LEXINGTON, Ky.– On Friday, Kevin Labracio Frazier was sentenced to 115 months in federal prison, by United States District Judge Danny C. Reeves, for an assault resulting in serious bodily injury. 

According to testimony at trial, Frazier, an inmate at the Federal Medical Center in Lexington, assaulted another inmate that resulted in the victim suffering facial fractures and a deep laceration under his eye. Evidence further revealed that Frazier repeatedly punched the victim in the head and face outside of the housing unit, that the victim briefly lost consciousness, and the victim was transported to the University of Kentucky for medical treatment.   Frazier was convicted at trial, in April of 2018.

Under federal law, Frazier must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for 3 years.           

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Amy Hess, Special Agent in Charge of the Federal Bureau of Investigation’s Louisville Field Office, jointly made the announcement. 

The investigation was conducted by Federal Bureau of Investigation and the Bureau of Prisons.  The United States was represented by Assistant United States Attorney Ron L. Walker, Jr. 

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JON E. MONTROLL, a/k/a “Ukyo,” pled guilty today to securities fraud and obstruction of justice.  MONTROLL, who issued and sold securities related to a bitcoin investment platform that he ran through false statements about the success of the business, later provided false sworn testimony to the United States Securities and Exchange Commission (the “SEC”) and provided the SEC with a false document during the course of the SEC’s investigation into his operation of the bitcoin investment platform.  MONTROLL’s plea was taken by U.S. Magistrate Judge James L. Cott.  The case is assigned to U.S. District Judge Richard M. Berman.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As he admitted today, Jon Montroll deceived his investors and then attempted to deceive the SEC.  He repeatedly lied during sworn testimony and misled SEC staff to avoid taking responsibility for the loss of thousands of his customers’ bitcoins.”

According to the Information, the allegations in the Complaint, and statements made during the proceedings in Manhattan federal:

JON E. MONTROLL operated two online bitcoin services:  WeExchange Australia, Pty. Ltd. (“WeExchange”) and BitFunder.com (“BitFunder”).  WeExchange functioned as a bitcoin depository and currency exchange service.  BitFunder facilitated the purchase and trading of virtual shares of business entities that listed their virtual shares on the BitFunder platform.

Between the launch of Bitfunder, in or about December 2012, and at least in or about July 2013, MONTROLL converted a portion of WeExchange users’ bitcoins to his personal use without the users’ knowledge or consent.  For example, MONTROLL exchanged numerous bitcoins taken from WeExchange into United States dollars, then spent those funds on personal expenses, such as travel and groceries.

Beginning on or about July 18, 2013, MONTROLL promoted a security referred to as “Ukyo.Loan.”  As described by MONTROLL in a public post about Ukyo.Loan, MONTROLL encouraged investors to “think of [Ukyo.Loan] as a sort of round-about investment” in BitFunder and WeExchange and, at the same time, described Ukyo.Loan as “a personal loan” and “for private investment purposes.”  MONTROLL further promised to pay purchasers of Ukyo.Loan daily interest on their investment and promised shares could be “redeemed at face value anytime upon request.”

During the summer of 2013, one or more individuals (the “Hackers”) exploited a weakness in the BitFunder programming code to cause BitFunder to credit the Hackers with profits they did not, in fact, earn (the “Exploit”).  As a result, the Hackers were able to wrongfully withdraw from WeExchange approximately 6,000 bitcoins, with the majority of those coins being wrongfully withdrawn between July 28, 2013, and July 31, 2013.  As a result of the Exploit, BitFunder and WeExchange lacked the bitcoins necessary to cover what MONTROLL owed to users.

Notwithstanding the scope of the Exploit, MONTROLL failed to disclose the Exploit to users of BitFunder and WeExchange, or investors in Ukyo.Loan.  Instead, MONTROLL continued to promote and sell Ukyo.Loan to customers and, on at least one occasion, falsely represented to customers that BitFunder was commercially successful.  As a result of his omissions and misrepresentations, MONTROLL raised approximately 978 bitcoins through Ukyo.Loan after his discovery of the Exploit.

The SEC’s New York Regional Office began an investigation into BitFunder and the Exploit.  During the course of the investigation, MONTROLL provided the SEC with a falsified screenshot purportedly documenting, among other things, the total number of bitcoins available to BitFunder users in the WeExchange Wallet as of October 13, 2013.  Additionally, during sworn investigative testimony on both November 14, 2013, and October 6, 2015, MONTROLL provided materially false and misleading answers to certain questions about, among other things, the timing of MONTROLL’s discovery of the Exploit.

*                *                *

MONTROLL, 37, of Saginaw, Texas, pled guilty to one count of securities fraud and one count of obstruction of justice.  Each charge carries a maximum penalty 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 defendant will be determined by the judge.

MONTROLL will be sentenced by Judge Berman at a date to be determined.

U.S. Attorney Geoffrey S. Berman praised the outstanding work of the Federal Bureau of Investigation.  He also thanked the SEC, which previously filed civil charges against MONTROLL in a separate action.

The prosecution of this case is being overseen by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorney Andrew Thomas is in charge of the case.                  

LEXINGTON, Ky.– A Nicholasville man, Jordan Combs, 29, has been sentenced to 30 years in federal prison, to be followed by a life term of supervised release, for inducing minors to produce sexually explicit images.

On Monday, Chief United States District Judge Karen K. Caldwell formally sentenced Combs, who was convicted by a jury, on March 8, 2018, of 10 counts of receipt of sexually explicit images in interstate commerce, four counts of producing such images, five counts of distributing such images, and one count of possession of such images.  Combs must serve 85 percent of his prison sentence.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Steven Igyarto, Special Agent in Charge, Department of Homeland Security – Homeland Security Investigations (DHS-HSI); and Richard Sanders, Commissioner of the Kentucky State Police; jointly announced the sentence.

The investigation was conducted by the Electronic Crimes Branch of the Kentucky State Police and DHS-HSI.  The United States was represented by Assistant United States Attorney David Marye.

PITTSBURGH, PA –A former resident of Evans City, Pennsylvania, pleaded guilty in federal court to a charge of possession of material depicting the sexual exploitation of a minor, United States Attorney Scott W. Brady announced today.

Christopher Robert Woods, age 46, pleaded guilty to one count before Chief United States District Judge Joy Flowers Conti.

In connection with the guilty plea, the court was advised that in November 2014-January 2015, Woods possessed images in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.

Judge Conti scheduled sentencing for November 16, 2018 at 3 p.m. The law provides for a total sentence of not more than 20 years in prison, a fine not more than $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant United States Attorneys Soo C. Song and Heidi M. Grogan are prosecuting this case on behalf of the government.

The Federal Bureau of Investigation conducted the investigation that led to the prosecution of Woods.

This case 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. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals 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.justice.gov/psc.

PITTSBURGH - Two California residents have been indicted by a federal grand jury in Pittsburgh, Pennsylvania, on charges of conspiracy to distribute fentanyl, methadone, and oxycodone; distribution of oxycodone; conspiracy to commit health care fraud, and conspiracy to launder money, United States Attorney Scott W. Brady announced today.

The 15-count indictment, returned on July 17, named Dr. Paul Michael Hoover, age 57, and Marcia Ramsier Arthurs, age 60, of Novato, California, as the defendants.

According to the indictment, from March 26, 2015 to June 22, 2018, in the Western District of Pennsylvania and elsewhere, Dr. Paul Hoover and his assistant Marcia Arthurs conspired to distribute fentanyl, methadone, and oxycodone. The indictment also alleges that from January 9, 2018, to June 22, 2018, Hoover and Arthurs distributed oxycodone on multiple occasions. Further, the indictment alleges that from March 26, 2015, to June 22, 2018, Hoover and Arthurs conspired to commit health care fraud. Lastly, the indictment alleges that during that same time, Hoover and Arthurs conspired to launder money.

The law provides for a maximum sentence of 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Assistant United States Attorneys Cindy K. Chung and Rachael L. Mamula are prosecuting this case on behalf of the government.

The investigations leading to the filing of charges in these cases were conducted by the Western Pennsylvania Opioid Fraud and Abuse Detection Unit, which combines personnel and resources from the following agencies to combat the growing prescription opioid epidemic: Federal Bureau of Investigation, U.S. Health and Human Services – Office of Inspector General, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigations, Pennsylvania Office of Attorney General - Medicaid Fraud Control Unit, United States Postal Inspection Service, U.S. Attorney’s Office – Criminal Division, Civil Division and Asset Forfeiture Unit, Department of Veterans Affairs-Office of Inspector General, Food and Drug Administration-Office of Criminal Investigations and the Pennsylvania Bureau of Licensing.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

NORFOLK, Va. – A federal jury convicted a Suffolk man today on charges of selling a firearm to a felon. 

According to court records and evidence presented at trial, Charlie Keys, 29, sold a loaded semi-automatic handgun to a man he knew was a felon. The man was working as a confidential informant for the Suffolk Police Department and recorded the gun sale on video. During the sale, Keys demonstrated that the gun worked by firing it into the air while standing in his front yard.

Keys faces a maximum penalty of five years in prison when sentenced on November 7. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

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.

G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office, and Thomas E. Bennett, Chief of Suffolk Police, made the announcement after U.S. District Judge Mark S. Davis accepted the verdict. Assistant U.S. Attorneys Andrew C. Bosse and William B. Jackson are prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:18-cr-73.

ALBUQUERQUE – This morning, a U.S. Magistrate Judge sitting in Las Cruces, N.M., found probable cause to support a criminal complaint charging Jorge Luis Vargas-Talamantes, 29, a legal permanent resident from Mexico who resides in El Paso, Texas, with a cocaine trafficking offense.  The charge arises from a U.S. Border Patrol seizure of 12.57 pounds of cocaine at a checkpoint in southern New Mexico on July 16, 2018.  Vargas-Talamantes was remanded into custody pending trial, which has yet to be scheduled.

U.S. Border Patrol agents arrested Vargas-Talamantes on July 16, 2018, after seizing approximately 5.7 kilograms (12.57 pounds) of cocaine allegedly concealed in Vargas-Talamantes’ vehicle.  According to the criminal complaint, the agents allegedly found the cocaine while inspecting Vargas-Talamantes’ vehicle at the U.S. Border Patrol checkpoint on Highway 54 south of Alamogordo, N.M., in Otero County, N.M.

If convicted of the charges in the criminal complaint, Vargas-Talamantes faces a statutory mandatory minimum penalty of ten years and a maximum of life in federal prison, and will be deported after serving his term of incarceration.  Charges in criminal complaints are merely accusations and criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.

The case was investigated by the U.S. Border Patrol and the Las Cruces office of the DEA.  Assistant U.S. Attorney Clara Cobos is prosecuting the case.

ERIE, Pa. - A former resident of Waterford, Pennsylvania, has been sentenced in federal court to 128 months in jail on his conviction of violating federal narcotics laws in two separate cases, United States Attorney Scott W. Brady announced today.

United States District Judge David S. Cercone imposed the sentence on Dana Scott Ball, 40.

According to information presented to the court, the court was advised that from in and around September 2013 to in and around January 2015, Ball conspired with three co-defendants to possess with intent to distribute and distribute more than 700 kilograms of marijuana. In a separate case, from June 2013 through February 2015, Ball engaged in a conspiracy with eighteen co-defendants to distribute and possess with intent to distribute in excess of 5 kilograms of cocaine.

Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.

United States Attorney Brady commended the Homeland Security Investigations, the Drug Enforcement Administration, the Pennsylvania State Police, U.S. Border Patrol, the Internal Revenue Service, Criminal Investigation; the Pennsylvania Office of Attorney General Organized Crime Section, the U.S. Postal Inspection Service, the U.S. Marshals Service, the Bureau of Alcohol Tobacco Firearms and Explosives, and the Arkansas State Police for the investigation leading to the successful prosecution of Ball.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that KATHY SCOTT and GEORGE SANTIAGO JR., both former New York State Correction Officers, were sentenced today by U.S. District Judge Kenneth M. Karas to 100 months and 87 months, respectively, for the November 12, 2013, beating of Kevin Moore, an inmate at the Downstate Correctional Facility in Fishkill, New York, and for falsifying records to cover up the beating.

SCOTT and SANTIAGO were convicted on November 20, 2017, following a two-week jury trial, of assaulting Moore in violation of his rights under the United States Constitution by repeatedly punching and kicking him in the head and body as he lay restrained on the floor.  Moore was hospitalized for two weeks with multiple serious injuries from the beating, including facial bone fractures, five broken ribs, and a collapsed lung.  SCOTT and SANTIAGO were also convicted of conspiring to violate Moore’s civil rights, as well as falsifying and conspiring to falsify Department of Correction records concerning the assault.  SCOTT and SANTIAGO were taken into custody immediately after sentencing.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Kathy Scott and George Santiago participated in a vicious beating of inmate Kevin Moore within an inch of his life.  Then they concocted a phony story to hide what they did, repeatedly lying in Department of Correction records and even creating a fake injury.  The U.S. Constitution protects all of us, including those in prison.  Correction officers who physically abuse inmates and lie about it will be punished as criminals.  Today, Scott and Santiago were held accountable for their crimes.”

According to the evidence introduced at trial:

On November 12, 2013, Kevin Moore, then 54 years old, was brought to the 1D Housing Unit at Downstate Correctional Facility to be housed overnight.  Moore objected to his cell assignment and a verbal dispute ensued between Moore and a group of correction officers.  After Moore yelled, in sum and substance, “I’m a monster,” multiple officers, including SANTIAGO, forced Moore to the floor, restrained him, and then proceeded to assault Moore as he lay there, repeatedly punching and kicking Moore in the head and body.  At no time did Moore ever try to attack, touch, or even make a threatening gesture toward any of the officers.  While Moore lay defenseless on the floor, SANTIAGO, who was wearing boots, cocked back his leg and delivered a soccer-style kick to Moore’s face.  SANTIAGO also continued to strike Moore after Moore was handcuffed.  During the beating, SANTIAGO laughed and taunted Moore, yelling “Who’s the monster now.” 

SCOTT, who was then a sergeant and the supervising officer on the scene, was present for the entire beating and was required to stop the excessive force being used by her subordinates.  Instead of taking action to stop the unlawful violence, SCOTT encouraged it, ordering an officer to hold Moore down on the floor while other officers continued to kick and punch him.  During the beating, Moore repeatedly cried out in pain and begged SCOTT and the other officers to stop hurting him.

Immediately after the beating, SANTIAGO and other officers, led by SCOTT, engaged in an elaborate cover-up of the crime they had committed.  They made up a false cover story that Moore had attacked one of the officers and that another officer had to strike Moore once in the head to save his fellow officer.  To make this lie believable, the officers claimed that Moore had injured the officer’s back by pushing the officer backward onto a table.  But because nothing of the sort had occurred, they created a phony injury.  Specifically, SANTIAGO hit one of the other officers repeatedly on the back with a baton and SCOTT photographed the fake injury.  SCOTT then prepared a false Use of Force Report describing the incident and incorporating the photos and false statements from herself and other officers, including SANTIAGO, and submitted the false report to her superiors.  SCOTT and SANTIAGO also repeatedly pressured other officers to lie to investigators about what had occurred.

Moore was severely injured, suffering multiple facial fractures, five broken ribs, and a collapsed lung, among other injuries.  According to the medical evidence, Moore received at least four forceful blows to the face and torso, including one crushing strike to the right eye that was consistent with a kick from a boot.

*                *                *

SCOTT, 44, of Saugerties, New York, was sentenced to 100 months in prison and one year of supervised release.  SANTIAGO, 36, of Fremont Center, New York, was sentenced to 87 months in prison and one year supervised release.

Three other former Downstate correction officers pled guilty to the same offenses in connection with the beating and cover-up.  Andrew Lowery pled guilty on July 27, 2016, Donald Cosman pled guilty on August 31, 2016, and Carson Morris pled guilty on November 1, 2017.  Lowery and Morris are scheduled to be sentenced on July 25, 2018, and September 14, 2018, respectively.  The sentencing of Cosman has not yet been scheduled.

Mr. Berman praised the investigative work of the Federal Bureau of Investigation and the Special Agents at the United States Attorney’s Office.  Mr. Berman also thanked the New York State Department of Correction Office of Special Investigation, and the Dutchess County District Attorney’s Office for their assistance in the investigation.

This case is being handled by the Office’s Civil Rights Unit and the White Plains Division.  Assistant U.S. Attorneys Andrew Dember and Pierre Armand are in charge of the prosecution.

BOSTON – A Harwich man was convicted today by a federal jury in Boston of firearms and drug offenses.

Timothy Fletcher, 36, was convicted of one count of possession of cocaine base with intent to distribute, one count of possession of cocaine with intent to distribute, and one count of being a felon in possession of a firearm and ammunition - a Tisas, Model Regent .45 caliber semi-automatic pistol, 58 rounds of .45 caliber ammunition and 60 rounds of 9mm ammunition. U.S. District Court Judge Richard G. Stearns scheduled sentencing for Oct. 23, 2018. Fletcher was arrested and charged in December 2015 and has been detained since.

On April 3, 2015, police executed a search warrant at a storage unit in Hyannis where they recovered, among other items, firearms, 124 rounds of ammunition, crack cocaine, powder cocaine, $1420 in cash, drug paraphernalia, two digital scales, boxes of plastic sandwich baggies, approximately 223 pairs of sneakers, and various documents containing Fletcher’s name. The firearms, firearm magazines, some of the drugs and the cash were hidden inside various sneakers and sneaker boxes. Fletcher’s fingerprints were recovered from a magazine found inside a sneaker box with the .45 caliber semi-automatic pistol.

The night before the warrant was executed, Fletcher was stopped by the police and found to be in possession of the key to the storage facility and unit.

The charge of being a felon in possession provides for a mandatory minimum sentence of 15 years and up to a lifetime in prison, a minimum of five years and up to a lifetime of supervised release and a fine of $250,000. Each drug charge provides for a sentence of no greater than 30 years in prison, three years of supervised release and a fine of $2 million.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Barnstable Police Chief Matthew Sonnabend; and Yarmouth Police Chief Frank Frederickson made the announcement today. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Lelling’s Major Crimes Unit is prosecuting the case.

ALBUQUERQUE – This morning, a U.S. Magistrate Judge sitting in Las Cruces, N.M., found probable cause to support a criminal complaint charging Mario Javier Jauregui-Alvidrez, 43, a Mexican national, with a methamphetamine trafficking offense arising out of the seizure of ten pounds of methamphetamine at a U.S. Border Patrol checkpoint in southern New Mexico on July 16, 2018.  Jauregui-Alvidrez was remanded into custody pending trial, which has yet to be scheduled.

U.S. Border Patrol agents arrested Jauregui-Alvidrez on July 16, 2018, after seizing approximately 4.5 kilograms (10.1 pounds) of methamphetamine allegedly concealed in Jauregui-Alvidrez’s vehicle.  According to the criminal complaint, the agents allegedly found the methamphetamine while inspecting Jauregui-Alvidrez’s vehicle at the U.S. Border Patrol checkpoint on Interstate 25 north of Las Cruces, in Dona Ana County, N.M.

If convicted of the charges in the criminal complaint, Jauregui-Alvidrez faces a statutory mandatory minimum penalty of ten years and a maximum of life in federal prison, and will be deported after serving his term of incarceration.  Charges in criminal complaints are merely accusations and criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.

The case was investigated by the U.S. Border Patrol and the Las Cruces office of the DEA.  Assistant U.S. Attorney Sarah M. Davenport of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.

Greenbelt, Maryland – Charles Bertsch, age 59, of Laurel, Maryland, pleaded guilty today to distribution of child pornography.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Chief Terrence B. Sheridan of the Baltimore County Police Department; Washington County Sheriff Douglas W. Mullendore; and Worcester County Sheriff Reggie T. Mason, Sr.

According Bertsch’s plea agreement, FBI Task Force agents in Maryland began an investigation into Bertsch after various law enforcement agencies downloaded child pornography via a file-sharing network from IP addresses which led back to Bertsch.  In an interview with law enforcement, Bertsch acknowledged that by connecting his computer and downloading such images, he was simultaneously enabling others to download child pornography from his hard drive. A forensic examination of Bertsch’s electronic devices, seized pursuant to a search warrant, revealed over 100,000 image files and over 2,000 video files of child pornography.

As part of his plea agreement, Bertsch must register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).

Bertsch faces a minimum mandatory sentence of five years in prison and a maximum of 20 years in prison, followed by up to lifetime of supervised release, for distribution of child pornography.  U.S. District Judge Paul W. Grimm has scheduled sentencing for January 31, 2019, at 1:00 p.m.

This case 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. Led by the United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals 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.justice.gov/psc.  For more information about internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.       

United States Attorney Robert K. Hur commended the FBI, the Baltimore County Police Department, the Washington County Sheriff's Office, and the Worcester County Sheriff's Office for their work in the investigation.  Mr. Hur and Mr. Benczkowski thanked Assistant U.S. Attorney Joseph Baldwin and Trial Attorney Nadia Prinz of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), who are prosecuting the federal case.

United States Attorney Ron Parsons announced that a Rapid City, South Dakota, woman has been indicted by a federal grand jury for Child Abuse and Operating a Motor Vehicle Under the Influence of Alcohol with a Minor Present in the Motor Vehicle.

Maria Big Crow, age 26, was indicted on June 12, 2018.  She appeared before U.S. Magistrate Judge Mark A. Moreno on July 20, 2018, and pled not guilty to the Indictment.

The maximum penalty upon conviction is up to 15 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund.  Restitution may also be ordered.

The Indictment alleges that on October 22, 2017, Big Crow was driving a vehicle with several passengers; some of the passengers were juveniles.  The vehicle Big Crow was operating was involved in a single vehicle rollover accident, resulting in injuries.  The Indictment further alleges that Big Crow was operating the vehicle while under the influence of alchol.

The charges are merely accusations and Big Crow is presumed innocent until and unless proven guilty. 

The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services.  Assistant U.S. Attorney Kirk Albertson is prosecuting the case.   

Big Crow was released on bond pending trial.  A trial date has not been set.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and William V. Grady, Dutchess County District Attorney, announced today that DAVONTE HAMILTON, a/k/a “Vont,” an alleged member of the “Uptown” street gang operating in Poughkeepsie, New York, was arrested in connection with the December 2012 murder of Daquelle LeBlanc.  The defendant is charged in a Superseding Indictment with racketeering conspiracy, murder in aid of racketeering activity, and a firearms offense.  HAMILTON was arrested tooday and arraigned in White Plains federal court before United States Magistrate Judge Lisa Margaret Smith.

Twelve members and associates of the Uptown gang, and 19 members and associates of the rival Downtown gang, which also operates in Poughkeepsie, New York, were previously charged in separate Indictments – United States v. Douglas Owens et al., 17 Cr. 506 (NSR) and United States v. Ronald Johnson et al., 17 Cr. 505 (VLB) – in August 2017 with murders, attempted murders, racketeering, narcotics, and firearms offenses.  The Superseding Indictment adds HAMILTON as the third defendant charged with murder in aid of racketeering activity and firearms offenses in connection with the 2012 murder of LeBlanc.    

U.S. Attorney Geoffrey S. Berman stated:  “As alleged, Devonte Hamilton aided and abetted the murder of Daquelle LeBlanc nearly six years ago.  Together with our law enforcement partners, we will continue to pursue justice for victims like Mr. Leblanc against all involved in such violent offenses.”

FBI Assistant Director William F. Sweeney Jr. said:  “The work done on this investigation is a perfect example of how our law enforcement partnerships have a positive impact helping innocent people.  Getting these alleged gang members, dealers, and murderers off the streets has made Poughkeepsie safer.  The FBI Hudson Valley Safe Streets Task Force won’t let up on our pursuit of these alleged violent criminals until we stop their destructive hold on the community.”

Dutchess County District Attorney William V. Grady said:  “I would like to compliment the City of Poughkeepsie Police Department and their law enforcement partners for their dedication in pursuing this important homicide investigation since 2012.  Thanks to our additional partnership with the United States Attorney’s Office on this case, we have been able to charge those individuals we feel responsible for this homicide.”

According to the Superseding Indictment[1] filed on July 18, 2018, in White Plains and Manhattan federal court and other documents in the public record:

The Superseding Indictment arose from a joint investigation by the FBI’s Hudson Valley Safe Streets Task Force, the City of Poughkeepsie Police Department, the Dutchess County District Attorney’s Office, and the Dutchess County Sherriff’s Office into a gang war between Uptown and Downtown, which led to multiple fatal and non-fatal shootings between 2012 and 2017 in the City of Poughkeepsie.

Uptown is a criminal organization whose members referred to themselves by, and were known by, several different names, including “Spready Gang,” the “400 Savages,” the “Boogotti Boys,” the “Young Bosses” or “YB’s,” and the “Mob Stars.”  Uptown is based within the eastern portion of Poughkeepsie, from east of Hamilton Street to the city line and, more specifically, within the Hudson Gardens housing development (commonly referred to as the “Bricks”). Uptown gang members and associates control the narcotics trade within the Bricks, distributing heroin, crack cocaine, and marijuana primarily.  Uptown gang members stored shared guns in various locations known to gang members to protect the narcotics business, to protect each other from rival gangs, and to strike against rival gangs.  

In addition to many non-fatal acts of violence against rival gang members and innocent victims, the rivalry between Uptown and Downtown led to the murder of Downtown gang member Daquelle LeBlanc, a/k/a “Hamo,” who was killed by a single gunshot wound to the chest at the age of 16 in the vicinity of Main Street, between Academy and North Hamilton Streets, on or about December 23, 2012.  According to the allegations contained in the Superseding Indictment, HAMILTON and two other defendants – who were charged and arrested in connection with the August 2017 Indictments – murdered LeBlanc to enhance their position in Uptown and advance the criminal objectives of that organization.

*                *                *

HAMILTON, a/k/a “Vont,” was in custody on state charges and was transferred to federal custody this morning.  If convicted, HAMILTON faces a maximum sentence of 20 years in prison on Count One (Racketeering Conspiracy), a maximum sentence of life in prison on Count Three (Murder in Aid of Racketeering Activity), and a mandatory minimum sentence of five years in prison and a maximum sentence of life in prison on Count Five (Murder Through Use of a Firearm in Furtherance of a Crime of Violence).[2]  The maximum potential sentences in this case 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 outstanding investigative work of the FBI’s Hudson Valley Safe Streets Task Force, the City of Poughkeepsie Police Department, the Dutchess County Sheriff’s Office, the Dutchess County Drug Task Force, as well as the United States Marshals’ Service, the New York State Police, and the New York State Department of Corrections and Community Supervision for their assistance in today’s arrests.  Mr. Berman also thanked the Bureau of Alcohol, Tobacco, Firearms, and Explosives for their assistance in the investigation.

The prosecution is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Christopher J. Clore, Maurene Comey, and Emily Deininger are in charge of the prosecution.

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

SPRINGFIELD, Ill. – A Springfield, Ill., man, Gregg Harwood, has been sentenced to 18 months in prison for failing to report more than $1.15 million in earnings on tax returns filed for tax years 2008, 2009, and 2010. Harwood, 60, of the 700 block of Clipper Rd., formerly owned Thermionics, a corporation that manufactured hot / cold pain therapy products that were sold at major retailers and pharmacies across the U.S.

In addition to the prison sentence, U.S. District Judge Sue E. Myerscough ordered that Harwood pay a fine of $50,000, and serve one year of supervised release following the prison term, with the first six months of supervised release as home confinement. Harwood was also ordered to work 20 hours of community service per week while on supervised release.

On Feb. 6, 2018, Harwood waived indictment and pleaded guilty to an information that charged him with filing false income tax returns that failed to report income of more than $1.15 million for tax years 2008, 2009, and 2010. Beginning in November 2007, Harwood  created various multi-level entities with no legitimate business purposes, which he used to divert and disguise income he received from Thermionics. Harwood used the resulting tax free income to support his personal lifestyle.

As provided in the plea agreement, today Harwood paid the amount due to the IRS, $447,528, and $250,000 to participants in Thermionics’ employee stock ownership plan.

Harwood remains on bond pending direction from the federal Bureau of Prisons as to the date and location to report to begin serving his prison sentence. 

Assistant U.S. Attorney Timothy A. Bass prosecuted the case. The Internal Revenue Service, Criminal Investigation Division, and the U.S. Department of Labor, Criminal Division, investigated the charges.

FRESNO, Calif. — Scott Radtke, 56, of Clovis, was arraigned today on a nine-count indictment charging him with bank fraud and aggravated identity theft, U.S. Attorney McGregor W. Scott announced.

According to court documents, Radtke owned California Motoring Company, a car dealership in Clovis. Beginning as early as January 1, 2016, and continuing through June 2017, Radtke executed a scheme to defraud banks. When customers wanted to buy vehicles that Radtke’s dealership did not have in its inventory, Radtke offered customers the opportunity to buy them from other dealerships. Radtke received up-front payments from the customers or their banks, but did not give that money to the other dealerships. Instead, he spent it on business and personal expenses. Radtke then signed the customers’ names on sale documents and loan applications, which led banks to issue loans without the customers’ knowledge or authorization. Radtke’s actions involved at least 48 vehicles and over $2 million in fraudulently obtained goods and funds.

This case is the product of an investigation by the California Department of Motor Vehicles, the Federal Bureau of Investigation, and the Clovis Police Department. Assistant U.S. Attorney Michael G. Tierney is prosecuting the case.

If convicted, Radtke faces a maximum statutory penalty of 30 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

WASHINGTON – A Virginia man was sentenced today to 276 months in prison, to be followed by a life term of supervised release, for traveling from the United States to Haiti and engaging in illicit sexual conduct with a minor, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Thomas T. Cullen of the Western District of Virginia and Special Agent in Charge Patrick J. Lechleitner of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, D.C., announced.

James Daniel Arbaugh, 40, of Stuarts Draft, Virginia, pleaded guilty on Feb. 6, to one count of traveling in foreign commerce from the United States to Haiti in or about 2016 to engage in illicit sexual conduct with a person under the age of 18 before U.S. District Court Judge Elizabeth K. Dillion of the Western District of Virginia, who sentenced him earlier today and remanded him to the custody of the U.S. Marshals Service. 

“James Arbaugh was a wolf in sheep’s clothing: he posed as a selfless missionary when in reality he was exploiting his position to prey on and sexually abuse vulnerable children in one of the most impoverished areas of the world,” said Assistant Attorney General Benczkowski.  “Today’s sentencing is a testament to the unwavering commitment of our prosecutors and law enforcement partners to hold sexual predators like Arbaugh accountable for their deplorable crimes.” 

“The defendant abused his position of trust to prey on vulnerable victims, and their lives will never be the same,” said U.S. Attorney Cullen.  “As this case indicates, our office is committed to working with our federal, state, and local law enforcement partners to identify and vigorously prosecute those who exploit children.”  

“This kind of heinous and evil activity has no place here, abroad or in-transit,” said Special Agent in Charge Lechleitner. “Those seeking to commit such abhorrent crimes and evade detection cannot hide from our highly skilled and dedicated investigators.”

According to admissions made in connection with his guilty plea, Arbaugh has lived in Haiti for approximately 15 years and has traveled regularly back to the United States during that time.  According to statements made by the Court during Armbaugh’s sentencing hearing, during his time in Haiti, Arbaugh traveled as a Mennonite missionary regularly visiting remote towns and villages, where he would befriend and groom children in these communities.  Arbaugh admitted that in 2016, while in Haiti, he engaged in illicit sexual contact with a minor under the age of 12 by touching the minor’s genitals under the minor’s clothing.

The investigation of the case was conducted by HSI and the Harrisonburg Police Department.  This case is being prosecuted by Trial Attorney Kaylynn Shoop of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Jeb Terrien of the U.S. Attorney’s Office in the Western District of Virginia.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc.

MACON: Charles E. Peeler, United States Attorney for the Middle District of Georgia, announces that on July 11, 2018, a Federal Grand Jury sitting in Macon, Georgia returned a sealed indictment.  That indictment has now been unsealed, revealing charges against 23 individuals.  An indictment is only an allegation of criminal conduct, and all of the defendants are presumed innocent until and unless proven guilty in a court of law beyond a reasonable doubt. 

“I want to thank our Federal, State and local law enforcement partners for their hard work bringing this case before the Federal Grand Jury,” said United States Attorney Peeler. 

Seventeen of the individuals were charged with conspiracy to possess with intent to distribute more than 50 grams of methamphetamine, more than 500 grams of cocaine, more than 28 grams of crack cocaine, and marijuana, which carries a mandatory minimum of 10 years in federal prison and up to life in prison.  The individuals charged with that crime were:

RICARDO BODIFORD a/k/a Rico, age 32, Moultrie, Georgia

DAVID SPRADLEY a/k/a ManMan, age 35, Moultrie, Georgia

ERIC TOWNSEND, age 29, Moultrie, Georgia

JOHNTAVIOUS JOHNSON a/k/a Mikey, age 32, Moultrie, Georgia

STACY McLELLAN, age 50, Moultrie, Georgia

BRENTON MILLER, age 31, Moultrie, Georgia

REGINA MILLER, age 35, Moultrie, Georgia

JOSH WHALEY, age 37, Tallahassee, Florida

KRISTEN DISMUKE, age 30, Moultrie, Georgia

TORRANZA McNEAL a/k/a Cheese a/k/a Meke, age 38, Moultrie, Georgia

ERIC LAMAR, age 35, Moultrie, Georgia

TRABIAN JONES, age 41, Moultrie, Georgia

RAMON WHITE, age 35, Moultrie, Georgia

JAMES FIELDER, age 34, Moultrie, Georgia

JARVIS WEST, age 31, Moultrie, Georgia

TONY STAMPER a/k/a Buggie, age29, Moultrie, Georgia; and

BRYANT PITTMAN a/k/a “John Gotti,” age 35, Moultrie, Georgia

Five individuals were charged with conspiracy to possess with intent to distribute more than 50 grams of methamphetamine, which carries a mandatory minimum of 10 years in federal prison and up to life in prison.  The individuals charged with that crime were:

GABINO TOBIAS, age 44, Fairburn, Georgia

MARIA DEL CARMEN SALAZAR-MIRALES, age44, Fairburn, Georgia

ALEJANDRO BUSTAMANTE, age 30, Moultrie, Georgia

GRICELDA BUSTAMANTE GUTIERREZ, age 36, Norman Park, Georgia

RICARDO GUTIERREZ a/k/a Dizzy, age31, Norman Park, Georgia

Five individuals were charged with distribution of more than 5 grams of methamphetamine, which carries a mandatory minimum of 5 years in federal prison and up to life in prison.  The individuals charged with that crime were:

RICARDO BODIFORD a/k/a Rico, age 32, Moultrie, Georgia

JARVIS WEST, age 31, Moultrie, Georgia

JOHNTAVIOUS JOHNSON a/k/a Mikey, age 32, Moultrie, Georgia

DAVID SPRADLEY a/k/a ManMan, age 35, Moultrie, Georgia

ERIC TOWNSEND, age 29, Moultrie, Georgia

DAVID SPRADLEY a/k/a ManMan, age 35, Moultrie, Georgia, is charged with possession of more than 500 grams cocaine with intent to distribute and possession of marijuana with intent to distribute.  If convicted of both charges, he faces a mandatory minimum of 5 years in federal prison and up to life in prison.

GRICELDA BUSTAMANTE GUTIERREZ a/k/a Chela, age 36, Norman Park, Georgia is also charged with possession of more than 50 grams of methamphetamine with intent to distribute; possession of marijuana with intent to distribute; possession of a firearm in furtherance of a drug trafficking crime; possession of a firearm with an obliterated serial number; aiding and abetting possession of a firearm by an illegal alien; and aiding and abetting possession of a firearm by a convicted felon.  If convicted on these charges, she faces a mandatory minimum of 15 years in federal prison and up to life in prison.

RICARDO GUTIERREZ a/k/a Dizzy, age31, Norman Park, Georgia, is also charged with possession of more than 50 grams of methamphetamine with intent to distribute; possession of marijuana with intent to distribute; possession of a firearm in furtherance of a drug trafficking crime; possession of a firearm with an obliterated serial number; possession of a firearm by an illegal alien; and possession of a firearm by a convicted felon.  If convicted on these charges, he faces a mandatory minimum of 15 years in federal prison and up to life in prison.

GABINO TOBIAS, age 44, Fairburn, Georgia, is also charged with possession of marijuana with intent to distribute; possession of more than 50 grams of methamphetamine with intent to distribute; possession of a firearm in furtherance of a drug trafficking crime; possession of a stolen firearm; and possession of a firearm by an illegal alien.  If convicted on these charges, he faces a mandatory minimum of 15 years in federal prison and up to life in prison.

MARIA DEL CARMEN SALAZAR-MIRALES, age44, Fairburn, Georgia, is also charged with possession of marijuana with intent to distribute; possession of more than 50 grams of methamphetamine with intent to distribute; possession of a firearm in furtherance of a drug trafficking crime; possession of a stolen firearm; and possession of a firearm by an illegal alien.  If convicted on all of these charges, she faces a mandatory minimum of 15 years in federal prison and up to life in prison.

RICARDO BODIFORD a/k/a Rico, age 32, Moultrie, Georgia is also charged with distribution of more than 50 grams of methamphetamine, maintaining a drug involved premises, and possession of marijuana with intent to distribute.  If convicted of these charges, he faces a mandatory minimum of 10 years in federal prison and up to life in prison.

ERIC TOWNSEND, age 29, Moultrie, Georgia is also charged with possession of cocaine with intent to distribute; possession of marijuana with intent to distribute; and possession of a firearm in furtherance of a drug trafficking crime.  If convicted of these charges, he faces a mandatory minimum of 5 years in federal prison and up to life in prison.

BRAD TUFF, age38, Norman Park, Georgia, is charged with conspiracy to possess with intent to distribute marijuana.  If convicted, he faces up to 5 years in federal prison.

The case was investigated by the Georgia Bureau of Investigation, the Drug Enforcement Administration, the Colquitt County Sheriff’s Office, the Moultrie Police Department, and the Leon County Florida Sheriff’s Office.  Assistant U.S. Attorney Leah E. McEwen is prosecuting the case for the Government.

Questions concerning this release should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.

CONTACT:      Barbara Burns
PHONE:         (716) 843-5817
FAX:            (716) 551-3051

BUFFALO, N.Y.--U.S. Attorney James P. Kennedy, Jr. announced today that Edgar Joel Jimenez-Rodriguez, 38, of North Tonawanda, NY, was arrested and charged by criminal complaint with possession with intent to distribute five kilograms or more of cocaine. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of life, and a $10,000,000 fine. 

Assistant U.S. Attorney Patricia Astorga, who is handling the case, stated that according to the complaint, on July 19, 2018, at approximately 6:15 p.m., law enforcement officers were on surveillance in the vicinity White Haven and Baseline Roads on Grand Island, NY. At approximately 7:25 p.m., officers surveilled a car hauler, which contained several newer-looking Toyota vehicles, pull into the back parking lot of a Toyota car dealership on Alvin Road on Grand Island. The car hauler was also carrying an older-looking, black SUV later identified as a black Mercury Mariner bearing a Florida registration. Officers deemed this to be suspicious since Toyota does not manufacture or sell Mercury vehicles, and there was no Mercury dealer in the vicinity of the Toyota car dealership. 

Shortly thereafter, officers observed the defendant, driving a gray Honda Accord, enter the Toyota car dealership parking lot. The Honda Accord drove up to the car hauler while two men began to unload cars from the hauler. Jimenez-Rodriguez exited the vehicle for a time and watched as the vehicles were unloaded from the car hauler. Shortly after the black Mercury Mariner was unloaded, Jimenez-Rodriguez got into the car and left the parking lot.

At approximately 8:13 p.m., officers stopped the vehicle driven by the defendant. As officers performed a security sweep, they noticed clear plastic wrapping consistent with that of narcotics concealed underneath the rear cargo area of the black Mercury Mariner. A drug-detecting K-9 alerted to the rear cargo area. During a subsequent search of the vehicle, officers recovered approximately 30 kilograms of cocaine. 

“Illicit drugs ruin lives,” stated U.S. Attorney Kennedy. “The over 65 pounds of cocaine seized in this case had the potential to cause a great deal of misery and ruin a number of lives in our community. Fortunately, we were spared that fate by the dedicated federal, state, and local law enforcement officers, who work tirelessly each day to protect our community from the harm caused by illicit substances. My Office will continue to support those efforts by charging, to the full extent of the law, those offenders who seek to poison our community and ruin lives through the unlawful distribution of drugs.”

DEA Special Agent-in-Charge James J. Hunt stated, “The arrest of Edgar Jimenez-Rodriguez is an example of how surveillance and great police work can lead to taking 30 kilograms of cocaine off of the streets of Erie County, New York. I commend this collaborative law enforcement effort and thank all of those involved for stemming the tide of cocaine and millions of dollars of drug proceeds into our communities.”

New York State Police Superintendent George P. Beach II said, “This case speaks to the tremendous interagency coordination and cooperation necessary to get the seized cocaine off of our streets. These illegal drugs perpetuate a cycle of addiction and criminal behavior which in turn threatens the safety and security of our neighborhoods. I want to thank our members and law enforcement partners for their tenacious dedication to tracking illegal drugs and intercepting them at their source before they can be distributed on our streets.”

The defendant made an initial appearance before U.S. Magistrate Judge Jeremiah J. McCarthy and is being held pending a detention hearing on July 24, 2018, at 2:00 p.m.

The complaint is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division, the Niagara Falls Police Department, under the direction of Commissioner Bryan DalPorto, and the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Lieutenant Kevin Reyes and Major Mary Clark.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

CONTACT:      Barbara Burns
PHONE:         (716) 843-5817
FAX:            (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Jason Guck,  43, of Victor, NY, pleaded guilty to conspiracy to commit wire fraud and filing a false tax return for the year 2012 before U.S. District Judge David G. Larimer. The charges carry a maximum penalty of 20 years in prison and a fine of $250,000.

Assistant U.S. Attorney Richard A. Resnick, who is assisting AUSA Craig R. Gestring in the prosecution, stated that in 2001, Guck, Craig Jerabeck, and Jeb Tyler started 5LINX Enterprise, Inc. (5LINX), a multi-level marketing company headquartered in Rochester, NY, which offered utility and telecommunications services, health insurance, nutritional supplements and business services. 5LINX used independent representatives to sell products and services and to recruit additional representatives.  Jerabeck was President and Chief Executive Officer, Guck was Vice President and Secretary, and Tyler was Vice President of 5LINX.

In June 2006 and July 2006, Guck, Tyler, and Jerabeck sold 5LINX stock for $5,500,000 to three investment companies, Trillium Lakefront Partners III, L.P.; Trillium Lakefront Partners III, NY L.P.; and Shalam Investment Co., L.L.C. (collectively known as "the Investors").  Guck admitted in the plea agreement that from in or about May 2010 to April 2016, 5LINX sold and distributed products for a Florida vendor.  Guck, along with Tyler and Jerabeck, and without the knowledge of the Investors, Board of Directors, or other stockholders, conspired and agreed to cause the Florida vendor to pay them personally or companies they owned approximately $2,310,510, which their Stockholders Agreements prohibited them from receiving.  5LINX, its investors, as owners between 2006 and January 2014, and as creditors thereafter, and stockholders were entitled to and should have received such funds instead of defendant, Guck, and Tyler.

Assistant U.S. Attorney Resnick further stated that Guck solely owned YaYa Holdings Corporation. Guck provided material false information on YaYa Holdings, Inc.’s federal tax returns for the fiscal years ending July 31, 2012, and 2013, and failed to file corporate returns for the fiscal years ending July 31, 2014, and 2015. In addition, for fiscal years ending July 31, 2012, and 2013, Guck failed to report income the corporation received from 5LINX.  Also, for the fiscal years ending July 31, 2014, and 2015, the corporation had income that Guck should have reported on corporate tax returns for those years. The false returns and failure to file returns resulted in a tax loss of approximately $778,718.

As part of Guck’s plea, the defendant will forfeit various assets previously seized by the government, including approximately $105,000.

In September 2017, Guck, along with Craig Jerabeck and Jeb Tyler, were charged in a superseding indictment. Jerabeck and Tyler have were previously convicted and are awaiting sentencing.

Today’s plea is the culmination of an investigation by Special Agents of the Federal Bureau of Investigations, under the direction of Special Agent-in-Charge Gary Loeffert, and the Internal Revenue Service, Criminal Investigation Division, under the direction of James D. Robnett, Special Agent in Charge, New York Field Office.

Sentencing is scheduled for October 16, 2018, at 2:00 p.m. before Judge Larimer.