Alleged to have stolen victim identities from federal student aid website FAFSA

PRESS RELEASE

Indianapolis – United States Attorney Josh Minkler announced the indictment of two men in an elaborate scheme of aggravated identity theft, identity theft, false claims, and conspiracy. Taiwo K. Onamuti, 29, Doraville, Georgia, and Muideen A. Adebule, 49, Indianapolis, Indiana, were indicted on 23 federal charges relating to the fraud scheme.

“The Onamuti organization is responsible for stealing the identities of thousands of victims, including students who were simply trying to apply for financial aid,” said Minkler. “The organization’s criminal conduct disrupted countless lives, and led to the theft of more than $12 million from the United States Treasury—money that could and should have been spent for the benefit of the taxpayer.”

The 23-count indictment alleges that from March 2014, through March 2016, Onamuti, Adebule, and others in the conspiracy, acquired personal identifying information (names, dates of birth and Social Security numbers) of victims by either purchasing it via E-mail, or by obtaining the information through the Data Retrieval Tool on the Free Application for Federal Student Aid (FASFA) website. The organization would then use the stolen information to file false tax returns with the Internal Revenue Service.

The indictment further alleges that Onamuti and his organization then used the stolen identity information to file thousands of false and fraudulent electronic tax returns, and directed the IRS to deposit the refunds onto prepaid debit cards purchased by Adebule and others. The organization then used the debit cards to purchase money orders at several locations in Indiana and Georgia. In total, Onamuti, Adebule, and others unlawfully obtained or attempted to obtain approximately $12,686,634 in federal tax refunds.

In March, the Department of Education and IRS removed the data retrieval tool from the fafsa.gov and StudentLoans.gov web sites until extra security protections could be added. The removal of the tool at the height of financial aid application season disrupted the application process for parents and students who were trying to prepare and submit FAFSA forms.

This case was investigated by the Internal Revenue Service-Criminal Investigation, the Office of Inspector General for the Department of Education and the United States Postal Inspection Service.

“The announcement of today’s indictment and arrest illustrates the tremendous work of IRS Criminal Investigation and our law enforcement partners to defend innocent taxpayers from the abuse of their stolen personal information, said IRS Criminal Investigation Special Agent in Charge, Gabriel Grchan. “This type of crime not only results in theft of taxpayer funds, but also has a damaging impact to those victims whose personal information was used without authorization. IRS Criminal Investigation aggressively investigators all persons engaged in this type of criminal activity.”

"I'm proud of the work of our staff and our law enforcement colleagues whose efforts brought about today's actions," said Robert Mancuso, Special Agent in Charge of the U.S. Department of Education (ED) Office of Inspector General (OIG) Technology Crimes Division, the OIG unit that works to protect ED programs and network infrastructure by investigating technology crimes, providing digital forensic services, and conducting proactive data analytics. "The OIG will continue to use our high-tech investigative and analytical capabilities to aggressively pursue those who misuse ED systems and programs in order to line their pockets with someone else's hard earned money. America's taxpayers and students deserve nothing less."

Assistant United States Attorney Tiffany J. Preston, who is prosecuting the case for the government, said that the charges carry maximum sentences of five to fifteen years’ imprisonment, and for the aggravated identity theft charges, two years’ imprisonment to be served consecutively.

An indictment is only a charge and not evidence of guilt. All defendants are presumed innocent until proven otherwise in federal court.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that PETER RESSLER, 70, of Woodbridge, waived his right to be indicted and pleaded guilty today before Senior U.S. District Judge Alfred V. Covello in Hartford to embezzling millions of dollars from his bankruptcy clients, and to related fraud offenses.

According to court documents and statements made in court, RESSLER,an attorney with a bankruptcy practice based in New Haven, defrauded numerous clients in various ways. First, RESSLER took retainers from at least 30 clients for various legal matters on their behalf, including protection under Chapters 7, 11, and 13 of the bankruptcy code. Although RESSLER represented that he would hold the funds in trust until he provided legal services, he used the monies for other expenses.

In addition, RESSLER required certain clients who were seeking a Chapter 11 or Chapter 13 reorganization to deposit funds and represented that such monies would be held in trust for purposes of the anticipated reorganization. RESSLER obtained the funds after he had filed formal bankruptcy actions, which created relevant bankruptcy estates for which he had a continuing duty to maintain client assets under his control and to give appropriate accountings to the U.S. bankruptcy court. RESSLER was entrusted with hundreds of thousands of dollars from at least 10 businesses involved with Chapter 11 reorganizations. Instead of holding the funds in trust, he used the monies for other purposes.

As part of both Chapter 11 and Chapter 13 filings, RESSLER submitted multiple documents to the bankruptcy court that represented the status of a debtor’s assets and liquidity, including the debtor-in-possession monthly operating reports. In various instances, RESSLER had already improperly dissipated a portion of a client/debtor’s assets and knew that operating reports filed for certain clients contained false representations, which misled both the bankruptcy court and creditors as to a debtor’s true financial condition. When asked directly in hearings as to whether certain assets existed in certain accounts, RESSLER falsely represented that certain assets existed, when he knew that they did not.

RESSLER also engaged in “work outs” where he would attempt to settle a client’s debts with creditors without relying on the protections of bankruptcy. As part of this process, RESSLER requested that his clients deposit with him funds and represented that he would hold the funds in trust and then use them to settle disagreements with financial institutions or other creditors, such as the IRS, or for some other purpose on behalf of his clients. The investigation revealed that RESSLER took $64,000 from a client purportedly to purchase property; $180,000 from a client to hold money in escrow; $45,000 from another client purportedly to buy back a home in foreclosure; $100,000 from a client to hold money in escrow; $97,000 from a client to hold money in escrow; $102,000 and $50,000 from two other clients purportedly to settle tax obligations with the IRS; at least $199,000 from a client to negotiate a settlement with the IRS; $141,000 from a client to settle debts with IRS and a lender; and $165,000 from a client purportedly to negotiate a loan modification with a lender. In each instance, RESSLER used the monies for other purposes.

In the spring of 2016, the U.S. bankruptcy court identified criminal conduct by RESSLER in cases involving debtors that were his clients. In one case, the debtor entrusted RESSLER with $450,000, which were proceeds of a legal settlement, to be held by RESSLER’s firm for the benefit of the debtor and its creditors. In a second case, the debtor entrusted RESSLER’s firm with approximately $321,409. In both cases, most of the deposited funds were used by RESSLER for other purposes than on behalf of the relevant clients.

In total, RESSLER misappropriated at least $3.4 million in client funds and used the money for personal and family living expenses, to cover the expenses of his practice, and to fund payments relating to other clients and other bankruptcy estates from which he had previously improperly taken monies.

RESSLER pleaded guilty to one count of wire fraud, two counts of embezzlement from a bankruptcy estate, and one count of bankruptcy fraud. Judge Covello scheduled sentencing for September 6, 2017, at which time RESSLER faces a maximum term of imprisonment of 35 years and a fine of up to approximately $6.8 million.

RESSLER has been released on a $100,000 bond since his arrest on April 25, 2016. He resigned from the Connecticut bar in March 2016.

This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.

KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man pleaded guilty in federal court today to his role in a $235,000 arson and insurance fraud conspiracy.

Joseph Levi Little, 43, of Kansas City, pleaded guilty before U.S. District Judge Brian C. Wimes to participating in a conspiracy to commit arson and mail fraud.

Little is the third defendant to plead guilty to his role in the scheme. Tina L. Shonk, 36, of Independence, Mo., was sentenced to three years and six months in federal prison without parole. Roy Thieman, 32, of Kansas City, was sentenced to 20 months in federal prison without parole. The court also ordered Shonk and Thieman to pay $242,717 in restitution to their victims and to forfeit to the government $62,364.

Shonk admitted that she led the arson and insurance fraud conspiracy in 2014. Shonk obtained renter’s insurance on a house she rented in the 3500 block of Garfield in Kansas City, Mo., then burned the house with the help of co-conspirators, and made false claims on the insured property. Conspirators also made plans to burn another house.

In January 2014 Shonk obtained renter’s insurance, claiming personal property valued at $82,000, much more than the value of her personal property. At the time, Shonk owed approximately $7,929 in back due rent and the gas had been shut off due to non-payment. On April 2 and 3, 2014, Shonk and her co-conspirators (including Little and Thieman) moved any personal property of value to a storage unit. They also moved damaged and broken electronic equipment and appliances into the house so that it would appear that valuable appliances were destroyed. By this time, Shonk owed $10,356 in back due rent and her landlord had begun eviction proceedings.

On April 4, 2014, Shonk, Little and Thieman set fire to the house by covering a space heater with a blanket and setting fire to the blanket, and then leaving the house. The Kansas City Fire Department extinguished the fire but the house was a total loss.

After the fire, Shonk submitted fraudulent personal property claims totaling $112,789, although several witnesses and Shonk’s landlord estimated Shonk’s property to be valued at only approximately $500. The insurance company paid Shonk $57,364; she paid Little $4,000 and Thieman $2,500.

The owner of the house had an insurance policy that paid out a total of $173,100.

In May 2014, Shonk and Thieman moved into a house in the 3800 block of Pittman Road in Kansas City, Mo., a property managed by a fourth co-conspirator. On Oct. 18, 2014, police arrested this co-conspirator and found a letter from Thieman to Shonk outlining a plan to repeat the arson insurance fraud scheme at the house on Pittman Road. Thieman wrote a letter to Shonk outlining plans to insure their personal property and then burn the house, stating in part, “there can be no evidence, nor signs of foul play, or accelerant.”

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

This case is being prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by the Kansas City, Mo., Police Department and the U.S. Postal Inspection Service.

Columbia, South Carolina –------- United States Attorney Beth Drake announced today that Kelly Sue Reynolds, age 51, of Mooresboro, North Carolina, pled guilty as charged in federal court this morning to five counts of income tax evasion.  The plea was accepted by United States District Judge Timothy M. Cain.  Reynolds faces a possible sentence of up to 25 years in prison and/or a fine of up to $500,000.00.  Judge Cain will sentence Reynolds after the preparation of a Presentence Report.

Evidence presented at the guilty plea hearing established that Reynolds was the bookkeeper for a firm located in Cherokee County, South Carolina.  As part of her duties, Reynolds paid bills for the firm, including the payment of various federal taxes.  In 2014, the Internal Revenue Service (IRS) conducted an audit of the firm Reynolds worked for due to the fact that certain taxes had not been paid.  During the course of that audit, Reynolds admitted that over a five-year period she had embezzled $439,459.97 from her employer. 

Reynolds further stated that she had covered up the embezzlement by falsifying the books, showing that she had paid bills which she in fact had not paid.  Included in the unpaid bills were the missing taxes, which started the investigation.  It was further determined that Reynolds had not filed personal tax returns during those years that she was embezzling funds and that based upon her salary and the money she stole, she owed the IRS $117,300.06 in personal income taxes.  U.S. Attorney Drake explained that income taxes are due both on illegally obtained funds as well as those legitimately earned.  Reynolds has agreed to make restitution in full to both her employer and the IRS as well as agreeing to forfeit to the United States an amount equal to that which she stole from her employer.

U.S. Attorney Drake commended the IRS agents who investigated the case for their dedicated work in this and all of the cases they handle in South Carolina.  Assistant United States Attorney David C. Stephens of the Greenville office prosecuted the case

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ASHEVILLE, N.C. – Joseph Frank Korzelius, owner of Western Carolina Counseling Services and a school counselor in the Polk County school system, admitted today to defrauding the North Carolina Medicaid Program of over $400,000, by submitting false and fraudulent reimbursement claims. Korzelius, 46, of Tryon, N.C., appeared before U.S. Magistrate Judge Dennis L. Howell and pleaded guilty to one count of health care fraud.

U.S. Attorney Rose is joined in making today’s announcement by North Carolina Attorney General Josh Stein.

“The defendant abused his position as an employee of the Polk County school system to access and misuse children’s identities to enrich himself, with funds stolen from a government-funded program. His actions are reprehensible and he will be punished for them,” said U.S. Attorney Rose.

“Using children’s personal information to defraud taxpayers is unconscionable,” said Attorney General Stein. "I will not tolerate Medicaid fraud, and my office will continue to work with the federal government to bring to justice anyone who is stealing from taxpayers.”

According to court documents and today’s plea hearing, from October 2013 to November 2016, Korzelius, a Licensed Professional Counselor and a Medicaid-approved provider of mental and behavioral health services, owned and operated Western Carolina Counseling Services in Tryon, NC. Korzelius was also employed as a school guidance counselor at Tryon Elementary School in Polk County. According to court records, Korzelius identified students and their siblings from his work at Tryon Elementary and used those potential beneficiaries’ information to access these individuals’ personal information. The defendant then used that information to create and submit billings for individual psychotherapy services when, in fact, no such services were provided.

Court documents show that Korzelius had minimal documentation to support his billings for services he fraudulently represented that he provided. Further, many recipients who Korzelius billed for indicated they never sought or received services from either Korzelius or Western Carolina Counseling Services. Filed court documents show that Korzelius controlled the bank accounts where the Medicaid approved reimbursements were deposited. During the course of his scheme, Korzelius submitted over $450,000 in false claims and received $436,229.08 in reimbursements for those fraudulent claims.

Korzelius was released on bond following his plea hearing. The health care fraud charge carries a maximum prison term of 10 years and a $250,000 fine. A sentencing date for the defendant has not been set.

The investigation was handled by the North Carolina Department of Justice, Medicaid Investigations Division (MID), and was prosecuted in the Western District of North Carolina through the MID’s participation in the Western District’s joint Health Care Task Force. The Task Force is a multi-agency team of federal and state investigators, working in conjunction with Civil and Criminal Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system and reducing the potential for health care fraud in the future. The Task Force builds upon existing partnerships between agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

If you suspect Medicare fraud, please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or email HHSTips@oig.hhs.gov. To report Medicaid Fraud in North Carolina, please call the North Carolina Medicaid Investigations Division at 919-881-2320.

ALBUQUERQUE – Kirk Simplicio, 24, a member and resident of Zuni Pueblo, N.M., was sentenced today in federal court in Santa Fe, N.M., to 16 months in prison followed by five years of supervised release for his conviction on a sexual abuse of a minor charge. Simplicio will be required to register as a sex offender after he completes his prison sentence.

Simplicio was arrested on March 17, 2015, on an indictment charging him with sexually abusing a minor who was between 12 and 16 years of age. According to the indictment, Simplicio committed the crime on Jan. 1, 2014, on Zuni Pueblo in McKinley County, N.M.

On May 26, 2016, Simplicio pled guilty to the indictment and admitted engaging in a sexual act with the victim, who was 14 years old and at least four years younger than Simplicio.

This case was investigated by the Zuni Pueblo Tribal Police Department and was prosecuted by Assistant U.S. Attorney Kyle T. Nayback.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York,  William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Leon Hayward, Acting Director of the New York Field Office of U.S. Customs and Border Protection, and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of three Indictments and one Complaint charging 33 defendants with a variety of racketeering, fraud, narcotics, firearms, and stolen property offenses.

Of the charged defendants, 27 are associated with a nationwide racketeering enterprise led by RAZHDEN SHULAYA and ZURAB DZHANASHVILI and are charged in United States v. Razhden Shulaya, et al. (the “Shulaya Indictment”) and an accompanying superseding indictment, which has been assigned to U.S. District Judge Katherine B. Forrest. Of those defendants, 23 were taken into federal custody. 18 will be presented before U.S. Magistrate Judge Gabriel W. Gorenstein today. One defendant will be presented in the District of Nevada.  Three defendants will be presented in the Southern District of Florida.  DENIS SAVGIR, EREKLE KERESELIDZE, GIORGI LOMISHVILI, MAMUKA CHAGANAVA, and SEMYON SARAIDAROV remain at large. One defendant, TIMUR SUYUNOV, is currently detained in federal custody and will be brought to Manhattan federal court on a writ.

Two additional defendants are charged in United States v. Nikoloz Jikia, et al. (the “Marat-Uulu Complaint”), with conspiracy to commit murder-for-hire and with additional firearms offenses.  Of those defendants, one of whom is also charged in the Shulaya Indictment, both were taken into federal custody last evening and will be presented before Judge Gorenstein today. 

Three additional defendants are charged in United States v. Alex Fishman, et al. (the “Fishman Indictment”), which has been assigned to U.S. District Judge Richard J. Sullivan.  Each of those three defendants was taken into federal custody today and will be presented before Judge Gorenstein this afternoon. 

Finally, one additional defendant was charged in United States v. Sergey Gindinov (the “Gindinov Indictment”), which has been assigned to U.S. District Judge Alison J. Nathan.  GINDINOV was taken into federal custody today and will be presented this afternoon before Judge Gorenstein. 

Acting Manhattan U.S. Attorney Joon H. Kim said:  “Today, we have charged 33 members and associates of a Russian organized crime syndicate allegedly engaging a panoply of crimes around the country. The indictments include charges against the alleged head of this national criminal enterprise, one of the first federal racketeering charges ever brought against a Russian ‘vor.’ The dizzying array of criminal schemes committed by this organized crime syndicate allegedly include a murder-for-hire conspiracy, a plot to rob victims by seducing and drugging them with chloroform, the theft of cargo shipments containing over 10,000 pounds of chocolate, and a fraud on casino slot machines using electronic hacking devices. Thanks to the remarkable interagency partnership of FBI, CBP, and NYPD, we have charged and arrested 33 defendants allegedly involved in this criminal enterprise.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “The suspects in this case cast a wide net of criminal activity, aiming to make as much money as possible, all allegedly organized and run by a man who promised to protect them. But that protection didn't include escaping justice and being arrested by the agents and detectives on the FBI New York Eurasian Organized Crime Task Force. Our partnerships with other FBI field offices, the NYPD and CBP allows us to do everything we can to go after criminals who don't believe the law applies to them.”

Acting CBP New York Director Leon Hayward said:  “U.S. Customs and Border Protection is extremely proud to have assisted our federal partners in this operation.  It is through our interagency partnerships, and collaborative approaches like the one leading to today’s arrests, that law enforcement successfully combats modern criminal organizations.”

NYPD Commissioner James P. O’Neill said:  “The Thief-in-Law allegedly established an extensive cross country criminal enterprise from Brighton Beach to Las Vegas that engaged in bribes, gambling, and murder for hire.  Thanks to all whose work resulted in the arrest and indictment of 33 today.”

According to the allegations in the Indictments and Complaint unsealed today in Manhattan federal court:[1]

The Shulaya Enterprise was an organized criminal group operating under the direction and protection of RAZHDEN SHULAYA a/k/a “Brother,” a/k/a “Roma,” a “vor v zakonei” or “vor,” which are Russian phrases translated roughly as “thief-in-law” or “thief,” and which refer to an order of elite criminals from the former Soviet Union who receive tribute from other criminals, offer protection, and use their recognized status as vor to adjudicate disputes among lower-level criminals.  As a vor, SHULAYA had substantial influence in the criminal underworld and offered assistance to and protection of the members and associates of the Shulaya Enterprise.  Those members and associates, and SHULAYA himself, engaged in widespread criminal activities, including acts of violence, extortion, the operation of illegal gambling businesses, fraud on various casinos, identity theft, credit card frauds, and trafficking of large quantities of stolen goods.

The Shulaya Enterprise comprised groups of individuals, often with overlapping members or associates, dedicated to particular criminal tasks.  While many of these crews were based in New York City, the Shulaya Enterprise had operations in various locations throughout the United States (including in New Jersey, Pennsylvania, Florida, and Nevada) and abroad.  Most members and associates of the Shulaya Enterprise were born in the former Soviet Union and many maintained substantial ties to Georgia, the Ukraine, and the Russian Federation, including regular travel to those countries, communication with associates in those countries, and the transfer of criminal proceeds to individuals in those countries. 

The Shulaya Enterprise was led principally by SHULAYA and ZURAB DZHANASHVILI, a/k/a “Zura,” his lieutenant.  Along with SHULAYA and DZHANASHVILI, AKAKI UBILAVA, a/k/a “Ako,” HAMLET UGLAVA, MAMUKA CHAGANAVA, MIKHEIL TORADZE, NAZO GAPRINDASHVILI, a/k/a “Anna,” ARTUR VINOKUROV, a/k/a “Rizhy,” EVGHENI MELMAN, TIMUR SUYUNOV, ZURAB BUZIASHVILI, GIORGI LOMISHVILI, AZER ARSLANOUK, IVAN AFANASYEV, a/k/a “Vanya,” DENIS SAVGIR, DIEGO GABISONIA, LEVAN MAKASHVILI, SEMYON SARAIDAROV, a/k/a “Sammy,” and VACHE HOVHANNISYAN are charged in Count One of the Shulaya Indictment with racketeering conspiracy.

The Enterprise’s criminal activities included:

• The operation of illicit poker businesses in Brighton Beach;
• The extortion of gamblers who became indebted to the Shulaya Enterprise;
• Attempts to extort local business owners;
• Efforts to defraud casinos in Atlantic City and Philadelphia by using electronic devices and computer servers to predict and exploit the behavior of electronic slot machines;
• The theft of cargo shipments, including a shipment containing approximately 10,000 pounds of chocolate confections;
• The use of a female member of the Shulaya Enterprise to seduce men, incapacitate them with gas, and then rob them;
• Attempts to create an after-hours nightclub that would host, among other things, the sale of narcotics;
• The transportation and sale of numerous cases of untaxed cigarettes;
• Plans to pay bribes to local law enforcement; and
• Creation and use of forged identification documents, checks, and invoices.

SHULAYA, DZHANASHVILI, UGLAVA, CHAGANAVA, TORADZE, VINOKUROV, SUYUNOV, BUZIASHVILI, LOMISHVILI, AFANASYEV, KANADASHVILI are charged in Count Two of the Shulaya Indictment with conspiring to sell and transport stolen goods in a scheme involving contraband cigarettes, falsified bills of lading, and assorted stolen merchandise.

SHULAYA, DZHANASHVILI, UGLAVA, CHAGANAVA, TORADZE, KANADASHVILI, and VINOKUROV are charged in Count Three of the Shulaya Indictment in connection with a multi-year conspiracy to transport and sell purportedly stolen contraband cigarettes.

SHULAYA, DZHANASHVILI, SUYUNOV, AFANASYEV, SAVGIR, HOVHANNISYAN, DAVYDOV, KERESELIDZE, and MITSELMAKHER are charged in Count Four of the Shulaya Indictment in connection with a conspiracy to create and use false identification documents.

SHULAYA, UBILAVA, UGLAVA, MELMAN, GABISONIA, and MAKASHVILI are also charged in Count Five with wire fraud in connection with their plot to defraud casinos through the use of electronic devices and software designed to predict the behavior of particular models of electronic “slot” machines, thereby removing the element of chance from play of those machines.

LOMISHVILI, MARAT-UULU, and PETRUSHYN are charged in Count Six of the Shulaya Indictment with narcotics conspiracy in connection with their efforts to sell cocaine and heroin.

LERNER is charged in Count Seven of the Shulaya Indictment with obstruction of justice for lying to the FBI about information LERNER provided the Shulaya Enterprise about the FBI’s investigation.

MARAT-UULU and JIKIA are charged in the Jikia Complaint with conspiring to commit a murder-for-hire, and with firearms offenses.

GINDINOV is charged in the Gindinov Indictment with conspiring to sell narcotics in Manhattan and Brooklyn.

ALEX FISHMAN, STEVEN FISHMAN, and MELNYK are charged in the Fishman Indictment with conspiring to transport and sell contraband cigarettes in Manhattan and Brooklyn.

A detailed chart with the defendants’ ages, residences, and maximum sentences are attached.

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Mr. Kim praised the outstanding work of the FBI, including the Atlantic City, New York, Los Angeles, Las Vegas, and Miami offices, the CBP, the NYPD, and the St. Pierce, Florida, Field Office of Homeland Security Investigations for their investigative efforts and ongoing support and assistance with the case.

The prosecution of this case is being overseen by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Andrew C. Adams and Andrew Thomas are in charge of the case.

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

United States v. Shulaya, et al.

United States v. Fishman, et al.

United States v. Jikia, et al.

United States v. Gindinov

SACRAMENTO, Calif. — Algernon Tamasoa, 28, of Sacramento, was sentenced today by U.S. District Judge Kimberly J. Mueller to eight years in prison for his participation in a methamphetamine trafficking organization and for selling dangerous assault rifles, U.S. Attorney Phillip A. Talbert announced.

On January 11, 2017, Tamasoa pleaded guilty to conspiracy to distribute methamphetamine and dealing firearms without a license.

According to court documents, Tamasoa conspired with co-defendant Epati Malauulu, 42, of Suisun City, and others to purchase high quality methamphetamine in California and ship it into Hawaii where it sold at a large profit on Oahu, an area hit particularly hard by the crystal methamphetamine epidemic.

Co-defendants John Ortiz, 44, of Vallejo; and Francisco Poloai, 45, of Dixon, were also charged in the drug conspiracy in the Eastern District of California. Ultimately, the drug investigation led to 44 defendants being charged in the District of Hawaii and four being charged in the Northern District of California (San Francisco).

According to court documents, between February 6, 2015, and May 27, 2015, Tamasoa sold 11 assault rifles to an undercover agent. Several of the rifles had high-capacity magazines. Tamasoa provided ammunition in addition to the firearm in the first four firearm sales. These assault weapons shoot high-velocity bullets that go through the bulletproof vests that most law enforcement officers wear. They also can go through walls and doors in an urban setting. Two of the assault rifles were manufactured by unlicensed gun makers and lacked serial numbers, making them untraceable.

On April 26, 2017, Malauulu was sentenced to 20 years in prison, and on May 17, 2017, Ortiz was sentenced to 10 years in prison for the methamphetamine trafficking activity. Poloai, the sole remaining defendant in the drug trafficking case, is scheduled for trial on September 25, 2017. The charges against Poloai are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Drug Enforcement Administration, the Federal Bureau of Investigation, the U.S. Postal Inspection Service, the Solano County Multi-Jurisdictional Methamphetamine Enforcement Team, the Solano County Sheriff’s Office, the Fairfield Police Department, the Vallejo Police Department, the San Francisco Police Department, the Honolulu Police Department, and others. Assistant United States Attorney Richard Bender is prosecuting the Sacramento case.

This case is the product of an investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.

ALEXANDRIA, Va. – A Culpeper man entered a plea of not guilty today to criminal charges that he had sex with a minor on multiple occasions.

According to the allegations in the indictment, Fielding Smith Daniel, 53, met a young girl on a sugar daddy website in August 2016. Such websites are set up to facilitate interactions between wealthy older men and younger women who provide companionship in exchange for financial support. Daniel allegedly arranged to meet the girl for sex for money. The girl, who was 14 years old, was staying with her grandmother in Stafford. Shortly after midnight on Aug. 11, 2016, Daniel picked her up from her grandmother’s house and brought her to a motel, where they engaged in sex. Although they had negotiated a rate of $200, Daniel provided the girl with $100 after she wanted to leave early. A few weeks later, on Aug. 23, 2016, Daniel again arranged to have sex with the girl for money. On this occasion, the girl was with her 14-year-old friend. Daniel attempted to persuade the girl to have her friend watch them have sex, offering to pay her $300 if the friend watched. Daniel picked up the girl and her friend and brought them to a local hotel. The friend declined multiple offers to watch but the girl again had sex with Daniel for $140, while the friend stayed in the car. Afterwards Daniel dropped both girls off at a local Wal-Mart.

Daniel is charged with two counts of commercial sex with a minor and one count of coercion and enticement of a minor. Trial is scheduled for August 14, and Daniel will remain in custody pending the outcome. Daniel faces a mandatory minimum of 10 years in prison and a statutory maximum of life in prison, if convicted on any count. 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.

This case is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ 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 individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc and click on the tab “resources” for more information about Internet safety education.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Adam Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after arraignment by U.S. District Judge Gerald Bruce Lee. Assistant U.S. Attorneys Jay V. Prabhu and Whitney Dougherty Russell 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 is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:17-cr-110 and 1:17-mj-145.

BOSTON - A Dominican national was sentenced today in federal court in Boston for illegal reentry after deportation.

Joel Perez-Matos, 31, was sentenced by U.S. District Court Judge William G. Young to 15 months in prison and two years of supervised release.  Perez-Matos, who pleaded guilty in March 2017, will be subject to deportation upon completion of his sentence.

Perez-Matos was deported from the United States in February 2016.  Federal authorities encountered Perez-Matos in December 2016, and determined him to be unlawfully present in the U.S.

Acting United States Attorney William D. Weinreb and Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistant U.S. Attorney Kelly Begg Lawrence of Weinreb’s Major Crimes Unit prosecuted the case.

BOSTON – A Salvadoran national was sentenced today in federal court in Boston for illegal reentry after deportation.

Ronald Ramirez-Escoto, 42, a Salvadoran national residing in Everett, pleaded guilty to illegal reentry after deportation and was sentenced by U.S. District Court Judge Nathan M. Gorton to time served and one year of supervised release.  Ramirez-Escoto will be subject to deportation upon completion of his sentence.

Ramirez-Escoto was previously removed from the United States in April 2012 and December 2012.  Most recently, federal authorities encountered Ramirez-Escoto in April 2017, and determined him to be unlawfully present in the U.S.

Acting United States Attorney William D. Weinreb and Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Weinreb’s Major Crimes Unit prosecuted the case.

Fayetteville, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Oscar Ceballos, age 31, of Rogers, was sentenced today to 87 months in federal prison followed by four years of supervised release and was ordered to pay a $2,400 fine on one count of Possession with Intent to Distribute Methamphetamine. The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville.

According to court records, in early 2016, investigators with the Springdale Police Department received information from a confidential source concerning Ceballos distributing methamphetamine. According the source, Ceballos facilitated his distribution by moving between high end hotels in the area. In February of 2016, officers observed Ceballos loadings items into a UHAUL truck. After making contact officers detected the smell of marijuana. A subsequent search revealed drug paraphernalia, a firearm, $4,950.00, and 96.9 grams of actual methamphetamine.

Ceballos was indicted by a federal grand jury in November, 2016 and pleaded guilty in January, 2017.

This case was investigated by the Springdale Police Department. Assistant United States Attorney Kim Harris prosecuted the case for the United States.

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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov

Fayetteville, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Edward Garcia, age 23, of Rogers, was sentenced today to 120 months in federal prison followed by three years of supervised release and was ordered to pay a $2,400 fine on one count of Possession with Intent to Distribute Methamphetamine. The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville.

According to court records, on October 30, 2016, Springdale police officers conducted a traffic stop on a vehicle operated by Garcia. After Garcia was arrested for an outstanding warrant officers conducted a vehicle search. A search of the vehicle resulted in officers locating a flashlight and inside the battery compartment of the flashlight officers located a plastic bag containing methamphetamine. The drugs seized were sent to the Arkansas State Crime Lab where they were confirmed to contain 9.5 grams of actual methamphetamine.

Garcia was indicted by a federal grand jury in November, 2016 and pleaded guilty in February 2017.

This case was investigated by the Springdale Police Department. Assistant United States Attorney David Harris prosecuted the case for the United States.

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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov

BOSTON – A Canadian man was sentenced today in federal court in Worcester for concealing $3–$4 million in his bankruptcy filings.

Cyril Gordon Lunn, 69, formerly of Pepperell, Mass., was sentenced by U.S. District Court Judge Timothy S. Hillman to 18 months in prison and restitution of $6,339. Upon the completion of his sentence, Lunn will face deportation hearings. In January 2017, Lunn pleaded guilty to concealing assets from his bankruptcy creditors and making a false statement under the penalty of perjury in one of his bankruptcy schedules.

From 1985 until 2001, Lunn was the owner of CY Realty Corporation, a construction and land development business in Pepperell. From 1998 to September 2001, Lunn transferred a variety of assets belonging to CY Realty and himself, including $3-$4 million in cash, from the United States to Canada, where he deposited some or all of the funds into safe deposit boxes. In the fall of 2001, Lunn filed for bankruptcy for CY Realty and himself; however, he failed to disclose in either bankruptcy case the asset transfers, including the millions in cash. In addition, Lunn made a false statement in one of his bankruptcy filings by stating that he had closed all safe deposit boxes by September 2001, when in fact, he had failed to disclose a safe deposit box that he had opened at the Granite Bank in New Hampshire, and which he continued to access after the bankruptcy filing.

Lunn’s actions were discovered after he testified about the asset transfers during a 2004 Canadian civil lawsuit. In March 2005, Lunn rented a snowmobile in Maine and fled across the border into Canada where he remained a fugitive until he was extradited from Canada in 2016.

Acting United States Attorney William D. Weinreb and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The U.S. Attorney’s Office received assistance from the U.S. Trustee’s Office in Boston and Worcester. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Weinreb’s Economic Crimes Unit.

Jacksonville, Florida – Acting United States Attorney W. Stephen Muldrow announces that Michael Eugene Williams (60, Jacksonville) has pleaded guilty to attempted commercial sex trafficking of a child. He faces a minimum mandatory penalty of 15 years, up to life, in federal prison.

According to the plea agreement, between February 25 and September 28, 2016, Williams solicited an adult woman in Texas to sexually abuse her 4-year-old daughter, take photographs of the abuse, and then sell the photographs to him. The investigation of Williams began after an Internet Crimes Against Children Task Force detective from the Jacksonville Sheriff’s Office (JSO) received a tip from the National Center for Missing and Exploited Children. JSO obtained a search warrant for Williams’s residence and found more than 450 images and videos of child pornography on his cellphone.

In addition to his collection of child pornography, forensic analyses revealed text communications between Williams and an adult woman in Texas beginning in January 2016, and continuing until the date of the search warrant, on July 7, 2016. During this time, there were approximately 337 messages between Williams and the woman, mostly about her 4-year-old daughter. Williams repeatedly requested pornographic pictures and videos of the child and indicated that he was willing to pay for them. He urged the mother to film herself engaged in sexual acts with her child and to have the child perform sexual acts on others. Williams used income from his JSO retirement pension to send at least 19 Western Union wire transfers to the mother as payment.

Immediately after discovering the images and videos of the 4-year-old’s sexual abuse, agents from U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and officers from JSO contacted federal and local law enforcement in Texas and the child was removed from the abusive environment.

On October 21, 2016, a search warrant was executed at Williams’s home, and agents recovered Williams’s newly obtained cellphone containing sexually explicit videos of the 4-year-old girl in Texas and messages detailing his desire to perform sexual acts on the child.

The Texas woman has pleaded guilty to two counts of production of child pornography in federal court in the Northern District of Texas. She faces up to 60 years in federal prison.

This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Jacksonville Sheriff’s Office, with assistance from the U.S. Secret Service. It is being prosecuted by Assistant United States Attorney Kelly S. Karase.

It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' 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 individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

BECKLEY, W.Va. – A District of Columbia man was sentenced today to three years and one month in federal prison for a gun charge, announced United States Attorney Carol Casto. Nicholas Loukas, 31, previously pleaded guilty to conspiracy to make false statements on records kept by licensed firearms dealers.

Loukas admitted that in September 2015, he directed others to purchase firearms for him so that he would not be named in records required to be maintained by federally-licensed firearms dealers. When the purchases were made, the buyers listed their names on the forms required by the Bureau of Alcohol, Tobacco, Firearms and Explosives, instead of Loukas’ name. Loukas further admitted that four handguns were purchased for him by others at Shooter’s Roost in Beckley. Loukas also admitted that another handgun was purchased for him by an individual at J & S Pawn in Beckley. As part of the investigation, law enforcement additionally recovered another handgun and a shotgun that Loukas unlawfully possessed. Loukas was prohibited from possessing any firearm under federal law because of a 2002 robbery conviction in Maryland.

The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant United States Attorney John File is responsible for the prosecution. United States District Judge Irene C. Berger imposed the sentence.

This case was prosecuted as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by working with existing local programs that target gun crime.

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Matthew Philip, 55, of Philadelphia, Pennsylvania, was charged by Information with one count of SNAP benefit fraud and one count of theft of government funds, announced Acting United States Attorney Louis D. Lappen. According to the Information, from January 2013 through December 2016, the defendant unlawfully exchanged cash for SNAP benefits. The defendant’s alleged actions resulted in a loss to the government of more than $3,500,000.

If convicted, the defendant faces a term of imprisonment, a period of supervised release, restitution to the government, a $260,000 fine, and a $200 special assessment.

The case was investigated by the United States Department of Agriculture, Office of Inspector General, and Homeland Security Investigations. The case is being prosecuted by Special Assistant United States Attorney Christopher E. Parisi.

An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.

SYRACUSE, NEW YORK – Daquan Rice, 22, and Damian Diaz, 26, both of Syracuse, New York, pled guilty to conspiracy charges relating to their role in a years-long credit-card cloning operation, announced United States Attorney Richard S. Hartunian.

Daquan Rice pled guilty to one count of conspiracy to commit wire-fraud, one count of conspiracy to commit money-laundering, and two counts of aggravated identity theft. Damian Diaz pled guilty to one count of wire-fraud conspiracy and one count of money-laundering conspiracy. As part of their guilty pleas, both men admitted to their involvement in the scheme, which involved the purchase of stolen credit card numbers belonging to numerous victims and the fabrication of cloned credit cards. They further admitted that they used those cloned credit cards to purchase tens of thousands of dollars of merchandise and prepaid gift cards. The defendants used the prepaid gift cards to purchase United States Postal money orders, which they converted to cash. Rice’s and Diaz’s criminal conspiracy ran from 2014 through 2016 in Syracuse, New York, as well as in Texas and Georgia.

Rice and Diaz are scheduled to be sentenced on September 29, 2017. The wire fraud and money laundering conspiracy charges carry a maximum possible sentence of twenty years incarceration. The aggravated identity theft charges to which defendant Daquan Rice pled guilty carry a two year mandatory minimum sentence, which must run consecutive to the sentence imposed on the other charges.

This case was investigated by the Federal Bureau of Investigation (FBI), the United States Postal Inspectors, the Syracuse Police Department – Gang Violence Task Force, the New York State Police, and the Town of Dewitt Police Department, and is being prosecuted by Assistant U.S. Attorney Nicolas Commandeur.

CHARLESTON, W.Va. – A Charleston drug dealer was sentenced today to three years and five months in federal prison for a methamphetamine crime, announced United States Attorney Carol Casto. Chelsea Fore, 25, previously pleaded guilty to distribution of methamphetamine.

On October 13, 2016, officers with the Metropolitan Drug Enforcement Network Team used a confidential informant to meet with Fore to purchase methamphetamine. The drug deal took place in the area of the Kmart located at 4th Avenue in Charleston. Once the informant gave Fore the prerecorded buy money, Fore got into the passenger seat of a BMW in the Kmart parking lot. After retrieving the methamphetamine, Fore got out of the car and gave the informant the drugs. Fore also admitted that she was responsible for distributing approximately two-and-a-half ounces of methamphetamine during the course of her drug trafficking.

The Metropolitan Drug Enforcement Network Team conducted the investigation. Assistant United States Attorney Monica D. Coleman is in charge of the prosecution. United States District Judge Thomas E. Johnston imposed the sentence.

This case was 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 illegal drugs, including methamphetamine. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.

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ALBUQUERQUE – Joshua Nestle, 26, of Las Cruces, N.M., pled guilty today in federal court to methamphetamine trafficking charges. Under the terms of his plea agreement, Nestle will be sentenced to 140 months in prison followed by a term of supervised release to be determined by the court.

Nestle and co-defendant Joclyn Telles, 35, also of Las Cruces, were arrested in Feb. 2017, and charged by criminal complaint with conspiracy and possession of a controlled substance with intent to distribute. The complaint also charged Nestle with being a felon in possession of a firearm and with using and carrying a firearm in relation to a drug trafficking crime. The criminal complaint alleged that the defendants committed the crimes on June 29, 2016, in Dona Ana County, N.M. According to the complaint, law enforcement officers arrested Nestle and Telles on outstanding arrest warrants following a traffic stop. During a search incident to the arrests, the officers found approximately 2.6 ounces of methamphetamine and a firearm in Telles’ vehicle.

During today’s proceedings, Nestle pled guilty to a felony information charging him with conspiracy and possession of methamphetamine with intent to distribute. In entering the guilty plea, Nestle admitted that on June 29, 2016, he conspired with others to violate the federal drug trafficking laws. He also admitted possessing the 2.6 ounces of methamphetamine found in his vehicle and acknowledged that he intended to distribute the drugs to others. Nestle further admitted that on March 9, 2017, he possessed a controlled substance while he was incarcerated at the Dona Ana County Detention Center. Nestle remains in custody pending a sentencing hearing, which has yet to be scheduled.

Telles remains in custody on the charges in the criminal complaint. Charges in criminal complaints are merely accusations and defendants are presumed innocent unless found guilty in a court of law.

This case was investigated by the Las Cruces office of the FBI and is being prosecuted by Assistant U.S. Attorney Mark A. Saltman of the U.S. Attorney’s Las Cruces Branch Office.