Gulfport, Miss. – Raphael Donzell Johnson, Jr., 40, of Moss Point, pled guilty yesterday before Senior U.S. District Judge Louis Guirola, Jr. to possession with intent to distribute heroin and methamphetamine, announced U.S. Attorney Mike Hurst and Special Agent in Charge Michelle Sutphin with the Federal Bureau of Investigation in Mississippi.

Johnson will be sentenced by Judge Guirola on April 29, 2020 at 10:30 a.m.  He faces a maximum penalty of 20 years in prison and up to $1,000,000 in fines.  

In May 2019, an individual made two purchases of heroin and methamphetamine from Johnson.  In June, agents executed a search warrant on his Moss Point residence where they found over 400 grams of heroin, methamphetamine and two firearms. 

The Mississippi Bureau of Narcotics and the Federal Bureau of Investigation investigated the case.  It is being prosecuted by Assistant United States Attorney Annette Williams.

CLARKSBURG, WEST VIRGINIA – Dr. Parth Bharill, a Pittsburgh and Morgantown physician, was sentenced today to five years probation, with the first six months on home confinement, for a drug charge, U.S. Attorney Bill Powell announced.

Bharill, age 61, of Pittsburgh, Pennsylvania, pled guilty to one count of “Conspiracy to Distribute Controlled Substances Outside the Bounds of Professional Medical Practice” in September 2019. Bharill admitted to working with the Redirections Treatment Advocates, LLC, of Morgantown, West Virginia, to write illegitimate prescriptions for suboxone. The crime occurred from November 2014 to January 2018 in Monongalia County, West Virginia.

Bharill was ordered to pay a $50,000 fine, as well as $23,076.95 in restitution. The judge also imposed an order of forfeiture of $12,312.

Assistant U.S. Attorney Sarah E. Wagner prosecuted the case on behalf of the government. The Drug Enforcement Administration, the Federal Bureau of Investigation, and the Inspector General at the U.S Department of Health and Human Services investigated.

U.S. District Judge Thomas S. Kleeh presided.

CLARKSBURG, WEST VIRGINIA – Andrew Parker, of Mannington, West Virginia, was sentenced today to five years probation, with the first 180 days on home confinement, for his involvement in a cocaine and heroin distribution operation, U.S. Attorney Bill Powell announced.
 
Parker, age 31, pled guilty to one count of “Aiding and Abetting in the Distribution of Cocaine Base” in September 2019. Parker admitted to selling cocaine base, also known as “crack,” in April 2018 in Monongalia County.

Assistant U.S. Attorney Zelda E. Wesley prosecuted the case on behalf of the government. The Mon Metro Drug & Violent Crimes Task Force, a HIDTA-funded initiative, and the West Virginia State Police investigated.

U.S. District Judge Thomas S. Kleeh presided.

WHEELING, WEST VIRGINIA – Shawn Andrew Hunt, of Weston, West Virginia, was sentenced today to 24 months incarceration for methamphetamine distribution, U.S. Attorney Bill Powell announced.

Hunt, age 27, pled guilty to one count of “Possession with Intent to Distribute Methamphetamine” in December 2019. Hunt admitted to distributing methamphetamine in Marshall County in February 2019. 

Assistant U.S. Attorney Danae DeMasi-Lemon prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Moundsville Police Department investigated.

U.S. District Judge John Preston Bailey presided.

WHEELING, WEST VIRGINIA – Kirk Grubler, of Wheeling, West Virginia, was sentenced today to 24 months incarceration for possessing child pornography, U.S. Attorney Bill Powell announced.

Grubler, age 37, pled guilty to one count of “Possession of Child Pornography” in March 2019. Grubler admitted to having images of child pornography depicting a child under the age of 12 in April 2017 in Ohio County.

Assistant U.S. Attorney Stephen L. Vogrin prosecuted the case on behalf of the government. The U.S. Department of Homeland Security Investigations investigated.

U.S. District Judge John Preston Bailey presided.

Matthew D. Krueger, U.S. Attorney for the Eastern District of Wisconsin, announced that on January 30, 2020, Clint J. Blaha (age: 37), of Two Rivers, Wisconsin, was sentenced to 15 years’ incarceration to be followed by ten years of supervised release for possessing with the intent to distribute over 50 grams of actual methamphetamine, in violation of Title 21, United States Code, Section 841(a) and (b)(1)(A),.

According to court documents, in May 2019, the Manitowoc County MEG Unit began investigating Blaha for suspected distribution of methamphetamine.  They monitored interstate wire transfers and surveilled Blaha’s travel to known drug distribution areas.  In July 2019, they initiated a traffic stop for the purpose of arresting Blaha.  During that traffic stop they recovered 77.5 grams of methamphetamine.  They obtained a search warrant for Blaha’s residence where they recovered an additional 1.25 pounds of actual (“crystal”) methamphetamine packaged for distribution.  

In pronouncing sentence, Senior District Judge William C. Griesbach noted the serious nature of Blaha’s offense and the need to send a strong message of deterrence to Blaha and anyone else who might attempt to distribute drugs in Northeast Wisconsin.            

The case was investigated by the Manitowoc County Metropolitan Enforcement Group with the assistance of the Manitowoc County Sheriff’s Office.  It was prosecuted by Assistant United States Attorney Daniel R. Humble.

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CHARLOTTE, N.C. – Late yesterday, U.S. District Judge Max O. Cogburn Jr. sentenced Garlin Raymond Farris, 57, of Mathews, N.C. to 288 months in prison and five years of supervised release for trafficking large amounts of methamphetamine, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.

Vincent C. Pallozzi, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, joins U.S. Attorney Murray in making today’s announcement.

According to court documents and today’s sentencing hearing, from 2016 through the summer of 2017, Farris trafficked significant amounts of methamphetamine throughout Western North Carolina. Court records show that Farris supervised a network of distributors, who sold his drugs throughout Mecklenburg, Watauga, Catawba, and Alexander Counties. Farris and his distributors made frequent trips to supply sources located in Atlanta, Georgia.  During those trips, Farris personally picked up at least 50 kilograms of methamphetamine and then brought the drugs back into North Carolina for distribution.

In April 2019, a federal jury convicted Farris of conspiracy to traffic methamphetamine.  He is currently in custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

In making today’s announcement, U.S. Attorney Murray thanked the ATF for handling the investigation.

Assistant U.S. Attorney Erik Lindahl, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

Jackson, TN – Jerome Lavell McBride, 39, has been sentenced to 188 months in federal prison for being a felon in possession of a firearm. U.S. Attorney D. Michael Dunavant announced the guilty plea today.

According to information presented in court, on December 12, 2017, as a law enforcement officer was traveling northbound on Highway 45W in his undercover vehicle when a crown Victoria passed him at a high rate of speed of approximately 70 mph in a 55 mph zone, so he initiated a traffic stop.

During the traffic stop, the agent observed a plastic baggy containing marijuana hanging out of the defendant’s pocket. A subsequent search of the vehicle produced a Lorcin .380 caliber pistol along with 15 individually wrapped bags of marijuana and $494.

The defendant has previously been convicted of 2nd degree robbery (KY), 2nd degree burglary (KY), second degree assault (KY), reckless endangerment with a deadly weapon, and aggravated assault. Because of these previous violent felony convictions, McBride was determined to be an armed career criminal under the federal sentencing guidelines, and subject to a mandatory minimum sentence of 180 months.

On January 30, 2020, Senior U.S. District Court Judge J. Daniel Breen sentenced McBride to 188 months in federal prison followed by 4 years supervised release.

U.S. Attorney D. Michael Dunavant said, "Convicted felons who possess firearms are an inherent danger to community, and in this case, the defendant was an armed career criminal who continued to possess a firearm despite his prior violent felony conviction history. There is and ought to be a significant consequence for such recidivist criminal behavior, and this is one more gun-toter removed from our streets for a very long time."

The Bureau of Alcohol, Tobacco, Firearms and Explosives and the West Tennessee Violent Crime and Drug Task Force investigated this case.

Assistant U.S. Attorney Hillary Lawler Parham prosecuted this case on behalf of the government.

MIAMI - On January 28, 2020, Tomas Vale Valdivia, 45, a Cuban national who was living in Isla Mujeres, Mexico, was sentenced to 57 months in prison by U.S. District Kathleen M. Williams in Miami, Florida for his participation in a for-profit alien smuggling conspiracy that transported Cuban nationals to Mexico and then into the United States. 

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Anthony Salisbury, Special Agent in Charge of the U.S. Immigration and Customs Enforcement’s, Homeland Security Investigations (ICE-HSI) Miami Field Office, and George L. Piro, Special Agent in Charge of the FBI’s Miami Field Office made the announcement.

According to the court record, including the agreed upon factual proffer and evidence presented during the sentencing hearing, beginning at least as early as October 2013, and continuing through at least July 2018, a group of individuals, including Vale Valdivia and additional unnamed associates, were members of an alien smuggling conspiracy operating in Miami, Florida, Mexico, the Dominican Republic, and Haiti.  Vale Valdivia admitted to being the leader and organizer of the alien smuggling conspiracy, which included five or more participants.  Through this conspiracy in excess of 100 migrants were smuggled from Cuba to Mexico and then ultimately to the border of the United States.  Generally, the migrants were charged approximately $10,000.  Vale Valdivia admitted to knowing that the migrants coming to, entry, and residence in the United States was a violation of law.  Vale Valdivia further admitted that this alien smuggling conspiracy, at times, smuggled aliens in a manner that intentionally or recklessly created a substantial risk of death or serious bodily injury to another person.  For example, at times vessels used to smuggle migrants were overloaded or were used during foul weather so as to risk capsizing.   In addition to smuggling migrants, Vale Valdivia smuggled baseball players from Cuba to the United States.  Vale Valdivia also admitted to being involved in a conspiracy that stole engines in the United States and then shipped the engines through a freight forwarding company in Miami to Mexico to be used to further the alien smuggling conspiracy.

This prosecution is the result of the ongoing efforts of the Operation Sisyphus Task Force, a multi-agency partnership to combat Caribbean based organized crime that includes the U.S. Attorney’s Office for the Southern District of Florida, FBI Miami and HSI Miami.  In recent years, the Operation Sisyphus Task Force has targeted organizations utilizing coercion and extortion to compel migrants and their families to make payments for the release of loved ones. 

If you believe you are a victim of migrant coercion or extortion or know someone who is, you are encouraged to call 1-866-347-2423 or visit https://www.ice.gov/tipline. The toll-free phone number is available 24 hours a day, 7 days a week, 365 days a year.  Help is available in English, Spanish, and additional languages.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the ICE-HSI, FBI, U.S. Customs and Border Protection (CBP), and U.S. Coast Guard Investigative Service (CGIS), Southeast Region in this matter. This case is being prosecuted by Assistant U.S. Attorneys J. Mackenzie Duane and Ignacio J. Vázquez, Jr.  Assistant U.S. Attorneys Adrienne Rosen and Annika Miranda are assigned to the asset forfeiture aspects of the case.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

MIAMI – Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Miami Field Office, announced today that Yorgan Arnaldo Ramos Teran (Ramos Teran), 46, of Weston, Florida, is charged with violating the temporary flight restrictions set up to protect the public during Super Bowl LIV and the week leading up to the game. Super Bowl LIV takes place on February 2, 2020, at the Hard Rock Stadium in Miami Gardens, Florida.

According to the criminal complaint filed in the Southern District of Florida, on the night of January 29, 2020, Ramos Teran illegally flew a drone in the temporarily restricted air space of Ocean Drive and 8^th Street in Miami Beach, without the required authorization from the Federal Aviation Administration (FAA). The complaint charges Ramos Teran with violating 49 U.S.C. § 46307, which prohibits knowingly and willfully violating national defense airspace; specifically, with knowingly and willfully flying a drone in an area with a temporary flight restriction imposed by the FAA. If convicted, Ramon Teran faces up to one year in federal prison. Ramos Teran is scheduled for an initial appearance before a federal magistrate judge at 2:00 p.m. today.  

A temporary flight restriction is a regulation that temporarily restricts certain aircraft (including drones) from operating within a defined area in order to protect people or property in the air or on the ground. As part of a comprehensive federal, state, and local law enforcement plan to protect the public and secure the events leading up to and including Super Bowl LIV, the FAA established temporary flight restrictions on drone and other aircraft flights in areas of Miami Beach and Downtown Miami, and around the Hard Rock Stadium. Restrictions on drone and other aircraft flights in South Florida remain in effect through February 2, 2020.

For more information on Super Bowl LIV-related “No Drone Zones” and other temporary flight restrictions, visit  superbowl.faa.gov.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI, FAA, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, and Miami Beach Police Department.

A criminal complaint is an accusation and defendant is presumed innocent unless and until he is found guilty beyond a reasonable doubt.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

Fayetteville, Arkansas – David Clay Fowlkes, Acting United States Attorney for the Western District of Arkansas, announced that Christopher Hauser, age 33, of Farmington, Arkansas, was sentenced yesterday to 72 months in federal prison followed by fifteen years of supervised release for one count of Receipt of Child Pornography.  The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville.

According to court records, in March 2018, members of the Internet Crimes Against Children (ICAC) Task Force identified an IP address that was using a peer-to-peer file sharing network to obtain suspected child pornography files.  The IP address was traced to Hauser.  On May 31, 2018, a federal search warrant was executed at Hauser’s residence in Farmington, Arkansas.  Law enforcement confiscated a digital device that had been connected to the internet with intent to view child pornography. A forensic analysis of that device revealed that it did in fact contain images of child pornography.

Hauser was indicted in May 2019 on federal charges and entered his guilty plea in September 2019.

This case was investigated by Homeland Security Investigations (HSI) and the Northwest Arkansas Internet Crimes Against Children (ICAC) Task Force.  Assistant United States Attorney Amy Driver prosecuted the case for the United States.

PHILADELPHIA – United States Attorney William M. McSwain announced that Philip Elvin Riehl, 68, of Bethel Township, Berks County, PA, was charged by Information with conspiracy, securities fraud, and wire fraud, stemming from an investigation into a Ponzi scheme worth approximately $60 million. The alleged fraud targeted members of the Mennonite and Amish religious communities in Pennsylvania and elsewhere and is one of the largest Pennsylvania-based alleged Ponzi schemes in history.

Riehl, an accountant, is alleged to have fraudulently solicited tens of millions of dollars in investments, from his accounting clients and others, into a bogus investment program that he operated. Riehl then diverted funds from the program to Trickling Springs Creamery, LLC, a Franklin County–based creamery of which he was the majority owner. Riehl also fraudulently solicited direct investments in Trickling Springs Creamery. The Information further alleges that Riehl made material misrepresentations about the safety and security of these investments in his program and about the performance of the program, as well as misrepresentations and omissions about the creamery’s business and financial condition. Trickling Springs Creamery announced it was ceasing operations in September 2019 and filed a bankruptcy petition in December 2019.

The allegations constitute what is sometimes referred to as “affinity fraud,” which typically involves investment scams that prey upon members of identifiable groups, such as religious or ethnic communities. These types of scams exploit the trust and friendship that exist in groups of people who share common interests or beliefs. The victims of Riehl’s alleged scheme were generally members of the Mennonite or Amish religious communities who wanted a safe and secure investment, operated within their community and in a manner consistent with their religious principles. The charges note that Riehl was a co-religionist in the Mennonite religious community.

 “These investors were looking for honesty and integrity when deciding where and with whom to invest their money,” said U.S. Attorney McSwain. “According to the Information, Riehl presented himself as a trusted member of their religious community, only to betray that trust and swindle them out of tens of millions of dollars. It is only natural for members of a tightly knit community to want to take care of one another, but Riehl did not care about anyone but himself. Fraudsters must be held accountable under the law – no matter what community they belong to – for justice to prevail.”

“So long as there are people with money to invest, there will be swindlers ready to take their money under false pretenses,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “But it is particularly loathsome when these criminals exploit trusting members of their own church or community. According to the Information, Philip Riehl repeatedly misrepresented what he was doing with his investors’ money – people who took him at his word. The FBI will continue to investigate and hold accountable those who engage in such financial fraud.”

If convicted, the defendant faces a maximum possible sentence of 45 years in prison, a $5,500,000 fine, a 3-year term of supervised release, forfeiture, and mandatory restitution.

The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Michael J. Rinaldi. The U.S. Attorney’s Office appreciates the assistance of the Pennsylvania Department of Banking and Securities, and the U.S. Securities and Exchange Commission.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

Jackson, Miss.– The U.S. Attorney’s Offices for the Southern and Northern Districts of Mississippi and the Mississippi Department of Public Safety presented the first annual Mississippi Human Trafficking Summit today at the Jackson, Mississippi, Convention Center.   More than 400 participants, including local, state tribal, and federal law enforcement officers, prosecutors, victim service providers, nonprofits, policy makers and social workers, attended and participating in the Summit.

“Human trafficking is here in Mississippi, and sadly, it is significantly and adversely impacting the lives of many Mississippians,” said U.S. Attorney Hurst.  “Our intent with the Mississippi Human Trafficking Council and with this summit is to train and raise awareness among the public, our nonprofits, and our law enforcement in order to prevent future trafficking, rescue and protect victims, and swiftly prosecute these evildoers.  The Department of Justice and the U.S. Attorney’s Offices in Mississippi have made combatting this horrific and reprehensible crime one of our highest priorities in order to keep the public safe.”

“Today has been such a powerful and important day in the fight against human trafficking here in Mississippi,” said U.S. Attorney Lamar. “We have seen a large, diverse and committed group of people come together to hear about the work that has been done so far, to celebrate the successes and milestones of those engaged in the fight, and to make plans for combatting human trafficking crimes in our Stare in the future. With the continued and combined efforts of those present and others who are willing to work together, we can make a difference in the lives of victims and combat these heinous crimes that strike at the heart of basic human dignity.”

The Mississippi Human Trafficking Council was formed in September 2019, and is chaired by an Assistant U.S. Attorney from Northern District of Mississippi, an Assistant U.S. Attorney from Southern District of Mississippi, and the Mississippi Human Trafficking Coordinator, who works for the Mississippi Bureau of Investigation at the Mississippi Department of Public Safety.  The mission of the Council is to use a victim-centered, collaborative, and multi-disciplinary model to prevent trafficking, protect victims, and prosecute criminals in all forms of domestic and international human trafficking, to include commercial sex trafficking and labor trafficking for the protection of both adult and minor victims.

Today’s Summit began with opening remarks from Mississippi Governor Tate Reeves, Lieutenant Governor Delbert Hosemann, Mississippi Attorney General Lynn Fitch, Colonel Chris Gillard, Assistant Commissioner of the Mississippi Department of Public Safety, Mississippi Band of Choctaw Indians Tribal Chief Cyrus Ben, U.S. Attorney Chad Lamar of the Northern District of Mississippi, and U.S. Attorney Mike Hurst of the Southern District of Mississippi.

           Summit attendees also heard from:

• Bill Woolf, Human Trafficking Programs Director at the Office of Justice Programs within the U.S. Department of Justice;
• Alexandra Perron with A21’s Freedom Center in Charlotte, North Carolina, regarding the upcoming Mississippi Human Trafficking Council Billboard Campaign;
• Council Co-Chairs Kathlyn Van Buskirk - Assistant US Attorney, Southern District of MS, Susan Bradley - Deputy Criminal Chief US Attorney, Northern District of MS, and Ashlee Lucas - Statewide Human Trafficking Coordinator, MS Bureau of Investigation
• Council Subcommittee Chairs:
  • Outreach and Public Awareness - Chair: Mandy Davis, Chief of Staff, MSDPS
  • Strategic Planning and Trafficking Protocol - Chair: Dr. Tamara Hurst, School of Social Work, University of Southern Mississippi
  • Policy and Legislation - Co-Chairs: Angela Cockerham, MS House of Representatives; Lora Hunter, General Counsel, MS Department of Public Safety
  • Training - Chair: Paula Broome, MS Attorney General’s Office
  • Victim Service - Co-Chairs: Hollie Jeffery, Children’s Advocacy Centers of Mississippi; Heather Wagner, Mississippi State Department of Health, Office Against Interpersonal Violence
• A Human Trafficking Survivor
• U.S. Department of Justice Grantees Relating to Human Trafficking:
  • Heather Wagner - Grant - Victim Services
  • Ashlee Lucas - Grant - Law Enforcement
• Those Involved in Mississippi Initiatives Addressing Human Trafficking:
  • Heather Collins - Statewide Human Trafficking Analyst, Mississippi Bureau of Investigation
  • Guy Collins - Master Sergeant, Mississippi Bureau of Investigation, Human Trafficking Special Victim’s Unit
  • Nick Brown - Hinds County Sheriff’s Office, FBI Task Force Officer
  • Mike Hurst - US Attorney, Southern District of Mississippi
  • Chad Lamar - US Attorney, Northern District of Mississippi
• Leslie Williams Fisher, Trial Attorney, U.S. Department of Justice, Criminal Division Child Exploitation & Obscenity Section
   
  The Department of Justice continues to fight human trafficking through investigating and prosecuting traffickers, dismantling transnational human trafficking networks, enhancing victim identification and protection of all victims of trafficking, and funding and providing domestic and international anti-trafficking programs. Information on the Department of Justice’s efforts to combat human trafficking can be found here. An update on human trafficking prosecution statistics can be found here. 
  Information about the Mississippi Human Trafficking Council can be found here.

            WASHINGTON - Airbus SE (Airbus or the Company), a global provider of civilian and military aircraft based in France, has agreed to pay combined penalties of more than $3.9 billion to resolve foreign bribery charges with authorities in the United States, France and the United Kingdom arising out of the Company’s scheme to use third-party business partners to bribe government officials, as well as non-governmental airline executives, around the world and to resolve the Company’s violation of the Arms Export Control Act (“AECA”) and its implementing regulations, the International Traffic in Arms Regulations (“ITAR”), in the United States.  This is the largest global foreign bribery resolution to date.  

            Airbus entered into a deferred prosecution agreement with the department in connection with a criminal information filed on Jan. 28, 2020 in the District of Columbia charging the Company with conspiracy to violate the anti-bribery provision of the Foreign Corrupt Practices Act (“FCPA”) and conspiracy to violate the AECA and its implementing regulations, the ITAR.  The FCPA charge arose out of Airbus’s scheme to offer and pay bribes to foreign officials, including Chinese officials, in order to obtain and retain business, including contracts to sell aircraft.  The AECA charge stems from Airbus’s willful failure to disclose political contributions, commissions or fees to the U.S. government, as required under the ITAR, in connection with the sale or export of defense articles and defense services to the Armed Forces of a foreign country or international organization.  The case is assigned to U.S. District Judge Thomas F. Hogan of the District of Columbia.

           “Airbus engaged in a multi-year and massive scheme to corruptly enhance its business interests by paying bribes in China and other countries and concealing those bribes,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “This coordinated resolution was possible thanks to the dedicated efforts of our foreign partners at the Serious Fraud Office in the United Kingdom and the PNF in France.  The Department will continue to work aggressively with our partners across the globe to root out corruption, particularly corruption that harms American interests.”

            “International corruption involving sensitive U.S. defense technology presents a particularly dangerous combination.  Today’s announcement demonstrates the department’s continuing commitment to ensuring that those who violate our export control laws are held to account,” said Principal Deputy Assistant Attorney General David P. Burns of the Justice Department’s National Security Division.  “The resolution, however, also reflects the significant benefits available under NSD’s revised voluntary self-disclosure policy for companies that choose to self-report export violations, cooperate, and remediate as to those violations, even where there are aggravating circumstances.  We hope other companies will make the same decision as Airbus to report potential criminal exportviolations timely and directly to NSD so that they too can avail themselves of the policy’s benefits.”

            “Today, Airbus has admitted to a years-long campaign of corruption around the world,” said U.S. Attorney Jessie K. Liu of the District of Columbia. “Through bribes, Airbus allowed rampant corruption to invade the U.S. system. Additionally, Airbus falsely reported information about their conduct to the U.S. government for more than five years in order to gain valuable licenses to export U.S. military technology. This case exemplifies the ability of our prosecutors and law enforcement to work with our foreign counterparts to ensure that corruption around the world is prevented and punished at the highest levels.” 

            “Airbus SE, the second largest Aerospace company world-wide, engaged in a systematic and deliberate conspiracy, that knowingly and willfully violated U.S. fraud and export laws,” said Special Agent in Charge Peter C. Fitzhugh of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) New York.  “Airbus’s fraud and bribery in commercial aircraft transactions strengthened corrupt airlines and bad actors worldwide, at the expense of straightforward enterprises.  Additionally, the bribery of government officials, specifically those involved in the procurement of U.S. military technology, posed a national security threat to both the U.S. and its allies.  The global threats facing the U.S. have never been greater than they are today, and HSI New York is committed to working with our federal and international partners to assure sensitive U.S. technologies are not unlawfully and fraudulently acquired. As this investigation reflects, national security continues to be a top priority not just for Department of Homeland Security, but for HSI New York.”

            The Company’s payment to the United States will be $527 million for the FCPA and ITAR violations, and an additional €50 million (approximately $55 million) as part of a civil forfeiture agreement for the ITAR-related conduct, and the department will credit a portion of the amount the Company pays to the Parquet National Financier (PNF) in France under the Company’s agreement with the PNF.  In addition, the Company has agreed to pay a $10 million penalty to the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC), of which the department is crediting $5 million.  In related proceedings, the Company settled with the PNF in France over bribes paid to government officials and non-governmental airline executives in China and multiple other countries and the Company has agreed to pay more than 2 billion Euros (more than approximately $2.29 billion) pursuant to the PNF agreement.  As part of this coordinated global resolution, the Company also entered into a deferred prosecution agreement with the United Kingdom’s Serious Fraud Office (SFO) over bribes paid in Malaysia, Sri Lanka, Taiwan, Indonesia and Ghana, and the Company has agreed to pay approximately 990 million Euros equivalent (approximately $1.09 billion) pursuant to the SFO agreement.  The PNF and SFO had investigated the Company as part of a Joint Investigative Team.

            According to admissions and court documents, beginning in at least 2008 and continuing until at least 2015, Airbus engaged in and facilitated a scheme to offer and pay bribes to decision makers and other influencers, including to foreign officials, in order to obtain improper business advantages and to win business from both privately owned enterprises and entities that were state-owned and state-controlled.  In furtherance of the corrupt bribery scheme, Airbus employees and agents, among other things, sent emails while located in the United States and participated in and provided luxury travel to foreign officials within the United States. 

            The admissions and court documents establish that in order to conceal and to facilitate the bribery scheme, Airbus engaged certain business partners, in part, to assist in the bribery scheme.  Between approximately 2013 and 2015, Airbus engaged a business partner in China and knowingly and willfully conspired to make payments to the business partner that were intended to be used as bribes to government officials in China in connection with the approval of certain agreements in China associated with the purchase and sale of Airbus aircraft to state-owned and state-controlled airlines in China.  In order to conceal the payments and to conceal its engagement of the business partner in China, Airbus did not pay the business partner directly but instead made payments to a bank account in Hong Kong in the name of a company controlled by another business partner. 

            Pursuant to the AECA and ITAR, the DDTC regulates the export and import of U.S. defense articles and defense services, and prohibits its export overseas without the requisite licensing and approval of the DDTC.  According to admissions and court documents, between December 2011 and December 2016, Airbus filed numerous applications for the export of defense articles and defense services to foreign armed forces.  As part of its applications, Airbus was required under Part 130 of the ITAR to provide certain information related to political contributions, fees or commissions paid in connection with the sale of defense articles or defense services.  The admissions and court documents reveal, however, that the Company engaged in a criminal conspiracy to knowingly and willfully violate the AECA and ITAR, by failing to provide DDTC with accurate information related to commissions paid by Airbus to third-party brokers who were hired to solicit, promote or otherwise secure the sale of defense articles and defense services to foreign armed forces.

            As part of the deferred prosecution agreement with the department, Airbus has agreed to continue to cooperate with the department in any ongoing investigations and prosecutions relating to the conduct, including of individuals, and to enhance its compliance program.

            For the FCPA-related conduct, the department reached this resolution with Airbus based on a number of factors, including the Company’s cooperation and remediation.  In addition, for the FCPA-related conduct, the U.S. resolution recognizes the strength of France’s and the United Kingdom’s interests over the Company’s corruption-related conduct, as well as the compelling equities of France and the United Kingdom to vindicate their respective interests as those countries deem appropriate, and the department has taken into account these countries’ determination of the appropriate resolution into all aspects of the U.S. resolution.

            With respect to the AECA and ITAR-related conduct, the department reached this resolution with Airbus based on the voluntary and timely nature of its disclosure to the department as well as the Company’s cooperation and remediation. 

            HSI’s New York Field Office Counter Proliferation Investigations Group is investigating the case.  Deputy Chief Christopher Cestaro, Assistant Chief Vanessa Sisti and Trial Attorney Elina A. Rubin Smith of the Criminal Division’s Fraud Section, Deputy Chief Elizabeth L. D. Cannon and Trial Attorney David Lim of the National Security Division’s Counterintelligence and Export Control Section, and Assistant U.S. Attorneys Michelle Zamarin, Gregg Maisel, David Kent and Karen Seifert of the District of Columbia are prosecuting the case.  The Criminal Division’s Office of International Affairs provided assistance.

            The Department of Justice acknowledges and expresses its appreciation of the significant assistance provided by France’s Parquet National Financier and the UK’s Serious Fraud Office. 

            The Fraud Section is responsible for all investigations and prosecutions of the Foreign Corrupt Practices Act, and conducts other investigations into sophisticated economic crimes.  The Counterintelligence and Export Control Section supervises the investigation and prosecution of cases involving the export of military and strategic commodities and technology, including cases under the AECA and ITAR.

BOSTON – A Ludlow couple was sentenced yesterday in federal court in Springfield for a six-year bid-rigging and kickback scheme.

Joanne Murray, 54, and James Murray, 53, both of Ludlow, were each sentenced by U.S. District Court Judge Mark G. Mastroianni to 18 months in prison and three years of supervised release. In February 2019, the defendants pleaded guilty to conspiracy to commit mail fraud, aggravated identity theft and tax evasion.  

From approximately 2010 through 2015, the Murrays, along with others, engaged in a scheme to defraud the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac. Joanne worked at a Springfield real estate brokerage, which managed hundreds of foreclosed properties owned by Freddie Mac. In the scheme, Joanne, James and others agreed to submit fraudulent “reimbursements” by the brokerage to Freddie Mac for James’s company, amounting to approximately $1,372,099 in repair, improvement and maintenance projects.  After Freddie Mac paid the purported reimbursements, the brokerage paid James approximately 90% of those amounts and retained an approximately 10% skim. Joanne ensured that James’s company would win these projects by submitting fraudulent bids to Freddie Mac by purported competitors. To avoid detection by Freddie Mac, Joanne submitted bids in the name of a friend of the Murrays, without his knowledge, instead of James’s company, for work that was ultimately performed by James’s company. The Murrays and others also agreed to submit similar fraudulent requests for reimbursement of minor cleaning projects for James’s relative, amounting to approximately $68,960, in exchange for the brokerage’s retention of approximately 10% of the relative’s payments.  

In addition, from 2012 through 2014, the Murrays evaded payment on outstanding federal tax debts based upon their 2008, 2009, 2010 and 2011 tax years by cashing numerous checks from the brokerage totaling approximately $461,030 rather than depositing those checks into their bank accounts. Lastly, in 2014, the Murrays jointly filed an individual federal income tax return that under-reported their gross receipts by approximately $151,178. 

United States Attorney Andrew E. Lelling; Robert Manchak, Acting Special Agent in Charge of the Federal Housing Finance Agency; Kristina O’Connell, Special Agent In Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division, made the announcement today. Assistant U.S. Attorneys Steven H. Breslow and Deepika Shukla of Lelling’s Springfield Branch Office prosecuted the case.

BOSTON – A Boston man pleaded guilty yesterday in federal court in Boston to being a felon in possession of a firearm and ammunition.

Kerry Charlotin, 30, pleaded guilty to being a felon in possession of a firearm and ammunition before U.S. District Court Judge William G. Young who scheduled sentencing for May 21, 2020. Charlotin was charged in August 2019.

On May 1, 2019, officers were in the area of Blue Hill Avenue in Mattapan due to resident complaints of drug dealing and public drinking. It is alleged that when Charlotin, who was seen by the officers wearing a black backpack, observed the police presence, he ran. The officers pursued him, and when they caught up to him, a black backpack was in the air and landed on the roof of a building. Charlotin, no longer wearing a black backpack, continued running from the officers; he was eventually found hiding in a fenced in area in a backyard. When officers recovered the black backpack, they found, among other things, a loaded Glock 26, 9mm caliber Lugar semi-automatic pistol containing nine rounds of ammunition, one of those rounds was in the chamber.

Based on prior felony convictions, Charlotin is prohibited from possessing a firearm and ammunition under federal law.

The charging statute provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Boston Police Commissioner William G. Gross made the announcement. Assistant U.S. Attorney Lindsey E. Weinstein of Lelling’s Major Crimes Unit is prosecuting the case.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. PSN is 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.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JASON GALANIS pled guilty today for his participation in multiple fraudulent schemes.  In particular, GALANIS pled guilty for his role in a scheme to manipulate the market for Gerova Financial Group, Ltd. (“Gerova”), a publicly traded company listed on the New York Stock Exchange, and to defrauding the shareholders of that company (the “Gerova Scheme”), as well as to defraud the clients of an investment advisory firm.  GALANIS also pled guilty today to defrauding a Native American tribal entity and the investing public of tens of millions of dollars in connection with the issuance of bonds by the tribal entity (the “Tribal Bond Scheme”).  GALANIS pled guilty to three counts of conspiracy to commit securities fraud, two counts of securities fraud, one count of investment adviser fraud, and one count of conspiracy to commit investment adviser fraud before U.S. District Judge P. Kevin Castel.  GALANIS had previously pled guilty, in July 2016, for his participation in the Gerova Scheme and, in January 2017, for his participation in the Tribal Bond Scheme, but those convictions were subsequently vacated.    

U.S. Attorney Geoffrey S. Berman said:  “As he admitted today, Jason Galanis orchestrated two multimillion-dollar fraud schemes, and put together a team of co-conspirators to carry them out.  He and his codefendants engaged in market manipulation and the defrauding of shareholders, and they stole a large portion of the proceeds of tribal bonds that were intended to fund economic development projects.  The overriding theme was victimizing others to enrich themselves.  Now Jason Galanis awaits sentencing for his criminal greed.”

According to the allegations contained in the Information filed against GALANIS, charging documents filed against GALANIS’s co-conspirators, and statements made in related court filings and proceedings:

The Gerova Scheme

From 2009 to 2011, GALANIS, along with his co-conspirators John Galanis, Gary Hirst, Derek Galanis, Ymer Shahini, and Gavin Hamels, engaged in a scheme to defraud the shareholders of Gerova and the investing public, by effecting securities transactions in Gerova stock for the purpose of conferring millions of dollars of undisclosed remuneration to GALANIS and his co-conspirators, without adequate disclosure of GALANIS’s role in directing the transactions or the benefits received by GALANIS and his co-conspirators.

As a part of the scheme to defraud, GALANIS obtained sufficient control over Gerova so as to be able to cause Gerova to enter into transactions of his design, and for his benefit, including the issuance of Gerova stock.  GALANIS obtained this control without causing himself to be identified as an officer or director of Gerova so as to purport to abide by an SEC-imposed bar that forbade him from holding such positions at publicly traded companies.  Among other means and methods, GALANIS, with the assistance of Hirst, caused over 5,000,000 shares of Gerova stock, which represented nearly half the company’s public float and which were intended for GALANIS’s ultimate benefit, to be issued to and held in the name of Ymer Shahini, who knowingly served as a foreign nominee for GALANIS.  GALANIS, John Galanis, Jared Galanis, Derek Galanis, Hirst, and Shahini understood that the purpose of the stock grant to Shahini was to disguise GALANIS’s ownership interest in the stock, and to evade the SEC’s regulations for issuing unregistered shares of stock. 

At the same time, and as a further part of the scheme to defraud, GALANIS’s co-conspirators, with his knowledge and approval, opened and managed brokerage accounts in the name of Shahini (the “Shahini Accounts”), effected the sale of Gerova stock from the Shahini Accounts, and received and concealed the proceeds, knowing that this activity was designed to conceal from the investing public GALANIS’s ownership of and control over the Gerova stock.

GALANIS, among others, also fraudulently induced investment advisers, including Gavin Hamels, to purchase shares of Gerova stock in the investment advisers’ client accounts by offering compensation and/or other benefits to the respective investment adviser.  By causing the purchase of Gerova stock at the time, quantity, and/or price of their choosing, GALANIS and others were able to, among other things, effectuate the sale of large quantities of Gerova stock from the Shahini Accounts that GALANIS controlled while artificially maintaining the price of Gerova stock through coordinated match trading.  Such coordinated trading served to manipulate the market for Gerova stock and deceive the investing public.  As a result, GALANIS and his co-conspirators reaped nearly $20 million in profits.

The Scheme to Defraud Clients of Investment Firm-1

From 2007 to 2010, GALANIS along with an investment adviser identified in the Information as “CC-2,” participated in a scheme to defraud the clients of CC-2’s investment advisory firm, identified in the Information as “Investment Firm-1.”  Oftentimes in exchange for compensation from GALANIS, CC-2 caused Investment Firm-1 clients to invest in notes issued by entities associated with GALANIS. 

When obligations owed by entities associated with GALANIS became due, CC-2 used client funds to purchase either notes issued by other entities associated with GALANIS or publicly traded shares held by such entities.  The funds generated were then used to pay the original obligations owed to other Investment Firm-1 clients.  Through these securities trades, funds in client accounts of one set of Investment Firm-1 investors were used to pay obligations owed to a different set of Investment Firm-1 investors by entities associated with GALANIS.   

The Tribal Bond Scheme

From March 2014 through April 2016, GALANIS, along with his co-conspirators Gary Hirst, John Galanis, a/k/a “Yanni,” Hugh Dunkerley, Michelle Morton, Devon Archer, and Bevan Cooney, engaged in a fraudulent scheme to misappropriate the proceeds of bonds issued by the Wakpamni Lake Community Corporation (“WLCC”), a Native American tribal entity (the “Tribal Bonds”), and to use funds in the accounts of clients of asset management firms controlled by GALANIS and his codefendants to purchase the Tribal Bonds, which the clients were then unable to redeem or sell because the bonds were illiquid and lacked a ready secondary market. 

Documents governing the Tribal Bonds specified that an investment manager would invest the proceeds of the Tribal Bonds in investments that would generate annuity payments sufficient to pay interest on the Tribal Bonds and provide funds to the WLCC to be used for tribal economic development purposes.  In fact, none of the proceeds of the Tribal Bonds were turned over to the investment manager specified in the closing documents.  Instead, significant portions of the proceeds were misappropriated by GALANIS and his codefendants for their own personal use. 

Specifically, the proceeds of the Tribal Bonds were deposited into a bank account in the name of Wealth Assurance Private Client Corporation (“WAPCC”), an entity controlled by Dunkerley and Hirst.  Dunkerley transferred more than $38 million from the WAPCC account to an account controlled by GALANIS, who then misappropriated more than $8.5 million of the proceeds for his personal use, including for expenses associated with his home, jewelry and clothing purchases, travel and entertainment, and restaurant meals. 

There was no ready secondary market for the Tribal Bonds.  Nonetheless, without prior notice to their clients, Morton and Hirst, acting at the direction of GALANIS, used funds belonging to clients of two related investment advisers, Hughes Capital Management, Inc. (“Hughes”), and Atlantic Asset Management, LLC (“Atlantic”), to purchase the Tribal Bonds, even though GALANIS, Hirst, and Morton were well aware that material facts about the Tribal Bonds had been withheld from clients in whose accounts they were placed, including the fact that the Tribal Bond purchases fell outside the investment parameters set forth in the investment advisory contracts of certain Hughes clients and of the Atlantic pooled investment vehicle in which the Tribal Bonds were purchased.  When Hughes and Atlantic clients learned about the purchase of the Tribal Bonds in their accounts, several of them demanded that the Tribal Bonds be sold.  However, because there was no ready secondary market for the Tribal Bonds, no Tribal Bonds have been sold from any Hughes or Atlantic client accounts.  In addition, GALANIS and his codefendants failed to apprise clients of Hughes and Atlantic regarding substantial conflicts of interest with respect to the issuance and placement of the Tribal Bonds before the Tribal Bonds were purchased on these clients’ behalf. 

In addition, a portion of the misappropriated proceeds was recycled and provided by GALANIS to entities affiliated with Archer and Cooney in order to enable Archer and Cooney to purchase subsequent Tribal Bonds issued by the WLCC.  As a result of the use of recycled proceeds to purchase additional issuances of Tribal Bonds, the face amount of Tribal Bonds outstanding increased and the amount of interest payable by the WLCC increased, but the actual bond proceeds available for investment on behalf of the WLCC did not increase. 

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GALANIS, 49, pled guilty to three counts of conspiracy to commit securities fraud, each carrying a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; two counts of securities fraud, each of which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense; one count of investment adviser fraud, which carries a maximum sentence of five years in prison and a maximum fine of $10,000 or twice the gross gain or loss from the offense; and one count of conspiracy to commit investment adviser fraud, which carries a maximum sentence of five years in prison and a maximum fine of $10,000 or twice the gross gain or loss from the offense.  GALANIS will be sentenced by Judge Castel on May 12, 2020. 

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

Mr. Berman praised the work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and thanked the SEC.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Brian Blais, Rebecca Mermelstein, and Negar Tekeei are in charge of the prosecution.  

BOSTON – A Dominican national previously residing in Springfield was sentenced on Tuesday, Jan. 28, 2020, in federal court in Springfield for his role in a large-scale heroin trafficking organization.

Juan Perez, 32, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 30 months in prison and five years of supervised. Perez will face deportation proceedings upon completion of his sentence. In July 2019, Perez pleaded guilty to conspiracy to distribute and possession with intent to distribute more than one kilogram of heroin. Perez and 17 co-defendants were indicted on heroin conspiracy charges in August 2017.

Perez worked with Alberto Marte, the leader of the Springfield-based drug trafficking organization, to distribute vast amounts of heroin in the Springfield area. Perez admitted to travelling to Bronx, N.Y. with Marte and other members of the organization where they purchased three kilograms of heroin, which they intended to distribute in Springfield.  Agents seized the heroin on Sept. 22, 2016, when they searched a vehicle on Marte’s property. 

The Marte drug trafficking organization had direct contact with heroin supply sources in the Dominican Republic. On a monthly basis, members of the organization transported between eight and 20 kilograms of heroin to the Springfield area.

Marte and 11 other co-conspirators have pleaded guilty and are awaiting sentencing. The remaining defendants have pleaded not guilty.

United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Jason Molina, Acting Special Agent in Charge of Homeland Security Investigations in Boston; Hampden County District Attorney Anthony D. Gulluni; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; Springfield Police Commissioner Cheryl Clapprood; Chicopee Police Chief William Jebb; Holyoke Police Chief Manny Febo; and West Springfield Police Chief Ronald Campurciani made the announcement today. Assistant U.S. Attorney Neil Desroches of Lelling’s Springfield Branch Office is prosecuting the cases. 

LAS VEGAS, Nev. - A Las Vegas, Nevada, tax return preparer was sentenced to 40 months in prison yesterday for tax fraud, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Nicholas A. Trutanich for the District of Nevada. 

According to court documents and statements made in court, Michael A. Sandoval provided payroll and tax preparation services for individuals and companies through his Las Vegas business Nevada Financial Solutions Inc. (NFS). When two of Sandoval’s clients provided NFS with $471,178 in payments to be forwarded to the Internal Revenue Service (IRS) as money due for their quarterly employment taxes, Sandoval did not provide those payments to the IRS, but instead spent the funds for his personal benefit. At NFS, Sandoval also filed and caused the filing of false individual income tax returns for a substantial number of clients by reporting fraudulent deductions, including false Schedule C business losses, charitable contributions, and state and local tax deductions. These fraudulent deductions caused a tax loss of over $2.8 million. On his own individual tax returns, Sandoval fraudulently understated his income from NFS for the years 2010 through 2017, causing an additional tax loss of $100,138. In total, Sandoval caused a tax loss totaling $3,425,654 to the IRS.

Sandoval previously pleaded guilty to one count each of tax evasion, aiding and assisting in the preparation and filing of a false tax return, and making and subscribing a false tax return.

In addition to the term of imprisonment, U.S. District Court Judge Gloria M. Navarro ordered Sandoval to serve three years of supervised release and to pay restitution of $281,630 to a client and of $100,138 to the United States.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Trutanich thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Thomas W. Flynn and Eric C. Schmale of the Tax Division, who prosecuted the case.

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

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LAS VEGAS, Nev. - A Las Vegas, Nevada, tax return preparer was sentenced to 40 months in prison yesterday for tax fraud, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Nicholas A. Trutanich for the District of Nevada. 

According to court documents and statements made in court, Michael A. Sandoval provided payroll and tax preparation services for individuals and companies through his Las Vegas business Nevada Financial Solutions Inc. (NFS). When two of Sandoval’s clients provided NFS with $471,178 in payments to be forwarded to the Internal Revenue Service (IRS) as money due for their quarterly employment taxes, Sandoval did not provide those payments to the IRS, but instead spent the funds for his personal benefit. At NFS, Sandoval also filed and caused the filing of false individual income tax returns for a substantial number of clients by reporting fraudulent deductions, including false Schedule C business losses, charitable contributions, and state and local tax deductions. These fraudulent deductions caused a tax loss of over $2.8 million. On his own individual tax returns, Sandoval fraudulently understated his income from NFS for the years 2010 through 2017, causing an additional tax loss of $100,138. In total, Sandoval caused a tax loss totaling $3,425,654 to the IRS.

Sandoval previously pleaded guilty to one count each of tax evasion, aiding and assisting in the preparation and filing of a false tax return, and making and subscribing a false tax return.

In addition to the term of imprisonment, U.S. District Court Judge Gloria M. Navarro ordered Sandoval to serve three years of supervised release and to pay restitution of $281,630 to a client and of $100,138 to the United States.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Trutanich thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Thomas W. Flynn and Eric C. Schmale of the Tax Division, who prosecuted the case.

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

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