Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that MICHAEL C. MONROE, 48, of Norwalk, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to six months of imprisonment, six months of home confinement, three years of supervised release, and 90 hours of community service, for tax evasion.

According to court documents and statements made in court, Monroe operated a construction business known as Monroe Construction.  From 2008 through 2013, Monroe owed substantial unpaid income taxes and penalties to the IRS.  In 2014, the IRS levied the business bank account used by Monroe as the operating account for his construction company.  Monroe subsequently closed his business bank account and, between approximately November 2014 and November 2017, evaded payment to the IRS of his preexisting tax obligations by using a check cashing service to cash approximately $1.5 million in customer checks paid to his business.  For the 2014 and 2015 tax years, Monroe failed to report to the IRS a total of more than $700,000 that his business generated in gross revenues.  In addition to evading payment to the IRS of more than $107,000, he understated the federal income taxes he owed in 2014 and 2015 by approximately $34,000.

Judge Underhill ordered Monroe to pay total back taxes of $141,041, plus interest and penalties.

On March 15, 2021, Monroe pleaded guilty to one count of tax evasion.

Monroe is required to report to prison by December 9, 2021.

This investigation was conducted by the Internal Revenue Service, Criminal Investigation Division.  The case was prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.

Clay Shepherd Possessed 1.37 kilograms of the synthetic opioid

          GRAND RAPIDS, MICHIGAN— U.S. Attorney Andrew Byerly Birge announced today that Clay Shepherd, 57, of Battle Creek Michigan, was sentenced to 57 months in prison after pleading guilty to possession of fentanyl, a Schedule II controlled substance, with the intent to distribute it.  Following his release from federal prison, Shepherd will serve five years on supervised release.  United States District Judge Paul Maloney imposed the sentence. 

          Fentanyl is a synthetic opioid that is 80-100 times stronger than morphine, the substance to which heroin metabolizes.  Drug traffickers add fentanyl to heroin to increase its potency or falsely claim that the fentanyl they are selling is highly potent heroin.

          On April 18, 2018, Battle Creek Police officers executed a search warrant at Shepherd’s residence and discovered a package containing 399 grams of fentanyl and tramadol and a package containing 975 grams of fentanyl concealed behind insulation in the attic.  The Battle Creek Police Department requested the assistance of federal authorities to investigate the matter further.  Investigators from Homeland Security Investigations (“HSI”) developed evidence that Shepherd possessed the fentanyl with the intent to distribute it by investigating his known associates and customers, who confirmed that Shepherd was selling narcotics and possessed the fentanyl seized on April 18.  

          “Clay Shepherd profited from distributing fentanyl, an opioid nearly 100 times more potent than morphine, without any regard to the destruction it caused to families or communities here in Michigan,” Homeland Security Investigations (HSI) Special Agent-in-Charge Vance Callender said.  “This complex investigation could not have been brought to conclusion without the outstanding partnership between HSI and Battle Creek PD.  Thank you to the hardworking and dedicated officers in Battle Creek.”

          U.S. Attorney Birge said, “My office will continue to aggressively pursue those who illegally peddle fentanyl to our community.  The illegal trafficking of this drug is responsible for a multitude of overdose deaths in our state, and we are committed to deterring the trafficking that leads to these tragedies.”

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SYRACUSE, NEW YORK – Jovaun Clark, age 45, of Syracuse, pled guilty yesterday to possessing unregistered machine guns and short-barreled rifles, possessing firearms and ammunition while a convicted felon, and selling firearms and ammunition to a convicted felon, announced United States Attorney Carla B. Freedman, John B. DeVito, Special Agent in Charge of the New York Field Division of the United States Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Chief Kenton Buckner, City of Syracuse Police Department, and Ray Donovan, Special Agent in Charge of the U.S. Drug Enforcement Administration (DEA), New York Division.

As part of his guilty plea, Clark admitted to selling seven firearms and numerous rounds of ammunition to a confidential informant during four meetings in January 2019.  Five of the firearms were “ghost guns” bearing no serial number, two were handguns that had been modified to operate as machine guns, and two were short-barreled rifles. None of the machine guns and short-barreled rifles were registered to the defendant as required by federal law.  In 1999, the defendant was convicted in Onondaga County Court of Criminal Possession of a Controlled Substance in the Third Degree, a felony offense. The confidential informant to whom Clark sold the firearms and ammunition also was a convicted felon.

Sentencing is scheduled for February 10, 2022, before United States District Judge David N. Hurd in Utica, New York, at which time Clark faces up to 10 years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 years.  The Court has discretion to order the sentences on separate counts to be served concurrently or consecutively in some circumstances. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.

This case was investigated by United States Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Syracuse Police Department, and the United States Drug Enforcement Administration (DEA), and is being prosecuted by Assistant U.S. Attorneys Thomas Sutcliffe and Andrew Beaty.

SYRACUSE, NEW YORK – Charles W. Whitcher, age 41, of Port Leyden, New York, was sentenced On October 13, 2021 in federal court to 51 months in prison after previously pleading guilty to distribution and possession with intent to distribute methamphetamine, possession of Pseudoephedrine with the intent to manufacture methamphetamine, and maintaining a drug-involved premises. 

The announcement was made by United States Attorney Carla B. Freedman and Ray Donovan, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), New York Division.

Whitcher was previously convicted in federal court, in 2003, for his involvement in a conspiracy to manufacture, distribute, and possess with intent to distribute methamphetamine.

As part of his previously entered guilty plea, Whitcher admitted that between August 2019 and September 2019, he distributed methamphetamine he had manufactured in his home using the “one pot” method, which uses Pseudoephedrine and other ingredients to produce methamphetamine that Whitcher would then distribute in exchange for cash or more Pseudoephedrine.

In addition to the 51-month term of imprisonment, Chief United States District Judge Hon. Glenn T. Suddaby imposed a term of 6 years of supervised release which will follow the term of incarceration. 

This case was investigated by the DEA, the Lewis County Drug Task Force, the Lewis County District Attorney’s Office, the Lewis County Sherriff’s Office, and the New York State Police and was prosecuted by Special Assistant U.S. Attorney Adrian S. LaRochelle.

          LOS ANGELES– A Calabasas physician was sentenced today to 14 months in federal prison for accepting nearly $800,000 in bribes and kickbacks as part of a conspiracy that unlawfully billed health insurers for compounded medication prescriptions.

          Dr. Amir Friedman, 56, was sentenced by United States District Judge John F. Walter. Friedman pleaded guilty in October 2019 to one count of conspiracy to commit honest services mail and wire fraud, and to violate the Travel Act, a federal law that – among other things – forbids the use of the U.S. mail for the purpose of aiding bribery.

          Friedman, a licensed anesthesiologist, violated the fiduciary duty he owed to his patients by accepting kickbacks and bribes for writing prescriptions for compounded medications for his patients.

          Compounded drugs are tailor-made products doctors may prescribe when the Food and Drug Administration-approved alternative does not meet the health needs of a patient.

          From August 2013 to May 2015, Friedman conspired with New Age Pharmaceuticals Inc., a Beverly Hills-based company, and a marketer – listed in court documents as “Marketer A” – to violate federal law. Insurance companies under the California Workers’ Compensation System reimbursed New Age for dispensing prescription drugs and other pharmaceuticals. Marketer A was paid commissions for facilitating the referral of compounded drug prescriptions.

          Marketer A provided pre-printed prescription pads for compounded drugs to Friedman and offered Friedman kickbacks and bribes for each prescription he wrote. After Friedman wrote the kickback-tainted prescriptions, New Age dispensed the compounded drugs, billed insurance companies for reimbursement and shipped through the mail the compounded drugs to patients.

          In total, Friedman accepted $788,140 in kickbacks and bribes – a sum he received in the form of approximately 28 check payments that represented illicit proceeds from the conspiracy. He admitted in his plea agreement that he was aware that the compounded drugs he prescribed were far more expensive than equivalents.

          The FBI investigated this matter.

          Assistant United States Attorney Poonam G. Kumar of the Major Frauds Section prosecuted this case.

A Tulsa man who possessed a revolver and shotgun to protect himself and the marijuana he was illegally distributing pleaded guilty Thursday in federal court, announced Acting U.S. Attorney Clint Johnson.

LeMorris Walton Jr., 33, pleaded guilty to possession of a firearm in furtherance of a drug trafficking crime. U.S. District Judge Claire V. Eagan will sentence Walton on Feb. 15, 2022.

“Violating federal firearms laws has consequences. The prosecution of these cases reduces violent crime,” said Acting U.S. Attorney Clint Johnson. “This office is committed to investigating and prosecuting individuals who illegally buy, sell, use, or possess firearms.”

Walton admitted that on Nov. 9, 2020, he possessed firearms at his residence in Tulsa for the purpose of protecting and furthering his marijuana distribution operation. The defendant possessed a Herman Weihrauch .38 special revolver, a Maverick 12 gauge shotgun, and 33 rounds of ammunition. Walton is also a felon and is prohibited from possessing firearms and ammunition.

The Tulsa Police Department and Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorneys Thomas E. Buscemi and Mark R. Morgan are prosecuting the case.

This case is being prosecuted as part of the 2150 Initiative. The initiative is a collaborative effort between the U.S. Attorney’s Office for the Northern District of Oklahoma, Tulsa Police Department, ATF, and all other local, state, tribal and federal law enforcement partners to combat violent crime by focusing efforts on prohibited persons in possession of firearms as well as straw purchasers.

Seattle – A 22-year-old Mount Vernon, Washington, man was sentenced today in U.S. District Court in Seattle to 100 months in prison and 4 years of supervised release for conspiracy to distribute fentanyl, announced U.S. Attorney Nicholas W. Brown.  Defendant Jiovanni Nunez supplied counterfeit oxycodone pills tainted with fentanyl to an associate, who distributed them in Skagit and Whatcom Counties.  The pills are connected to at least two overdoses, including the overdose death of a Bellingham 17-year-old.  At the sentencing hearing Chief U.S. District Judge Ricardo S. Martinez said, “This entire case is tragic… the victim’s family continues to suffer as a direct consequence of the defendant’s actions.”

“Far too many people are dying from these fentanyl tainted pills — especially the young and vulnerable,” said U.S. Attorney Brown.  “It is critical that we not only stem the flow of the drugs into our community, but also remind people that using these pills often leads to death and devastation, with families left to mourn.”

Nunez and co-conspirator, Rosaliana Lopez-Rodriguez, 23, of Mount Vernon, were arrested in late 2019 after an investigation to track down the source of the tainted pills.  According to records filed in the case, a family member found the 17-year-old victim unresponsive on November 9, 2019.  Despite efforts of emergency responders to resuscitate him, the victim died; his cause of death was later determined to be fentanyl overdose.  Investigators found a whole and a partial pill near the 17-year-old victim.  The pills were designed to look like oxycodone 30-milligram pills, with “M” and “30” stamped on them.  But they were fakes tainted with fentanyl.  Similar pills have been linked to other overdose deaths throughout the Puget Sound region.  In fact, a friend of the 17-year-old victim nearly died after smoking one of the pills on November 2, 2019.  Nunez’s co-conspirator knew of that near-fatal overdose when she sold the 17-year-old victim more pills a week later, on November 9, 2019.

During this investigation, law enforcement executed court-authorized search warrants at each defendant’s residence.  At Nunez’s residence, law enforcement found a safe containing more than 900 fake oxycodone pills that matched the appearance of the fentanyl-laced pills linked to the fatal overdose.  Co-conspirator Lopez-Rodriguez admitted that Nunez supplied her with the pills that killed the Bellingham 17-year-old. 

Speaking to the court today, the victim’s mother talked about her son as a bright light for many people.  Her son’s death left “a big hole of grief we carry that nothing can fill.” The mother noted that Nunez “knew how deadly the pills were,” and continued “dealing lethal poison in our community.”

Lopez-Rodriguez was sentenced to 84 months in prison in August 2021.

The case was investigated by the Drug Enforcement Administration (DEA), the Whatcom County Sheriff’s Office, the Skagit County Interlocal Drug Enforcement Unit (SCIDEU), and the Whatcom County Drug and Gang Task Force, which is made up of members of the Whatcom County Sheriff’s Office, Washington State Department of Corrections, U.S. Customs and Border Protection, and Homeland Security Investigations. 

The case was prosecuted by Assistant United States Attorney Jonas Lerman.

Acting U.S. Attorney Ellison C. Travis announced that the Department of Justice’s Bureau of Justice Assistance (BJA) has awarded $272,998 collectively to the East Baton Rouge Sheriff’s Office, Ascension Parish Sheriff’s Office, and Livingston Parish Sheriff’s Office.  These awards will be used to support criminal justice initiatives that fall under one or more of the allowable JAG program areas, which may include multijurisdictional drug and gang task forces, crime prevention and domestic violence programs, courts, corrections, treatment, justice information sharing initiatives, or other programs aimed at reducing crime and/or enhancing public/officer safety.

The Edward Byrne Memorial Justice Assistance Grant (JAG) Program is the leading source of federal justice funding to state and local jurisdictions.  It allows states and units of local government, including tribes, to support a broad range of activities to prevent and control crime based on their own state and local needs and conditions. Grant funds can be used for state and local initiatives, technical assistance, training, personnel, equipment, supplies, contractual support, and information systems for criminal justice, including for any one or more of the following program areas: 1) law enforcement programs; 2) prosecution and court programs; 3) prevention and education programs; 4) corrections and community corrections programs; 5) drug treatment and enforcement programs; 6) planning, evaluation, and technology improvement programs; 7) crime victim and witness programs (other than compensation); and 8) mental health programs and related law enforcement and corrections programs, including behavioral programs and crisis intervention teams.  Learn more at https://bja.ojp.gov/program/jag/overview.

Jackson, Miss. – A Jackson man was sentenced to 120 months in federal prison for possession with intent to distribute methamphetamine, announced Acting U.S. Attorney Darren LaMarca and Special Agent in Jermicha Fomby of the Federal Bureau of Investigation. 

According to court records, Jeffery Rivers, 39, sold almost a pound of pure methamphetamine to an individual in March of 2020.  Rivers pled guilty on June 29, 2021, to possession with intent to distribute 50 grams or more of methamphetamine. 

The case is the result of an extensive investigation, dubbed “Hailstorm,” which began as an operation targeting illegal methamphetamine distribution in central Mississippi. 

This operation is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. 

The FBI Jackson Safe Streets Task Force investigated the case.  

The case was prosecuted by Assistant United States Attorney Keesha Middleton.

NEWARK, N.J. – A former Newark city official and officer of the Newark Community Economic Development Corp. (NCEDC), along with two Newark business owners, were indicted today by a federal grand jury in connection with a conspiracy for the official to obtain corrupt payments intended to influence and reward him for assisting the business owners with the acquisition and redevelopment of various Newark-owned properties, Acting U.S. Attorney Rachael A. Honig announced.

Carmelo G. Garcia, 45, of Hoboken, New Jersey, a former Newark official, and Frank Valvano Jr., 52, of Florham Park, New Jersey, and Irwin Sablosky, 60, of Springfield, New Jersey, co-owners of a New Jersey-based pawnbroker and jewelry business, are charged with: one count of conspiracy to defraud the city of Newark and the NCEDC of Garcia’s honest services facilitated by the use of interstate wire transmissions; 17 counts of honest services wire fraud; and four counts of use of interstate facilities to promote and facilitate bribery in violation of the Travel Act. Garcia is additionally charged with three counts of receiving bribes in connection with the business of a federally funded local government and organization and Valvano and Sablosky are additionally charged with three counts of offering those bribes. The defendants will be arraigned in federal court on a date to be determined.

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

From at least 2017 through April 2019, while serving as a high-level Newark official, and prior to that, as an executive officer of the NCEDC (now known as Invest Newark), Garcia sought and received significant monetary payments and other benefits from Valvano, Sablosky, and others in exchange for Garcia’s use of his official positions and influence to advance real estate development matters of interest to Valvano and Sablosky., including securing Newark-approved redevelopment agreements (RDAs) to purchase and acquire various Newark-owned properties for redevelopment, and to ensure that Garcia did not use his influence and authority to act against their interests.Garcia also received jewelry, including multiple high-end watches and chains, from Valvano’s and Sablosky’s pawnbroker and jewelry business, including a Rolex watch with a “Selling Price” of $8,900, a Cartier watch with a “Selling Price” of $3,295, an Omega watch with a “Selling Price” of $7,295, and a chain with a “Selling Price” of $9,345.

Phone records and text messages obtained by law enforcement show extensive communication between Garcia, Valvano, Sablosky, and others throughout this period of time, including text messages in which Garcia arranged to personally collect cash provided by Valvano and Sablosky. In one instance, in June 2018, Garcia, then the City’s acting deputy mayor and director of the city’s Department of Economic and Housing Development (DEHD), received an envelope containing $25,000 in cash, supplied by Valvano through an intermediary,in the restroom of a New Jersey restaurant. Text messages obtained by law enforcement show that Garcia used his personal cellular phone to coordinate the location and timing of the meeting. 

In other text messages, Valvano and Sablosky discussed additional payments of money and jewelry the two had made to Garcia, and also to an associate of Garcia (identified in the indictment as “Individual 1”), as well as their ongoing efforts to obtain RDAs with the city to acquire and redevelop Newark-owned properties. E-mails obtained by law enforcement further show the official actions, assistance, and influence Garcia provided in violation of his duties in exchange for the cash and other non-cash benefits he received from Valvano and Sablosky and the actions that Valvano and Sablosky were seeking from Garcia for those benefits. 

Defendants also took steps to conceal their corrupt and fraudulent arrangement. For example, they used coded language in their electronic communications to refer to the corrupt cash payments that Garcia accepted and agreed to accept, referring to the payments, for instance, as “docs” and “butter.” Also, Valvano informally kept track of the money and jewelry that Garcia received from Valvano and Sablosky in the form of handwritten notes drafted in a manner intended to obscure Garcia’s identity. The notes, for instance, included a list of figures, some annotated with dates or other notations, under the letter “C,” a veiled reference to Garcia using only the first initial of his first name.  

The honest services fraud conspiracy and honest services wire fraud charges each carry a maximum potential penalty of 20 years in prison. The Travel Act charges each carry a maximum potential penalty of five years in prison. The bribery concerning governments receiving federal funds charges each carry a maximum penalty of 10 years in prison. All charges are punishable by a fine of $250,000 or twice the amount of the pecuniary gain from the offense. The indictment also seeks forfeiture of ill-gotten gains obtained from the bribery scheme. 

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Jeffrey J. Manis, Elaine K. Lou, and Jihee G. Suh of the U.S. Attorney’s Office’s Special Prosecutions Division.

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

Acting United States Attorney Bob Murray announced today that PHILIP JAY SCALES, age 44, of Cheyenne, Wyoming pleaded guilty to being an unlawful user of a controlled substance in possession of a firearm during a plea hearing held on October 12, 2021 in front of Federal District Court Judge Nancy D. Freudenthal.
Scales was arrested on July 29, 2021 in Cheyenne and indicted by a federal grand jury. He faces up to 10 years imprisonment, up to three years of supervised release, a fine of up to $250,000, and a $100 special assessment.
This crime was investigated by the United States Drug Enforcement Administration and the Cheyenne Police Department. The case is being prosecuted by Assistant United States Attorney Jonathan C. Coppom.
Case Number 0:21-cr-00093

Miami, Florida – Today, United States District Judge Aileen M. Cannon sentenced 51-year-old Donald Reid to seven and one-half years in prison for dealing methamphetamine.

Reid distributed methamphetamine on four separate occasions in 2019. On July 3, 2019, Reid sold 26.4 grams of methamphetamine in Lake Placid, Highlands County, Florida.  On August 9, 2019, Reid sold 55.7 grams of methamphetamine in Arcadia, DeSoto County, Florida.  On August 16, 2019, Reid sold 55.8 grams of methamphetamine in Arcadia. And, on September 9, 2019, Reid sold 110.14 grams of methamphetamine in Arcadia.  

On October 22, 2019, a Highlands County Sheriff’s Deputy stopped Reid as he was driving to Highlands County from DeSoto County.  After a K-9 alerted on the vehicle, law enforcement seized 209.8 grams of methamphetamine and over $6,000 cash from the vehicle.  Reid admitted that he was a drug dealer and that he obtained at least eight to 16 ounces of methamphetamine a week from his supplier.  Reid was on bond for a pending felon-in-possession charge out of DeSoto County, Florida at time of the traffic stop. 

Reid previously pled guilty to possession with intent to distribute 50 grams or more of methamphetamine.

Juan Antonio Gonzalez, Acting U.S. Attorney for the Southern District of Florida, and La Verne J. Hibbert, Acting Special Agent in Charge, Drug Enforcement Administration, Miami Field Division announced the sentence.

DEA Miami investigated this case, with assistance from Florida Department of Law Enforcement and Highlands County Sheriff’s Office.  Assistant U.S. Attorney Michael D. Porter prosecuted the case.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-14019.

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Federal District Court Alan B. Johnson sentenced LUIS SALGUERO-NOLASCO, 33, of Brooklyn Center, Minnesota on October 15, 2021 for illegal re-entry of previously deported alien into the Unites States. He received 12 months and one day of imprisonment and ordered to pay a $100.00 special assessment. Salguero-Nolasco was arrested by Campbell County Sheriff’s Office on April 26, 2021, for no driver’s license and possession of a controlled substance. On April 27, 2021, he told a Homeland Security Investigations agent that he was an illegal alien and a former member of the violent street gang MS-13. On May 15, 2021, the agent filed a Complaint in federal court against Salguero-Nolasco for illegal re-entry of previously deported alien into the United States. The grand jury later returned an indictment re-alleging that charge. The United States Homeland Security Investigations investigated this case.  

Federal District Court Judge Nancy D. Freudenthal sentenced VICTORIA RENEE WILSON, 39, of Gillette, Wyoming on October 12, 2021 for possession of child pornography. She received 37 months of imprisonment to be followed by five years of supervised release. Wilson was ordered to pay a $100.00 special assessment. Wyoming Division of Criminal Investigation and Homeland Security Investigations investigated this case.

Federal District Court Judge Nancy D. Freudenthal sentenced NATOSHA MARTIN, 37, of Cody, Wyoming on October 12, 2021 for conspiracy to distribute methamphetamine. She received 37 months of imprisonment to be followed by three years of supervised release. Martin was ordered to pay a $100.00 special assessment and a $300.00 community restitution. ThePostal Inspector with the United States Postal Service and the Wyoming Division of Criminal Investigation investigated this case.

Federal District Court Judge Nancy D. Freudenthal sentenced CHRISTOPHER RYAN GROSS, 34, of Cheyenne, Wyoming on September 30, 2021 for felon in possession of a firearm. He received 37 months of imprisonment to be followed by 37 months of supervised release. Gross was ordered to pay a $100.00 special assessment. The Laramie County Sheriff’s Office investigated this case.

Reagor Dykes Auto Group owner Bart Reagor was convicted today of lying to a bank about his company's prospects, announced Acting U.S. Attorney for the Northern District of Texas Chad Meacham.

After 12 hours of deliberation, a federal jury found Bart Wade Reagor, 55, guilty of making false statements to a bank insured by the FDIC. Mr. Reagor, whose trial lasted four days, now faces up to 30 years in federal prison.

“Bart Reagor’s greed and insatiable need to flaunt his wealth led him to lie to a federally-insured bank and ultimately resulted in that bank suffering a loss of over $20 million dollars.” said Acting U.S. Attorney Chad Meacham. “He’s now bracing for a possibly decades-long sentence. The Department of Justice will not permit this kind of abuse of our nation’s financial institutions and the funds of its hard-working depositors.”

According to evidence presented at trial, in 2017, Mr. Reagor told International Bank of Commerce (IBC) that the auto group was experiencing tremendous growth and expected to go public. He claimed the company needed a cash infusion to sustain its upward trajectory and maintain a cash cushion for each of the dealerships to operate.

Relying on that information, IBC granted Reagor Dykes a $10 million working capital loan, which was distributed in two tranches: $5,000,000 in July 2017 and another $5,000,000 in February 2018, to be disbursed to the various RDAG entities. 

Instead of investing all of the money into the business as he’d said he would, Mr. Reagor diverted more than $1.7 million to his personal account at Prosperity Bank – $766,277 in July 2017, following IBC’s disbursement of the first tranche of money, and $1 million in February 2018, following IBC’s disbursement of the second tranche of money.

Reagor Dykes’ CFO, Shane Smith, testified that Mr. Reagor and his partner, Rick Dykes, routinely drew money out of the business. Over a 10-year-period, Mr. Smith estimated, the pair withdrew more than $25 million.

While the jury convicted Mr. Reagor of lying to an FDIC-insured bank, they acquitted him of bank fraud. His sentencing date has not yet been set.

Fifteen of Mr. Reagor’s employees previously pleaded guilty to various crimes involving dummy flooring and check kitting at Reagor Dykes, including:

• Shane Andrew Smith, Reagor Dykes’ CEO, who pleaded guilty in June 2019 to conspiracy to commit wire fraud
• Diana Urias, an office manager in Reagor Dykes’ used car mall in Levelland, who pleaded guilty in September 2019 to conspiracy to commit bank fraud.
• Sheila Miller, an RDAG group controller, who pleaded guilty in September 2019 to conspiracy to commit bank fraud
• Paige Johnston, an office manager in Reagor Dykes’ Chevrolet store in Floydada, who pleaded guilty in October 2019 to conspiracy to commit wire fraud
• Lindsay Williams, and RDAG group accounting manager, who pleaded guilty in October 2019 to conspiracy to commit bank fraud
• Sherri Wood, an office manager at Reagor Dykes’ Ford store in Plainview, who pleaded guilty in October 2019 to conspiracy to commit wire fraud
• Pepper Rickman, an accounting controller at Reagor Dykes’ Toyota store in Plainview, who pleaded guilty in October 2019 to conspiracy to commit wire fraud
• Brad Fansler, an RDAG group administrative director, who pleaded guilty in November 2019 to conspiracy to commit wire fraud
• Ashley Dunn, executive assistant to the CEO, who pleaded guilty in December 2019 to conspiracy to commit bank fraud
• Whitney Maldonado, an office manager at Reagor Dykes’ Mitsubishi store in Lubbock, who pleaded guilty in December 2019 to conspiracy to commit wire fraud
• Elaina Cabral, an office manager at Reagor Dykes’ Toyota store in Plainview, who pleaded guilty in December 2019 to conspiracy to commit wire fraud-
• Mistry Canady, an office manager at Reagor Dykes’ Ford store in Lamesa, who pleaded guilty in January 2020 to conspiracy to commit wire fraud
• Andrea Kate Phillips, an office manager at Reagor Dykes’ Ford store in Plainview, who pleaded guilty in February 2020 to misprision of a felony
• Wesley Neel, RDAG Safety & Compliance Manager, who pleaded guilty in March 2020 to conspiracy to commit wire fraud
• Steven Reinhart, RDAG Legal Compliance Director, who pleaded guilty in February 2021 to misprision of a felony

The Federal Bureau of Investigation’s Dallas Field Office and Internal Revenue Services - Criminal Investigation Division conducted the investigation.  Assistant U.S. Attorneys Joshua Frausto, Jeffrey Haag, and Amy Burch are prosecuting the case.

SPRINGFIELD, Ill. – Two Springfield, Illinois, residents - Heather Horrighs, 42, and Theodis Parnell, 50 – were arrested on October 14, 2021, for allegedly robbing the Alliance Community Bank on September 13, 2021.

Horrighs and Parnell were charged via a criminal complaint in the United States District Court for the Central District of Illinois. Both defendants appeared in federal court in Springfield today in front of Magistrate Judge Tom Schanzle-Haskins, at which time the criminal complaint against them was unsealed.

According to the complaint affidavit, Horrighs entered the bank carrying a box with a note attached to it. The note stated that the box contained a bomb and demanded that bank employees hand over money. Parnell is alleged to have acted as an accomplice and getaway driver in the robbery.

Both defendants remain in the temporary custody of the United States Marshals Service pending detention hearings that are set for next week.

If convicted, the maximum statutory penalties for the alleged crimes charged are up to 20 years in prison and a $250,000 fine.

The United States has thirty days to present the case to a grand jury, which will decide if there is probable cause. Members of the public are reminded that a complaint is merely an accusation; the defendant is presumed innocent unless proven guilty. 

Agencies participating in the investigation include the Federal Bureau of Investigation, Springfield Office; the United States Marshal’s Service; the Sangamon County Sheriff’s Office; the Springfield Police Department; the Sherman Police Department; and the Chatham Police Department. Assistant U.S. Attorney Matthew Weir is representing the government in the prosecution.

Assistant U. S. Attorneys Mario Peia and Alexandra F. Foster (619) 546-9706/6735

NEWS RELEASE SUMMARY– October 15, 2021

SAN DIEGO – A federal magistrate judge denied bond today for one of two Mexican nationals indicted by a federal grand jury in connection with the kidnapping and death of a 19-year-old San Diego man in May of 2020.

The defendant, Wyatt Valencia-Pacheco of Tijuana, is charged along with fugitive Jonathan Emmanuel Montellano-Mora, also from Tijuana. They were indicted on June 3, 2021, for Hostage Taking Resulting in Death, Conspiracy to Take Hostages Resulting in Death, and Intentional Killing While Engaged in Drug Trafficking. The indictment was unsealed last week.

According to the indictment, Valencia and Montellano worked with others to arrange the killing of the victim, M.A.R., as part of their methamphetamine importation and trafficking activities.

The indictment further alleges that Valencia and Montellano worked with others to kidnap, detain and threaten the victim at a location outside the United States, in order to compel the victim’s family to pay with money or methamphetamine to gain his release. The victim was ultimately killed.

At Valencia’s detention hearing today before U.S. Magistrate Judge Allison H. Goddard, the government provided greater detail as to Valencia’s alleged involvement. The government identified the victim as a 19-year-old U.S. citizen who had been arrested twice before for strapping drugs onto his body and attempting to cross into the United States through a port of entry. The victim was tortured and killed over the theft of three pounds of methamphetamine, the government told the court.  

At the hearing, the government provided the following chronology of the alleged crimes:

On May 28, 2020, the victim stole three pounds of methamphetamine from a drug trafficker connected to the defendants in Tijuana. Almost immediately after the theft, Valencia started sending the victim threats over Facebook Messenger, ordering the victim to return the drugs immediately or pay them $2,000. In Spanish, Valencia told the victim that he “fucked up” and now had to take responsibility, because “they only gave us two hours to pay for that shit.”

The victim asked for more time or a smaller payment, to which Valencia responded: “I don’t know how you’re going to do it, but I want it today.” The victim asked for Valencia to trust him and promised to pay later. Valencia replied, “I don’t give a fuck. You’ll see how I make you pay today.” Valencia even told others that he planned to kidnap the victim.

On May 29, 2020, approximately four hours after the victim was supposed to have crossed the drugs, Valencia was in conversation with a co-conspirator on Facebook Messenger, assuring the co-conspirator that he (Valencia) was in touch with the victim, and they would find him. Valencia assured his co-conspirator that the victim was scared.

About eleven hours later, at a little after 11 a.m. that same day, Valencia told a girlfriend that he was angry, because a guy stole “work” from him, and Valencia was looking for the guy. When asked why he was looking for the guy, Valencia answered, “because I’m going to kill him.” Valencia said he gave the guy until 5 p.m. to return and pay for the “work,” or else Valencia was “going to send people to his house … here and there … here I’m going to shoot it up.”

About an hour later, Valencia communicated with a co-conspirator to plan how best to kidnap the victim.

At 11:57 p.m. on May 29, 2020, three males forcibly took the victim from a hotel in Tijuana at gunpoint. The event was captured by hotel surveillance cameras. One of the kidnappers was wielding a gun, which he used to beat the victim.

In the early morning hours of May 30, 2020, the kidnappers began contacting the victim’s mother and stepfather to demand money (sometimes $2,000, other times $3,000) or methamphetamine. The hostage takers permitted the victim’s family to see him through FaceTime, as proof of life. The victim appeared bloodied and beaten.

During this same time, a co-conspirator asked Valencia, “Hey, dude, give us ideas where we can get him signed,” that is, where to kill the victim.  

After a few minutes, and after insisting that he did not want to get further involved, Valencia answered the previous question about “where can we get him signed.” Valencia offered, “Smoke the guy by the dam, dude. Or by Cerro Colorado. … Or in the canal. It’s around the corner.” The co-conspirator asked, “Which canal?” To which Valencia responded, “The one by La Rapida (laughs)”

The family’s last contact with the victim occurred on May 30, 2020, at 12:30 p.m. No one has heard from or seen the victim since that time.

At the close of the hearing, U.S. Magistrate Judge Goddard detained Valencia, finding that there were no conditions of release which would guarantee his return to court. She detained the defendant based on the nature and circumstances of the criminal activity, the lengthy period of incarceration which the defendant faced, the defendant’s use of weapons, the fact that he would be subject to immigration removal to Mexico if he were released from custody, his significant ties outside the United States, and the weight of the evidence against him.

“The narcotic netherworld is full of extreme danger and tragedy, and this case is no exception,” said Acting U.S. Attorney Randy Grossman. “A misguided young man tangled with the wrong people and paid a terrible price, and now his family lives with the unspeakable horror of their loss. We will always seek justice for victims of drug-related violence that destroys families, communities and futures.” Grossman thanked prosecutors Mario Peia and Alexandra Foster, as well as the investigating FBI agents, for their excellent work on this case.

“The FBI will vigorously pursue justice for U.S. citizens who fall victim to violence regardless of where the crime occurs,” said FBI Special Agent in Charge Suzanne Turner. “The victim was killed over a $2,000 drug debt. May these charges serve as a warning to those who think violence against U.S. citizens committed outside of the United States exempts them from prosecution here; It does not.”

Valencia is next in court on December 16, 2021, at 9 a.m. before U.S. District Court Judge William Q. Hayes. Montellano has not yet been apprehended.

DEFENDANTS                                            Case Number 21CR1683-WQH

Wyatt Valencia-Pacheco,

aka “JC HF,” aka “Jacob,” aka “Jacob Herrera”        Age: 21            Tijuana           

Jonathan Emmanuel Montellano-Mora,

aka “Che Cho” aka “Chori,”                                      Age: 22            Tijuana

SUMMARY OF CHARGE

21 USC Sec. 848(e) (1) (A) - Intentional Killing While Engaged in Drug Trafficking

Maximum Penalty: Life or Death Penalty; Mandatory Minimum: Twenty years in prison

18 USC Sec. 1203 - Hostage Taking Resulting in Death

Maximum Penalty: Life or Death Penalty; Mandatory Minimum: Life in prison

18 USC Sec. 1203 - Conspiracy to Take Hostages Resulting in Death

Maximum Penalty: Life or Death Penalty; Mandatory Minimum: Life in prison

INVESTIGATING AGENCY

Federal Bureau of Investigation

Special Assistant U.S. Attorney Nicole Bredariol (619) 546-8419  and Assistant U.S. Attorney Joshua Mellor (619) 546-9733

NEWS RELEASE SUMMARY– October 15, 2021

SAN DIEGO – Jose Rosario Segura Balentierra, a Colombian national interdicted by the United States Coast Guard on a semi-submersible vessel containing approximately 2,000 kilograms (4,4000 pounds) of cocaine, was sentenced on Tuesday in federal court to 200 months in prison for operating a semi-submersible vessel on the high seas twice in less than five years.

Balentierra was interdicted by United States Coast Guard Cutter BERTHOLF on a semi-submersible vessel with his three co-defendants on August 14, 2020, over 500 nautical miles from Central America.

The Defendants on the semi-submersible vessel failed to stop when ordered by the Coast Guard. The Coast Guard first tried warning shots, and then used disabling fire, shooting at the engines of the vessel to try to get the defendants to stop. When even this failed, one of the Coast Guard boarding officers jumped onto the moving vessel, took control of the engines, and removed the fuel lines to finally stop the vessel.

The Coast Guard observed two to three feet of water in the bottom of the semi-submersible vessel, indicating the defendants attempted to scuttle or sink the vessel to evade capture and seizure of its cargo. The semi-submersible vessel itself was stuffed with packages of cocaine, totaling over 2,000 kilograms (4,400 pounds) and worth over $35 million.

Balentierra was previously convicted in 2016 in the Southern District of Florida for Conspiracy to Operate and Embark on a Semi-Submersible Vessel Without Nationality with Intent to Evade Detection, and Operating and Embarking on a Semi-Submersible Vessel Without Nationality with Intent to Evade Detection. Similarly, in that case he was interdicted by the U.S. Coast Guard on a semi-submersible vessel approximately 300 nautical miles from Mexico. That semi-submersible vessel rapidly sunk to the bottom of the ocean floor and no drugs were recovered. He was sentenced to 41 months in custody and three years of supervised release. After serving his sentence he was deported to his home country of Colombia. In 2020, just over eighteen months after returning to Colombia, he engaged in this almost identical offense.

On July 14, 2021, Balentierra pleaded guilty to Possession of Cocaine with Intent to Distribute on Board a Vessel in violation of 46 U.S.C. § 70503 and Operation of a Semi-Submersible Vessel without Nationality in violation of 18 U.S.C. § 2285. On Tuesday he was sentenced to 182 months in custody and five years of supervised release on each of the charges, to run concurrently. He was also sentenced to 18 months in custody, to run consecutively, for violating the terms of his 2016 supervised release by engaging in trafficking cocaine. He was sentenced to a total custodial term of 200 months.

“The Pacific Ocean is not a freeway for drug traffickers,” said Acting U.S. Attorney Randy Grossman. “The sentence issued in this case sends a clear message that repeated maritime drug smuggling will not be tolerated in the Southern District of California.” Grossman thanked prosecutors Nicole Bredariol and Josh Mellor and the U.S. Coast Guard and San Diego Strike Force for their excellent work on this case.

“Due to the dedicated actions of the Coast Guard Cutter Bertholf’s commanding officer and crew, these smugglers have been brought to justice,” said Rear Adm. Brian Penoyer, the Eleventh Coast Guard District commander. “The Coast Guard kept $35 million worth of drugs off our streets, and we will continue to patrol the maritime domain to fight against the trafficking of narcotics.”

This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.

DEFENDANT                                                           Case Number 20cr2671-LAB                                  

Jose Rosario Segura Balentierra                                 Age: 35                                               Colombia                                                           

SUMMARY OF CHARGES

Possession with Intent to Distribute Cocaine Onboard a Vessel Subject to the Jurisdiction of the United States – Title 46, U.S.C., Section 70503

Maximum Penalty: Life in prison and $10 million fine

Operation of a Semi-Submersible Vessel without Nationality, with Intent to Evade Detection –

Title 18, U.S.C., Section 2285

Maximum Penalty: Fifteen years in prison and $250,000 fine

AGENCY

United States Coast Guard

San Diego Strike Force
Organized Crime and Drug Enforcement Taskforce (OCDETF)

ALBANY, NEW YORK – Wakeem Ricks, age 30, of Albany, was ordered detained today pending trial on a charge that he distributed cocaine base.

The announcement was made by United States Attorney Carla B. Freedman and Ray Donovan, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), New York Division.

The complaint alleges Ricks distributed cocaine base to another individual on September 23, 2021.  The charge in the complaint is merely an accusation.  The defendant is presumed innocent unless and until proven guilty.

The charge carries a maximum sentence of 20 years in prison, a fine of up to $1 million, and a term of post-imprisonment supervised release of at least 3 years.  A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.

This case is being investigated by the DEA, Albany Police Department, and Albany County Sheriff’s Department, and is being prosecuted by Assistant U.S. Attorney Dustin Segovia. 

LEXINGTON, Ky.– The United States has reached a settlement with Sayre School (Sayre), a Lexington-based private school, resolving allegations of disability discrimination and taking steps to ensure that individuals with disabilities have equal access to the school’s facilities.

The settlement agreement resolves a compliance review, initiated in 2016 by the United States, under the Americans with Disabilities Act (ADA), after receiving a complaint about physical access barriers for individuals with mobility disabilities, at Sayre’s Lower School.  Sayre is a private, nonsectarian school in Lexington that serves more than 600 students from pre-kindergarten through twelfth grade.  As a private elementary and secondary school, Sayre is a “public accommodation” that is subject to the requirements of Title III of the ADA.

Following an on-site architectural assessment of Sayre’s campus, the United States concluded that numerous buildings on Sayre’s campus contained physical barriers to access in violation of the ADA.  As part of the resolution between the parties, Sayre:

• Has taken broad remedial action to remove architectural barriers in school buildings across its campus, to ensure access for individuals with disabilities;
• Consulted with the United States during construction of its new Lower School to ensure the building was ADA-compliant; and
• Will renovate its playground facilities to ensure that they are readily accessible to, and usable by, children with disabilities.

“Under federal law, public accommodations like Sayre School have an obligation to provide facilities that do not discriminate against students with disabilities,” said Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky.  “Though this settlement, Sayre has agreed to address access barriers on its campus and safeguard ongoing compliance.  The Department of Justice remains committed to doing its part to ensure that children with disabilities have equal access to their school facilities.”

“Sayre School appreciates the opportunity to work with the Department of Justice to ensure that our campus is inclusive and accessible to all students, faculty, and visitors,” said a statement released by Sayre. “By improving the accessibility of our campus, we have further enhanced our learning environment.”

This matter was handled by Assistant U.S. Attorneys Hydee Hawkins and Carrie Pond, in consultation with the Civil Rights Division’s Disability Rights Section.

For more information about the Civil Rights Division and the laws it enforces or to file an online complaint regarding a potential civil rights violation, please visit civilrights.justice.gov.  Individuals seeking additional information about the ADA can call the Department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.

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