CHARLOTTE, N.C. – A high-ranking North Carolina leader of the Nine Trey Gangsters set of the United Blood Nation (UBN or Bloods) street gang, was sentenced today to 19 years in prison for racketeering conspiracy.  Also sentenced today were two other members of the Bloods gang.  Sixty-seven defendants have now either pleaded guilty or have been convicted at trial.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray for the Western District of North Carolina, and Special Agent in Charge John A. Strong of the FBI Charlotte, North Carolina Field Division, made the announcement.

Cynthia Gilmore, aka Cynthia Young and Lady Bynt, 43, of Raleigh, North Carolina, was sentenced by Chief Judge Frank D. Whitney to serve 228 months in prison.  Gilmore had been convicted, together with UBN Godfathers Pedro Gutierrez and James Baxton, by a federal jury sitting in Charlotte on May 17, following a two-week trial.  In addition, two other Bloods members were also sentenced today.  Robert Allen McClinton, aka Trigga, 29, of Charlotte, North Carolina, was sentenced by Judge Whitney to serve 43 months in prison.  Renaldo Rodregus Camp, aka Rodeo and Drop, 40, of Shelby, North Carolina, was sentenced by Judge Whitney to serve 70 months in prison.

“As a trusted leader of the Nine Trey Gangsters, Cynthia Gilmore played an integral role in the gang’s violent mission by trafficking narcotics, robbing other drug dealers, and acting as a communications conduit for Pedro Gutierrez, the gang’s incarcerated leader who had previously ordered a gang war,” said Assistant Attorney General Benczkowski.  “Now totaling 67 defendants adjudicated guilty, the Department of Justice’s prosecution of the Nine Trey Gangsters continues to disrupt and weaken this violent prison and street gang, and serves as a testament to what cooperation between federal, state, and local law enforcement can accomplish.”

“Cynthia Gilmore was a gang member who had risen to the leadership ranks within the Nine Trey Gangsters, a powerful set of the Bloods in North Carolina, said U.S. Attorney Murray.  “As a gang member, Gilmore engaged in racketeering criminal acts, including robbery and drug trafficking, to support the gang and pay her dues.  As a trusted gang leader, Gilmore had direct access to the gang’s highest leadership, including to the Bloods’ Godfather, Pedro Gutierrez, with whom she had face-to-face meetings while he was incarcerated in New York.  As the Godfather’s messenger, Gilmore assisted Gutierrez in maintaining control over the gang, and made certain that other gang members knew, understood, and executed Gutierrez’s orders.  With another Bloods leader and two more gang members put behind bars, my office continues our work to dismantle criminal enterprises and to protect the people of the Western District from violent street gangs.”

In February 2017, President Donald Trump directed the Department of Justice “to reduce crime in America,” and Attorney General Jeff Sessions has made violent crime reduction and eliminating gangs a priority during his tenure. In June 2018, the Attorney General announced the largest increase in Assistant U.S. Attorneys—311 new prosecutors, including eight in North Carolina—to combat violent crime and carry out other Department priorities.

Additionally, Attorney General Sessions last year announced a reinvigorated Project Safe Neighborhoods program aimed at reducing the rising tide of violent crime in America. The U.S. Attorney’s Office for the Western District of North Carolina is an active participant in PSN.

Deputy Attorney General Rod Rosenstein mentioned many of these announcements and more when he delivered remarks in August to the 17^th Annual Gangs Across the Carolinas Conference, a conference which Attorney General Sessions delivered remarks to in August 2017.

According to court documents and evidence presented at trial, the UBN is a violent criminal street gang operating throughout the east coast of the United States since it was founded as a prison gang in 1993.  UBN members are often identified by their use of the color red, and can also often be identified by common tattoos or burn marks.  Examples include: a three-circle pattern, usually burned onto the upper arm, known as a “dog paw”; the acronym “M.O.B.,” which stands for “Member of Bloods”; the words “damu,” or “eastside”; the number five; the five-pointed star; and the five-pointed crown.  UBN members have distinct hand signs and written codes, which are used to identify other members and rival gang members.  The Nine Trey Gangster set of the UBN refer to themselves as “Billies.”

According to court documents and evidence presented at trial, the UBN is governed by a common set of 31 rules, known as “The 31,” which were originally written by the founders of the UBN.  Members of the UBN are expected to conduct themselves and their illegal activity according to rules and regulations set by their leaders.  Prominent among these is a requirement to pay monthly dues to the organization, often in the amounts of $31 or $93.  A percentage of these funds are transferred to incarcerated UBN leadership in New York; these funds also are used locally to conduct gang business.  UBN gang dues are derived from illegal activity performed by subordinate UBN members including narcotics trafficking, robberies, wire fraud, and bank fraud, among other forms of illegal racketeering activities.

According to court documents and evidence presented at trial, the Nine Trey Gangsters’ leadership proceeds in rank, from lowest to highest, from “Scrap,” “1-Star General” through “5-Star General,” “Low,” “High,” and “Godfather.” 

Evidence at trial established that Gilmore was a high-ranking leader of the Nine Trey Gangsters in North Carolina with the rank of “Low,” and that she was involved in drug trafficking and the robbery of other drug dealers.  Evidence also established that Gilmore traveled regularly between North Carolina and New York State, where she met with Pedro Gutierrez, the highest ranking leader of the United Blood Nation, who was incarcerated at the time.  Evidence further established that Gilmore assisted Gutierrez’s control of the Bloods organization in North Carolina by sending him dues and by passing along communications from Gutierrez to other gang leaders and members.

In all, 67 defendants have been adjudicated guilty in this case, including the three defendants who were found guilty at trial; 64 defendants have pleaded guilty in this investigation.  Twelve defendants in high-ranking leadership positions have been convicted:

• Montraya Antwain Atkinson, aka Hardbody, 31, of Raleigh, North Carolina, pleaded guilty to racketeering conspiracy.  According to the factual basis of his plea agreement, Atkinson admitted to holding the leadership rank of “High,” and admitted to possessing marijuana and cocaine with intent to distribute, and to purchasing and selling powder cocaine.  Atkinson was sentenced on Aug. 21 to a term of 208 months in prison;
• James Baxton, aka Frank White and Grown, 44, of New York City, New York,  was convicted at trial on May 17.  Trial evidence established that Baxton was a “Worldwide High” of the Nine Trey Gangsters and that, while incarcerated in the New York State Department of Corrections, Baxton trafficked heroin within the prison system and engaged in wire fraud by threatening the relatives of other incarcerated inmates.  Baxton was sentenced on Sept. 4 to a term of 240 months in prison, to be served federally after completing a term in New York State prison;
• Adrian Nayron Coker, aka Gotti, 28, of Gastonia, North Carolina, pleaded guilty to racketeering conspiracy and three counts of possession with intent to distribute narcotics.  According to the factual basis of his plea agreement, Coker admitted to holding the leadership rank of “Low,” and to possessing a stolen firearm and ammunition, despite having previously been convicted of a felony.  Coker was also recorded discussing a potential murder of a rival gang member.  Coker was sentenced on June 18, to a term of 140 months in prison;
• Pedro Gutierrez, aka Magoo, Light, and Inferno, of New York City, New York, was convicted at trial on May 17.  Based on evidence introduced during the trial, Gutierrez was a “Godfather” of the Nine Trey Gangsters and had served since 2003 as the “Chairman” of the council that governs the UBN.  As the Godfather of the set, Gutierrez, along with Baxton, conducted gang business and participated in the distribution of gang dues while incarcerated in the New York State Department of Corrections. Trial evidence also established that Gutierrez ordered a gang war in North Carolina in 2011, directing that members of the Bloods gang attack and kill members of a renegade gang called Pretty Tony. The war resulted in numerous injuries among inmates and the lockdown of five North Carolina prisons for six months.  Gutierrez was sentenced on Sept. 4 to a term of 240 months in prison, to be served consecutively to the remainder of a New York State sentence for murder;
• Bianca Kiashie Harrison, aka Lady Gunz, 28, of Midway Park, North Carolina, pleaded guilty to racketeering conspiracy.  According to the factual basis of her plea agreement, Harrison admitted to holding the leadership rank of “High,” and to participating, at facilities within the New York Department of Corrections, in gang leadership meetings with alleged UBN Godfathers Gutierrez and Baxton.  Harrison was sentenced on June 18, to a term of 32 months in prison;
• Quincy Delone Haynes, aka Black Montana, 39, of Lawndale, North Carolina, pleaded guilty to racketeering conspiracy and three counts of trafficking cocaine.  According to the factual basis of this plea agreement, Haynes admitted to holding the leadership rank of “Low.”  Haynes was sentenced on Aug. 15, to a term of 64 months in prison;
• Bobby Earl Hines, aka Swahili Red, 35, of North Carolina, pleaded guilty to racketeering conspiracy.  According to the factual basis of his plea agreement, Hines admitted to holding the leadership rank of “High;”
• Barrington Audley Lattibeaudiere, aka Bandana and Bobby Seale, 31, of Fort Lauderdale, Florida, pleaded guilty to racketeering conspiracy and conspiracy to commit wire fraud.  According to the factual basis of his plea agreement, Lattibeaudiere admitted to holding the leadership rank of “High,” and coordinating the transmission of hundreds of dollars of UBN gang dues to Gutierrez and Baxton. Lattibeaudiere further admitted to participating in a scheme to make and attempt to make over $64,000 in purchases using fraudulent credit and gift cards.  Lattibeaudiere was sentenced on June 19, to serve 56 months in prison;
• MyQuan Lamar Nelson, aka Dripz, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and conspiracy to possess with intent to distribute heroin, and according to the factual basis of his plea agreement admitted to holding the leadership rank of “Low;”
• Omari Rosero, aka Uno B, 41, of Elmira, New York, pleaded guilty to racketeering conspiracy.  During his plea, Omari Rosero admitted to holding the leadership rank of “High,” and to serving as an acting “Godfather” of the entire UBN.  Rosero was sentenced on July 31, to 87 months in prison, to be served federally after completing a sentence in New York State;
• Porsha Talina Rosero, aka Lady Uno B, 35, of Syracuse, New York, pleaded guilty to racketeering conspiracy.  Rosero admitted to participating in the distribution of gang dues, and to participating in a phone call during which Omari Rosero stated that a suspected cooperator would be “faded straight up.”  Porsha Rosero was sentenced on July 31, to serve 21 months in prison; and
• Tywlain Wilson, aka 5 Alive, 25, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy, possession with intent to distribute marijuana, and firearm possession in furtherance of a drug trafficking crime.  According to the factual basis of his plea agreement, Wilson admitted to holding the leadership rank of “Low.”  Wilson was sentenced on July 30, to serve 82 months in prison.

The following 34 defendants have also pleaded guilty and have been sentenced in this investigation:

• Sherman Devante Addison, aka Ace, 24, of Lawndale, North Carolina, pleaded guilty to racketeering conspiracy.  Addison was sentenced on Aug. 15, to serve 33 months in prison;
• Freddrec Deandre Banks, aka Drec and Banga, 22, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy.  Banks was sentenced on Aug. 14, to serve 33 months in prison;
• Destinee Danyell Blakeney, aka Lady Rude, 23, of Morven, North Carolina, pleaded guilty to racketeering conspiracy.  Blakeney was sentenced on July 31, to serve 18 months in prison;

• Shakira Monique Campbell, aka Lady Rage, 24, of Charlotte, North Carolina, pleaded guilty to possession of cocaine.  Campbell was sentenced to serve eight months in prison;
• Brandon Khalil Covington, aka Blokka, 25, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm in furtherance of drug trafficking.  Covington was sentenced to serve 87 months in prison;
• Alex Levi Cox, aka Quick, 28, of Loris, South Carolina, pleaded guilty to racketeering conspiracy.  Cox was sentenced on Aug. 21, to serve 17 months in prison;
• Richard Diaz, aka Damu, 34, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Diaz was sentenced on Aug. 15, to serve 33 months in prison;
• Christopher Dentre Hamrick, aka Red Dot, 29, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm by a convicted felon.  Hamrick was sentenced on May 30, to serve 64 months in prison;
• Lavaughn Antonio Hanton, aka Killem and Billy-D, 35, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Hanton was sentenced on Aug. 21, to 216 months in prison;
• Anthony ONeil Harrison, aka Ant, 20, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Harrison was sentenced on June 25, to serve 27 months in prison;
• Delonte Maurice Hicks, aka BBB Shooter and Black, 29, of Bennettsville, South Carolina, pleaded guilty to racketeering conspiracy.  Hicks was sentenced on May 31, to serve 24 months in prison;
• Raheam Shumar Hopper, aka Bone, 24, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy.  Hopper was sentenced on June 20, to serve 27 months in prison;
• Donl Lequintin Hunsucker, aka Remy, 31, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Hunsucker was sentenced on Aug. 15, to serve 52 months in prison;
• Muhammad John Jackson, aka Picasso, 33, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Jackson was sentenced on Aug. 21, to serve 27 months in prison;
• Terrence Thomas Johnsom, aka Sypher, 41, of Durham, North Carolina, pleaded guilty to racketeering conspiracy.  Johnsom was sentenced on May 30, to serve 57 months in prison;
• Joe Tarpeh Johnson, aka JR, Big Pusha and Kutthroat, 26, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud.  Johnson was sentenced on April 28, to serve 31 months in prison;
• Latif Nakia Antoine Johnson, aka Billy Solo, 24, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Johnson was sentenced on July 9, to serve 18 months in prison;
• Rashad Monte King, aka Billy Kilo Montana, 26, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  King was sentenced on July 30, to serve 25 months in prison;
• David Matthew Lowe, aka Gucci, 26, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy.  Lowe was sentenced on May 29, to serve 24 months in prison;
• Charles Kenyon Lytle, aka Kam, 40, of Concord, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm by a convicted felon.  Lytle was sentenced on Aug. 22, to serve 46 months in prison;
• Brandon Theodore Manning, aka Billy B, 29, of Columbia, South Carolina, pleaded guilty to racketeering conspiracy.  Manning was sentenced on July 31, to serve 21 months in prison;
• Travis McClain, aka Fridaay Daa Thuurteenth, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  McClain was sentenced on Aug. 14, to serve 27 months in prison;
• Isaac Nabah McIntosh, aka Mac, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  McIntosh was sentenced on July 30, to serve 18 months in prison;
• D’Angelo De’Mara McNeil, aka Dutch, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  McNeil was sentenced on June 20, to serve 33 months in prison;
• Kolawole Olalekan Omotosho, aka Rugged Red, 19, of Jacksonville, North Carolina, pleaded guilty to racketeering conspiracy.  Omotosho was sentenced on May 29, to serve 33 months in prison;
• James Brandin Pegues, 31, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Pegues was sentenced on May 29, to serve 33 months in prison;
• Deshawn Deonta Peterkin, aka Proo, 29, of Wallace, South Carolina, pleaded guilty to racketeering conspiracy.  Peterkin was sentenced on June 25, to serve 21 months in prison;
• Austin Demontry Potts, aka Big Tek and B-Tek, 24, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Potts was sentenced on May 29, to serve 30 months in prison;
• Rashad Sattar, 20, of Lauderdale Lakes, Florida, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud.  Sattar was sentenced on Aug. 22, to serve 33 months in prison;
• Anthony Bernard Smith, aka Redd Lion, 25, of Gastonia, North Carolina, pleaded guilty to racketeering conspiracy.  Smith was sentenced on April 23, to serve 44 months in prison;
• Cedric Surratt, aka Hollywood, 5-Star and Lingo, 30, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Surratt was sentenced on June 20, to serve 28 months in prison;
• Peatrez Lamar Teaste, aka P-Wheezy, 25, of Loris, South Carolina, pleaded guilty to racketeering conspiracy.  Teaste was sentenced on Aug. 21, to serve 109 months in prison;
• Lavon Christopher Turner, aka Hungry, 28, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud.  Turner was sentenced on April 23, to serve 35 months in prison; and
• Jesse James Watkins, aka Showtime, 34, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Watkins was sentenced on July 30, to serve 27 months in prison.

The following 19 defendants have also pleaded guilty and are awaiting sentencing in this case:

• Aaron Demitri Alexander, aka A Dawg, 25, of Charlotte, North Carolina, pleaded guilty on July 9, to racketeering conspiracy;
• Antarious Quashard Byers, aka Bang, 25, of Shelby, North Carolina, pleaded guilty on Aug. 28, to racketeering conspiracy;
• Renaldo Rodregus Camp, aka Rodeo and Drop, 40, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and to possession with intent to distribute cocaine;
•  
• Marquel Michael Cunningham, aka Omega, 22, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
• James Walter Dowdle, aka Staxx, 25, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and use of a firearm in furtherance of a crime of violence;
• John Paul Durant, aka JP, Glock and Gudda, 29, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
• Shamon Movair Goins, aka Rugie, 28, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy;
• Jasmin Reikeem Hicks, aka Rude, 28, of Morven, North Carolina, pleaded guilty to racketeering conspiracy;
• Wesley Javon Howze, aka Drama, 22, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
• Juan Cruz Leon, aka Jefe, 22, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy;
• Terry Lavon Maddox, aka Turbo, 27, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and possession with intent to distribute cocaine base;
• Robert Allen McClinton, aka Trigga, 29, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and two counts of possession with intent to distribute cocaine base;
• Christopher Lashon Miller, aka Dro, 24, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
• Johnny Thomas Mitchell, aka Joker, 38, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
• Christopher O’Brien Moore, aka Ratchet, 23, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
• Kenneth Marquise Ruff, aka Red Hot, 28, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
• Isaiah Devon Stallworth, aka Zay and Juice, 25, of Charlotte, North Carolina, pleaded guilty on Jan. 5, to racketeering conspiracy and to use of a firearm in furtherance of a crime of violence;
• Jhad Elijah Thorbourne, aka Flight, 24, of Charlotte, North Carolina, pleaded guilty on July 19, to racketeering conspiracy; and
• Patrick Wray, aka Ike and Murda, 30, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy.

The investigation was conducted by the FBI; the Charlotte Mecklenburg Police Department; the Shelby Police Department; the Cleveland County Sheriff’s Office; the Gastonia Police Department; the North Carolina State Highway Patrol; the Mecklenburg County Sheriff’s Office; the North Carolina Division of Adult Correction and Juvenile Justice; the North Carolina Department of Motor Vehicles; the U.S. Federal Probation; the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; the IRS Criminal Investigation; the U.S. Postal Inspection Service; the U.S. Army Criminal Investigation Command; and the New York Department of Corrections and Community Supervision, Office of Special Investigations.  Trial Attorneys Andrew L. Creighton and Beth Lipman of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Matt Warren and Christopher Hess for the Western District of North Carolina are prosecuting the case.

This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Forces (OCDETF) Program.  OCDETF is a joint federal, state, and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

John H. Durham, United States Attorney for the District of Connecticut, announced that ANTHONY WHITLEY, 35, of Hartford and New London, was sentenced today by U.S. District Judge Jeffrey A. Meyer in New Haven to 60 months of imprisonment, followed by four years of supervised release, for trafficking narcotics.

According to court documents and statements made in court, on March 3, 2017, a court-authorized search of a New London apartment connected to Whitley and his nephew, Bashon Whitley, revealed approximately 14 grams of heroin, approximately 27 grams of cocaine, approximately 150 grams of crack cocaine, items used to process and package narcotics for street sale, a .380 caliber semiautomatic handgun, ammunition and $9,180 in cash.  Anthony and Bashon Whitley were arrested on state charges at that time.

Anthony Whitley has been detained since his arrest on March 3, 2017.  On July 31, 2018, he pleaded guilty to one count of conspiracy to possess with intent to distribute heroin, cocaine and 28 grams or more of cocaine base (“crack”).

Whitley has eight prior convictions, including state felony convictions for drug and firearm offenses.

On May 30, 2018, Bashon Whitley pleaded guilty to the same charge.  On September 5, he was sentenced to 60 months of imprisonment.

This matter has been investigated by the Drug Enforcement Administration, Connecticut State Police Statewide Narcotics Task Force East, and New London Police Department.  The case is being prosecuted by Assistant U.S. Attorney Natasha M. Freismuth.

The Office of the United States Attorney for the District of Vermont stated that Hilary Denault-Reynolds, 53, formerly of St. Albans, Vermont, was sentenced on October 22, 2018, in United States District Court in Rutland, Vermont, to serve seven years in prison after his guilty plea to one count each of distribution of child pornography and possession of child pornography.  Chief U.S. District Judge Geoffrey W. Crawford also ordered Denault-Reynolds to serve a fifteen year term of supervised release upon his release from prison.

According to court records and proceedings, in spring of 2016, internet service providers Yahoo and Chatstep transmitted “Cybertips” to the National Center for Missing and Exploited Children (NCMEC) that a user, later identified as Denault-Reynolds, had transmitted images of child pornography over their online platforms.  NCMEC forwarded the tips to the Vermont Internet Crimes Against Children Task Force (the ICAC).  The ICAC investigated the tips and obtained warrants to search Denault-Reynolds’ Yahoo account and ultimately his residence in St. Albans, Vermont.  On November 17, 2016, law enforcement executed the residential search warrant and seized multiple computers and electronic storage devices from Denault-Reynolds.  Forensic examination of the computers and devices revealed that they contained thousands of images and videos of child pornography, and that Denault-Reynolds distributed child pornography to others using Yahoo Messenger.  Subsequent investigation revealed that Denault-Reynolds had also bragged online about his sexual abuse of children earlier in his life, and that he had spent years “grooming” a child who lived near him.

The government was represented by Assistant U.S. Attorney Nicole P. Cate.  Denault-Reynolds was represented by Assistant Federal Public Defender David L. McColgin. 

United States Attorney Christina E. Nolan commended the efforts of the Vermont Internet Crimes Against Children Task Force and Homeland Security Investigations in the investigation and prosecution of Denault-Reynolds. 

U.S. Attorney Nolan noted that this prosecution is part of the U.S. Department of Justice’s Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney’s Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

          GRAND RAPIDS, MICHIGAN— U.S. District Judge Janet T. Neff sentenced Michael Clayton (a.k.a. "Rodeo Loco") to life in prison for sexually exploiting three girls, each about half Clayton’s age. The sentence follows a three-day trial, where a jury found Clayton guilty of being a felon in possession of firearms, conspiring to distribute cocaine, producing child pornography involving the three girls, and forcing one of them to engage in prostitution. Judge Neff remarked, "this was a horrendous, drug-fueled, weapon-heavy nightmare…. We really do need to protect the public from further crimes of this man."

          The Battle Creek Police Department (BCPD) became aware of Clayton’s exploitation when they received a call on October 5, 2017, informing them Clayton was holding a 16-year-old girl against her will. Police reported to Clayton’s residence around 9:30 pm. Clayton initially told police there were no females at the house, but they found the 16-year-old girl in the unlit basement:

          After interviewing the girl, police learned Clayton forced her into the basement to avoid police detection. She originally met Clayton a few weeks earlier, when he invited her to party, gave her cocaine, and expected her to have sex with him as payment for the cocaine. Clayton continued providing her cocaine and demanding sex, and he frequently recorded and saved videos of those sex acts. When BCPD and the Department of Homeland Security Investigations (HSI) executed search warrants for Claytons SnapChat account and iPhone, they uncovered over 20 videos of Clayton engaging in sex acts with the 16-year-old, as well as approximately 10 more videos involving a 15 and 17-year-old.

          Those search warrants also revealed videos of Clayton with cocaine and guns:

          Clayton used the proceeds of his illegal drug sales to promote a business he called Zombie Lifestyle. Police seized this car in association with the case:

          The 16-year-old girl also told BCPD that Clayton and his co-defendant, Ramiro Hernandez, pushed her to have sex for money about a week before BCPD found her. Clayton and Hernandez arranged that sex date with someone she did not know, and Clayton kept all of the money. Hernandez pled guilty to sex trafficking the 16-year-old, testified against Clayton at trial, and received a 10-year sentence from Judge Neff.

          "This sentencing highlights HSI's commitment to aggressively investigate human trafficking crimes by protecting victims and bringing traffickers to justice," said HSI Special Agent in Charge Steve Francis. "HSI will continue to work tirelessly with our law enforcement partners to dismantle these vile trafficking networks that prey on the vulnerable members of our community."

          This case is part of the Project Safe Neighborhood initiative, and it was investigated by BCPD and HSI. Assistant U.S. Attorneys Davin M. Reust and Daniel Y. Mekaru prosecuted it.

END

The Office of the United States Attorney for the District of Vermont stated that Timothy Durkin, 43, was sentenced yesterday in United States District Court in Rutland, Vermont, to serve five years in prison after his guilty plea to maliciously destroying by means of fire real property used in interstate commerce.  Chief U.S. District Judge Geoffrey W. Crawford also ordered Durkin to serve a three year term of supervised release upon his release from prison.

According to court records and proceedings, in the early morning hours of October 27, 2017, Durkin set fire to a building located at 3579 Waterbury-Stowe Road in Waterbury, Vermont.  The fire destroyed the entire building.  In December 2017, after he was arrested on unrelated charges in Washington County Superior Court, Durkin admitted to the arson.

Assistant U.S. Attorney Jonathan A. Ophardt handled the prosecution.  Durkin was represented by Assistant Federal Public Defender David L. McColgin.  U.S. Attorney Christina E. Nolan commended the efforts of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Vermont State Police in the investigation and prosecution of Durkin.

These enforcement actions and partnerships are 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. Learn more about Project Safe Neighborhoods.

Jacksonville, FL – U.S. District Judge Brian J. Davis today sentenced Brian James Holland (23, Jacksonville) to 10 years in federal prison for aggravated sexual abuse by force. A federal jury found Holland guilty on July 18, 2018.

According to evidence presented at trial, on February 27, 2018, a passenger with an intellectual disability, onboard the Carnival Cruise Line vessel Elation reported an incident of sexual abuse by force. The victim testified that she had been in the cruise ship’s hot tub when Holland attempted to put his arm around her and she attempted to move further away from him. Holland then tried to put his hand on her shoulder and pull her back towards him. Two passengers that were in the hot tub at the time of the incident corroborated the victim’s claim.  

The victim further testified that Holland also had touched her genitals both over and under her bathing suit, digitally penetrating her by force. The victim then left the hot tub and reported the incident to her family, who reported it to ship security. An examination of the victim was by the ship’s medical personnel revealed abrasions on the victim’s genitals consistent with digital penetration by force.

This case was investigated by the Federal Bureau of Investigation. Carnival Cruise Line’s Security Department also provided assistance during the case. It was prosecuted by Assistant United States Attorneys Ashley Washington and Jay Taylor.

WICHITA, KAN. - A Wichita woman was sentenced Monday to 110 months in federal prison for prying open a display case and stealing guns from a local store, U.S. Attorney Stephen McAllister said.

Chaelyn Nichole Aaron, 28, Wichita, Kan., pleaded guilty of one count of theft of firearms. In her plea, she admitted the crime occurred March 28, 2018, at an Atwoods store at 6235 N. Broadway. Aaron went into the store and used a small red crowbar to pry open a display case. She took seven handguns from the case and left the store. According to documents filed in court, she gave the guns to a drug dealer to pay off her debt.

McAllister commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and Assistant U.S. Attorney Matt Treaster for their work on the case. This case was prosecuted under the Department of Justice’s Project Safe Neighborhoods initiative.

NEWARK, N.J. – A Linden, New Jersey, man was sentenced today to 21 months in prison for conspiring with officials at the Paterson Municipal Utilities Authority (MUA) and the Jersey City Childhood Development Centers Inc. (JCCDC) to fraudulently obtain payments for services he never provided, U.S. Attorney Craig Carpenito announced.

Carnell Baskerville, 51, previously pleaded guilty before U.S. District Judge Jose L. Linares to an information charging him intentionally conspiring with a former commissioner with the Paterson MUA to commit extortion under color of official right and conspiring with Robert E. Mays, the former Executive Director of the JCCDC, to embezzle and obtain by fraud funds that were under the care and control of the JCCDC, an organization that received more than $10,000 in federal program benefits annually. Judge Linares imposed the sentence today in Newark federal court.

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

Baskerville was a self-employed contractor based in Linden who provided contracting services for both residential homes and commercial businesses. Around 2014, Baskerville became acquainted a conspirator who was then a commissioner with the since-dissolved Paterson MUA, which had been created to manage the hydroelectric plant on the Passaic River and care for certain surrounding properties.

Baskerville and the conspirator entered into an agreement whereby the conspirator, who exercised control over Paterson MUA finances, would approve payments from the Paterson MUA to Baskerville’s company for services rendered, even though both Baskerville and the conspirator knew that Baskerville had not and would not perform those services.

Between December 2014 and May 2015, the conspirator wrote a series of Paterson MUA checks totaling $146,500 to Baskerville’s company. Baskerville deposited these checks in his bank account and kicked back a significant percentage in cash to the conspirator to reward him for his official assistance in carrying out the scheme.

Baskerville entered into a similar scheme with Mays, the Executive Director of the JCCDC, which operated as a non-profit organization created to serve impoverished and disabled children in Jersey City. In February 2014, Baskerville and Mays entered into a purported contract for Baskerville to provide kitchen renovation work on behalf of JCCDC, knowing full well that Baskerville had not and would not perform those services.

In late February 2014, Mays issued a JCCDC check in the amount of $29,675 to Baskerville. Baskerville and Mays met at a check cashing business in Jersey City where they cashed the check and split the proceeds between them.

In addition to the prison term, Judge Linares sentenced Baskerville to three years of supervised release and ordered him to pay restitution of $176,175.

Mays pleaded guilty to wire fraud on June 7, 2016 before U.S. District Judge Susan D. Wigenton. On July 31, 2017, he was sentenced to 18 months in prison and ordered to pay restitution in the amount of $257,418.20.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation.

The government is represented by Assistant U.S. Attorney Mark J. McCarren of the U.S. Attorney’s Office’s Special Prosecutions Division in Newark.

Defense counsel: Arthur Abrams Esq., Jersey City

ATLANTA – Olayinka Olaniyi, a citizen of Nigeria, was sentenced on charges of conspiracy to commit wire fraud, computer fraud and aggravated identity theft. Olaniyi was convicted by a federal jury on August 9, 2018, after a three-day trial. Co-defendant, Damilola Solomon Ibiwoye, pleaded guilty to similar charges and was sentenced on January 31, 2018. 

“These defendants’ attempted theft of millions of dollars by tricking unsuspecting victims into providing personal information, subsequently leading to the infiltration of other computer systems,” said U.S. Attorney Byung J. “BJay” Pak. “While cybercrime has no borders, those who operate under the cloak of anonymity that the Internet provides will not be shielded from extradition and prosecution.”

“This sentence is the direct result of the hard work of FBI investigators and federal prosecutors working with their international partners, proving once again that cybercriminals cannot hide behind geographic borders anymore,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “We are determined to protect our citizens and our institutions no matter how far the investigation reaches.”

“The scheme that these perpetrators attempted against college and university employees in our state is unfortunately all too common and underscores the ever-increasing need to remain vigilant in cybersecurity efforts,” said Attorney General Chris Carr. “We will continue working with our local, state and federal partners to investigate and prosecute those who seek to steal from Georgians and educate our citizens on how to avoid falling victim to deceptive practices.”

According to U.S. Attorney Pak, the charges, and other information presented in court: Olaniyi and Ibiwoye were behind several “phishing scams” that targeted colleges and universities in the United States, including the Georgia Institute of Technology (“Georgia Tech”) and the University of Virginia.  While both are Nigerian citizens, they committed their crimes while living in Kuala Lumpur, Malaysia, and were extradited to the United States to face these charges.

A “phishing scam” is the act of sending fraudulent emails that appear to come from legitimate enterprises for the purpose of tricking the recipients into providing personal information, including usernames and passwords.  Olaniyi and Ibiwoye directed phishing emails to college and university employees.  Once they had possession of employee logins and passwords, they were able to steal payroll deposits by changing the bank account into which the payroll was deposited.  Also, while logged into the university system through the stolen logins and passwords, these defendants were able to gain access to employee W2 forms, which they used to file fraudulent tax returns.  The attempted theft was over $6 million. 

The stolen funds were routed into U.S. bank accounts, and the evidence showed that access to these bank accounts was acquired through the use of romance scams, where fraudsters pose on dating sites and apps as potential partners to gain the trust of their victim.  At some point, the fraudsters made requests to deposit money into their victims’ accounts and claimed to need all of the account information, including their account numbers, routing numbers, passwords, and answers to security questions.  In this case, all of that information was then used to funnel the proceeds of theft through those accounts and out of the country. 

Olayinka Olaniyi, 34, of Nigeria was sentenced to five years, 11 months in prison, to be followed by three years of supervised release on October 22, 2018. Olaniyi was also ordered to pay restitution in the amount of $56,175.44.

Damilola Solomon Ibiwoye, 29, of Nigeria was sentenced to three years, three months in prison to be followed by three years of supervised release on January 31, 2018. He was also ordered to pay $56,175.44 in restitution.

This case was investigated by the Federal Bureau of Investigation.

Assistant U.S. Attorney Jeffrey A. Brown, Deputy Chief of the Complex Frauds Section, and Special Assistant U.S. Attorney Laura D. Pfister prosecuted the case.

HOUSTON – Two people have been charged with conspiracy to commit mail fraud and mail fraud for their participation in a scheme to defraud Dr. Pepper Snapple Group Inc. (DPSG), announced U.S. Attorney Ryan K. Patrick.

Authorities took Joseph A. Isaac, 52, of Houston, into custody today, He is expected to make his initial appearance before U.S. Magistrate Judge Nancy Johnson at 2:00 p.m. Co-defendant Anna Maria Sites, 41, of Friendswood, is expected to make her initial appearance in the near future.

The indictment, returned under seal Oct. 17 and unsealed today, alleges Isaac and Sites defrauded DPSG from 2010 through Feb. 17, 2015. The pair worked at FulFill Plus Inc., a company which  administered rebate campaigns for DPSG, according to the charges.

DPSG paid money to Fulfill Plus to fund rebates for those who had requested them. However, the rebates were not paid, according to the indictment. Isaac and Sites allegedly used the money not paid out in rebates for their own personal expenses and non-rebate related expenses of FulFill Plus. 

​Conspiracy to commit mail fraud carries a maximum penalty of five years imprisonment, upon conviction. Each also faces up to 20 years for each count of mail fraud. Both charges also carry a potential $250,000 maximum fine.

​The FBI investigated. Assistant U.S. Attorney John Braddock is prosecuting the case.

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

PORTLAND, Ore. – Martin J. Shain, 61, of Seattle, Washington, was sentenced today to 46 months in federal prison and three years’ supervised release for engaging in a fraud scheme with a former Oregon Department of Energy Employee. Shain was also ordered to pay more than $520,000 in restitution.

“At the expense of taxpayers, small businesses, and the State of Oregon, Martin Shain and Joseph Colello orchestrated a corrupt scheme to profit off the sale of government tax credits. Corruption schemes involving public employees foster a distrust in government that can take years to restore,” said Billy J. Williams, U.S. Attorney for the District of Oregon.

“Mr. Shain undermined the process of fair and open competition when he paid kickbacks in exchange for ODOE tax credit sales,” said IRS-Criminal Investigation Special Agent in Charge Darrell Waldon. “IRS-Criminal Investigation is committed to investigating individuals who engage in corruption and tax fraud.”

“Treating a government program as a personal ATM risks the integrity of all public servants who have responsibility for protecting Oregon's resources. The fight against public corruption is a high priority for the FBI, and we look to the public to help us identify those government officials who are taking advantage of their powers and positions," said Renn Cannon, Special Agent in Charge of the FBI in Oregon.

According to court documents, between June 2012 and March 2015, Shain and Joseph Colello, a former employee of the Oregon Department of Energy’s (ODOE) Business Energy Tax Credit (BETC) program, maintained a secret business relationship whereby the two would personally profit from the sale and purchase of Oregon BETCs.

Shain and Colello devised a plan whereby Colello would give Shain the names of BETC sellers and interested buyers—information he had access to as an ODOE employee. Colello would then contact the sellers and buyers to negotiate credit transfers, but made it appear as though the Shain had brokered the deals. Shain created a company in the name of his relative in order to receive commission payments from the sellers of the tax credits and to conceal their earned income from the IRS. Shain charged sellers a 1-2% fee, undercutting brokers who typically charged a 10% fee for facilitating similar transfers. Colello would receive a portion of this fee as a kickback.

Between 2012 and 2015, Shain deposited over $1.3 million in income from the commissions charged to sellers of BETC credits. He would transfer a portion of these funds into a personal account from which he would purchase and issue biweekly cashier’s checks payable to Colello. Over the course of the conspiracy, Shain purchased and issued approximately 58 cashier’s checks to Colello or Colello’s girlfriend. In total, Colello received more than $300,000 in bribe payments for his role in the scheme. Shain failed to report more than $1.34 million in income received brokering tax credit sales on four income tax returns between 2012 and 2015.

Colello pleaded guilty to one count of conspiracy to engage in monetary transactions in property derived from specific unlawful activity, one count of conspiracy to defraud the United States, and one count of filing a false income tax return on March 15, 2018. On April 3, 2018, he was sentenced to 60 months in prison and was ordered to pay more than $81,000 in restitution.

Shain previously pleaded guilty to one count each of conspiracy to defraud the U.S. and tax evasion on June 20, 2018. He will self-surrender to the U.S. Marshals on October 25, 2018.

The case was investigated by IRS Criminal Investigation and the FBI and prosecuted by Claire M. Fay and Scott E. Bradford, Assistant U.S. Attorneys for the District of Oregon.

NEWARK, N.J. – A Jersey City police officer was sentenced today to 23 months in prison for accepting corrupt payments in exchange for helping employers operate at worksites without the required presence of an off-duty police officer, U.S. Attorney Craig Carpenito announced.

Juan Berrios, 42, of Rahway, New Jersey, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with one count of conspiracy to commit fraud and accept corrupt payments. Judge Vazquez imposed the sentence today in Newark federal court.

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

Berrios was a police officer with the Jersey City Police Department from 2004 to 2017. Under Jersey City’s municipal code, police officers performing off-duty work were not permitted to receive cash payments directly from other employers. Rather, the employers were supposed to pay Jersey City, which would then pay the off-duty police officers, minus certain fees, taxes and deductions.

Berrios agreed with numerous off-duty employers to accept payments directly from them and cut Jersey City out of the process. In exchange for the payments, Berrios permitted off-duty employers to operate at worksites without the presence of a police officer when such a presence was required.

On several occasions, Berrios submitted off-duty vouchers seeking and obtaining compensation for working as a traffic director or security guard. Berrios also sought and received overtime compensation for appearing in court at the same time he was purportedly performing off-duty work. As a result, Berrios fraudulently obtained compensation from Jersey City for separate assignments that occurred at the same time.

In addition to the prison term, Judge Vazquez sentenced Berrios to three years of supervised release and ordered forfeiture of $50,000 and restitution of $34,951.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing.

The government is represented by Vikas Khanna, Deputy Chief of the U.S. Attorney’s Office Criminal Division, and Assistant U.S. Attorney Sarah Devlin of the Asset Recovery and Money Laundering Unit, in Newark.

Defense counsel: Danny J. Welsh Esq., Jersey City, New Jersey

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

ROCHESTER, N.Y. U.S. Attorney James P. Kennedy, Jr. announced that Michael Pecka, 33 of Fairport, NY, pleaded guilty before U.S. District Court Judge Charles J. Siragusa to making a false official statement. The charge carries a maximum penalty of five years in prison, a fine of up to $250,000, or both.

Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that Pecka filed a claim for VA Disability Benefits in 2011 claiming that he had Post Traumatic Stress Disorder (PTSD) from witnessing the suicide of two fellow soldiers while deployed to Kuwait in 2004-2005 with the Army Reserve. In support of his claim for PTSD, the defendant described in detail the two suicides that he claimed to have witnessed to include his distance from the soldiers, the manner in which they each committed suicide, his observation of the bodies, and his role in the investigations. As a result of this claim, Pecka received a high disability rating and was awarded tax free disability benefits of $3,167 per month. The defendant filed the initial claim while he was an inmate in federal prison for an unrelated bank fraud conviction.

Pecka repeated his false claims about observing the suicides on Official VA Forms, signed under penalty of perjury, in 2011 and 2014. However, an investigation by Special Agents of the VA Office of Inspector General determined that the defendant lied about being present for either suicide, lied about observing either suicide, lied about being involved in the investigation of either suicide, and in the case of one of the soldiers, was not even in the same country at the time he committed suicide. Pecka repeatedly stated under oath that he watched this soldier commit suicide, when in fact, the defendant was stationed over 6,000 miles away in Kuwait when the soldier committed suicide near Ft. Drum, NY. 

On May 24, 2018, Pecka provided statements to an undercover VA Office of Inspector General Special Agent whom the defendant believed to be a VA Field Examiner conducting a routine file update for his compensation claim. During that meeting, Pecka falsely told the agent that he personally witnessed the suicide of one of the soldier, now claiming that it happened while they were “on a mission” together. Pecka described the incident stating that soldier shot himself with his pistol without warning, and that he reported the incident to his First Sergeant. None of that was true. Regarding the second suicide, the defendant falsely claimed that he saw the muzzle fire from the discharge of that soldier’s rifle, discovered that victim in his vehicle, and then reported the suicide to Military Police. This too was a lie.
After making these statements to the undercover VA-OIG Special Agent, Pecka completed a new VA Statement in Support of Claim for Service Connection for Post-Traumatic Stress Disorder Form, in his own hand. In that statement, the defendant again falsely claimed that he saw both soldiers shoot themselves.

As a result of his false statements to the VA, Pecka received over $92,000 in tax free VA Disability benefits to which he was not legally entitled.

According to the National Center for PTSD, Post-Traumatic Stress Disorder is a mental health condition that some people develop after experiencing or witnessing a life-threatening event, like combat. The condition may last months or years, with triggers that can bring back memories of the trauma accompanied by intense emotional and physical reactions. Symptoms may include nightmares or unwanted memories of the trauma, avoidance of situations that bring back memories of the trauma, heightened reactions, anxiety, or depressed mood. For further information on PTSD, treatment options, and how to obtain help from the Department of Veterans Affairs, please go to https://www.ptsd.va.gov/

The plea is the result of an investigation by the United States Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, Northeast Field Office, under the direction of Special Agent-in-Charge Sean J. Smith.

Pecka also has a pending violation of his supervised release conditions from the prior federal bank fraud conviction.

The defendant was ordered detained pending sentencing on both cases, which is scheduled for January 24, 2019, at 10:00 a.m. before Judge Siragusa.

# # # #  

A Canton man was sentenced to more than eight years in prison for child pornography crimes.

Marshall Belden, Jr., 70, previously pleaded guilty to receiving, distributing and possessing visual depictions of minors engaged in sexually explicit conduct. Belden was sentenced to 103 months in federal prison.

Belden on Oct. 24, 2016 knowingly received and distributed numerous computer files which contained visual depictions of real minors engaged in sexually explicit conduct, and which files had been shipped and transported in and affecting interstate and foreign commerce. On Jan. 26, 2017, Belden possessed a computer and an external hard drive, each of which contained child pornography, according to court documents.

This case is being prosecuted by Assistant U.S. Attorney Michael A. Sullivan following an investigation by the Canton office of the Federal Bureau of Investigation and the Canton Police Department.

HOUSTON – A 54-year-old resident of Kingwood and Panama City, Panama, has been ordered to federal prison for mail fraud and ordered to pay more than $8 million in restitution, announced U.S. Attorney Ryan K. Patrick. Steven Patrick Jones pleaded guilty May 1, 2014.

Today, U.S. District Judge Gray Miller, who accepted the guilty plea, handed Jones a total sentence of 85 months in federal prison. He was further ordered to pay restitution to victims in the amount of $8.2 million.

Jones has admitted he and his partner - John Patrick Acord, 75, of Magnolia - formed a company called Intermodal Wealth (IW) to sell shipping containers. Dean Lester Springer Sr., 58, of Hillsboro, Oregon, worked as a salesman for IW from May to November 2012.

Intermodal offered to sell the containers to investors, then lease the containers for them. Jones promised to pay their investors 16% per year from the proceeds of the leases. However, the company had few containers and did not lease any of them. Payments were made to investors, but the funds came from subsequent investors rather than from true proceeds.

The Texas State Securities Board issued an emergency cease and desist order against IW from offering securities in Texas on July 20, 2012, claiming the company was engaged in fraud and that their acts threatened immediate and irreparable harm to the public. They also included information about their criminal histories.

As a result of the publicity following the order, Springer formed World Container (WC) on Nov. 30, 2012, offering to sell securities to investors. Specifically, he promised to use investor funds to purchase shipping containers for the investors and make money for them by leasing the containers as he had done as a salesman for IW.

He told Investors that WC was independent of IW and its associated companies. However, Springer sent the contracts, investments and money received from WC investors to Jones and IW in Panama. Springer did not purchase or lease containers for investors as promised. Many WC investors were not told IW was receiving their funds, nor about the criminal records, extensive civil judgments, tax liens or Securities and Exchange Commission injunctions against Jones and Acord. Springer also failed to reveal to investors that he received a commission from investments from Jones and Acord.

Through WC, Springer recruited new investors using a business model very similar to IW. WC received $3,927,189.28 from investors and paid $728,886.38 in returns. Investors lost $3,198,302.90 as a result of the scheme. 

Intermodal received more than $5.5 million from investors throughout the United States and worldwide. Jones, his family and partners spent the majority of the investment funds they received.

Acord and Springer also pleaded guilty and were later sent to prison.

Jones has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The U.S. Postal Inspection Service conducted the investigation with the assistance of the Texas State Securities Board. Assistant U.S. Attorney Jay Hileman is prosecuting the case.

PITTSBURGH - A resident of Pittsburgh, Pennsylvania, has been sentenced in federal court to three years and 10 months in prison followed by six years supervised release on his conviction of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.

United States District Judge Nora Barry Fischer imposed the sentence on Robert Fields, Jr. aka Squid, 24, of Pittsburgh, Pennsylvania.

According to information presented to the court, from in and around November 2015, and continuing thereafter to in and around January 2016, Fields conspired with others to distribute and possess with intent to distribute 100 grams of heroin. The court was informed that Fields was a member of the Wavy Boyz gang, which operates out of the Hill District Section of the City of Pittsburgh.

Assistant United States Attorney Amy L. Johnston prosecuted this case on behalf of the government.

United States Attorney Brady commended the federally administered Organized Crime and Drug Enforcement Task Force (OCDETF) for the investigation leading to the successful prosecution of Robert Fields, Jr. The OCDETF task force is headed by the Federal Bureau of Investigation and is comprised of members drawn from the FBI Greater Pittsburgh Safe Street Task Force including the Pittsburg Bureau of Police, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, and the Allegheny County Police Department. Substantial assistance was provided by FBI San Juan, Puerto Rico (St. Thomas Resident Agency, U.S. Virgin Islands) and the United States Postal Inspection Service. Numerous other FBI field offices, including Detroit, Cleveland, New York, and Atlanta, in addition to the Bureau of Alcohol, Tobacco, and Firearms, also assisted with this investigation. The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.

ATLANTA – Kenneth Copeland was sentenced to federal prison on October 22, 2018, for being a felon in possession of a firearm after bringing an assault rifle into the Dunbar Recreational Center Gymnasium.

“Our community centers are designed to be a place where the public—especially our children—can safely play and gather together,” said U.S. Attorney Byung J. “BJay” Pak.  “By bringing a loaded assault rifle into the gymnasium, Copeland put all those present in danger and took from the community its sense of safety.” 

“The illegal possession of a firearm is a crime in itself” said Arthur Peralta, ATF Special Agent in Charge. “However, taking a firearm into a place where children are present and leaving it in plain view, recklessly endangering everyone, is shocking.  In this case, a concerned citizen saved the day and the defendant is no longer in a position to endanger anyone else.”

“There’s no place on our streets for guns to be in the hands of convicted felons, and certainly no place for guns of any kind to be in a place that’s supposed to be a safe haven for so many of our children,” said Atlanta Police Chief Erika Shields. “This is great teamwork by our officers and the U.S. Attorney's Office to once again assist us in getting dangerous and irresponsible individuals out of our communities.”

According to U.S. Attorney Pak, the charges and other information presented in court: On April 28, 2015, Copeland came to the Dunbar Center Gymnasium with a loaded assault rifle in a shopping bag.  Despite the presence of approximately 20 members of the public, including children, Copeland left the assault rifle on the bleachers and went to play basketball. A concerned citizen called 911 to alert law enforcement that the assault rifle was inside the gymnasium.  Atlanta Police Department officers arrived, detained Copeland, and successfully secured the loaded assault rifle.  Copeland was convicted of multiple felonies prior to April 28, 2015, and as a result, he is prohibited by law from possessing a firearm.

Kenneth Copeland, 27, of Atlanta, Georgia was sentenced by U.S. District Judge Amy Totenberg to five years in federal prison, to be followed by three years of supervised release. Copeland pleaded guilty to one count of a felon in possession of a firearm on July 25, 2018.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Atlanta Police Department.

Assistant U.S. Attorneys Katherine I. Terry and Kim Dammers, Chief of the Organized Crime and Gangs Section, prosecuted the case. The Fulton County District Attorney’s office and the Cobb County District Attorney’s Office also provided assistance with the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

SACRAMENTO, Calif. — Martin Gasca-Rojas, 49, of Mexico, was sentenced to 12 years and seven months in prison, for distributing methamphetamine, U.S. Attorney McGregor W. Scott announced.

According to court documents, between October 2016 and May 2017, Gasca-Rojas distributed nearly 4 pounds of methamphetamine on three occasions. In October 2016, Gasca‑Rojas sold 1 pound of methamphetamine for $3,300. In November 2016, he arranged a sale of 2 pounds of methamphetamine for $6,500, and had two other individuals deliver the methamphetamine. Finally, in May 2017, he sold 1 pound of methamphetamine for $3,600.

This case was the product of an investigation by the Drug Enforcement Administration and Homeland Security Investigations (HSI). Assistant U.S. Attorney Audrey B. Hemesath prosecuted the case.

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

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that George H. Moses, 50, of Rochester, NY, was charged by criminal complaint with making false statements to Special Agents of the FBI. The charge carries a maximum penalty of five years in prison and a $250,000 fine.

Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that according to the complaint, the defendant is the Chairman of the Board of Commissioners of the Rochester Housing Authority (RHA), which provides housing opportunities and services for the Rochester community and a board member of the Rochester Housing Charities (RHC). The RHA has an annual contract with the United States Department of Housing and Urban Development from which it receives millions of dollars.

As alleged in the criminal complaint, on March 25, 2015, defendant Moses, as Chairperson of the Board of RHA, caused that Board: (a) to appoint him as one of the three new board members of the RHC, and (b) to approve a loan by the RHA to the RHC in the amount of $300,000.

On July 7, 2015, the RHC entered into an $87,500 one year contract with Capital Connection Partners LLC (CCP) for various services including: (a) advocating at the local, state and federal level of government for policy and legislation, reviewing best practices, and issuing presentations to elected officials; and (b) finding self-sufficient resources to include creating entrepreneurial opportunities and workforce development, developing revenue streams for residents, and applying for federal home loan bank grants.

The following day, on July 8, 2105, Adam McFadden, on behalf of his company, Caesar Development LLC, executed a contract with CCP entitled the Pass Through Funding and Services Agreement, which provided that CCP would pass through 75% of the funds it received from the RHC to Caesar Development LLC.

On August 3, 2015, the RHA on behalf of the RHC paid CCP $43,750, which represented the first installment payment under the terms of the RHC and CCP Contract.  Thereafter, on August 8, 2015, CCP paid $32,812.50 to Caesar Development LLC, which represented 75% of the funds CCP had just received from the RHA.

Subsequently, on December 23, 2015, the RHC paid $43,750 to CCP, which represented the second installment payment under the terms of the RHC and CCP Contract. On the following day, December 24, 2015, CCP paid $32,812.50 to Caesar Development LLC, which represented 75% of the funds CCP had just received from the RHC.

In the course of an investigation into these contracts between RHC and CCP and between CCP and Caesar Development LLC, Special Agents of the FBI had occasion to interview defendant Moses regarding his knowledge of those contracts and payment of funds pursuant to them.

As alleged in the criminal complaint, during the course of those interviews Moses made the following materially false statements to the FBI:

• When asked how RHC learned of CCP, defendant Moses falsely stated that he could not recall specifically who brought CCP to the attention of the RHC, when in truth and in fact, defendant Moses knew that McFadden had brought CCP to his attention and to the attention of the RHC.

• When asked whether he knew if CCP had any subcontractors doing work under the RHC and CCP Contract, Moses stated that he was unaware of any sub-contractors that CCP utilized to execute the RHC and CCP Contract, when in truth and in fact, defendant Moses knew that McFadden and his company, Caesar Development LLC were allegedly performing work on behalf of CCP in connection with CCP’s contract with RHC.

• When told that Adam McFadden and his company received money from the RHC and CCP Contract, defendant Moses stated that he was surprised that McFadden and Caesar Development LLC received such money, when in truth and in fact, defendant Moses knew that McFadden and Caesar Development LLC, had received such money.

• When discussing a meeting held between CCP and the boards of the RHA and RHC on December 11, 2015, defendant Moses stated that he was surprised that McFadden was also at the meeting, when in truth and in fact, defendant Moses knew McFadden would be in attendance at such meeting.
 
The defendant made an initial appearance before U.S Magistrate Judge Payson and was released.

The complaint is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, and the Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent-in-Charge Brad Geary.

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.
 
# # # #

BOSTON – The founder and operator of a Swiss asset management firm has been indicted by a federal grand jury on charges of engaging in a massive global securities fraud scheme that netted trading proceeds of approximately $164 million.   

Roger Knox, 47, a citizen of the United Kingdom who resides in Switzerland, was indicted on one count of securities fraud and one count of conspiracy to commit securities fraud.  On Oct. 3, 2018, Knox was arrested and charged by criminal complaint.

Knox, together with others, operated a purported asset management firm based in Switzerland called Silverton, and later renamed Wintercap.  Knox allegedly helped facilitate pump-and-dump, and other market manipulation schemes, by selling massive quantities of microcap securities on behalf of “control groups” who secretly owned the stock through nominee shareholders and who simultaneously orchestrated promotional campaigns and other efforts to artificially inflate the price and trading volume of those shares.

It is further alleged that Knox then funneled the proceeds of the securities fraud—totaling an estimated $164 million over the last three years—to co-conspirators in the United States and elsewhere through a complex money transfer system that disguised the source and nature of the funds. 

The charge of securities fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $5 million. The charge of conspiracy to commit securities fraud provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or gross loss. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. The Securities and Exchange Commission’s Boston Regional Office provided assistance with the investigation. Assistant U.S. Attorney Eric Rosen of Lelling’s Securities and Financial Fraud Unit is prosecuting the case. 

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.