St. Louis, MO – Michael Litz, 63, of Ladue, pled guilty today to assisting in an unlawful insider loan scheme at Excel Bank.  He appeared before United States District Judge Audrey G. Fleissig.  Sentencing is scheduled for April 25, 2018.

Litz is the third person to plead guilty in a criminal investigation following the failure of Excel Bank in 2012.  Litz and Shaun Hayes were indicted on bank fraud and related charges involving a series of insider loans and straw party loans at Excel Bank.  Hayes was the controlling shareholder in that bank which had main offices in Sedalia, Missouri and a loan production office in Clayton.  Litz was a principal in Bellington Realty and Eighteen Investments which managed over 1,000 residential and commercial rental properties in the area and bought and sold hundreds of residential properties each year.  In 2009, Eighteen Investments was delinquent on over $100,000,000.00 in loans at banks throughout the area.  Litz and Hayes were also partners in a number of real estate development projects.  One of those was McKnight Man I which involved the development of the property at the intersection of Manchester and McKnight Roads in Rock Hill.  Litz and Hayes were guarantors on a McKnight Man loan at Centrue Bank in the amount of $900,000.00.  That loan was delinquent in July, 2009.  At the same time Eighteen Investments was delinquent on $3,600,000.00 in loans at Centrue Bank.  

Litz admitted that he recruited a close friend, identified in the court papers as LS, to sign on to a $3,300,000.00 loan at Excel Bank to assist Litz in his business.  LS was assured that he would not be held liable on the note and that the loan would be taken care of.  The LS loan was secured on paper by a list of Eighteen Investments loans which were not performing and were substandard.  Litz provided no details to LS on the specifics of the loan.  According to court papers, LS was simply assisting Litz as a friend.  The loan proceeds were used to pay off Litz’s and Hayes’s McKnight Man debt at Centrue Bank as well as the Eighteen Investments debt at that bank. Since Hayes was a principal at Excel Bank, the use of the LS loan funds to pay off the Hayes-Litz liability at Centrue Bank constituted unlawful self-dealing. Litz admitted that he participated in that transaction and directly benefitted from it. 

According to court papers, Litz and Hayes set up other straw party loans at Excel Bank to cover millions of dollars in other delinquent loans of Eighteen Investments. 

"Michael Litz used his connections to banker Shaun Hayes to commit fraud. The two men worked together to enrich themselves at the expense of Excel Bank," said Special Agent in Charge Richard Quinn of the FBI St. Louis Division. "This type of self-dealing and fraud violates the integrity of our banking system and undermines consumer confidence."

“These convictions are an important step in the fight against fraud that hurt a TARP bank which lost $4 million in TARP funds,” said Christy Goldsmith Romero, Special Inspector General for TARP. “Banker Shaun Hayes, as the majority shareholder of Excel Bank, controlled the bank’s lending. He directed former executive vice president Tim Murphy to increase dramatically the bank’s commercial and real estate lending. So called “friends of Shaun” loans were approved absent Excel Bank’s normal underwriting safeguards such as appraisals—putting the bank at risk. Hayes also made the bank issue millions of dollars in loans to straw borrowers, concealing that the loans personally benefited himself and his business partner, Michael Litz.  I commend the Office of the U.S. Attorney for the Eastern District of Missouri for its commitment to bringing justice to bankers who break the law.”

Bank regulators closed Excel Bank in October, 2012, and Simmons Bank succeeded it.  

Hayes pled guilty on January 3 to one count of bank fraud and one count of misapplication of Excel Bank funds and is scheduled for sentencing on April 13.

Murphy, former Executive Vice President at Excel Bank, pled guilty on January 11 to bank fraud and sentencing is scheduled for April 24. 

This case has been investigated by the Federal Bureau of Investigation, the Federal Finance Agency Office of Inspector General, the Federal Deposit Insurance Corporation Office of Inspector General and the Office of the Special Inspector General for the Troubled Asset Relief Program.  Criminal Chief James E. Crowe, Jr. and Assistant United States Attorney Gilbert Sison are handling the case for the U.S. Attorney’s Office. 

Bart Sidney Posey, Sr., 50, a Springfield, Tenn. resident and former owner of the Springfield-based companies American Trade Association (ATA) and Smart Data Solutions (SDS), pleaded guilty yesterday before United States District Judge Aleta A. Trauger, to leading a multi-million dollar insurance fraud scheme that harmed thousands of victims across the country, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. 

According to court documents, from January 2008 through March 2010, Posey and his co-conspirators engaged in a widespread fraud designed to defraud consumers looking for health insurance.  Through ATA and SDS, Posey sold and caused others to sell bogus health insurance products to unsuspecting consumers.  Posey admitted that he duped consumers by denying legitimate health insurance claims, selling an insurance product that was not backed by a legitimate underwriter, and embezzling millions of dollars of insurance premiums paid to his company by victims.   Posey used those premium payments to buy, among other things, a Harley Davidson motorcycle, a sports car, college football tickets, and to pay off a $500,000 personal mortgage. 

Posey operated his companies much like a Ponzi scheme – paying off some insurance claims with new premiums to create the appearance of a legitimate insurance carrier and to keep the scheme going.  Posey admitted that some of his victims had pre-existing conditions and were stuck with thousands of dollars of unpaid medical bills due to his fraud.  

As part of his plea agreement, Posey pleaded guilty to mail fraud and to embezzling health care fraud premium payments.  He faces up to twenty years in prison on the mail fraud conviction and up to ten years for the embezzlement conviction.  Posey also agreed to forfeit over $6 million.  He will be sentenced on April 30, 2018.  

This case was investigated by the FBI; the United States Postal Inspection Service; the United States Department of Labor Employee Benefits Security Administration and Office of Inspector General; the United States Secret Service; and the IRS-Criminal Investigation.  Assistant United States Attorneys Ryan R. Raybould, Henry C. Leventis and Thomas J. Jaworski are prosecuting the case. 

ALEXANDRIA, Va. – Accenture Federal Services LLC (Accenture), located in Reston, agreed to pay $1,744,559 to settle overcharges billed to a General Services Administration multiple award schedule contract.

The resolution follows from a disclosure by the company to the U.S. Army Contracting Command, which arose out of an internal investigation conducted by Accenture. Accenture reported to the government that overcharges had been caused by unauthorized purchases of copy toner that had been surreptitiously made by a subcontractor on the contract. The disclosure by Accenture to the Army was made pursuant to the Contractor Code of Business Ethics and Conduct under the Federal Acquisition Regulations (FAR). Accenture provided assistance during the government’s investigation.

The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney's Office for the Eastern District of Virginia and the Army Criminal Investigation Command. The civil claims settled are allegations only; there has been no determination of civil liability.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.

CAMDEN, N.J. – A Collingswood, New Jersey, man was sentenced today to 240 months in prison for conspiring with his former girlfriend to produce sexually explicit images of two children, U.S. Attorney Craig Carpenito announced.

Alexander Capasso, 44, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to Count One of an indictment charging him with conspiring with Janine Kelley, 36, of Audubon, New Jersey, to engage in the sexual exploitation of children. Judge Simandle imposed the sentence today in Camden federal court. Capasso has been in federal custody since his July 20, 2015 arrest.

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

Capasso began a sexual relationship with Kelley in 2010. During that relationship, Capasso took, or allowed Kelley to take, recorded images of Capasso engaged in sexually explicit conduct with a child. Capasso also took, or allowed Kelley to take, recorded images of Kelley engaged in sexually explicit conduct with two children. 

In addition to the prison term, Judge Simandle sentenced Capasso to a lifetime of supervised release.

Kelley has also pleaded guilty to her role in the conspiracy and is scheduled to be sentenced Jan. 19, 2018. 

U.S. Attorney Carpenito credited special agents of the FBI Philadelphia Division, under the direction of Special Agent in Charge Michael Harpster, and the FBI Washington D.C., Field Office, under the direction of Assistant Director in Charge Andrew Vale, with the investigation.

The government is represented by Assistant U.S. Attorneys Diana Carrig and Sara Aliabadi of the U.S. Attorney’s Office Criminal Division in Camden. 
 
Defense counsel: Terri Lodge Esq., Cinnaminson, New Jersey

COLUMBUS, Ohio – Joy McShan Edwards, 37, of Steubenville, was convicted in U.S. District Court today of retaliation against a witness.

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration, and U.S. Marshal Pete Tobin announced the verdict, which was reached today by Chief U.S. District Judge Edmund A. Sargus, Jr, after a one-day bench trial on December 11, 2017.

Edwards’s two brothers, Fred McShan and David McShan, were convicted at a federal jury trial in March 2016 of conspiracy to possess with intent to distribute heroin in the Southern District of Ohio.

During the trial, Deputy U.S. Marshals had to escort multiple family members and friends of the McShan brothers out of the courtroom for violating the Federal Court’s cell phone policy. The family and friends had been attempting to photograph and video record witnesses in the case.

After the first day of trial, a Social Media post to Snapchat was posted by a family member, which revealed a comment about a government witness and a short video of the confidential informant’s testimony.

On May 11, the United States Probation Department released its pre-sentence investigation report and recommended sentences for Fred and David McShan. On that same day, authorities discovered Edwards made a post on her Facebook page about the confidential informant. The post included photos of the witness cropped onto a body and comments that the confidential informant was a “snitch.”

Edwards continued posting multiple images of the witness cropped onto other photographs, including images of rats and skulls.

According to the victim, the retaliation via social media has severely impacted his life and the safety of himself and his family.

“We take very seriously the safety and security of government witnesses,” U.S. Attorney Glassman said. “Those who retaliate against government witnesses will be identified and prosecuted to the fullest extent of the law. Today’s verdict is an example.”

Retaliating against a witness, victim or an informant is a federal crime punishable by up to 10 years in prison.

Edwards was charged by criminal complaint and arrested in June. She was indicted by a federal grand jury in August.

U.S. Attorney Glassman commended the cooperative investigation by the DEA and the U.S. Marshals Service, as well as Deputy Criminal Chief Michael J. Hunter and Jefferson County Prosecutor and Special Assistant United States Attorney Jane M. Hanlin, who are representing the United States in this case. 

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ALBUQUERQUE – In Aug. 2016, a multi-agency investigation led by the ATF concluded with the filing of 59 federal indictments and a federal criminal complaint charging 103 Bernalillo County residents with federal firearms and narcotics trafficking offenses.  To date, 84 of these defendants have been convicted, including 83 who have entered guilty pleas, and 57 of them have been sentenced.

The investigation was undertaken in support of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution.  Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies collaborate with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution primarily based on their prior criminal convictions with the goal of removing repeat offenders from communities in New Mexico for as long as possible.

Today, Albuquerque, N.M., resident, Felix Ulibarri, 39, was sentenced to 84 months in prison followed by six years of supervised release for his conviction on a methamphetamine trafficking charge. 

Ulibarri was indicted on July 28, 2016, and was charged with distributing methamphetamine on July 11, 2016.  The indictment subsequently was superseded on Aug. 9, 2016, to add Leo Lopez, 29, Joseph Sena, 40, and Jennifer Padilla, 39.  The superseding indictment charged Ulibarri and Padilla with participating in a conspiracy to distribute methamphetamine in July 2016; Lopez, Sena and Padilla with participating in a different conspiracy to distribute methamphetamine in July 2016; Ulibarri with distributing methamphetamine on July 11, 2016; and Sena with distributing methamphetamine on July 26, 2016.  According to the indictment, the defendants committed the crimes in Bernalillo County. On Aug. 22, 2017, Ulibarri pled guilty to one count of distributing methamphetamine and admitted that on July 11, 2016, he distributed more than 50 grams of methamphetamine to an undercover law enforcement agent.

Ulibarri’s three co-defendants have entered guilty pleas.  Padilla pled guilty on Sept. 22, 2017, and was sentenced to 24 months in prison followed by three years of supervised release on Jan. 3, 2018.  Lopez pled guilty on March 20, 2017, and was sentenced to 60 months in prison followed by four years of supervised release on June 19, 2017.  Sena pled guilty on May 5, 2017, and is pending sentencing.

Sixteen of the defendants charged as the result of the ATF investigation have entered not guilty pleas.  Charges in indictments are merely accusations, and defendants are presumed innocent unless found guilty in a court of law.   Two defendants are fugitives and the charges against two defendants have been dismissed.

This case was investigated by the Albuquerque office of ATF and is being prosecuted by Assistant U.S. Attorney Eva Fontanez.

SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Antonio Perez, age 45, of Hazleton, Pennsylvania, pleaded guilty on January 16, 2018, before U.S. Magistrate Judge Karoline Mehalchick, to distribution of heroin.

According to United States Attorney David J. Freed, Perez admitted to selling heroin to another person on July 2, 2014, in Hazleton. Perez sold slightly less than 100 grams of heroin, which is equivalent to just under 4,000 retail bags of heroin.

Judge Mehalchick ordered a pre-sentence investigation, and noted that Senior U.S. District Court Judge Richard P. Conaboy will schedule a date for sentencing.

Perez was indicted by a grand jury in October 2014, following an investigation by special agents of the Federal Bureau of Investigation and Scranton Police. Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.

This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin.  Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.

A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

The maximum penalty under federal law is 20 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.

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HARRISBURG-The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Anthony Rowe, age 55, of Wilmington, Delaware, was sentenced on January 16, 2018, to 151 months’ imprisonment byUnited States District Court Judge Sylvia H. Rambo for distributing heroin in Dauphin and Lycoming counties.

According to United States Attorney David J. Freed, Rowe was found guilty by a jury on March 16, 2017.  The evidence showed that Rowe travelled from Philadelphia to Dauphin and Lycoming Counties between February and June 2016, and distributed over 10 kilograms of heroin. Ten kilograms of heroin is approximately equal to 400,000 retail bags of heroin.

This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.

This case was investigated by the Drug Enforcement Administration, the Pennsylvania State Police and the Dauphin County Drug Task Force.  Assistant United States Attorneys Daryl F. Bloom and Chelsea Schinnour prosecuted the case. 

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ALBUQUERQUE – Christopher Joshua Cortes, 33, of El Paso, Texas, was sentenced today in federal court in Las Cruces, N.M., to 63 months in prison for his conviction on a methamphetamine trafficking charge.  Cortes will be on supervised release for three years after completing his prison sentence.

Cortes was arrested on April 17, 2017, on an indictment charging him with conspiring to distribute methamphetamine from March 2016 through June 2016, and distributing methamphetamine on June 6, 2016.  According to the indictment, Cortes committed the offenses in Dona Ana County, N.M.  The indictment included forfeiture provisions requiring Cortes to forfeit $6,500, the money involved in the drug transaction, to the United States.

On Aug. 2, 2017, Cortes pled guilty to a felony information charging him with possession of methamphetamine with intent to distribute, and admitted that he voluntarily agreed with others to distribute methamphetamine in Dona Ana County from about March 13, 2016 through June 6, 2016.  Cortes further admitted distributing approximately 407 grams of pure methamphetamine to an undercover law enforcement agent on June 6, 2016.

This case was investigated by Homeland Security Investigations and was prosecuted by Special Assistant U.S. Attorney Clara Cobos of the U.S. Attorney’s Las Cruces Branch Office.

Jacksonville- FL - United States Attorney Maria Chapa Lopez, along with Special Agent in Charge James Spero, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), announce today the distribution of more than $1.7 million in civilly forfeited funds to three law enforcement agencies. These awards are the result of a federal civil forfeiture of more than $4.5 million in funds obtained fraudulently through the hacking of bitcoin accounts. Pursuant to the Department of Treasury Equitable Sharing Program, the funds were distributed to the Nassau County Sheriff’s ($1,044,550.05); the Florida National Guard ($627,487.74); and the Jacksonville Sheriff’s Office ($209,162.58). The presentations took place today at the Jacksonville Office of Homeland Security Investigations. 

“I applaud the cooperation and diligence of our law enforcement partners in working with us to investigate and prosecute this case successfully,” said U.S. Attorney Chapa Lopez. “Divesting criminals of their ill-gotten gains and returning these resources to our enforcement agencies is yet another step in continuing our fight against crime.” 

“This asset sharing is a perfect example of how a criminal’s illegal profits can be used to protect the citizens of our communities,” said Special Agent in Charge Spero. “The Nassau County Sheriff’s Office, the Florida National Guard’s Counterdrug Program and the Jacksonville Sheriff’s Office all worked with HSI to hold these criminals accountable and we are honored to be able to publically recognize them for their hard work, while sharing with them a large portion of the seized monies.”     

According to court documents, in November 2013, HSI special agents learned of the theft of approximately 5,400 bitcoins from Sheep Marketplace, an illicit online marketplace that has since been shut down. Sheep Marketplace was used predominantly for the illicit sale of narcotics. Jacksonville residents Sean Mackert and Nathan Gibson determined that the Sheep Marketplace had a single online “wallet” that contained the bitcoins earned by individuals using the marketplace. They devised a scheme that tricked Sheep Marketplace’s “wallet” into transferring the bitcoins of others into “wallets” they controlled. During their investigation, HSI agents determined that Mackert and Gibson had routed the bitcoins through multiple online “wallets,” then wired them to a licensed money service business. At their direction, the money service business exchanged the bitcoins for United States currency, then wired the funds to bank accounts in Jacksonville that were controlled by Mackert and Gibson.

Mackert and Gibson both have pleaded guilty to conspiracy to commit wire fraud and are awaiting sentencing. Each faces up to 20 years in federal prison.

During the criminal investigation, HSI agents and local law enforcement, with the assistance of the United States Attorney’s Office, seized the funds and two vehicles. The United States commenced a civil forfeiture action against the funds, alleging that they were the proceeds of fraud. The district court ultimately ordered the forfeiture of the funds and two vehicles.     

In the Middle District of Florida, enforcement of federal asset forfeiture laws is an integral part of our law enforcement mission. Taking the profit out of crime is important in disrupting and dismantling illegal enterprises, deterring crime, and restoring property to victims. It is also an effective way to have criminals help fund law enforcement efforts. Through the Equitable Sharing Program, our state and local law enforcement partners receive resources to supplement their law enforcement mission. Asset forfeiture and equitable sharing are valuable law enforcement tools that send a clear message that crime does not pay.

The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations with assistance from the Nassau County Sheriff’s Office, the Florida National Guard, and the Jacksonville Sheriff’s Office. The civil forfeiture action was handed by Assistant United States Attorney Bonnie Glober. The criminal prosecution is being handled by Assistant United States Attorney Kevin Frein.   

CINCINNATI – Susan M. Ruhe, 54, of Cincinnati, was sentenced in U.S. District Court to 21 months in prison and four years of supervised release for one count of bank fraud. Ruhe defrauded her former employer, Procter & Gamble, of more than $454,000.

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Yvonne DiCristoforo, Special Agent in Charge, U.S. Secret Service, announced the sentence imposed today by U.S. District Judge Timothy S. Black.

According to the Statement of Facts in this case, Ruhe was employed by Procter & Gamble, the multinational consumer goods company headquartered in Cincinnati, from July 1989 through June 2013. Her last job title was Executive Assistant in the Global Beauty Care Business Development Group. In that capacity, her primary job duties were executive travel planning, expense reporting, calendar management and the scheduling of team meetings and events.

From November 2007 through the end of her employment, Ruhe defrauded the company by requesting that the payment department issue corporate checks to be used to pay for expenses that Procter & Gamble had incurred in the ordinary course of business. In reality, she used the corporate checks to make payments on her personal credit card accounts. Both accounts were through Citibank.

To conceal her scheme, Ruhe used the email of an executive without consent to approve her requests for corporate checks. She would then designate an unwitting third party from whom she would retrieve the checks in accordance with company policy. In total, she obtained 40 fraudulent corporate checks through this scheme.

Ruhe pleaded guilty in June 2017, and as part of the plea agreement, agreed to pay $454,116.47 in restitution to Procter & Gamble.

U.S. Attorney Glassman commended the investigation of this case by the U.S. Secret Service and Assistant United States Attorney Deborah D. Grimes, who is representing the United States in this case.

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NEWPORT NEWS, Va. – A Newport News man was sentenced today to eight years in prison for drug trafficking and his role in stealing 52 firearms from a federally licensed firearms dealer in February 2017.

According to court documents, Angel Lewis Bruno, 19, was part of a robbery crew that stole 52 firearms from Hunter’s Heaven Gun Store in Hayes on Feb. 12, 2017. Approximately nine days later, law enforcement apprehended all four defendants, including two who fled in a vehicle travelling at over 100 miles per hour.

Law enforcement has recovered 17 of the stolen firearms to date. The whereabouts of other 35 firearms are unknown.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Thomas L. Chittum, III, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, Michael C. Grinstead, Acting Chief of Newport News Police, and Darrell W. Warren, Jr., Gloucester County Sheriff, made the announcement after sentencing by U.S. District Judge Raymond A. Jackson. Assistant U.S. Attorney Megan M. Cowles prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:17-cr-72.

CLARKSBURG, WEST VIRGINIA – Michael Austin Boyd, Jr., of Toledo, Ohio was sentenced today to 240 months incarceration for cocaine distribution, United States Attorney Bill Powell announced.

Boyd, age 36, pled guilty to one count of “Possession with Intent to Distribute Cocaine” in September 2017. Boyd admitted to possessing 280 grams or more of cocaine in Harrison County in September 2016.

Boyd was also ordered to forfeit proceeds, directly or indirectly, from the crime, including United States currency in the amount of $35,580.00 and a Taurus revolver, Model 85, .38 caliber.

Assistant U.S. Attorney Traci M. Cook prosecuted the case on behalf of the government. The Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, and Bridgeport Police Department investigated. 

Senior U.S. District Judge Irene M. Keeley presided.

BOSTON – A Methuen real estate broker pleaded guilty yesterday in connection with a sweeping conspiracy to defraud banks and mortgage companies by engaging in sham “short” sales of residential properties in Merrimack Valley.

Greisy Jimenez, 50, pleaded guilty to two counts of bank fraud and one count of conspiracy to commit bank fraud. U.S. Senior District Court Judge Mark L. Wolf scheduled sentencing for April 24, 2018.  In March 2017, co-conspirators Jasmin Polanco, 37, a real estate closing attorney, and Vanessa Ricci, 40, a mortgage loan officer, each pleaded guilty to one count of conspiracy to commit bank fraud and are scheduled to be sentenced on March 23, 2018 and March 26, 2018, respectively. Also in March 2017, Hyacinth Bellerose, 51, a real estate closing attorney, was sentenced to time served and one year of supervised release to be served in home detention after pleading guilty to conspiracy to commit bank fraud.

The charges arose out of a scheme to defraud various banks via bogus short sales of homes in Haverhill, Lawrence and Methuen in which the purported sellers remained in their homes, with their debt substantially reduced. A short sale is a sale of real estate for less than the value of any existing mortgage debt on the property. Short sales are an alternative to foreclosure that typically occur only with the consent of the mortgage lender.  Generally, the lender absorbs a loss on the loan and releases the borrower from the unpaid balance.  By their very nature, short sales are intended to be arms-length transactions in which the buyers and sellers are unrelated, and in which the sellers cede their control of the subject properties in exchange for the short-selling bank’s agreement to release them from their unpaid debt.

The conspiracy began in approximately August 2007 and continued through June 2010, a period that included the height of the financial crisis and its aftermath.  Home values in Massachusetts and across the nation declined precipitously, and many homeowners found themselves suddenly “underwater” with homes worth less than the mortgage debt they owed. As part of the scheme, Jimenez, Polanco, Ricci, Bellerose and others submitted materially false and misleading documents to numerous banks in an effort to induce them to permit the short-sales, thereby releasing the purported sellers from their unpaid mortgage debts, while simultaneously inducing the purported buyers’ banks to provide financing for the deals.  In fact, the purported sellers simply stayed in their homes, with their debt substantially reduced.

The conspirators falsely led banks to believe that the sales were arms-length transactions between unrelated parties; in fact, the buyers and sellers were frequently related, and the sellers retained control of (and frequently continued to live in) the properties after the sale. The conspirators also submitted phony earnings statements in support of loan applications that were submitted to banks in order to obtain new financing for the purported sales.  In addition, the defendants submitted phony “HUD-1 Settlement Statements” to banks that did not accurately reflect the disbursement of funds in the transactions.  (HUD-1 Settlement Statements are standard forms that are used to document the flow of funds in real estate transactions.  They are required for all transactions involving federally related mortgage loans, including all mortgages insured by the Federal Housing Administration.) 

The charge of bank fraud and conspiracy to commit bank fraud provides for a sentence of no greater than 30 years in prison and a fine of $1 million.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Christina Scaringi, Special Agent in Charge of the Department of Housing and Urban Development, Office of Inspector General, New York Field Office; and Christy Goldsmith Romero, Special Inspector General of the Troubled Asset Relief Program, made the announcement.  Assistant U.S. Attorney Stephen E. Frank, Chief of Lelling’s Economic Crimes Unit, and Assistant U.S. Attorneys Sara Miron Bloom and Victor A. Wild, also of the Economic Crimes Unit are prosecuting the cases.

KANSAS CITY, KAN. – A Kansas City, Kan., man was sentenced Wednesday to 15 years in federal prison after admitting he distributed six to 10 kilos of methamphetamine a week, U.S. Attorney Tom Beall said.

Luis Enrique Martinez-Rosales, 25, Kansas City, Kan., pleaded guilty to one count of conspiracy to distribute methamphetamine and one count possession with intent to distribute. In his plea, he admitted the Kansas Highway Patrol found two kilograms of methamphetamine and almost $50,000 in cash when they stopped his car on I-70 in Wyandotte County, Kan. He received methamphetamine in loads smuggled into the United States in tractor-trailers and wired payment to Mexico.

Beall commended the Kansas Highway Patrol, the Drug Enforcement Administration and Assistant U.S. Attorney Tris Hunt for their work on the case.

DAVENPORT, Iowa -- On January 16, 2018, Oscar Lee Hall, Jr., age 41, formerly of Nichols, Iowa, was sentenced by United States District Court Judge Stephanie M. Rose to 33 months in prison after pleading guilty to failure to register as a sex offender, announced United States Attorney Marc Krickbaum. Hall was ordered to serve five years of supervised release to follow his prison term, a condition of which will include continued compliance with the sex offender registration laws, and pay a $100 special assessment to the Crime Victims’ Fund.

Hall was convicted in Michigan of criminal sexual conduct in 1998. Between November 18, 2016 and March 24, 2017, Hall returned to Iowa and failed to register and update his registration pursuant to the Sex Offender Registration and Notification Act.

This matter was investigated by the United States Marshals Service, Muscatine County Sheriff’s Office, and West Liberty Police Department. The case was prosecuted by the United States Attorney’s Office for Southern District of Iowa.

St. Louis, MO – Olusola Luke, 38, a native of Nigeria and resident of Guatemala, was sentenced to 35 months imprisonment for his participation in a stolen identity tax fraud scheme.

According to court documents, Luke and others used stolen identities to unlawfully obtain data from U.S. Government computers and then used that data to seek $3.5 million in government funds by filing false tax returns in the names of the identity theft victims.  Many of the fraudulent tax refunds were stopped and not paid by the IRS.  Luke admitted he obtained more than $734,000 in fraudulent tax refunds as a result of this scheme.

Luke was sentenced for one felony count of conspiracy to commit theft of government funds before United States District Judge Henry Autrey.  Luke has been in federal custody since April when he was arrested by the United States Marshals Service as he attempted to enter the United States.  In addition to the sentence of imprisonment, Luke was ordered to pay $734,000 in restitution to the IRS.

Luke’s co-conspirator, Olefunsho Adeshina, also a native of Nigeria, is serving a sentence of 40 months imprisonment which was handed down in 2016 for his role in the conspiracy.

This case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI), Treasury Inspector General for Tax Administration (TIGTA)  Strategic Data Services Division, the Department of Treasury Inspector General for Tax and Administration (TIGTA) and the Federal Bureau of Investigation (FBI) Cyber Task Force as part of their Stolen Identity Refund Fraud (SIRF) initiative which seeks to disrupt the multi-billion-dollar enterprise whereby Americans’ identities are compromised and used to defraud the government through the income tax system.

U.S. Attorney Jeffrey B. Jensen also credited the investigators of the many financial institutions and the persistence of the investigators of the U.S. Customs and Immigration - Fraud Detection and National Security (FDNS) team with their support of the investigation leading to today’s sentencing.  Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.

A mail carrier from North Olmsted was charged with one count of willful obstruction of the passage of mail, law enforcement officials said.

Alaina Chalkley, 36, took 24 pieces of first-class mail, 17 gift cards, 14 tobacco mailers, 694 pieces of undelivered mail and an envelope containing lottery tickets worth $5. This took place between March and July 2017, according to the criminal information.

If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

The case is being handled by Assistant U.S. Attorney Danielle K. Angeli following an investigation by the U.S. Postal Service – Office of Inspector General.  

An information is only a charge and is not evidence of guilt. Defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Jackson, Miss. – Bobby Earl Thweatt, 53, of Morton, pled guilty today before United States District Judge Tom S. Lee, to theft of government funds by fraudulently obtaining Social Security Disability payments, announced U.S. Attorney Mike Hurst and Resident Agent in Charge Marvin Mauldin of the Office of Inspector General, Social Security Administration.

Thweatt was approved for Title II Social Security disability benefits effective in October, 1998, based on an injury. As part of the application, he agreed under penalty of perjury to notify the Social Security Administration in the event that his medical condition improved so that he was able to work. Thweatt received monthly Social Security Disability payments based on his medical condition.

In January, 2009, Thweatt began working again on a full-time basis but did so using his wife’s Social Security number instead of his own, in order to avoid having to notify the Social Security Administration that he was able to work and therefore was no longer eligible to receive disability payments from the United States government. From January, 2009, to April, 2015, Thweatt received a total of $97,083.00 in funds belonging to the United States by receiving Social Security Title II Disability Insurance benefits to which he knew he was not entitled. Thweatt converted this money to his own personal use and benefit.

Thweatt will be sentenced in Jackson by Judge Tom S. Lee on April 19, 2018, and faces a maximum penalty of 10 years in prison, followed by up to 3 years of supervised release, and a $250,000 fine. Federal law mandates the full payment of restitution.

The case was investigated by the Office of Inspector General of the Social Security Administration. It is being prosecuted by Assistant United States Attorney Dave Fulcher.

HELENA—Jeremy Michael Sullivan, 44, of Boulder, Montana, was sentenced to 30 months in prison, 3 years’ supervised release, and a $100 surcharge by United States District Court Judge Sam E. Haddon on Wednesday, January 17, 2018 for possessing a firearm as a prohibited felon.  Sullivan was arrested after being investigated for selling a stolen handgun. Sullivan was previously convicted of felony theft in Utah.

The charge against Sullivan is the result of an investigation by the Boulder Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.  Assistant United States Attorney Tom Bartleson prosecuted the case.

The U.S. Attorney’s Office is partnering with federal, state, local and tribal law enforcement to identify those responsible for significant violent crime in Montana.  A centerpiece of this effort is Project Safe Neighborhoods, a recently reinvigorated Department of Justice program that has proven to be successful in reducing violent crime.  Today’s sentencing is part of the Project Safe Neighborhoods program.