricably intertwined with the conduct of her family members and that it was reasonably foreseeable to Gonzalez that an act of violence would occur when her brother, mother and father left for Delaware in early February 2013.

“The life sentences imposed by Judge McHugh were necessary to punish the defendants and to protect Christine Belford’s children and our community,” said Acting U.S. Attorney Weiss.  “We hope that these sentences provide some comfort to the victims’ families and we thank the law enforcement and legal communities for their contributions to the successful prosecution of this case.”

“The Matusiewicz family caused a lot of unnecessary harm in this case, killing and injuring innocent people for no reason, said Special Agent in Charge Perkins.  “This ground-breaking prosecution and investigation shows people who actively take part in planning crimes, even though they don't pull the trigger, will be held accountable.”

“The Delaware State Police supports the decision of the jury and the judge for holding all defendants in this case fully accountable for their actions,” said Colonel McQueen Jr. “The successful prosecution and sentencing of the defendants responsible in the first federal conviction of cyber-stalking resulting in death is truly welcomed news for all federal, state and local law enforcement involved in the investigation.  This investigation is a landmark case that emphasizes the impact and benefit to the community when all agencies are working together.”

According to the evidence presented at trial and sentencing, David Matusiewicz and Belford were involved in divorce and child custody proceedings in the family court of Delaware in 2007.  In August 2007, David Matusiewicz and his mother, Lenore Matusiewicz, kidnapped the three young children born of his marriage to Belford and fled to South America.  In March 2009, David and Lenore Matusiewicz and the young children were found living in a motor home in Nicaragua.  David and Lenore Matusiewicz were arrested and prosecuted in Delaware and the children were returned to the care of their mother.  In September 2009, David and Lenore Matusiewicz each pleaded guilty to crimes relating to their kidnapping of the children.

In December 2009, David Matusiewicz was sentenced in federal court to 48 months in prison, to be followed by five years of supervision by the U.S. Probation Office.  In the days following his December 2009 sentencing, David Matusiewicz began to orchestrate, from his prison cell, a course of conduct designed to stalk, harass and intimidate Belford and her children.  He enlisted his father, mother, sister and various other persons in this effort, which stretched from December 2009 to February 2013.  The Matusiewicz family’s stalking campaign included broad dissemination -- by mail, email, websites, Internet postings and other means – of false and defamatory allegations against Belford.  

After his release from federal custody, David Matusiewicz resided in southern Texas.  On Jan. 8, 2013, David Matusiewicz sought and received permission from the U.S. Probation Office in Texas to travel to Delaware to attend a child support arrearage hearing he had requested.  That hearing was scheduled for Feb. 11, 2013.  David Matusiewicz never informed the probation officer that he intended to travel to Delaware with Thomas and Lenore Matusiewicz.

On the morning of Feb. 11, 2013, David and Thomas Matusiewicz drove to a hotel parking garage near the New Castle County Courthouse in a Honda CRV, which contained ammunition, a military style knife, three sets of restraints of progressively smaller sizes, a bullet proof vest, an electric shock device, binoculars and photographs of Belford’s children and residence.  After entering the courthouse lobby at approximately 7:30 a.m., David Matusiewicz entered and stayed in the security screening line, while Thomas Matusiewicz moved around the lobby, occasionally approaching and talking to David Matusiewicz.

Shortly before 8:00 a.m., David Matusiewicz passed through courthouse security screening and walked to another floor of the building.  Thomas Matusiewicz remained in the lobby, where he shot Belford multiple times as she entered the courthouse lobby, killing her.  He then shot Mulford multiple times as she attempted to flee.  After a shootout during which he shot and injured two Capitol Police officers, Thomas Matusiewicz died on the sidewalk of the courthouse of a self-inflicted gunshot wound.

This case was investigated by the FBI and the Delaware State Police and is being prosecuted by Assistant U.S. Attorneys Jamie M. McCall and Shawn A. Weede.

TWO SENTENCED IN ARIZONA BRIBERY SCHEME INVOLVING A PASTOR AND TWO MENTAL HEALTH COMPANIES

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, February 18, 2016

Two Former Arkansas Officials Sentenced for Bribery Scheme

A former deputy director of the Arkansas Department of Human Services (ADHS), a multibillion-dollar state agency, and a former probation officer in Crittenden County, Arkansas, and West Memphis, Arkansas, councilmember were sentenced today in Little Rock, Arkansas, for engaging in a bribery scheme involving the owner of two mental health companies, announced Assistant Attorney General Leslie R. Caldwell of the Department of Justice’s Criminal Division and First Assistant U.S. Attorney Patrick C. Harris of the Eastern District of Arkansas.

Steven B. Jones, 51, of Marion, Arkansas, the former deputy director of ADHS, was sentenced to 30 months for conspiracy to commit bribery concerning programs receiving federal funds and honest services wire fraud and for federal funds bribery.  Co-conspirator Phillip W. Carter, 47, also of Marion, was sentenced to 24 months for conspiracy to commit bribery concerning programs receiving federal funds and honest services wire fraud.

According to the plea agreements, Carter and a local pastor served as intermediaries in a bribery scheme involving Jones and Theodore Suhl, the owner of two businesses that provided inpatient and outpatient mental health services to juveniles.  Jones admitted that, beginning in April 2007 and while serving as ADHS deputy director, he solicited and accepted multiple cash payments and other things of value from Suhl.  Suhl provided the cash payments and other things of value to Jones through Carter and the pastor, and in return, Jones admitted that he agreed to perform official acts that benefitted Suhl and his businesses.

As part of their pleas, both Jones and Carter admitted that they and other members of the conspiracy concealed their activity and dealings by, among other things, holding periodic meetings at restaurants in Memphis, Tennessee, or in rural Arkansas where they would not be easily recognized; funneling the cash payments through the pastor’s church; providing the bribe payments to Jones in cash so that the transactions would not be easily traceable; and speaking in code during phone conversations.

On Dec. 2, 2015, Suhl was indicted on one count of conspiracy to commit bribery and honest services fraud, three counts of honest services fraud, one count federal funds bribery and one count of interstate travel in aid of bribery and is awaiting trial.  The charges and allegations contained in that indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

The FBI’s Little Rock Field Office investigated both cases.  Assistant U.S. Attorney Angela S. Jegley of the U.S. Attorney’s Office for the Eastern District of Arkansas and Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section prosecuted Jones’s case.  Trial Attorneys Edward P. Sullivan, Lauren Bell and Gwendolyn A. Stamper of the Criminal Division’s Public Integrity Section prosecuted Carter’s case.

EXECS CHARGED IN CASE INVOLVING ELIMINATING COMPETITION IN WATER TREATMENT CHEMICALS BUSINESS

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, February 19, 2016

Two Executives Charged for Conspiring to Eliminate Competition to Supply Water Treatment Chemicals

Two water treatment chemicals executives were indicted in Newark, New Jersey, for their roles in a conspiracy to eliminate competition among suppliers of liquid aluminum sulfate to municipalities and pulp and paper companies in the United States, the Department of Justice announced today.

Vincent J. Opalewski, former president, vice president and general manager of a water treatment chemicals manufacturer headquartered in Parsippany, New Jersey, and Brian C. Steppig, director of sales and marketing of a water treatment chemicals manufacturer headquartered in Lafayette, Indiana, are the second and third executives charged in connection with the conspiracy, which sought to eliminate competition for contracts to supply liquid aluminum sulfate.  Liquid aluminum sulfate is a coagulant used by municipalities to treat drinking and waste water and by pulp and paper companies in their manufacturing processes.

“Municipalities and pulp and paper companies deserve competitive prices for water treatment chemicals,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.  “These charges reflect our ongoing efforts to hold accountable those who conspire to cheat their customers responsible for their crimes.”

“These charges send a message that anyone intent on corrupting the free market will be identified and brought to justice,” said Acting Special Agent in Charge Andrew Campi of the FBI’s Newark Division.  “Our mission is to protect victims who don't see these crimes occurring, but who always end up paying the price.”

The indictment, returned by a grand jury in the U.S. District Court for the District of New Jersey, alleges that Opalewski, from 2005 to 2011, and Steppig, from 1998 until 2011, and their co-conspirators participated in the conspiracy by meeting to discuss each other’s liquid aluminum sulfate business, agreeing to stay away from each other’s historical customers, submitting intentionally losing bids to favor the intended winner of the business, withdrawing inadvertently winning bids and discussing with each other prices to be quoted to municipalities and pulp and paper companies.

The charges contained in the indictment are allegations and not evidence of guilt.  The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.  

The investigation into collusion in the liquid aluminum sulfate industry is being conducted by the New York Office of the Antitrust Division and the FBI’s Newark Division.

MAN SENTENCED FOR ROLE IN BRIBERY CONSPIRACY RELATED TO U.S. CONTRACTOR IN AFGHANISTAN

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, February 16, 2016

Former Employee of U.S. Contractor in Afghanistan Sentenced on Bribery and Structuring Conspiracy Charges

A former government contractor employee was sentenced to 46 months in prison today for his role in a bribery scheme involving a federal program in Afghanistan and conspiracy to structure financial transactions to avoid currency transaction reporting requirements.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John M. Bales of the Eastern District of Texas, the Special Inspector General for Afghanistan Reconstruction (SIGAR) John F. Sopko, Special Agent in Charge Thomas M. Class Sr. of the FBI’s Dallas Division and Inspector General Ann Calvaresi Barr of the U.S. Agency for International Development (USAID) made the announcement.

George E. Green, 58, of Carrollton, Texas, who worked at International Relief and Development Inc. (IRD) in Afghanistan, was sentenced by U.S. District Judge Marcia A. Crone of the Eastern District of Texas, who also ordered the defendant to forfeit $51,000.

According to his plea agreement, Green served as IRD’s director of contracts, procurement and grants in connection with a cooperative agreement between USAID and IRD to strengthen economic stabilization and promote long-term agricultural development in specific areas of Afghanistan.  Green admitted that in March and April 2012, he solicited and received a $51,000 bribe from a representative of an Afghan company that provided agriculture-related products and that sought subcontracts from IRD.  Between May and August 2012, after he returned to Texas, he attempted to conceal the bribe proceeds by conspiring with others to make cash deposits of less than $10,000 each into his bank and credit card accounts to circumvent the financial institutions’ mandatory cash reporting requirements, he admitted.

SIGAR, the FBI and USAID’s Office of Inspector General investigated the case.  Former Special Trial Attorney Mark H. Dubester and Trial Attorney Michael T. O’Neill of the Criminal Division’s Fraud Section prosecuted the case.  Assistant U.S. Attorney Kevin McClendon of the Eastern District of Texas assisted with the prosecution.

WOMAN INDICTED FOR ROLE IN FEDERAL TAX FRAUD AND IDENTITY THEFT SCHEME

FROM:  U.S. JUSTICE DEPARTMENT

Tuesday, February 16, 2016

Illinois Woman Charged in Stolen Identity Tax Fraud Scheme

A Poplar Grove, Illinois resident was indicted by a federal grand jury today on six counts of mail fraud, six counts of aggravated identity theft and one count of access device fraud, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.

According to the indictment, Shameka Carr filed fraudulent tax returns with the Internal Revenue Service (IRS) in the names of individuals whose identities she had stolen.  Carr is alleged to have directed the IRS to issue the tax refunds requested on these fraudulent returns in the form of prepaid debit cards and U.S. Treasury checks, both of which were mailed to addresses she had access to in Rockford, Illinois, and surrounding areas.  It is further alleged that Carr used the debit cards and U.S. Treasury checks for her personal benefit.

If convicted, Carr faces a statutory maximum sentence of 20 years in prison for each mail fraud count, 15 years in prison for the charge of access device fraud and a mandatory sentence of two years in prison for each count of aggravated identity theft, which would be in addition to any other term of imprisonment she receives.  Carr also faces potential fines and restitution.

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

Acting Assistant Attorney General Ciraolo commended the U.S. Postal Inspection Service, IRS Criminal Investigation and the Boone County Sheriff’s Department, who investigated the case and Trial Attorneys Michael C. Boteler and John T. Mulcahy of the Tax Division, who are prosecuting the case.

SUBSIDIARIES OF SOFTWARE COMPANY TO PAY OVER $14.5 MILLION TO RESOLVE FOREIGN BRIBERY CASE

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, February 16, 2016

PTC Inc. Subsidiaries Agree to Pay More Than $14 Million to Resolve Foreign Bribery Charges

Two subsidiaries of Massachusetts software company PTC Inc. entered into a non-prosecution agreement and agreed to pay a $14.54 million penalty today to resolve the government’s investigation into whether the companies improperly provided recreational travel to Chinese government officials in violation of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.

According to admissions made in the resolution documents, Parametric Technology (Shanghai) Software Company Ltd. and Parametric Technology (Hong Kong) Ltd. (collectively, PTC China), through local business partners, arranged and paid for employees of various Chinese state-owned enterprises to travel to the United States, ostensibly for training at PTC Inc.’s headquarters in Massachusetts, but primarily for recreational travel to other parts of the United States, including New York, Los Angeles, Las Vegas and Hawaii.  PTC China paid a total of more than $1 million through its business partners to fund these trips, while during the same time period, PTC China entered into more than $13 million in contracts with the Chinese state-owned entities.  Company employees typically accompanied the Chinese officials on these trips.  PTC China admitted that the cost of these recreational trips was routinely hidden within the price of PTC China’s software sales to the Chinese state-owned entities whose employees went on the trips.

As part of the non-prosecution agreement, PTC China agreed to pay the criminal penalty, to continue to cooperate with the department, to enhance its compliance program and to periodically report to the department on the implementation of its enhanced compliance program.  The department reached this resolution based on a number of factors.  Among other factors, PTC China did not receive voluntary disclosure credit or full cooperation credit because, at the time of its initial disclosure, it failed to disclose relevant facts that it had learned in connection with a prior internal investigation and did not disclose those facts until the department uncovered additional information independently and brought them to PTC China’s attention.  By the conclusion of the investigation, however, the companies had provided to the department all relevant facts known to them, including information about individuals involved in the FCPA misconduct.

In a related matter, PTC Inc. reached a settlement today with the U.S. Securities and Exchange Commission (SEC) under which it agreed to pay $11,858,000 in disgorgement plus $1.764 million in prejudgment interest.  Thus, the approximately $28 million in combined penalty and disgorgement far exceeds the $13 million in contracts associated with the improper payments.

The FBI’s Boston Field Office investigated the case.  Trial Attorney Aisling O’Shea of the Criminal Division’s Fraud Section prosecuted the case.  The U.S. Attorney’s Office of the District of Massachusetts and the SEC also provided assistance during the investigation.

DOJ ANNOUNCES U.S. NAVY COMMANDER PLEADS GUILTY IN BRIBERY CASE INVOLVING PROSTITUTES

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, January 28, 2016

U.S. Navy Commander Pleads Guilty to Accepting Cash and Prostitutes in International Bribery Scheme

A U.S. Navy Commander pleaded guilty today to bribery charges, admitting that he accepted cash, gifts, travel expenses, entertainment and the services of prostitutes from foreign defense contractor Glenn Defense Marine Asia (GDMA) in exchange for classified U.S. Navy information, including ship schedules that contained information related to the U.S. Navy’s ballistic missile defense operations in the Pacific.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura Duffy of the Southern District of California, Deputy Inspector General for Investigations James B. Burch of the Defense Criminal Investigative Service (DCIS) and Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) made the announcement.

Michael Vannak Khem Misiewicz, 48, of San Diego, pleaded guilty before U.S. Magistrate Judge Jan Adler of the Southern District of California to one count of conspiracy and one count of bribery.  Sentencing is scheduled for April 29, 2016, before U.S. District Judge Janis L. Sammartino of the Southern District of California.

“In exchange for luxury vacations, gifts and other expenses, Commander Misiewicz betrayed his oath, the men and women of the U.S. Navy, and American taxpayers by directing lucrative government contracts to his financial patron,” said Assistant Attorney General Caldwell.  “Working with our law enforcement partners, the Department of Justice’s Criminal Division is committed to prosecuting corrupt officials who abuse positions of public trust.”

“Commander Misiewicz provided information to a foreign contractor that, in the wrong hands, could’ve had a devastating impact on national security,” said U.S. Attorney Duffy.  “By giving in to greed, he put his Navy shipmates and fellow Americans in harm’s way.  This guilty plea is an important step in ensuring that all those who violated their duty of trust to the United States in this affair are held accountable.”

“Today's guilty plea of Commander Misiewicz is yet another example of a U.S. Navy officer who sought to enrich himself at the expense of U.S. taxpayers,” said Director Burch.  “This type of reprehensible behavior will not be tolerated.  Those who serve in the U.S. Navy have an obligation to uphold the public's trust or suffer the consequences.  DCIS, the Naval Criminal Investigative Service and the Department of Justice will vigorously pursue this investigation wherever it may lead us.”

“Commander Misiewicz chose personal gain and gratification over sacrifice and service to our country," said Director Traver.  “His actions are antithetical to the Navy’s core values of honor, courage and commitment.  Along with DCIS, we will continue vigorously pursuing all aspects of the investigation.”

According to admissions in his plea agreement, from January 2011 until September 2013, Misiewicz provided classified U.S. Navy ship schedules and other sensitive U.S. Navy information to the defense contractor Leonard Glenn Francis, CEO and owner of Singapore-based GDMA.  GDMA provided port services to U.S. Navy ships and submarines when they arrived at ports throughout the Pacific.

Misiewicz admitted that when he was stationed in Japan, on the USS Mustin and in Colorado Springs, Colorado, he used his position and influence within the U.S. Navy to advance the interests of GDMA, including by providing Francis with classified ship schedules and other proprietary U.S. Navy information.  In return, Misiewicz admitted that Francis gave him cash, paid for luxury travel on at least eight occasions for Misiewicz and his family, provided his wife with a designer handbag and provided Misiewicz with the services of prostitutes on multiple occasions.  Throughout the conspiracy, Misiewicz admitted that he and his conspirators took steps to avoid detection by law enforcement by, among other means, using clandestine email accounts, which they periodically deleted.

To date, nine individuals have been charged in connection with this scheme; of those, eight have pleaded guilty, including Misiewicz, Captain Daniel Dusek, Commander Jose Luis Sanchez, NCIS Special Agent John Beliveau and U.S. Navy Petty Officer First Class Daniel Layug.  Former Department of Defense (DoD) civilian employee Paul Simpkins awaits trial.  On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; the others await sentencing.

The NCIS, the DCIS and the Defense Contract Audit Agency are conducting the ongoing investigation.  Assistant Chief Brian R. Young and Trial Attorney Lawrence Atkinson of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California are prosecuting the case.

DOJ ANNOUNCES TAX RETURN PREPARERS CONVICTED OF FILING FALSE TAX RETURNS

FROM:  U.S. JUSTICE DEPARTMENT

Wednesday, February 3, 2016

Three Texas Tax Return Preparers Convicted of Filing False Tax Returns for Clients

Three El Paso, Texas, tax return preparers were convicted by a jury yesterday in the U.S. District Court for the Western District of Texas (El Paso Division) of conspiracy to defraud the United States for their involvement in a fraudulent tax return preparation scheme and numerous counts of aiding and assisting in the preparation and filing of materially false federal income tax returns, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U. S. Attorney Richard L. Durbin Jr. for the Western District of Texas announced.

According to evidence and witness testimony introduced at the trial, Belia Mendoza, 60, was the owner of Mendez Tax Services (MTS), a tax preparation business she operated out of her home in El Paso.  Margarita Hernandez, 36, and Denise Duchene, 46, relatives of Mendoza’s, were employees of MTS hired and trained by Mendoza to prepare tax returns for clients for tax years 2008, 2009 and 2010.  From February 2009 until June 2011, Mendoza, Hernandez and Duchene conspired to prepare and submit to the Internal Revenue Service (IRS) numerous false Forms 1040 (U.S. Individual Income Tax Returns).

To maximize their clients’ income tax refunds, Mendoza, Hernandez and Duchene placed materially false items on the clients’ tax returns, at times without the knowledge or consent of the clients, including false or inflated figures for unreimbursed employee business expenses, child and dependent care expenses and education credits.  Income tax returns prepared by the defendants also included false filing statuses and improperly claimed Earned Income Tax Credits.

“These verdicts represent our continued commitment to identifying and prosecuting those individuals who willfully prepare and file false and fraudulent tax returns,” said Acting Assistant Attorney General Ciraolo.  “The millions of U.S. taxpayers who will file returns during the 2016 filing season are entitled to the assistance of honest and competent professionals, and the Tax Division will hold those preparers who in engage in criminal conduct accountable.”

“It’s tax season and the guilty verdicts for Belia Mendoza and her relatives, Margarita Hernandez and Denise Duchene, are proof that taxpayers are fed up with tax fraud and abuse,” said Special Agent in Charge William Cotter of IRS-Criminal Investigation, San Antonio. “Dishonest return preparers use a variety of methods to cheat the government. Remember, it is your responsibility to know what is on your income tax return. You are ultimately responsible for what gets filed with the IRS. Taxpayers are encouraged to visit the IRS.gov website for tips on looking for a reputable return preparer.”

Mendoza, Hernandez and Duchene each face up to five years in federal prison on the conspiracy charge and up to three years in federal prison for each false tax return preparation charge.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Durbin commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorney Joseph M. Giannullo of the Tax Division and Assistant U.S. Attorneys Adrian Gallegos and Rifian Newaz, who prosecuted the case.

TRUCKING COMPANY AGENT PLEADS GUILTY TO BRIBING PUBLIC OFFICIAL AT MILITARY BASE

FROM:  U.S. JUSTICE DEPARTMENT

Wednesday, February 3, 2016

Florida Man Pleads Guilty to Bribing Public Official at Georgia Military Base

A former agent for a large national trucking company has pleaded guilty for paying bribes to officials at the Marine Corps Logistics Base (MCLB) in Albany, Georgia, in order to obtain lucrative freight-hauling business, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney G.F. Peterman III of the Middle District of Georgia.

Ivan Dwight Brannan, 60, of Jupiter, Florida, pleaded guilty before U.S. District Judge W. Louis Sands of the Middle District of Georgia to one count of bribery of a public official.  

During his plea, Brannan admitted that from 2006 to 2012, he provided cash and other items of value to Mitchell Potts, a former traffic office supervisor for the Defense Logistics Agency (DLA) at MCLB-Albany, to ensure that his trucking company client was awarded millions of dollars of business at MCLB-Albany.  Brannan also admitted that he directed David Nelson, a truck driver, to provide cash and other things of value to both Potts and Jeffrey Philpot, another official in the DLA Traffic Office at MCLB-Albany.  From 2006 to 2012, Brannan and Nelson paid at least $120,000 in bribes to Potts and Philpot.    

Potts and Philpot both previously pleaded guilty to one count of bribery of a public official and were sentenced to 10 years and seven years in prison, respectively, for their roles in the conspiracy.  Nelson pleaded guilty to one count of bribery of a public official on Oct. 7, 2014, and awaits sentencing.

The U.S. Army Criminal Investigation Command, the Naval Criminal Investigative Service and the Defense Criminal Investigative Service are investigating the case.  Trial Attorney John Keller of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia are prosecuting the case.

ALLEGED "CRIPS GANG MEMBERS INDICTED IN NEBRASKA..."

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, January 29, 2016

Crips Gang Members Indicted in Nebraska for Racketeering Conspiracy and Related Offenses

Six alleged members of the Crips have been indicted for their alleged roles in a racketeering conspiracy involving murder, attempted murder and other offenses in Nebraska, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and the U.S. Attorney Deborah R. Gilg of the District of Nebraska.

A federal grand jury returned the superseding indictment on Jan. 27, 2016, and it was unsealed today in the District of Nebraska.  It charges Jerell Haynie, aka Bootie and T; Gregory Bahati, aka Pooh Bear and Murk 2x; Dionte Dortch, aka Killa Tay; Kendell Tealer; Brandon Heard, aka B; and Julio Arias, aka Rudy, all of Omaha, Nebraska, with conspiracy to participate in racketeering activity.  Haynie is also charged with one count of attempted murder in aid of racketeering, one count of attempt to commit assault with a dangerous weapon in aid of racketeering and one count of discharging a firearm during a crime of violence; Heard is also charged with three counts of distribution of cocaine base; Bahati is also charged with one count of threats in aid of racketeering and one count of brandishing a firearm during a crime of violence; Dortch is also charged with one count of felon in possession of a firearm, one count of witness tampering and one count of attempted obstruction of justice; and Arias is also charged with three counts of distribution of cocaine base.  As of this morning, five of the defendants are in custody; Heard is a fugitive.

According to the superseding indictment, the Crips is a violent street gang originally based in Los Angeles with members located throughout the country.  The Crips are divided into local chapters, referred to as “sets.”  There are numerous “sets” of Crips in the Omaha area, including but not limited to the “40th Ave Crips” and the “44th Ave Crips.”  The 40th Ave. Crips and the 44th Ave Crips have “cliqued up” in response to, and in order to protect themselves against, rival Blood gangs in Omaha.

The superseding indictment alleges that the 40th Ave Crips operated a drug-distribution organization dealing mainly in crack cocaine and sought to protect that enterprise through threats and violence.  The 40th Ave Crips also sought to keep victims and witnesses in fear of the gang through acts of violence.  Specifically, for example, the indictment alleges that in December 2010, Tealer used a firearm to shoot and kill a victim; in September 2012, Haynie shot at an occupied residence; and in April 2015, Dortch was in a vehicle with Crips associates, leaned out of a window and shot at four victims, including an infant, in another vehicle.

The Bureau of Alcohol, Tobacco, Firearms and Explosives field office in Omaha and the Omaha Police Department are investigating the case.  Trial Attorneys Yvonne L. Garcia and Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Matthew Molsen and Michael Norris of the District of Nebraska are prosecuting the case.

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