FORMER HONDURAN SOCCER FEDERATION PRESIDENT PLEADS GUILTY TO RACKETEERING, CORRUPTION AND WIRE FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 

Monday, March 28, 2016

Former President of Honduran Soccer Federation Pleads Guilty to Racketeering and Corruption Charges

Earlier today in federal court in Brooklyn, New York, Rafael Callejas, the president of the Honduran soccer federation (FENAFUTH) from 2002 to 2015, pleaded guilty to racketeering conspiracy and wire fraud conspiracy in connection with his receipt of bribes in exchange for the awarding of contracts for the media and marketing rights to FIFA World Cup qualifier matches.  Callejas, who served as the President of the Republic of Honduras from 1990 to 1994, also agreed to forfeit $650,000.  At sentencing, Callejas faces a maximum sentence of 20 years for each count.  Today’s plea proceeding took place before U.S. Magistrate Judge Robert M. Levy.

The guilty plea was announced by U.S. Attorney Robert L. Capers for the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez for FBI’s New York Field Office and Acting Special Agent in Charge Anthony J. Orlando for the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Los Angeles Field Office.

According to court filings and facts presented during the plea proceeding, Callejas negotiated and accepted bribes totaling hundreds of thousands of dollars in exchange for his agreement to exercise his influence as the president of FENAFUTH to award contracts to Media World, a Florida sports marketing company, for the media and marketing rights to the Honduran national soccer team’s home World Cup qualifier matches for the 2014, 2018 and 2022 editions of the World Cup.  Over a period of years, Media World transmitted these bribes from its U.S. bank accounts, through an intermediary, to the foreign bank accounts of the defendant and a co-conspirator.

The guilty plea announced today is part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI’s New York Field Office, and the IRS-CI Los Angeles Field Office.  The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Asset Forfeiture and Money Laundering Section and the Fraud Section, as well as from INTERPOL Washington.

Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Paul Tuchmann, Nadia Shihata, Keith D. Edelman and Brian D. Morris of the Eastern District of New York are in charge of today’s prosecution.

The government’s investigation is ongoing.

FORMER U.S. NAVY E8 OFFICER SENTENCED FOR ACCEPTING BRIBES IN AFGHANISTAN

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, March 29, 2016

Former Navy Noncommissioned Officer Sentenced to 24 Months in Prison for Accepting Bribes While Serving in Afghanistan

A former Navy noncommissioned officer was sentenced today to 24 months in prison for accepting approximately $25,000 in cash bribes from vendors while he served in Afghanistan.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Christopher P. Canova of the Northern District of Florida, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office, Special Inspector General for Afghanistan Reconstruction (SIGAR) John F. Sopko, Director Frank Robey of the U.S. Army Criminal Investigation Command (CID) Major Procurement Fraud Unit, Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office and Brigadier General Keith M. Givens of the Air Force Office of Special Investigations (OSI) made the announcement.

Donald P. Bunch, 46, of Pace, Florida, was sentenced by Senior U.S. District Judge Roger Vinson of the Northern District of Florida, who also ordered Bunch to pay a $5,000 fine and to forfeit $25,000.  Bunch pleaded guilty on Sept. 18, 2015, to a one-count information charging him with accepting bribes.

According to the plea agreement, from February 2009 to August 2009, Bunch worked as a U.S. Navy E8 senior chief at the Humanitarian Assistance Yard (HA Yard) at Bagram Airfield in Afghanistan.  The HA Yard purchased supplies from local Afghan vendors for use as part of the Commander’s Emergency Response Program, which enabled U.S. military commanders to respond to urgent humanitarian relief requirements in Afghanistan, Bunch admitted.

Bunch was responsible for replenishing food and supplies at the HA Yard and for selecting vendors from a pre-determined list to provide the necessary items, according to his plea.  In connection with his guilty plea, Bunch admitted that his predecessor had instructed him to rotate among the vendors.

According to admissions made in connection with his plea agreement, certain Afghan vendors offered money for the purpose of influencing their contracts.  Bunch admitted that he accepted a total of approximately $25,000 in bribes from the vendors and as a result, he secured on their behalf more frequent and lucrative contracts.  Bunch sent greeting cards stuffed with proceeds of the bribes to his wife and used the money to pay for the construction of a new home.

The FBI, SIGAR, CID, DCIS and OSI investigated the case.  Trial Attorney Daniel P. Butler of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David L. Goldberg of the Northern District of Florida prosecuted the case.

U.S. MARSHALS SERVICE ANNOUNCES ARREST OF MURDER SUSPECT WHO STOLE VICTIM'S CAR

FROM:  U.S. MARSHALS SERVICE 

March 24, 2016

U.S. Marshals Task Force Arrests Ft. Worth Murder Suspect

 JETFTF LogoTyler, TX - Jonnie Warren, Jr., 36, was arrested in Kilgore on Wednesday March 23rd for a homicide and aggravated robbery warrant out of Tarrant County. Warren allegedly shot a woman in Ft. Worth and stole her vehicle on Tuesday, March 22nd.

The initial investigation in Ft. Worth developed information indicating Warren maybe in the East Texas area driving a silver 2010 Chevy Impala. Warren was suspected of having two weapons with him and may also be disguised as a woman, since he stole some female clothing. A request for assistance was sent from the U.S. Marshals in Ft. Worth to the U.S. Marshals Joint East Texas Fugitive Task Force (JETFT) in Tyler.

After a comprehensive investigation, the vehicle was located in Longview, TX. A traffic stop was attempted, but the vehicle led law enforcement in a pursuit until it was finally stopped on Birch Lane in Kilgore, TX. The driver of the vehicle fled the scene, but the passenger, Johnnie Warren, Jr., was arrested without further incident.

The driver of the vehicle was apprehended down the street from where he abandoned the vehicle. He was identified as Phillip Redwine of Kilgore, TX and was a charged with evading arrest and unauthorized use of a motor vehicle. Both individuals were booked into the Gregg County Jail.

The law enforcement agencies that participated in the capture of Warren include the Texas DPS, Gregg County Sheriff’s Office, Longview PD, Kilgore PD, Smith County Constable Precinct 4, and the JETFT.

GUATEMALA-BASED DRUG TRAFFICKERS CONVICTED FOR ROLES IN INTERNATIONAL NARCOTICS BUSINESS

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, March 23, 2016

Leaders of Lorenzana Drug Trafficking Organization Convicted on International Narcotics Trafficking Charges

Eliu Elixander Lorenzana-Cordon and Waldemar Lorenzana-Cordon, leaders of a Guatemala-based  international drug trafficking organization responsible for importing multi-ton quantities of cocaine into the United States, were convicted on international narcotics trafficking charges in the District of Columbia following a four-week trial.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced the conviction.

“For well over a decade, the defendants led a major Central American drug trafficking organization responsible for importing tons of cocaine into the United States,” said Assistant Attorney General Caldwell.  “This verdict sends a powerful message that the United States and its partners will pursue and obtain justice against international drug traffickers.”

“Eliu and Waldemar Lorenzana-Cordon’s crimes have destroyed families and communities,” said Acting Deputy Administrator Riley.  “Their organization fed a pipeline of drugs ultimately sold on American streets, fostering violence and drug addiction.  Their conviction marks the end of their criminal reign and the beginning of their life behind bars.”

Eliu, 43, and Waldemar, 49, were each convicted on one count of conspiring to unlawfully import and distribute cocaine into the United States.  The defendants were arrested in Guatemala after their indictment on this conspiracy charge and then extradited to the United States.

According to evidence presented at trial, the Lorenzana-Cordons were leaders of an international drug trafficking organization with close ties to the Sinaloa Cartel.  Evidence at trial demonstrated that between 1996 and 2009, the defendants and their co-conspirators received, stored and distributed multi-ton quantities of cocaine from Colombia at their properties in Zacapa, Guatemala, for importation into Mexico and then ultimately into the United States.

On April 27, 2010, the Department of Treasury’s Office of Foreign Asset Control designated both defendants as Specially Designated Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act due to their significant roles in international narcotics trafficking and their ties to the Sinaloa Cartel, according to evidence presented at trial.

The Drug Enforcement Administration’s 959/Bilateral Investigations Unit and Guatemala City Country Office led the investigation, which was part of the Organized Crime Drug Enforcement Task Force.  Trial Attorneys Michael Lang, Stephen Sola and Emily Cohen of the Criminal Division’s Narcotic and Dangerous Drug Section are prosecuting the case.  The Criminal Division’s Office of International Affairs provided substantial assistance.  The Chicago Police Department and the governments of El Salvador and Panama provided support and assistance in this prosecution.  The Justice Department in particular wishes to convey its gratitude to the government of Guatemala for its steadfast commitment, collaboration and assistance in the investigation, extradition and prosecution of this case.

FORMER CANADIAN CEO CONVICTED FOR ROLE IN KICKBACK/FRAUD SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, March 16, 2016

Former CEO of Canadian Hazardous Waste Treatment Company Convicted of Conspiracy to Pay Kickbacks and Committing Major Fraud against the United States

The former Chief Executive Officer of a firm that specialized in the treatment and disposal of contaminated soil was convicted in the District of New Jersey of conspiring to pay kickbacks and committing major fraud against the United States in connection with obtaining subcontracts for the treatment and disposal of contaminated soil at a New Jersey Superfund site overseen by the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers, the Department of Justice announced today.

John Bennett, of Vancouver, British Columbia, was charged with these crimes in August 2009, extradited from Canada to the United States in November 2014 to face trial, and was convicted today after a three week trial in Newark, New Jersey.  Bennett was also the founder and Chairman of the Board of Bennett Environmental Inc., a firm with offices in Vancouver and Toronto.

“John Bennett corrupted the competitive bidding process by paying kickbacks in order to win a Superfund contract.  He literally stole money from the United States,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.  “Thanks to the hard work of our law enforcement agents, antitrust prosecutors, and colleagues in Canada who secured his extradition, a jury of his peers has held him accountable for his crimes.”

Beginning in 2001, Bennett conspired with others at Bennett Environmental to pay kickbacks worth over $1 million to the project manager at Federal Creosote, a Superfund site located in Manville, New Jersey, in an effort to guarantee the award of soil treatment contracts to his company.  These kickbacks included money transferred by wire to a co-conspirator’s shell company, lavish trips and entertainment expenses, and personal gifts.

In exchange for these gifts and cash payments, the project manager at Federal Creosote provided Bennett Environmental employees with “last looks” at their competitors’ confidential bids.  The provision of these last looks allowed Bennett Environmental to submit its own bid at the last minute and outbid its competitors without independently determining its price, thereby guaranteeing an award to the company and undermining the competitive bid process on this federally-funded project.

According to court testimony by two cooperating witnesses who participated in the scheme with Bennett, he authorized and actively participated in the conspiracy by approving the payment of kickbacks in exchange for last looks and by approving the prices at which Bennett Environmental would bid.  This testimony was supported by dozens of emails, memoranda, phone and bank records and other company documents.  As a result of the payment of these kickbacks, Bennett Environmental was fraudulently awarded tens of millions of dollars in soil treatment and disposal contracts at Federal Creosote.  The conspiracy continued until 2004.

Sentencing is scheduled for June 27, 2016 before Judge Susan D. Wigenton.  The fraud conspiracy for which Bennett was found guilty carries a maximum penalty of five years in prison and a $250,000 criminal fine.  The major fraud against the United States conviction carries a maximum of ten years in prison and a $1 million criminal fine for individuals.  The maximum may be increased to twice the gain derived from the crime or twice the loss.

The investigation at Federal Creosote has resulted in the conviction of 10 individuals and three companies of charges including major fraud against the United States, tax fraud, money laundering and obstruction of justice.  Criminal fines and restitution of more than $6 million also have been imposed.

The Federal Creosote investigation was conducted by the Antitrust Division’s New York Office, the EPA’s Office of Inspector General Office and the Internal Revenue Service Criminal Investigation, with the support of the Antitrust Division’s Foreign Commerce Section, the Criminal Division’s Office of International Affairs and with the assistance of  the U.S Customs and Border Protection – Department of Homeland Security, and the Canadian Department of Justice – International Assistance Group and the Royal Canadian Mountain Police.

ASSISTANT AG CARLIN'S REMARKS ON IRANIANS CHARGED FOR U.S. CYBER ATTACKS

FROM:  U.S. JUSTICE DEPARTMENT 

Assistant Attorney General John P. Carlin Delivers Remarks at Press Conference Announcing Seven Iranians Charged for Conducting Cyber Attacks against U.S. Financial Sector

Washington, DCUnited States ~ Thursday, March 24, 2016

Good morning.  And thank you, Preet – this case would not have been possible without the hard work of the men and women of your office and our partners at the FBI.  I also want to thank the men and women of the National Security Division for their work on this case and for their efforts to protect our country from all manner of national security threats.

In addition, we thank all of the victims for their critical assistance during the investigation.  This case demonstrates the power of public-private partnerships in holding accountable cyber actors who threaten our national security.

For many years, nation states and their affiliates enjoyed what they perceived to be a cloak of anonymity.  A cloak they hid behind to break our laws through cyber intrusions and to threaten our security and economic well-being.

They had this perceived cloak because they thought we couldn’t figure out who did it and, if we did figure it out, we would keep it a secret.

They are wrong.  In a new approach, we have unleashed prosecutors and FBI agents against national security cyber threats, and that is why, two years ago – from this very podium – we could announce an indictment against five members of the People's Liberation Army.

Today, let this indictment reinforce that the days of perceived anonymity are gone – we can remove the cloak.

And we will.

Today’s announcement proves, once again, there is no free pass for nation state affiliated computer intrusions.

This week is significant – a landmark for our national security cyber program.  On Tuesday, we unsealed a complaint against members of the Syrian Electronic Army.  Yesterday, a Chinese businessman in Los Angeles pled guilty for conspiring to hack into U.S. defense contractors and to steal sensitive information related to fighter jets.

And now, today, we can tell the world that hackers affiliated with the Iranian government attacked U.S. systems, and we seek to bring them to justice for their crimes.

No matter where a hacker is located or who he is affiliated with – China or North Korea, ISIL or SEA – we can figure who did it, by name and face, we can do so publicly and we can impose consequences.

This is still the beginning.  We will continue to pursue hackers affiliated with nation states or terrorist organizations.  And when we find you, we will use every available tool at our disposal to hold you accountable.

That means more public actions, more charges, more arrests and more sanctions, until the conduct changes.  

Thank you.

FINANCIAL SERVICES COMPANY CEO PLEADS GUILTY TO OBSTRUCTION

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, March 23, 2016

Financial Services Company Executive Pleads Guilty to Obstruction of Justice

The CEO of Preferred Merchants LLC, a financial services company based in Napa, California, pleaded guilty yesterday to engaging in an elaborate obstruction of justice scheme to conceal millions of dollars—which were subject to a freeze order and seizure warrant—from the government using a series of offshore accounts, domestic and foreign nominee accounts, a shell company and related bank and brokerage accounts.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina, Special Agent in Charge Michael Rolin of the U.S. Secret Service’s Charlotte, North Carolina, Field Division and Special Agent in Charge Thomas J. Holloman III of the Internal Revenue Service-Criminal Investigation (IRS-CI) Charlotte Field Office made the announcement.

Jaymes Meyer, aka James Meyer, 47, of Napa, pleaded guilty yesterday before U.S. Magistrate Judge David S. Cayer of the Western District of North Carolina in Charlotte to obstruction of justice.

According to the plea agreement, in or about 2012, the U.S. Securities and Exchange Commission’s (SEC’s) Division of Enforcement commenced a securities fraud investigation concerning a Ponzi scheme centering on Rex Ventures Group LLC (RVG), a North Carolina-based company for which Preferred Merchants held millions in assets in treasury and trust accounts.  As a result of its investigation, the SEC filed a civil enforcement action against RVG, after which the court entered a freeze order that appointed a receiver and froze all of RVG’s assets.  Among other things, the receiver was responsible for marshaling, managing and distributing remaining RVG assets to impacted RVG investors.  In addition to the freeze order, the U.S. Secret Service also obtained a seizure warrant of RVG assets held by Meyer through Preferred Merchants.  Meyer admitted that in August 2012, the SEC informed him of, among other things, the investigation and the court order freezing RVG’s assets and requested that Meyer freeze any RVG assets in his possession, custody or control.

According to the plea agreement, in response to this request, Meyer misled the SEC by falsely implying that Preferred Merchants did not exercise dominion or control over any RVG assets when, in fact, Meyer controlled approximately $17.4 million in RVG assets.  Meyer further admitted that he wired approximately $4.8 million from an RVG trust account to a brokerage account under his control within an hour of learning about the SEC’s investigation.  Over the next 10 months, Meyer used that money to purchase homes in Napa and the Turks and Caicos, to which he subsequently made $1.5 million in improvements, and withdrew approximately $195,000 in cash.  He also established a Cook Islands-based trust account, formed a shell company and opened a brokerage account in the shell company’s name to further conceal the trail of RVG assets subject to the freeze order and seizure warrant.

Meyer also admitted that throughout the pending civil litigation surrounding the RVG scheme, he made fraudulent and misleading statements to the U.S. District Court for the Western District of North Carolina, the SEC and the court-appointed receiver during depositions.

In connection with his plea agreement, Meyer agreed to pay an approximately $4.8 million money judgment and to forfeit the homes that he purchased in the Turks and Caicos and Napa as proceeds of the obstruction of justice offense.

The U.S. Secret Service and the IRS-CI investigated the case.

Trial Attorney Kevin Lowell of the Criminal Division’s Asset Forfeiture and Money Laundering Section-Bank Integrity Unit and Assistant U.S. Attorney Mark T. Odulio of the Western District of North Carolina are prosecuting the case.

CALL CENTER OPERATOR SENTENCED TO PRISON FOR SWEEPSTAKES SCAM THAT TARGETED ELDERLY

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, March 15, 2016

Owner of Costa Rican Call Center Sentenced to Nine Years in Prison for Defrauding Elderly through Sweepstakes Scam

A dual U.S.-Costa Rican citizen was sentenced yesterday to 108 months in prison for his role in a $1.88 million sweepstakes fraud scheme that victimized hundreds of elderly U.S. residents, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.

Geoffrey Alexander Ramer, 36, formerly of Falls Church, Virginia, was sentenced today by U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina.  Ramer was also ordered to pay $2,871,430.35 in restitution and to forfeit $1,886,018.

On Sept. 15, 2014, Ramer pleaded guilty to one count of conspiracy to commit wire fraud, eight counts of wire fraud, one count of conspiracy to commit money laundering and four counts of international money laundering in connection with the telemarketing fraud scheme.

According to the plea documents, from 2008 through December 2013, Ramer owned and operated call centers located in Costa Rica.  Ramer admitted that he and his co-conspirators called U.S. residents, many of whom were elderly, and falsely informed the victims that they had won a substantial cash prize in a sweepstakes, and that, in order to receive their prize money, the victims were to send money to Costa Rica for a purported refundable insurance fee.  After receiving the victims’ money, the co-conspirators would contact the victims to falsely inform them that the prize amount had increased and the victims needed to send additional money for more purported fees, Ramer admitted.  According to the plea, Ramer and his co-conspirators would continue these attempts to collect additional money until the victims went broke or discovered the fraud.  Ramer admitted that he and his co-conspirators utilized VoIP phones that displayed a Washington, D.C., area code in order to conceal that they were calling from Costa Rica, and sometimes falsely claim to be from a U.S. federal agency to give victims a false sense of security.  The co-conspirators kept the victims’ funds, never provided any winnings to the victims and used the funds to continue the call centers’ operation and for the co-conspirators’ personal benefit, Ramer admitted.

Plea documents state that, along with his co-conspirators, Ramer was responsible for causing more than $1.88 million in losses to hundreds of elderly Americans.

The U.S. Postal Inspection Service, the Internal Revenue Service-Criminal Investigation, the FBI, the Federal Trade Commission and the Department of Homeland Security are investigating the case.  Senior Litigation Counsel Patrick M. Donley and Trial Attorney William H. Bowne of the Criminal Division’s Fraud Section are prosecuting the case.

MAN WITH 67 POUNDS OF METH SENT TO PRISON FOR 19 YEARS

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, March 9, 2016

Kentucky Man Sentenced to 19 Years in Prison for Possession and Distribution of Methamphetamine and Carrying a Firearm During a Drug Trafficking Crime

Defendant Obtained 67 Pounds of Crystal Meth in California and Shipped the Drug to His Todd County Home

Scott Windell Harris, 45, of Allensville, Kentucky,  was sentenced today in U.S. District Court  in the Western District of Kentucky to 19 years in prison followed by five years of supervised release for multiple charges associated with firearms, possession and distribution of methamphetamine, announced U.S. Attorney John E. Kuhn, Jr. for the Western District of Kentucky.

Harris purchased 67 pounds of crystal meth during approximately nine trips to California, then shipped the schedule II controlled substance to a residence off Russellville Road in Todd County.  Harris, an unlawful user of methamphetamine, also carried a firearm during and in relation to a drug trafficking offense.

“Methamphetamine is a highly addictive drug with devastating consequences to users, their families and communities,” said U.S. Attorney Kuhn.  “This prosecution closes a significant pipeline for dangerous drugs running from California to the streets of Western Kentucky.  We are grateful to the many law enforcement agencies whose coordinated efforts assisted my office in achieving this sentence.”

Law enforcement officials became aware of Harris’ criminal conduct in February 2015, when a package was intercepted at the Louisville, Kentucky, hub of UPS.  A search warrant executed on the package revealed 19.6 pounds of suspected methamphetamine being shipped from California to Todd County.   Later forensic testing of the methamphetamine at the Drug Enforcement Administration Laboratory in Chicago, Illinois, revealed a purity level exceeding 100 percent.  State and federal law enforcement officials conducted a controlled delivery of the package and observed Harris taking possession of the package and placing it inside a black van.  Later, a search of the van revealed a loaded Kel-Tec CNC Industries, Model P3AT, .380 caliber pistol with seven rounds of .380 ammunition in the van’s glove box.  At the time, Harris was an unlawful user of methamphetamine and, therefore, prohibited from possessing a firearm.

Harris made multiple trips to Los Angeles, California, where he obtained a total of 67 pounds of crystal methamphetamine, with an estimated street value of approximately $3 million.  Once he had the methamphetamine, Harris packaged the drugs and shipped them to his residence in Allensville.   When law enforcement officials arrested Harris, they searched the residence and found an additional one and one-half pounds of crystal methamphetamine, scales, baggies and just over $14,000 in cash.

Harris previously pleaded guilty to the charges on Oct. 13, 2015, in Bowling Green, Kentucky, before U.S. District Judge Stivers.

This case was prosecuted by Assistant U.S. Attorney Jo E. Lawless and was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and Kentucky State Police Drug Enforcement/Special Investigations West, with assistance from the Drug Enforcement Administration Laboratory.

OIL SUPPLY COMPANY EXECS PLEAD GUILTY TO FRAUD IN KICKBACK SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, February 26, 2016

Two Former Executives of Houston-Based Oil Supply Company Plead Guilty to Fraud in Illegal Kickback Scheme

Two former executives of a Houston-based oil supply company pleaded guilty today to fraud charges for their role in a scheme to secure illegal kickbacks in connection with oil projects in Latin America.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas and Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office made the announcement.

Franklin Marsan, 51, and Eduardo Betancourt, 48, both of Spring, Texas, each pleaded guilty to one count of conspiracy to commit wire fraud.  They will be sentenced on July 1, 2016, by U.S. District Judge Melinda Harmon of the Southern District of Texas, who accepted their pleas today.  As part of their plea agreements, Marsan and Betancourt agreed to pay restitution to their former employer.

According to the plea agreements, Marsan and Betancourt worked for a Texas-based company that, among other things, manufactured and supplied products for the petroleum, oil and gas industries.  The company hired and paid third-party sales agents to promote and sell its products to customers outside the United States.  Marsan and Betancourt ran the company’s Latin American operations from offices located in Houston.  As part of their guilty pleas, Marsan and Betancourt admitted that from at least 2008 until at least March 2011, they obtained kickbacks from the commissions that these third-party sales agents received in connection with sales of the company’s products in several Latin American countries.  Marsan and Betancourt admitted that during the course of the scheme, they received a total of at least $150,000, mostly in cash, in kickbacks, which they actively concealed from the company.

The FBI’s Houston Field Office investigated the case.  Senior Trial Attorney Patrick Pericak and Trial Attorney Lorinda Laryea of the Criminal Division’s Fraud Section and Deputy Chief John Pearson of the Southern District of Texas are prosecuting the case.

The United States thanks the government of Panama for its assistance in this case.  The Criminal Division’s Office of International Affairs provided significant assistance in this matter.

MIAMI HEALTH CARE CLINICS SENTENCED FOR HEALTH CARE FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, March 17, 2016

Owner of Two Miami Clinics Sentenced to 82 Months for Health Care Fraud Charges

An owner of two fraudulent medical clinics in the Miami area was sentenced to 82 months in prison today for his role in a Medicare fraud scheme that caused more than $3 million in losses.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Division and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Miami Regional Office made the announcement.

Carlos Medina, 56, of Miami, pleaded guilty before U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida to one count of conspiracy to commit health care fraud in January 2016.  In addition to his prison sentence, Judge Altonaga ordered Medina to forfeit $3,067,898.69.

According to admissions in the factual basis for his plea agreement, Medina was the owner of Doral Community Clinic Inc. and Advanced Medical of Doral Inc., however, other individuals served as the owners on the clinics’ corporate paperwork.  Medina’s clinics purportedly provided medically necessary services to Medicare beneficiaries, but in reality the clinics charged cash kickbacks ranging from $100 to $200 in exchange for prescriptions for home health care services, and some of the beneficiaries who frequented the clinics did not meet Medicare’s criteria for the prescribed services, according to the factual basis.  Some of the services prescribed by the medical professionals at Doral and Advanced Medical were never provided by the home health agencies to which the patients were referred, according to admissions in the factual basis.

The factual basis for the plea agreement states that Medina’s clinics sold prescriptions that were used to facilitate submission of false and fraudulent claims to Medicare by more than 20 home health agencies in the Miami area.  Medicare paid more than $3 million in payments as a direct result of prescriptions sold by Doral and Advanced during a period of less than two years, according to the factual basis.

The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida.  Fraud Section Trial Attorneys Lisa H. Miller and Jon M. Juenger are prosecuting the case.                        

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

LOUISIANA IBERIA PARISH OFFICIALS CHARGED IN CASE INVOLVING INMATE ASSAULTS

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, March 9, 2016

Iberia Parish, Louisiana, Sheriff and Lieutenant Colonel Charged in Conspiracy to Assault Inmates

Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Stephanie A. Finley of the Western District of Louisiana announced today that Iberia Parish, Louisiana, Sheriff Louis Ackal and Lieutenant Colonel Gerald Savoy were charged with civil rights violations arising out of the beatings of five pre-trial detainees at the Iberia Parish Jail (IPJ) on April 29, 2011.  Ackal is charged with one count of conspiracy against rights and two counts of deprivation of rights under color of law, and Savoy is charged with one count of conspiracy against rights and one count of deprivation of rights under color of law.

The indictment alleges that Ackal and Savoy conspired with each other and with other officers to assault five inmates, identified by the initials C.O., S.S., A.T., A.D. and H.G., and that  members of the conspiracy failed to intervene and stop the assaults.

Eight former Iberia Parish Sheriff Office employees previously entered guilty pleas in related cases before U.S. District Judge Patricia Minaldi of the Western District of Louisiana.  The eight officers are former IPJ Warden Wesley Hayes, former IPJ Assistant Warden Jesse Hayes, former Lieutenant Bret Broussard of the Narcotics Unit, former narcotics agent Wade Bergeron, former narcotics agent Jason Comeaux, former narcotics agent David Hines, former narcotics agent Byron Benjamin Lassalle and former K-9 handler Robert Burns.

An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty.  If convicted, Ackal and Savoy each face a maximum sentence of 10 years in prison for each of the civil rights violations, as well as a potential $250,000 fine for each count.

The case is being investigated by the FBI’s Lafayette Resident Agency.  The case is being prosecuted by Assistant U.S. Attorney Joseph G. Jarzabek of the Western District of Louisiana, Special Litigation Counsel Mark Blumberg and Trial Attorney Tona Boyd of the Civil Rights Division’s Criminal Section.

U.S. VETERAN CONVICTED OF TRYING TO JOIN ISIL

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, March 9, 2016

Jury Finds Air Force Veteran Guilty in First Conviction After Trial in the United States for Attempting to Travel Overseas to Join ISIL

Former U.S. Air Force Airplane Mechanic Convicted of Attempting to Provide Material Support to Terrorists and Obstruction of an Official Proceeding

A jury in the Eastern District of New York today found Tairod Nathan Webster Pugh, 48, of Neptune, New Jersey, a veteran of the U.S. Air Force, guilty of attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, and obstructing an official proceeding.

The verdict was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department.                

“Pugh, an American citizen and former member of the U.S. Air Force where he served as an aircraft mechanic, attempted to travel to Syria to provide material support to ISIL,” said Assistant Attorney General Carlin.  “This is the first conviction after a trial by jury in the United States involving an individual who attempted to travel to Syria to join ISIL, and further demonstrates our commitment to bring to justice all those who seek to provide material support to terrorists.  I would like to thank all the members of law enforcement whose tireless efforts made this result possible.”

“Today’s verdict provides yet another example of a successful outcome in our national security effort, and demonstrates the crucial role that law enforcement action plays in that effort,” said U.S. Attorney Capers.  “The evidence presented at trial and the jury’s verdict instill confidence that our law enforcement agencies and their many important partners at home and abroad work effectively to disrupt and defeat the deadly siren’s call of terrorist groups around the globe.  Pugh has now been held accountable for his crimes by a jury and will not reach the terrorist group he sought to support.”      

“As presented in trial, Tairod Nathan Webster Pugh was willing to become a martyr, using his U.S. military training as a weapon for ISIL,” said Assistant Director in Charge Rodriguez.  “Instead, found guilty of his crimes, he is facing a lengthy incarceration.  We are pleased the jury found his actions confirmed his expressed desire to cause violence and destruction on behalf of this terrorist organization.  The FBI’s Joint Terrorism Task Forces continue to work globally with our partners to successfully stop such actions before they happen, keep communities safe and bring criminals to justice.”

“We applaud today’s verdict, finding the first ISIL defendant guilty after attempting to travel to Syria and wage jihad," said Commissioner Bratton.  "Those who adhere to ISIL’s deadly terrorist agenda should be on notice: reject this ideology or face swift justice in American courts. It is fitting that the first ISIL conviction case is here in the Eastern District of New York, which has prosecuted more terrorism cases than any other district in the country. It is to them — and the many others on the Joint Terrorism Task Force — that New Yorkers owe their gratitude for the relentless efforts to keep our city safe.”

At trial, the government presented evidence that prior to traveling overseas to try to join ISIL, Pugh served in the Air Force as an avionics instrument system specialist and received training in the installation and maintenance of aircraft engines, navigation and weapons systems.  After leaving the Air Force, the defendant worked for a number of companies in the United States and Middle East as an airplane mechanic.  Pugh lived abroad for over a year before his arrest in this case.                  

On Jan. 10, 2015, the defendant traveled from Egypt to Turkey in an effort to cross the border into Syria to join ISIL to engage in violent “jihad.”  However, Turkish authorities denied the defendant entry and returned him to Egypt.  At the time of his detention, Pugh was carrying a laptop computer and four USB thumb drives that he had stripped of their plastic casings in an effort to destroy their contents and thereby make them unavailable to investigators.  The defendant also was carrying solar power chargers, compasses and a black ski mask.  Foreign government officials deported the defendant to the United States, where the FBI closely monitored him, relying in part on a covert undercover employee who encountered the defendant at John F. Kennedy Airport in New York.  The defendant was arrested on Jan. 16, 2015, in Asbury Park, New Jersey, and thereafter indicted in the Eastern District of New York.

At trial, the government presented evidence obtained from the defendant’s laptop computer and social media posts.  The defendant’s laptop contained Internet searches for “borders controlled by Islamic state.”  The government also introduced evidence of the defendant’s Internet searches for “Flames of War” (an ISIL propaganda video) as well as terrorist videos he had downloaded, including one horrific video showing ISIL members executing prisoners.  In addition, statements to coworkers and social media posts established Pugh’s empathy and support for ISIL’s cause and terrorist methods.

At trial, the government also introduced a letter drafted by Pugh on Jan. 5, 2015, shortly before he left Egypt for Turkey on his way to Syria.  In that letter, the defendant proclaimed, “I am a Mujahid.  I am a sword against the oppressor and a shield for the oppressed.  I will use the talents and skills given to me by Allah to establish and defend the Islamic State.  There is only 2 possible outcomes for me.  Victory or Martyr.”

Based on his trial convictions, the defendant faces a maximum sentence of up to 35 years in prison.  Sentencing has not yet been scheduled, but is expected to occur later this year.

Assistant Attorney General Carlin joined U.S. Attorney Capers in extending his grateful appreciation to the FBI’s Joint Terrorism Task Force (JTTF), as well as to the U.S. Department of State, U.S. Customs and Border Protection, the U.S. Attorney’s Office of the District of New Jersey, the Asbury Park Police Department and the Neptune Police Department.

The government’s case is being prosecuted by Assistant U.S. Attorneys Samuel P. Nitze, Tiana A. Demas and Mark Bini of the Eastern District of New York, with assistance provided by Trial Attorney Larry Schneider of the National Security Division’s Counterterrorism Section.

MAN PLEADS GUILTY TO FAILING TO PAY EMPLOYMENT TAXES

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, February 23, 2016

Virginia Man Pleads Guilty to Employment Tax Fraud

An Ashland, Virginia, man who operated two masonry contractor construction companies pleaded guilty today in the U.S. District Court for the Eastern District of Virginia to one count of failing to collect, account for and pay over employment taxes to the Internal Revenue Service (IRS), announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia.

According to court documents, Michael Manning, 52, was the President of Manning Construction and Manning-Carhen Construction.  Manning controlled the businesses’ finances and was responsible for filing the Employer’s Quarterly Federal Tax Returns, Forms 941 and paying over to the IRS the federal income, social security and Medicare taxes withheld from the wages of the businesses’ employees.  For the third and fourth quarters of 2014, Manning willfully failed to comply with these legal obligations by failing to pay over more than $800,000 in withheld taxes to the IRS.  Additionally, as part of his plea, Manning admitted that Manning Construction, regularly and deliberately created false financial statements for submission to financial institutions in order to comply with that business’s existing loan covenants, to encourage banks to lend new funds to the company, or to enable the renewal of existing loans.

Manning faces a statutory maximum sentence of five years in prison and a fine of $250,000.  As part of his plea agreement, Manning also agreed to pay restitution to the IRS.  The sentencing hearing is set for May 31.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Boente commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorney Melanie Smith of the Tax Division and Assistant U.S. Attorneys Jasmine Yoon and Thomas Garnett of the Eastern District of Virginia, who are prosecuting the case.

MAN GOES TO PRISON FOR TRYING TO ACQUIRE RICIN

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, March 8, 2016

New York Man Sentenced to 16 Years in Prison for Attempting to Acquire Ricin

Cheng Le, 22, of Manhattan, New York, was sentenced today to 16 years in prison for attempting to acquire ricin, postal fraud and identity theft in relation to a terrorism offense.  Le was convicted on Aug. 27, 2015, following a four-day jury trial before U.S. District Judge Alison J. Nathan of the Southern District of New York, who imposed today’s sentence.  Le’s trial conviction marked the first time in the Southern District of New York a defendant had been convicted at trial of attempting to possess a biological toxin for use as a weapon or of aggravated identity theft during and in relation to a terrorism offense.

The announcement was made by Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Preet Bharara of the Southern District of New York.

“Cheng Le attempted to acquire ricin for use as a lethal weapon, and used a stolen identity to do so,” said Assistant Attorney General Carlin.  “Le sought a ‘risk-free’ way to murder an individual, but thanks to the efforts of law enforcement, his lethal plans were thwarted and the deadly toxin was kept out of his hands.”

“Through the Dark Web, Cheng Le attempted to acquire a lethal toxin,” said U.S. Attorney Bharara.  “In Le’s own words, established at trial, he was looking for ‘simple and easy death pills’ and ways to commit ‘100% risk-free’ murder.  Thanks to the FBI, the NYPD and the Postal Inspection Service, Le’s deadly plot was thwarted and he has been incapacitated by a lengthy term in federal prison.”

According to the allegations contained in documents previously filed in federal court and the evidence presented at trial:

Ricin is a highly potent and fatal toxin with no known antidote.  The dark web is a colloquial name for a number of extensive, sophisticated and widely used online criminal marketplaces, which allow participants to buy and sell illegal items, including ricin.    

In early December 2014, Le contacted a FBI online covert employee (OCE) on a particular dark web marketplace using an encrypted messaging service.  The OCE had taken over the dark web identity from another individual who had a reputation for selling lethal poisons.  After making contact with the OCE, Le inquired, “this might sound blunt but do you sell ricin?”      

Following that initial contact, Le exchanged a series of messages with the OCE concerning his efforts to purchase ricin.  During these messages, Le confirmed his understanding of the lethal nature of ricin, revealed his intent to resell the ricin to at least one secondary buyer, proposed that the OCE conceal the ricin in a single pill in an otherwise ordinary bottle of pills and indicated a desire to obtain more ricin in the future.  Le’s messages to the OCE included the following:

• “If [the ricin’s] good quality, I’ve already had buyers lining up.”

• “Does ricin have antidote? Last I check there isn’t one, isn’t it?”

• “Injection can be difficult to pull off. Ricin doesn’t work immediately. You wouldn’t expect the target to not fight back after being jabbed.”

• “The client would like to know . . . if it is wise to use ricin on someone who is hospitalized. . . .  Injection will leave needle holes on the body which could be found in regular forensic examination. But hospitalized people already have needles in them so it wouldn’t be suspicious. Thing is, would ricin make the death look like someone succumbed to the injuries after an accident and didn’t make it through? In that case then, a little anethestical [sic] gas in the target’s car, get him drowsy when driving, get into an accident, and then kill him in the hospital bed.”

• “I probably told you this before, about mixing one and only one toxic pill into a bottle of normal pills. They all look identical. And as the target takes the medicine every day, sooner or later he’d ingest that poisonous pill and die. Even if there is a murder investigation, they won’t find any more toxin. 100% Risk Free.”

• “If you can make them into simple and easy death pills, they’d become bestsellers.”

• “I’ll be trying out new methods in the future. After all, it is death itself we’re selling here, and the more risk-free, the more efficient we can make it, the better.”

• “Also, besides that one bottle of pills with one poisonous pill in there, can you send some extra loose powder/liquid ricin? I’d like to test something.”

Moreover, during these exchanges, Le revealed to the OCE that he had a specific victim in mind: “someone middle-aged.  Weight around 200 lbs.”

On Dec. 18, 2014, Le directed the OCE to send a quantity of ricin addressed to the name of an individual whose stolen identity Le had assumed at a particular postal box in Manhattan.  On Dec. 22, 2014, the FBI prepared a mock shipment of ricin that was consistent with Le’s request to the OCE.  The sham shipment included a fake ricin tablet concealed in a pill bottle, and a quantity of loose fake ricin powder.  The next day, the sham shipment was delivered to the postal box.  Le, wearing latex gloves, retrieved the sham shipment, opened it and took the contents to his apartment.

When FBI agents entered Le’s apartment to arrest him and search the apartment pursuant to a search warrant, they saw the pill bottle open in his apartment.  The agents also recovered from Le’s apartment an envelope containing castor seeds from which Ricin can be produced.  The agents further observed that Le’s computer was open to the online account that he had used to communicate with the OCE and to Le’s personal email account.

Le was arrested in New York on Dec. 23, 2014, and was later convicted at trial of one count of attempting to possess a biological toxin for use as a weapon, one count of using a fictitious name in furtherance of unlawful business involving the mail and one count of aggravated identity theft during and in relation to a terrorism offense.  In addition to the prison term, Le was sentenced to five years of supervised release.

Assistant Attorney General Carlin joined U.S. Attorney Bharara in praising the outstanding investigative efforts of the FBI’s New York Joint Terrorism Task Force and the U.S. Postal Inspection Service.

This prosecution is being handled by Assistant U.S. Attorneys Ilan Graff and Andrew D. Beaty of the Southern District of New York and Trial Attorney Joseph Kaster of the National Security Division’s Counterterrorism Section.

U.S. MARSHALS ANNOUNCE ARREST OF ALLEGED MURDERS

FROM:  U.S. JUSTICE DEPARTMENT 

March 04, 2016

Joseph Barreras, Deputy U.S. Marshal

District of New Mexico 

U.S. Marshals Arrest Wanted Murderers

Albuquerque, NM - The U.S. Marshals Service in New Mexico and the Eastern District of Oklahoma worked together to bring the alleged killers and New Mexico’s most wanted fugitives, Matthew Chavez and Veronica Trimble to justice.

Chavez and Trimble are wanted by the Albuquerque Police Department for Murder (Open Count), Armed Robbery (Deadly Weapon), Arson, Assault with the Intent to Commit a Violent Felony, Tampering with Evidence, Conspiracy to Commit a First Degree Felony, Aggravated Assault (Deadly Weapon), Receiving and Transferring a Stolen Motor Vehicle. The suspects are wanted for the murder of 24-year-old Tyler Lackey and the two fugitives are suspects in multiple other alleged armed robberies.

Due to surveillance by Deputy U.S. Marshals in an undercover capacity and extensive law enforcement networking these suspects were tracked down across multiple states and safely apprehended.

United States Marshal Conrad Candelaria said, “The Marshals Service for the Districts of New Mexico and Oklahoma worked tirelessly, applying broad and comprehensive undercover and surveillance techniques that led to the apprehension of two dangerous fugitives. Above it all the Marshals Service and its task force officers extend deep and sincere condolences to family of our slain veteran."

AG LYNCH MAKES VIDEO REGARDING UNSAFE DIETARY SUPPLEMENTS

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, March 8, 2016

Attorney General Lynch Discusses Department's Efforts to Protect Consumers From Unsafe Dietary Supplements

As part of National Consumer Protection Week, Attorney General Loretta E. Lynch recorded a video to talk about the department’s work protecting the health and safety of consumers from unsafe dietary supplements.

“At the Department of Justice, we are committed to working with our partners across the federal government to protect the health and safety of all Americans,” said Attorney General Lynch.  “Recently, we announced a nationwide operation targeting unlawful dietary supplements.  We are bringing civil and criminal cases against more than 100 makers and marketers of supplements who were violating federal law by misrepresenting ingredients; by making unsupported health claims; or even by lacing products with undeclared substances.”

The complete text of the Attorney General’s video message is below:

“Hello.  As part of National Consumer Protection Week, I want to take a moment to talk to you about dietary supplements, which are used by millions of Americans every day.  What many Americans don’t know is that dietary supplements are not subject to testing by the Food and Drug Administration before they reach store shelves – meaning that every day, millions of Americans are ingesting substances whose safety and efficacy are not guaranteed.

“Some of these supplements are simply a waste of money, promising results they can’t deliver or advertising ingredients that they don’t contain.  And too often, these supplements don’t just abuse consumer trust – they also endanger public health.  Some contain harmful ingredients, causing consumers to fall ill.  Others falsely claim to cure illness and disease, leading patients to use them as a substitute for the proven therapies they need.  But whether these supplements are deceptive or dangerous, the fact remains that too many companies are making a profit by misleading – and in some cases harming – American consumers.

“At the Department of Justice, we are committed to working with our partners across the federal government to protect the health and safety of all Americans.  Recently, we announced a nationwide operation targeting unlawful dietary supplements.  We are bringing civil and criminal cases against more than 100 makers and marketers of supplements who were violating federal law by misrepresenting ingredients; by making unsupported health claims; or even by lacing products with undeclared substances.

“In one case, for example, the Justice Department brought criminal charges against high-ranking executives at USPlabs, a company that sold workout and weight loss supplements.  As we alleged, they claimed that their products were made from natural plant extracts, when in fact, they were made from untested synthetic chemicals from China.  In several cases, consumers suffered severe liver damage.  And although the company was allegedly aware of the risks their product posed, they continued to sell it to consumers, compromising the health and well-being of thousands of Americans.

“The Justice Department is determined to hold bad actors in the dietary supplement industry accountable for their actions.  But consumers need to do their part to protect themselves.  I urge consumers to be cautious when choosing to take dietary supplements.  Visit the FDA and the Federal Trade Commission websites, where you can find useful information about dietary supplements.  Use tools developed by the Department of Defense and the U.S. Anti-Doping Agency, including a smartphone app, to help you make informed choices.  And above all, if you are considering taking a dietary supplement, talk to a doctor first.  Should you and your health care provider decide that dietary supplements are right for you, know that the Department of Justice is working tirelessly to ensure that the products you choose are safely manufactured, accurately labeled, and honestly marketed – because the American people deserve nothing less.”

FBI IMPERSONATOR INDICTED IN JAMAICA

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, March 4, 2016

Woman Indicted for Impersonating FBI Agent in Connection with Lottery Fraud Scheme Based in Jamaica

A federal grand jury in the Southern District of Georgia indicted a woman for impersonating an FBI special agent in connection with an international lottery fraud scheme based in Jamaica, the Department of Justice announced today.

Vania Lee Allen, 30, was charged with one count of conspiracy to commit wire fraud and falsely impersonating an employee of the United States, one count of wire fraud and one count of falsely impersonating an employee of the United States.

According to the indictment, Allen and a co-conspirator in Jamaica sought to unlawfully enrich themselves through a fraudulent lottery scheme targeting an elderly resident of Evans, Georgia.  Allen’s co-conspirator falsely informed the victim by phone that the victim had won money in a lottery and instructed the victim to make payments to various people in order to collect the purported lottery winnings.  As alleged in the indictment, in order to gain the trust of the victim and induce him to continue to make payments, Allen traveled from Jamaica to the United States and falsely portrayed herself to the victim as an FBI agent.

“Fraud schemes operating from other countries and targeting Americans often cannot fully succeed without assistance from a co-conspirator in the United States,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Scammers use many different tactics in an effort to gain the trust of their victims.  The Justice Department will actively pursue and charge those who participate in such criminal activity.”

“The U.S. Attorney’s Office for the Southern District of Georgia is committed to vigorously prosecuting fraud schemes of all kinds,” said U.S. Attorney Edward J. Tarver of the Southern District of Georgia. “Those who perpetrate scams upon the vulnerable should know that federal law enforcement will work tirelessly to shut down fraud schemes and prosecute those responsible.”

According to the indictment, Allen traveled from Jamaica to the United States in early May 2015.  The indictment alleges that Allen sent a number of text messages to her co-conspirator in Jamaica discussing the plan to impersonate an FBI agent, including a text that attached an image of a law enforcement style badge with an “FBI” logo and the words “Federal Bureau of Investigation” on the face of the badge.  The indictment further alleges that on May 7, 2015, Allen traveled to the victim’s home in Evans, Georgia, falsely portrayed herself to the victim as a FBI special agent and provided the victim with a cellphone and directed him to speak with the person on the line, who was her co-conspirator in Jamaica.

“These lottery scammers prey on elderly Americans, and convince them to send significant amounts of money based on false promises,” said U.S. Postal Inspector in Charge David W. Bosch of the Philadelphia Division. “The Postal Inspection Service is committed to investigating and combating these international lottery schemes.”

This prosecution is part of the Department of Justice’s effort to work with federal and local law enforcement to combat fraudulent lottery schemes in Jamaica that prey on American citizens.  According to the U.S. Postal Inspection Service, Americans have lost tens of millions of dollars to fraudulent foreign lotteries.

If convicted, Allen faces a statutory maximum sentence of up to 20 years in prison for the wire fraud count, as well as up to five years for the conspiracy count and up to three years for the false impersonation count.

The case is being prosecuted by Trial Attorney Clint Narver of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney C. Troy Clark of the Southern District of Georgia.  The case was investigated by the U.S. Postal Inspection Service and the Columbia County Georgia Sherriff’s Office.

An indictment is merely an allegation and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.

NARCOTICS KINGPIN PLEADS GUILTY FOR ROLE N INTERNATIONAL DRUG TRAFFICKING CONSPIRACY

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, February 23, 2016

Alfredo Beltran Leyva Pleads Guilty to International Drug Trafficking Conspiracy Charges

Attorney General Loretta E. Lynch announced today that Alfredo Beltran Leyva, also known as Mochomo, one of the leaders of the Beltran Leyva Organization, a Mexican drug-trafficking cartel responsible for importing multi-ton quantities of cocaine and methamphetamine into the United States, pleaded guilty to participating in an international narcotics trafficking conspiracy.

Assistant Director Joseph S. Campbell of the FBI’s Criminal Investigative Division, Acting Administrator Chuck Rosenberg of the Drug Enforcement Administration (DEA) and Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) joined the Attorney General in making the announcement.

“For decades, Alfredo Beltran Leyva helped to lead one of the world’s most notorious drug cartels, causing widespread violence and disrupting lives,” said Attorney General Lynch.  “With this guilty plea, justice has been done, and Beltran Leyva will be held accountable for his crimes.  This conviction is the result of our close partnership with the Mexican government, and it should serve as a reminder that our countries will not rest in the fight against drug trafficking and violent crime.”

“This plea is the result of the unwavering commitment to aggressively investigate the leaders of transnational criminal organizations throughout world,” said Assistant Director Campbell.  “The significant and constant cooperation between our domestic and international law enforcement partners aided significantly in this successful outcome.”

“Alfredo Beltran Leyva and his criminal network destroyed families and communities,” said Acting Administrator Rosenberg.  “He oversaw a violent organization responsible for pushing dangerous drugs like cocaine and methamphetamine onto the streets of America and his guilty plea marks the end of his criminal reign and the beginning of his life behind bars.”

“Today’s guilty plea sends the strongest possible message to drug traffickers,” said Executive Associate Director Edge.  “HSI and our law enforcement partners, both in the United States and around the world, will continue to work tirelessly to disrupt and dismantle international drug trafficking organizations and bring them to justice.”

Leyva, 45, was indicted on Aug. 24, 2012, for conspiracy to distribute cocaine and methamphetamine for importation into the United States.  The defendant was extradited from Mexico to the United States on Nov. 15, 2014, and pleaded guilty before U.S. District Judge Richard J. Leon of the District of Columbia.

In court, the defendant admitted that he was part of a conspiracy to import large quantities of drugs into the United States.  At the hearing, the government proffered evidence that from 1990 until his arrest in January 2008, the defendant was a leader of the Beltran Leyva Organization, a global criminal enterprise that was responsible for importing multi-ton quantities of cocaine and methamphetamine into the United States.  Beltran Leyva admitted that he and his organization obtained tonnage quantities of cocaine from South American suppliers, which the defendant and his organization helped finance and which were transported to Mexico via air, land and sea.  Once the cocaine reached Mexico, the defendant’s organization transported it to central key points in Mexico, including to Culiacan, Sinaloa, which was also the central point for the collection of billions of dollars from drug trafficking proceeds in the United States.  Additionally, the government’s evidence would have shown that the organization carried out acts of violence, including murders, kidnappings, tortures and violent collections of drug debts, in order to sustain the drug importation operation.  Further, the government’s evidence would have shown that the organization made payments to public officials to ensure that the organization’s drug shipments passed through Mexico uninhibited.

On May 30, 2008, the president added the Beltran Leyva Organization to the Department of Treasury’s Office of Foreign Asset Control’s Specially Designated Nationals and Blocked Persons list pursuant to the Foreign Narcotics Kingpin Designation Act.  On Aug. 20, 2009, the president specifically designated Beltran Leyva as a specially designated drug trafficker under the same Kingpin Act.

The FBI’s El Paso Office led the investigation in partnership with the DEA’s New York Field Division and HSI’s New York Office as part of the Organized Crime Drug Enforcement Task Force.  Deputy Chief Andrea Goldbarg, Assistant Deputy Chief Amanda Liskamm and Trial Attorney Adrian Rosales of the Criminal Division’s Narcotic and Dangerous Drugs Section and Assistant U.S. Attorney Marcia M. Henry of the Eastern District of New York are prosecuting the case.  The Criminal Division’s Office of International Affairs and the U.S. Attorneys’ Offices of the Eastern District of New York, the Southern District of Florida, the Southern District of Texas, the Northern District of Georgia and the Northern District of Illinois provided substantial assistance.  The Justice Department thanks the government of Mexico for their assistance in this matter.

OPERATORS OF ONLINE BUSINESS INDICTED IN TAX AND BANK FRAUD CASE

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, March 4, 2016

North Carolina Couple Indicted for Tax Fraud and Bank Fraud Related to Their Online Business

A federal grand jury in the Middle District of North Carolina returned an indictment March 1 charging a Greensboro, North Carolina couple, who operated an online sales business with tax fraud as well as bank and wire fraud, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Ripley Rand of the Middle District of North Carolina. The defendants were arrested earlier today and had their initial court appearances this afternoon.

Daniel Balson and Renee Balson were charged with one count of conspiracy to defraud the United States and to commit bank fraud, one count of bank fraud and five counts of wire fraud.  Daniel Balson was additionally charged with three counts of filing false tax returns for 2009 through 2011 and Renee Balson was charged with one count of filing a false tax return for 2009.  

According to the indictment, Daniel Balson owned and operated Southern Sales Online (SSO), an online retail business that sold a variety of merchandise through eBay and Amazon, including scrapbooking and art materials, books, inspirational DVDs, pet supplies and tools.  It is alleged that although SSO earned more than $1 million in gross receipts during 2005 through 2011, the Balsons failed to report gross receipts for SSO on their tax returns filed with the Internal Revenue Service (IRS).  The Balsons also failed to report income from SSO on a bank application for a mortgage loan modification in 2011.  The indictment also alleges that the Balsons stole merchandise from LifeWay Christian Stores and Hobby Lobby and then knowingly sold the stolen merchandise through SSO at prices less than retail value.

If convicted, Daniel Balson and Renee Balson each face a statutory maximum sentence of five years in prison for the conspiracy count, 30 years in prison for the bank fraud count, 20 years in prison for each wire fraud count and three years in prison for each false tax return count.  The Balsons also face substantial monetary penalties and restitution.

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

Acting Assistant Attorney General Ciraolo and U.S. Attorney Rand commended special agents of IRS-Criminal Investigation, who investigated the case, and Assistant Chief Todd A. Ellinwood and Trial Attorney Mara Strier of the Tax Division, who are prosecuting the case.  Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office of the Middle District of North Carolina for their assistance.

NEW JERSEY MAN SENTENCED FOR SENDING DAMAGING COMPUTER CODE

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, February 23, 2016

Former Software Company Employee Sentenced to 30 Months in Prison for Sending Damaging Computer Code to Company Servers

A Union, New Jersey, man was sentenced today to 30 months in prison following his guilty plea to one count of causing the transmission of computer code and, as a result, damaging computers and causing at least $5,000 in losses.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney John Stuart Bruce of the Eastern District of North Carolina and Special Agent in Charge John A. Strong of the FBI in North Carolina.

Nikhil Nilesh Shah, 33, was sentenced by U.S. District Judge Louise W. Flanagan of the Eastern District of North Carolina, who also ordered Shah to pay $324,462 in restitution.

According to the plea agreement, from 2007 to 2012, Shah was an information technology manager at Smart Online Inc., a company located in Durham, North Carolina, that developed platforms for the creation of mobile applications.  Shah admitted that in March 2012, he left Smart Online to work for another technology company, and on June 28, 2012, he sent malicious computer code to Smart Online’s computer servers in Durham and Raleigh, North Carolina, deleting much of Smart Online’s intellectual property.

The FBI’s Raleigh Office investigated the case.  Senior Trial Attorney Richard D. Green of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Hulbig of the Eastern District of North Carolina prosecuted the case.

CUBAN NATIONAL PLEADS GUILTY IN FLORIDA HEALTH CARE FRAUD CASE

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, March 1, 2016

Former Fugitive Pleads Guilty in Florida Multimillion-Dollar Health Care Fraud Scheme

A Cuban national who fled the United States and had been wanted since 2013 on federal criminal charges relating to a multimillion-dollar health care fraud scheme in the greater Tampa Bay, Florida, area pleaded guilty today for his role in the scheme.  

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney A. Lee Bentley III of the Middle District of Florida; Special Agent in Charge Paul Wysopal of the FBI’s Tampa, Florida, Field Office, Special Agent in Charge George Piro of the FBI’s Miami Field Office; and Special Agent in Charge Shimon Richmond of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) Miami Regional Office made the announcement.

Ubert Guillermo Rodriguez, aka Ubert Guillermo Rodriguez Sigler, 47, pleaded guilty in federal court in Tampa today to conspiracy to commit health care fraud.  Rodriguez was arrested on the health care fraud charges when he arrived at Miami International Airport on a flight from Cuba in October 2015.

According to documents filed in the case, Rodriguez was the president and owner of G.R. Services Equipment & Supplies Inc., a Largo, Florida, company that purported to provide durable medical equipment to Medicare beneficiaries.  From May 2013 through July 2013, Rodriguez’s company submitted approximately $2,579,695 in false and fraudulent claims to Medicare seeking reimbursement for durable medical equipment, such as wound care supplies, that was not legitimately prescribed by doctors and was not provided to beneficiaries.  For example, Rodriguez’s company sought reimbursement for thousands of dollars of negative pressure wound therapy electrical pumps and sterile collagen dressings purportedly provided in May and June 2013 to Medicare beneficiaries.  Federal law enforcement agents previously executed a seizure warrant on Rodriguez’s company’s bank account, resulting in the seizure of approximately $243,339 in proceeds of the health care fraud scheme.

HHS-OIG and the FBI are investigating the case, which and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and U.S. Attorney’s Office of the Middle District of Florida.  Senior Trial Attorney Christopher J. Hunter of the Criminal Division’s Fraud Section is prosecuting the case.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.