United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man and woman have been indicted by a federal grand jury for Incest.

Daniel Mexican, age 43, and Santana Mexican, age 25, were indicted on December 14, 2016.  They appeared before U.S. Magistrate Judge Mark A. Moreno on December 16, 2016, and pled not guilty to the Indictment.

The maximum penalty upon conviction is up to 5 years in custody 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 November 20, 2016, Daniel Mexican and Santana Mexican knowingly engaged in consensual sex with each other, when they are within the degrees of consanguinity which would render a marriage void.

The charge is merely an accusation and Daniel Mexican and Santana Mexican are presumed innocent until and unless proven guilty. 

The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services.  Assistant U.S. Attorney Jay Miller is prosecuting the case.   

Both Defendants were released on bond pending trial, which has been set for February 21, 2017.

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that JOHN O’BRIEN, 53, waived his right to be indicted and pleaded guilty yesterday in New Haven federal court to one count of wire fraud related to his stealing more than $824,000 from clients of his law practice.

According to court documents and statements made in court, O’BRIEN was an attorney with an office located in Fairfield.  Between approximately April 2011 and June 2014, O’BRIEN defrauded four clients by using funds from one client to pay off debts owed in connection with his representation of other clients, and also to pay for personal expenses, including the tuition for one of his children at a private high school.

In approximately May 2012, O’BRIEN accepted $458,343.06 into his Interest on Lawyer Trust Account (“IOLTA”) as proceeds of a reverse mortgage taken by a client (“Client 1”) and his client’s wife, both of whom are now deceased.  The funds from the reverse mortgage were intended to pay debts that would keep the client’s family business sustainable.  Between June 2012 and February 2014, O’BRIEN disbursed only $204,000 to the family business.  In approximately July 2013, O’BRIEN received an additional $194,636.89 from bank accounts held in the name of his client and one of his client’s children.  The funds were supposed to be distributed to the client’s children.  Only $104,008 was distributed.  In approximately April 2014, O’BRIEN accepted $837,250 into his IOLTA as proceeds of a sale of his client’s real property.  Only $470,000 of that amount was disbursed to his client’s heirs.  The first check written from O’BRIEN’s IOLTA account upon receipt of the $837,250 was to a prior unrelated client for a debt owed to that client.  In total, O’BRIEN defrauded Client 1 of $712,221.95.

In May 2011, O’BRIEN deposited $74,250 from a second client (“Client 2”) into his IOLTA.  The money was never disbursed to the client.

In approximately September 2011, O’BRIEN agreed to represent a terminally ill woman (“Client 3”) for estate planning.  Upon this client’s death in January 2013, O’BRIEN received $137,000 from the estate into his IOLTA.  After the deposit, O’BRIEN paid personal expenses from the IOLTA, including his son’s private school tuition and thousands of dollars to his ex-wife.  Only $112,283.20 was distributed to the heirs of O’ BRIEN’s client.  Upon a review of this matter by the Connecticut Bar Statewide Grievance Committee, O’BRIEN produced fraudulent memos allegedly written to the daughter of his client requesting “release” of various amounts.  One of the memos included payment to the family business of Client 1 for a $15,000 lawnmower, which was paid for from Client 3’s estate.  Client 3 did not purchase a lawnmower from the family business of Client 1. 

O’BRIEN represented a client (“Client 4”) in the purchase of the client’s deceased mother’s home in Westport.  In two payments in August 2013 and February 2014, the client transferred to O’BRIEN approximately $199,332 for purchase of the home, which O’BRIEN was supposed to pay to the fiduciary of the estate to complete the sale.  In approximately April 2014, O’BRIEN finally paid the fiduciary of the estate to complete the sale.  The check to the fiduciary of Client 4’s mother’s estate was the first check written from the defendant’s IOLTA upon receipt of the $837,250 in Client 1’s real estate sale proceeds.  Because of the delay in the defendant’s transfer of payment to the fiduciary of the estate, Client 4 incurred approximately $13,558.38 in storage fees for belongings while the property was unavailable for occupancy by Client 4.

While O’BRIEN was engaged in the above conduct, he made withdrawals of thousands of dollars in cash from his IOLTA.  On several occasions, deposits of the same or similar amounts were made into his personal bank account on the same day that the funds were withdrawn from his IOLTA.

O’BRIEN is scheduled to sentenced by Chief U.S. District Judge Janet C. Hall on March 23, 2017, at which time he faces a maximum term of imprisonment of 20 years, a fine of up to approximately $1.6 million, and restitution in the amount of $824,747.13.

O’BRIEN resigned from the Connecticut bar in June 2015.

This matter is being investigated by the U.S. Secret Service and the Connecticut Financial Crimes Task Force, with assistance from investigators of the Connecticut Statewide Bar Grievance Committee.  The case is being prosecuted by Assistant U.S. Attorney Sarala V. Nagala.

United States Attorney Randolph J. Seiler announced that a Mission, South Dakota, woman has been indicted by a federal grand jury for Possession with Intent to Distribute a Controlled Substance.

Yolanda Prue, age 31, was indicted on December 14, 2016.  She appeared before U.S. Magistrate Judge Mark A. Moreno on December 21, 2016, and pled not guilty to the Indictment.

The maximum penalty upon conviction is up to 20 years in custody and/or a $1,000,000 fine, at least 3 years of supervised release, and $100 to the Federal Crime Victims Fund.  Restitution may also be ordered.

The Indictment alleges that on May 3, 2016, Prue knowingly and intentionally possessed with intent to distribute methamphetamine in South  Dakota.

The charge is merely an accusation and Prue 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 Meghan N. Dilges is prosecuting the case.   

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

United States Attorney Randolph J. Seiler announced that a Blunt, South Dakota, man has been indicted by a federal grand jury for two counts of Felon in Possession of a Firearm and Ammunition.

Robert Dwayne Spaid, age 60, was indicted on December 13, 2016.  He appeared before U.S. Magistrate Judge Mark A. Moreno on December 21, 2016, and pled not guilty to the Indictment.

The maximum penalty upon conviction is up to 10 years in custody 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 or about October 27, 2016, Spaid, having previously been convicted of a felony, did knowingly possess a firearm.  The Indictment further alleges that on or about November 23, 2016, Spaid knowingly possessed ammunition.

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

The investigation is being conducted by the Hughes County Sheriff’s Office and the U.S. Marshals Service.  Assistant U.S. Attorney Kirk Albertson is prosecuting the case.   

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

WHEELING, WEST VIRGINIA – The United States Attorney’s Office collected $3,149,500 in criminal and civil actions in fiscal year 2016, U.S. Attorney William J. Ihlenfeld, II, announced today.

According to Ihlenfeld, $1,001,768 was collected in criminal actions and $2,147,731 was collected in civil actions, and his office worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $155,650.00 in cases pursued jointly with those offices.
 
U.S. Attorneys’ Offices throughout the country are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
 
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

LEXINGTON, Ky. —  U.S. Attorney Kerry B. Harvey announced today that his office collected more than $15,765,000 in Fiscal Year 2016.  Of this amount, more than $8,214,000 was collected in criminal actions and more than $7,551,000 was collected in civil actions.  

In addition to funds collected solely by the United States attorney’s Office for the Eastern District of Kentucky, Harvey’s office worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect $3,353,000 in cases pursued jointly with those offices.  Of this amount, $2,370,500 was collected in criminal actions and more than $982,000 was collected in civil actions.  Federal FY 2016 ran from October 1, 2015 to September 30, 2016.  

“Federal law enforcement in the Eastern District of Kentucky is a wise investment for the taxpayers,” said Harvey.  “Our top priority will always be to enforce the laws which keep Americans safe.  We are pleased, however, that our efforts also enhance and protect the public treasury, while securing restitution for crime victims.  Last year, we recovered an amount representing more than twice our office’s annual budget in fines, forfeitures, and restitution.  We will continue to work hard every day to be good stewards of the resources allocated for our use.”       

Attorney General Loretta E. Lynch announced earlier this month that the U.S. Department of Justice collected nearly $15.4 billion in civil and criminal actions in FY 2016.  This amount represents more than five times the 2016 appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the litigating divisions of the Justice Department, combined.

“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch.  “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment.  I want to thank the prosecutors and trial attorneys who made this year’s collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs. 

The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

In addition to these collections, the U.S. Attorney’s Office for the Eastern District of Kentucky, working with partner agencies and divisions, also collected more than $12,356,000 in asset forfeiture actions in FY 2016.  Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

A Waterloo woman who possessed heroin with intent to distribute near Morris Park in Waterloo, Iowa, was sentenced yesterday to 21 months in federal prison.

Michelle Hanson, age 28, from Waterloo, Iowa, received the prison term after an October 3, 2016, guilty plea to possession with intent to distribute heroin and fentanyl near Morris Park in Waterloo, Iowa on March 2, 2016.

At the guilty plea, Hanson admitted she sold heroin and fentanyl out of her Waterloo home, which was located near Morris Park.  A search of her home by the Tri-County Drug Enforcement Task Force resulted in the seizure of over 12 grams of heroin and six patches containing fentanyl. 

Hanson was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade.  Hanson was sentenced to 21 months’ imprisonment and a special assessment of $100 was imposed.  She must also serve a 6-year term of supervised release after the prison term.  There is no parole in the federal system.  Hanson is being held in the United States Marshal’s custody until she can be transported to a federal prison.

The case was prosecuted by Assistant United States Attorney Patrick J. Reinert and was investigated as part of the National Heroin Initiative of the Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice through a cooperative effort of Tri-County Drug Task Force, which is comprised of the Waterloo Police Department, Black Hawk County Sheriff’s Office, Cedar Falls Police Department, LaPorte City Police Department, Hudson Police Department, Evansdale Police Department, University of Northern Iowa Police Department, Waverly Police Department and the Bremer County Sheriff’s Office. 

Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. 

The case file number is 16-CR-2036.  Follow us on Twitter @USAO_NDIA.

Two felons from Dubuque, who stole firearms in a burglary in March 2016, were each sentenced last week to federal prison.  Arthur Robledo, age 25, received a 57 month sentence after his June 30, 2016, guilty plea to one count of possession of firearms by a felon.  His co-defendant, Adam Becker, also 25 years old, received a 71 month sentence after a July 5, 2016, guilty plea to the same crime.  Robledo and Becker were sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade.  In their respective plea agreements, and at sentencing hearings, Robledo and Becker each admitted they stole firearms in a burglary in Dubuque, Iowa, on March 29, 2016.

Chief Judge Reade found Robledo was affiliated with the “Latin Kings” gang, posed a danger to the community, and was at a high risk to recidivate.  At his sentencing hearing, Chief Judge Reade also found that, on the night of Christmas 2014, following an incident at a local bar, Robledo was intoxicated and acted in a “totally outrageous” manner by attempting to bite an East Dubuque, Illinois police officer, trying to spit blood on an officer, and threatening to have a number of law enforcement officers and their families beheaded.  In the 2014 incident, Robledo bragged that his family were members of the Los Zetas Mexican drug cartel and referenced the well-publicized assassinations of police officers in another state.  Chief Judge Reade observed Robledo’s criminal activity was “escalating”, as the 2016 burglary followed the 2014 incident and another burglary conviction in Iowa.

Chief Judge Reade found Becker had a “very concerning criminal history”, which included multiple burglary convictions involving firearms.  Judge Reade characterized Becker as a “serial burglar” at “extremely high risk to recidivate.”  She indicated Becker had committed “the same offense over and over again” yet had received leniency in state court.

A special assessment of $100 was imposed in each case.  Robledo and Becker must also each serve a three-year term of supervised release after the prison term.  There is no parole in the federal system.

Robledo and Becker are being held in the United States Marshal’s custody until they can be transported to a federal prison.

The case was prosecuted by Assistant United States Attorneys Tim Vavricek and Lisa Williams and investigated by the Dubuque Police Department. 

Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. 

The case file number is 16-CR-1015-LRR.

Follow us on Twitter @USAO_NDIA.

TRENTON, N.J. – A Mercer County, New Jersey, man was sentenced today to 135 months in prison for distributing images of child sexual abuse from his home computer, U.S. Attorney Paul J. Fishman announced.

Shawn Brown, 35, of Ewing, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to one count of a three-count an indictment charging him with distributing child pornography over the Internet. Judge Thompson imposed the sentence today in Trenton federal court.

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

Brown admitted that on July 14, 2013, he distributed a video depicting child sexual abuse on the Internet to another individual via instant messaging software. Authorities were first alerted to Brown’s conduct when an undercover agent discovered and downloaded images and videos containing child pornography that Brown had made available to users of a peer-to-peer file sharing network. Law enforcement traced the username and IP address of the sharer back to Brown’s residence. A review of Brown’s electronic devices, seized pursuant to a search warrant, revealed that Brown had been using aliases to contact underage girls online via instant messaging software and social media, where he had created a fake profile posing as a teenage boy.

In addition to the prison term, Judge Thompson sentenced Brown to lifetime supervised release.

U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Molly Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.

Defense counsel: Lisa Van Hoeck Esq., Assistant Federal Public Defender, Trenton

LEXINGTON, Ky.– Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, has announced his resignation, effective Friday, January 13, 2017.  U.S. Attorney Harvey has served in office since May 14, 2010.

“The opportunity to serve as United States Attorney for the Eastern District of Kentucky has been a distinct honor,” United States Attorney Harvey said today.  “I will be forever grateful for the trust placed in me by President Obama and the opportunity to serve in the Department of Justice during such consequential times.  I am inspired by the tremendous work of the state, local and federal law enforcement communities with which I have served, and I will always treasure the chance to work alongside the exceptional staff of the United States Attorney’s Office for the Eastern District of Kentucky.  We have accomplished a great deal together, and their commitment to the cause of justice will continue.”

“As United States Attorney for the Eastern District of Kentucky since 2010, Kerry Harvey has been an indispensable partner in our work to build a stronger and safer nation for all Americans," said Attorney General Loretta E. Lynch. "Under Kerry's leadership, his office has played a crucial role in the Justice Department's initiatives to prosecute fraud, corruption, and white-collar crime.  And he has been a visionary leader in our work to end the devastating opioid epidemic, joining with state and local authorities to hold accountable those who illegally distribute heroin, prescription drugs, and other substances that ravage our communities.  Kerry's work with the families of those who have fallen victim to this epidemic has given voice to those who have suffered and helped to steer countless others way from the same path.  His efforts are in the highest traditions of the Department of Justice.  I want to thank Kerry for his tireless efforts on behalf of the American people over the last seven years, and I wish him the very best as he begins the next chapter of his distinguished career."

Harvey’s efforts include serving on the National Heroin Task Force; serving three years on the Attorney General’s Advisory Committee (AGAC), a select group appointed by the Attorney General to serve as advisors to the Attorney General and as the voice for all United States Attorneys nationwide; serving as Co-Chairman of the AGAC’s Healthcare Fraud Working Group; establishing the highly successful U.S. Attorney’s Heroin Education Action Team (“USA HEAT”), an initiative to increase public awareness of the opioid epidemic in Kentucky; achieving landmark criminal convictions and civil recoveries for fraudulent healthcare practices; prosecuting significant public corruption cases; and prosecuting large-scale drug trafficking organizations.  Under Harvey’s leadership, his office has become a national leader in federal prosecution of drug-overdose cases.  His time in office has seen significant change – twenty-one of the forty-four Assistant United States Attorneys allocated to the office have been hired under Harvey’s leadership.

Signature achievements under Harvey’s leadership include:

Securing a number of public-corruption convictions against former state and local officials, including Richie Farmer, former Kentucky Commissioner of Agriculture; Timothy Longmeyer, former Secretary of the Commonwealth of Kentucky’s Personnel Cabinet and former Deputy Attorney General of Kentucky; Timothy Conley, former County Judge -Executive of Morgan County; Keith Hall, former member of the Kentucky House of Representatives; Robert Porter, former Mayor of Paintsville; Arch Turner, former superintendent of the Breathitt County Public Schools, and Tim Fegan, former Director of the Buffalo Trace Narcotics Task Force;

Securing landmark civil recoveries under the False Claims Act against two hospitals – $40.9 million from King’s Daughters Medical Center in Ashland and $16.5 million from Saint Joseph’s Hospital in London – to settle allegations of unnecessary cardiac procedures; and securing the criminal convictions of Dr. Richard Paulus and Dr. Sandesh Patil for their roles in performing unnecessary cardiac procedures;

Securing a $15.75 million civil recovery against an addiction treatment center (“SelfRefind”), a clinical laboratory (“PremierTox”), and two physician owners to resolve allegations that they fraudulently billed federal healthcare programs for medically unnecessary and excessive urine screens;

Securing a $16 million civil judgment against Nurses’ Registry Home Health Corporation and the estate of its former owner Lennie House, resolving allegations of widespread healthcare fraud;

Collecting more than $182 million on behalf of taxpayers during 2014 alone, an amount that represents the highest annual recovery in the Office’s history and more than twenty times the Office’s annual budget;

Securing criminal convictions of numerous pain clinic owners, pharmacists, doctors, and other health care professionals for the illegal distribution of prescription pain medication and other controlled substances, including pain-clinic owners William Singleton, Joel Shumrack and Michael Leman, pharmacist Charles Terry Tenhet, and Dr. James “Ace” Chaney;

             Securing the criminal conviction of Lexington attorney Bryan Coffman and his co-defendant Gary Milby on charges relating to a fraudulent $36-million-dollar oil-and-gas investment scheme;

             Developing an Overdose Prosecution Initiative to combat Kentucky’s opioid epidemic.  The Initiative employs significant federal penalties for drug trafficking that results in death or serious bodily injury.  It has resulted in dozens of prosecutions involving overdoses and has become a national model for other U.S. Attorney’s Offices; and

Creating the Office’s Civil Rights Program to prosecute criminal and civil violations of federal civil rights law, including prosecution of the first case in the nation charged under the Shepard-Byrd Hate Crimes Act.

As of January 14, 2017, Carlton S. Shier, IV, will assume leadership of the Office as Acting United States Attorney.  Shier has been the First Assistant United States Attorney since April of 2013 and has been with the Department of Justice since 2010.

Roanoke, VIRGINIA – United States Attorney John P. Fishwick Jr. announced the sentencing of a local man on a federal drug charge.

Herbert Lee Childs, of Roanoke, Va., previously pled guilty to one count of distribution of cocaine. Today in District Court, Childs was sentenced to 151 months in federal prison.   

“Keeping our communities free of illegal drugs in the first step to allowing residents to lead safer, more productive lives,” United States Attorney Fishwick said today.

According to evidence presented at previous hearings by Assistant United States Attorney Andrew Bassford, Childs previously sold cocaine to a police informant out of his Roanoke apartment.

The investigation of the case was conducted by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Roanoke City Police Department.  Assistant United States Attorney Andrew Bassford prosecuted the case for the United States.

Deirdre M. Daly, United States Attorney for the District of Connecticut, and Joel P. Garland, Special Agent in Charge of IRS Criminal Investigation in New England, announced that on December 7, 2016, a federal grand jury in New Haven returned an indictment charging REGAN TIPPETT, 41, of East Lyme, with filing false tax returns. 

According to the indictment and statements made in court, TIPPETT is a partner in the bails bonds company, Statewide Bail Bonds.  It is alleged that, for the 2009 through 2012 tax years, TIPPETT failed to report approximately $260,000 in taxable income that was derived from bail bond fees.

The indictment charges TIPPETT with four counts of filing a false tax return, an offense that carries a maximum term of imprisonment three years on each count.

TIPPETT appeared today before U.S. Magistrate Judge Sarah A. L. Merriam in New Haven and pleaded not guilty to the charges.  He was released on a $50,000 bond.

U.S. Attorney Daly stressed that an indictment is not evidence of guilt.  Charges are only allegations and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter has been investigated by the Internal Revenue Service, Criminal Investigation Division.  The case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.

Contact: Andrew McCormack
Assistant United States Attorney
Tel: (207) 945-0373

Bangor, Maine:  United States Attorney Thomas E. Delahanty II announced that Charles Roberson, 44, of Hermon, Maine, was sentenced today in U.S District Court by Judge John A. Woodcock, Jr. to five years probation for Failure to Register as a Sex Offender.  The defendant pled guilty to the charge on July 21, 2016.

According to court records, in 2004, Roberson was convicted in Minnesota of Criminal Sexual Conduct in the First Degree.  This felony conviction made Roberson a lifetime sex offender registrant.  In or about the fall of 2015, Roberson moved from Minnesota and began living and working in Hermon, Maine.  He did not notify the Minnesota Predatory Offender Registration unit that he was moving.  Further, up until his arrest on February 23, 2016, he made no attempt to register with the Maine State Police Sex Offender Registry.

The case was investigated by the United States Marshals Service.

Harrisonburg, VIRGINIA – A federal grand jury, sitting in the United States District Court for the Western District of Virginia in Harrisonburg, has charged a Winchester man with a federal drug conspiracy charge, United States Attorney John P. Fishwick Jr. announced today.

Joshua Dillon Burkhart, 26, of Winchester, Va., was charged today in an indictment returned in the United States District Court in Harrisonburg with one count of conspiring with others to distribute and possess with the intent to distribute 1,000 grams or more of heroin and to distribute and possess with the intent to distribute cocaine.

The investigation of the case was conducted by Drug Enforcement Administration and the Northwest Virginia Regional Drug and Gang Task Force, which is comprised of the Virginia State Police, the Winchester Police Department, the Front Royal Police Department, the Strasburg Police Department, the Frederick County Sheriff’s Office, the Page County Sheriff’s Office, the Warren County Sheriff’s Office, the Shenandoah County Sheriff’s Office and the Clarke County Sheriff’s Office. Assistant United States Attorney Erin M. Kulpa will prosecute the case for the United States.

A Boardman man was charged in federal court with defrauding investors out of nearly $1.2 million and related tax violations, said Carole S. Rendon, U.S. Attorney for the Northern District of Ohio, Stephen D. Anthony, Special Agent in Charge of the FBI and Troy Stemen, Acting Special Agent in Charge of the IRS’s Cincinnati Field Office.

George N. Krinos was charged in a two-count criminal information with engaging in a securities fraud scheme and willfully failing to collect and pay taxes for his employees. 

The information alleges that Krinos, through his various companies known as Krinos Holdings, engaged in a securities fraud scheme in which he sold through false and deceptive practices securities to numerous victims in the Northern District of Ohio.  These securities consisted of debenture notes and private placement memoranda that were not properly registered with the Securities and Exchange Commission.  Because the securities were not registered with and therefore subject to greater scrutiny by the SEC, Krinos was limited to selling them to “accredited investors” who were generally individuals having a net worth in excess of $1 million or who met specific, high-dollar income thresholds. 

The information alleges that from 2011 through 2014, Krinos sold these unregistered securities to at least 10 investors in Ohio, causing them financial losses.  Krinos sold the securities under the pretense that his investors’ funds would be used for legitimate business purposes, including to provide venture capital to various client companies seeking funding from Krinos Holdings.  Rather than use these funds for their intended uses, Krinos instead used the money for personal expenses and to engage in unauthorized foreign currency transactions.  To entice his victims, Krinos made promises that their initial investments of $.10 per share would rise in value to as much as $5 or $6 per share.   Krinos also falsely told investors and others that he managed approximately $600 million in an investment account when he in fact had only $5 in the account. 

The information further alleges that Krinos submitted falsified letters and statements to reflect high balances in his accounts.  Krinos also falsely told investors that they were making high returns on their investments and that his relationships with the client companies was on good terms.  Contrary to his representations to his investors, Krinos actually used their funds on for his own personal use at restaurants, bars, casinos, adult entertainment clubs and hotels.  Rather than disclose these personal expenses, Krinos later characterized them as “sales and marketing” costs in a budget given to his shareholders at a meeting in Boardman, in 2013.

Over the course of his securities fraud scheme, Krinos caused more than ten victims to lose nearly $1.2 million.   

The information also alleges that, in addition to the securities fraud scheme, Krinos improperly withheld taxes, including federal income taxes and Federal Insurance Contribution Act taxes from his employees without paying over those taxes to the IRS.  Over the course of approximately two years, Krinos improperly withheld and kept approximately $91,495 of his employees’ tax contributions from the IRS. 

“This defendant lied to investors as means to funding a lavish lifestyle for himself,” Rendon said.

“Krinos’ victims extend not only include those who entrusted their financial assets to Mr. Krinos, but his employees and the taxpayers whose payroll taxes were squandered to further his personal gain,” Stemen said. “IRS-Criminal Investigation will continue devote our investigative resources to ensure honesty and integrity in the financial and tax systems and hold those accountable who threaten them.”   

If convicted, the defendant’s sentence will be determined by the court after review of the factors unique to this case, including the defendant’s prior criminal record, the defendant’s role in the offense and the characteristics of the criminal conduct.  In all cases, the sentence will not excess the statutory maximum and in most cases it will be less than the maximum. 

This case is being prosecuted by Assistant U.S. Attorneys Om Kakani and Robert J. Patton, following an investigation by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigations.

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

ABINGDON, VIRGINIA – Five more defendants who were part of a conspiracy that trafficked methamphetamine in and around Virginia and Kentucky, were sentenced today in the United States District Court for the Western District of Virginia in Abingdon, United States Attorney John P. Fishwick Jr. announced.

Robert Holman, 35, of Winder, Georgia, previously pled guilty to one count of conspiracy to possess with the intent to distribute and distribute methamphetamine. Today in District Court, Holman was sentenced to 100 months in federal prison.  

Billy Ray Marlow, 43, of Middlesboro, Kentucky, previously pled guilty to one count of conspiring to possess with the intent to distribute and distribute methamphetamine. Today in District Court, Marlow was sentenced to 216 months in federal prison.

Jeremy Reden, 38, of Tazewell, Va, previously pled guilty to one count of conspiring to possess with the intent to distribute and distribute methamphetamine and one count of possessing a firearm in furtherance of a drug trafficking crime. Today in District Court. Reden was sentenced to 188 months in federal prison.

Rebeca Metcalf, 32, of Middlesboro, Kentucky, previously pled guilty to one count of conspiring to possess with the intent to distribute and distribute methamphetamine. Today in District Court, Metcalf was sentenced to 27 months in federal prison.  

Kaelea Meagan Thomas V, 27, of Middlesboro, Kentucky, previously pled guilty to one count of possessing and using a firearm in furtherance of a drug trafficking crime. Today in District Court, Thomas was sentenced to 36 months in federal prison.  

“These defendants, and the others they conspired with to bring methamphetamine into Southwest Virginia and Kentucky, will be held accountable for their actions,” United States Attorney Fishwick said today. “We will continue to work with our federal, state and local law enforcement partners to stop the flow of this dangerous drug into our communities.”

Along with the five individuals sentenced today, a total of 15 defendants have been charged with being part of the conspiracy, three of which have already been sentenced to federal prison terms. Tracie Cartwright was previously sentenced to 188 months in federal prison for her role in the conspiracy, Amanda Szemac was sentenced to 12 months and one day in prison for her role in the conspiracy and Curtis Howerton was sentenced to 57 months in federal prison for his role in the conspiracy.

Several other defendants previously convicted as part of the conspiracy will be sentenced later this week in federal court in Abingdon.                                                                                                         

The investigation of the case was conducted by the Bell County, Kentucky Sheriff’s Office, the Middlesboro, Kentucky Police Department, the Lee County Virginia Sheriff’s Office and Bureau of Alcohol, Tobacco, Firearms and Explosives Bristol and Atlanta Field Divisions. Assistant United States Attorney Zachary T. Lee prosecuted the case for the United States.

A Waterloo woman who possessed heroin with intent to distribute near Morris Park in Waterloo, Iowa, was sentenced yesterday to 21 months in federal prison.

Michelle Hanson, age 28, from Waterloo, Iowa, received the prison term after an October 3, 2016, guilty plea to possession with intent to distribute heroin and fentanyl near Morris Park in Waterloo, Iowa on March 2, 2016.

At the guilty plea, Hanson admitted she sold heroin and fentanyl out of her Waterloo home, which was located near Morris Park.  A search of her home by the Tri-County Drug Enforcement Task Force resulted in the seizure of over 12 grams of heroin and six patches containing fentanyl. 

Hanson was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade.  Hanson was sentenced to 21 months’ imprisonment and a special assessment of $100 was imposed.  She must also serve a 6-year term of supervised release after the prison term.  There is no parole in the federal system.  Hanson is being held in the United States Marshal’s custody until she can be transported to a federal prison.

The case was prosecuted by Assistant United States Attorney Patrick J. Reinert and was investigated as part of the National Heroin Initiative of the Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice through a cooperative effort of Tri-County Drug Task Force, which is comprised of the Waterloo Police Department, Black Hawk County Sheriff’s Office, Cedar Falls Police Department, LaPorte City Police Department, Hudson Police Department, Evansdale Police Department, University of Northern Iowa Police Department, Waverly Police Department and the Bremer County Sheriff’s Office. 

Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. 

The case file number is 16-CR-2036.  Follow us on Twitter @USAO_NDIA.

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a St. Joseph, Mo., man pleaded guilty in federal court today to robbing UMB Bank.

Terry L. Hager, 49, of St. Joseph, pleaded guilty before U.S. District Judge Fernando J. Gaitan to the charge contained in a May 19, 2016, federal indictment.

By pleading guilty today, Hager admitted that he stole $13,957 from UMB Bank, 1211 N. Belt Hwy., St. Joseph, on March 5, 2016.

Under federal statutes, Hager is subject to a sentence of up to 20 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Alison D. Dunning. It was investigated by the St. Joseph, Mo., Police Department and the FBI.

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that the John Dempsey Hospital, which is a part of the University of Connecticut Health Center, has entered into a voluntary resolution agreement with the U.S. Attorney’s Office for the District of Connecticut and the U.S. Department of Health and Human Services, Office for Civil Rights (OCR), to ensure effective communication with, and enhance the quality of services for, persons who are deaf or hard of hearing.

This matter was initiated by a complaint filed with the Department of Justice (DOJ) by Connecticut’s Office of Protection and Advocacy for Persons with Disabilities alleging violations of Title II of the Americans with Disabilities Act (ADA).  Specifically, the complaint alleges that an individual who is deaf and communicates using American Sign Language (ASL) was discriminated against and denied an interpreter when John Dempsey Hospital failed to timely provide auxiliary aids and services during an Emergency Department visit for medical treatment.  According to the complainant, she was forced to rely on her boyfriend’s limited ability to interpret her symptoms during the medical examination because her request for an ASL interpreter was denied by hospital staff.  Within two days after discharge, the complainant’s symptoms had escalated, and she ultimately had an emergency appendectomy at another hospital because her appendix had burst. 

Title II of the ADA prohibits public entities, including hospitals, from discrimination against qualified individuals with disabilities by excluding such individuals from participation in or denying them the benefits of the services, programs, or activities of a public entity, or subjecting them to discrimination by any public entity.  A public entity is required to furnish appropriate auxiliary aids and services where necessary to afford individuals with disabilities, including applicants, participants, companions, and members of the public, an equal opportunity to participate in, and enjoy the benefits of, a service, program, or activity of a public entity.  The U.S. Attorney’s Office investigates allegations of violations of the ADA and commences enforcement action as and when appropriate.

In coordination with DOJ, HHS-OCR initiated a compliance review of John Dempsey Hospital with regard to the Hospital’s policies and procedures for ensuring effective communication with individuals who are deaf or hard of hearing to determine the Hospital’s compliance with Section 504 of the Rehabilitation Act of 1973.  Section 504 of the Act prohibits discrimination on the basis of disability in any program or activity receiving federal financial assistance.  The investigation raised concerns about the Hospital’s policies and procedures to ensure effective communication with deaf or hard of hearing individuals.

Under the agreement, which resolves both the DOJ complaint investigation and the HHS-OCR compliance review, John Dempsey Hospital is obligated to take critical steps toward improving access to ensure communication with deaf and hard of hearing individuals is as effective as communication with those without disabilities, including revising its policies and procedures, revising its training, and performing initial and ongoing assessments of the need for auxiliary aids and services for patients and their companions who are deaf or hard of hearing.

John Dempsey Hospital also has agreed to pay the complainant $20,000 to resolve the matter.

The agreement is effective for two years, during which time both HHS-OCR and the U.S. Attorney’s Office will monitor the Hospital’s compliance.

“An important component of our federal law enforcement responsibilities is the protection of vulnerable communities, especially people struggling with disabilities,” said U.S. Attorney Daly.  “Enforcement of the ADA is one of many tools we use to help achieve that goal.  We are gratified with the number of ADA settlements that we have reached with public and private entities in Connecticut, and applaud the level of cooperation that these entities have demonstrated.  UConn Heath Center, in particular, has already implemented a number of changes at John Dempsey Hospital that will benefit not only individuals who are deaf and hard of hearing, but others with a broad range of disabilities, and ultimately all hospital patrons and companions.”

A copy of the voluntary resolution agreement may be found at: www.ada.gov/jdh_sa.html.

This matter was handled by Assistant U.S. Attorney Vanessa Roberts Avery.

To learn more about the ADA and its application to public entities, places of public accommodation and commercial facilities, call the Justice Department’s toll-free ADA information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.

HOUSTON – A 33-year-old resident of the Bronx, New York, has been ordered to federal prison following his convictions of wire and mail fraud, announced U.S. Attorney Kenneth Magidson. A federal jury convicted Christopher Donrick Daley Sept. 21, 2016, following a  two-day trial.

Today, U.S. District Judge Lynn Hughes, who presided over the trial, handed Daley a total sentence of 120 months in prison. He was further ordered to pay restitution in the amount of $614,950 and will serve three years of supervised release following completion of the prison term. In handing down the sentence, the court noted that Daley tried to appear as a family man when he ate with his victims. “You actually sat down with their children when you knew you were stealing them blind,” Hughes said.

Daley devised a scheme to defraud investors by falsely representing he operated a commodity pool which invested in oil futures contracts which would pay investors return of at least 20% per month and had never had a losing month. The evidence at trial showed that Daley received more than $1.4 million in investor funds, but he only invested approximately $195,000.

Daley lost all the investors funds he did invest.

The evidence also proved that Daley emailed monthly statements to his investors showing significant monthly returns when there were none. Daley also used money from the investor funds to purchase a new BMW and Range Rover.

Judge Hughes ordered Daley into custody immediately after the verdict was returned where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI conducted the investigation. Assistant U.S. Attorneys John Braddock and Charles Escher prosecuted the case.