Baltimore, Maryland – Federal prosecutors in Maryland have filed a federal criminal complaint charging Dogar Singh, age 67, of Carteret, New Jersey, and Rehan Afridi, age 36, of West Deptford, New Jersey, on the federal bank fraud charges related to an alleged $10 million multi-state bank fraud scheme involving 76 businesses, including BBQ Tonite and Al Madina Kabob, which are associated with the defendants.  The complaints were signed on July 2, 2020, and were unsealed at their initial appearances today.

The federal charges were announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Bo Keane of the United States Secret Service - Baltimore Field Office.

According to the affidavit filed in support of the criminal complaint, in October 2019, BBQ Tonite and Al Madina Kabob were identified as being part of a ring of 76 suspect merchants in Maryland, Michigan, New York, New Jersey, and Virginia, that engaged in a refund fraud/invalid authorization scheme where fraudulently authorized refunds were sent to debit cards linked to bank accounts associated with the suspect merchants.  As part of the scheme, multiple suspect businesses refunded the same debit cards.  Over the course of fraud scheme, 2,426 credit or debit card transactions were executed totaling $10,782,047.  The loss associated with Al Madina Kabob alone is alleged to be at least $470,000.

The affidavit further alleges that in April 2019, Singh and Afridi opened multiple business and personal accounts at TD Bank.  Just a few days later, those accounts received large deposits from Al Madina Kabob, totaling $776,900.  Although those deposits were ultimately rejected by TD Bank as fraudulent, Singh and Afridi allegedly withdrew or transferred approximately $232,152.40 before the funds were returned.  Prior to the bank’s rejection of the deposits as fraudulent, Singh and Afridi were seen withdrawing cash at cash windows at casinos in Maryland, Delaware, and Pennsylvania as well as issuing checks and conducting cash withdrawals from Automated Teller Machines.

If convicted, Singh and Afridi each face a maximum sentence of 30 years in federal prison for conspiracy to commit bank fraud.  Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.  At today’s initial appearance in U.S. District Court in New Jersey, U.S. Magistrate Judge Lois Goodman ordered that Singh and Afridi be released pending trial and that they appear in U.S. District Court in Maryland on the charges on July 15, 2020.

A criminal complaint is not a finding of guilt.  An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings. 

United States Attorney Robert K. Hur commended the U.S. Secret Service for their work in the Maryland investigation, and recognized U.S. Attorney for the Eastern District of Virginia Zachary Terwilliger, the U.S. Attorney for the District of New Jersey Craig Carpenito, the U.S. Postal Inspection Service in New Jersey, and the FBI in Virginia, whose offices also participated in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Judson T. Mihok and Molissa H. Farber, who are prosecuting the Maryland case.

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NEWPORT NEWS, Va. – A Newport News man made his initial appearance in federal court today on gun charges stemming from his alleged role in the death of a Newport News police officer in January.

According to court documents and statements made in court, Vernon Evander Green, II, 38, is charged with being a felon in possession of a firearm and possession of marijuana. Both charges stem from Green’s alleged involvement in a January traffic stop that led to the death of Newport News Police Officer Katie Thyne.

Green is scheduled for arraignment at 3 p.m. on Thursday at the federal courthouse in Norfolk.

Green is charged with being a felon in possession of a firearm and felony possession of marijuana. If convicted, Green faces a maximum penalty of 12 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Ashan M. Benedict, Special Agent in Charge of the ATF’s Washington Field Division; and Steve R. Drew, Chief of Newport News Police, made the announcement. Assistant U.S. Attorneys Lisa R. McKeel and Howard J. Zlotnick are prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:20-cr-35.

An indictment is merely an accusation. The defendant is presumed innocent until proven guilty.

BECKLEY, W.Va. – A Lashmeet man was sentenced to federal prison for a sex crime against a minor, announced United States Attorney Mike Stuart. Joshua Kevin Laxton, 29, was sentenced to 57 months in prison for travel in interstate commerce with the intent to engage in illicit sexual activity with a minor. Following his release from prison, Laxton will be required to serve 15 years of supervised release and will have to register as a sex offender.

“Horrific,” said United States Attorney Mike Stuart. “Crimes against children are the other pandemic. My prosecutors and our federal, state and local investigators are working tirelessly to protect West Virginia’s children from predators like Laxton. My office will prosecute child predators to the fullest extent of the law.”

Laxton previously admitted that on September 14, 2019, he began communicating via text messages with a minor he believed to be a 14-year-old girl located in Lewisburg. Despite knowing her age, Laxton discussed meeting the minor to engage in sexual intercourse. On November 1, 2019, Laxton drove through Virginia to meet the purported minor at an arranged meeting location in Lewisburg in order to engage in sexual intercourse.

The Federal Bureau of Investigation’s West Virginia Child Exploitation and Human Trafficking Task Force, in partnership with the West Virginia State Police, conducted the investigation. United States District Judge Frank W. Volk imposed the sentence. Assistant United States Attorney Jennifer Rada Herrald handled the prosecution.

This case was prosecuted as part of Project Safe Childhood, a nationwide initiative of the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

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Greenbelt, Maryland – A federal criminal complaint has been filed charging Justina Elena Olivero, a/k/a Justina Guzman, age 33, of Laurel, Maryland for bank fraud, wire fraud, aggravated identity theft, and unlawful possession of stolen mail.  The criminal complaint was filed on July 1, 2020 and was unsealed at her initial appearance today.

The criminal complaint was announced by United States Attorney for the District of Maryland Robert K. Hur; Postal Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service - Washington Division; Chief Marcus Jones of the Montgomery County Police Department; and Special Agent in Charge John Eisert of Homeland Security Investigations (HSI) Baltimore.

According to the affidavit filed in support of the criminal complaint, beginning in at least August 2017 and continuing through May 2020, Olivero allegedly orchestrated three separate fraud schemes involving multiple victims and losses of more than $142,000.  The affidavit alleges that the fraud schemes included: 1) an identity theft scheme in which stolen checks were deposited into various bank accounts and then the money was withdrawn by Olivero; (2) a credit card fraud scheme in which Olivero impersonated American Express customers, ordered emergency replacement cards in those customers’ names, and had those cards mailed to her addresses; and (3) while working at a criminal defense law firm, Olivero fraudulently posed as an attorney and convinced the law firm’s clients to send her money for services she could not and did not provide.

For example, as detailed in the affidavit, in June 2018, the Montgomery County Police Department (MCPD) received a complaint of check forgery and mail theft from Victim 1, a resident of Bethesda, Maryland. On December 29, 2017, Victim 1 mailed a check for $27,000 made payable to the Montgomery County Government for property taxes. Approximately six months later, Victim 1 learned the Montgomery County Government never received this check.  In fact, Victim 1’s check was altered and deposited into a TD Bank account opened in the names of Victim 2 and Victim 3 with an address in Laurel, Maryland, where Olivero was a resident.  Two additional stolen checks were also found to have been deposited into that account. Investigators interviewed Victim 2 and Victim 3, a married couple, at their residence in Potomac, Maryland and the victims reported that they did not open or authorize the opening of the account.

According to TD Bank records, there were two cash withdrawals from the account, on May 30 and June 6, 2018, each for $5,000, and both withdrawal slips were signed “Justina Guzman.”  Two checks were also issued from the account on May 28 and May 29, 2018, each for $1,750.  Investigators learned that Oliveroprovided both checks as payment for a rental property located in Laurel.

On September 14, 2018, law enforcement officers executed a state search warrant at Olivero’s Laurel residence and recovered stolen mail consisting of blank convenience checks; bank, credit card, and investment account statements belonging to victims residing in Potomac, Maryland; two Apple iPhones (including an iPhone X), one Apple iPad, and one HP laptop; credit/debit cards and numerous bank statements in the name of “Justina Guzman” and “Justina Olivero”; and a spiral notebook containing handwritten notes of victims’ names, addresses, social security numbers, and dates of birth, including the personal identifying information (“PII”) of Victim 2 and Victim 3.  Law enforcement officers also obtained and reviewed statements from six bank accounts allegedly associated with Olivero.  Twenty-three personal checks totaling $102,276.49 and involving seventeen victims were deposited into these six accounts and another account maintained by Olivero.  Once the stolen checks were deposited, approximately $102,276.49 was subsequently depleted from the accounts through ATM cash withdraws, online transfers, and debit card purchases.

In addition to stealing and altering checks, Oliveroused stolen identities to order replacement American Express (“AMEX”) credit cards in the names of individuals without the account holders’ knowledge or consent. Olivero then directed those credit cards to addresses associated with Olivero.

According to the affidavit, in August 2017, an unknown individual purporting to be Victim 16 contacted AMEX to request an emergency card replacement (“ECR”).  AMEX issued an ECR in Olivero’s name, using a shipping address in Laurel which was a residence of Olivero’s.  In January 2018, an unknown individual contacted AMEX to add Olivero’s name to Victim 16’s account and subsequently requested another ECR.  AMEX issued the ECR and delivered it, via FedEx, to another residence of Olivero’s.  Also in January 2018, seven emergency replacement cards for Victim 17 were shipped to this residence.  Five of the ECRs that were sent had an unlimited credit limit, and two of the ECRs that were sent had credit limits of $14,500 each.  The calls requesting the ECRs came from a number associated with Olivero’s Apple iPhone seized during the search on September 14, 2018.

Finally, during the Fall of 2018, Olivero agreed to work at a law firm in exchange for legal services from the firm and Individual 3.  Unbeknownst to the law firm or Individual 3, Olivero used her employment with the law firm to hold herself out as an attorney in order to fraudulently obtain money from victims by providing services and obtaining their PII.  In total, as part of this scheme, victims provided approximately $13,000 in payments directly to Olivero.

If convicted, Olivero faces a maximum sentence of 30 years in federal prison for bank fraud; a maximum of 20 in federal prison for wire fraud; a maximum of five years in federal prison for possession of stolen mail; and a mandatory two years in federal prison, consecutive to any other sentence, for aggravated identity theft.  Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.  At today’s initial appearance in U.S. District Court in Greenbelt, U.S. Magistrate Judge Gina L. Simms ordered that Olivero be detained pending trial.

A criminal complaint is not a finding of guilt.  An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings. 

United States Attorney Robert K. Hur commended the U.S. Postal Inspection Service, the Montgomery County Police Department, and HSI for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Erin B. Pulice and Rajeev Raghavan, who are prosecuting the case.

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BLUEFIELD, W.Va. – A Princeton man was sentenced to federal prison for his participation in a drug trafficking organization (DTO) operating between New York and Mercer County, announced United States Attorney Mike Stuart. David Simmons, 51, of Princeton, was sentenced to 24 months in prison, to be followed by three years of supervised release, for conspiring to distribute quantities of oxymorphone and oxycodone. Simmons, along with four other individuals, was charged as a result of a long-term, multi-state investigation known as Operation X-Nation.

“Thanks to the collaborative efforts of many law enforcement agencies, a multi-state pill distribution network has been shut down,” said United States Attorney Mike Stuart. “Southern West Virginia communities have been ravaged by prescription drug abuse and addiction. You can rest assured that we will not rest until all those responsible are held accountable.”

Simmons previously admitted that between August 2017 and August 31, 2019, he participated in a DTO operating in Mercer County. During this time period, Simmons worked with other members of the DTO to acquire and distribute prescription pills in and around Mercer County. In or about the month of August 2019, Simmons had telephone calls intercepted by law enforcement. During these calls, Simmons was discussing the distribution of oxymorphone and oxycodone with other members of the DTO. Simmons admitted that he was responsible for conspiring to distribute approximately 210 oxymorphone pills and approximately 257 oxycodone pills. Simmons also admitted it was the plan of the DTO to redistribute the pills in and around Mercer County.  

Stuart commended the cooperative investigative efforts of the Drug Enforcement Administration (DEA) and the Southern Regional Drug and Violent Crime Task Force, which is composed of officers from the West Virginia State Police, the Mercer County Sheriff’s Department, the Princeton Police Department and the Bluefield Police Department. Each agency provided additional and essential support throughout this investigation. 

Assistant United States Attorney Timothy D. Boggess handled the prosecution. Senior United States District Judge David A. Faber imposed the sentence.

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WASHINGTON – Elizabeth Jo Shirley, of Hedgesville, West Virginia, has admitted to unlawfully retaining a document containing national defense information and committing international parental kidnapping, Assistant Attorney General John C. Demers and U.S. Attorney William J. Powell for the Northern District of West Virginia announced.

Shirley, 47, pled guilty to one count of “Willful Retention of National Defense Information” and one count of “International Parental Kidnapping.”  Shirley admitted to unlawfully retaining a National Security Agency (NSA) document containing information classified at the TOP SECRET/SECRET COMPARTMENTED INFORMATION (“TS/SCI”) level relating to the national defense that outlines intelligence information regarding a foreign government’s military and political issues.  Shirley also admitted to removing her child, of whom she was the non-custodial parent, to Mexico with the intent to obstruct the lawful exercise of the custodial father’s parental rights.

“When Shirley took classified information from her work with the Intelligence Community and later fled to Mexico, she violated the confidence placed in her by the American people,” said Assistant Attorney General for National Security John C. Demers. “She doubled down on this betrayal when she sought to offer classified information to the Russian government.  We are grateful for our law enforcement partners’ timely work to locate and arrest the defendant in Mexico.  Given Shirley’s troubling conduct after fleeing the United States, the damage to national security could have been far greater had law enforcement not acted swiftly.  Shirley will now be held accountable for betraying the trust of the American people.”

“High level security clearance requires a commensurate level of trust.  Shirley breached that trust and attempted to put our country at risk.  National security is one of our highest priorities and always will be.  Shirley will now face the consequences of her actions,” said William J. Powell.

"Federal government employees and contractors with high level security clearances pledge to protect classified information from foreign adversaries. It's an essential responsibility in guarding our country’s national security," said FBI Pittsburgh Special Agent in Charge Michael Christman. "Ms. Shirley had a duty to safeguard classified information. Instead, she chose to break the law and trust placed in her and made plans to pass national defense information to Russian officials, which could have put our citizens at risk. The FBI does not take these violations lightly and will work to hold wrongdoers accountable to keep our country safe."

Shirley served on active duty with the United States Air Force, and in August 1994, the Air Force granted Shirley her first TS/SCI security clearance.  After leaving active duty, Shirley served in the United States Air Force Reserves and later in the United States Navy Reserves.  While serving in the Air Force, she worked on assignments with the NSA.  From May 2001 to August 2012, Shirley held various positions with the United States Navy’s Office of Naval Intelligence, the Department of Defense, the Department of Energy, the National Cyber Investigative Joint Task Force, and at least five different cleared defense contractors.  In connection with these positions, Shirley held TOP SECRET/SCI security clearances at various times.

In July 2019, Shirley took her six-year-old daughter to Mexico with the intent to make contact with representatives of the Government of Russia to request resettlement in a country that would not extradite her to the United States.  Shirley took with her to Mexico national defense information, which she had unlawfully retained.  While in Mexico, Shirley prepared a written message to Russian Government officials, referencing “an urgent need” to have “items shipped from the USA related to [her] life’s work before they are seized and destroyed.”

On Aug. 13, 2019, the United States Marshals Service and Mexican law enforcement located Shirley and her daughter at a hotel in Mexico City.  Mexican authorities arrested Shirley pursuant to an arrest warrant the West Virginia State Police (WVSP) had obtained on a charge of concealment of a minor from a custodian.

The Federal Bureau of Investigation (FBI) subsequently executed search warrants on numerous of Shirley’s electronic devices, including devices she took to Mexico in July 2019 and devices the FBI seized from her Martinsburg storage unit in August 2019.  Pursuant to the search of the storage unit, the FBI located the NSA document underlying the Willful Retention of National Defense Information offense.  In addition, pursuant to searches of the electronic devices, the FBI found an Office of Naval Intelligence PowerPoint presentation containing information classified at the SECRET level and messages Shirley had drafted to Russian Government officials while in Mexico, the latter of which the Central Intelligence Agency has determined to include information classified at the SECRET level.

Shirley faces up to ten years of incarceration and a fine of up to $250,000 for the national security charge and up to three years of incarceration and fine of up to $250,000 for the kidnapping charge.  Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Assistant U.S. Attorneys Jarod J. Douglas and Lara K. Omps-Botteicher and Trial Attorney Evan N. Turgeon with the Department of Justice’s Counterintelligence and Export Control Section, National Security Division, are prosecuting the case on behalf of the government.  The FBI and WVSP investigated.  The Webster County Prosecuting Attorney’s Office cooperated in the investigation and prosecution of the case.

U.S. Magistrate Judge Robert W. Trumble presided.

United States Attorney Ron Parsons announced that a Sioux Falls, South Dakota, man convicted of Wire Fraud and Money Laundering was sentenced on July 6, 2020, by U.S. District Judge Karen E. Schreier.

Paul Erickson, age 58, was sentenced to 84 months in federal prison, followed by 3 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $200.  Restitution has been deferred for 30 days.

Erickson was indicted by a federal grand jury on February 6, 2019.  He pled guilty on November 26, 2020.

The conviction stemmed from incidents when Erickson, who solely operated a business venture to develop land in the Bakken oil fields in North Dakota, became acquainted, through his business, with several individuals with whom he developed strong professional and personal relationships.  He approached many of those individuals about investing in his business.  However, he falsely represented to investors that he would use the money to purchase real estate and the construction of single-family homes in North Dakota, which he did not do.

On March 1, 2017, he accepted a $100,000 wire transfer that was deposited into his Wells Fargo bank account, which was supposed to be an investment in his business.  He told the investor that the money would be used for the development of real estate in North Dakota, and that the amount would be repaid no later than August 28, 2017.  However, he did not invest the money received into the Bakken oil fields venture and he did not repay the investor. 

Furthermore, from the $100,000 Erickson received on March 1, 2017, he conducted a financial transaction and transferred $1,000 to another person.

“The dramatic upward departure for Mr. Erickson's sentence speaks    volumes about the crimes he committed over the vast course of time they occurred,” said FBI Minneapolis Special Agent in Charge, Rainer Drolshagen. “The scope, breadth, and length of his illegal actions spanning more than 20 years involving more than 150 victims was a tall order to investigate but the effort is well worth it with the justice that was meted out today.”

“Investors should be wary about promoters of business ventures that promise to double investor’s money in a short time,” said IRS Acting Special Agent in Charge Adam Steiner.  “IRS Criminal Investigation is committed to investigating Ponzi schemes in an effort to protect the financial well-being of the American public.  We will continue to work with the U.S. Attorney’s Office and our law enforcement partners to put in jail promoters that prey upon trusting investors.”         

This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service.  Assistant U.S. Attorney Jeffrey C. Clapper prosecuted the case.
Erickson is to self-report by July 20, 2020.

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NEWARK, N.J. – A Monmouth County, New Jersey, man was charged today for subscribing to a false tax return, U.S. Attorney Craig Carpenito announced.

Steven Bryce, 50, of Monmouth County, New Jersey, is charged by complaint with subscribing to a false tax return for tax year 2013. A summons was issued for Bryce to appear before a U.S. Magistrate Judge in Newark federal court at a time to be scheduled.

According to the complaint:

In 2013, Bryce operated a gambling business. On July 14, 2014, Bryce filed with the IRS U.S. Individual Income Tax Return, Form 1040, for the calendar year 2013 on behalf of himself and his spouse, which falsely stated that they had total income of $112,899. The 2013 Tax Return was not true and correct: Bryce received tens of thousands of dollars from his gambling business, and, as a result, had income substantially in excess of the amount he reported.

The charge of subscribing to a false tax return carries a maximum potential penalty of three years in prison and a maximum $250,000 fine.    

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez and special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorney J Fortier Imbert of the U.S. Attorney’s Office’s Special Prosecutions Division.

The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

DENVER – United States Attorney Jason R. Dunn today announced that Kristin Martin, age 39, of Littleton, Colorado, was sentenced to serve 33 months in federal prison followed by 3 years of supervised release for mail fraud and tax evasion related to selling fraudulently obtained items on eBay. Martin was also ordered to pay $872,337.68 in restitution for the fraud to her former employer and $161,864 to the IRS for the tax evasion. 

The Denver Division of the FBI, the IRS—Criminal Investigation, and the United States Postal Inspection Service joined in this announcement.

According to the information and the stipulated facts contained in the plea agreement, Martin worked as an executive assistant for her employer.  She was provided with a unique identification and password to purchase supplies from Staples.  Her company used various cost centers to track internal expenses, and ordinarily an employee could only designate the cost center affiliated with the specific department they worked in when ordering items through the Staples website.  However, if an employee transferred positions or responsibilities, the employee obtained access to a new cost center without losing access to the prior assignment’s cost center.

Between January 2013 and December 2016, Martin used her identification and password to fraudulently order unauthorized items such as I-Pads, Apple TVs, Kindles, and other items which she kept and then resold on eBay for her own profit.  These fraudulent purchases caused a loss of $864,441.11 to her employer.  Martin was able to facilitate this scheme by intentionally assigning the fraudulent purchases to 23 different cost centers so each one would be less likely to notice the fraudulent charges. Martin also used her company’s Federal Express account to ship the fraudulently purchased items to her buyers. 

Over the course of this scheme, Martin received at least $571,725.61 from the resale of the fraudulently ordered items.  Martin did not provide her personal accountant with information regarding the online sales until she received a notice of additional income from the IRS.  At that time, she provided her accountant false information regarding the cost of goods sold and other expenses she did not incur in order to significantly reduce her income tax liability.  Based on this false information, her accountant then prepared a false and fraudulent 2014 amended tax return that was filed with the IRS.

“Ms. Martin not only stole from her employer, she stole from all of us as taxpayers” said U.S. Attorney Jason Dunn. “Thanks to the FBI, IRS-CI, USPIS and the team in my office, she was caught and will now have time in a federal prison to contemplate the harm that this type of behavior does.”

“Even when confronted with additional income generated from her theft, Kristen Martin chose to falsify information to limit her tax liability at the expense of American taxpayers,” said IRS-Criminal Investigation Special Agent in Charge Andy Tsui. “Now Martin will reap the reward of defrauding her employer and the public by serving time in prison.”

“Ms. Martin's sentencing should illustrate the FBI and our partners will aggressively investigate those criminals who take advantage of unsuspecting victims in order to enrich themselves,” said FBI Denver Special Agent in Charge Michael Schneider. “We are thankful to our partners at the U.S. Attorney's Office, Internal Revenue Service, and USPIS for their diligence and hard work in this investigation.”

“This is a great example of a joint investigation in which the financial footprint of this defendant bore an opportunity for multiple federal law enforcement agencies to bring their collective investigative strengths together for a successful prosecution,” said Ruth M. Mendonça, U.S. Postal Inspector in Charge of the Denver Division.  “Postal Inspectors have been investigating mail fraud since the law’s inception in 1872, and we will never relent in our search for justice for fraud victims,” Mendonça said.

This case was investigated by Internal Revenue Service – Criminal Investigation, the Denver Division of the FBI, and the United States Postal Inspection Service.  The case was prosecuted by Assistant United States Attorney Pegeen Rhyne.

The sentence was pronounced by U.S. District Court Judge Christine M. Arguello.  Martin was charged by Information on January 14, 2020, and pleaded guilty to the charges on March 5, 2020.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Colorado.  Related court documents can be found on PACER by searching for Case Number 20-cr-0016.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

United States Attorney Ron Parsons announced that a Sioux Falls, South Dakota, man convicted of Wire Fraud and Money Laundering was sentenced on July 6, 2020, by U.S. District Judge Karen E. Schreier.

Paul Erickson, age 58, was sentenced to 84 months in federal prison, followed by 3 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $200.  Restitution has been deferred for 30 days.

Erickson was indicted by a federal grand jury on February 6, 2019.  He pled guilty on November 26, 2020.

The conviction stemmed from incidents when Erickson, who solely operated a business venture to develop land in the Bakken oil fields in North Dakota, became acquainted, through his business, with several individuals with whom he developed strong professional and personal relationships.  He approached many of those individuals about investing in his business.  However, he falsely represented to investors that he would use the money to purchase real estate and the construction of single-family homes in North Dakota, which he did not do.

On March 1, 2017, he accepted a $100,000 wire transfer that was deposited into his Wells Fargo bank account, which was supposed to be an investment in his business.  He told the investor that the money would be used for the development of real estate in North Dakota, and that the amount would be repaid no later than August 28, 2017.  However, he did not invest the money received into the Bakken oil fields venture and he did not repay the investor. 

Furthermore, from the $100,000 Erickson received on March 1, 2017, he conducted a financial transaction and transferred $1,000 to another person.

“The dramatic upward departure for Mr. Erickson's sentence speaks volumes about the crimes he committed over the vast course of time they occurred,” said FBI Minneapolis Special Agent in Charge, Rainer Drolshagen.  “The scope, breadth, and length of his illegal actions spanning more than 20 years involving more than 150 victims was a tall order to investigate but the effort is well worth it with the justice that was meted out today.”

“Investors should be wary about promoters of business ventures that promise to double investor’s money in a short time,” said IRS Acting Special Agent in Charge Adam Steiner.  “IRS Criminal Investigation is committed to investigating Ponzi schemes in an effort to protect the financial well-being of the American public.  We will continue to work with the U.S. Attorney’s Office and our law enforcement partners to put in jail promoters that prey upon trusting investors.”

This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service.  Assistant U.S. Attorney Jeffrey C. Clapper prosecuted the case.

Erickson is to self-report by July 20, 2020.

A criminal complaint was unsealed today in federal court in Brooklyn, New York charging Luis Enrique Martinelli Linares (Luis Martinelli Linares) and Ricardo Alberto Martinelli Linares (Ricardo Martinelli Linares), for their roles in a massive bribery and money laundering scheme involving Odebrecht S.A. (Odebrecht), a Brazil-based global construction conglomerate.  Luis Martinelli Linares and Ricardo Martinelli Linares were arrested today at el Aeropuerto Internacional la Aurora in Guatemala.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Brian C. Rabbitt, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.

On December 21, 2016, Odebrecht pleaded guilty in the Eastern District of New York to a criminal information charging it with conspiracy to violate anti-bribery provisions of the Foreign Corrupt Practices Act for its involvement in the bribery and money laundering scheme. 

The overarching Odebrecht scheme involved the payment of more than $700 million in bribes to government officials, public servants, political parties and others in Panama and other countries around the world to obtain and retain business for the company.  The defendants are alleged to have participated in the scheme by, among other means, serving as intermediaries for approximately $28 million in bribe payments made by and at the direction of Odebrecht to a then high-ranking government official in Panama (Panama Government Official), who was a close relative of the defendants.  Luis Martinelli Linares and Ricardo Martinelli Linares were each charged with one count of conspiracy to commit money laundering. 

As alleged in the complaint, between approximately August 2009 and January 2014, the defendants facilitated the payment of bribes from Odebrecht to or for the benefit of the Panama Government Official by taking a number of steps that included opening and managing secret bank accounts held in the names of shell companies in foreign jurisdictions.  These secret bank accounts were used to receive, transfer and deliver the bribe payments.  The defendants served as the signatories on certain of the shell company bank accounts and personally sent and caused to be sent wire transfers through the structure of shell company bank accounts to conceal and spend bribery proceeds.  Many of these financial transactions were in U.S. dollars and were made through U.S. banks, some of which were located in New York.

The charges in the complaint announced today are allegations, and the defendants are presumed innocent unless and until proven guilty.

The case is being prosecuted by Assistant United States Attorneys Julia Nestor and Alixandra Smith of the Office’s Business and Securities Fraud Section, Criminal Division Fraud Section Trial Attorney Michael Culhane Harper and Money Laundering and Asset Recovery Section Trial Attorneys Barbara Levy and Michael Redmann.  The FBI’s International Corruption squad in New York investigated this case.

The Criminal Division’s Office of International Affairs provided substantial assistance. 

The Defendants:

LUIS ENRIQUE MARTINELLI LINARES
Age: 38
Panama City, Panama

RICARDO ALBERTO MARTINELLI LINARES
Age: 40
Panama City, Panama

E.D.N.Y. Docket No. 20-M-498 (RML)

West Palm Beach, Fl. – Today, federal district judge Kenneth A. Marra committed a man who fired gunshots inside a West Palm Beach VA Medical Center to the custody of the U.S. Attorney General for 25 years of mental health care and treatment at a suitable medical facility. The commitment is a provisional sentence for sixty-year old defendant Larry Ray Bon, a former West Palm Beach resident. If during Bon’s commitment, it is determined that he no longer needs treatment, Bon will reappear in federal court, where a judge will sentence him to a federal prison term of between 12.5 and 25 years. Lawyers for the U.S. and Bon jointly recommended this provisional sentence arrangement for the defendant.    

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI’s Miami Field Office, and David Spilker, Special Agent in Charge, Veterans Affairs Office of Inspector General, made the announcement.

According to court records, Bon brought the firearm and ammunition to the emergency room of the Department of Veterans Affairs Medical Center in West Palm Beach, Florida. When he became frustrated with medical staff, Bon retrieved the firearm from his wheelchair, and fired several shots. He placed VA Medical Center employees in fear for their lives, including two employees who were near Bon. An emergency room doctor attempted to disarm Bon, who fired the gun again, hitting the doctor in the neck. Despite being injured, the doctor was still able to disarm Bon. VA Medical Center staff then subdued Bon. The doctor survived the gunshot wound.

On March 13, 2020, Bon pleaded guilty to three counts of Assaulting, Resisting, or Impeding Federal Employees, and one count of Possession of a Firearm in a Federal Facility with Intent to Commit a Crime. Federal law allows for a provisional sentence that commits a defendant to the custody of the Attorney General for treatment where a judge “finds by a preponderance of the evidence that the defendant is presently suffering from a mental disease or defect and that he should, in lieu of being sentenced to imprisonment, be committed to a suitable facility...” 18 U.S.C. §4244 (d).  

“When U.S. military veterans walk through the doors of a VA medical clinic for healing, they should feel comfort and hope, not fear of violence,” said Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida. “We are committed to protecting our cherished veterans and the dedicated employees of the South Florida VA medical clinics who treat them.”  

“As detailed in the plea agreement and subsequent sentence, Bon’s dangerous actions injured VA employees and risked the safety and well-being of veterans.  VA OIG is committed to holding accountable anyone who commits an act of violence at a VA facility and ensuring that both veterans and employees have a safe environment to obtain quality healthcare," said David Spilker, Special Agent in Charge, Veterans Affairs Office of Inspector General.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI and VA OIG.  Assistant U.S. Attorneys Susan Osborne and Rinku Tribuiani prosecuted this case. Assistant U.S. Attorney Danielle Croke is handling 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.

For more information on the U.S. Attorney’s Office for the Southern District of Florida, visit https://www.justice.gov/usao-sdfl

Fort Myers, FL – United States Attorney Maria Chapa Lopez announces that Florida Cancer Specialists & Research Institute, LLC (FCS), an oncology group headquartered in Fort Myers, Florida, has agreed to a civil settlement that will return $2,341,508.91 that was overpaid by the Department of Veterans Affairs (VA) for certain claims relating to physician-administered drugs.

Although the majority of veterans enrolled in the VA healthcare system receive care in VA-operated medical facilities, the VA may also contract with non-VA facilities to provide services that are not readily available from a VA medical facility. The Code of Federal Regulations allows for VA reimbursement of non-VA care providers for certain physician-administered drugs in accordance with Medicare pricing schedules.

Marianne K. Parker, a Claims Resolution Specialist with FCS, filed a qui tam complaint in the Middle District of Florida after contacting the VA Office of Inspector General’s hotline concerning her discovery that FCS was being overpaid by the VA for physician-administered drugs. In response to the hotline complaint, the VA-OIG Office of Audits and Evaluation determined that a mistake in the Fee Basis Claims System had led the Florida Claims Processing Centers to pay the full amount billed by the provider rather than the appropriate Medicare rate. Subsequently, the VA fixed the issue. 

The United States worked cooperatively with FCS to identify the remaining amount of the overpayments made by the VA to FCS. The civil settlement will conclude the lawsuit filed by Ms. Parker and she will receive 20% of the recovery. 

“Money designated for the medical care of our veterans is a precious commodity,” said United States Attorney Chapa Lopez. “We are pleased that Florida Cancer Specialists cooperated with the investigation and will return the overpayment back to the VA. Any other providers who received such overpayments should follow suit.”

David Spilker, Special Agent in Charge, VA-Office of Inspector General, stated, “The VA’s Community Care program provides veterans with the ability to obtain critical healthcare services from providers in their community. This civil settlement reinforces the VA-OIG’s commitment to safeguarding the integrity of VA’s healthcare programs and preserving taxpayer funds for their intended purposes."

The investigation was handled by Assistant U.S. Attorney Kyle S. Cohen, with assistance from the Department of Veterans Affairs – Office of Inspector General.

The claims resolved by the settlement are allegations only and there has been no determination of liability. 

Justin Herdman, U.S. Attorney for the Northern District of Ohio, announced today that Amin M. Salem, age 61, of Westlake, was sentenced to 33-months imprisonment after entering a plea of guilty to money laundering, unpermitted discharged into a waterway of the United States, and the slaughter of animals for commercial use without a permit on December 17, 2019. According to court documents, Amin Salem operated an unregulated slaughterhouse in Elyria and polluted a stream by dumping animal blood and other fluids. Salem then laundered the profits from the illegal slaughterhouse operation at Cleveland-area gas stations. 

"Salem's blatant disregard for the rules and regulations governing our food and water supply put the health of countless people at risk, all so he could make a quick profit," said U.S. Attorney Justin Herdman. "These actions, combined with his admitted money laundering activities, all show that Salem's sentenced was earned and justified."

“Amin Salem attempted to conceal the profits from the illegal sale of lamb through his legitimate gas station bank accounts, but the financial expertise of IRS Criminal Investigation and the joint investigative efforts of our federal, state and local counterparts unraveled this money laundering scheme,” said Bryant Jackson, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.

According to the indictment, from September 2014 through March 2016, Salem owned two properties in Elyria, Ohio where he, and others, slaughtered animals for commercial sale and personal consumption without any licenses or permits. As part of the slaughterhouse operation, Salem discharged blood and other bodily fluids into Engle Ditch, a waterway that emptied into Beaver Creek and Lake Eire. In total, Salem slaughtered at least 400 lambs or goats weighing approximately 25,000 pounds.

From October 2010 through March 2016, Salem owned several Cleveland area gas stations where he sold his adulterated and uninspected meat. Proceeds from the sales of the meat were deposited into gas station bank accounts in an attempt to conceal their source and further facilitate the illegal slaughtering operation. In total, over $695,000 was deposited into the banks accounts for the gas station located at 3934 West 117th Street in Cleveland, Ohio, with approximately $88,000 coming from the illegal sale of meat.

Also indicted in this matter were Mohamed Salem (Amin Salem's son), age 34, of Westlake and Zahran Al-Qadan, age 57, of Cleveland. Al-Qadan was sentenced to two years of probation, the first four months as home confinement. Mohamed Salem is awaiting sentencing.

This case was investigated by the FBI, IRS-Criminal Investigations, USDA-OIG, USDA-FSIS, EPA-CID, Ohio Investigative Unit, Ohio Department of Taxation, Ohio Department of Agriculture, BCI, Ohio EPA, Lorain County Sheriff's Office, Guernsey County Sheriff's Department, Cleveland Division of Police, Westlake Police Department and Strongsville Police Department.

This case was prosecuted by Assistant U.S. Attorneys Duncan Brown and Brad Beeson.

A complaint was unsealed yesterday in the Eastern District of New York charging Bryant Espinoza Aguilar, the stepson of Sinaloa Cartel leader and notorious fugitive Rafael Caro Quintero, with conspiring to commit violations of the Kingpin Act, an economic sanctions program against narcotics traffickers that is administered and enforced by the Office of Foreign Assets Control (OFAC) of the United States Department of Treasury.  Specifically, Espinoza is charged with assisting Caro Quintero and his common law wife by putting their assets in his own name, thereby violating OFAC’s prohibition on United States Citizens from conducting financial transactions with specially designated narcotics traffickers.

The complaint was announced by Richard P. Donoghue, United States Attorney for the Eastern District of New York; Timothy J. Shea, Acting Administrator, Drug Enforcement Administration (DEA); Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York Field Office (HSI); Dermot F. Shea, Commissioner, New York City Police Department (NYPD); and Keith M. Corlett, Superintendent, New York State Police (NYSP), announced the charge.

According to court filings, OFAC designated Caro Quintero as a specially designated narcotics trafficker in 2000, and designated Caro Quintero’s wife as a specially designated narcotics trafficker in 2016.  The OFAC designations stem from Caro Quintero’s criminal history as the leader of the Caro Quintero drug trafficking organization, a faction of the Mexican organized crime syndicate known as the Sinaloa Cartel.  Between January 1980 and January 2017, Caro Quintero led a continuing criminal enterprise responsible for importing into the United States and distributing massive amounts of illegal narcotics and conspiring to murder persons who posed a threat to his narcotics enterprise.  The murder conspiracy includes Caro Quintero’s kidnapping and murder of DEA Special Agent Enrique “Kiki” Camarena in Guadalajara, Jalisco, Mexico in February 1985. 

On August 9, 2013, a Mexican tribunal ruled that Caro Quintero could be released from custody because he had been tried improperly in a federal tribunal, rather than a state tribunal.  The Mexican tribunal’s finding was later overturned, but Caro Quintero remains at large as a fugitive from Mexican and U.S. justice. 

The complaint charges Espinoza Aguilar transferred property owned by his mother into his own name and bribed a public official to change the name of the property’s owner on public registry documents to protect the property from being restrained as a result his mother’s OFAC designation. 

“As alleged, the defendant acted as a straw man to protect property purchased with the illicit, blood-stained proceeds of his stepfather’s drug trafficking empire from being seized by the government,” stated United States Attorney Donoghue.  “This Office and our partners at the Drug Enforcement Administration are using every legal measure at our disposal to hold accountable those enablers of Caro Quintero and bring them to justice.”  Mr. Donoghue expressed his grateful appreciation to the DEA’s Raleigh Division Office for its assistance on the case.

“On February 7, 1985, DEA was forever changed when Special Agent Enrique “Kiki” Camarena was kidnapped, tortured, and murdered in Guadalajara, Mexico,” stated DEA Acting Administrator Shea.  “We will never forget his sacrifice and remain steadfast in our pursuit of the man responsible for his death, Rafael Caro Quintero, and those that continue to protect and enable his criminal activities.  Let today’s action be a clear message to Caro Quintero, his family, and his criminal associates — we will stop at nothing in our pursuit for justice for SA Camarena.” 

“While his stepfather, a Sinaloa Cartel leader, was specially designated by OFAC as a narcotics trafficker twenty years ago, Espinoza Aguilar is alleged to have violated the Kingpin Act by transferring his stepfather’s assets into his name, seeking to evade the sanctions program,” stated HSI Special Agent-in-Charge Fitzhugh.  “HSI’s partnership with the DEA and its Strike Force is one in which collaboration is key, and will continue to focus on arresting those who pursue ways to circumvent the law and hide their criminal acts.”

“I commend the dedicated teamwork of the New York Strike Force which was instrumental in working to bring this suspect to justice. This defendant attempted to protect and hide the profits of dangerous narcotics that were our communities, profits made at the expense of the safety of our communities. We will continue to be vigilant in working together with our law enforcement partners to keep our neighborhoods safe, to keep harmful narcotics off our streets and those who commit these types of crimes, or protect those who do, are held accountable,” stated NYSP Superintendent Corlett.

“This case is another example of our joint responsibilities to eradicate international drug trafficking. Our NYPD detectives, and state and local partners, stop at nothing to stem the flow of illegal narcotics,” stated NYPD Commissioner Shea.

The investigation was led by the New York Strike Force, a crime-fighting unit comprising federal, state and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force and the New York/New Jersey High Intensity Drug Trafficking Area.  The Strike Force is based at the DEA’s New York Division and includes agents and officers of the DEA, New York City Police Department, New York State Police, Homeland Security Investigations, U.S. Internal Revenue Service Criminal Investigation Division, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Customs and Border Protection, U.S. Secret Service, U.S. Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department and New York State Department of Corrections and Community Supervision.

The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Michael Robotti and Erin Reid are in charge of the prosecution.

The Defendant:

BRYANT ESPINOZA AGUILAR
Age:  30
United States and Mexico

E.D.N.Y. Docket No. 20-MJ-458

An indictment has been returned in federal court in Central Islip, New York charging Ashraf Omar Eldarir, a U.S. citizen, with smuggling Egyptian cultural property into the United States.  Eldarir was previously arrested on a complaint in February 2020 after arriving at John F. Kennedy International Airport (JFK) with three suitcases filled with undeclared Egyptian antiquities.  Eldarir will be arraigned at a later date.   

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations (HSI), and Troy Miller, Director of Field Operations, U.S. Customs and Border Protection, New York Field Office (CBP), announced the indictment.

As set forth in court filings, on January 22, 2020, Eldarir arrived at JFK from Egypt with three checked suitcases.  Eldarir falsely declared to U.S. Customs and Border Protection (CBP) that he was carrying goods valued at only 300 U.S. dollars.  However, when CBP officers opened Eldarir’s suitcases they found 590 bubble and foam-wrapped Egyptian antiquities.  When the protective wrapping was opened, loose sand and dirt spilled out, and some of the items smelled of wet earth, indicators that the artifacts had been recently excavated.  Among the items recovered by law enforcement officers are gold amulets from a funerary set; a relief with the cartouche of a Ptolemaic king that was originally part of a royal building or temple; wooden tomb model figures with linen garments dating to approximately 1900 BCE; and two complete Roman period funerary stelae of the type found at Kom abu Bellou in Egypt.  Eldarir did not produce any of the required documentation from Egypt authorizing the export of the artifacts.  Eldarir was charged with one count of smuggling arising from this incident, and one count of smuggling involving an earlier trip in which he smuggled an ancient Egyptian polychrome relief.  

“These cultural treasures traveled across centuries and millennia, only to end up unceremoniously stuffed in a dirt-caked suitcase at JFK,” stated United States Attorney Donoghue.  “We commend our CBP and HSI partners for their excellent work and, with them, we stand ready to investigate and prosecute those who attempt to profit from the illegal smuggling of irreplaceable ancient artifacts.”

 Eldarir’s alleged smuggling of 590 artifacts pillaged from Egypt is yet another example of an individual seeking to profit by stealing history from another nation,” stated HSI Special Agent-in-Charge Fitzhugh.   “HSI New York continues to collaborate with our partners at CBP to stop the smuggling of illicit goods through the JFK airport and onto American soil.”

“U.S. Customs and Border Protection is extremely proud to have played an important role in the seizing of these Egyptian antiquities as this would be smuggler attempted to enter the country with his illegally obtained artifacts," stated CBP Director of Field Operations Miller.  “CBP’s cooperation with HSI and the Eastern District of New York demonstrates the continuing resolve of law enforcement in the United States to address illegal trafficking in stolen artifacts.”

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Eldarir faces a maximum sentence of 20 years’ imprisonment on each count.

The government’s case is being handled by the Office’s General Crimes Section.  Assistant United States Attorney Marietou Diouf is in charge of the prosecution.  Cultural Property Coordinator Karin Orenstein of the Office’s Civil Division is handling forfeiture matters.

The Defendant:

ASHRAF OMAR ELDARIR (also known as “Omar Eldarir”)
Age:  47
Brooklyn, New York

E.D.N.Y. Docket No. 20-CR-243 (LDH)

United States Attorney Brandon J. Fremin announced that U.S. District Judge John W. deGravelles sentenced Derrick J. Banks, age 45, of Baton Rouge, Louisiana, to 84 months in federal prison following his conviction for possession of firearms by a convicted felon.  The Court further sentenced Banks to three years of supervised release following his term of imprisonment and ordered that the firearms and ammunition involved be forfeited.

According to admissions Banks made as part of his guilty plea, on February 27, 2019, detectives with the Baton Rouge City Police Department executed a search warrant at Banks’ residence.  A loaded Beretta PX4 Storm, .40-caliber pistol and a loaded Romarm/Cugir Model M10-762, .762 caliber rifle were located in Banks’ bedroom. 

Prior to possessing the firearms, Banks was convicted in 2004 in the United States District Court for the Middle District of Louisiana for possession of a firearm by a convicted felon.  Banks was also convicted in 2017 in East Baton Rouge Parish for bank fraud. 

U.S. Attorney Fremin stated, “Sending repeat offenders to prison is another example of our commitment to fight violence and how the collaborative efforts of the federal, state, and local law enforcement can make our streets safer.  I want to thank our prosecutor, ATF, and the Baton Rouge City Police for their efforts.”

“ATF, in this joint effort, will continue to focus on repeat offenders, like Derrick Banks, who is prohibited from possessing firearms,” said ATF New Orleans Field Division Special Agent in Charge Kurt Thielhorn. “The sentence imposed today will reduce firearm related crimes and keep our communities safe.”

This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws.  Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. The United States Attorney’s Office has prosecuted this case with support from the following Project Guardian partners: the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, and the East Baton Rouge Parish Sheriff’s Office.  For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.

This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Baton Rouge Police Department.  It was prosecuted by Assistant United States Attorneys Robert Piedrahita and Kristen Craig.

          LOS ANGELES– A former Beverly Hills stockbroker has been sentenced to 72 months in federal prison for scheming to manipulate penny stock prices to inflate the reported profits of his co-conspirator’s hedge funds, generating millions of dollars in fees and commissions for himself, but causing investors to suffer more than $215 million in losses when the funds collapsed.

          Todd Michael Ficeto, 53, of Marion, Ohio, was sentenced late Monday by United States District Judge Virginia A. Phillips, who also ordered him to pay $215,815,031 in restitution.

          During a 17-day trial that concluded in July 2019, a jury found Ficeto guilty of 18 felonies: one count of conspiracy to commit securities fraud and wire fraud, seven counts of securities fraud, two counts of investment adviser fraud, one count of money laundering conspiracy, five counts of money laundering, one count of obstruction of justice, and one count of making false statements.

          At Monday’s sentencing hearing, Judge Phillips described the scheme as “serious” and “far-reaching” as she ordered Ficeto to being serving his sentence within two weeks. Ficeto has waived his right to appeal his conviction and sentence.

          Ficeto was the president of Hunter World Markets (HWM), a Beverly Hills-based broker-dealer that he co-owned with German financier Florian Wilhelm Jürgen Homm. Homm founded Absolute Capital Management Holdings (Absolute Funds), a Cayman Island-based company that managed eight hedge funds and which Homm operated from Mallorca, Spain. Homm, 60, was indicted in March 2013 on charges of securities fraud and wire fraud after he was arrested in Italy, but later fled to Germany and remains there as a fugitive from justice.

          Between September 2004 and September 2007, Ficeto used HWM’s investment arm to find small, private companies that could be converted into publicly traded penny-stock businesses. Once the penny stock companies went public, Ficeto arranged financing deals where Homm invested millions of dollars from the Absolute Funds to acquire a majority of the new company’s stock. Through these financial deals, Ficeto and Homm paid themselves substantial “placement agent” fees and issued themselves and their co-conspirators millions of shares of the newly created penny stock companies.

          Ficeto also caused existing shareholders in the penny stock companies to enter into “lock-up agreements” that prevented them from traded these companies’ shares. Meanwhile, Ficeto, Homm and their co-conspirators freely traded the shares they controlled, and executed their scheme by trading the penny stocks – through HWM – at prices set by Homm and co-defendant Colin Heatherington, 45, of Port Alberni, Canada, along with his brother, Craig Heatherington, 42,of Queensland, Australia. In several of the penny stock companies, Ficeto and his co-conspirators accounted for more than 90 percent of the companies’ trading volume.

          Ficeto, Homm, and other co-conspirators fraudulently manipulated the penny stocks to inflate their prices, exaggerating the purported profitability of the Absolute Funds. As a result, the co-conspirators were able to sell their own shares of the penny stocks at the inflated prices to the hedge funds.

          For example, over the span of four minutes near the end of the trading day on May 15, 2007, Ficeto, Homm and Colin Heatherington, through manipulative cross-trades at HWM, caused the price of a penny stock company’s shares to increase from $3.25 to $12.

          The stock price inflation also served to overstate the performance of the hedge funds that, in turn, generated substantial performance fees and other compensation for defendant Homm and his co-conspirators. The co-conspirators then used the inflated performance figures to induce investments from unsuspecting victim-investors.

          Ficeto admitted at trial to making more than $27 million through HWM from 2005 and 2008, money that he spent lavishly on luxury cars, expensive homes and a yacht.

          As the scheme unraveled, Homm abruptly resigned from the firm in the middle of the night on September 18, 2007 and fled to avoid prosecution. Redemption requests from concerned Absolute Funds investors poured in when they discovered that significant portions of their investments were placed in speculative, illiquid and essentially worthless penny stocks. HWM ceased operations in 2009.

          Ficeto then lied to investigators with the Securities and Exchange Commission and the Financial Industry Regulatory Authority. He also suborned lies from his company’s chief stock trader in an attempt to conceal the fraud.

          Ficeto has forfeited $6,954,265 to the government, funds he laundered for his personal gain into accounts in the Cook Islands days before his SEC testimony and money Ficeto used to purchase homes in Malibu, California and Park City, Utah with the illicit proceeds. This money was returned to his victims.

          The total losses to investors in this case exceed $215 million.

          Colin Heatherington is located in Canada and the United States is seeking his extradition. Craig Heatherington testified for the government at Ficeto’s trial and received a deferred prosecution agreement in exchange for his cooperation.

          This matter was investigated by the FBI. IRS Criminal Investigation, the SEC, and FINRA provided assistance to the investigation.

          This case was prosecuted by Assistant United States Attorneys Cassie D. Palmer of the General Crimes Section; Scott Paetty of the Major Frauds Section; Ian V. Yanniello of the International Narcotics, Money Laundering, and Racketeering Section; and Katharine Schonbachler of the Asset Forfeiture Section.

Jacksonville, Florida – U.S. District Judge Marcia Morales Howard today sentenced Brandi Nicole Fletcher (25, Jacksonville) to four years and nine months in federal prison for perjury and aggravated identity theft in connection with obtaining a fraudulent passport. Fletcher had pleaded guilty on March 20, 2020.

According to court documents, Fletcher was in possession of multiple pieces of personal identification information, including social security cards, birth certificates, and driver licenses, that belonged to real people. On February 7, 2019, Fletcher traveled to a Florida Department of Highway Safety and Motor Vehicles (“DHSMV”) location, where she presented identification documents belonging to a person with the initials A.I.N.D., representing herself to be A.I.N.D. The same day, Fletcher was issued a Florida identification card in the identity of A.I.N.D.  Fletcher then traveled to a Passport Acceptance Facility located in Jacksonville and applied for a passport in the identity of A.I.N.D., which was issued the following day. In applying for the passport, Fletcher certified, under penalty of perjury, that she had not made false statements in the application. In May and June 2019, Fletcher then used the passport to travel internationally from the United States to Santo Domingo, Dominican Republic, in order to obtain plastic surgery.

On July 12, 2019, Fletcher again traveled to the DHSMV, where she provided identification documents belonging to a person with the initials K.N.P. The same day, Fletcher was issued a Florida identification card in the identity of K.N.P.  Approximately two hours later, Fletcher testified in federal court as a potential third-party custodian for an individual facing revocation of his supervised release.  Fletcher was sworn in as a witness, thereafter stated under oath, that she was K.N.P., and that she had no criminal record. That testimony was false. At the conclusion of the hearing, the other individual was released on bond into K.N.P.’s custody.

On August 5, 2019, Fletcher was arrested in South Carolina for possession of stolen property. Fletcher’s vehicle was searched and found to contain the passport that Fletcher had obtained using the A.I.N.D. identity and multiple pieces of identification documents for multiple other individuals. Fletcher also possessed court-issued monitoring equipment that was issued to her in her role as third-party custodian of the other individual.

Upon being interviewed by law enforcement, Fletcher admitted that she was aware of an outstanding warrant for her arrest, and did not believe she would be allowed to leave the country using her own identity. Fletcher also admitted that she did not think the other individual would be released into her custody if she had used her true identity to testify in federal court.

A search of DHSMV databases revealed that Fletcher had obtained Florida drivers licenses and identification cards using four identities that did not belong to her.

This case was investigated by the U.S. Marshals Service and the Diplomatic Security Service. It was prosecuted by Assistant United States Attorney Laura Cofer Taylor.

MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Brent Allen Haire, age 42, of Muskogee, Oklahoma entered a guilty plea to Possession With Intent To Distribute Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B), punishable by not less than 5 years and not more than 40 years imprisonment, a fine up to $5,000,000.00, or both; to Possession Of Firearms In Furtherance Of Drug Trafficking Crime, in violation of Title 18, United States Code, Section 924(c), punishable by not less than 5 years to run consecutive to any other term of imprisonment imposed, a fine up to $250,000.00, or both; and to Felon In Possession Of Firearms, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2), punishable by not more than 10 years imprisonment, a fine up to $250,000.00, or both.

The Indictment alleged that on or about February 24, 2020, in the Eastern District of Oklahoma, the defendant, did knowingly and intentionally possess with intent to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance. 

The Indictment further alleged that on or about February 24, 2020, in the Eastern District of Oklahoma, the defendant, did knowingly possess firearms in the furtherance of a drug trafficking crime for which he may be prosecuted in a court of the United States, that is, Possession with Intent to Distribute Methamphetamine as alleged in Count One.  

The Indictment further alleged that on or about February 24, 2020, in the Eastern District of Oklahoma, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, and knowing of said conviction, did knowingly possess in and affecting commerce, firearms which had been shipped and transported in interstate commerce. 

The charges arose from an investigation by the Muskogee Police Department and the Drug Enforcement Administration.

The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.

Assistant United States Attorney Nalani Ching represented the United States at the change of plea hearing.