Columbia, South Carolina --- United States Attorney Sherri A. Lydon announced today that Dustin Tiller, age 32, was sentenced to 220 months (or 18 years and 3 months) imprisonment in federal court in Greenville.

The evidence presented at Tiller’s guilty plea and sentencing hearings revealed that Tiller, an inmate in the South Carolina Department of Corrections, was the mastermind and leader of a multi-state drug trafficking organization that facilitated the transportation and distribution of multiple kilograms of methamphetamine in the Upstate of South Carolina, Atlanta, Georgia, Kentucky, and elsewhere.  During the course of the conspiracy, Tiller directed other conspirators, both inmates in the South Carolina Department of Corrections and individuals on the outside, to travel to Atlanta, Georgia, to retrieve kilogram quantities of methamphetamine, to sell the methamphetamine in Greenville and Anderson Counties, and to transport drug proceeds back to the source(s) of supply in Georgia and elsewhere.  The investigation culminated in the arrest of Tiller and others in August and September of 2016, after federal agents intercepted a load of methamphetamine that members of the organization were transporting from Georgia to South Carolina.

Assistant U.S. Attorney Andy Moorman, Deputy Chief for the Narcotics Unit, is the lead prosecutor. 

The Drug Enforcement Administration, the Drug Enforcement Task Force, the Anderson County Sheriff’s Office, the Anderson Police Department, and the Franklin County (GA) Sheriff’s Office investigated the case. 

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John H. Durham, United States Attorney for the District of Connecticut, announced that ERIC SMITH, also known as “Hood,” 30, of Hartford, was sentenced today by Chief U.S. District Judge Janet C. Hall in New Haven to 40 months of imprisonment, followed by five years of supervised release, for distributing heroin and crack cocaine in Hartford.

According to court documents and statements made in court, this matter stems from an investigation headed by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force and the Hartford Police Department’s Vice and Narcotics Division targeting gang violence and narcotics trafficking by members and associates of the Orange Street Killas (OSK) in Hartford’s Parkville neighborhood.  The investigation followed a series of reports of shots fired in the area, and a homicide that was committed on Cherry Street in October 2015.  The prosecution was built on court-authorized wiretaps, controlled purchases of narcotics and physical and video surveillance, all of which revealed that OSK members, including SMITH, acquired heroin and crack cocaine and then sold the drugs on the streets of Hartford.

SMITH has been detained since his arrest on February 10, 2017.  On March 30, 2018, he pleaded guilty to one count of conspiracy to possess with intent to distribute cocaine base (“crack”) and heroin.

Sixteen individuals were charged as a result of the investigation.

This matter has been investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force and the Hartford Police Department.  The Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction.  The Hartford Police Department’s Vice and Narcotics Division and Shooting Task Force provided valuable assistance to the investigation.

The case is being prosecuted by Assistant U.S. Attorney Brian P. Leaming.

TOPEKA, KAN. – The developer of the Oread Hotel and his bookkeeper were indicted Wednesday on federal charges of scheming to collect more than $400,000 in fraudulent tax refunds from the City of Lawrence.

Thomas S. Fritzel, 52, Lawrence, Kan., and Keela Lam, 46, Lawrence, Kan., are charged with one count of conspiracy to defraud the city and one count of interstate transportation of stolen funds. Also named as defendants are companies controlled by Fritzel including Oread Construction LC, Oread Wholesale LC, Oread Inn LC and R6 LC.

The indictment alleges that in 2008 Fritzel signed an agreement with the City of Lawrence to develop the Oread Hotel in Lawrence, a seven-story hotel with restaurants, bars and a gift shop.

The city set up a Tax Increment Financing District and a Transportation Development District around the hotel and agreed to reimburse Fritzel for his development costs. The funds to pay Fritzel were to come from property tax and sales taxes collected inside the redevelopment district.

The indictment alleges Fritzel and Lam conspired to defraud the city by seeking reimbursement for hundreds of transactions that were not generated within the redevelopment district. The indictment alleges the defendants fraudulently sought refunds for taxes paid on furniture and appliances, work on houses Fritzel owned in Lawrence and Colorado, landscaping materials, party tent rentals, car batteries, equipment for a car wash and other items.

A separate indictment alleges Fritzel and others violated the requirements of the Clean Air Act for disposal of asbestos.

The indictment charges Fritzel, Casey Stewart, 38, Lawrence, Kan., Wesley Lynch, 60, Lawrence, Kan. and Tucker Fritzel, 25, Lawrence, Kan., with one count of conspiracy (count one), one count of failing to notify the Environmental Protection Agency of the removal of asbestos materials (count two), one count of failing to wet materials that contained asbestos during demolition (count three) and one count of failing to dispose of asbestos waste in leak-tight containers (count four).

Also named as defendants in the second indictment are DFC Company of Lawrence, LC; Eagle 1968, LC of Lawrence and R&R Supply Company, LC of Lawrence.

The indictment alleges the defendants conspired with Fritzel to violate federal laws for handling asbestos in order for Fritzel to save money on demolition and renovations at the Alvamar Country Club in Lawrence.

In the first indictment, upon conviction, the defendants face up to five years in federal prison and a fine up to $250,000 on the conspiracy count, and up to 10 years and a fine up to $250,000 on the count charging interstate transportation of stolen funds.

In the second indictment, upon conviction, the defendants face up to five years in federal prison and a fine up to $250,000 on count one, up to two years and a fine up to $250,000 on count two and up to five years and a fine up to $250,000 on counts three and four.

The Lawrence Police Department and the FBI investigated the Oread Hotel indictment. The Environmental Protection Agency – Office of Inspector General investigated the other indictment. Assistant U.S. Attorney Richard Hathaway is prosecuting both cases.

OTHER INDICTMENTS

Alan J. Haag, 53, Wichita, Kan., is charged with unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred June 13, 2018, in Sedgwick County, Kan.

If convicted he faces up to 10 years in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney David Lind is prosecuting.

Kasey A. Haag, 25, Wichita, Kan., is charged with unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred June 13, 2018, in Sedgwick County, Kan.

If convicted he faces up to 10 years in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney David Lind is prosecuting.

Anthony Hervey, 36, is charged with unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred June 13, 2018, in Sedgwick County, Kan.

If convicted he faces up to 10 years in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney David Lind is prosecuting.

In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), and Peter R. Rendina, Inspector-in-Charge of the New York Field Division of the U.S. Postal Inspection Service (“USPIS”), announced today that JONATHAN RIENDEAU and JADE PLANTE have been charged with operating websites that sold more than $1 million of synthetic cannabinoids throughout the United States.  Both defendants were arrested this morning.  RIENDEAU will be presented today in federal court in the Southern District of California.  PLANTE will be presented today in federal court in the Southern District of Florida.  The case has been assigned to United States District Judge Naomi Reice Buchwald.

U.S. Attorney Geoffrey S. Berman said:  “Trafficking of synthetic cannabinoids – sometimes called K2 or Spice – is on the rise and poses a serious threat to public health and safety.  Packaged attractively to appeal to teenagers and young adults, synthetic cannabinoids are in reality a toxic cocktail that can be very dangerous to consume.  As alleged, Jonathan Riendeau and Jade Plante used the internet to peddle massive quantities of synthetic cannabinoids.  Thanks to our law enforcement partners, Riendeau and Plante have been arrested and their dangerous business has been dismantled.”

NYPD Commissioner James P. O’Neill said:  “As NYPD detectives continue to do remarkable work in investigating those responsible for directing smokeable synthetic cannabinoids onto our streets – and the resulting scourge of related overdoses – we are grateful for the collaboration of our federal partners, whose reach and expertise greatly strengthens our impact on this crisis.  The composition of these toxic chemicals varies by batch, and the results of taking them are unpredictable. What is predictable, however, is our relentless investigation of anyone who produces or sells so-called ‘synthetic marijuana’ in New York City or anywhere else in America.”

HSI Special Agent-in-Charge Angel M. Melendez said:  “These individuals allegedly sold and distributed massive quantities of laced smokeable synthetic cannabinoids, throughout the country using the internet.  These arrests are so timely, considering amount of K2 related overdoses we have experienced here in New York City.  Law enforcement is full steam ahead on investigations to bring down those online drug dealers and prosecute them to the fullest extent of the law.”

USPIS Inspector-in-Charge Peter R. Rendina said:  “Dealers in synthetic drugs never think of the lasting impact on the lives destroyed and the communities devastated by their greedy and illegal operation. Their only goal is to make money off of the users. Whether it be a clever name or packaging, these illegal operations will never go unnoticed by law enforcement.  Today’s arrests are a strong message to drug traffickers that Postal Inspectors and their law enforcement partners will spare no resource or expense to protect our customers and the sanctity of the U.S. Mail.”

According to the allegations in the Indictment[1]:

From February 2014 until June 2018, RIENDEAU and PLANTE operated a scheme to distribute massive quantities of smokeable synthetic cannabinoids (“SSC”), containing controlled substances and controlled substance analogues, throughout the United States.  SSC, which can be addictive, are often marketed as safe, legal alternatives to marijuana.  In fact, SSC are not safe and may affect the brain much more powerfully than marijuana; their actual effects can be unpredictable and, in some cases, more dangerous or even life-threatening.

RIENDEAU and PLANTE operated three different websites on which they sold SSC, colloquially referred to as “K2” or “Spice,” which included dried, shredded plant material onto which synthetic cannabinoid chemicals had been sprayed, and liquids containing synthetic cannabinoid chemicals for users to vaporize and inhale with e-cigarettes or other similar devices.  The SSC distributed by the scheme were branded with colorful graphics and distinctive names, including “Dead Man Walking,” “Brainfreeze,” “Klimax,” “Twilite,” “Delirium,” “Purple Haze,” “Diablo,” “AK-47,” “ScoobySnax,” “F*cking Crazy,” and “Dafuq.”  Many of the SSC were marketed as having flavors, including chocolate, apple, and strawberry.  The SSC were sometimes marked “not for human consumption,” or “potpourri.”

Over the course of the scheme, RIENDEAU and PLANTE shipped approximately 6,000 packages of SSC through the United States mail to customers throughout the U.S., including locations in Manhattan, the Bronx, and all 50 states, containing a total of more than 120 kilograms of SSC.  RIENDEAU and PLANTE were paid more than $1 million for SSC in the course of the scheme.

*                      *                      *

RIENDEAU, 38, of San Diego, California, is charged with three counts of conspiring to distribute narcotics.  PLANTE, 39, of Port Saint Lucie, Florida, is charged with one count of conspiring to distribute narcotics.  Each count carries a maximum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.  

Mr. Berman praised the outstanding investigative work of HSI, USPIS, and the NYPD, and thanked the Drug Enforcement Administration for its assistance.  The long-term investigation of this case was partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (“HIDTA”), which is a federally funded crime fighting initiative and part of the Organized Crime Drug Enforcement Task Force program.

The prosecution is being handled by the Office’s Narcotics Unit.  Assistant United States Attorney Robert B. Sobelman is in charge of the prosecution. 

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

KANSAS CITY, Mo. – A Kansas City, Mo., woman who embezzled from her family’s company was sentenced in federal court today for failing to pay taxes on at least $466,000.

Tammera Goodman, 56, was sentenced by U.S. District Judge Roseann Ketchmark to two years in federal prison without parole. The court also ordered Goodman to pay $144,631 in restitution to the Internal Revenue Service and the state of Missouri.

On Oct. 16, 2017, Goodman pleaded guilty to making false statements on a tax return.

Goodman worked as office manager for a business owned by her family, Restoration Remediation Resources Corporation d/b/a Rainbow International of Kansas City (Re-Corp). From 2011 to 2015, Goodman unlawfully used Re-Corp funds to pay at least seven personal credit cards, which she used exclusively for personal spending. She also wrote at least 26 fraudulent unauthorized Re-Corp checks to herself, and used unauthorized Re-Corp funds to pay her personal mortgage.

From 2011 to 2015, Goodman embezzled at least $466,274 from Re-Corp. Goodman stole money from re-Corp on hundreds of occasions, according to court documents, and on dozens of occasions forged her brother’s name. She spent the money she embezzled on retail purchases, restaurants, cash, and vehicles, among other items. She did not declare the embezzled income on her federal or state income tax returns. Re-Corp did not want to prosecute her for her embezzlement and allowed her to continue to work at the company.

Goodman pleaded guilty to a specific charge of claiming $33,164 in income on her federal income tax return for tax year 2015. In reality, Goodman’s income for 2015 (including stolen money) was $151,236.
 
This case was prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by IRS-Criminal Investigation and the Missouri Department of Revenue Criminal Investigation Bureau.
 

WASHINGTON – On June 26, 2018, the Department of Justice, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), the U.S. Secret Service (USSS), the U.S. Postal Inspection Service (USPIS) and the U.S. Drug Enforcement Administration (DEA), announced the results of a year-long, coordinated national operation that used the first nationwide undercover action to target vendors of illicit goods on the Darknet. Special Agents of the HSI New York Field Division, in coordination with the U.S. Attorney’s Office for the Southern District of New York, posed as a money launderer on Darknet market sites, exchanging U.S. currency for virtual currency.  Through this operation, HSI New York was able to identify numerous vendors of illicit goods, leading to the opening of more than 90 active cases around the country. The Money Laundering and Asset Recovery Section (MLARS) of the Department of Justice’s Criminal Division, working with more than 40 U.S. Attorney’s Offices throughout the country, coordinated the nationwide investigation of over 65 targets, that lead to the arrest and impending prosecution of more than 35 Darknet vendors.

These results were announced by Deputy Attorney General Rod J. Rosenstein, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Executive Associate Director Derek Benner of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Special Agent-in-Charge Angel M. Melendez of HSI New York Field Office, Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service (USPIS) New York Division, Assistant Director Kenneth Jenkins of the U.S. Secret Service (USSS) Office of Investigations, and Special Agent in Charge James J. Hunt of the U.S. Drug Enforcement Administration (DEA) New York Division.

“Criminals who think that they are safe on the Darknet are wrong,” said Deputy Attorney General Rosenstein.  “We can expose their networks, and we are determined to bring them to justice. Today, we arrested more than 35 alleged Darknet vendors.  We seized their weapons, their drugs, and $23.6 million of their ill-gotten gains. This nationwide enforcement effort will reduce the supply of deadly drugs like fentanyl that are killing an unprecedented number of Americans.  I want to thank our federal prosecutors, and the dedicated federal agents with DEA, Homeland Security Investigations, the Postal Inspection Service, and the Secret Service for their outstanding work.”

“The Darknet is ever-changing and increasingly more intricate, making locating and targeting those selling illicit items on this platform more complicated.  But in this case, HSI special agents were able to walk amongst those in the cyber underworld to find those vendors who sell highly addictive drugs for a profit,” said HSI Executive Associate Director Benner.  “The veil has been lifted. HSI has infiltrated the Darknet, and together with its law enforcement partners nationwide, it has proven, once again, that every criminal is within arm’s reach of the law.”

“Postal Inspectors and their law enforcement partners will spare no resource or expense to shine a light on the sale and distribution of illicit and dangerous items on the Darknet, that serve to destroy the lives of many through addiction and despair,” said Inspector in Charge Rendina.  “Today’s announcement of our law enforcement partnership and operation sends a strong message to those who choose this illegal path, we are watching and will bring you to justice for your crimes against the American public.”

“The Secret Service is proud to work with our law enforcement partners to help combat one of the largest threats to the U.S. financial infrastructure, money laundering with virtual currency,” said U.S. Secret Service Assistant Director Jenkins.  “The Secret Service continues to adapt along with these cyber criminals to maintain our level of success in stopping them.”

“At this crucial time of unprecedented drug related deaths, one of the greatest threats we face is cyber drug trafficking,” said DEA Special Agent in Charge Hunt.  “Because the Darknet invites criminals into our homes, and provides unlimited access to illegal commerce, law enforcement is taking steps to identify and arrest those involved. I applaud all the agencies who participated in this groundbreaking investigation.”

The extensive operation, which culminated in four weeks of more than 100 enforcement actions around the country, resulted in the following:

• Federal arrests of more than 35 Darknet vendors who engaged in tens of thousands of sales of illicit goods;
• Execution of 70 search warrants, resulting in the seizure of massive amounts of illegal narcotics, including 333 bottles of liquid synthetic opioids, over 100,000 tramadol pills, 100 grams of fentanyl, more than 24 kilograms of Xanax, and additional seizures of Oxycodone, MDMA, cocaine, LSD, marijuana, and a psychedelic mushroom grow found in a residence;
• Seizure of more than 100 firearms, including handguns, assault rifles, and a grenade launcher;
• Seizure of five vehicles that were purchased with illicit proceeds and/or used to facilitate criminal activity;
• Seizure of more than $3.6 million in U.S. currency and gold bars;
• Seizure of nearly 2,000 Bitcoins and other cryptocurrencies, with an approximate value of more than $20 million;
• Confiscation of 15 pill presses, which are used to create illegal synthetic opioids; and
• Seizure of Bitcoin mining devices, computer equipment, and vacuum sealers.
   
  Amongst those charged federally, include:
   

• Joshua Sweet, 26, of Hazleton, Pennsylvania, was charged in a criminal complaint by the U.S. Attorney’s Office for the Middle District of Pennsylvania with possession with intent to distribute controlled substances.  Sweet operated an online drug business, obtaining alprazolam, typically sold under the brand name Xanax, LSD, and other substances from foreign sources and selling them on the dark web.  At the time of arrest, agents had already seized over 18,000 alprazolam tablets and other controlled substances,  60.65 Bitcoin, and an additional $25,000 in cash.  As part of this drug trafficking scheme, Sweet also laundered over $200,000 in bitcoin.
   

• Antonio Tirado, 26, and Jeffrey Morales, 32, of the Bronx, New York, were arrested on June 18, and separately charged by the U.S. Attorney’s Office for the Southern District of New York with distribution and possession with intent to distribute narcotics, including cocaine, LSD (also known as “acid”), marijuana, and hashish oil.  Additionally, Tirado was charged with possession of a firearm in furtherance of his drug trafficking offenses.  Following an investigation into a Darknet marketplace vendor using the moniker “Trapgod,” investigators executed search warrants at homes in two residential neighborhoods in the Bronx leading to Tirado and Morales.  As alleged in the complaints, during the execution of the search warrants at the Tirado and Morales residences, agents seized controlled substances including powder cocaine, marijuana, and LSD, as well as various precursor powders, liquids, and reagents, and other narcotics-related paraphernalia including marijuana growing equipment, a home chemistry lab, scales, and heat sealing packaging materials.  In Tirado’s home, agents recovered a fully loaded shotgun alongside a narcotics stash.  Investigators in Tirado’s apartment recovered additional evidence of Darknet narcotics distribution, such as numerous U.S. Postal Service shipping boxes, already addressed to customers around the United States, which boxes contained hairbrushes some of which had already been packed with powder cocaine for distribution.
   
• Jian Qu, 30; Raymond Weng, 24; and Kai Wu, 22, all of Queens, New York, along with Dimitri Tseperkas, 22, and Cihad Akkaya, 22, of Middle Island and Port Jefferson, New York, respectively, were each arrested on June 18, and charged by the U.S. Attorney’s Office for the Southern District of New York with participation in a conspiracy to distribute more than 1,000 kilograms of marijuana.  Tseperkas and Akkaya were also charged with firearms offenses relating to the drug conspiracy.  Investigators monitoring Darknet marketplaces found accounts used by some of the conspirators, leading agents to execute search warrants at three addresses in residential communities in Flushing and Mt. Sinai, New York.  From the residences, agents recovered approximately $400,000 in U.S. currency, 140 kilograms of suspected marijuana and an additional 10 kilograms of suspected marijuana vape cartridges, 12 kilograms of suspected Xanax pills, over half a kilogram of suspected ecstasy, four pill presses, mixers, and pill press parts, over a dozen kilograms of various powders, packaging materials, and paraphernalia.   While searching the residence where Akkaya and Tseperkas were found, investigators recovered three loaded shotguns, including a tactical double-barreled shotgun loaded with 14 shells, and over 50 shotgun shells, as well as significant quantities of narcotics, packaging materials, and paraphernalia including a money-counting machine.  Review of electronic evidence recovered from the residences proved the conspirators’ connections to Darknet marketplaces, use of cryptocurrency, and narcotics distribution schemes.
   
• Ryan Farace, 34, of Reisterstown, Maryland, and Robert Swain, 34, of Freeland, Maryland, were charged by the U.S Attorney’s Office for the District of Maryland related to a scheme to manufacture and distribute alprazolam tablets, which are typically sold under the brand name “Xanax.”  The indictment alleges that Farace distributed the drugs through sales on the dark web in exchange for Bitcoin, and that Farace and Swain laundered the drug proceeds through financial transactions designed to conceal the source and ownership of the illegal funds.   To date, law enforcement has seized various crypto currency, to include bitcoin, valued at over $22 million at the time of the seizures, and over $1.5 million in cash, which was seized from Farace’s residence upon the execution of a search warrant on Jan. 18.  As part of the indictment, the government seeks the forfeiture of no less than $5.665 million, plus the value of 4,000 Bitcoin believed to be the proceeds of the illegal drug sales, two residences, and a vehicle used to facilitate the drug distribution.
   
• Nicholas J. Powell, 32, and Michael Gonzalez, 27, former and current residents of Parma, Ohio, respectively, were charged by the U.S. Attorney’s Office for the Northern District of Ohio with conspiracy to distribute controlled substances and laundering money using the dark web.  The complaint alleges that Powell used various monikers on Darknet marketplaces as part of his criminal scheme, including “TheSource,” “BonnienClyde,” BnC,” “BCPHARMA,” and “Money TS.”  The conspiracy operated on multiple Darknet marketplaces, including Silk Road 2, AlphaBay, and HANSA.  The conspiracy involved distributing Xanax, steroids, marijuana and other drugs across the country using these and other Darknet monikers.  Powell and Gonzalez would then launder the funds as cryptocurrencies such as Bitcoin, Etherium, and Komodo through individuals specializing in money laundering on Darknet marketplaces.  At the time of arrest, law enforcement had already seized approximately $437,000 in cryptocurrencies from Powell.
   

• Jose Robert Porras III, 21, and Pasia Vue, 23, both of Sacramento, were charged with drug distribution, money laundering, and illegally possessing firearms, in a 16-count indictment returned by a grand jury in the Eastern District of California. According to the indictment, Porras and Vue were using the online monikers “Cannabars” and “TheFastPlug,” to distribute marijuana, Xanax, and methamphetamine on various dark web marketplaces, including Trade Route, Wall Street Market, and Dream Marketplace.  Porras and Vue then laundered the Bitcoin proceeds of their drug distribution through the HSI undercover agent located in New York.  After receiving the Bitcoin from Porras and Vue, the undercover agent mailed parcels of cash to them in Sacramento. HSI and USPIS agents seized nine weapons including an AK-47 magazine and ammunition, 30 pounds of marijuana, $10,000 in U.S. currency, a vehicle, and over 100 bars of Xanax.
   
• Sam Bent, 32, of St. Johnsbury, Vermont (and formerly of East Burke, Vermont), and his cousin, Djeneba Bent, 26, also of St. Johnsbury (and formerly East Burke) were charged with conspiracy to distribute LSD, MDMA (also known as “ecstasy”), cocaine, and marijuana in an indictment returned by a federal grand jury in the District of Vermont.  The indictment alleges that the conspiracy involved setting up accounts on dark web marketplaces, establishing online identities, accepting Bitcoin in exchange for sales over the dark web, and mailing controlled substances from several different post offices in Northeastern Vermont and Northwestern New Hampshire in an effort to avoid detection.   The indictment also charges Sam Bent with four counts of money laundering involving three different exchanges of bitcoin drug distribution proceeds for U.S. currency. 
   
• In Fresno, California, a federal grand jury returned an 11-count indictment on May 17, against Daniel Boyd McMonegal, 35, of San Luis Obispo and Mariposa, California, charging him with drug distribution and money laundering in the Eastern District of California.  According to the indictment, McMonegal, using the online monikers “Sawgrass,” “Ross4Less,” and “ChristmasTree,” distributed marijuana on various dark web marketplaces, including Dream Market.  McMonegal was also the owner of a marijuana delivery service in San Luis Obispo called West Coast Organix, which claimed to be a non-profit medical marijuana cooperative.  McMonegal then laundered the Bitcoin proceeds of his drug distribution through an undercover agent located in New York.  After receiving the Bitcoin from McMonegal, the undercover agent mailed parcels of cash to McMonegal in San Luis Obispo and Mariposa.

More than 50 Darknet vendor accounts were identified and attributed to the real individuals selling illicit goods on Darknet market sites such as Silk Road, AlphaBay, Hansa, Dream, and others. HSI-New York Field Division and MLARS coordinated with law enforcement and federal prosecutors to investigate 65 targets identified by the undercover operation in more than 50 Federal districts, including: the District of Arizona, the Eastern District of Arkansas, the Western District of Arkansas, the Central District of California, the Eastern District of California, the Northern District of California, the Southern District of California, the District of Colorado, the District of Connecticut, the Middle District of Florida, the Northern District of Florida, the Southern District of Florida, the Northern District of Iowa, the District of Kansas, the District of Maryland, the Eastern District of Michigan, the District of Minnesota, the Eastern District of North Carolina, the Western District of North Carolina, the District of New Hampshire, the Northern District of New York, the Southern District of New York, the Western District of New York, the District of North Dakota, the Northern District of Ohio, the Southern District of Ohio, the District of Oregon, the Eastern District of Pennsylvania, the Middle District of Pennsylvania, the District of South Carolina, the District of South Dakota, the Eastern District of Texas, the Northern District of Texas, the Southern District of Texas, the Western District of Texas, the District of Utah, the Eastern District of Virginia, the District of Vermont, the Eastern District of Washington, and the Western District of Washington.  FBI was part of the investigative team in the Northern District of California.    

The investigation is ongoing.

# # #

KANSAS CITY, Mo. – A Kansas City, Mo., man was sentenced in federal court today for illegally possessing a firearm.

Shane E. Jones, 31, was sentenced by U.S. District Judge Stephen R. Bough to 15 years and 10 months in federal prison without parole. The court sentenced Jones as an armed career criminal due to his prior felony convictions. The court ordered the federal sentenced be served consecutively to Jones’s sentence in two unrelated state cases.

On Feb. 8, 2018, Jones pleaded guilty to being a felon in possession of a firearm. He was arrested following a traffic stop by Independence, Mo., police officers for having different license plates on the front and rear of his vehicle. Officers found a loaded Hi-Point .380-caliber semi-automatic pistol and a box of ammunition under the front driver’s seat.

Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Jones has 17 adult felony convictions, including five prior felony convictions for sale of a controlled substance. He had been out of prison, and on probation, for approximately four months prior to his arrest.

This case was prosecuted by Assistant U.S. Attorney Brad K. Kavanaugh. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Independence, Mo., Police Department.
 

SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury indicted Julio Polanco Suarez, age 41, of Allentown, Pennsylvania, with conspiring to defraud the government, theft of government money, and aggravated identity theft.  The indictment was returned on April 10, 2018, but remained under seal until Suarez’s apprehension.

According to United States Attorney David J. Freed, the indictment charges Suarez with conspiring to defraud the government between March 1, 2009 and September 20, 2016.  The government money and identity theft charges are alleged to have occurred in Luzerne County, Pennsylvania, on September 20, 2016.

The indictment alleges that Suarez’s coconspirators stole individuals’ identities, used them to prepare and file false tax returns, and obtained the refund checks issued by the U.S. Treasury pursuant to those false tax returns.  Suarez took possession of the refund checks, forged names and social security numbers on them, and cashed them at check cashing businesses in the Middle District of Pennsylvania.  Suarez and his coconspirators are charged with cashing $522,613.80 in fraudulently obtained Treasury checks, and attempting to cash an additional $41,401.57 worth of checks.

The case was investigated by the Department of the Treasury’s Office of the Inspector General, the Internal Revenue Service Criminal Investigation, and other federal and state law enforcement agencies.  Assistant United States Attorney Phillip J. Caraballo is prosecuting the case.

Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.

A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

The maximum penalties under federal law for the most serious charges are up to 10 years of imprisonment.  The aggravated identity theft charge carries a two-year consecutive mandatory minimum term of imprisonment.  Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.

# # #

SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that on June 26, 2018, United States District Judge Malachy E. Mannion sentenced Kristyna Shotwell, age 30, of Plymouth, Pennsylvania, to one year and one day imprisonment for conspiring to distribute heroin, crack cocaine, and fentanyl.

According to United States Attorney David J. Freed, Shotwell pleaded guilty to conspiring to distribute controlled substances in Pennsylvania between approximately July 2015 through February 2017.  Shotwell admitted to serving as a courier for other members of the conspiracy, allowing members of the conspiracy to use her resident to package and sell narcotics, and selling heroin herself.  Shotwell admitted that she trafficked in excess of 22.4 grams of crack cocaine and in excess of 80 grams of heroin, the latter of which is the equivalent of 3,200 potentially fatal doses of heroin.

Shotwell was charged in June 2017 with 14 other individuals.  All of her co-defendants have pleaded guilty, with two others having already been sentenced:

• Kassandra Martin of Wilkes-Barre, Pennsylvania, was sentenced to 60 months’ imprisonment; and
• Joshua Lenchick of Luzerne, Pennsylvania, was sentenced to 60 months’ imprisonment.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Kingston Police Department, and by the Luzerne County Drug Task Force.  Assistant U.S. Attorney Phillip J. Caraballo prosecuted the case.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

This case also was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin.  Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.

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SCRANTON - The United States Attorney=s Office for the Middle District of Pennsylvania announced today that Joy Dykes, age 36, of Edwardsville, Pennsylvania was charged on June 26, 2018, in a criminal information for her participation in a money laundering scheme.

According to United States Attorney David J. Freed, the criminal information alleges that between November 2011 and February 2016, Dykes’ was involved in an on-line scheme to defraud an unsuspecting victim of money by creating multiple identities, luring the victim into a romantic relationship, and then soliciting money from the victim via threats and coercion, including the creation of a fraudulent identity of an FBI agent.  The criminal information also alleges that Dykes unlawfully received approximately $124,000 from the victim of the fraud.

The case was investigated by the Internal Revenue Service, Criminal Investigation - Scranton.  Assistant United States Attorney Michelle Olshefski is prosecuting the case.

Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.

A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

The maximum penalty for the charge under the federal statutes is imprisonment for 20 years, a term of supervised release following imprisonment, and a fine.  Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public, and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.

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BOSTON – A Randolph man pleaded guilty today in federal court in Boston to being a previously convicted felon in possession of a firearm.

Dararong James Heang, 28, pleaded guilty to being a convicted felon in possession of a firearm and ammunition. U.S. District Court Chief Judge Patti B. Saris scheduled sentencing for Oct. 3, 2018.

Shortly after midnight on June 16, 2017, law enforcement officers stopped Heang and two other individuals in the area of Shirley Avenue in Revere, which had been the scene of recent gang violence. Heang was known to officers as being previously involved with gang activity. During a subsequent search, Heang was found to be in possession of a semi-automatic firearm and seven rounds of ammunition. At the time, Heang was on state probation and had previously been convicted of multiple felonies in state court, including assault and battery and possession with intent to distribute drugs.

The charge of being a felon in possession of a firearm provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Suffolk County District Attorney Daniel F. Conley; and Revere Police Chief James R. Guido made the announcement today. Assistant U.S. Attorney Kunal Pasricha of Lelling’s Organized Crime & Gang Unit is prosecuting the case.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Robert E. Perez, Director, Field Operations, New York, U.S. Customs and Border Protection (“CBP”), and Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), announced today that the United States filed and settled civil fraud claims brought under the False Claims Act against TEMPLE ST. CLAIR LLC (“TEMPLE ST. CLAIR”), a fine jewelry designer, manufacturer, and importer based in New York, New York, with merchandise sold in retail stores and online throughout the United States.  As alleged in the Government’s complaint, TEMPLE ST. CLAIR systematically and unlawfully avoided payment of customs duties it owed on goods imported from Thailand, Sri Lanka, and Italy by falsely stating to CBP that the value of the goods was substantially less than the true value, and by senior leadership of TEMPLE ST. CLAIR hand-carrying jewelry into the United States for commercial purposes without declaring it to CBP.  Additionally, TEMPLE ST. CLAIR failed to properly affix to jewelry that was manufactured in Sri Lanka and Thailand permanent markings indicating its country of origin, in violation of CBP regulations.  As part of the settlement, approved yesterday in Manhattan federal court by U.S. District Judge Katherine Polk Failla, TEMPLE ST. CLAIR admitted to and accepted responsibility for underpaying customs duties and failing to properly mark its merchandise, and agreed to pay $796,000 to the United States and implement corrective measures to prevent future customs violations.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “This Office is committed to pursuing customs fraud and holding importers accountable for evading customs duties and disregarding CBP requirements.”

ICE HSI Special Agent-in-Charge Angel M. Melendez said:  “Temple St. Clair LLC employed fraudulent schemes that resulted in the underpayment of customs duties and the significant loss of revenue to the U.S. government.  Unfair trade practices hurt industries and consumers alike.  HSI stands committed with CBP, to vigorously investigate those people and businesses that seek to make a larger profit by circumventing, or even disregarding, customs regulations.”

CBP Director of New York Field Operations Robert E. Perez said:  “Today’s settlement is a testament to the dedication of our partners in the United States Attorney's Office, Homeland Security Investigations, and the men and women of CBP in enforcing our nation’s trade laws and taking effective action against those who seek to defraud the government.”  

As part of the settlement, TEMPLE ST. CLAIR admitted, acknowledged, and accepted responsibility for engaging in the following conduct:

• From January 2011 through July 2016, TEMPLE ST. CLAIR repeatedly understated the actual value of jewelry it imported from Italy, Sri Lanka, and Thailand in documents presented to CBP to establish the import duties owed on the jewelry.
• From January 2011 through July 2016, to obtain duty-free treatment pursuant to the Generalized System of Preferences trade-preference program, TEMPLE ST. CLAIR misrepresented to the United States that at least 35% of the value of jewelry was added in Sri Lanka or Thailand.
• In 2017, TEMPLE ST. CLAIR failed to ensure that the jewelry it was importing from Sri Lanka and Thailand was permanently marked with its country of origin at the time of entry.
• Between 2011 and 2016, TEMPLE ST. CLAIR senior management brought jewelry into the country for commercial purposes, and improperly failed to declare those items to CBP.  As a result, TEMPLE ST. CLAIR improperly avoided paying import duties for those items.

The settlement also requires TEMPLE ST. CLAIR to implement procedures to properly mark its jewelry with the country of origin.  TEMPLE ST. CLAIR must affix markings to the jewelry prior to the time of importation and with sufficient permanence to withstand normal shipping and handling. 

The allegations of fraud stated in the Complaint were first brought to the attention of federal law enforcement by a whistle-blower who filed a lawsuit under the False Claims Act. 

Mr. Berman praised the investigative work of HSI on this case.  He also thanked CBP for its assistance.

This case is being handled by the Office’s Civil Frauds Unit.  Assistant United States Attorneys Kirti Vaidya Reddy and Peter Aronoff are in charge of the case.

ANSAS CITY, KAN. – An Olathe man was sentenced Tuesday to 18 years in federal prison for trafficking in methamphetamine, U.S. Attorney Stephen McAllister said.

David C. True, 32, Olathe, Kan., pleaded guilty to one count of possession with intent to distribute methamphetamine. In his plea, he admitted he was a member of a drug trafficking organization that distributed meth in the Johnson County area. He admitted to regularly handling up to 10 pounds of methamphetamine a week, acting as both a buyer and a seller. In addition, he possessed firearms, which he was prohibited from doing because of a previous felony conviction.

McAllister commended the Miami County Sheriff’s Office, the Olathe Police Department, the Kansas City, Kan., Police Department, the Secret Service, the Kansas Bureau of Investigation, the Johnson County Sheriff’s Office, and Special Assistant U.S. Attorney James Ward for their work on the case.

HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Chief United States District Court Judge Christopher C. Conner sentenced Nathan A. Ott, age 34, of Chambersburg, Pennsylvania, to 210 months’ imprisonment for conspiring to distribute fentanyl.

According to United States Attorney David J. Freed, Ott pled guilty in July 2017 to conspiring to distribute fentanyl in Chambersburg between October 2015 through May 2017. 

Ott obtained kilogram quantities of fentanyl and then pressed and distributed the fentanyl pills. Ottbegan by using a manual pill press but was unable to keep up with demand and purchased a motorized press capable of making 5,000 pills an hour.  Ott purchased the ingredients to manufacture the fentanyl pills on the internet through the “dark web.” Ott distributed the fentanyl pills via the internet and to his co-conspirators who further distributed the pills to consumers. Ott began to sell the pills over the internet, using the dark web, in March 2017.

Chief Judge Conner also ordered Ott to forfeit $164,010 in cash and 19.7128804 in Bitcoin (with a current value of approximately $120,000). 

Ott was charged in July 2017 with six other individuals.  All of his co-defendants are awaiting trial.

The case was investigated by the Federal Bureau of Investigation, the Franklin County District Attorney’s Office, the Franklin County Drug Task Force, the Chambersburg and the Shippensburg Police Departments and the Pennsylvania State Police.  Assistant U.S. Attorney Daryl F. Bloom prosecuted the case.

Fentanyl is a powerful synthetic opioid analgesic that is similar to morphine, but is 50 to 100 times more potent than heroin.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

This case also was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin.  Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.

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KANSAS CITY, Mo. – Additional charges were brought today against the owner of a Kansas City, Mo., day care center who, along with the center’s director, was previously indicted by a federal grand jury for a conspiracy to fraudulently receive as much as $556,000 in federal benefits. 

Sharif Karie, 40, of Olathe, Kan., was charged with 15 counts of money laundering in a superseding indictment returned by a federal grand jury in Kansas City, Mo. Today’s 23-count superseding indictment also contains the original eight counts charged against Karie and Sheri Beamon, 47, of Kansas City, Mo. 

Karie, a naturalized U.S. citizen from Somalia, is the owner and CEO of a day care center established under two businesses and two names for the same location, with the same key employees: KARIE Day Care Center, LLC, and Tima Child Care Center, LLC, at 1019 Admiral Blvd., Kansas City, Mo. Beamon is the director of KARIE/Tima Childcare Center.

The original indictment, which was returned by a federal grand jury on Jan. 12, 2017, was the result of a nationwide sweep that targeted childcare center fraud schemes. The national law enforcement operation in Missouri and six other states was the result of separate, but related, federal investigations into childcare center fraud that resulted in a loss of more than $1 million to the government.

The money-laundering charges relate to financial transactions in which Karie allegedly attempted to conceal the source of the proceeds of illegal activity.

The indictment alleges that Karie and Beamon participated in a conspiracy from October 2013 to June 2016 to submit false claims to the government. They allegedly billed a federal grant program to provide childcare services to low-income families for more hours and children than actually attended the daycare center. As much as $556,000 was fraudulently billed in connection with this scheme, the indictment says. 

The Child Care and Development Fund provides daycare subsidies for low-income families where the parents are employed or engaged in job training. Providers contract with the Children’s Division of the Missouri Department of Health and Senior Services and submit claims electronically. 

According to the indictment, pole cameras were installed near the day care center and captured footage of the entrances and exits of the building during two time periods in 2015 and in 2016. Timesheets and billing records were reviewed and compared to the children seen on the pole cameras being dropped off and picked up from the daycare center during that time. There were significant discrepancies, the indictment says, between the timesheets, claims submitted and the pole camera footage. 

In addition to the conspiracy, Karie and Beamon are charged together in one count of theft of public money, three counts of aiding and abetting each other to commit aggravated identity theft and three counts of wire fraud. The indictment also contains a forfeiture allegation, which would require Karie and Beamon to forfeit to the government any property derived from the proceeds of the alleged scheme.

According to the indictment, the state conducted a compliance review of the daycare center’s billing for May 2014 and July 2014. The review found several attendance records missing. The review also identified 14 out of the 15 families with children at the center who had a parent employed there. With only two classrooms, the indictment says, it is improbable that parents were not caring for their own children. One of these parents reported that her job was contingent on having all of her children placed in care at KARIE Day Care Center so her child care would be paid by the state. This same 2014 audit found several discrepancies on the time sheets submitted to the state.

Subsequent unannounced inspections at KARIE Day Care Center found the facility in violation of state regulations pertaining to child care licensing rules, the indictment says, including health and safety, staff ratios and the maintaining of attendance records. Each of the inspections resulted in violation findings. 

The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

This case is being prosecuted by Assistant U.S. Attorney Rudolph R. Rhodes IV. It was investigated by the U.S. Department of Health and Human Services – Office of Inspector General, Office of Investigations, the FBI, the Missouri Department of Social Services – Division of Legal Services Investigations and the Kansas City, Mo., Police Department.
 

A grand jury returned an indictment yesterday charging Dr. Lesly Pompy, 57, of Monroe, Michigan with unlawful distribution of prescription drugs and health care fraud, United States Attorney Matthew Schneider announced today.

Schneider was joined in the announcement by Special Agent in Charge Timothy J. Plancon, U.S. Drug Enforcement Administration, Detroit Field Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

The 37-count Indictment charges that between 2012 and 2016, Dr. Pompy unlawfully distributed more than 4,221,892 dosage units of Schedule II controlled substances and over 6,196,642 total dosage units of all controlled substances outside the course of professional medical practice.  During that time frame, he also submitted claims to Medicare, Medicaid and Blue Cross Blue Shield totaling approximately $16,856,683.  The majority of these fraudulent claims were seeking reimbursement for the costs of office visits and other services that were not medically necessary and that Dr. Pompy never rendered.

“The damage that the proliferation of opioid distribution has done to our community, like many across the United States has been devastating,” stated United States Attorney Schneider.  “It’s particularly disturbing when the distributor is a medical professional

DEA Special Agent in Charge Plancon stated, “This investigation was only possible because of the collaborative efforts of our federal and local law enforcement partners including but not limited to the Monroe Area Narcotics and Investigation Team. The indictment of Pompy reminds the citizens we serve that collectively we are ridding the community of crime one drug dealer at a time.”

Dr. Pompy was arraigned this afternoon in federal court and was released on bond.

This case is being prosecuted by Assistant United States Attorney Brandy R. McMillion and Health Care Fraud Chief Wayne F. Pratt.  McMillion serves as the Opioid Fraud Abuse and Detection Unit Prosecutor for the Eastern District of Michigan.  This Department of Justice initiative uses data to target and prosecute individuals that are contributing to the nation’s opioid crisis.  The Eastern District of Michigan is one of the twelve districts included in the Opioid Fraud Abuse and Detection Unit. 

The case was investigated by the U.S. Drug Enforcement Administration and the U.S. Department of Health and Human Services, Office of Inspector General.

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

BOISE – Jose Luis “Joey” Sanchez, 39, of Boise, pleaded guilty yesterday in United States District Court to access with intent to view child pornography, U.S. Attorney Bart M. Davis announced.

According to court records, between October 2015 and January 2016, agents with Homeland Security Investigations monitored an online video conferencing application used to view and exchange images of child pornography.  Agents identified Sanchez as a user from Idaho who had logged into the chatroom and viewed child pornography on seventeen separate occasions.

In May 2016, investigators with the Idaho Internet Crimes Against Children Task Force (ICAC) served a search warrant on Sanchez’s residence in Boise, Idaho, and seized a laptop computer.  Sanchez admitted that he had used the video conferencing application and viewed images of child pornography.  On Sanchez’s laptop, investigators found evidence that it was used to access the video conferencing application, that Sanchez had communicated with other users about sexual acts with children, and that Sanchez exchanged information on chatrooms where images of child pornography were available.

Sentencing is set for September 25, 2018, before Chief U.S. District Judge B. Lynn Winmill.  Access with intent to view child pornography is punishable by up to 20 years imprisonment, a $250,000 fine, a term of supervised release of not less than five years and up to life, and a $5,100 special assessment.  As part of his plea, Sanchez also agreed to forfeit the computer and electronic storage devices used in the commission of the charged offense.

This case was investigated by the ICAC Task Force and Homeland Security Investigations, and was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  As part of Project Safe Childhood, the United States Attorney’s Office for the District of Idaho and the Idaho Attorney General’s Office marshal federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims.

For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.

For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”

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BOSTON – A businessman, who owned and operated five real estate development companies in Pittsfield, pleaded guilty today in federal court in Springfield to defrauding a credit union.

Jeffrey Pierce, 51, of Pittsfield, pleaded guilty to one count of conspiracy to receive money through transactions of a credit union with intent to defraud the credit union and to make false statements to a federal credit union. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Oct. 3, 2018.

Between 2005 and 2008, a former Vice President of Greylock Federal Credit Union (GFCU) authorized approximately $4 million in various loans and modifications to Pierce and his companies in violation of GFCU’s loan policies. By circumventing GFCU’s policies, the Vice President caused GFCU to provide Pierce and his companies with funds far in excess of what Pierce and his companies could reasonably receive or repay. In exchange for improperly authorizing these loans, Pierce agreed to provide - and did provide - the Vice President with $134,773 in check payments from Pierce’s companies derived from GFCU loans that were paid to a front company created by the employee; the free use of a home constructed by one of Pierce’s companies with a GFCU loan; and the free use of a BMW automobile purchased by one of Pierce’s companies with a GFCU loan. Around March 2010, at the Vice President’s direction and for the purpose of influencing the action of GFCU upon the loans, Pierce falsely stated to GFCU that the money paid by his companies to the front company were payments for design work that the Vice President’s wife provided to Pierce’s construction projects.

The conspiracy charge provides for a sentence of no greater than five years in prison, up to three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.   

United States Attorney Andrew E. Lelling and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, New England Field Division, made the announcement today. Assistant U.S. Attorney Steven H. Breslow of Lelling’s Springfield Branch Office is prosecuting the case.

John H. Durham, United States Attorney for the District of Connecticut, announced that KEITH YOUNG, also known as “Capo,” “Bapo” and “Poncho,” 28, of Hamden, was sentenced today by Chief U.S. District Judge Janet C. Hall in New Haven to 180 months of imprisonment, followed by five years of supervised release, for his role in a violent New Haven street gang.

According to court documents and statements made in court, in January 2014, ATF and the New Haven Police Department began “Operation Red Side” through a series of controlled narcotics purchases and firearms seizures.  The investigation revealed that members and associates of the Red Side Guerilla Brims (“RSGB”), a sect of the Bloods street gang based in New Haven, were engaged in narcotics trafficking and related acts of violence, including murder, attempted murder, assaults and armed robberies.  YOUNG was a member and leader of the RSGB.  In addition to distributing crack cocaine and other narcotics in and around New Haven, the investigation indicated that members and associates of the RSGB, under the direction of Jeffrey Benton and others, transported the drugs to Bangor, Maine, and sold them in Bangor and its surrounding communities.  The RSGB also traded narcotics for firearms and used drug addicts as straw purchasers of firearms.  Members then brought the firearms back to New Haven and distributed them to gang members.

YOUNG had a role in three gang-related murders in 2011.  On June 24, 2011, Donnell Allick was shot and killed as he stood in his New Haven home.  The investigation revealed that, on that date, Benton, YOUNG, Luis Padilla and Kavon Rogers drove in a car searching for a rival gang leader that Benton intended to murder.  Instead, Benton encountered Allick, with whom Benton was angry over a drug transaction.  After Benton, Padilla and YOUNG exited the car, Benton fired multiple shots through an open kitchen window, killing Allick.  Benton, Padilla and YOUNG then returned the car, where Rogers had been waiting.  Rogers then drove to a location where Benton hid the gun.

In September 2011, RSGB leadership ordered Robert Short, also known as “Santana,” to murder Darrick Cooper, who was a leader of a rival gang and seen as a threat.  In the early morning hours of September 19, 2011, Short lured Cooper to a location in Hamden and shot Cooper in the back of the head as Cooper walked up a staircase.  The investigation revealed that YOUNG had offered to help Short kill Cooper.  YOUNG was with Short and Cooper shortly before Cooper’s murder and, after the murder, YOUNG drove Short to a location to dispose of the firearm used in the murder.

In December 2011, YOUNG and Trevor Murphy, also known as “Snookie,” planned a robbery of drugs and cash from Joseph Zargo, and YOUNG provided a firearm for Murphy to use.  Murphy ordered a quantity of ecstasy from Zargo and, just after midnight on December 23, 2011, Murphy met Zargo on Houston Street in New Haven.  After Murphy took ecstasy pills from Zargo, he pulled out a firearm.  When Zargo reached into his pocket, Murphy shot Zargo once in the chest.  Zargo died later that morning.  After the murder, Murphy fled the scene and met up with YOUNG, who had watched the robbery and murder unfold from a nearby location.

YOUNG has been detained since his arrest on September 30, 2015.  On February 13, 2017, he pleaded guilty to one count of engaging in a pattern of racketeering activity, and one count of money laundering related to the transferring of drug proceeds from Maine to Connecticut through Western Union.

As a result of this investigation, 21 members and associates of the RSGB were convicted of federal charges in Connecticut and Maine.  The investigation has resolved seven murder cases, four attempted murders and four armed robberies that occurred in 2011 and 2012.

Benton, Padilla, Rogers, Short and Murphy pleaded guilty to various offenses stemming from this investigation.  On October 4, 2017, Benton and Short were sentenced to 40 years of imprisonment and 30 years of imprisonment, respectively; on October 5, 2017, Murphy was sentenced to 30 years of imprisonment, and on April 9, 2018, Rogers was sentenced to 12 years of imprisonment.  Padilla awaits sentencing.

This investigation has been conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the New Haven Police Department, the Connecticut Department of Correction, the Connecticut State Police, the U.S. Drug Enforcement Administration, the Maine Drug Enforcement Agency and the Hamden Police Department.  The New Haven State’s Attorney’s Office also provided critical assistance in the investigation.

An instrumental component of the investigation has been the work of the Connecticut State Crime Laboratory in utilizing the National Integrated Ballistic Information Network (NIBIN) to analyze ballistics evidence.

This matter is being prosecuted in the District of Connecticut by Assistant U.S. Attorneys Jocelyn Kaoutzanis and Peter Markle.  A related case in the District of Maine is being prosecuted by Assistant U.S. Attorney Joel Casey.

NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to 168 months in prison for his leadership role in a massive drug distribution ring responsible for selling millions of dollars’ worth of heroin out of a residential building near a high school in Newark, U.S. Attorney Craig Carpenito announced.

Quawee Jones, a/k/a “Hatman,” 34, of Newark, previously pleaded guilty before U.S. District Judge Jose L. Linares to a superseding information charging him with conspiracy to distribute heroin. Judge Linares imposed the sentence today in Newark federal court

According to documents filed in the case and statements made in court:

Jones and his co-defendants operated a heroin distribution marketplace out of the first floor hallway of a residential building at 25 Johnson Avenue in Newark. The building is just a few doors away from the Malcolm X. Shabazz High School and the Terrell James Park playground. The conspiracy was led by Quawee Jones and Almalik Anderson, who, along with other heroin dealers that worked with them, took advantage of the building’s location on a dead-end street, making it difficult for law enforcement to infiltrate the distribution network despite a constant stream of buyers entering the building at all hours of the day.

“Lookouts” were paid by the defendants to alert them to any police activity coming onto the block from the only access point on Clinton Avenue. Police could not infiltrate the building without lookouts detecting their presence and signaling the sellers. Members of the drug trafficking organization also set up an escape route whereby residents were paid to keep their doors unlocked. The dealers in the hallways would run through the building and exit via fire escapes at the rear of the building or simply hide within the apartments before police could apprehend them.

The drug conspiracy operated nearly 24 hours a day and was well-known among heroin users, who came from several different counties across New Jersey. The defendants allegedly worked in carefully planned “shifts” in order to handle the constant flow of heroin buyers. The heroin was sold in various “brands,” which were stamped onto the glassine envelopes that contained the heroin, allowing buyers to identify and purchase the brands that they preferred.
The defendants sold on average one to two kilograms of heroin per week between January 2013 and November 2015. Based upon the quantities sold, information from court-authorized wiretaps, and other evidence, the profit from the heroin distribution was estimated to be between $4 million and $7 million a year.

In addition to the prison term, Judge Linares sentenced Jones to five years of supervised release.

All 16 defendants indicted for their roles in the heroin distribution conspiracy, including Anderson, have been convicted.

U.S. Attorney Carpenito credited special agents of the FBI and task force officers assigned to the FBI’s Safe Streets Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation. He also thanked officers of the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, the Essex County Sheriff’s Office under the direction of Armando B. Fontoura; the N.J. State Parole Board, under the direction of Chairman Samuel J. Plumeri Jr.; and the Orange Police Department, under Director Todd Warren, for their work on the investigation.

The government is represented by Assistant U.S. Attorneys Jonathan M. Peck and David E. Malagold, and Senior Litigation Counsel Robert Frazer of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Stacy Ann Biancamano Esq. and Dan Holzapfel Esq., Cranford, New Jersey