Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced former attorney Saundra Lucille White, a/k/a Lucille Parrish-White and six variations of those names, age 57, of Lothian, Maryland, today to 11 years in prison, followed by three years of supervised release, for mail fraud, wire fraud, money laundering, and aggravated identity theft in connection with a scheme to defraud clients of $841,908.57. Judge Grimm also entered an order requiring White to pay restitution of $841,908.57, and to forfeit that same amount, along with property and several vehicles.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Robert Geary of the Treasury Inspector General for Tax Administration; Anne Arundel County Police Chief Tim Altomare; and Interim Chief Henry P. Stawinski of the Prince George’s County Police Department.

According to the evidence presented at White’s seven day trial, in March 2010, White agreed to assist Victim H to obtain guardianship for a relative (Victim M) who had been incapacitated by a stroke.  At White’s request Victim H provided White with an accounting of Victim M’s assets.  With White’s assistance, Victim H obtained guardianship of Victim M a short time later. Victim M died on January 7, 2011.  White was disbarred from the practice of law in the District of Columbia on January 20, 2011 and disbarred in Maryland on September 9, 2011.  White did not inform Victim H of her pending disbarment, nor did she tell Victim H that she was no longer a licensed attorney.

According to trial evidence, from March 2010 through May 2013, White created fraudulent tax notices that purported to be from the Internal Revenue Service, and demanded payment of taxes purportedly owed by Victim M and by a deceased relative of Victim M.  The notices required that payments be sent to an entity called Intel Realty Financial Services (IRFS) at a mailbox in Annapolis, Maryland, controlled by White.  White then mailed and faxed the fraudulent tax notices to Victim H, advising Victim H that in her role as legal guardian of Victim M, she was required to remit payments for these taxes to the address in the notice.  Once White obtained the checks sent by Victim H in response to the fraudulent tax notices, totaling $750,000, she deposited them in the bank accounts she opened in the names of IRFS and Victim M.  White withdrew the funds from the bank accounts, forging Victim M’s signature on checks made out to White, other entities controlled by White, a family member, or otherwise for White’s benefit.  White also obtained debit cards in Victim M’s name and attempted to obtain a Maryland driver’s license in the name of Victim M, but bearing White’s photograph. White used some of the money to purchase luxury items, including a $20,500 check used as a down payment for a 2011 Silver Volvo C70 hard-top convertible.

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended TIGTA, the Anne Arundel County Police Department, and Prince George’s County Police Department for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Thomas P. Windom and Special Assistant U.S. Attorney James I. Pearce of the U.S. Department of Justice, who prosecuted the case.

COEUR D'ALENE - The Rooter Guy, LLC, and its founder Ben Broyles, 62, of Hayden, Idaho, were sentenced today in federal court for violating the Clean Water Act, U.S. Attorney Wendy J. Olson announced.  The Rooter Guy, LLC was sentenced to three years organization probation.  Ben Broyles, the majority owner and operator of The Rooter Guy, LLC was also sentenced to three years of probation.  Chief U.S. District Judge B. Lynn Winmill also ordered that Broyles and his corporation pay a $17,000 fine and $4,000 in restitution to the City of Hayden, and to perform 100 hours of community service.  Guilty pleas were entered on November 18, 2015. 

According to the plea agreements, between March 17, 2014, and May 16, 2014, the defendants violated the Clean Water Act by pumping septic waste into the City of Hayden’s municipal sewer system operated by the Hayden Area Regional Sewer Board.  Although The Rooter Guy LLC is licensed to collect septic waste from commercial and residential customers, it is required to dispose of septic waste at facilities designed to collect and treat waste in accordance with environmental considerations and EPA regulation.  Hayden’s municipal sewer system is not designed to accept and treat septic waste.  

"Enforcement of federal criminal environmental laws promotes healthy safe communities for all of us,” U.S. Attorney Wendy Olson observed.  “Unfortunately, The Rooter Guy LLC put its bottom line above its obligation to conduct its business in a way that protects public safety.  The successful investigation and prosecution in this case sends a clear message that businesses who put profits ahead of public safety will be brought to justice."

“Dumping unpermitted septic waste into a wastewater treatment plant not only damages expensive equipment, but can sicken or injure people,” said Scot Adair, Acting Special Agent in Charge of EPA’s criminal enforcement program in Idaho.  “By refusing to comply with the law, the defendants jeopardized the health and safety of an entire community.  Today’s guilty plea shows that those who ignore this country’s environmental laws can expect to face the consequences in court.”    

The case was investigated by the Environmental Protection Agency with the assistance of the City of Hayden, the Hayden Area Regional Sewer Board, Federal Bureau of Investigation, U.S. Forest Service, U.S. Secret Service, and the Kootenai County Sheriff’s Office.  

CHARLESTON, W.Va. – A former owner of Freedom Industries was sentenced today to three years of probation and ordered to pay a $20,000 fine for a Refuse Act violation connected to the 2014 Elk River chemical spill, announced Acting United States Attorney Carol Casto. Charles E. Herzing, of McMurray, Pennsylvania, previously pleaded guilty in March 2015 to unlawfully discharging refuse matter. Herzing is one of six former officials of Freedom Industries, in addition to Freedom Industries itself as a corporation, to be prosecuted for federal crimes associated with the chemical spill.

On January 9, 2014, a major chemical leak was discovered in Charleston at the above-ground storage tank area owned and operated by Freedom Industries (Freedom) on the Elk River. Freedom used these storage tanks to keep and process chemicals, and the leak consisted primarily of 4-methylcyclohexane methanol (MCHM), a chemical used in the coal mining industry as a cleansing agent. A significant amount of MCHM leaked into the Elk River, flowed into a water treatment plant, and contaminated the water supply of Charleston and the surrounding areas for several days. Freedom did not have a permit required by law that would have allowed the company to discharge MCHM into the Elk River.

Herzing, along with co-defendants Dennis P. Farrell and William E. Tis, owned Freedom until December 2013, when they sold their shares to a Pennsylvania corporation. From 2004 until the 2013 sale, Herzing served as the Vice President of Freedom. In this role, Herzing had the responsibility and the authority to ensure that Freedom and its facility on the Elk River complied with the law. 

Freedom had a permit issued by West Virginia’s Department of Environmental Protection that allowed for the discharge of storm water and groundwater subject to monitoring and reporting requirements. However, this permit did not allow for the discharge of MCHM, and required the development and maintenance of a storm water plan and a groundwater plan. Generally, storm water and groundwater plans identify potential sources of pollution and outline steps to prevent, contain, and reduce pollutants.

Herzing admitted that he was aware of the permit and was put on notice that Freedom was required to have a storm water plan. He further admitted that he had the responsibility to ensure that Freedom complied with the permit by having a storm water and groundwater plan in place. During Herzing's tenure as a corporate officer, Freedom never developed a storm water or groundwater plan, which was a contributing cause to the chemical spill.

Herzing is the second defendant sentenced as part of the investigation into the chemical spill. Robert J. Reynolds, of Apex, North Carolina, who worked as an environmental consultant with Freedom, was sentenced yesterday for a Clean Water Act violation.

Freedom itself, which has been in bankruptcy since shortly after the chemical spill, pleaded guilty to violating the Clean Water Act, the unlawful discharge of refuse matter in violation of the Refuse Act, and violating an environmental permit. Freedom is scheduled to be sentenced on February 4, 2016.

William E. Tis, of Verona, Pennsylvania, a former owner of Freedom, pleaded guilty in March 2015 to the unlawful discharge of refuse matter in violation of the Refuse Act. Tis is scheduled to be sentenced on February 8, 2016.

Michael E. Burdette, of Dunbar, a plant manager for Freedom, pleaded guilty in March 2015 to violating the Clean Water Act by negligently discharging a pollutant, and is scheduled to be sentenced on February 4, 2016.

Dennis P. Farrell, of Charleston, a former Freedom president and owner, pleaded guilty in August 2015 to violating the federal Refuse Act and violating a permit by failing to have a pollution prevention plan. Farrell is scheduled to be sentenced on February 11, 2016.

Gary Southern, of Marco Island, Florida, the president of Freedom at the time of the spill, pleaded guilty in August 2015 to violating the Clean Water Act, unlawfully discharging refuse matter in violation of the Refuse Act, and violating a permit by failing to have a pollution prevention plan. Southern is scheduled to be sentenced on February 17, 2016.

The investigation of the chemical spill was conducted by the Federal Bureau of Investigation and the Environmental Protection Agency’s Criminal Investigation Division. Assistant United States Attorneys Philip H. Wright, Larry R. Ellis, and Eric P. Bacaj, as well as the Environmental Protection Agency’s Regional Criminal Enforcement Counsel Perry D. McDaniel, are handling the prosecutions. United States District Judge Thomas E. Johnston imposed the sentence, and will preside over the remaining sentencing hearings associated with the chemical spill.

Preet Bharara, United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of an Indictment in Manhattan federal court charging GJETO PRELAJ, a/k/a “Bibi,” ERBI KAU, a/k/a “Mafia,” BLEDAR BATSKA, a/k/a “Alex,” NIKOLIN DEDUSHI, a/k/a “Niko,” ENIS MUSTAFA, and MEHMET BOGIC, a/k/a “Bogi,” with access device fraud and aggravated identity theft for their alleged roles in schemes to steal customer bank account information and to use counterfeit/stolen debit and credit cards in New York and Nevada.  PRELAJ, KAU, BATSKA, DEDUSHI, and VICTOR TOMESCU were also charged with possessing, using, and trafficking devices that used “skimming” technology to secretly record the debit card and personal identification numbers of customers who used automated teller machines (“ATMs”).  Such devices can be employed to steal hundreds of card numbers of ATM users, which can be encoded on new counterfeit cards and used to make thousands of dollars of fraudulent charges or withdrawals. 

All the defendants were arrested and taken into custody earlier this morning.  The case has been assigned to U.S. District Judge Richard J. Sullivan.  PRELAJ, KAU, BATSKA, MUSTAFA, TOMESCU, and BOGIC was presented before Judge Sullivan in Manhattan federal court this afternoon.  DEDUSHI, who was arrested in Las Vegas, Nevada, was presented in the U.S. District Court for the District of Nevada in Las Vegas.            

Manhattan U.S. Attorney Preet Bharara said:  “Today, we arrested seven defendants who allegedly stole debit and credit card numbers using sophisticated skimming devices installed on ATMs, and then used that information to defraud victims out of thousands of dollars.  I want to thank the FBI, NYPD, as well as the Joint Organized Crime Task Force and FBI-NYPD Financial Cyber Crimes Taskforce, for their excellent work in this investigation.”          

FBI Assistant Director-in-Charge Diego Rodriguez said:  “As alleged today, the defendants participated in a plot to steal proprietary financial information from their victims. Criminals who turn a quick profit in these types of schemes exploit and manipulate the very technology we depend on to streamline the banking process.  Furthermore, this system of new-age thievery has the ability to cause considerable losses to banks and their clientele.  The FBI is serious about protecting banks and bank customers from the nefarious actions of cyber criminals and transnational organized crime groups who are known to engage in this type of activity. We urge the public to visit our website at www.fbi.gov for tips on how to avoid being victimized by skimming.”

Police Commissioner William J. Bratton said:  “Identity theft is a crime that often has an ongoing impact on unwitting victims who are left to piece their financial lives back together.  As alleged, the individuals named in this indictment engaged in a type of criminal activity that affects not only their direct victims, but financial systems as well, through the use of skimming device technology and the counterfeiting of credit cards. I commend the well-coordinated work of the investigators assigned to this case and our many law enforcement partners in dismantling this operation.”

According to the allegations in the Indictment[1] unsealed today in Manhattan federal court:

From January 2015 through December 2015, PRELAJ, KAU, BATSKA, DEDUSHI, and MUSTAFA conspired to, among other things, place skimming devices on ATMs in Las Vegas, which can be used to surreptitiously record the numbers of cards that are used in the ATM by reading the information contained on the cards’ magnetic strips.  For example, on September 2, 2015, KAU removed a skimming device that was installed on an ATM in a gas station in Las Vegas.  On the morning of September 12, 2015, BATSKA installed at least one skimming device on ATMs in the business center of a hotel in Las Vegas, which was later removed by KAU on the evening of the same day.

The conspiracy also involved producing and trafficking in counterfeit debit cards created with information stolen by skimming devices, and using those cards to withdraw money fraudulently from victims’ bank accounts.  For example, on August 18, 2015, PRELAJ and KAU used counterfeit debit cards at an ATM in Manhattan.  Also, on September 10, 2015, MUSTAFA used at least one counterfeit debit card to withdraw almost $1,000 in cash fraudulently from an ATM at a gas station in Las Vegas.  In addition, on October 24, 2015, DEDUSHI mailed a magnetic card reader and writer from Las Vegas to PRELAJ in the Bronx, New York to be used to produce counterfeit cards.  

In January 2015, PRELAJ and KAU sold a skimming device in Queens, New York, in exchange for $6,000 in a transaction that was brokered by TOMESCU.  Furthermore, from November 2015 through December 2015, PRELAJ and BATSKA fraudulently obtained thousands of dollars of merchandise at department stores in Manhattan by using at least one credit card that had been stolen from a victim by BOGIC.

Finally, PRELAJ, KAU, BATSKA, DEDUSHI, MUSTAFA, and BOGIC were charged with aggravated identity theft for transferring, possessing, and using other persons’ debit and credit card numbers and associated personal identification numbers in connection with the felony crimes described above.

*                *                *

Attached are charts containing the charges against the defendants and the maximum penalties they face, as well as the defendants’ ages and residences.  The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the Court.

Mr. Bharara praised the outstanding investigative work of the Joint Organized Crime Task Force and FBI-NYPD Financial Cyber Crimes Task Force.  He also thanked the FBI’s Las Vegas Field Office, the Las Vegas Metropolitan Police Department, the United States Postal Inspection Service, and U.S. Customs and Border Protection for their assistance throughout the investigation.

This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Robert Allen and Sagar K. Ravi are in charge of the prosecution.

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

###

United States v. Gjeto Prelaj, et al.

RENO– A former Reno mortgage broker was sentenced today to five years in prison, three years of supervised release, 150 hours of community service, and ordered to pay restitution for embezzling $260,000 from a Reno company’s employee pension plan, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.

Marcilin Anne Benvin, 56, currently a resident of Douglas, Alaska, pleaded guilty last September to one count of embezzlement and theft from an employee benefit plan, and was sentenced today by U.S. District Judge Larry R. Hicks. Benvin must self-report to federal prison by May 6 at noon. 

“The investigation and prosecution of financial crimes, including loan and investment fraud, is currently a top priority of the District,” said U.S. Attorney Bogden. “We work with our local, state and federal law enforcement partners to ensure that individuals who commit this type of crime are brought to justice.”

From approximately 1996 to 2008, Benvin lived and worked as a mortgage broker in Reno, and was the President and operator of Cetus Mortgage, Ltd. (Cetus). Cetus was in the business of providing and servicing loans made by private investors to borrowers, primarily for residential construction and development projects.  A Reno painting service company had been investing its employee pension plan money with Cetus for more than 20 years. In November 2006, Benvin told one of the trustees for the pension plan that one of its investment loans had matured.  Benvin asked the trustee whether the pension plan wanted to rollover the $260,000 principal into another loan. The plan agreed, and was provided documents, including a promissory note and deed of trust, stating that it was being invested in Maverick Development.  As it turned out, the documents were forged and Benvin had failed to invest the loan monies as promised, and had misappropriated the investor funds for herself. To date, the pension plan has not received back any of the $260,000 that it provided to Cetus through Benvin. Cetus closed its business and filed for bankruptcy in 2008.

The case was investigated by the FBI, IRS Criminal Investigation, and the U.S. Department of Labor Employee Benefits Security Administration, and is being prosecuted by Assistant U.S. Attorney Brian L. Sullivan.

This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.  For more information about the task force visit: www.stopfraud.com.

FRESNO, Calif. — On Monday, February 1, 2016, after a seven-day trial, a federal jury found Joaquin Cuenca, 38, of San Diego, guilty of three counts of wire fraud in a scheme to fraudulently obtain bonuses in a recruitment program for the California National Guard, United States Attorney Benjamin B. Wagner announced.

According to evidence produced at trial, Cuenca was a full-time recruiter for the California National Guard in Fresno and defrauded a military recruiting program out of thousands of dollars. The program, the Guard Recruiting Assistance Program (G-RAP), offered a financial incentive to members of the National Guard and others (called Recruiting Assistants, or RAs) who nominated new soldiers. If an RA referred a potential Guard member to a recruiting office and that person ultimately enlisted, the RA was typically eligible to receive $1,000 when a nominee enlisted and $1,000 more when the nominee left for basic training. Because the point of the program was to encourage other soldiers to join in the recruiting effort, G‑RAP incentives were not available for soldiers employed by the Guard as recruiters. Ultimately, G-RAP was discontinued following the discovery of widespread fraud.

According to court documents and evidence presented at trial, Cuenca, was a recruiter and not eligible for bonuses through G-Rap. However, he fed information about new recruits to soldiers who were eligible for G-RAP. Those soldiers (or Cuenca himself) then would enter the information about the new solder online and claim a bonus even though the RA had not in fact referred the new soldier at all. Cuenca would often receive a portion of the bonuses.

“Cuenca joins the ranks of others who have been brought to justice for defrauding G‑RAP and the Army National Guard,” said U.S. Attorney Wagner. “Cuenca and his co-schemers discovered a natural flaw in the program and exploited it. The U.S. Attorney’s Office will continue to uncover and prosecute fraud and abuse of taxpayer money.”

“Joaquin Cuenca's greed and criminal activity permanently tarnished his military career and disrespected the sacrifice of the many men and women who serve our country with honor,” said FBI Special Agent in Charge Monica Miller of the Federal Bureau of Investigation Sacramento field office. “We thank Army Criminal Investigative Command for their continued partnership, ensuring criminals face justice when they allow greed to eclipse their duty to fellow serve members and the American people.”

Chris Hendrickson, Special Agent in Charge of the Western Field Office, Defense Criminal Investigative Service, said: “Corruption strikes at the heart of good government and erodes public trust. The investigation of these offenses is a top priority for the DCIS, its investigative partners, and the U.S. Attorney's Office. Today's verdict demonstrates that there is zero tolerance for this type of shameful misconduct.”

"When individuals fail to live up to the values of the U.S. Armed Forces, they should be held accountable," said Maj. Gen. David S. Baldwin, California's Adjutant General. "We applaud the U.S. Attorney's Office and the law enforcement community in helping us keep the Cal Guard a force of which our communities can be proud."

Cuenca is the second person to be convicted in this district in the last 10 days in connection with fraud with G-RAP. On January 22, 2016, Richard Sihner, 54, of Elk Grove was convicted by a jury in Sacramento of 18 counts of wire fraud and making false statements.

Cuenca is scheduled to be sentenced by United States District Judge Dale A. Drozd on May 16, 2016. Cuenca faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of wire fraud. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an ongoing investigation by the Army Criminal Investigative Command Major Procurement Fraud Unit, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation. Assistant United States Attorney Michael Tierney and Department of Justice Trial Attorney Alexis Loeb are prosecuting the case.

Other National Guard members and recruiters have been charged in similar recruiting‑fraud schemes in the Eastern District of California. The following defendants have pleaded guilty and await sentencing.

• 2:14-cr-153 TLN — Brian Kaps, 42, of Chico, pleaded guilty on November 21, 2014, to one count of wire fraud. Sentencing is set for February 4, 2016.

• 2:14-cr-152 TLN — Sarah Nattress, 28, of Paradise, pleaded guilty on October 23, 2014, to one count of wire fraud. A status conference for sentencing is set for February 4, 2016.

• 1:14-cr-107 DAD — Leonardo Pesta, 47, of Mountain View, pleaded guilty on July 27, 2015, to one count of wire fraud. Sentencing is set for April 26, 2016.

• 1:14-cr-108-LJO — Nicholas Huerta, 33, of Fresno, pleaded guilty on September 14, 2015 to one count of wire fraud. Sentencing is set for November 14, 2016.

• 2:14-cr-151 JAM — Richard C. Sihner, 54, of Elk Grove, was found guilty of 18 counts of wire fraud and one count of making false statements. Sentencing is set for May 3, 2016.

  Charges are pending against the following (the charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt):

• 2:15-cr-005 TLN — Steel A. Davis, 43, of Paradise, was charged with eight counts of wire fraud on January 8, 2015. A status conference is set for February 4, 2016.

• 1:14-cr-109 LJO — Jimmy Maldonado, 35, a recruiter, and his wife Mayra Garcia Maldonado, 29, a recruiting assistant, both of Fresno, are allegedly responsible for causing $40,000 in fraudulent bonuses. Trial is scheduled for May 3, 2016.

SACRAMENTO, Calif. — The final defendant in a shoplifting ring that stole over $2.5 million in retail goods and resold them on eBay was sentenced today to three years in prison, United States Attorney Benjamin B. Wagner announced.

Jason Nathaniel Reed, 36, of Aspen, Colorado, previously of Vacaville, California, is the seventh defendant sentenced to prison in this case. Jason Schroeder, 36, of Sacramento, was previously sentenced to seven years in prison, Kirk Arthell Sanderson, 37, of Walnut Creek, was previously sentenced to four years in prison; John Judah Young, 34, of Sacramento, was sentence to two and a half years in prison; and David Reed, 29, of Vacaville, was sentenced to one year in prison. Two others, Andrea Lynn Turner, 34, of Roseville, and Joshua Roy Payne, 30, of Vacaville, were each sentenced to two months in prison.

On June 16, 2015, Schroeder pleaded guilty to one count of mail fraud. According to the plea agreement, in October 2012, a sporting goods company with retail stores in Sacramento called the FBI stating that an eBay account was listing items for sale it suspected were stolen. Follow-up investigation revealed that the account was controlled by co-defendant Schroeder using co-defendant Young’s name, and since 2009, it listed more than 17,000 items for sale, including sporting goods, household items, recreational equipment and pet care products. Most of the items were listed as new or with tags. Virtually all of the items sold on the account were stolen by Reed or others, and were sold at a discount to buyers across the country.

According to the plea agreement, Jason Reed and Jason Schroeder took a road trip across the country to Miami to attend the Super Bowl. On that trip, Schroeder and Reed were stealing items on a daily basis, listing the items for sale on eBay in the evenings, and shipping the items out via FedEx.

Wiretaps and surveillance also revealed the specific roles of other members of the conspiracy. According to court documents, David Reed assisted Schroeder with the packaging and shipment of the stolen merchandise. Sanderson assisted in moving items away from Schroeder’s residence when he learned of the federal investigation. Turner and Payne provided false statements to federal agents upon being interviewed regarding their assistance to Schroeder.

This case was the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the United States Postal Inspection Service. Assistant United States Attorneys Jared C. Dolan and Jeremey J. Kelley are prosecuting the case.

SACRAMENTO, Calif. — Pablo Barreto-Cruz, 39, of Mexico, was sentenced today by United States District Judge John A. Mendez to five years and three months in prison and ordered to pay $22,800 in restitution for cultivating marijuana on public land and depredation of public lands and resources, United States Attorney Benjamin B. Wagner announced.

According to court documents, between March 2015 and May 2015, Barreto-Cruz grew 2,998 marijuana plants in the Mendocino National Forest. The marijuana cultivation operation caused significant harm to the habitat and water quality of the National Forest.. Following Barreto-Cruz’s arrest on May 12, 2015, authorities searched the marijuana cultivation site and discovered approximately 1,000 pounds of irrigation pipe, approximately 1,000 pounds of camp debris, and several fertilizers and pesticides, including the highly toxic pesticide Carbofuran, which is dangerous to both humans and animals. The U.S. Forest Service estimates that the marijuana cultivation site diverted approximately 18,000 gallons of water per day.

This case was the product of an investigation by the United States Forest Service, the Glenn County Sheriff’s Office and the California Department of Fish and Wildlife. Assistant United States Attorney Christiaan Highsmith prosecuted the case.

BOISE – Isaac Bright, 22, of Nampa, Idaho, was sentenced today to 27 months in prison for unlawful possession of a firearm, U.S. Attorney Wendy J. Olson announced.  Senior U.S. District Judge Edward J. Lodge also ordered Bright to serve three years of supervised release and have no contact with gang members.  The federal sentence imposed will run consecutively with a state sentence that the defendant is now serving.  Bright was found guilty on November 5, 2015. 

According to court documents, law enforcement stopped a vehicle in which Bright was a passenger because of a traffic violation.  During the stop, Bright lied to the officer about his identity and the fact that he was on felony probation at the time.  Officers ultimately were able to determine Bright’s identity and confirmed that he had an outstanding warrant for his arrest.  During a search of his person, the officer found a loaded handgun in his waistband.  Bright was prohibited from possessing a gun because he was previously convicted of the felony crime of kidnapping on May 2, 2014, in Canyon County.  Bright was also known to be a documented Norteno gang member.

Bright was charged as a result of an investigation by the Treasure Valley Metro Violent Crimes Task Force, which focused on the “Norteno” Northside gang that is active in Nampa and other parts of the Treasure Valley.  Fourteen individuals were indicted on drug and gun charges as a result of the investigation.  So far, eleven defendants have been sentenced.  Guadalupe Serrano, 35, of Caldwell, was sentenced on April 21, 2015, to 75 months in prison for possession of methamphetamine with intent to distribute and for possessing firearms in furtherance of the drug trafficking crime.  Nicole Danelle Nieto, 31, of Nampa, was sentenced on May 26, 2015, to 41 months in prison for distributing methamphetamine.  Jose Manuel Menchaca, 35, of Nampa, was sentenced on May 28, 2015, to 60 months in prison for distributing methamphetamine.  On June 17, 2015, Brandi Larrea, 31, of Nampa, was sentenced to 48 months in prison for distributing methamphetamine and Tara Noelle Rivera, 30, of Nampa, was sentenced to 24 months in prison for distributing methamphetamine.  Johnny Lee Martinez, 33, of Nampa, was sentenced on July 20, 2015, to 57 months in prison for distributing methamphetamine.  Michael David Bradshaw, 31, of Nampa, was sentenced on August 6, 2015, to 66 months in prison for distributing methamphetamine.  Kenny P. Breedlove, 35, of Porterville, California, was sentenced on October 22, 2015, to 110 months for possession of methamphetamine with the intent to distribute.  Guillermo Farias Jr., 29, of Nampa, was sentenced on October 26, 2015, to time served and three years of supervised release for his role in assisting with methamphetamine distribution.  Richard Lobato, 51, of Nampa, was sentenced on December 3, 2015, to 60 months for distribution of methamphetamine.  Veronica Cantu, 26, of Nampa, was arrested in Michigan in November and is set for trial in April. One defendant, Ruben Rodriguez, 36, of Nampa, has an outstanding warrant.

These cases are the result of a joint investigation by the Treasure Valley Metro Violent Crime Task Force and the Organized Crime and Drug Enforcement Task Force (OCDETF).  The Treasure Valley Metro Violent Crime Task Force is comprised of federal, state and local agencies, including the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Boise Police Department; Ada County Sheriff’s Office; Caldwell Police Department; Nampa Police Department; Meridian Police Department; Canyon County Sheriff’s Office; and Idaho Department of Probation and Parole.  The Organized Crime and Drug Enforcement Task Force (OCDETF), includes the cooperative law enforcement efforts of the Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; U. S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Internal Revenue Service-Criminal Investigation; and U.S. Marshals Service.  The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.

These cases are being prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes.  The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth.  For more information, visit treasurevalleypartners.org. 

BECKLEY, W.Va. – A White Sulphur Springs woman and a Beckley felon were sentenced today in federal court, announced Acting United States Attorney Carol Casto. The sentences were imposed by United States District Judge Irene C. Berger.

Paula Kay Butts, 51, of White Sulphur Springs, was sentenced to a year and a half in federal prison for using a phone to facilitate methamphetamine distribution. Butts previously pleaded guilty in November 2015 to the federal drug crime. Butts admitted that on June 27, 2015, while in White Sulphur Springs, she texted a confidential informant working with law enforcement to arrange a drug deal. Later that day, Butts met the informant and distributed methamphetamine.

Leon Eugene Smith, Jr., 35, of Beckley, was sentenced to five years in federal prison for being a felon in possession of a firearm, a Smith & Wesson 9mm handgun. Smith previously pleaded guilty in October 2015 to the federal gun crime. Smith was prohibited under federal law from possessing any firearm because of a 2005 felony conviction in federal court for possession with intent to distribute a controlled substance.  

The case against Butts was investigated by the Greenbrier Valley Drug and Violent Crime Task Force as part of the Greenbrier Valley Heroin and Pill Initiative, a multi-agency effort led by the United States Attorney’s Office to combat drug trafficking in communities across the Southern District of West Virginia.

The case against Smith was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Beckley Police Department as part of Project Safe Neighborhoods, a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.

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CHICAGO — A Chicago woman has been charged with posing as a federal housing representative to scam homeowners out of cash, federal authorities announced today.

CYNTHIA WALLACE, 45, of Chicago, is charged with one count of falsely assuming and pretending to be an officer of the United States.  Last month Wallace posed as an official from the “Federal Housing Authority” and “H.U.D.” in numerous phone calls she placed to Chicago-area homeowners, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  During the calls, Wallace said the federal government would foreclose on the victims’ homes unless they wired money to a location determined by Wallace. 

One of Wallace’s intended targets was a 79-year-old woman from the West Side of Chicago, the complaint states.  Two other targets – a husband and wife from south suburban Harvey – wired more than $3,500 to Wallace, according to the complaint.

Wallace was arrested on Jan. 29, 2016, and appeared in court the following day before U.S. Magistrate Judge Michael T. Mason.  Judge Mason ordered Wallace detained in federal custody, pending further proceedings.  The next court date has not yet been set.

According to the complaint, Wallace – using the alias “Sherry Rice” – told the 79-year-old woman that the woman was entitled to $31,200 from the federal government, but only if the woman first wired $500 to a location determined by Wallace.  If the woman didn’t submit the money, Wallace said the government would foreclose on the woman’s home, according to the complaint.  The woman notified federal authorities, allowing agents to tape-record subsequent phone calls between her and Wallace.  In one recorded call, Wallace told the woman, “We can do whatever we want to do if you’re not compliant,” according to the complaint.  The woman did not wire any money.

Wallace later used a different alias – “Shree Box” – to target the Harvey couple, the complaint states.  Wallace told the couple that they were qualified for a $12,000 “H.U.D./F.H.A. grant” to avoid foreclosure on their house.  In order to receive the purported grant money, Wallace said they had to obtain a home inspection at a cost of $480 – payable via MoneyGram to a location determined by Wallace, the complaint states.  The couple wired the money.  In a series of subsequent phone calls, Wallace told the couple that they could qualify for a larger grant, a low-interest mortgage loan and mortgage insurance if they wired additional funds, according to the complaint.  The couple submitted the additional payments, but then notified federal authorities.

Wallace was arrested when she attempted to claim an additional $1,500 from the couple at a currency exchange on the South Side.  The purported MoneyGram was actually a ruse set up by federal authorities, the complaint states.

Wallace is not employed by the Federal Housing Administration, which is a division of the U.S. Department of Housing and Urban Development.

The arrest was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Brad Geary, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development’s Office of Inspector General in Chicago; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

The public is reminded that a complaint is not evidence of guilt.  The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines. 

The government is represented by Assistant U.S. Attorneys Matthew S. Ebert and Maribel Fernandez-Harvath.

To report suspected fraud, logon to https://www.hudoig.gov/report-fraud or call 1-800-347-3735.

Greenbelt, Maryland – U.S. District Judge Peter J. Messitte sentenced Rasheed Adedokun, age 26, of Lanham, Maryland, today to 54 months in prison, followed by three years of supervised release, for use of unauthorized access devices, aggravated identity theft, and possession of device making equipment, arising from a scheme to use the personal identifying information, credit card and debit card numbers of victims to purchase goods and services worth more than $100,000.  Judge Messitte also entered an order requiring Adedokun to pay restitution of $107,403.61.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge James Murray of the United States Secret Service - Washington Field Office; Interim Chief Henry P. Stawinski of the Prince George’s County Police Department; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Chief Murray “Jay” Farr of the Arlington County, Virginia Police Department.

According to Adedokun’s plea agreement, on May 14, 2009, he used the credit/debit card of Victim 1 to make over $1,200 in unauthorized purchases in just a few days.  On July 11, 2009, Adedokun and three co-conspirators were captured on store surveillance cameras making unauthorized purchases totaling $7,799.10 using the credit/debit cards of nine other victims.  On August 5, 2009, Adedokun was arrested by Maryland State Police.  Troopers recovered 17 debit cards in Adedokun’s pants pockets and an additional 63 debit cards were found at his residence.  Examination of the cards revealed that 18 of the cards’ magnetic strips had been re-encoded with victims’ credit card account information.  During a search of Adedokun’s residence, law enforcement also recovered four pages of Social Security Administration screen printouts containing the names and Social Security numbers of 34 individuals, a credit card encoding machine and a computer. A forensic examination of the computer revealed a software program designed to check the validity of a given credit card number, and additional files that contained the names and credit/debit card account numbers that appeared to be assigned to other co-conspirators.

Adedokun was responsible for losses of $107,403.61. Four other co-conspirators have pleaded guilty to their roles in the scheme and are awaiting sentencing. Adetokunbo Babatunde was sentenced to 30 months incarceration and restitution in the amount of $107,403.61.  Ridwan Kekere-Ekun was sentenced to one year and one day and restitution in the amount of $107,403.61. Two others are awaiting sentencing. A fifth co-conspirator also pleaded guilty and was sentenced to time served and ordered to pay restitution of $35,000.

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended the U.S. Secret Service, Prince George’s County Police Department, Maryland State Police, and the Arlington County, Virginia Police Department for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Bryan E. Foreman and Special Assistant U.S. Attorney Jennifer L. Wine, who are prosecuting the case.

SACRAMENTO, Calif. — United States District Judge Kimberly J. Mueller sentenced Manuel Ruiz, 47, of Sacramento, to 18 months in prison for making false claims for tax refunds on federal income tax returns, United States Attorney Benjamin B. Wagner announced. Ruiz pleaded guilty on May 26, 2015.

According to court documents, Ruiz engaged in a scheme to fraudulently prepare tax returns for clients of a tax preparation business he operated from his home. As part of the scheme, Ruiz reported false wages and listed false dependents on his clients’ returns to qualify them for the Earned Income Credit (EIC) when they would not otherwise have been eligible, and to maximize the tax benefits of the EIC beyond the legitimate amounts to which his clients were actually qualified.

In total, between tax years 2009 and 2011, Ruiz made false claims on more than 180 returns, including returns that he filed on his own behalf and on behalf of others, which resulted in over $650,000 in fraudulent refunds paid out by the IRS. During that period, Ruiz directed more than $460,000 in tax refunds from the false claims into bank accounts he controlled. After payments to clients, Ruiz retained at least $192,000 from the false claims.

This case was the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorneys Sherry D. Hartel Haus and André M. Espinosa prosecuted the case.

Preet Bharara, United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest of ERIC IAN HORNAK SPOUTZ, a/k/a “Robert Chad Smith,” a/k/a “John Goodman,” a/k/a “James Sinclair,” on charges of wire fraud in connection with the sale of dozens of forged artworks by renowned American artists, such as Willem De Kooning, Franz Kline, and Joan Mitchell. SPOUTZ was arrested in Los Angeles today and will be presented before U.S. Magistrate Judge Gail Standish of the Central District of California this afternoon. 

Manhattan U.S. Attorney Preet Bharara said:  “As alleged, Eric Spoutz used false and fictitious provenance to peddle his forged artwork to unsuspecting buyers, claiming they were masterpieces from Willem De Kooning, Franz Kline and Joan Mitchell.  Our Office has a long history of investigating – and prosecuting – those who try to contaminate the art world with fraudulent artwork.  Thanks to the outstanding investigative work by the FBI, Spoutz’s alleged forgery mill is no longer in business.”

FBI Assistant Director-in-Charge Diego Rodriguez said: “As alleged, Eric Spoutz created an entire world of fiction to make a profit—from the fraudulent paintings he was selling, to the phony letters and receipts for provenance. The only real thing in this situation seems to be the financial losses the victims have incurred for purchasing what they thought were true works of art, whether for investment purposes or personal enjoyment.”

According to the allegations contained in the Complaint[1] and other documents in the public record, and statements made in court:

Between 2010 and March 2015, SPOUTZ repeatedly sold works of art he falsely claimed were by well-known artists, using forged documents to convince buyers of the authenticity of those works.  During the course of the scheme, SPOUTZ sold dozens of fraudulent works of art – which he attributed to, among others, Willem De Kooning, Franz Kline, and Joan Mitchell – through various channels, including auction houses and on EBay.

SPOUTZ was publicly accused of selling forged works of art as early as 2005, after which he began selling them under various aliases, particularly “Robert Chad Smith” and “John Goodman.”  To deceive his victims into believing the works of art were authentic, SPOUTZ created and provided forged receipts, bills of sale, and letters from deceased attorneys and other individuals.  These documents falsely indicated that SPOUTZ, in the guise of one of his false identities, had inherited or purchased dozens of works by these artists. 

Despite his efforts to create false histories for the artwork, investigators identified multiple inconsistencies and errors in SPOUTZ’s forged provenance documents.  Many of the purported transactions took place before SPOUTZ was born, and the forged letters included non-existent addresses both for the purported sender and various parties referenced as sources of the artworks.  SPOUTZ also consistently used a single distinctive typesetting when forging documents purportedly authored by entirely different art galleries in different decades regarding unrelated transactions.  In one instance, investigators located the original letter used by SPOUTZ as a model for one of his forgeries in a collection at a private university, which holds a collection of letters from the individual whose identity SPOUTZ used to create a false story of inheritance.

*                *                *

SPOUTZ, 32, of Mount Clemens, Michigan, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Unknown victims may have purchased artwork from SPOUTZ unwittingly under provenance documents using historical names such as “Betty Parsons Gallery,” “Larry Larkin,” “Henry Hecht,” and “Julius or Jay Wolf.”  If you believe you are a victim and purchased a fraudulent painting, please call the New York Art Crime Team at 212-384-1000, attention Special Agent Chris McKeogh or Special Agent Meridith Savona.

The case is being prosecuted by the Office’s Money Laundering and Asset Forfeiture Unit.  Assistant United States Attorney Andrew C. Adams is in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

CHARLESTON, W.Va. – Acting United States Attorney Carol Casto and Internal Revenue Service (IRS) Special Agent in Charge Thomas Jankowski presented three local law enforcement agencies today with over $1 million in forfeited cash as a result of their participation in a joint investigation of a Barboursville pharmacy owner. Officials from the Charleston Police Department, the Huntington Police Department, and the Boone County Sheriff’s Department were on hand to receive the forfeiture awards at a press conference in the U.S. Attorney’s Office in Charleston.

Several law enforcement agencies worked together on a far-reaching investigation that resulted in the convictions of 19 defendants on federal drug charges, including 15 local drug dealers, two out-of-state drug suppliers, and one local pharmacy owner. The IRS’s Criminal Investigation Division, the Huntington Police Department, the West Virginia State Police, the West Virginia National Guard, Drug Enforcement Administration Task Force Officers from the Charleston Police Department, and the Boone County Sheriff’s Department jointly investigated the extensive drug conspiracy that stretched from Lincoln County to Florida.

As part of the conspiracy, the drug suppliers illegally filled prescriptions for oxycodone and sent the drugs to Lincoln County for distribution. During a search by law enforcement of the drug suppliers’ home in Florida, agents discovered prescription pill bottles for oxycodone that had been filled at A+ Care Pharmacy in Barboursville. Law enforcement then executed search warrants at A+ Care Pharmacy and at the home of its owner, Kofe Agyekum, and seized over 50,000 oxycodone pills, over $2 million in cash, and a Lexus. Agyekum pleaded guilty and was sentenced to over five years in federal prison. 

“Let me be clear – we will work with every local, state, and federal law enforcement agency and use every available tool to prosecute those who flood West Virginia with drugs. As we proved in this case, we will travel beyond our state’s borders to bring them to justice,” said Acting United States Attorney Casto. “I want to thank the law enforcement agencies that worked as a team to investigate this case. These forfeiture assets will be used by law enforcement to continue this fight and make our communities safer.”

These prosecutions were brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.

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BECKLEY, W.Va. – A McDowell County Assistant Prosecuting Attorney pleaded guilty today to a federal tax crime, announced Acting United States Attorney Carol Casto.  Jason Ray Grubb, 38, of Beaver, entered his guilty plea in federal court to failing to pay employment taxes.

Grubb admitted that while working as a lawyer in private practice, he had an employee from whom he withheld taxes. Instead of withholding and paying those taxes as required under federal law, he kept the money and did not pay the Internal Revenue Service. Grubb also admitted that he failed to pay personal income taxes for a number of years, and that he falsified vouchers sent to West Virginia Public Defender Services, including 51 days on which he billed for over 24 hours of work. Grubb has agreed to pay restitution for his failure to pay over $247,000 in federal taxes, overbilling Public Defender Services more than $126,000, and not paying a financing company, Daniels Capital Corporation, for more than $29,000 in advances.

He faces up to five years in federal prison and a $10,000 fine when he is sentenced on May 12, 2016.

This case was investigated by the Internal Revenue Service and the West Virginia Commission on Special Investigations. Assistant United States Attorneys Meredith George Thomas and Eric Bacaj handled the prosecution. The plea hearing was held before United States District Judge Irene C. Berger.

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            Preet Bharara, the United States Attorney for the Southern District of New York, James Hunt, the Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”), William J. Bratton, the Police Commissioner of the City of New York (“NYPD”), and Joseph D’Amico, Superintendent of the New York State Police (“NYSP”), announced that JOSE LUIS GRACESQUI was found guilty Tuesday of conspiracy to commit murder-for-hire, murder-for-hire, and murder in connection with a narcotics conspiracy for his role in the murder of a 28-year old Manhattan man in 1999.  GRACESQUI was convicted after a three-week jury trial before U.S. District Judge P. Kevin Castel. 

            Manhattan U.S. Attorney Preet Bharara said: “Thanks to the efforts of the dedicated agents, detectives, and prosecutors who relentlessly pursued justice, this cold-case murder of an innocent 28-year old man has now been solved and prosecuted.  We hope seeing justice done brings some measure of peace to Richard Diaz’s family.” 

            DEA Special-Agent-in-Charge James Hunt said: “This conviction exemplifies the significant role violence plays in the infrastructure of drug trafficking. I commend the New York Drug Enforcement Task Force and the U.S. Attorney's Office Southern District of New York for their diligent work throughout this three week jury trial.”

            NYPD Commissioner William J. Bratton said: “It is our hope that this conviction brings some level of comfort to the victim’s family. I commend the efforts of the NYPD investigators and our law enforcement partners who worked to bring this individual to justice.”

            According to the evidence introduced at trial, other proceedings in this case, and documents previously filed in Manhattan federal court:

            JOSE LUIS GRACESQUI, a/k/a “Luis Perez,” a/k/a “Ramon Ortiz,” a/k/a “Onel Colon,” a/k/a “Muffler,” was a member of a crew who committed violent robberies, kidnappings, and beatings of drug dealers.  In the summer of 1999, GRACESQUI was hired by a major drug dealer in upper Manhattan to kill one of the drug dealer’s customers (“Intended Victim-1”) after Intended Victim-1 and a number of his associates stole heroin from the drug dealer.

            On the night of July 19, 1999, GRACESQUI and a member of his crew saw Intended Victim-1 in a car with another person and began following Intended Victim-1 through Manhattan.  When the car with Intended Vicitm-1 stopped at a red light, GRACESQUI got out of the car in which he had been, approached the car with Intended Victim-1, and began shooting.  The shots hit both Intended Victim-1 and the driver of the car, Richard Diaz.  Richard Diaz was able to drive a short distance to the Henry Hudson Parkway, until Diaz lost consciousness and died.  Intended Victim-1 sustained injuries but did not die.  

*               *               *

            JOSE LUIS GRACESQUI, 45, of Queens, faces a mandatory minimum sentence of life in prison.  The potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  Sentencing is scheduled for June 10, 2016, before Judge Castel. 

            Mr. Bharara praised the investigative work of the DEA New York Drug Enforcement Task Force, which comprises agents and officers of the DEA, NYPD, and the New York State Police.

            This case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Laurie A. Korenbaum, Brendan F. Quigley, and Rebekah Donaleski are in charge of the prosecution.

CHARLESTON, W.Va. – Freedom Industries, Inc., and a former plant manager at Freedom Industries were sentenced today for environmental crimes connected to the 2014 Elk River chemical spill, announced Acting United States Attorney Carol Casto. Freedom Industries (Freedom) was sentenced to a fine of $900,000, to be paid after all other claims against Freedom are satisfied, for negligently discharging a pollutant, unlawfully discharging refuse matter, and knowingly violating an environmental permit. Freedom has been in bankruptcy since shortly after the chemical spill. Michael E. Burdette, of Dunbar, was sentenced to three years of probation and a $2,500 fine for negligently discharging a pollutant. Both Freedom and Burdette previously pleaded guilty in March 2015. Burdette is one of six former officials of Freedom Industries, in addition to Freedom Industries itself as a corporation, to be prosecuted for federal crimes associated with the chemical spill.

On January 9, 2014, a major chemical leak was discovered in Charleston at the above-ground storage tank area owned and operated by Freedom Industries (Freedom) on the Elk River. Freedom used these storage tanks to keep and process chemicals, and the leak consisted primarily of 4-methylcyclohexane methanol (MCHM), a chemical used in the coal mining industry as a cleansing agent. A significant amount of MCHM leaked into the Elk River, flowed into a water treatment plant, and contaminated the water supply of Charleston and the surrounding areas for several days. Freedom did not have a permit required by law that would have allowed the company to discharge MCHM into the Elk River.

Freedom had a permit issued by West Virginia’s Department of Environmental Protection (DEP) that allowed for the discharge of storm water and groundwater subject to monitoring and reporting requirements. However, this permit did not allow for the discharge of MCHM, and required the development and maintenance of a storm water plan and a groundwater plan. Generally, storm water and groundwater plans identify potential sources of pollution and outline steps to prevent, contain, and reduce pollutants.

Freedom admitted that it should have taken reasonable steps to ensure that MCHM did not leak into the Elk River. Freedom did not maintain the containment area that was supposed to prevent a chemical spill from reaching the Elk River. Freedom also failed to inspect and maintain the storage tank holding MCHM. In spite of the permit requirements, Freedom also failed to implement and maintain a storm water and groundwater plan. Furthermore, Freedom did not conduct the necessary training to ensure all personnel were working in compliance with environmental laws. When the chemical spill occurred, Freedom did not have adequate spill prevention material on hand and instead, had on hand a mere two bags of absorbent material and no booms or other materials to stem the flow of MCHM. Freedom admitted that its failure in all of these essential areas was a proximate cause of the chemical spill.

Burdette worked as a plant manager for Freedom’s facility on the Elk River. In that role, Burdette was responsible for operating and maintaining Freedom’s facility in a safe manner and in compliance with environmental laws. He was also responsible for making sure the employees he supervised were properly trained in environmental compliance. Burdette admitted he should have known Freedom was required to implement and maintain a storm water and groundwater plan as required by the permit. He also admitted he knew the measures Freedom had in place to handle a chemical spill were inadequate, and that Freedom should have had proper containment structures to contain a spill from the largest storage tank for 72 hours. Burdette further admitted that his failure to implement these required safety measures was a proximate cause of the chemical spill. 

Including Freedom and Burdette, four defendants have been sentenced as part of the investigation into the chemical spill. Robert J. Reynolds, of Apex, North Carolina, who worked as an environmental consultant with Freedom, was sentenced on Monday for negligently discharging a pollutant. Charles E. Herzing, of McMurray, Pennsylvania, a former owner and vice president of Freedom, was sentenced on Tuesday for unlawfully discharging refuse matter.

William E. Tis, of Verona, Pennsylvania, a former owner of Freedom, pleaded guilty in March 2015 to the unlawful discharge of refuse matter. Tis is scheduled to be sentenced on February 8, 2016.

Dennis P. Farrell, of Charleston, a former Freedom president and owner, pleaded guilty in August 2015 to violating the federal Refuse Act and violating a permit by failing to have a pollution prevention plan. Farrell is scheduled to be sentenced on February 11, 2016.

Gary Southern, of Marco Island, Florida, the president of Freedom at the time of the spill, pleaded guilty in August 2015 to violating the Clean Water Act, unlawfully discharging refuse matter in violation of the Refuse Act, and violating a permit by failing to have a pollution prevention plan. Southern is scheduled to be sentenced on February 17, 2016.

The investigation of the chemical spill was conducted by the Federal Bureau of Investigation and the Environmental Protection Agency’s Criminal Investigation Division. Assistant United States Attorneys Philip H. Wright, Larry R. Ellis, and Eric P. Bacaj, as well as the Environmental Protection Agency’s Regional Criminal Enforcement Counsel Perry D. McDaniel, are handling the prosecutions. United States District Judge Thomas E. Johnston imposed the sentence, and will preside over the remaining sentencing hearings associated with the chemical spill.

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BLUEFIELD, W.Va. – Four defendants appeared in federal court today on drug charges, announced Acting United States Attorney Carol Casto. 

Steven Andrew Short, 30, of Bluefield, was sentenced to four years in federal prison for using a phone to facilitate the distribution of hydromorphone. Short previously pleaded guilty in November 2015 to the federal drug crime. Short admitted that on April 8, 2015, he used a phone to help set up a drug deal with a confidential informant working with law enforcement. Later that same day, Short distributed hydromorphone pills to the informant near Rock in Mercer County. Short also admitted that he distributed more than 1800 hydromorphone pills.

Adam Christopher Skeens, 45, of Princeton, pleaded guilty to distribution of hydromorphone, admitting that on February 23, 2015, he distributed hydromorphone pills to a confidential informant in Princeton. Stephen Wayne Steele, 42, of Bluefield, pleaded guilty to distribution of hydromorphone, admitting that on April 7, 2015, he distributed hydromorphone pills to a confidential informant in Green Valley in Mercer County. Terrance Dewayne Hayes, 30, of Welch, pleaded guilty to distribution of heroin, and admitted that on June 16, 2015, he distributed heroin to a confidential informant near Havaco in McDowell County.

Each of the defendants faces up to 20 years in federal prison and a $1 million fine when they are sentenced on May 17, 2016.

The cases were investigated by the Southern Regional Drug and Violent Crime Task Force and the West Virginia State Police Bureau of Criminal Investigations. Assistant United States Attorney John File handled the prosecutions. The hearings were conducted by Senior United States District Judge David A. Faber.

These case were prosecuted as part of the Bluefield Pill Initiative, an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.

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