CA RESIDENT PLEADS GUILTY TO MANUFACTURING GUNS, POSSESSION OF A MACHINEGUN

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, April 14, 2016

California Man Pleads Guilty to Manufacturing Guns and Dealing in Firearms and Possession of a Machinegun

Daniel Albert Crowninshield, 45, of Sacramento, California, pleaded guilty today to unlawfully manufacturing and dealing in firearms and possession of an unregistered machinegun, announced U.S. Attorney Benjamin B. Wagner for the Eastern District of California.

In his plea agreement, Crowninshield, who was also known by his online moniker “Dr-Death,” admitted that he operated an unlicensed firearms manufacturing business out of C&G Tool, a metal shop in North Sacramento.  Using sophisticated computer controlled machines, Crowninshield manufactured lower receivers for AR-15s and other firearms.  Crowninshield did not conduct background checks, enforce waiting periods, or complete firearm transaction paperwork.

Crowninshield advertised such services on at least one online firearm enthusiast forum.  This website mainly consists of forums where people ask and answer questions related to firearms.  Crowninshield, using the moniker Dr-Death was a prolific poster on the website.  Additionally, other members frequently posted about Dr-Death, including review of service provided and recommending that other users visit his shop.

“The manufacturing and unlicensed sale for profit of high-capacity firearms is a serious threat to public safety,” said U.S. Attorney Wagner.  “We will continue to vigorously investigate unlicensed gun dealers and prosecute violations of the federal firearms laws.”

“Daniel Crownshield aka Dr. Death owned and operated a machine shop where he allowed customers with unknown backgrounds to use his machinery to unlawfully manufacture firearms for profit,” said Special Agent in Charge Jill A. Snyder for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).  “ATF regulates the firearm industry and it is illegal to manufacture and sell firearms without possessing a federal firearms license and without conducting background checks.  ATF’s goal is to keep firearms out of the hands of prohibited individuals and prevent violent crime.”

This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the California Department of Justice’s Bureau of Firearms, with the assistance of the Sacramento Police Department, Sacramento County Sheriff’s Department and California Highway Patrol. Assistant United States Attorneys Justin Lee and Matthew Yelovich are prosecuting the case.

Crowninshield is scheduled to be sentenced by U.S. District Judge Judge Troy L. Nunley for the Eastern District of California on June 30.  Crowninshield faces a maximum statutory penalty of 10 years in prison and a $250,000 fine.  The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

UNIVERSAL ARYAN BROTHERHOOD MEMBER SENTENCED FOR DRUG TRAFFICKING, RACKETEERING

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, April 15, 2016

Universal Aryan Brotherhood Member Sentenced to 294 Months in Prison for Racketeering and Drug Trafficking

A member of the Universal Aryan Brotherhood (UAB) prison gang was sentenced in federal court today to 294 months in prison for conspiring to conduct a racketeering enterprise and related charges, announced Assistant Attorney General ­­­­­­­Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Danny C. Williams Sr. of the Northern District of Oklahoma.

Anthony Ramon Hall, aka Tony, 40, of Tulsa, Oklahoma, was sentenced today by U.S. District Judge Claire V. Eagan of the Northern District of Oklahoma, who also ordered Hall to serve five years of supervised release.

Hall pleaded guilty on June 9, 2015, and in connection with his plea, Hall acknowledged his membership in or association with the UAB, a violent, “whites only” prison-based gang with members and associates operating inside and outside of state prisons throughout Oklahoma.  According to the plea, Hall held a leadership position in the UAB as a “main-council” member.

Hall admitted that he conspired in racketeering activities to advance the UAB enterprise, including possessing and selling 500 grams or more of methamphetamine.  Specifically, Hall admitted to using smuggled cell phones to coordinate the delivery, receipt and sale of methamphetamine by UAB members and associates outside of prison who would then return profits to him while he was incarcerated.  Hall also coordinated the firebombing of automobile car that belonged to someone Hall believed had stolen from the UAB drug conspiracy, he admitted.

The U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Tulsa Police Department; Bureau of Alcohol, Tobacco, Firearms and Explosives; Internal Revenue Service-Criminal Investigation; FBI; Tulsa County Sheriff’s Office and Oklahoma Department of Corrections investigated the case.  Trial Attorney John C. Hanley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Allen Litchfield and Jan Reincke of the Northern District of Oklahoma are prosecuting the case.

THREE TAX PREPARERS RECEIVE PRISON SENTENCES IN FALSE TAX RETURN FILING CASE

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, April 14, 2016

Three Minnesota Tax Return Preparers Sentenced to Prison for Conspiracy to Defraud the Government and Filing False Tax Returns

Defendants Prepared Thousands of False Tax Returns for Filing with IRS and State of Minnesota

Three tax return preparers based in Minneapolis, Minnesota, were sentenced to prison yesterday for their involvement with a fraudulent return-preparation business with multiple storefronts in the Minneapolis area, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

Ishmael Kosh, 39, of Philadelphia, Pennsylvania, and Amadou Sangaray, 36, of New York, New York, were convicted following a two-week jury trial in September 2015.  Kosh was convicted of one count of conspiracy to defraud the United States and eight counts of aiding and assisting in the filing of false tax returns.  Sangaray was convicted of one count of conspiracy to defraud the United States, four counts of aggravated identity theft and eight counts of aiding and assisting in the filing of false tax returns.  Francis Saygbay, 43, of Minneapolis, failed to appear for trial, but later pleaded guilty to one count of conspiracy to defraud the United States, one count of aggravated identity theft, and two counts of aiding and assisting in the preparation of false tax returns.

Yesterday, Chief U.S. District Judge John R. Tunheim sentenced Kosh to 52 months in prison, Sangaray to 50 months in prison and Saygbay to 40 months in prison.  In addition to the prison terms, Judge Tunheim also ordered each Kosh and Saygbay to serve three years of supervised release and Sangaray two years of supervised release, following their release from prison.

“As the 2016 tax filing season draws to a close, taxpayers are reminded to be wary of return preparers who make promises that seem too good to be true,” said Acting Assistant Attorney General Ciraolo.  “Dishonest return preparers like Messrs.  Kosh, Sangaray and Saygbay cost the U.S. Treasury billions of dollars each year.  Taxpayers should stay alert for the warning signs that their preparer is more interested in making a quick buck than filing an accurate tax return.”

According to the evidence presented at the trial, Kosh, Sangaray, Saygbay and a fourth individual, Chatonda Khofi, 50, of St. Paul, Minnesota, established a storefront location of Primetime Tax Services Inc. (Primetime), a tax return preparation business in the Minneapolis area.  Along with a fifth individual, David Mwangi, 47, of Arlington, Texas, the defendants prepared over 2,000 fraudulent individual income tax returns on behalf of customers of Primetime for filing with the Internal Revenue Service (IRS) for the years 2006, 2007 and 2008.  The defendants also prepared approximately 1,700 fraudulent state income tax returns for filing with the state of Minnesota for those years.  At yesterday’s sentencing hearing, Judge Tunheim found that the defendants’ conduct caused a total tax loss of between $1.5 and $3.5 million.

On the fraudulent returns, the defendants included false dependents, fake business income and losses, inflated deductions and credits and false filing status in order to obtain inflated tax returns for their customers.  The defendants also bought and sold dependents for use on their customers’ tax returns in order to falsely qualify their customers for inflated deductions and tax credits.  The defendants caused the fraudulently obtained refunds to be sent directly to Primetime in order to maintain control over the funds.  When a customer came to pick up their refund checks or debit card, the defendants sometimes demanded an additional fee in cash, and/or escorted that customer to a check cashing location or ATM.

“Tax-return preparers who try to scam the government for tax refunds are not only stealing from the government, they are stealing from all the honest citizens who pay their fair share of taxes,” stated Special Agent in Charge Shea Jones of IRS-Criminal Investigation St. Paul Field Office.  “The special agents of IRS-Criminal Investigation are committed to protecting the integrity of our system of taxation by investigating tax and accounting professionals who conspire with others to violate the tax laws.  It is our hope that yesterday’s sentencings of Ishmael Kosh, Amadou Sangaray and Francis Saygbay, send the strong message that tampering with the integrity of our nation’s tax system will result in jail time.”

In November 2014, Mwangi pleaded guilty to one count of conspiracy to defraud the United States and Khofi pleaded guilty to one count of conspiracy to defraud the United States and one count of aggravated identity theft.  They are currently awaiting sentencing.  A sixth individual associated with this scheme, Stephanie Robinson, 33, of Minneapolis, pleaded guilty in August 2013 to one count of filing a false tax return in her own name and one count of aiding and assisting in the filing of a false tax return for another individual.

Acting Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Thomas W. Flynn and Ryan R. Raybould, and former Trial Attorney Dennis R. Kihm of the Tax Division, who prosecuted the case.  Acting Assistant Attorney General Ciraolo also thanked the Minnesota Department of Revenue for their significant work on this matter.

Newsletter: The INL Beat, April 2016

Newsletter: The INL Beat, April 2016

COUPLE INDICTED FOR ALLEGED MEDICARE FRAUD AND FORCED LABOR SCHEMES

FROM:  U.S. JUSTICE DEPARTMENT 

Monday, April 11, 2016

Husband and Wife Owners of Chicago Physical Therapy Company Indicted in Schemes to Defraud Medicare and Forced Labor 

A Chicago couple was charged in an indictment with a scheme to use their health care business to defraud Medicare out of millions of dollars, while also conspiring to employ a woman against her will.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois, Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Division, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office, Special Agent in Charge James D. Robnett of the Internal Revenue Service-Criminal Investigation (IRS-CI) Chicago Field Office, Acting Special Agent in Charge James M. Gibbons of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Chicago Field Office, Special Agent in Charge James Vanderberg of the U.S. Department of Labor’s Office of Inspector General-Office of Labor Racketeering and Fraud Investigations Chicago Region and Cook County State’s Attorney Anita Alvarez made the announcement.

Richard Tinimbang, 38, and his wife, Maribel Tinimbang, 40, both of Chicago, were charged with participating in a $45 million fraud scheme involving three Lincolnwood, Illinois, based home health care companies owned by Richard Tinimbang’s mother, Josephine Tinimbang.  The companies allegedly paid bribes and kickbacks to obtain Medicare beneficiaries, ignored doctors who refused to certify beneficiaries as being in need of home health care and falsified medical records to make patients appear sicker than they actually were.

This indictment is part of a larger health care fraud investigation in which 13 others have been charged.  Three defendants have pleaded guilty and await sentencing; the 10 others, including Josephine Tinimbang, are awaiting trial.  Richard and Maribel Tinimbang’s business, Patients First Physical Therapy Inc., purportedly provided in-home therapy services to patients of three home health care companies – Donnarich Home Health Care Inc., Josdan Home Health Care Inc. and Pathways Home Health Services LLC.  According to the indictment, several individuals who worked at Donnarich, Josdan and Pathways conspired to commit health care fraud and laundered money to conceal the scheme.  From 2008 through 2014, the scheme resulted in $45 million in losses to Medicare, according to the indictment.  

Richard Tinimbang also allegedly submitted fraudulent forms to the U.S. Department of Homeland Security in order to allow a Filipino woman to legally work in the United States, stating that the woman would be hired as a business analyst at Josdan, thus qualifying her for an H-1B visa.  However, according to the indictment, when the woman arrived in the United States, Richard Tinimbang put her to work full time as a nanny and housekeeper for him, his wife and others.  The couple allegedly attempted to induce the woman to sign a servitude contract that provided for payment of $66 per day – regardless of the number of hours worked – for a term of seven years.  According to allegations in the indictment, the contract further provided that if the woman quit before the seventh year, she would be required to pay $25,000 in damages.  The couple allegedly threatened to send her back to the Philippines without being paid for the work she had already performed in order to force her to sign the contract and surrender her passport.

The couple and Josephine Tinimbang used proceeds from the fraud to make numerous personal purchases, including shares of stock, vehicles, real estate and jewelry, according to the indictment.  The indictment alleges that the couple concealed the money they had pocketed by falsely making it appear to be business expenses.

Richard Tinimbang is charged with one count of conspiracy to defraud Medicare, one count of conspiracy to pay or receive health care kickbacks, two counts of paying kickbacks to induce referrals of Medicare beneficiaries, one count of money laundering conspiracy, one count of conspiracy to obtain forced labor and one count of presenting false statements in an immigration document.  Maribel Tinimbang is charged with one count of conspiracy to defraud Medicare, one count of money laundering conspiracy and one count of conspiracy to obtain forced labor.

An indictment is merely a charge and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The Medicare Fraud Strike Force and the Cook County Human Trafficking Task Force investigated the case.  Trial Attorney Brooke Harper 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 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.

RETIRED JUDGE INDICTED FOR ROLE IN $600 MILLION SOCIAL SECURITY FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, April 5, 2016

Retired Judge, Attorney and Psychologist Indicted in $600 Million Social Security Fraud Scheme

Thousands of Kentucky Claimants Improperly Received Disability Benefits

A retired administrative law judge, a lawyer and a psychologist were charged in a federal indictment unsealed today for their roles in a scheme to fraudulently obtain more than $600 million in federal disability payments for thousands of claimants.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division; Special Agent in Charge Howard S. Marshall of the FBI’s Louisville, Kentucky, Field Division; Special Agent in Charge Tracey D. Montaño of Internal Revenue Service Criminal Investigations (IRS-CI) Nashville, Tennessee, Field Office; and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Atlanta Regional Office made the announcement.

David Black Daugherty, 81, of Myrtle Beach, South Carolina; Eric Christopher Conn, 55, and Alfred Bradley Adkins, 44, both of Pikeville, Kentucky, were charged in an 18-count indictment returned on April 1, 2016, in the U.S. District Court for the Eastern District of Kentucky.  The indictment was unsealed upon Conn’s arrest and initial court appearance today before U.S. Magistrate Judge Robert E. Wier of the Eastern District of Kentucky.  Conn was detained pending his detention hearing, which is scheduled for April 7, 2016.

The indictment charges all three defendants with one count of conspiracy to commit mail and wire fraud.  In addition, Conn is charged with three counts of mail fraud, three counts of wire fraud, two counts of obstruction, two counts of false statements, one count of conspiracy to commit money laundering, four counts of money laundering, and one count of conspiracy to structure payments.  Adkins is charged with one count of mail fraud, one count of wire fraud, and one count of false statements.  Daugherty also is charged with two counts of mail fraud, two counts of wire fraud, and one count of conspiracy to commit money laundering.

“The defendants are charged with designing an intricate scheme, using their expertise and positions of authority, to fraudulently induce payment of $600 million in federal disability and healthcare benefits,” said Assistant Attorney General Caldwell.  “While Social Security disability programs are designed to support the disabled, the defendants allegedly used it to enrich themselves.  Today’s arrests demonstrate, however, that the Criminal Division will root out greed and corruption wherever they may be found.”

“The Social Security Administration Office of the Inspector General is committed to pursuing those who violate the public trust by conspiring to misrepresent disabling conditions to defraud not only Social Security, but all American taxpayers,” said Special Agent in Charge McGill.  “We will continue to uphold the integrity of Social Security’s disability programs, which are a lifeline for so many Americans and their families.  I would like to thank the Department of Justice’s Criminal Division, and in particular, the division’s Fraud Section, for their willingness to take on this case and their diligent efforts to ensure these individuals will be held accountable for their actions.”

“As I stated just a few days ago when announcing charges against Kentucky Deputy Attorney General Timothy Longmeyer, the Louisville FBI is committed to cleaning up Kentucky,” said Special Agent in Charge Marshall.  “The allegations against these defendants is yet another example of Kentucky’s historical willingness to accept corruption as the status quo.  Although cleaning up Kentucky is a long and difficult process, today’s announcement is another step toward ending public corruption and taking back the commonwealth from those who corrupt it.”

“IRS-Criminal Investigation is committed to unraveling complex fraud and money laundering schemes,” said Special Agent in Charge Montaño.  “The allegations in this case describe a gross abuse of a system that was established to provide assistance to those truly in need.  The defendants are alleged to have conspired to use their positions, to corrupt the system for their own personal gain, at the expense of the American taxpayers who fund the Social Security system.  We are proud to work with our law enforcement partners to investigate and prosecute individuals who attempt to enrich themselves by fraudulent means.”

“This scheme allegedly enrolled ineligible people in Medicare and Medicaid,” said Special Agent in Charge Jackson.  “We are working with our law enforcement partners to protect these government health care programs funded by our taxpayer dollars.”

The indictment alleges that from October 2004 to Feb. 13, 2012, Conn, Daugherty and Adkins conspired to defraud the government by, among other things, submitting false and fraudulent medical documentation to the SSA in order to have the SSA pay claimants’ retroactive disability benefits, continue to pay claimants’ disability benefits in the future, award Medicare and Medicaid benefits to claimants and pay Conn’s attorney fees.  According to the indictment, the conspirators intended that the SSA disburse more than $600 million in disability benefits in more than 2,000 cases to claimants in Kentucky and elsewhere, irrespective of the claimants’ actual entitlement to benefits.  Conn, Adkins and Daugherty allegedly received more than $5 million during the nearly eight-year scheme.

According to the indictment, Conn is an attorney whose firm in Floyd County has focused for the past 20 years primarily on representing individuals seeking Social Security disability benefits; Adkins is a clinical psychologist who performed medical evaluations for Conn from 2004 through 2011; and Daugherty is a former SSA administrative law judge who began working with the SSA in 1990 and was assigned to the Office of Disability and Adjudication Review hearing office in Huntington, West Virginia, which maintained a satellite office in Prestonsburg, Kentucky, and handled the claims of Kentucky claimants who requested hearings.  Daugherty, who retired in July 2011, was responsible for deciding whether claimants were disabled and entitled to benefits.

As part of the scheme, Conn allegedly filed disability applications with the Prestonsburg Field Office, irrespective of the claimants’ residence in an effort to ultimately bring the cases before the Huntington Hearing Office, where Daugherty either self-assigned or directed others to assign those cases to himself.  Daugherty allegedly solicited Conn to submit falsified medical evidence so that Daugherty could issue fully favorable decisions.  Adkins and others performed pretextual physical and mental evaluations on claimants, the indictment alleges.  They routinely prepared and signed evaluation reports indicating that claimants had limitations considered disabling by the SSA, irrespective of claimants’ actual physical or mental conditions, according to the indictment.

According to the indictment, once the law enforcement investigation began, Conn allegedly threatened to retaliate against another person’s livelihood when that person provided truthful information to a law enforcement officer about the scheme.  Conn also allegedly destroyed and directed others to destroy evidence, including federal reports, a computer tower and other electronic hardware and media located at his law firm.

An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The SSA-OIG, the FBI, IRS-CI and HHS-OIG investigated the case.  Trial Attorney Dustin M. Davis and Special Trial Attorney Trey Alford of the Criminal Division’s Fraud Section and Trial Attorney Kristen M. Warden of the Criminal Division’s Asset Forfeiture and Money Laundering Section are prosecuting the case.

GUCCIFER FACES CHARGES OF HACKING

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, April 1, 2016

Romanian National “Guccifer” Extradited to Face Hacking Charges

Marcel Lehel Lazăr, 44, of Arad, Romania, allegedly the hacker “Guccifer,” made his initial appearance today in federal court in Alexandria, Virginia.

Lazăr had been temporarily surrendered from Romania to face U.S. charges relating to unauthorized access of protected computers, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office, Principal Deputy Assistant Secretary Bill A. Miller of the U.S. Department of State Bureau of Diplomatic Security (DSS) and Special Agent in Charge James M. Murray of the U.S. Secret Service’s Washington Field Office.

“Marcel Lazar is the latest of a dozen high-level cybercriminals who have recently been extradited to face justice in the United States,” said Assistant Attorney General Caldwell.  “Old-fashioned investigative work, enhanced international law enforcement relationships, and a long memory can ensure that foreign-based hackers have no safe haven even in the remote corners of the globe.  As the saying goes, ‘they can run, but they can’t hide.’”

“Mr. Lazar violated the privacy of his victims and thought he could hide behind the anonymity of the Internet,” said U.S. Attorney Boente.  “No matter where they are in the world, those who commit crimes against U.S. citizens will be held accountable for their actions, pursued by our investigators and prosecutors and brought to justice.”

“As a direct result of relentless investigative efforts and cooperation with our international partners, Marcel Lazar, also known as Guccifer, will begin answering for his alleged cyberhacking activities today in the U.S. judicial system,” said Assistant Director in Charge Abbate.  “I commend the dedicated work of the agents, analysts, prosecutors and our federal partners to identify Guccifer, who is alleged to have gained unauthorized access to on-line accounts and violated the privacy of victims, while attempting to hide unsuccessfully behind the anonymity of the Internet.”

In the United States, Lazăr is charged in a nine-count indictment with three counts of wire fraud, three counts of gaining unauthorized access to protected computers, and one count each of aggravated identity theft, cyberstalking and obstruction of justice.  Lazăr's case will be heard before U.S. District Judge James C. Cacheris of the Eastern District of Virginia.

According to the indictment, from December 2012 to January 2014, Lazăr hacked into the email and social media accounts of high-profile victims, including a family member of two former U.S. presidents, a former U.S. Cabinet member, a former member of the U.S. Joint Chiefs of Staff and a former presidential advisor.  After gaining unauthorized access to their accounts, Lazăr publicly released his victims’ private email correspondence, medical and financial information and personal photographs.  The indictment also alleges that in July 2013 and August 2013, Lazar impersonated a victim after compromising the victim’s account.

The charges and allegations contained in an indictment are merely accusations.  The defendant is presumed innocent until and unless proven guilty.

The FBI’s Washington Field Office, the DSS and the U.S. Secret Service are investigating the case with assistance from the Romanian National Police.

Senior Counsels Ryan K. Dickey and Peter V. Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Jay V. Prabhu and Maya D. Song of the Eastern District of Virginia are prosecuting the case.  The Criminal Division’s Office of International Affairs has provided significant assistance.

FORMER COAL COMPANY CEO SENTENCED TO PRISON

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, April 6, 2016

Former Massey Energy CEO Sentenced to a Year in Federal Prison

Don Blankenship Sentenced on Federal Conspiracy Charge

Acting U.S. Attorney Carol Casto announced that former Massey Energy Chief Executive Officer Don Blankenship was sentenced today to a year in federal prison and ordered to pay a $250,000 fine.  Blankenship was sentenced for conspiracy to willfully violate mine health and safety standards after a jury returned a guilty verdict on the federal crime.

“This sentence is a victory for workers and workplace safety,” said Acting U.S. Attorney Casto.  “It lets companies and their executives know that you can’t take chances with the lives of coal miners and get away with it.  Putting the former chief executive officer of a major corporation in prison sends a message that violating mine safety laws is a serious crime and those who break those laws will be held accountable.”

Over the course of the trial, in which jury selection began on Oct. 1, 2015, and the jury returned a guilty verdict on Dec. 3, 2015, the jury heard evidence from 27 witnesses called by the United States.  Many of these witnesses were coal miners who worked at the Upper Big Branch (UBB) mine prior to the 2010 explosion and they testified in detail from their firsthand knowledge of the unsafe working conditions at UBB, violations of U.S. Mine Safety and Health Administration (MSHA) regulations and organized efforts to obstruct and interfere with MSHA inspectors.  The jury heard from Bill Ross, former Manager of Technical Services at Massey, who testified that he warned Blankenship about the company’s practice of rampant violations and told the defendant prior to the UBB explosion that Massey’s standard tactic of ignoring or defrauding MSHA could not be sustained without the possibility of a serious accident that could have fatalities.  The evidence also showed that Blankenship received daily updates on safety violations and helped perpetuate them.

“Putting profits over the safety of workers is reprehensible,” said Acting U.S. Attorney Casto.  “The jury acknowledged that with the guilty verdict and the sentence imposed today recognizes that disregarding safety laws has real consequences.  From the beginning, the objective of this investigation and this prosecution was to not only show that those who violate safety laws will be held responsible, but also to deter these violations in the future to make everyone’s workplace safer.”

“Today’s sentence marks the culmination of a comprehensive, joint investigation that took over five years to complete and resulted in five criminal convictions.” said Special Agent in Charge Scott S. Smith of the FBI’s Pittsburgh Field Office.  “Along with dedicated prosecutors in the U.S. Attorney’s Office and investigators in U.S. Department of Labor’s Office of Inspector General, the FBI is committed to holding those who commit crimes by enabling safety violations and who place profits above the value of human life accountable.”

“Donald Blankenship’s trial and conviction came after an explosion that killed 29 miners at the Upper Big Branch mine,” said Special Agent in Charge John Spratley of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations’ Philadelphia Regional Office.  “His sentencing today reaffirms the responsibility of company executives to ensure they adhere to health and safety standards.  The Department of Labor’s Office of Inspector General will continue to work with the Mine Safety and Health Administration and our law enforcement partners to investigate criminal worker safety violations that pose a threat to American workers.”

The prosecution was the result of a comprehensive investigation that, including Blankenship, resulted in five criminal convictions.  In addition to the convictions of individuals, the outcome of the investigation also included a resolution of over $200 million with Alpha Natural Resources after it acquired Massey.  This agreement established a foundation dedicated to mine safety and health research, the first of its kind and set aside nearly $50 million in funding for the foundation.  That funding has provided the resources for some of the best and brightest minds in the country to pursue research that will make mines safer all over the world.

This matter was investigated by the FBI and the U.S. Department of Labor’s Office of Inspector General.  Assistant U.S. Attorneys Steven R. Ruby, Gregory McVey and Gabriele Wohl, as well as former U.S. Attorney Booth Goodwin, handled the prosecution and tried the case before a federal jury.

The prosecution is part of a sustained effort by the U.S. Attorney’s Office for the Southern District of West Virginia to protect the health and safety of West Virginia workers by vigorously prosecuting workplace safety crimes and holding accountable those responsible for dangerous working conditions.

Seven Iranians Charged for Conducting Cyber Attacks Against U.S. Financi...

PLASTIC SURGEON SENTENCED TO PRISON FOR TAX EVASION CRIMES

FROM:  U.S.  JUSTICE DEPARTMENT 

Monday, April 4, 2016

Alaska Plastic Surgeon Sentenced to Prison for Wire Fraud and Tax Evasion

Defendant Concealed Bank Accounts in Panama and Costa Rica from the IRS

An Anchorage, Alaska, plastic surgeon was sentenced to 48 months in prison on Friday for wire fraud and tax evasion, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Karen L. Loeffler of the District of Alaska.

“Tax evasion knows no geographic bounds,” said Acting Assistant Attorney General Ciraolo.  “This case demonstrates that there is no longer any country where it is safe for a defendant like Dr. Brandner to hide money from the government.  The Department of Justice, along with its law enforcement partners, will continue to aggressively pursue individuals who conceal assets and income abroad in an effort to evade their responsibilities under our nation’s tax laws.”

Dr. Michael D. Brandner, 67, was convicted by a federal jury in November 2015 of four counts of wire fraud and three counts of tax evasion.  The charges arose from a scheme to conceal over $5 million of assets in secret bank accounts in Panama and Costa Rica from the Internal Revenue Service (IRS) and Dr. Brandner’s wife.  According to the indictment and evidence introduced at trial, shortly after his wife filed for divorce in late 2007, Dr. Brandner collected millions of dollars in marital assets and secretly drove from Tacoma, Washington, to Costa Rica in Central America.  In Costa Rica, he opened two bank accounts into which he deposited over $350,000 in cash and hid a thousand ounces of gold in a safe deposit box.  He then traveled to Panama where he opened an account under the name of a sham corporation and deposited $4.6 million into the account in 2008.

Dr. Brandner concealed both the existence of the bank accounts and the interest income he earned on those accounts from the court in the divorce proceedings and from the IRS.  Dr. Brandner owed the IRS $500,000 in additional taxes for the 2008 through the 2010 tax years.  In 2011, Dr. Brandner repatriated over $4.6 million once the divorce was final only to have the funds seized by U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE HSI) special agents.  He then lied to federal agents about his control of the funds.

In addition to the prison term, U.S. District Judge Sharon Gleason in Anchorage ordered Dr. Brandner to serve two years of supervised release, and pay $25,922.95 toward the costs of prosecution.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Loeffler thanked special agents of IRS-Criminal Investigation and HSI, who investigated the case and Trial Attorney Ignacio Perez de la Cruz of the Tax Division and Assistant U.S. Attorney Bryan Schroder of the District of Alaska, who jointly prosecuted the case.

AMBASSADOR SARAH MENDELSON'S REMARKS ON PREVENTING TRAFFICKING OF WOMEN AND GIRLS

FROM:  U.S. STATE DEPARTMENT 

Remarks on Combatting the Trafficking of Women and Girls: What Role Can the Private Sector Play in Addressing and Preventing Human Trafficking and Modern-Day Slavery

Ambassador Sarah Mendelson

U.S. Representative for Economic and Social Affairs

U.S. Mission to the United Nations

New York City

March 16, 2016

AS DELIVERED

Thank you distinguished delegates, guests, and panelists for joining us today. Thank you to our experts who helped put this event together. Now, I want to talk to you about the moment – why we’re here – the call to action, and end with a final word of caution.

The moment - in September, the international community came together in agreement over an ambitious set of priorities. The 2030 Agenda for Sustainable Development presents an unprecedented opportunity to invest in our collective future and achieving progress on the world’s most significant social, economic, and environmental challenges. Among those, of course, is combatting the buying and selling of humans – an industry that is estimated to generate annual profits of $150 billion. Specifically, with the adoption of the 2030 Agenda, Member States have targeted trafficking. We have agreed to end trafficking in Target 5.2, “to eliminate all forms of violence against all women and girls in public and private spheres, including trafficking and sexual and other types of exploitation,” Target 8.7, “to take immediate and effective measures to eradicate forced labor, end modern slavery, and human trafficking and secure the prohibition and elimination of the worst forms of child labor, including recruitment and use of child soldiers, and by 2025 end child labor in all its forms,” and Target 16.2, “to end abuse, exploitation, trafficking, and all forms of violence and torture against children.” This is a universal agenda and applies to all of us. Unlike the Millennium Development Goals, the SDGs shift accountability from recipients and donors to relationships between states and people. Governments, companies, nongovernmental organizations, academic institutions, and citizens all have an essential role to play in making the SDGs real.

The call – so we want to seize this opportunity and explore the possibility of building new and creative partnerships to broaden constituencies specifically to combat human trafficking. We envision this as a network of networks. Each of us as consumers has a unique ability to leverage our individual economic power to influence existing markets and create new ones where workers are free from coercion and the exploitation associated with human trafficking. Consumers, cash in hand, have the power to steer this conversation from responsibilities to results. This is no easy task and cannot be achieved in silos. We look forward to continuing this conversation beyond the walls of this chamber.

Let me give you a snap shot of what we are thinking about and encourage you to engage us with your ideas. Along with other Missions and the UN Global Compact, the U.S. Mission is interested in building a coalition of Member States and CEOs of major companies that commit to making their supply chains free of forced labor. Of course, we welcome partnerships with other members of the UN family, such as UNODC and the ILO. This initiative should be understood as part of our broader effort to address cross-cutting themes, goals, and targets to jump start implementation of the SDGs, specifically Goal 5 “gender equality”, Goal 8 “decent work and economic growth,” and Goal 16 “peace, justice, and strong institutions.”

There is no set way to do this. One possibility is that corporate partners would be chosen by member state’s capitals and drawn from a specific list of industries, such as cocoa, coffee, electronics, seafood, mining, and textiles for example. Founding members could agree on an outcome document, financial commitments, and/or a social marketing campaign to ensure domestic and international outreach on the issue of eradicating human trafficking from public and private sector supply chains.

However the coalition comes together, we hope to launch in the coming months, either at a side event during the High Level Political Forum held under the auspices of ECOSOC in July 2016 in New York or in the lead up to the high-level ministerial week in mid-September 2016. This gathering would present an opportunity to share best practices and build a commitment to establish a growth plan from 2016 to 2030 to increase the numbers of Member States and companies to advance SDG implementation as it relates to human trafficking.

Some member states have shared ideas on what shape this could take, who should be engaged, and how best to engage the private sector. Some have expressed interest in engaging civil society. Others are keen to use technology to map supply chains. Understanding how supply chains operate, where key suppliers are located, and what working conditions exist in those locations and sectors is vital to helping a company gain control of its supply chain and target areas with high risks for human trafficking. Some of have suggested creating an UN-related Hub to build on existing efforts with free training courses and case studies. Many have noted that companies prefer “peer-to-peer” engagement, or B2B, approaches when resolving forced labor issues, as these remain crimes and can be problematic for brands. We are agnostic how this effort comes together. What we want to see is member states and companies and consumers agreeing to take action to make supply chains free of forced labor and therefore helping make the SDGs real.

We recognize there is a lot of action in this space. This is sort of the flavor of the month. But so far, work on this has not been closely linked either to the UN or to the SDGs. And here we see this effort as additive: if successful, it would be the first collaboration between multiple member states and the private sector to address human trafficking ideally in both private and public sector supply chains over the next 15 years.

We can work together so that governments enforce labor laws and treat all workers fairly and business can create anti-trafficking policies that acknowledge and address the risks in their industries, operations and supply chains, ensure workers have the right to fair compensation and redress, train staff to understand the indicators of human trafficking, and put remediation plans in place. Governments should set clear expectations for businesses on this issue and adopt policies that promote greater transparency and better reporting on clean supply chain efforts.

I want to end on a note of caution, however. Thank you to all of the panelists for being here today, but I have to admit, for all the talk about how this is the flavor of the month, it was not easy getting representatives from the private sector here today. When my expert called one corporate contact, the first thing the person said was, “Ouch – why would a company want to attend an event on trafficking in their industry? Wouldn’t that make them look bad?” Thankfully, not all companies are concerned about optics. The State Department’s Office to Monitor and Combat Trafficking in Persons has partnered with executives at the Electronics Industry Citizenship Coalition, a coalition of more than 100 electronics companies with a combined annual revenue greater than $3 Trillion committed to supporting the rights of workers. Similarly, there are partnerships to address trafficking in supply chains between companies themselves, such as the Global Business Coalition Against Human Trafficking, GBCAT. But under their breath, colleagues will tell you, this is no easy task. We hope that corporate coalitions to support SDG implementation, such as Impact2030, and UN Global Compact will be partners in this effort.

As I noted at the top, we are still very much in the idea phase of this effort and we welcome input, advice, and engagement as we hope to build out the Circle of Champions.

DETROIT DOC RECEIVES PRISON SENTENCE FOR PARTICIPATING IN $5.7 MILLION MEDICARE FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, March 23, 2016

Detroit-Area Physician Sentenced to 45 Months in Prison for Role in $5.7 Million Medicare Fraud Scheme

A Detroit-area doctor who prescribed medically unnecessary controlled substances and billed for office visits and diagnostic testing that never took place was sentenced to 45 months in prison today for his role in a $5.7 million Medicare fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Region and Special Agent in Charge Jarod J. Koopman of Internal Revenue Service-Criminal Investigation (IRS-CI) Detroit Field Office made the announcement.

Laran Lerner, 59, of Northville, Michigan, was sentenced today by U.S. District Judge Victoria A. Roberts of the Eastern District of Michigan, who also ordered Lerner to pay $2,789,409 in restitution.  Lerner pleaded guilty on Aug. 31, 2015, to one count of health care fraud and one count of structuring cash transactions to avoid bank reporting requirements.

According to admissions made as part of his plea agreement, Lerner lured patients into his clinic with prescriptions for medically unnecessary controlled substances and then caused Medicare to be billed for a variety of unnecessary prescriptions, diagnostic tests and office visits to make it appear as though he was providing legitimate medical services.  Lerner admitted that in reality, the controlled medications were simply used to facilitate and conceal his scheme to steal millions of dollars from the Medicare program.  According to Lerner’s plea agreement, Medicare was billed $5,748,237 as a result of Lerner’s unnecessary prescriptions, office visits and diagnostic testing.

Lerner also admitted that he structured cash deposits he received as a result of his scheme in $5,000 increments on consecutive days at various branch locations in the Detroit area in order to avoid the requirement that domestic banks file a currency transaction report with the Secretary of the Treasury for all currency transactions over $10,000.  According to his plea agreement, for example, in April 2013, Lerner deposited $70,000 in cash by making deposits of $5,000 on 14 different days.

As part of the plea agreement, Lerner agreed to permanently surrender his Drug Enforcement Administration controlled substance registration and agreed to not to re-apply for this license in the future, and agreed that were he granted any application from any agency to prescribe or dispense controlled substances, it would be against the public interest.

The FBI, HHS-OIG and IRS-CI investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan.  Fraud Section Trial Attorney Elizabeth Young 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 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.

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.