SOUTH BEND - Acting United States Attorney Clifford D. Johnson announced that Justin C. Pratt, 34, of LaPorte, Indiana was sentenced before District Court Judge Jon E. DeGuilio for receiving child pornography.

Pratt was sentenced to 87 months of imprisonment, 5 years of supervised release and ordered to pay $5000 in restitution.

According to documents in this case, between April 2014 and July 2015, Pratt used his cell phone to download child pornography images and videos from the internet.

This case was investigated by the Federal Bureau of Investigation and handled by Assistant U.S. Attorney John M. Maciejczyk.

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WAYCROSS, GA– Two federal indictments were unsealed yesterday and today which charged 36 South Georgia, North Florida and California residents with conspiring to traffic large amounts of methamphetamine, cocaine and other drugs. The indictments follow a joint federal and state investigation into violent gang and drug trafficking activities in Ware, Pierce and Glynn Counties, Georgia. The drug trafficking activities are alleged to have occurred throughout Georgia, Florida and elsewhere. The more than one-year undercover investigation was led by the FBI, the Waycross Police Department and the Ware County Sheriff’s Office. The Glynn County Police Department, the Brunswick Police Department, the Blackshear Police Department, the U. S. Marshal Service, the U. S. Probation Office and the Georgia Department of Community Supervision also assisted.

The 36 Defendants charged are:

CEDRIC L. KING (37, Waycross, GA),

A/K/A “Ced” and “Sanchez,”

CARLOS RUELAS (35, Bakersfield, CA),

GIOVANNI ESQUIVEL (36, Bakersfield, CA),

A/K/A “Worm” and “Gio,”

TERRACA PARKER (24, Jacksonville, FL),

MARKEY PITTMAN (28, Jacksonville, FL),

A/K/A “Jap,”

PAUL DIXON (45, Waycross, GA),

BEN DUKES (80, Waycross, GA),

A/K/A “Pops,”

CALVIN IVEY (61, Waycross, GA),

A/K/A “Tex,”

JOHN HOWARD (54, Waycross, GA),

TARENCE WASHINGTON (40, Waycross, GA),

A/K/A “T,”

QUANSHARD DUKES (27, Waycross/Brunswick, GA),

A/K/A “Shad,”

SHAMPOIRE ORANGE (35, Waycross, GA),

A/K/A “Po,”

WILBUR HIGHTOWER (38, Waycross, GA),

ISHMIL STRICKLAND (26, Blackshear, GA),

A/K/A “Ish,” and “Convertible Ish,”

STEFAN WILLIAMS (33, Waycross, GA)

MYRON BOLDEN (36, Waycross/Homerville, GA),

A/K/A “Snap,” and “Snapp Paid,”

COREY RIGGS (32, Waycross, GA),

ELMO ROBINSON (33, Waycross, GA),

A/K/A “Gutta Kolombo” and “Macon MO,”

ESQUADRICK WILLIAMS, (35, Waycross, GA),

A/K/A “Lamon,”

LASHADRE SMITH (26, Waycross, GA),

A/K/A “Shafa” and “Shaffa Billythekid Smith,”

JASON COOPER (24, Waycross, GA),

ANTWAN CLARK, (32, Waycross, GA),

DUSTIN STEEDLEY (31, Waycross, GA),

TYLER COUNCIL (22, Blackshear, GA),

CHRISTOPHER WELLS (29, Alma, GA),

A/K/A “Jugg,”

PHILLIP JOHNSON (25, Waycross, GA),

A/K/A “Gunplay,”

CLARENCE KELLY (29, Waycross, GA),

A/K/A “Buckshot,”

RANDY HAWKINS (45, Waycross, GA),

JOSHUA BEVERLY (28, Blackshear, GA),

ALVERTIS GEDDIS (27, Waycross, GA),

AKA “Man Man” and “Draco,”

JA’LYN KINCEY (22, Waycross, GA),

A/K/A “Monk,”

JERONE MARTIN (26, Waycross, GA),

A/K/A “Rome” and “Jermone,”

ZYTREVIS ROBINSON (27, Waycross, GA),

A/K/A “Webbie,”

IKEYA JONES (21, Waycross, GA),

A/K/A “Juvie Mona,”

LAKENDRA NORTON (28, Waycross, GA),

AND

TANYA JOHNSON (29, Blackshear, GA).

Most of the Defendants have been arrested and were brought yesterday and today before a federal Magistrate Judge sitting in Waycross, Georgia for their initial appearances. Defendants Esquadrick Williams, Quanshard Dukes, Jason Cooper, Anyway Clark, Giovanni Esquivel and Zytrevis Robinson remain at large. Upon conviction, many of the Defendants face up to life in a federal prison. Acting United States Attorney James Durham emphasized that the indictments are only accusations and are not evidence of guilt. The Defendants are entitled to a fair trial, during which it will be the Government’s burden to prove guilt beyond a reasonable doubt.

Assistant United States Attorneys Marcela C. Mateo and Jennifer J. Kirkland are prosecuting the cases on behalf of the United States. Please contact the United States Attorney’s Office for any questions at (912) 201-2522.

DALLAS — Michael Johnson, aka “Psych” and “Syke,” 34, of Dallas, Texas, was sentenced yesterday by Chief U.S. District Judge Barbara M.G. Lynn to 151 months in federal prison following his guilty plea earlier this year to one count of conspiracy to distribute a controlled substance, announced U.S. Attorney John Parker of the Northern District of Texas.

A federal grand jury indicted Johnson and seventeen others in August 2016 on conspiracy drug trafficking charges. Johnson has been in custody since the time of his arrest in August 2016.

According to documents filed in the case, beginning in January 2015, Johnson supplied cocaine and marijuana to co-conspirators on several occasions in exchange for payment. During the conspiracy the defendants utilized North Texas residences to cut, package and distribute cocaine to numerous customers.

The Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Phelesa Guy prosecuted.

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LAFAYETTE, La. –Acting U.S.Attorney Alexander C. Van Hook announced that a man living in Oregon was sentenced Thursday to 300 months in prison for sexually assaulting and torturing a woman who he had a child with and who engaged in prostitution.

Gammion McCloud, 37, originally from Washington, D.C., but who was living in Oregon at the time of his arrest, pleaded guilty before U.S. District Judge Elizabeth E. Foote to one count of travel to engage in criminal sexual activity and one count of interstate domestic violence. He was also sentenced to five years of supervised release and ordered to pay $73,550 restitution. While on supervised release, he must obtain sex offender specific treatment. According to the March 2, 2017 guilty plea, McCloud acted as the “pimp” for the victim who he convinced to engage in prostitution. They were together from 2008 until 2014. He had a child with the victim and thereafter became progressively more abusive to her. He raped and tortured her repeatedly in the presence of her young child. He locked her in a small cage, forcing her to engage in acts of prostitution. She and her child were able to escape while in Louisiana after McCloud doused her in gasoline and set her on fire. During all of these acts, the defendant was in possession of a firearm.

The U.S. Department of Homeland Security-Homeland Security Investigations investigated the case. Assistant U.S. Attorney John Luke Walker prosecuted the case.

CHARLESTON, W.Va. – A Cross Lanes man pleaded guilty today a federal gun charge, announced United States Attorney Carol Casto. Tristen Paxton, 21, entered his guilty plea to possessing firearms after being convicted of a misdemeanor crime of domestic violence.

Paxton admitted that on March 27, 2017, during a traffic stop conducted by the Sheriff’s Tactical Operations Patrol (STOP) Team of the Kanawha County Sheriff’s Department, he possessed two firearms in the vehicle. Law enforcement recovered a loaded Taurus Judge .45 caliber/410 gauge handgun from the passenger seat and a Poly Technologies AK-47 rifle with a loaded high capacity magazine in the trunk. As part of his plea agreement, Paxton also admitted that he was responsible for selling two other firearms and methamphetamine.

Paxton faces up to 10 years in federal prison when he is sentenced on November 2, 2017.

The Kanawha County Sheriff’s Department’s STOP Team and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant United States Attorney Monica D. Coleman is in charge of the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.

This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.

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Jacksonville, FL – Acting United States Attorney W. Stephen Muldrow announces that Vernon Stroman (40, St. Augustine) has pleaded guilty to violating the anti-kickback statute. He faces a maximum penalty of five years in federal prison.

According to the plea agreement, Stroman was a marketer and consultant for Wellness Pharmacy in St. Augustine. In this role, he was responsible for finding patients that had TRICARE insurance and could be referred to the pharmacy. Beginning on January 27, 2015, Stroman referred his parents to the pharmacy and provided them with prescriptions for several creams – including a “scar/post-op” cream and a “general pain/inflammation” cream. Neither of his parents had received a physician order attesting to the medical necessity of the cream. By submitting the prescriptions to Wellness Pharmacy, Stroman knew that the pharmacy intended to fill the prescriptions and submit claims for reimbursement.

Approximately one week after Stroman submitted the prescriptions to the pharmacy, he picked up the creams and purportedly paid the $102.00 in copayments. Stroman later admitted that he never paid these copayments; instead, he received $3,000.00 for “consulting services.” In total, from February to May 2015, Stroman received $50,461.75.

As a result of Stroman’s actions, Wellness Pharmacy submitted 18 claims for reimbursement for his parents. TRICARE paid Wellness Pharmacy a total of $178,193.40 for these prescriptions.

This case was investigated by the Federal Bureau of Investigation and the Defense Criminal Investigative Service. It is being prosecuted by Assistant United States Attorney Jason Mehta.

BOSTON – A Georgia man was charged today in federal court in Boston in connection with a scheme to defraud Framingham-based Staples, Inc. of more than $1.4 million. 

Layne Michael Gosnell, 46, of Duluth, Georgia, was charged with conspiracy to commit wire fraud and mail fraud. 

According to the charging documents, Gosnell, John Douglas, and other co-conspirators engaged in a complex scheme to defraud Staples of more than $1.4 million worth of customer loyalty rewards and product rebates by creating more than 1,100 Staples rewards accounts, often using fictitious names, addresses, and contact information.  Douglas created a computer script to query a Staples website and seek unclaimed customer loyalty rewards for purchases that neither he nor Gosnell made.  The computer script made thousands of queries a day, amassing more than $889,000 worth of rewards in small increments, often less than a dollar at a time. Gosnell and Douglas then used the rewards like cash to buy merchandise at Staples retail locations throughout the southern United States and along the eastern seaboard, as far north as Massachusetts.  Gosnell sold his share of the fraudulently obtained Staples merchandise on eBay. 

It is further alleged that Gosnell and Douglas used a similar method to claim more than $527,000 in cash rebates from Staples for products that they did not purchase. 

Staples discovered the fraud and referred the matter to federal authorities.

In January 2017, Douglas pleaded guilty to his role in the scheme and is scheduled to be sentenced on Aug. 25, 2017.

The charge of conspiracy to commit wire and mail fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss from the offense, whichever is greater.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today.  Assistant U.S. Attorney David J. D’Addio of Weinreb’s Cybercrime Unit is prosecuting the case.

The details contained in the charging documents are allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

DALLAS— A San Antonio, Texas, man, Zachary Whiteside, aka “Sharkey,” Shark” and “Zach,” 37, was sentenced this week by Chief U.S. District Judge Barbara M.G. Lynn to 214 months in federal prison, following his guilty plea in November 2016 to one count of conspiracy to distribute a controlled substance, announced U.S. Attorney John Parker of the Northern District of Texas.

Whiteside has been in custody since his arrest in May 2015.

According to documents filed in the case, Whiteside travelled to Dallas, Texas on several occasions beginning in January 2014 to purchase various quantities of methamphetamine from a Dallas-based methamphetamine distributor. Whiteside then distributed the drugs to customers in exchange for payment. On one occasion Whiteside exchanged a 2013 Ford Mustang, a 2002 Audi, U.S. currency and guns as payment for methamphetamine.

The case was investigated by the Drug Enforcement Administration. Assistant U.S. Attorney Phelesa Guy was in charge of the prosecution.

# # #

Jose R. Flores, 39, of Bronx, New York, was charged today by Indictment with travel to engage in illicit sexual conduct, and the production and possession of child pornography, announced Acting United States Attorney Louis D. Lappen.

If convicted the defendant faces a maximum possible sentence of lifetime incarceration, a mandatory minimum fifteen years’ imprisonment, a mandatory minimum five years’ supervised release up to lifetime supervised release, a $1,250,000,000 fine, a $500 special assessment and an additional $25,000 Justice for Victims special assessment.

The case was investigated by Bethlehem Police Department and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Sherri A. Stephan.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

Acting U.S. Attorney Jack Smith today, announced his departure from the Department of Justice, effective in September. Smith has been the Acing U.S. Attorney since David Rivera resigned in March of this year.

Smith has been a prosecutor with the Department of Justice for 16 years, having served as the head of the Public Integrity Section in D.C. for 5 years, prior to coming to Nashville in 2015 to serve as the First Assistant U.S. Attorney.

Though not looking to leave the department of Justice, Smith said he had been offered an incredible opportunity and after much consideration, he had decided to leave the DOJ.

“This was one of the most difficult professional decisions that I have ever been faced with,” said Smith. “I truly love representing the American people and seeking justice on their behalf. I will profoundly miss the close relationships I have developed with the exceptional public servants in our office, as well as the consummate professionals of our law enforcement community. While I am leaving the Department of Justice, I remain committed to our serving our community here in Nashville in other ways in the coming years.”

Smith will remain in the office until early September.

BOSTON – A Colombian national was sentenced today in federal court in Worcester for drug and immigration offenses.

Leonardo Franco, 45, was sentenced by U.S. District Court Judge Timothy S. Hillman to 18 months in prison, three years of supervised release, and will be subject to deportation proceedings upon completion of his sentence. In May 2017, Franco pleaded guilty to one count of possession of cocaine with intent to distribute and one count of illegal re-entry of a deported alien. 

On Nov. 3, 2016, Franco was traveling to Oxford, Mass., with the intent of selling cocaine to a repeat customer.  Law enforcement confronted Franco and found him in possession of more than a half-pound of cocaine contained in several clear baggies. 

Franco has previously been removed from the United States on four occasions, including once in 2005, twice in 2010, and once in 2011 after being convicted of a federal immigration crime. Sometime after his removal in 2011, Franco illegally re-entered the United States again. 

Acting United States Attorney William D. Weinreb; Michael Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistant U.S. Attorney William F. Abely of Weinreb’s Worcester Branch Office prosecuted the case.

Harrisonburg, VIRGINIA – A Winchester man, who filmed himself sexually exploiting two minor children, was sentenced today in the United States District Court for the Western District of Virginia in Harrisonburg, Acting United States Attorney Rick A. Mountcastle announced.

LaMarcus Thomas, 33, of Winchester, Va., was sentenced today to 360 months in federal prison. Thomas previously pled guilty to two counts of production of child pornography.

According to evidence presented at previous hearings, in the fall of 2014, the Winchester Police Department began an investigation into a complaint that two children had been molested by Thomas. When the defendant was arrested on state sex crime allegations for acts against the two children, the Winchester Police Department recovered a cellphone that belonged to Thomas.

Examination of the cell phone revealed numerous images and movies of child pornography depicting two different minor boys. It appeared the two victims were likely sleeping during the production of the images and movies, which showed various images of the penis and hands of the defendant and the penis of one of the minor boys. Thomas admitted producing the child pornography and identified himself and the two minors depicted in the images in the videos. The investigation determined that Thomas spent significant time with the two minors depicted in the videos, including spending overnight visits with the victims.

The investigation of the case was conducted by the Federal Bureau of Investigation, the Virginia State Police and the Winchester Police Department. Virginia State Police conducted the initial forensic examination of the cellphone. Assistant United States Attorney Nancy S. Healey and Criminal Division Trial Attorney Leslie Williams Fisher of the Child Exploitation and Obscenity Section (CEOS) prosecuted the case for the United States.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

PHILADELPHIA– The U.S. Court of Appeals for the Third Circuit today upheld the 35-month prison sentence of the former chairman of the Bergen County Democratic Organization (BCDO), who was convicted at trial for his role in a racketeering scheme involving bribery and fraud, Acting U.S. Attorney William E. Fitzpatrick announced.

Joseph A. Ferriero, 60, had raised multiple issues on appeal, each of which was rejected in a unanimous, precedential opinion written by Judge Anthony J. Scirica.

Ferriero had argued, among other things, that the evidence convicting him of bribery was insufficient. The Court disagreed, noting that the evidence showed he had agreed to accept payments from a software services company soliciting business from various Bergen County towns, in exchange for recommending the company to those towns. It noted that, as BCDO “party chair, Ferriero’s recommendations carried great weight.”

The Court reached a similar conclusion regarding the sufficiency of the evidence showing Ferreiro had committed fraud. It noted that, in response to an inquiry from one of those towns about who was involved in the software services company, Ferriero had concealed his financial interest in the company’s revenues.

The Court also rejected Ferriero’s arguments that the constitution prevented New Jersey’s bribery statute from applying to his conduct. It held there was no constitutional issue because “New Jersey’s bribery law does not punish legitimate First Amendment activity.” Instead, “[i]t punishes corrupt agreements in which party officials accept payment in exchange for making a particular decision or recommendation, expressing a particular opinion, or voting a particular way . . . . Such corrupt agreements do not enjoy First Amendment protection.”

According to documents filed in this case and the evidence presented at trial:

Ferriero served as the chairman of the BCDO from 1998 until January 2009 and was the sole member of SJC Consulting LLC. The jury found Ferriero accepted bribes in his capacity as BCDO chairman in the course of a scheme involving SJC. Ferriero agreed with John Carrino, a Nutley, New Jersey-based attorney and software developer, that Ferriero would recommend and provide a favorable opinion of the software developer and his companies to various public officials in Bergen County with whom Ferriero had influence. The software developer agreed to pay Ferriero one-quarter to one-third of the gross receipts from any contract obtained because of Ferriero’s efforts. Ferriero’s financial interest in the software developer’s public contracts was completely hidden using two shell companies, one of which was created and incorporated in Nevada for the sole purpose of contracting with and accepting payments from another shell company controlled by the software developer.

In addition to his prison sentence, which will be followed by three years’ supervised release, the Court affirmed the order requiring Ferriero to pay restitution.

The government was represented by Assistant U.S. Attorney Bruce P. Keller of the U.S. Attorney’s Office Appeals Division in Newark. Assistant U.S. Attorney Barbara Llanes, now Chief of the General Crimes Unit, represented the government at Ferriero’s trial.

Orlando, Florida – U.S. District Judge Carlos Mendoza has sentenced Angel N. Rodriguez (39, Miami) to four years in federal prison for aggravated identity theft and conspiracy to commit access device (credit card) fraud. He pleaded guilty on May 18, 2017.

According to court documents, Rodriguez and his co-conspirators used stolen identification information to obtain credit at retail stores throughout central Florida. When Rodriguez and others were arrested in late 2014, they were found in possession of 6 fake Florida driver licenses, 8 credit cards obtained using the fake licenses, folders with the personal information of identity theft victims, and 21 large items purchased through fraud - including washers, dryers, and refrigerators. In total, the group purchased more than $80,000 in merchandise using stolen identities in 2014 and early 2015.

This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Nathan W. Hill.

CONTACT:      Barbara Burns
PHONE:         (716) 843-5817
FAX:            (716) 551-3051

BUFFALO, N.Y. - Acting U.S. Attorney James P. Kennedy, Jr. announced today that Ernesto Alvarez Santos, 20, of Miami, Florida, pleaded guilty to conspiracy to commit bank fraud before Chief U.S. District Judge Frank P. Geraci, Jr. The charges carry a maximum penalty of 30 years in prison and a $1,000,000 fine.

Assistant U.S. Attorney Paul E. Bonanno, who is handling the case, stated that in January 2017, the defendant, along with two co-conspirators traveled from Miami, Florida to Hamburg, New York. In Hamburg, Santos and another co-conspirator were provided with numerous counterfeit access devices, which consisted of gift cards re-encoded with account numbers for actual credit card or debit card accounts.  

Between January 23, and January 24, 2017, Santos and the others used 129 different counterfeit access devices to purchase gift cards at various Walmart stores in Erie, Niagara, and Orleans Counties. Upon purchasing the legitimate Walmart gift cards, the defendants transmitted the legitimate gift card numbers by cellular telephone to another co-conspirator. In addition, Santos and the co-conspirators possessed an additional 102 different counterfeit access devices, which consisted of gift cards re-encoded with account numbers for actual credit card or debit card accounts at various financial institutions. The account holders of these credit card or debit card accounts did not authorize use of their credit card or debit card account information. The total estimated loss amount is $120,689.02. 

The plea is the result of an investigation by the United States Secret Service, under the direction of Special Agent-in-Charge Lewis Robinson.

Sentencing is scheduled for November 2, 2017 before Judge Geraci.

          A Bellevue developer who fraudulently obtained over $235 million dollars during his real estate investment scheme, including over $140 million from immigrant investors, was sentenced today in U.S. District Court in Seattle to four years in prison, announced U.S. Attorney Annette L. Hayes. LOBSANG DARGEY, 43, entered guilty pleas in January 2017 to two federal felonies, admitting that he defrauded immigrant investors, federal regulators, and institutional investors. DARGEY promised to use the immigrant investors’ investment funds in compliance with a federal immigration program designed to stimulate growth and create jobs. Instead, he secretly diverted tens of millions of dollars of investor funds to unauthorized uses and used falsified financial records in an attempt to obtain additional funding to make up the shortfall. At the sentencing hearing, U. S. District Judge Robert S. Lasnik said DARGEY engaged in “reckless behavior . . . putting these people in jeopardy of never achieving their immigration dreams.”

          “This defendant stole not just money but something that he knew from personal experience was much more valuable – the right to come to the United States and live the American dream,” said U. S. Attorney Annette L. Hayes. “Many of the investors that the defendant defrauded sold everything they had in China in reliance on his promises. They now live in limbo – with their money tied up in litigation and no idea of whether their dream to live in this country will come true.”

          According to records filed in the case, between 2012 and 2015, DARGEY recruited overseas investors, primarily in China, to fund two development projects – one in Everett, Washington known as the “Path American Farmer’s Market” and one in Seattle’s Belltown neighborhood known as the “Potala Tower.” DARGEY promoted the projects under the federal “EB-5” program, which allows immigrant investors to qualify for permanent residency if they create American jobs by investing $500,000 in a qualifying American business project. DARGEY represented to the immigrant investors and to the U.S. Department of Homeland Security that he was investing all of investors’ funds in the Everett and Seattle projects in compliance with program requirements.

          Contrary to his promises, DARGEY used tens of millions of investor dollars for uses not allowed under the federal program and not disclosed to investors. This included approximately $11.5 million of investor funds that DARGEY secretly used to pay unauthorized sales expenses, including sales commissions to Asian brokers. The money also went for lavish meals, expensive gifts, and cash withdrawals at casinos, and the purchase of a $1.4 million Bellevue home for a DARGEY business associate. DARGEY withdrew over $10 million in investor funds from the project as developer fees to fund his lavish lifestyle, including his purchase of a $2.5 million home in Bellevue.

          In addition, DARGEY told investors and the United States government that DARGEY would contribute $32.5 million of his own money toward the projects. In fact, DARGEY admitted that he did not contribute any funds to the projects. DARGEY’s fraud resulted in tens of millions of dollars in funding shortfalls for the EB-5 approved projects. DARGEY attempted to fill these shortfalls by using a falsified bank statement to obtain a $25 million construction loan, and by using altered financial statements to obtain $60 million in additional funding from a private institutional investor.

          Of the 281 foreign investors defrauded by DARGEY, none has received permanent resident status in the United States. A majority of the investors have had their applications denied because of DARGEY’s fraud, and are appealing the denials. Some wrote to the court explaining the damage DARGEY’s conduct caused:

• Investor Y.Y. wrote: In order to provide our children with better lives and study environments, we sold our one and only real estate so as to accumulate money for the American EB-5 investment immigration [program]…. Lobsang’s illegal behavior has destroyed our immigration dream.

• Investor Y.W. wrote: Many younger investors like me had to dramatically alter their life path. Some adults were forced to return to China without finishing their college degree.

• Investor Z.C. wrote: “…because of defendant’s illegal behavior, it led us to live in fear and suffer huge mental damage because our lives can be cancelled at any moment…. My wife is so afraid that she dares not pick up the mail for fear of receiving a deportation notification.”

          “Mr. Dargey’s selfish greed twice robbed his investors as he seized both their funds and jeopardized their dreams for a future life in the United States,” said Acting Director of U.S. Citizenship and Immigration Services James McCament. “We are grateful to our many law enforcement partners who helped to deliver justice in this case and uphold the integrity of the EB-5 Program.”

          U.S. Citizenship and Immigration Services administers the EB-5 Program. Under this program, entrepreneurs (and their spouses and unmarried children under 21) are eligible to apply for permanent residence if they make the required investment in a commercial enterprise in the United States and plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers.

          DARGEY’s fraudulent conduct came to an end in August 2015, when the Securities and Exchange Commission filed a civil suit and won a court order freezing his assets. The FBI simultaneously executed search warrants at DARGEY’s offices in Bellevue and Everett.

          As part of his plea agreement in this case, DARGEY agreed to provide restitution of more than $24 million to the investors.
 

          The case was investigated by the FBI and is being prosecuted by Assistant United States Attorneys Justin Arnold and Seth Wilkinson. The Department of Justice appreciates the assistance of the Securities and Exchange Commission and U.S. Citizenship and Immigration Services in connection with this matter.

The former general manager of Volkswagen AG’s (VW) U.S. Environment and Engineering Office, who was a senior aide to VW’s head of engine development, pleaded guilty today for his role in violating the Clean Air Act in connection with VW’s sales of “clean diesel” vehicles in the U.S.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, and Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan made the announcement.

Oliver Schmidt, 48, a citizen and resident of Germany, pleaded guilty to one count of conspiracy to defraud the U.S., to commit wire fraud and to violate the Clean Air Act; and to one count of violating the Clean Air Act. He was indicted by a federal grand jury on January 11, along with five other VW executives and employees. The case is assigned to U.S. District Judge Sean F. Cox of the Eastern District of Michigan, who accepted Schmidt’s plea today. Sentencing has been scheduled for December 6.

“Today’s guilty plea by a VW senior manager follows the successful prosecution of the company earlier this year and of another VW engineer in 2016,” said Acting Assistant Attorney General Blanco. “The Criminal Division is committed to holding both corporations and individuals accountable to the rule of law, and to protecting U.S. consumers and the environment. This case is a great example of this important commitment.”

“Schmidt participated in a fraudulent VW scam that prioritized corporate sales at the expense of the honesty of emissions tests and trust of the American purchasers,” said Deputy Assistant Attorney General Williams. “Schmidt along with each and every official involved in this emissions scandal will be held fully accountable for their actions by the Department of Justice as this investigation continues.”

“We hope this prosecution sends a message of the importance the U.S. Attorney’s Office places on protecting the environment,” said Acting U.S. Attorney Lemisch. “Where criminal charges are appropriate, we will prosecute both corporations and individual employees who pollute and illegally evade our clean air laws.”

As part of his guilty plea, Schmidt admitted that he agreed with other VW employees to mislead and defraud the U.S. and domestic customers who purchased diesel vehicles, and to violate the Clean Air Act. In the spring of 2014, a non-governmental organization in the U.S. published results of a study that showed substantial discrepancies in nitrogen oxide (NOx) emissions from certain VW vehicles when measured on the road compared to standard drive cycle tests. During the summer of 2015, Schmidt was told of the existence of cheating software in certain VW diesel vehicles that had been in place for years that would cause the vehicles to emit substantially higher amounts of NOx when the software detected that the car was not being tested, he admitted.

Schmidt admitted that he participated in discussions with other VW employees in the summer of 2015 to determine how to respond to questions from U.S. regulators about VW’s diesel vehicles without revealing the defeat device. After a meeting with VW management in July 2015, VW management instructed Schmidt to seek a meeting with a senior employee of the California Air Resources Board (CARB) and to obtain approval from CARB for the sale of additional VW diesel vehicles in the U.S. without disclosing the fact that VW was cheating on emissions tests. Schmidt admitted following VW management’s instructions. During two meetings in August 2015, Schmidt attempted to obtain approval for the sale of additional VW diesel vehicles by responding to questions from CARB without revealing what he knew was the truth – that the real cause for the vehicles’ substantially higher emissions on the road was that VW had intentionally installed software designed to cheat and evade emissions testing, he admitted.

Schmidt further admitted that he knew that in August 2015 VW employees submitted to the U.S. Environmental Protection Agency (EPA) two reports pursuant to the Clean Air Act that were fraudulent and misleading. Moreover, Schmidt knew that VW was falsely marketing diesel vehicles to the U.S. public as being environmentally friendly and compliant with U.S. environmental regulations, including by promoting increased fuel economy, he admitted.

As part of his guilty plea, Schmidt agreed that during his participation in the scheme, he and his co-conspirators caused losses to victims of more than $150 million and that he obstructed justice.

The case is being investigated by the FBI’s Detroit Field Office and the EPA’s Criminal Investigation Division, with assistance from Homeland Security Investigations. Securities and Financial Fraud Unit Chief Benjamin D. Singer and Trial Attorney David M. Fuhr of the Fraud Section of the Justice Department’s Criminal Division; Senior Trial Attorney Jennifer Blackwell of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division; and White Collar Chief John K. Neal of the U.S. Attorney’s Office of the Eastern District of Michigan are prosecuting the case.

SACRAMENTO, Calif. — Kamyar “Kami” Soltani, 47, of Sacramento, formerly of El Dorado Hills, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to six months in prison, six months home confinement with electronic monitoring, and ordered to pay $150,446 in restitution for tax evasion, U.S. Attorney Phillip A. Talbert announced.

“All Americans have a duty to pay their fair share,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “Soltani took advantage of the system and obtained refunds to which he was not entitled while all along living a lavish lifestyle. In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe.”

According to court documents, Soltani attempted to evade his tax obligations for tax years 2005, 2006, and 2007. Soltani worked in the used car sales industry. In each of the tax years in question, Soltani received taxable income between $229,000 and $296,000 and failed to file timely income tax returns for the tax years of 2005 and 2006. He ultimately filed tax returns for all three tax years in March 2008, but those returns only reported income of approximately $14,000 to $18,500 in each year. As a result of his conduct and tax filings, Soltani evaded $150,446 in federal income taxes, paid no taxes for those years, and in each year fraudulently claimed and received tax refunds of over $2,000 by falsely claiming that he was entitled to an Earned Income Tax Credit reserved for taxpayers with low and moderate income. Soltani admitted he acted willfully to evade taxes, in part, through his filing of false tax returns and by receiving his income in the form of cash and through indirect payments made to third parties.

This case was the product of an investigation by Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorneys Nirav K. Desai and Christopher S. Hales prosecuted the case.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that NEFTY RODRIGUEZ, 24, of Hartford, was arrested today on an indictment charging him with one count of possession with intent to distribute, and distribution of, heroin and cocaine base (“crack cocaine”).

The charge stems from an ongoing statewide initiative targeting narcotics dealers who distribute heroin, fentanyl or opioids that cause death or serious injury to users.

The indictment, which was returned on July 19, 2017, alleges that RODRIGUEZ sold heroin and crack cocaine between June 2015 and September 2015.

RODRIGUEZ appeared today before U.S. Magistrate Judge Robert A. Richardson in Hartford and was ordered detained.

The charge carries a maximum term of imprisonment of 20 years.

U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter is being investigated by the Manchester Police Department and the Drug Enforcement Administration’s New Haven Tactical Diversion Squad. The case is being prosecuted by Assistant U.S. Attorney Robert M. Spector.

On July 28, 2017, a convicted felon from Miami-Dade pled guilty to selling firearms and narcotics.

Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida; Katherine Fernandez Rundle, State Attorney, Miami-Dade State Attorney’s Office; Peter J. Forcelli, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division; and Juan J. Perez, Director, Miami-Dade Police Department (MDPD), made the announcement.

Maxo Ducler, 34, of Miami, pled guilty to participating in a conspiracy to possess with the intent to deliver controlled substances, possession with the intent to deliver controlled substances, possession of a firearm by a convicted felon, and possession of a firearm in furtherance of a drug trafficking crime. Dulcer faces maximum statutory sentences of up to life in prison for the charges of conviction. Ducler is scheduled to be sentenced before U.S. District Court Judge Donald M. Middlebrooks on October 13, 2017.

According to the court record, including the agreed upon factual proffer, on February 28, 2017, Ducler sold cocaine; on March 8, 2017, he sold a loaded firearm and additional ammunition; and on March 22, 2017, he sold cocaine and a firearm. Widner Gabriel, 37, of Miami, was present for the March 22, 2017 firearm sale and helped Ducler to unload the firearm before the transaction was complete. On May 3, 2017, law enforcement executed a search warrant on the “stash house” used to facilitate the drug and firearm sales. Gabriel was found inside the stash house with the keys to the residence and approximately $3,000. Law enforcement seized four firearms, approximately two hundred rounds of ammunition and narcotics such as cocaine, fentanyl, MDMA, and Oxycodone from the stash house.

Gabriel pled guilty on July 12, 2017, to possession with the intent to deliver controlled substances, possession of a firearm by a convicted felon, and possession of a firearm in furtherance of a drug trafficking crime. Gabriel faces maximum statutory sentences of up to life in prison for the charges of conviction. He is scheduled to be sentenced before Judge Middlebrooks on September 12, 2017.

Mr. Greenberg commends the investigative efforts of the ATF and MDPD. Mr. Greenberg also thanked the Miami-Dade State Attorney’s Office for their assistance. This case is being prosecuted by Special Assistant U.S. Attorney Marianne Curtis from the Miami-Dade State Attorney’s Office.

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 on http://pacer.flsd.uscourts.gov.