PHILADELPHIA – U.S. Attorney William M. McSwain announced that the owners of a Yeadon, PA, tax preparation business were charged today in connection with a scheme to prepare fraudulent tax returns in order to generate unwarranted refunds.

Deron Joe and Edmund Dassin, the owners of Edron Tax Preparation Services, were charged today by superseding indictment with one count of conspiracy to defraud the United States and 15 counts of aiding and assisting in the preparation and filing of a false tax return.

According to the superseding indictment, Joe and Dassin prepared certain tax returns for clients for tax years 2008 to 2010 and falsely claimed on these returns that these clients had incurred unreimbursed employee business expenses. The indictment alleges the defendants knew their clients were not entitled to such refunds, as the clients had neither reported these expenses to the defendants nor provided any documentation to support such deductions. One of their clients was an IRS agent acting in an undercover capacity.

If convicted, the defendants face a maximum possible sentence of 47 years of imprisonment and a fine of $3.75 million.

The case was investigated by Internal Revenue Service’s Criminal Investigation Division and is being prosecuted by Department of Justice Tax Division Attorneys Chris O’Donnell and Kathryn Sparks and Assistant U.S. Attorney Tomika N.S. Patterson.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a criminal Complaint charging WILLIAM McFARLAND with wire fraud and money laundering, in connection with conducting a sham ticket scheme in which he purported to sell fraudulent tickets to exclusive fashion, music, and sporting events through NYC VIP Access, a company controlled by McFARLAND, and also caused the fraud proceeds to be sent to others’ financial accounts in an effort to conceal his ownership and control of the funds.  McFARLAND is expected to be presented before U.S. Magistrate Gabriel W. Gorenstein today. 

Manhattan U.S. Attorney Geoffrey Berman said:  “William McFarland, already awaiting sentencing for a prior fraud scheme, allegedly continued to conduct criminal business as usual, selling nonexistent tickets to fashion, music, and sporting events.  As alleged, McFarland’s purported exclusive event ticket company, NYC VIP Access, in fact had no access to events for which he sold bogus tickets.  Now McFarland faces criminal charges on top of those to which he already pled guilty.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “In March of 2018, William McFarland pled guilty to defrauding investors and vendors of the Fyre Festival, but it is apparent that he did not stop there.  McFarland allegedly went on to sell fraudulent tickets to many grand events, totaling almost $100,000.  Today’s charges depict our intolerance for such fraudulent activity, and we will continue to diligently investigate acts such as this.”

According to the allegations in the Complaint[1] unsealed today in Manhattan federal court:

On March 6, 2018, McFARLAND pled guilty before United States District Judge Naomi Reice Buchwald to one count of wire fraud in connection with a scheme to defraud over 80 investors in Fyre Media and Fyre Festival LLC of over $24 million in losses, and one count of wire fraud with a scheme to defraud a ticket vendor for the Fyre Festival of $2 million in losses.  United States v. William McFarland, 17 Cr. 600 (NRB).  McFARLAND has been on pretrial release since July 1, 2017, and is currently awaiting sentencing in that case.

From at least in or about late 2017, up to and including at least in or about March 2018, McFARLAND owned NYC VIP Access, a company based in New York, New York, that purported to be in the business of obtaining and selling for profit tickets to various exclusive events including fashion galas, music festivals, and sporting events.  NYC VIP Access purported to sell tickets to the following events, among others: the 2018 Met Gala, Burning Man 2018, Coachella 2018, the 2018 Grammy Awards, Super Bowl LII, and a Cleveland Cavaliers game and team dinner with Lebron James.  McFARLAND, while on pretrial release, perpetrated a scheme to defraud attendees of the Fyre Festival and others by soliciting them to purchase tickets from NYC VIP Access to exclusive events when, in fact, no such tickets existed. 

McFARLAND took steps to make NYC VIP Access appear as it if were controlled and operated by other individuals.  In soliciting ticket sales, McFARLAND used an email account in the name of a then-employee (“Employee-1”) in order to hide his affiliation with NYC VIP Access.  McFARLAND provided prospective customers with contracts that falsely represented that NYC VIP Access had tickets to exclusive events in fashion, music, and sports.  In order to distance himself from the operation, McFARLAND directed that Employee-1 sign the contracts between NYC VIP Access and the customers.  After McFARLAND induced customers to wire money for tickets, McFARLAND either did not provide tickets at all, or did not provide tickets as advertised.  McFARLAND charged at least approximately $100,000 in fraudulent tickets to at least approximately 15 customer-victims. McFARLAND instructed and caused ticket sale proceeds to be sent to a bank account belonging to Employee-1, to which McFARLAND had access and control, or a mobile payment service account belonging to another employee (“Employee-2”), for the purpose of concealing his ownership and control of the funds.             

*                *                *

McFARLAND, 26, of New York, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of money laundering, which carries a maximum sentence of 20 years in prison.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the investigative work of the FBI’s New York Field Office.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United State Attorney Kristy J. Greenberg is in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

            DALLAS— Javier Contreras Vargas, aka “Cuñado,” a citizen of Mexico and in the United States illegally, was sentenced Monday, June 11, 2018, before U.S. District Judge David C. Godbey for his role in a methamphetamine distribution conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas. 

                 Vargas was sentenced to 235 months in federal prison following his guilty plea in August 2017, to one count of conspiracy to possess with intent to distribute and to distribute a schedule II controlled substance.  He was in the United States illegally at the time of the offense and will be deported after serving his sentence.  Vargas has been in custody since his arrest in August 2016. 

                Vargas was charged along with twenty-one others with various offenses related to a methamphetamine distribution conspiracy.  Of the twenty-one charged, two are awaiting trial. 

                According to documents filed in the case, between January 1, 2015, and July 7, 2015, Vargas and his coconspirators conspired to distribute methamphetamine and used coded language to purchase multiple kilograms of the illegal substance so that he could distribute the drug to other people. 

               On July 7, 2015, law enforcement conducted a traffic stop and Vargas was found to be in possession of 2 kilograms of methamphetamine.  Officers subsequently searched his residence and found approximately 17 kilograms of methamphetamine.  Law enforcement also seized a firearm, and several thousand dollars in United States currency.  As part of the plea agreement, Vargas agreed to forfeit the items seized, including the firearm and $25,137.00.

               The Federal Bureau of Investigation investigated, with assistance from the Dallas Police Department and the Internal Revenue Service Criminal Investigations Division.  Assistant U.S. Attorney George Leal prosecuted.           

# # #

Assistant U.S. Attorneys Meghan Heesch (619) 546-9442 and Andrew Young (619) 546-7981

NEWS RELEASE SUMMARY– June 12, 2018

SAN DIEGO – Johnny Martin, a former supervisor in the Department of Homeland Security, was arraigned in federal court today on an indictment charging him with lying to the Federal Bureau of Investigation about his improper transmission of sensitive law enforcement information. The charges against Martin stem from an investigation into a massive immigration fraud scheme involving over 150 victims and millions of dollars in losses.

According to the indictment, FBI agents approached Martin in June 2017 and asked about his dealings with an individual who had shared information with Martin and from 2010 to 2012.  In fact, Martin was well acquainted with this individual. While still employed by Homeland Security Investigations (HSI) in 2015 and 2016, Martin had improperly searched a confidential law enforcement database on more than a dozen occasions for names provided by this individual. Martin then created new documents containing the confidential information, and used his personal email account to send the documents he created to the individual.

During the June 2017 interview, agents showed Martin an example of the sensitive information that he had personally extracted from a confidential law enforcement database, and had emailed directly to the individual. This document contained the personally identifiable information, immigration history, and criminal history of someone whom the individual had victimized in his immigration fraud scheme, and agents were attempting to determine how the individual had obtained this document. According to the indictment, Martin falsely claimed to agents that he had no idea how the document had been transmitted to the individual, and falsely denied sending the document or any other law enforcement sensitive information to the individual.

Martin’s case is related to a separate immigration fraud case pending against Hardev Panesar, Rafael Hastie, and Gurdev Singh (Case No. 17CR1371-GPC).  According to the indictment in that case, Panesar and Hastie posed as Department of Homeland Security agents and defrauded their victims by claiming that they could obtain immigration status and stop deportation proceedings in exchange for exorbitant fees. According to statements and filings made in court in that case, Panesar and Hastie were able to convince victims they were bona fide federal agents by, in part, presenting them with confidential information obtained from law enforcement databases.

Martin, who is no longer employed by HSI, was released on bond and is scheduled to appear before U.S. District Judge Gonzalo P. Curiel on July 27, 2018.

DEFENDANT                                   Case Number:   18CR2835-GPC

Johnny MARTIN                                Age: 59               Chula Vista, California

SUMMARY OF CHARGE

Count 1: 18 U.S.C. § 1001, Making a False Statement to a Federal Agent

Maximum Penalties: 5 years’ imprisonment, $250,000 fine, 3 years’ supervised release.

AGENCIES

Federal Bureau of Investigation

Customs and Border Protection - Office of Field Operations

Customs and Border Protection - Office of Professional Responsibility

*The charges and allegations contained in an Indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.

SACRAMENTO, Calif. — Brandon Anderson-Lacy, 30, of Fairfield, was sentenced today by U.S. District Judge John A. Mendez to three years and five months in prison for a tax refund fraud conspiracy, U.S. Attorney McGregor W. Scott announced.

“Today’s sentencing shows the seriousness of identity theft with the filing of false tax returns to the IRS,” said Cindy S. Chen, Acting Special Agent in Charge, IRS Criminal Investigation. “IRS-CI continues to investigate these types of tax crimes and purse the criminals who steal other people’s identity and file false tax returns to enrich themselves and undermine the U.S. tax system. We will continue to work with our law enforcement partners in combating these tax crimes.”

According to court documents, from February 2011 through March 2012, Anderson-Lacy and others participated in a conspiracy to submit false tax returns to the IRS by obtaining personal identifying information of others, and then submitting returns seeking refunds to which the people listed on the returns were not entitled. The false tax returns included fake Forms W-2 listing false employers, false income amounts, and false federal income tax withholdings, all of which was used to help generate a claimed refund. Many of the tax returns also included false information related to dependents and education expenses that were used to further increase the refunds requested. Anderson-Lacy and his co-conspirators requested that the refunds issue in a variety of ways, including by prepaid debit cards, direct deposit into bank accounts, and by treasury check. More than $319,000 in refunds were claimed in connection with the conspiracy.

This case was the product of an investigation by IRS Criminal Investigation with assistance from the Vacaville Police Department. Assistant U.S. Attorneys Christopher S. Hales and Miriam R. Hinman are prosecuting the case.

JOHNSTOWN, Pa. - A citizen of Mexico has been sentenced in federal court in Johnstown to five months in prison, with credit for time served, and then ordered deported by Immigration and Customs Enforcement to Mexico, on his conviction of re-entry of an illegal alien, United States Attorney Scott W. Brady announced today.

United States District Judge Kim R. Gibson imposed the sentence on Yovani Escalante-Escalante, 32, of Blair County, Pa.

According to information presented to the court, on Oct. 12, 2017, Escalante-Escalante, an alien who had been deported from the United States on May 13, 2009 was found in Blair County, Pa.  He had unlawfully reentered this Country without receiving permission to do so from the Secretary of the Department of Homeland Security.

Assistant United States Attorney Stephanie L. Haines prosecuted this case on behalf of the government.

Mr. Brady commended the Department of Homeland Security/Immigration and Customs Enforcement for the investigation that led to the successful prosecution of Escalante-Escalante.

JOHNSTOWN, Pa. – A resident of Philadelphia, Pa., has been sentenced in federal court in Johnstown to 96 months in prison and three years’ supervised release on his conviction of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.

United States District Judge Kim R. Gibson imposed the sentence on Kareem Jamal Jones, 28, of Philadelphia, Pa.

According to information presented to the court, from Aug. 25, 2016, through Sept. 14, 2016, Jones conspired with a co-defendant to distribute and possess with the intent to distribute less than 100 grams of heroin.

Assistant United States Attorney Stephanie L. Haines prosecuted this case on behalf of the government.

Mr. Brady commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force for the investigation that led to the successful prosecution of Jones.

LAS VEGAS, Nev. – A Las Vegas resident who used gas pump skimming devices to steal customers’ personal credit and debit card information was sentenced today to 24 months in federal prison, announced U.S. Attorney Dayle Elieson of the District of Nevada.

Virab Torosyan, 55, was sentenced by U.S. District Judge Andrew P. Gordon. In addition to the prison term, he was ordered to pay $41,475.22 in restitution. He previously pleaded guilty to one count of aggravated identity theft.

According to court documents, Torosyan possessed 1,673 stolen credit and debit card account numbers. He admitted that, from February 2014 to July 2014, he and his co-conspirators placed card skimming devices at gas pumps in order to steal victims’ personal credit and debit card data. Torosyan would re-encode the stolen credit and debit card information to any plastic card with a magnetic strip. Then, he used the counterfeit cards to purchase fuel in North Las Vegas and elsewhere for pick-up trucks that had custom-made 400 gallon fuel tanks hidden under the truck’s hardtop bed cover. Torosyan would resell the fuel at a discounted price to gas stations and other drivers.

The case was investigated by the Las Vegas Metropolitan Police Department and U.S. Secret Service. Assistant U.S. Attorneys Nicholas Dickinson, Kilby Macfadden, and Kimberly Frayn prosecuted the case.

If you are a victim of identity theft, you may make a report to the Federal Trade Commission (FTC) by calling 1-877-438-4338 or online at www.identitytheft.gov. For identity theft prevention tips and free resources visit www.ftc.gov/idtheft.

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          SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that he and Assistant U.S. Attorney Belinda Alcantara, Elder Justice Coordinator, were guest speakers at the “2018 Enhancing Judicial Skills in Elder Abuse Cases Workshop,” organized by Guam Supreme Court Justice F. Philip Carbullido, Chairperson of the Pacific Judicial Council Education Committee.  U.S. Attorney Anderson and AUSA Alcantara spoke about the DOJ Elder Justice Program, elder abuse, neglect, and financial exploitation, and resources available on the DOJ webpage elderjustice.gov.  The workshop, held at the Hilton Guam Resort & Spa on June 4-6, 2018, was attended by judges from Guam, our neighboring islands of Saipan, Rota, Tinian, Pohnpei, Chuuk, American Samoa, and Palau, law enforcement and community stakeholders.  Presenters at the workshop also included speakers from the National Judicial Institute on Domestic Violence, which included judges and speakers from North Carolina, Washington, the District of Columbia, Minnesota, and Nevada.

          The Elder Justice Program stems from the DOJ Elder Justice Initiative (EJI) to prevent and combat financial fraud and scams that target seniors, elder abuse, and neglect.  The mission of the EJI is to strengthen awareness about elder abuse and financial exploitation through education, build law enforcement capacity to respond to elder justice issues, and facilitate prosecution efforts to make our community safer for all.

Some examples of the elder financial exploitation prosecuted by DOJ:

•  “Lottery phone scams,” in which callers convince seniors that a large fee or taxes be paid before one can receive lottery winnings;

•  “IRS imposter schemes,” which defraud victims by posing as IRS agents and claiming those victims owe back taxes;

•  “Inheritance or business opportunity scams,” which lure victims to believe that a business opportunity or inheritance awaits them, deceiving them to part with monies or carry an innocuous “gift or package” on an airline which turns out to be contraband;        

•  “Tech support scams” in which telemarketers convince seniors to give remote access to their personal computers or pay for software not needed;

•  “Guardianship schemes,” which siphon seniors’ financial resources into the bank accounts of deceitful relatives or guardians.

          Many of these cases illustrate how an elderly American can lose his or her life savings to a relative, guardian, or stranger who gains the victim’s trust.  The devastating effects these cases have on victims and their families, both financially and psychologically, make prosecuting elder fraud a key Department of Justice priority.

          The U.S. Attorney’s Office in Guam and the NMI will be conducting outreach to various senior citizens centers in Guam and the NMI.   Anyone interested in learning more about the program can log on to https://www.justice.gov/elderjustice.

USA Shawn N. Anderson at Pacific Judicial Council Workshop

USA Anderson and AUSA Belinda Alcantara sharing on DOJ’s Elder Justice Program Initiative

SAN FRANCISCO – Naum Morgovsky and Irina Morgovsky pleaded guilty today for their respective roles in a scheme to export components for the production of night vision and thermal devices in violation of the Arms Export Control Act, announced Acting United States Attorney Alex G. Tse, Assistant Attorney General for National Security John C. Demers, and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.  Naum Morgovsky also pleaded guilty to laundering the proceeds of from the scheme.  The pleas were accepted by the Honorable Vince Chhabria, U.S. District Judge.   

According to their guilty pleas, Naum Morgovsky, 69, and Irina Morgovsky, 66, both residing in Hillsborough, Calif., admitted that from April 2012 until August 25, 2016, they conspired to export without the necessary license to a company in Moscow, Russia, numerous scope components, including image intensifier tubes and lenses.  They further admitted a coconspirator in Russia communicated to them lists of components necessary for the Russian business to manufacture certain night vision devises.  The defendants used their U.S. business, Hitek International, to purchase these components and misrepresented to the sellers that the products would not be exported.  The defendants then shipped the products to Russia and other countries in Europe where an associate arranged for them to be hand-carried into Russia.  Further, the defendants admitted the scope components they exported were on the United States Munitions List and that they therefore were not permitted to export the items without a license from the Department of State, Directorate of Defense Trade Controls. The defendants admitted they knew a license was required to export the components and that they did not obtain a license.

“Protecting sensitive technology from unlawful export is crucial to our national security, especially when that technology has military uses,” said Acting U.S. Attorney Tse.  “This prosecution and today’s guilty pleas demonstrate the Department of Justice’s continuing commitment to using all available tools, including criminal charges, to safeguard national security.”

In addition to exporting the components, Naum Morgovsky admitted he took steps to conceal his crimes so that the couple could continue to run the illegal export business undetected.  Specifically, he admitted he laundered the proceeds of the export crimes and used the name of a deceased person to conceal the fact that he was the source and owner of an US-based account.  

On April 27, 2017, a federal grand jury issued a superseding indictment charging the Morgovskys, along with Mark Migdal, 72, of Portola Valley, Calif., for their respective roles in three related schemes—the illegal export scheme resolved by today’s plea agreements, and two additional bank fraud schemes allegedly involving Naum Morgovsky.  The charges related to the alleged bank fraud scheme remain pending against Naum Morgovesky.  The defendant is presumed innocent until proven guilty beyond reasonable doubt with regard to those charges.  

With respect to the illegal export scheme, the grand jury charged Naum Morgovesky with conspiracy to violate the Armed Export Control Act, in violation of 22 U.S.C. § 2778, and two counts of money laundering, in violation of 18 U.S.C. §§ 1956(a)(1)(B)(i) and (a)(2)(A).  The grand jury charged Irina Morgovesky with the § 2778 conspiracy and with misuse of a passport, in violation of 18 U.S.C. § 1544.  Today the defendants pleaded guilty to all the charges with the exception of the passport charge pending against Irina Morgovesky—that charge will be dismissed at the time of sentencing if she complies with the terms of the plea agreement.  Bank fraud charges alleged in the indictment against Naum Morgovsky remain pending and will be scheduled for trial.

The defendants face a maximum sentence of 20 years in prison for each of the counts to which they pleaded guilty.  The maximum fine for the Armed Export Conspiracy charges is $1,000,000, and the maximum fine for the money laundering charges is $500,000.  Any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Judge Chhabria has scheduled a hearing for sentencing with respect to today’s guilty pleas for September 18, 2018.  No date has been scheduled yet to resolve the remaining charges against Naum Morgovsky.  

The case is being prosecuted by Assistant United States Attorneys Colin Sampson and Erin Cornell and National Security Division Trial Attorney Jason McCullough.  The prosecution is the result of an investigation by the counterintelligence squad of the Federal Bureau of Investigation; Internal Revenue Service, Criminal Investigation; and the Department of Commerce, Bureau of Industry and Security. 
 

St. Thomas, USVI - United States Attorney Gretchen C.F. Shappert announced that she and federal law enforcement partners, plus members of the District’s Project Safe Neighborhoods Task Force, will participate in a Town Hall Meeting at the Kirwan Terrace Community on Thursday, June 14th at 6:00 p.m. The purpose of the meeting is to provide community members with an opportunity to share their ideas and concerns about public safety. The United States Attorney will also discuss the Department of Justice’s Project Safe Neighborhoods (PSN) initiative.

According to U.S. Attorney Shappert, "Project Safe Neighborhoods is the centerpiece of our crime reduction strategy. It is a tested and proven program to invest in our communities and foster vital partnerships. PSN enables the United States Attorney’s Office, together with our law enforcement partners, to target and prioritize criminal prosecutions on the most violent people in the most violent areas. Second, we engage with a wide variety of stakeholders—from federal and local law enforcement, to community groups, educators, faith-based organizations, and victims’ advocates—in order to identify the needs specific to our communities and to develop strategies to reduce crime. The Kirwan Terrace Community Town Hall Meeting is a wonderful opportunity for us to hear what matters most to the citizens who live there." U.S. Attorney Shappert emphasized that the June 14th Town Hall is only one of several PSN outreach activities planned for the next several months.

Additional information about Project Safe Neighborhoods can be found on the U.S. Attorney’s Office website, https://www.justice.gov/usao-vi.

DAYTON – A federal grand jury has charged the owner and manager of Busch’s Country Corner, Inc. with fraud charges related to the Supplemental Nutrition Assistance Program (SNAP) in a 42-count indictment returned here today.

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Anthony V. Mohatt, Special Agent in Charge, U.S. Department of Agriculture Office of Inspector General Investigations, Midwest Region, Yvonne DiCristoforo, Special Agent in Charge, U.S. Service and Michelle Thourot, Agent-in-Charge, Ohio Investigative Unit, announced the charges.

According to the indictment, from April 2010 until May 2018, Busch’s Country Corner co-owner Michael D. Busch and his brother, Randall S. Busch, illegally exchanged cash for SNAP benefits.

The indictment alleges the defendants caused more than 195,000 individual SNAP Electronic Benefit Transfer (EBT) transactions to be completed by Busch’s Country Corner, totaling more than $5.4 million. It is alleged that approximately 64 percent, or $3.4 million, of those SNAP transactions were fraudulent. Busch’s Country Corner operates as a vendor in the downtown Cincinnati Findlay Market complex.

The defendants allegedly used electronic point of sale devices in order to process EBT transactions for cash. For example, one transaction included a beginning EBT balance of $1,300 and an ending balance of $11.

The indictment includes one count of conspiracy to commit money laundering, one count of conspiracy to commit SNAP fraud, 20 counts of SNAP fraud and 20 counts of wire fraud.

U.S. Attorney Glassman commended the investigation of this case by the USDA OIG, U.S. Secret Service and Ohio Investigative Unit, and Assistant United States Attorney Dwight Keller, who is prosecuting the case.

An indictment merely contains allegations, and the defendants are presumed innocent unless proven guilty in a court of law.

# # #

A jury convicted Rocky River business executive C. David Snyder on six charges related to embezzling $126,000 from an employee retirement fund and collecting nearly $860,000 from his employees but not paying the money to the IRS.

Snyder, 61, is scheduled to be sentenced Oct. 9. He was convicted on one count of embezzling from an employee pension fund and five counts of failure to pay over taxes. He was acquitted on two tax charges.

Snyder served as chairman, president and chief executive officer of Attevo, Inc., a technology consulting company headquartered in Cleveland. He also served as chairman and primary shareholder at Ruralogic, Inc., headquartered in Bryan, Ohio.

Attevo employees prepared financial records and schedules, quarterly and annual returns and reports for Attevo, at Snyder’s direction. Snyder ranked Attevo’s payables in order of importance, according to court documents.

Snyder, on behalf of Attevo, and the IRS in 2011 agreed to a monthly payment plan of $48,350 per month to repay the company’s outstanding payroll tax liabilities. Attevo made 10 payments totaling $483,500 then made no further payments, according to court documents.

Snyder withheld payroll tax from employees but failed to pay it to the IRS. Snyder failed to pay over approximately $328,355 of employee’s portion of payroll taxes in 2010 and approximately $530,778 in 2012, according to court documents.

Snyder created a 401(k) and profit-sharing plan for Attevo employees in 2009. Ruralogic was added to the plan in 2010. The plan was funded through employee payroll deferrals. Between 2010 and 2012, Snyder failed to pay into the plan approximately $126,000 in contributions and loan repayments withheld from Attevo and Ruralogic employee wages, according to court documents.

During the time of his criminal conduct, instead of paying Attevo’s employment taxes, Snyder paid $20,000 per month for the rental of a personal residence in Lakewood and his vacation home in Chautauqua, New York, leases on four vehicles and other personal expenses, according to trial testimony and court documents.

He also used Attevo’s American Express to pay personal expenses, including women’s clothing at Ann Taylor, Nieman-Marcus and other stores, beauty supplies at Oro Gold in Las Vegas, travel to resorts in Florida and for pool/spa renovations, according to trial testimony and court documents.

Snyder earned income from Attevo totaling approximately $1.6 million between 2009 and 2012, according to the court documents and trial testimony.

U.S. Attorney Justin E. Herdman said: “A jury found this defendant embezzled money from his employees. He also took taxes out of their paychecks, but instead of paying the taxes of the IRS, he used the stolen money to pay for his vacation home, pool renovation and otherwise fund his own lavish lifestyle.”

“Business owners have a responsibility to withhold income taxes for their employees and then remit those taxes to the Internal Revenue Service,” said IRS Special Agent in Charge Ryan Korner. “The failure to pay over withheld taxes results in the loss of tax revenue to the United States government and the loss of future Social Security or Medicare benefits for employees.”

“Charles Snyder embezzled retirement savings from his employees’ 401(k) accounts, and used the money for his personal benefit. We will continue to work with our law enforcement and other partners to protect retirement assets covered by the Employee Retirement Income Security Act," said James Vanderberg, Special Agent-in-Charge, Chicago Region, U. S. Department of Labor Office of Inspector General.

This case was investigated by the Internal Revenue Service – Criminal Investigations and the U.S. Department of Labor – Office of Inspector General. It is being prosecuted by Assistant U.S. Attorneys Michael L. Collyer and Megan R. Miller.

HOUSTON – Two Houston women have been taken into custody on charges they committed fraud against the Veterans Administration (VA) by generating purchase orders for fictitious goods and services, announced U.S. Attorney Ryan K. Patrick.

Authorities arrested Eduora McDaniel aka Eudora McDaniel, 75, today, and she is expected to make her initial appearance before U.S. Magistrate Judge Nancy Johnson at 1:00 p.m. Co-defendant Angela Hunter aka Angelia Hunter, 53, is expected to appear in federal court Thursday at 2:00 p.m.

The 11-count indictment, returned June 7, 2018, alleges McDaniel was a prosthetics representative at the VA, while Hunter co-owned Divine Iron Works - a company that was an approved VA prosthetics vendor. They allegedly entered into an agreement to split VA payments for goods and services Hunter’s company never provided.

While Divine Iron Works was an approved vendor to provide prosthetic goods and services for the VA, the company was effectively defunct from January 2011 to December 2014 and provided no actual goods or services, according to the charges. The indictment alleges that as a VA prosthetics representative, McDaniel had the authority to obtain prosthetic goods and services if a Veterans Administration physician found it medically necessary, which she was authorized to pay using a government-issued VISA credit card. McDaniel allegedly created bogus purchase orders for Hunter’s company, which Hunter used to obtain payment on McDaniel’s government credit cards. McDaniel and Hunter split the payments according to the charges.  

Each is charged with conspiracy to commit wire fraud and face up to five years in prison, upon conviction. McDaniel is also charged with 10 counts of wire fraud and one count of theft of government property. Each count of wire fraud carries a possible sentence of 20 years in prison, while theft of government property could result in a maximum of 10 years imprisonment. All the charges also carry a possible fine of $250,000.

VA - Office of Inspector General conducted the investigation. Assistant U.S. Attorney Belinda Beek is prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.

A medical assistant was indicted on charges of defrauding the Michigan Unemployment Insurance Agency (UIA) and stealing patients’ Personal Identifying Information (PII) from a doctor’s office in Pontiac, Michigan, announced United States Attorney Matthew Schneider.

Schneider was joined in the announcement by Douglas J. Zloto, Special Agent in Charge of the U.S. Secret Service, Detroit Field Office.

Indicted was Aline Harris, 34, of Detroit, Michigan.  The indictment charges wire fraud, wrongful disclosure of health information, and identity theft in relation to unemployment benefits fraud and unauthorized disclosure of patients’ PII. 

According to the indictment, Harris, who worked for a doctor’s office in Pontiac, Michigan was fraudulently printing out patients’ profiles which contained PII and giving the information to others who used them to commit other federal crimes.  She also lied to the Michigan UIA and collected over $33,000 in unemployment benefits she was not entitled to.

Harris was arrested today and appeared in court the Eastern District of Michigan for arraignment on the indictment.  She was released on a personal bond.

The case was investigated by the Southeast Michigan Financial Crimes Task Force led by the United States Secret Service.  West Bloomfield, Warren, and Royal Oak Police Departments, Michigan Attorney General’s Office, and the IRS.

The case is being prosecuted by Assistant U.S. Attorney Abed Hammoud with the United States Attorney’s Office for the Eastern District of Michigan in Detroit.

An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

BIRMINGHAM– A federal judge today sentenced a Mountain Brook man to nearly three years in prison for cyberstalking, including threatening to kill, a former girlfriend and a second woman associated with her, announced U.S. Attorney Jay E. Town and FBI Special Agent in Charge Johnnie Sharp Jr.

U.S. District Judge Karon O. Bowdre sentenced STEPHEN PARKS LEWIS, 32, to two years and nine months in prison on two counts of cyberstalking. Lewis pleaded guilty to the charges in January. Along with the prison sentence, Judge Bowdre ordered Lewis to serve three years of supervised release following his prison term. She prohibited him from any contact with his victims or their extended families during his supervised release, and ordered him to undergo in-patient treatment for drug and alcohol abuse during the first year of his release.

“Lewis used Facebook, emails, text messages and voicemails to harass and threaten a young woman who broke off an abusive relationship with him, and when he could no longer find her, he turned his cyberstalking and cruel threats on her family. He even threatened to kill the woman who was dating his victim’s brother, as well as the woman’s six-year-old child,” Town said. “Prison is the best destination for someone who methodically torments and terrifies his victims.”

“Lewis will now answer for his sustained and menacing cyberstalking,” Sharp said. “This prison sentence should send the message that the FBI and our partners will hold accountable those who would use modern communication methods to deliver threats and intimidation.”

According to court documents, Lewis’s threats to the woman who had ended their five-year dating relationship included claims that he would commit a mass shooting akin to the one in Las Vegas last year, in which 58 people were killed and more than 500 wounded, if she did not submit to his demands. His cyberstalking went on for at least 10 months in 2017 and he threatened his harassment would “continue forever.”

The second woman Lewis threatened and harassed was the girlfriend of his first victim’s brother. Lewis used Facebook and text messages to threaten her, including threats to stalk and kill her and her minor daughter.

Among Lewis’ often profane Facebook messages to his second victim, he demanded to know where he could find his former girlfriend. “I have your phone number. I have your address. I know where [Victim-1’s brother] lives. I know where you live,” he wrote, according to his plea agreement. “You tell me where she is. You tell me whats (sic) going on. Or I’m coming with a desert eagle .45.” Following that message, Lewis sent a photo of a Desert Eagle pistol to Victim 2.

The FBI investigated the case, which Assistant U.S. Attorney Mohammad Khatib prosecuted.

El Dorado, Arkansas – Duane (DAK) Kees, United States Attorney for the Western District of Arkansas, announced today that Ian Mitchell Ashcraft, age 28, of Crossett, Arkansas was sentenced yesterday to 72 months in federal prison followed by fifteen years of supervised release on one count each of Receiving Child Pornography and Possession of Child Pornography. The Honorable Susan O. Hickey presided over the sentencing hearing in the United States District Court in El Dorado.

According to court records, in October of 2015, the United States Secret Service intercepted an Internet Protocol address which was downloading images of child pornography from the file sharing program Freenet. A subsequent search warrant to internet service provider, returned to the residence of Ian Mitchell Ashcraft of Crossett, Arkansas. On February 8, 2016, law enforcement officers with the Arkansas State Police Cyber Crimes Unit, United States Secret Service and Homeland Security Investigations executed a search warrant of Ashcraft’s residence. Several electronic devices capable of accessing the internet, owned by Ashcraft, were seized by agents.  A subsequent forensic examination of an external hard drive seized from Ashcraft’s bedroom yielded numerous images and videos depicting child pornography.

Ashcraft was indicted in July 2017 on federal charges and plead guilty in September 2017.

This case was investigated by the United States Secret Service (USSS) and the National Center for Missing and Exploited Children (NCMEC).  Assistant United States Attorney Denis Dean prosecuted the case for the United States.

Former Detroit Police Department Officer Charles Wills was sentenced today to twenty-six months’ imprisonment for accepting bribes from an owner of an automobile collision shop in exchange for referring stolen and abandoned vehicles recovered in the City of Detroit to that shop, United States Attorney Matthew Schneider announced today.

Schneider was joined in the announcement by Timothy Slater, Special Agent in Charge, Federal Bureau of Investigation, Patricia Armstrong, U.S. Postal Inspector in Charge, U.S. Postal Inspection Service, Detroit Division and Chief James Craig, Detroit Police Department, Patricia Armstrong, U.S. Postal Inspector in Charge, U.S. Postal Inspection Service, Detroit Division and Chief James Craig, Detroit Police Department. The defendant was actively employed with the Detroit Police Department at the time of the offense.

Charles Wills, age 53, was sentenced by U.S. District Judge Robert Cleland. Wills previously pleaded guilty to two counts of extortion.

According to the facts alleged in the superseding indictment and further developed at the plea hearing and in sentencing briefing, Wills accepted cash payments from the owner/operator of a Detroit collision shop in exchange for referring abandoned vehicles to that shop for repairs. Wills also accepted cash from other collision shops, wrote false police reports, and introduced another officer to the scheme of accepting cash in exchange for referring vehicles to collision shops. 

This is the fifth defendant to have been sentenced as a result of this investigation.  The sixth defendant, Deonne Dotson, is awaiting trial.

All of the Officers were charged with engaging in extortion for using their official positions as Police Officers to refer cars to certain collision shops in exchange for cash payments.

The investigation was conducted by the FBI, the U.S. Postal Inspection Service, Detroit Police Department and the following agencies from the FBI Detroit Area Corruption Task Force: Michigan State Police and U.S. Customs and Border Protection, Office of Professional Responsibility, Investigative Operation Division.

The FBI Detroit Area Corruption Task Force is comprised of personnel from the Detroit Division of the FBI; Michigan State Police; Michigan Department of Attorney General; Detroit Police Department; U.S. Internal Revenue Service, Criminal Investigation Division; U.S. Customs and Border Protection, Office of Professional Responsibility, Investigative Operations Division; U.S. Postal Inspection Service; U.S. Department of Labor, Office of the Inspector General, Office of Labor Racketeering and Fraud Investigations; U.S. Department of Housing and Urban Development, Office of the Inspector General; U.S. Department of Transportation, Office of the Inspector General; U.S. Department of Homeland Security, Office of the Inspector General; U.S. Department of Education, Office of the Inspector General; and U.S. Environmental Protection Agency, Office of the Inspector General.

The case is being prosecuted by Assistant United States Attorneys Sarah Resnick Cohen and Craig A. Weier

BEAUMONT, Texas – A 42-year-old Baytown man has pleaded guilty to federal drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.

Jose Quiroga pleaded guilty to conspiracy to possess with intent to distribute cocaine and conspiracy to money launder today before U.S. Magistrate Judge Keith Giblin.

           According to information presented in court, Quiroga served as a narcotics and bulk currency courier for a drug trafficking organization led by Eugenio Cerda.  This organization was responsible for trafficking cocaine and fentanyl from the Houston area to Beaumont and further east into Louisiana and Mississippi.  On June 17, 2017, Quiroga was stopped by law enforcement officers in Beaumont driving a truck registered to Cerda.  Agents discovered $51,040 cash, which was the proceeds of a two-kilogram cocaine delivery, concealed in a hidden compartment of the truck’s tailgate. Further investigation revealed Quiroga distributed approximately nine kilograms of cocaine for Cerda.  Quiroga was indicted by a federal grand jury on Jan. 10, 2018.

           Under federal statutes, Quiroga faces up to life in federal prison at sentencing.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is being prosecuted under the Organized Crime Drug Enforcement Task Force (OCDETF) as a joint investigation.  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking organizations, weapons trafficking offenders, money laundering organizations, and those individuals responsible for the nation’s illegal drug supply.            

            This case was investigated by the Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Christopher T. Rapp.

BISMARCK – United States Attorney Christopher C. Myers announced that on June 11, 2018, Chief United States District Judge Daniel L. Hovland sentenced Timothy Joshua Adam Carnahan, age 24, Longview, WA, on charges of Attempted Transportation to Engage in Unlawful Sexual Acts with a Minor.  Judge Hovland sentenced Carnahan to serve 7 years and 6 months in federal prison, to be followed by 10 years supervised release. 

This investigation was initiated by law enforcement when Carnahan responded to an ad on Craigslist that advertised the availability of a young female as an escort.  Unbeknownst to Carnahan, the ad was placed online by an officer with the Bismarck Police Department acting in an undercover capacity as a 17-year-old female.  Carnahan arranged to pick up the minor female at a local shopping center and take her to his residence to engage in sexual acts.  Upon arrival at the shopping center, Carnahan was arrested.  He was interviewed by law enforcement authorities and admitted his intent to engage in sexual acts with a minor.  Carnahan has a prior sexual assault conviction from 2012 in Washington State.

This case was investigated by the Bismarck Police Department, Bureau of Criminal Investigation, and Homeland Security Investigations.

Assistant United States Attorney Gary L. Delorme prosecuted the case.

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