Northern District of Alabama

BIRMINGHAM -- A federal judge today sentenced a former Birmingham tax-return preparer to seven months in prison and ordered her to repay $70,045 to the IRS for filing false returns, announced U.S. Attorney Joyce White Vance and IRS, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot.

U.S. District Judge Sharon Lovelace Blackburn sentenced JANICE E. FOY on one count of subscribing to a false federal tax return and one count of aiding in the preparation of a false return. Foy, 52, of Snellville, Ga., pleaded guilty to the charges in May. Foy owned and operated the now-defunct tax preparation business, VIP Tax Services, on Bankhead Highway in Birmingham. Blackburn ordered Foy to serve a year of supervised release following her prison sentence. Among special conditions of that release, the judge ordered Foy to pay restitution to the Internal Revenue Service and to refrain from assisting or aiding others in the preparation of taxes.

"An integral part of the agency's mission involves detecting and stopping fraudulent refund claims," Hyman-Pillot said. "IRS Criminal Investigation identified and investigated the filing of false tax returns submitted by Janice Foy, and as a result Ms. Foy will serve time in jail for her actions. Special Agents work year-round to investigate and root out dishonest return preparers like Ms. Foy," she said.

According to court records, Foy orchestrated a tax refund scheme through VIP Tax Services. During the time Foy professionally prepared tax returns, from 2008 to 2010, she filed false tax returns on behalf of taxpayer clients who retained VIP's services, often including numerous false items on client's returns in order to maximize their refunds.

Foy pleaded guilty to one count of subscribing to a false U.S. tax return for claiming a First-time Homebuyer Credit of $7,500 on her own 2008 tax return, knowing she was not entitled to that deduction. She also pleaded guilty to one count of preparing a false federal tax return while operating a tax preparation service by adding false education credits, child tax credit and the First-time Homebuyer Credit to a client's return.

In her plea agreement, Foy also admitted to causing 26 false U.S. tax returns for 20 of her clients to be filed with the IRS for the tax years 2007-2009. Those returns contained fictitious dependents, inflated deductions, false income and expenses, and false education credits, dependent care expenses, and First-Time Homebuyer Credits or Residential Energy credits. Some of the false deductions and credits also enabled the defendant's clients to falsely claim the Earned Income Credit and the Additional Child Tax Credit. The total loss to the government was $90,798.

In a related case, KRISTIE SYKES, 42, of Birmingham, who worked at VIP, pleaded guilty on Monday to two counts of a five-count indictment charging her with aiding in the preparation of false federal tax returns.

IRS-CI investigated the case, which Assistant U.S. Attorney Chinelo Dike-Minor is prosecuting.

BIRMINGHAM -- U.S. Attorney Joyce White Vance and DEA Assistant Special Agent in Charge Clay A. Morris are encouraging residents of North Alabama to take advantage of DEA's next nationwide Prescription Drug Take-Back Day on Sept. 27 to properly dispose of unused prescription drugs.

It is critical to get unused, unwanted and expired prescription drugs out of family medicine cabinets before they can fall into the hands of children and others who might use them to fuel addiction. A new U.S. Drug Enforcement Administration regulation that will permit the establishment of long-term drop-off sites for disposal of prescription pills will go into effect later this year, permitting return of unused medication on an ongoing basis.

The U.S. Attorney and DEA, along with representatives of local law enforcement and the public health and addiction prevention and treatment communities, held a press conference today at the U.S. Attorney's Office in Birmingham to encourage people to take action at this last nationwide take-back day, rather than waiting for the permanent process to come online.

"Prescription drug abuse and heroin addiction, both at record rates in our community, are strongly linked," Vance said. "Each of us has the responsibility to take every step possible to prevent access and addiction to these drugs and bring down our unacceptably high overdose death rates," she said.

"Cultivating a habit of removing prescriptions from our medicine cabinets that are no longer necessary is a vital step in curtailing easy access, as there are many reports that children have their first contact with opiates at home, in the guise of prescription medication," Vance said.

"Over the past several years, Alabama has seen a significant increase in the use and abuse of opiate-based prescription drugs," Morris said. "Unfortunately, the untreated abuse of opiate-based drugs will lead to the beginning of a cycle of addition that will end in the use of heroin. As we all know, heroin overdose deaths are at record numbers in the Birmingham area," he said.

"The Prescription Drug Take-Back Initiative sponsored by DEA is one step in a comprehensive plan to remove a simple and often overlooked source of supply of drugs from potential abuse. I would urge parents, educators, civic organizations, faith-based organizations and all citizens to partner with law enforcement and help remove unused pharmaceuticals from the reach of the most vulnerable of potential drug abuse victims...our children," Morris said.

The DEA's ninth nationwide take-back event will give the public a convenient opportunity to prevent pill abuse and theft by ridding their homes of potentially dangerous drugs until more permanent drop-off sites are established after the agency's new regulation takes effect Oct. 9. The DEA currently has no plans to sponsor more nationwide Take-Back Days after Sept. 27, as authorized collectors, such as pharmacies, hospitals and clinics, begin offering the drop-off service.

The temporary collection sites will be open from 10 a.m. to 2 p.m. on Sept. 27. Local sites can be found on the DEA website at: http://www.deadiversion.usdoj.gov/drug_disposal/takeback/ . The service is free and anonymous, no questions asked. DEA, however, cannot accept liquids or needles.

Rates of prescription drug abuse in the U.S. are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet. In addition, Americans are now advised that flushing unused medicines down the toilet, or throwing them in the trash, pose potential environmental and health hazards.

Last April, Americans turned in 390 tons (over 780,000 pounds) of prescription drugs at nearly 6,100 sites operated by the DEA and more than 4,400 of its state and local law enforcement partners. Combined with DEA's previous Take-Back events, the agency and its partners have taken in more than 4.1 million pounds, or 2,100 tons, of pills.

The new DEA regulation announced last week by U.S. Attorney General Eric Holder should enhance the public's ability to properly dispose of prescription drugs. The new policy authorizes pharmacies, hospitals and clinics to serve as authorized drop-off sites for unused medications. The new rule also enables long-term care facilities to collect controlled substances turned in by residents of those facilities, and it allows prescription drug users everywhere to directly mail in their unused medications to authorized collectors.

In 2011 alone, more than half of the 41,300 unintentional drug overdose deaths in the United States involved prescription drugs, and hazardous opioid pain relievers led to about 17,000 of those deaths, Holder said. Young people are especially susceptible to these dangers. The attorney general noted that nearly four in 10 teens who have misused or abused a prescription drug have obtained it from their parents' medicine cabinet.

BIRMINGHAM – A federal judge today changed a sentence of probation to one year and day in prison for a Birmingham Police officer convicted of using excessive force when he beat a handcuffed defendant in 2007, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.

U.S. District Judge Inge P. Johnson resentenced COREY L. HOOPER for depriving the civil rights of Martez Gulley when he repeatedly struck the man with his hands and fists while Gulley was handcuffed and secured in the backseat of a patrol car on Sept. 6, 2007. A federal jury convicted Hooper, 36, in 2012 for depriving Gulley's civil rights while Hooper operated under his authority as a police officer. Hooper must report to prison Dec. 1

The 11th U.S. Circuit Court of Appeals, ruling on a government appeal of the probationary sentence, vacated it in May and returned the case to the federal district court for resentencing. Prosecutors challenged the probationary sentence as unreasonable, arguing it did not satisfy the need for general deterrence of the crime of excessive use of force by police officers. The appeals court held that the original five-year probationary sentence was "substantively unreasonable," and that the district judge had "expressly declined to consider the need for Hooper's sentence to adequately deter other police officers from using excessive force."

"Most police officers honor their oaths, day in and day out, to uphold the law and protect the public, but this defendant disgraced his badge and harmed a person he was sworn to protect," Vance said. "Today's sentence reflects that abusing the authority of a police badge is a serious crime and it will be punished accordingly. I thank the FBI for its hard work investigating and compiling evidence in this case. My office remains committed to aggressive civil rights enforcement."

"This case is representative of the FBI's commitment to enforce and protect civil rights," Schwein said. "While the vast majority of law enforcement officers uphold and obey the law, in those rare instances where serious transgressions occur and the public's trust is violated, citizens should know that the FBI will conduct a complete investigation to preserve and restore that trust," he said.

According to court records in the case, the blows Hooper struck caused Gulley serious injury. Gulley's "slight size in comparison to Hooper and his medical history made him particularly vulnerable to the heavy face blows delivered by Hooper during the attack," the government said in its 2013 sentencing memorandum.

The government also argued that Hooper committed perjury when he testified that he punched Gulley only after Gulley kicked at him from the patrol car. "Had the jury believed Hooper's version was truthful, they could have decided that the level of force used by Hooper was justified, or they could have decided they were not satisfied beyond a reasonable doubt that Hooper was guilty of using excessive force under the circumstances. The jury's guilty verdict reflects they did not believe Hooper's made-up version of the events."

The FBI investigated the case, which Assistant U.S. Attorney J. Patton Meadows prosecuted.

WASHINGTON – Jeremy Heath Higgins, 28, a resident of Quinton, Alabama, pleaded guilty today before U.S. District Judge Madeline Haikala to two counts of federal civil rights violations, announced the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Northern District of Alabama.

As part of the plea proceedings, Higgins admitted that on June 14, 2013, he approached and threatened an African-American man at the Alabama Rose Steakhouse, a restaurant in Quinton, Alabama, because the man was present at the restaurant with a white woman. Soon after, the couple left the bar. A manager at the Alabama Rose Steakhouse confronted Higgins because of his behavior toward the African-American man and ordered Higgins to leave the restaurant. As Higgins was being escorted from the bar, he used racial slurs, shouted a racial slur at the restaurant manager, and threatened to burn down the Alabama Rose Steakhouse. Later that evening, Higgins returned to the restaurant and threatened the restaurant manager by painting graffiti on the restaurant’s front exterior and fence.

Sentencing in this case is set for January 9, 2015.

“Threatening an individual over their race or a business for its acceptance of others has no place in a civilized society,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “The Department of Justice will vigorously prosecute those who seek to intimidate others with these types of hateful threats.”

“Access to public places, like restaurants, has been at the core of the civil rights struggle,” said U.S. Attorney Joyce White Vance for the Northern District of Alabama. “Unlike the lunch counters of the 1960s, the restaurant in this case welcomed and sought to protect the rights of its African American customer. In prosecuting this case, we make clear our commitment to enforcing the civil rights of individuals and the businesses who seek to serve all, without regard to the color of their skin.”

This case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Robin B. Mark of the Northern District of Alabama and Trial Attorney David Reese of the Justice Department’s Civil Rights Division.

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BIRMINGHAM -- Federal prosecutors have charged a Tuscaloosa County freight broker with bribing two National Guard officials to steer military transport contracts totaling $441,698 to the two Alabama companies he represented, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and Frank Robey, director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit.

The U.S. Attorney's Office late Friday charged DANIEL BOYD, 60, of Vance, in a four-count information filed in U.S. District Court. The information charges Boyd with two counts of bribery and two counts of mail fraud in the scheme to illegally obtain shipping contracts for Crimson Express and U.S. Transport. He has entered an agreement with the government to plead guilty to the charges.

One of the National Guard officials Boyd is charged with bribing, Timothy Wooten, 52, a traffic management specialist for the Guard Bureau's U.S. Property and Fiscal Office in South Carolina, pleaded guilty in June to three wire fraud counts and one count of accepting bribes to steer freight contracts to an Alabama broker. Boyd's information and plea agreement reference Wooten as T.W.

Boyd also is charged with bribing a traffic management specialist for the Guard's U.S. Property and Fiscal Office in Florida. The Florida official is identified in the court documents as K.T.

K.T.'s and T.W.'s duties with the National Guard Bureau included procuring funding for and arranging the movement of personnel, items and equipment. Their duties also involved managing the transportation with their respective states, in coordination with the Department of Defense, Department of the Army, National Guard Bureau and active duty installations.

According to Boyd's plea agreement, he and K.T. agreed in January 2011 that Boyd would hire K.T. when he left his National Guard service at the end of February 2011. During that February, K.T. used his position to award transportation contracts to Boyd's Crimson Express, and Boyd paid K.T. about 50 percent of the commissions he received on those contracts.

Boyd reached his bribery agreement with Wooten in October 2011, according to Boyd's and Wooten's plea agreements. In exchange for Wooten using his position to award contracts to Boyd's companies, Boyd paid Wooten about 25 percent of the commissions he received on the contracts.

Boyd received total commissions of about $156,386 on the $441,698 in transportation contracts the two Guard officials awarded to Crimson Express and U.S. Transport, according to Boyd's plea agreement. In exchange, Boyd paid bribes of about $20,252 to K.T. and about $29,742 to Wooten, Boyd acknowledges in his plea agreement.

The two Guard traffic management specialists were able to steer the contracts to Boyd's companies by overriding the government's electronic system that generated a list of "Best Value Carriers" for a freight shipment so that they could manually select a company for the contract, according to court records.

Boyd acknowledges in his plea agreement that he had his wife write checks to Wooten's wife to pay the bribes he promised. The U.S. Postal Service delivered those checks from Alabama to Lexington, S.C., where Wooten lived.

The FBI and Army CID, MPFU, investigated the case, which Assistant U.S. Attorney Tamarra Matthews Johnson is prosecuting.

BIRMINGHAM -- A second sales manager at Serra Nissan faces federal charges in connection with a conspiracy at the Birmingham car dealership to fraudulently boost loan approvals and car sales, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.

A federal grand jury last week indicted GERALD R. SHEPARD, 56, of Pinson, on conspiracy and bank fraud charges. A federal judge lifted the seal on the indictment this week after the government withdrew a warrant for Shepard's arrest.

The five-count indictment charges Shepard with conspiring with others at the dealership, between August 2010 and October 2013, to defraud financial institutions, Nissan North America and Serra Nissan customers by fraudulently increasing vehicle sales in order to boost personal profits. The indictment also charges Shepard with four bank fraud counts for fraudulent loan information submitted to financial institutions in September and October of 2012.

Shepard's indictment follows federal charges earlier this year against another sales manager at Serra Nissan, Abdul Islam Mughal. Mughal, 48, of Trussville, pleaded guilty in July to conspiring with others, including Serra Nissan salesmen, general managers, sales managers and finance managers, to sell more cars by falsifying loan documents in order to defraud customers, Nissan North America and financial institutions. Mughal also pleaded guilty to one count of bank fraud for submitting falsified loan documents to financial institutions between January 2012 and October 2013. Mughal is scheduled for sentencing Nov. 5.

According to the indictment against Shepard, he and other members of the conspiracy participated in various means to carry out their fraud and obtain auto loans that, otherwise, would not have been approved. Those means included the following:

• Creating or altering documents to submit to financial institutions to show inflated income for prospective buyers.
• Directing finance managers and salesmen to submit fraudulent utility bills and bank statements to financial institutions to misrepresent proof of a customer's residency.
• Listing accessories not actually included on a vehicle so a financial institution would increase its loan amount. Shepard and others had a financial incentive to increase a loan amount in order to increase commissions paid to certain employees.
• Presenting straw buyers, who could qualify for a loan, to financial institutions when the actual buyer could not qualify.

Shepard and others also defrauded customers and financial institutions by quoting a customer an inflated monthly vehicle loan payment so that a finance manager could add a warranty and gap insurance without the customer realizing it, according to the indictment.

The maximum penalty for the conspiracy count is five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years in prison and a $1 million fine.

The FBI and the IRS investigated the case, which Assistant U.S. Attorney Amanda Schlager Wick is prosecuting.

The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.

BIRMINGHAM -- A federal judge today sentenced the owners and operators of Richard Joseph SalonSpas in the Birmingham area to three years in prison for conspiring to avoid paying more than $1 million in employment taxes to the IRS, announced U.S. Attorney Joyce White Vance and Internal Revenue Service Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.

U.S. District Judge Abdul K. Kallon sentenced both RICHARD JOSEPH SMITH, 54, and TIMOTHY EUELL BROWN, 55, to prison for the tax fraud conspiracy in which they failed to pay employment taxes to the IRS that they withheld from employees' wages over eight years from 2006 to 2013. Smith and Brown pleaded guilty to the charge in May, and acknowledged that they also skimmed money from the salons for personal use. Their prison reporting dates have not been set.

The judge ordered the men to pay $1.4 million in restitution to the IRS, which they had agreed to as part of their plea agreements with the government. The $1.4 million represents only the payroll taxes withheld from employees, not the employer portion of payroll taxes, which also went unpaid.

The government is seeking an order restraining the defendants' assets and directing the proceeds from the sale of personal property be applied to the restitution.

The men's Hoover home was lavishly furnished with antiques, art, fine china and chandeliers. The house is now for sale and most of the furnishings have been moved into storage. The IRS has a tax lien on the house for unpaid employment taxes, predating the current prosecution. Any proceeds from the home sale would go, first, to satisfy the tax lien.

"These defendants lived a high-end lifestyle of luxury at the expense of their employees and the nation's tax-paying citizens," Vance said. "They deducted more than $1 million in payroll taxes from their workers' wages, but they kept the money for themselves instead of lawfully paying the money to the IRS, leaving more than 100 employees uncertain about their future benefits and security," she said. "Prosecutions like this protect hard-working Americans."

“Employment tax fraud has a huge impact on our nation’s tax system. It results in loss of revenue to the government and affects the livelihood of the victims," Hyman-Pillot said. “Richard Smith and Tim Brown abused the trust of many people and must be held accountable for their corrupt actions. IRS Criminal Investigation will continue to enforce our nation’s tax laws and investigate individuals who choose to disregard those laws for personal benefit,” she said.

Richard Joseph SalonSpa has been a prominent business for more than two decades in the Birmingham area, with Smith as master stylist and Brown as business manager handling finances, including payroll, according to government documents.

By neither paying over to the IRS the taxes they withheld from their employees, nor reporting and paying taxes on their individual incomes, Brown and Smith lived an extravagant lifestyle, according to the government's Aug. 27 sentencing memorandum.

Brown bought the couple's home in the Preserve neighborhood in Hoover in 2005 for $891,000, and they have maintained the $5,245 monthly mortgage payment, according to the memorandum. In 2008 and 2009, they paid more than $80,000 to add a swimming pool and outdoor fireplace. The two men also employed as many as four full-time staff to perform housework, lawn maintenance, elder care for a live-in relative, and pet care for their 12 dogs, according to the sentencing memorandum.

The defendants' tax fraud proceeded as follows, according to government documents:

Beginning in 1991, a company called Smith, Hobart & Brown operated Richard Joseph SalonSpa in Mountain Brook, and Brown was the sole owner and registered agent of SHB. SHB operated the spa from 1991 to July 2006. SHB owed more than $300,000 in employment taxes to the IRS by the third quarter of 2006. The IRS began notifying Brown of payroll tax deficits and requesting payment in 2004. When a revenue officer met with Brown and his accountant in 2007, Brown said he had closed his salon in July 2006 and no longer worked at Richard Joseph SalonSpa.

While the daily operation and management of Richard Joseph SalonSpa never changed, Smith incorporated a new company, RJSS Inc., in June 2006. RJSS took over operation of Richard Joseph SalonSpa in Mountain Brook, and Smith and Brown opened a business checking account together for RJSS, listing both men as its owners.

Brown misrepresented to the IRS that he closed his salon business in 2006 and no longer worked at Richard Joseph Salon, the government said in its sentencing memorandum. Rather than closing the salon, he transferred its ownership to Smith and "carried forward with business as usual."

In August 2008, Smith incorporated another business, Richard Joseph Redmont Group Inc., and he and Brown together opened a business checking account for it. In July 2009, Smith and Brown opened a Richard Joseph Salon on U.S. 280 in Inverness, and operated it through the Redmont Group.

Between 2006 and 2013, Smith and Brown withheld the $1.4 million from employees of RJSS and Redmont group and failed to pay it over to the IRS in employment taxes.

IRS Criminal Investigation Division investigated the case, which Assistant U.S. Attorney Robin Beardsley Mark prosecuted.

Augus 27 , 2014

BIRMINGHAM -- A federal grand jury today indicted two north Alabama men in separate child pornography cases that include images of children younger than 12 years old, announced U.S. Attorney Joyce White Vance.

A three-count indictment filed in U.S. District Court charges JUSTIN CLAY McNEILL, 28, of Somerville, with receiving, distributing and possessing child pornography on a computer at his Morgan County residence between July 8, 2013, and July 8, 2014. A separate and unrelated indictment charges JASON WARREN McCLURE, 36, of Huntsville, with receiving and possessing child pornography via the Internet at his Madison County home between January 26, 2013, and March 7, 2014.

Each of the child pornography charges carries a maximum penalty of 20 years in prison and a $250,000 fine.

The Alabama Bureau of Investigation investigated the case involving McNeill, which Assistant U.S. Attorneys Elizabeth A. Holt and Jacquelyn M. Hutzell are prosecuting. The FBI is investigating the case involving McClure, which Assistant U.S. Attorney Mary Stuart Burrell is prosecuting.

The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.

 

Augus 27 , 2014

BIRMINGHAM -- A federal grand jury today indicted three Tennessee men on charges connected to the removal of Civil War-era archaeological artifacts from the Tennessee River at Bridgeport in Jackson County, Ala., announced U.S. Attorney Joyce White Vance and Tennessee Valley Authority Police Director David Jolley.

An indictment filed in U.S. District Court charges KENNETH STEPHEN FAGIN JR., 38, of South Pittsburg, Tenn., TERRY BRUCE TATE, 60, of Jasper, Tenn., and ANGELO DOMINIC PERUIT, 46, of Knoxville, Tenn., under the Archeological Resources Protection Act.

The indictment charges Fagin, former owner of Historical Resurrections in Jasper, Tenn., with one count of excavating and removing archeological resources from public lands, the Tennessee River at Bridgeport, in April 2010. It charges Fagin and Tate with one count of exchanging and transporting archeological resources taken from the river in March 2010. The indictment also charges Fagin and Peruit, owner of The Army of Tennessee Civil War Relics in Knoxville, with one count of offering to sell and exchange archeological resources removed from the river between April 1, 2010, and Aug. 31, 2011. The resources, in all counts, are said to have a commercial value and a cost of restoration and repair in excess of $500.

Each of the charges carries a maximum penalty of two years in prison and a $20,000 fine.

TVA Police Investigations Unit investigated the case, which Assistant U.S. Attorney David H. Estes is prosecuting.

The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.

BIRMINGHAM -- Federal prosecutors today charged a Cullman mother and son in connection with a scheme to defraud federal government health agencies and a non-profit east Alabama health center of more than $100,000 for personal expenditures including electronic fish finders, truck tires, cell phones and an adult website membership.

The U.S. Attorney's Office for the Northern District of Alabama charged SHEILA OSBORNE PARKER and JAMES ROBERT PARKER in separate informations filed in U.S. District Court. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr., IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot, and U.S. Department of Health and Human Services, Office of Inspector General, Atlanta Regional Office Special Agent in Charge Derrick Jackson announced the charges.

Sheila Parker, 59, faces six counts of wire fraud, two counts of bank fraud and two counts of failing to file federal income tax returns. James Parker, 33, faces five counts of wire fraud and two counts of failing to file income tax returns. Both defendants have entered plea agreements with the government.

Sheila Parker worked for Birmingham Health Care, a non-profit organization in Birmingham intended to provide free or low-cost health care services to the homeless and to people living below poverty level in the metro area. In 2008, BHC assumed responsibility for the fiscal affairs of Central Alabama Comprehensive Health Inc. in Tuskegee, and Sheila Parker began, on a contract basis, to perform bookkeeping and fiscal duties for that center. CACH was a non-profit organization intended to provide primary and preventative health care to people in east Alabama, regardless of their ability to pay.

Both community health centers began receiving grants from the Health Resources and Human Services Administration, an arm of the U.S. Department of Health and Human Services, more than 20 years ago, according to the charges and plea agreements filed today. The overwhelming majority of BHC and CACH funding comes through grants administered by HRSA and HHS, and the two centers have received millions of dollars from those grants, according to the court documents.

"Today, these defendants acknowledge that they took money from a federally funded community health center intended to serve the poor and uninsured so the defendants could enjoy a more lavish lifestyle and indulge an expensive hobby," Vance said. "That conduct is as unacceptable as it is criminal, and we are committed to addressing any criminal conduct that may have occurred as we move forward with the investigation," she said.

"It is outrageous that fraudsters, in order to fuel personal shopping sprees, would steal scarce taxpayer funds meant to provide critically needed health care services to poor and homeless individuals," Jackson said. "Our agency is dedicated to uprooting such fraud."

"Sheila Parker and James Parker completely disregarded the payment of their tax liability to the Internal Revenue Service," Hyman-Pillot said. "It is a federal crime for individuals to deliberately neglect their filing requirements to the United States government. These actions jeopardize the integrity of our tax system, which fosters voluntary compliance."

According to the charges and plea agreements in the case, the Parkers carried out their fraud as follows:

Sheila Parker enlisted her son's help with her duties for CACH and allowed him access to the center's bank accounts. She permitted, and sometimes instructed him to use CACH funds for personal purchases. The total loss amount attributed to the Parkers' fraud is $116,416 and the government seeks that amount in forfeiture from the two defendants.

The Parkers' fraudulent transactions on CACH accounts between March 2010 and May 2011 included a $2,799 charge at Best Buy for two Lowrance Fishfinder/Chartplotters, a $328 charge at Systems & Services Technologies to make a payment on a bass boat, $3,500 charged through PayPal to send to James Parker's then-girlfriend, a $668 charge at Tire Rack, and $14.95 spent at the adult website epoch.com to buy a one-month membership to "Jamie's World."

The bank fraud charges against Sheila Parker are the result of disputes she filed with Regions Bank on about 40 charges on CACH's bank account. Although those were fraudulent charges made by Sheila and James Parker, she disputed the charges in an effort to conceal the fraud. Regions Bank returned about $30,668 to the CACH account for the charges Sheila Parker disputed.

Sheila and James Parker both face failure to file federal income tax returns for the calendar years 2010 and 2011.

Sheila Parker acknowledges in her plea agreement that she failed to file a return on a gross income of $78,481 in 2010, and on $92,127 in 2011. She also acknowledges she failed to file returns every year from 2004 through 2012, and that for tax years 2008 through 2012, she owes the IRS $11,946.

James Parker acknowledges in his plea agreement that he failed to file returns for the tax years 2004 through 2011. In 2010, he had a gross income of about $90,215, of which $82,212 was illegal, according to his plea agreement. His gross income in 2011 was $24,729, all of which was illegal. According to his plea agreement, James Parker owes the IRS $17,658 for tax years 2004 through 2011.

The FBI, IRS Criminal Investigation Division, and the HHS OIG investigated the case, which Assistant U.S. Attorneys Tamarra Matthews-Johnson and Melissa Kay Atwood are prosecuting.

BIRMINGHAM -- A federal judge today sentenced a Birmingham man to 10 years in prison for possessing a pipe bomb crafted from a vehicle airbag canister, announced U.S. Attorney Joyce White Vance and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Glenn Anderson.

A jury in March convicted JAMES DAVID KIRCUS, 55, on one count of knowingly possessing an unregistered destructive device. U.S. District Judge David Proctor sentenced Kircus on that charge. Kircus has remained in custody since the conviction.

"Improvised explosive devices can maim and kill. They are illegal," Vance said. "Mr. Kircus was working at an auto salvage business in Birmingham when he took a vehicle airbag, broke it down and reconfigured it into a dangerous weapon containing a high-powered explosive. This was a serious crime met today with serious punishment," she said.

"ATF's Frontline model of reducing violent crime, along with the collaborative efforts of our local partners, led to the success of this investigation," Anderson said.

Airbag cylinders contain sodium azide, a chemical that when ignited in a crash, quickly creates a gas to inflate the bag. According to evidence at trial, Kircus took the sodium azide tablets out of the airbag cylinders and crushed them to enhance their explosive power, then placed the crushed material back into the cylinders.

Employees at the salvage company called police after discovering what they thought were bombs in Kircus' toolbox. One airbag cylinder had been fully transformed into a bomb, another was in process and other unmodified cylinders were found, according to testimony.

At the time of the incident in August 2013, Kircus was living at Keeton Corrections, a half-way house in Birmingham for federal prisoners. Kircus was nearing the end of a seven-year and three-month sentence for his guilty plea related to making pipe bombs and possession of firearms by a convicted felon, according to trial evidence.

ATF investigated the case, which Special Assistant U.S. Attorney E. Wilson Hunter prosecuted.

BIRMINGHAM -- More than 40 people interested in developing a comprehensive strategy to address opiate abuse and addiction and quell the rising number of heroin overdose deaths in north Alabama met today at Canterbury United Methodist Church to organize working groups and lay the groundwork for a community action plan, announced U.S. Attorney Joyce White Vance.
Today's community planning meeting was an outgrowth of the June 10 community awareness summit, "Pills to Needles -- The Pathway to Rising Heroin Deaths," held at the University of Alabama at Birmingham. The summit, sponsored by the U.S. Attorney's Office, the UAB School of Public Health, the Jefferson County Department of Health and the Addiction Prevention Coalition, drew more than 300 people and launched the effort to develop a strategic plan.

The summit, and the need for a planned community response, followed a sharp spike in heroin overdose deaths in north Alabama, and across the nation, within the past five years. Heroin-related deaths in Jefferson, Shelby and Tuscaloosa counties soared from 15 in 2008 to 83 in 2012. The number dipped to 72 confirmed deaths for the three counties in 2013, but in April in Jefferson County, the number of heroin overdose deaths was at 36, on pace to exceed the county's 58 heroin deaths in both 2012 and 2013. In the Northern District of Alabama, federal, state and local law enforcement have worked together since 2012 to prioritize prosecution of heroin suppliers and street dealers. Such prosecutions continue, but enforcement, alone, will not solve the problem.

The key accomplishment today was engaging influential community leaders, with specific expertise across various disciplines and areas of concern, to detail the next steps for working groups that will begin to draw the strategic plan.

"Collaboration across communities and professional disciplines is vital in creating a strategic plan that will organize resources and establish a network that can address the myriad ways opiate abuse affects our families, our lives and our society," Vance said. "Leaders from the medical, education, law enforcement and faith-based communities in North Alabama, as well as addiction, prevention and treatment professionals, and members of families who have lost a loved-one to overdose, came together today to begin the serious work of developing an action plan."

“This is a serious public health crisis in our community that demands action," said Jefferson County Health Officer Mark Wilson. "The dramatic increase in the number of overdose deaths is quite tragic, but this number only tells part of the story of the uncountable number of individuals and families being devastated by addiction to heroin and other opioids," he said. "We’ve talked about it, and we’ve begun to raise awareness. Now begins the hard work of actually doing something that can make a positive difference.”

Working groups were established in five strategic areas: Public Awareness, Medical Community Engagement, Effective Research and Policy, Law Enforcement Partnership, and Access to Resources. The next step is for group members to identify leaders, refine the group's priority items and begin to develop strategies to accomplish their goals. Public and private funding is being sought to support continuing the work toward a comprehensive action plan.

The work is proceeding under the direction of a steering committee identified before the Pills to Needles summit in June. Members of the steering committee are Wilson, UAB School of Public Health Dean Max Michael, Northern District of Alabama U.S. Attorney's Office Law Enforcement Coordination Manager Lyndon J. Laster, Addiction Prevention Coalition Executive Director J. Sandor Cheka, and Treatment Alternatives for Safer Communities Director Foster Cook.

BIRMINGHAM -- A federal appeals court ruled today that a district judge's sentence of probation was unreasonable for a computer software vendor who paid more than $600,000 in bribes over four years to the chancellor of Alabama's two-year college system, announced U.S. Attorney Joyce White Vance.

After the government challenged the sentence on appeal, the U.S. Court of Appeals for the Eleventh Circuit vacated the district court's 2011 sentence for JAMES WINSTON HAYES and returned the case to U.S. District Judge Virginia Emerson Hopkins for resentencing.

Hayes, 70, formerly owned ACCESS Group Software, a Walker County company that sold educational computer software to the Alabama Department of Postsecondary Education. ACCESS did business with more than 25 two-year colleges and technical schools in Alabama. Hayes pleaded guilty in 2008 to bribing Roy Johnson, then chancellor of the two-year college system, and to conspiring to commit money laundering.

From 2002 to 2006, Hayes paid Johnson more than $600,000 in bribes, and in return, Hayes' software company obtained lucrative government contracts that earned his company more than $14 million in revenue and about $5 million in profit.

"As corruption cases go, this was bribery writ large, and on this record the district court's significant variance down to probation cannot stand," the appeals court wrote.

"Bribery cannot properly be seen as a victimless crime, for in a sense it threatens the foundation of democratic government," the appeals court wrote. "Putting aside the financial havoc it can cause, bribery tears at the general belief of the citizenry that government officials will carry out their duties honestly, if not always competently."

Johnson pleaded guilty in the case to charges of bribery, conspiracy to commit bribery, conspiracy to commit money laundering, obstruction of justice and tampering with a witness. Johnson was sentenced to six years and six months in prison. Both Hayes and Johnson assisted the government in its investigation of corruption in the two-year college system after they were charged. Including Hayes and Johnson, the investigation resulted in 17 convictions.

Assistant U.S. Attorney George Martin prosecuted the case and Assistant U.S. Attorney Praveen Krishna handled the case on appeal.

BIRMINGHAM -- A federal appeals court ruled today that a district judge's sentence of probation was unreasonable for a computer software vendor who paid more than $600,000 in bribes over four years to the chancellor of Alabama's two-year college system, announced U.S. Attorney Joyce White Vance.

After the government challenged the sentence on appeal, the U.S. Court of Appeals for the Eleventh Circuit vacated the district court's 2011 sentence for JAMES WINSTON HAYES and returned the case to U.S. District Judge Virginia Emerson Hopkins for resentencing.

Hayes, 70, formerly owned ACCESS Group Software, a Walker County company that sold educational computer software to the Alabama Department of Postsecondary Education. ACCESS did business with more than 25 two-year colleges and technical schools in Alabama. Hayes pleaded guilty in 2008 to bribing Roy Johnson, then chancellor of the two-year college system, and to conspiring to commit money laundering.

From 2002 to 2006, Hayes paid Johnson more than $600,000 in bribes, and in return, Hayes' software company obtained lucrative government contracts that earned his company more than $14 million in revenue and about $5 million in profit.

"As corruption cases go, this was bribery writ large, and on this record the district court's significant variance down to probation cannot stand," the appeals court wrote.

"Bribery cannot properly be seen as a victimless crime, for in a sense it threatens the foundation of democratic government," the appeals court wrote. "Putting aside the financial havoc it can cause, bribery tears at the general belief of the citizenry that government officials will carry out their duties honestly, if not always competently."

Johnson pleaded guilty in the case to charges of bribery, conspiracy to commit bribery, conspiracy to commit money laundering, obstruction of justice and tampering with a witness. Johnson was sentenced to six years and six months in prison. Both Hayes and Johnson assisted the government in its investigation of corruption in the two-year college system after they were charged. Including Hayes and Johnson, the investigation resulted in 17 convictions.

Assistant U.S. Attorney George Martin prosecuted the case and Assistant U.S. Attorney Praveen Krishna handled the case on appeal.

BIRMINGHAM -- Federal agents today arrested seven people in Talladega County on drug and gun charges, announced U.S. Attorney Joyce White Vance and Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Jeffrey L. Fulton.

The seven arrested today are among nine defendants from the east-central Alabama county charged with firearms or drug distribution offenses in eight separate July indictments. The two men who were already in custody are CHANCY BERRY TEMPLE, 28, of Talladega, and CHRISTOPHER MURRAY, 30, of Childersburg. Both are charged as convicted felons in possession of a firearm.

The seven arrested today and their charges are: • MAREAO CITRON SEARS, 24, of Sylacauga, conspiracy to distribute narcotics.
• JERMAINE MORRIS, 41, of Sylacauga, conspiracy to distribute narcotics and convicted felon in possession of a firearm.
• TERRELL ALPHONSO MCELRATH, 29, of Sylacauga, felon in possession of a firearm.
• JULIAN ARTHUR HARRIS, 25, of Talladega, felon in possession of a firearm.
• JUSTIN KIRKLAND, 24, Sylacauga, possession with intent to distribute crack cocaine, and carrying a firearm during a drug-trafficking offense.
• TRAVIS LEVERT CHATMAN, 35, of Talladega, felon in possession of a firearm.
• MELTRONE SHUNTANG SEARS, 31, of Sylacauga, distribution of narcotics.
Morris and Mareao Sears are charged in the same indictment with conspiracy to distribute crack cocaine in Talladega County.
The maximum penalty for conspiracy to distribute narcotics is 20 years in prison and a $5 million fine. The maximum penalty for being a convicted felon in possession of a firearm is 10 years in prison and a $250,000 fine.
The maximum penalty for possession with intent to distribute crack cocaine is 20 years in prison and a $1 million fine. Carrying a firearm in relation to a drug-trafficking offense carries a sentence of at least five years in prison, consecutive to any other sentence imposed for the crime, and a possible $250,000 fine.
Illegal distribution of narcotics carries a maximum penalty of 20 years in prison and $1 million fine.
ATF, the Drug Enforcement Administration and the Talladega County Drug Task Force investigated the cases, which the U.S. Attorney's Office for the Northern District of Alabama is prosecuting.
The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.

BIRMINGHAM – On August 6, 2014, a federal judge sentenced a Fort Payne man to 30 years imprisonment to be followed by 20 years of supervised release for three counts of child pornography, announced U.S. Attorney Joyce White Vance and Special Agent in Charge Raymond Parmer, Jr. from Homeland Security Investigations.

U.S. District Judge R. David Proctor sentenced ROBERT WILLIAM FRAZIER, 34, to 30 years imprisonment for transporting, receiving, and possessing images of child pornography.

The defendant pleaded guilty to three counts carrying a statutory maximum of twenty years each. Pursuant to the factual basis of the plea agreement, forensic examination of the defendant's IPhone, computer and/or hard-drive indicated that there were images of child pornography produced, transported, received, and possessed. The images of child pornography produced, transported, received, and possessed by the defendant were of real children engaged in sexually explicit conduct, including but not limited to, actual or simulated sexual intercourse, masturbation, and the lascivious exhibition of the genitals or pubic area of at least two minor female children from DeKalb county. The defendant sent images of child pornography to and communicated with another individual, Michael Haynes, from Anniston, Alabama, who has also been prosecuted and sentenced to 10 years imprisonment.

According to U.S. Attorney Joyce White Vance, "As a direct result of the hard work of law enforcement and the National Center for Missing and Exploited Children, prosecutors have put two pedophiles in federal prison, where they will serve lengthy sentences. And most importantly, the child victims are now safe from these two predators."

HSI Special Agent in Charge Raymond Parmer, Jr. said, "The collaboration between Homeland Security Investigations, the U.S. Secret Service's Electronic Crimes Task Force, and several local law enforcement agencies, was essential to identifying and rescuing the child victims. I also appreciate the substantial assistance provided by the National Center for Missing and Exploited Children from pictures that had been shared among the defendants."

The DeKalb County Sheriff's Office, Alabama Department of Public Safety, Sylvania Police Department, U.S. Secret Service Electronic Crimes Task Force, and the Hoover Police Department, provided assistance to Homeland Security Investigations in the investigation of these cases. The National Center for Missing and Exploited Children (NCMEC) was instrumental in providing information from pictures that had been shared among the defendants. Assistant U.S. Attorneys Daniel Fortune and Henry Cornelius prosecuted the cases.

BIRMINGHAM -- A federal grand jury today indicted two Mexican nationals for illegally re-entering the United States after previously having been deported, announced U.S. Attorney Joyce White Vance and U.S. Immigration and Customs Enforcement's Enforcement and Removal Operations Field Office Director David Rivera.

Separate indictments filed in U.S. District Court charge JOSE ANIVAL-RIVERA, 29, and JOSE ADAN PAVON-RODRIGUEZ, 33, with being in the United States illegally, having previously been removed following a felony conviction. Anival-Rivera was living in Decatur, and Pavon-Rodriguez was living in Oxford.

Anival-Rivera, also known as Jose Anibal-Rivera, Paulino Balderas, and Wan Camacho, was deported in March 2011, and again in January 2013, February 2013, and July 2013, after a felony conviction, according to his indictment. Pavon-Rodriguez was deported in December 2011, and again in August 2013, following an aggravated felony conviction, according to his indictment. Neither indictment states the nature of the prior convictions.

The maximum prison sentence for illegal re-entry following a felony conviction is 10 years. The maximum for illegal re-entry following an aggravated felony conviction is 20 years.

ICE ERO investigated both cases. Assistant U.S. Attorney Erica Williamson Barnes is prosecuting Anival-Rivera. Assistant U.S. Attorney Daniel M. Murdock is prosecuting Pavon-Rodriguez.

The public is reminded that an indictment is only a charge. A defendant is presumed innocent unless and until proven guilty.

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TUSCALOOSA -- A federal judge on Tuesday sentenced a Birmingham man to 10 years in prison for possessing and intending to distribute about a pound of cocaine, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.

U.S. District Judge L. Scott Coogler varied upward from federal guidelines in sentencing BINIAM ASGHEDOM, 40, an Eritrean national, for the possession with intent to distribute cocaine. The judge found that Asghedom had played a significant role in a larger conspiracy to distribute cocaine and heroin in the Birmingham metro area.

Judge Coogler also ordered Asghedom to serve 30 years of supervised release after completing his prison term, but indicated that Asghedom would be deported to Eritrea.

A federal jury convicted Asghedom, following a two-day trial in March, for possessing and intending to distribute the pound of cocaine.

According to evidence at trial, Birmingham police stopped Asghedom for a traffic violation on Dec. 1, 2010, after federal agents had followed him from a known drug location. Asghedom was one of a number of targets of a larger DEA investigation. After obtaining Asghedom’s consent, officers searched the 2000 GMC Sierra pick-up truck he was driving and found the cocaine and $14,500. Forensic testing later revealed that the outside packaging of the cocaine had two latent fingerprints that matched Asghedom's.

The DEA investigated the case, which Assistant U.S. Attorney Gregory R. Dimler prosecuted.

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BIRMINGHAM -- A federal grand jury today indicted four employees of a north Alabama farmer's cooperative for making false statements to the U.S. Department of Agriculture, announced U.S. Attorney Joyce White Vance, U.S. Secret Service Special Agent in Charge Craig Caldwell and U.S. Department of Agriculture, Office of Inspector General-Investigations, Special Agent in Charge Karen Wilcox-Citizen.

In separate indictments filed in U.S. District Court, the grand jury charged AARON BLAKE WILLIAMS, 25, and TYLER THOMAS GLAZE, 26, both of Decatur, JAMES EDWARD TOON JR., 35, of Elkmont, and JOSHUA WAYNE HOLT, 32, of Hartselle, with falsifying certifications of harvest load weights from August 2009 to March 2013 at the Alabama Farmer's Cooperative in Decatur.

The maximum penalty for making false statements to the government is five years in prison and a $250,000 fine.

The Secret Service and USDA, OIG, investigated the case, which Assistant U.S. Attorney David H. Estes is prosecuting.

The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.

BIRMINGHAM -- A federal judge today sentenced a Tuscaloosa County man to three years in prison for his schemes to defraud financial institutions and the Small Business Administration of more than $3 million, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.

DANNY RAY BUTLER, 58, of Fosters, Ala., pleaded guilty in February to three counts each of wire fraud and bank fraud, and consented to forfeit $1.76 million to the government as proceeds of illegal activity. U.S. District Judge L. Scott Coogler sentenced Butler to the prison term, ordered him to forfeit the $1.76 million and to pay restitution of $1.76 million to the SBA and $50,000 to Next Gear Capital, a finance company that loaned money to Butler's used car dealership. The court will decide later the amount of restitution that Butler must pay to Alabama One Credit Union, which he defrauded.

Butler's crimes were related to three separate fraud schemes.

Butler owned and operated Butler Wholesale Inc., a used car lot in Tuscaloosa, and Fosters Groceries, LLC, a company formed to build and operate a grocery store in Fosters. According to his plea agreement and other court records, Butler defrauded the SBA of $1.76 million in connection with a loan to build Fosters Groceries. He also engaged in a check-kite scheme that caused Alabama One Credit Union to lose about $1.28 million, and he misrepresented Butler Wholesale's car inventory to Next Gear Capital, causing Next Gear to lose $50,000.

"The defendant perpetrated his two most lucrative schemes – the SBA fraud and the check-kite scheme – simultaneously, garnering the use of $3 million to satiate his need for money," the government said in its sentencing memorandum. Butler created counterfeit documents, altered existing documents, forged signatures, and repeatedly lied to his several victims, the government said.

The SBA is a federal agency that supports and protects the interests of small businesses. Through public and private partnerships, the agency helps Americans start, build, and grow small businesses. One of its supports is the SBA 504 Loan Program.

In early 2010, Butler sought to borrow about $5 million from West Alabama Bank and Trust to build a grocery store in Fosters. When the bank refused to finance the entire project, Butler applied for and obtained an SBA 504 loan. West Alabama Bank and Trust ultimately agreed to loan Butler half of the project's total cost, and SBA agreed to finance 35 percent. Butler was required to provide the remaining 15 percent as his cash injection into the project.

Almost immediately, after construction was complete, Butler defaulted on the loans by failing to make payments to SBA and West Alabama Bank and Trust as promised, according to court records.

Butler's check-kite scheme in 2011 and 2012 involved carefully timed deposits and checks between his Fosters Groceries account at West Alabama Bank and Trust and his Butler Wholesale account at Alabama One Credit Union, in order to artificially inflate the account balances. He deposited hundreds of checks, totaling about $45 million, from one account to the other at the two financial institutions, according court records. When the bank and trust discovered the check-kite scheme in February 2012 and refused to honor a number of Fosters Groceries' checks deposited into Butler's Alabama One Credit Union account, the credit union lost about $1.28 million.

The third fraud scheme involved Butler's misrepresentations to Next Gear Capital. Butler received loans from Next Gear to buy inventory for his car lot. A specific car secured each loan, and Next Gear inspected the dealership's inventory monthly. According to court records, Butler employed various schemes to defraud Next Gear and continue receiving loans. His misrepresentations included listing cars as part of the dealership's inventory, even though they already had been sold, and lying to Next Gear representatives when they inspected his inventory.

The FBI and SBA-OIG investigated the case. Assistant U.S. Attorney George A. Martin Jr. prosecuted it.

 

 

BIRMINGHAM – A federal judge today sentenced a government contractor in Huntsville to nine years in prison for a scheme to defraud the government of nearly $14 million in contract payments over six years.

U.S. District Judge R. David Proctor sentenced JOSEPH SHANE TERRY, 41, of Meridianville, Ala., on charges of wire fraud, false statements to the Small Business Administration, false statements on loan applications, and money laundering. The sentencing caps a 4 ½-year government investigation. Terry, who was sole owner of Government Technical Services, pleaded guilty to the charges in August 2013. The judge today ordered Terry to forfeit $1,019,761 to the government as proceeds of illegal activity. Terry is in custody.

U.S. Attorney Joyce White Vance; Internal Revenue Service, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot; Department of the Army, Criminal Investigation Command Special Agent in Charge James Wallis; Department of Defense, Defense Criminal Investigative Service Special Agent in Charge John F. Khin; and Small Business Administration Inspector General Peggy E. Gustafson announced Terry's sentence.

"Government contractors should not view taxpayer funds as their personal pocketbooks and when they do, as Joseph Terry did in this case, we are going to hold them accountable and put them in jail," Vance said. "We encourage our citizens, particularly those in the Huntsville area with so many government contractors, to bring to light other instances of fraud so that wrongdoers can be brought to justice."

"In concert with our partner agencies, DCIS aggressively investigates fraud and corruption that undermines the integrity of Department of Defense programs and contracts," Khin said. "We must do all we can to preserve precious American taxpayer dollars while ensuring our national security."

"Our agents worked tirelessly on this case and are very pleased to see that justice has been served," said Frank Robey, director of the U.S. Army Criminal Investigation Command's, Major Procurement Fraud Unit. "We will not tolerate fraud in the Department of the Army and every one of these criminal cases, either directly or indirectly, negatively impacts our brave men and women serving this nation during a time of war."

"Joseph Shane Terry used his position as a government contractor to defraud the United States government. IRS Criminal Investigation, along with our law enforcement partners, will continue to pursue any and all individuals who make a choice to violate the integrity of government contracts," Hyman-Pillot said. "We work aggressively to expose complex financial transactions and money-laundering schemes in an effort to protect our nation's financial and justice system," she said.

According to Terry's plea agreement, he carried out his scheme to defraud the government as follows:

Terry applied for and obtained a small disadvantaged or minority-owned business status from the SBA in 2003 by submitting fraudulent tax returns. In order to maintain that status, Terry also submitted false tax returns to the SBA for each year from 2004 through 2008. Having the special status with the SBA enabled his company, GTS, to bid on and win government contracts specifically set aside for small disadvantaged businesses.

Terry submitted personal and corporate returns to the SBA for the tax years 2002 through 2007 to show he was current on filing his taxes, but he had never filed the returns with the IRS.

Terry's wire fraud scheme culminated in GTS obtaining a $961,551 contract in September 2006 to install metal roofing on three buildings at Fort Polk, La. In order to obtain authorization to start work on this contract, GTS submitted forged performance and payment bonds and a power of attorney from a Mississippi bond company and its parent surety company in Louisiana. GTS won the contract, but was terminated in April 2008 for failing to perform the work and for providing fraudulent bonds. In all, Terry employed the fraudulent scheme to obtain more than $14 million in government contracts.

Terry pleaded guilty to five wire fraud counts that involved separate electronic fund transfers totaling more than $500,000. The Defense Finance and Accounting Service in Indiana, an agency of the Department of Defense, transferred the money to a bank account of Terry's in Huntsville in 2007. The five wire transfers were all payments to GTS on the Fort Polk roofing contract.

Terry also pleaded guilty to three counts of mortgage fraud in the Madison County area. He induced banks to make mortgage loans totaling $480,000 based on his false tax returns and other false financial documents.

The money laundering conviction arose from one of the false statements Terry made on a loan application. He admitted that in 2008 he induced his then-girlfriend to apply for a loan and supplied documents falsely claiming that GTS employed her. Terry admitted to money laundering for using the fraudulently obtained loan proceeds for his own purpose.

The normal statute of limitations on fraud against the United States is five years. However, certain charges in this indictment were prosecuted under the Wartime Suspension of Limitations Act, which operates to suspend the statute of limitations for crimes involving fraud against the Government during a time when the United States is at war or there is an Authorization for Use of Military Force in effect, such as Afghanistan and Iraq. This case was the first time that the suspension statute was used in this district.

IRS, Criminal Investigations; U.S. Army Criminal Investigation Command; SBA, Office of Inspector General; Department of Defense, Defense Criminal Investigative Service, and Defense Contract Audit Agency Investigative Support Division, Eastern Region, investigated the case. Assistant U.S. Attorneys David Estes and Jennifer Murnahan prosecuted the case.

BIRMINGHAM -- A federal judge today sentenced a Jasper man to more than 11 years in prison for robbing a Walker County bank, calling in bomb threats on a hospital and a highway bridge before the robbery, and possessing guns as a convicted felon, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.

U.S. District Judge Karon O. Bowdre sentenced BRANDON JOSEPH PEAKE, 33, to 11 years and three months in prison for the July 2013 armed robbery of Traders and Farmers Bank on Curry Highway in Jasper, and to brandishing a gun during the robbery, a Heckler & Koch .40-caliber pistol that he pointed at one of the tellers. The judge also sentenced Peake on three counts of being a convicted felon in possession of a firearm, and to charges of using a telephone to make false bomb threats against Walker Baptist Medical Center and a bridge spanning Alabama Highway 69. Peake pleaded guilty to all charges in December. Peake has remained in custody since his arrest in Tennessee about a week after the bank robbery.

Peake called in the bomb threats on July 5, 2013, before the afternoon bank robbery, according to his plea agreement with the government. Because of the threats, the hospital was evacuated, a police bomb squad dispatched, and the bridge and a stretch of Highway 69 closed.

A Walker County Sheriff's deputy found the H&K .40-caliber pistol used in the robbery of Traders and Farmers Bank in woods near the bank. The gun was traced to Peake, who bought it in 2007. Peake, who was convicted in Jefferson County Circuit Court in August 2012 for felony possession of a controlled substance, was prohibited from possessing a firearm.

He admitted in his plea agreement that he had traveled to Tupelo, Miss., two days after the bank robbery to meet an acquaintance who sold him a Glock 9mm pistol and a Bushmaster .223-caliber semi-automatic rifle. A fourth gun Peake possessed illegally was a Beretta 9mm pistol, which was found July 11 in the Chattanooga hotel room where police arrested him for the Walker County bank robbery.

The FBI, Walker County Sheriff's Office and the Walker County District Attorney's Office investigated the case. Special Assistant U.S. Attorney E. Wilson Hunter prosecuted the case.

OXFORD, Ala. -- About 400 law enforcement officers from northeast Alabama and northwest Georgia will attend safety training on Thursday in Oxford to better prepare them for potential encounters with domestic extremists, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr., and Oxford Police Chief Bill Partridge.

The U.S. Attorney's Office for the Northern District of Alabama, the FBI's Joint Terrorism Task Force and the Oxford Police Department will present the training at the Oxford Performing Arts Center. The training is designed to give local, state and federal law enforcement officers and government security personnel survival skills and best practice tips in case they do encounter domestic extremists, such as members of the Sovereign Citizen Movement or militia groups. The training also will address deadly force survival and weapons of mass destruction.

"Law enforcement officers must, first, protect themselves in order to protect the communities they serve," Vance said. "The goal of this training is for each participant to gain a greater appreciation of the potential threats associated with domestic extremism and how best to protect himself or herself if ever confronted with such a situation," she said.

"As sovereign citizens’ numbers grow, so do the chances of contact with law enforcement and, thus, the risks that incidents will end in violence," Schwein said. "Law enforcement must understand the sovereign-citizen movement, be able to identify indicators, and know how to protect themselves from the group’s threatening tactics and techniques,” he said.

“Under pressure, you don’t rise to the occasion; you sink to the level of your training. You react the way you’re trained," Partridge said. "Train hard and train often, your life depends on it.”
The afternoon session of the daylong training will be a study of the Aug. 5, 2012, mass shooting at a Sikh temple in Oak Creek, Wis., in which a white supremacist shot and killed six temple worshippers. The gunman, a U.S. Army veteran, also wounded three other worshippers and the first officer on the scene, who was struck with 12 bullets. The shooter killed himself with a shot to the head after another police officer shot him in the stomach.
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BIRMINGHAM – A federal judge today sentenced the leader of one of Birmingham’s largest heroin and cocaine trafficking rings to nearly 22 years in federal prison, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein, Jr., IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot, and Jefferson County Sheriff Mike Hale.

U.S.  District Judge Sharon L. Blackburn sentenced BILLY WILLIAMS, JR., 41, to 262 months in prison for his role in leading one of Birmingham’s largest heroin and cocaine trafficking rings.  Williams pleaded guilty in December 2013 to participating in the drug-trafficking conspiracy and to various other drug charges, including using a telephone to traffic drugs and money laundering.

Williams and nine others were originally charged with conspiracy to possess with intent to distribute and distributing heroin, cocaine, and other drugs in a 41-count May 2013 federal grand jury indictment.  A superseding indictment in October 2013 removed one defendant and added two.  In addition to being charged in the conspiracy, various defendants were also charged with distributing drugs and laundering money.

“The drug trafficking organization Billy Williams, Jr., led was a significant contributor to our heroin epidemic,” Vance said. “This conviction of these eleven heroin traffickers is a great example of how cooperation between federal and local law enforcement can lead to dismantling significant drug-trafficking organizations that are killing our children.”

“Heroin is a highly dangerous and addictive drug being sold on our streets,” Vance said. “Law enforcement efforts must and will continue to focus heavily on suppressing the supply of this extremely dangerous drug and supporting the development of a community wide plan that tackles prevention and addiction treatment along with law enforcement.”

“This case is a model of law enforcement coming together to identify and eliminate the criminal element. I would  like to personally thank the Jefferson County Sheriff’s Office and other members of the FBI’s North Alabama Safe Streets Task Force, as well as IRS-Criminal Investigation Division, and ATF for their hard work in bringing these drug traffickers to justice and making our community a safer place,” said Schwein.

“The role of IRS Criminal Investigation in narcotics investigations is to follow the money and financially disrupt major drug trafficking organizations. This has been illustrated in the financial investigation and subsequent prosecution of Billy Williams, Jr.,” stated IRS-CI Special Agent in Charge Veronica Hyman-Pillot.  “We will continue to work alongside our law enforcement partners to aggressively investigate individuals that engage in organized drug activity and money laundering offenses.”

 The investigation focused on Williams, a large-scale heroin and cocaine distributor in west-end Birmingham, and his network of operators.  For over a year, using a variety of sophisticated law enforcement techniques, the FBI gathered intelligence exposing Williams’ extensive drug trafficking operation.  The investigation culminated in the January 25, 2013, arrest of SAMMUEL DEWAYNE GULLEY, a key member of Williams’ organization, who was arrested in possession of two kilograms of nearly pure heroin following a high-speed chase with Jefferson County Sheriff’s deputies.  Later that night, agents seized over one and a half kilograms of cocaine from a home associated with Williams and Gulley.  During his arrest in late May of 2013, Williams threw over $60,000 in cash out of the window of his 12th floor condo at City Federal.  From the condo, agents recovered over $166,000 in cash and over $177,000 in jewelry and other valuables.

Others sentenced today were ABE JOHNSON, 51, who received a 54-month sentence, MARION REYNOLDS, Jr., 53, who was sentenced to 48 months, and WALTER JOHNSON, 48, who was sentenced to 42 months in federal prison.  Three weeks ago, Judge Blackburn sentenced DEANDRE MURRELL, 28, to a 20- year prison term and Sammuel Gulley, 29, to a 10- year term of incarceration.  Also sentenced at that time were GRADY JENKINS, 47, who received a 37-month sentence and VERNON MCADORY, 39, who was imprisoned for a term of six months custody and six months home confinement.  PRENTICE TANNIEHILL, was sentenced to 4 months in prison for his role in assisting Williams in laundering money and for causing false IRS forms to be filed.

The prosecution led to the forfeiture of large amounts of cash, three vehicles valued at over $200,000, and eight money judgments of $5 million were levied against the defendants.  The FBI, IRS Criminal Investigations, the Birmingham Police Department, and the Jefferson County Sheriff’s Office investigated the case.  Assistant U.S. Attorney Greg Dimler prosecuted the case.

BIRMINGHAM -- A former sales manager at Serra Nissan in Birmingham pleaded guilty today in federal court to charges related to a scheme at the car dealership to falsify auto loan documents, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr., and IRS-CI Special Agent in Charge Veronica Hyman-Pillot.

ABDUL ISLAM MUGHAL, 48, of Trussville, pleaded guilty before U.S. District Judge Virginia Emerson Hopkins to one count of conspiring with others, including Serra Nissan salesmen, general managers, sales managers and finance managers, to falsify loan documents in order to defraud customers, Nissan North America and financial institutions and sell more cars. Mughal also pleaded guilty to one count of bank fraud for submitting falsified loan documents to financial institutions, including Capital One Auto Finance, between January 2012 and October 2013.

Mughal is scheduled for sentencing Nov. 5.

According to Mughal's plea agreement with the government, while he was the dealership's general sales manager, "there was a pervasive scheme throughout Serra Nissan ... that if a customer did not qualify for a car loan for some reason, the salesman, finance managers, sales managers, or GSM were to falsify information or documents that would ensure the customer was funded."

The plea agreement lists ways that Mughal and others falsified loan documents including, but not limited to: • Inflating the income information of prospective car buyers, a process participants sometimes referred to as “fluffing.”
• Creating or altering documents to submit to financial institutions that required proof of the prospective buyer's income or residency.
• Listing accessories not actually included on a vehicle so a financial institution would increase its loan amount, a process participants sometimes called “power booking.” Mughal and others had a financial incentive to power book a deal, because if the profit on a transaction were high enough, the dealership would pay the employees on the deal something above their normal commission.
• Presenting straw buyers, who could qualify for a loan, to financial institutions when the actual buyer could not qualify because of poor credit or insufficient income.

In Mughal's plea agreement, he acknowledges one incident in which he told a salesman that a specific sale “could not be funded until they created a ‘legal lie’ for the bank” that showed the buyer, identified as J.T., made $5,000 per month.

J.T. bought a vehicle from Serra Nissan on Oct. 16, 2012. According to the plea agreement, J.T. submitted a bank statement to Serra Nissan showing an ending account balance of $11.03, but the loan application the dealership submitted to Capital One Auto Finance included a fraudulent bank statement showing J.T. had monthly deposits of $6,179.

In a second vehicle purchase on Oct. 16, 2012, a customer identified as W.K. submitted only a Social Security letter as proof of income. Serra Nissan, however, submitted a loan application to Capital One on W.K.'s behalf that also included a fraudulent bank statement, a claim of $2,973 in monthly Veterans Administration benefits -- although W.K. is not a veteran -- and false information that W.K. was retired from the State of Alabama and made $4,500 a month.

The maximum penalty for the conspiracy count is five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years in prison and a $1 million fine.

The FBI and IRS investigated the case, which Assistant U.S. Attorney Amanda Schlager Wick is prosecuting.

WASHINGTON, D.C. -- Northern District of Alabama U.S. Attorney Joyce White Vance participated in today's White House event focusing on the important connection between expanding employment opportunities for people leaving prison and their ability to successfully re-enter society.

Vance was one of three of the nation's 93 U.S. attorneys who represented the Department of Justice at the White House's daylong program on ex-offender re-entry. The day concluded with U.S. Attorney General Eric Holder joining White House officials to honor local "Champions of Change" who are doing extraordinary work to facilitate job opportunities for individuals coming out of prison. According to the White House, the Champions have distinguished themselves through their extraordinary dedication and hard work to help those with criminal records re-enter society with dignity and viable employment opportunities.

"Our lives will be better if the lives of the 12,000 people who return to the community each year from Alabama prisons and jails are better," Vance said. "If we put them in a position to succeed, our communities can be safer and we can put more of our resources into education and our communities, instead of into prisons."

Vance currently is a member of the attorney general's Federal Interagency Re-entry Council. Twenty federal agencies work on the council to make communities safer by reducing criminal recidivism. Among U.S. Attorneys, Vance has been a leader in advocating for re-entry programs and criminal justice reform. Vance organized the North Alabama Re-entry Council, through which her office coordinates with federal, state, and community agencies to improve re-entry outcomes within Alabama. The Northern District of Alabama's ongoing efforts center on collaborating with state and local partners to remove barriers to successful re-entry. Some of the worst barriers are limited job opportunities, lack of a driver's license, and restricted access to housing. Within the past three years, Alabama has received federal grants to improve community supervision, job skills, and access to medication for ex-offenders.

Before this afternoon's Champions of Change recognition, the White House co-hosted a seminar with the Council of State Governments Justice Center titled, Pathways to Prosperity: How Public and Private Sectors Can Put People with Criminal Records to Work. The first session brought together business leaders to explore how governmental actions can affect private sector efforts to integrate people with criminal records into the workforce. The second session included corrections and workforce development professionals from across the country to discuss the latest strategies for improving employment outcomes for adults with criminal records, and ways to engage business leaders in those efforts.

Currently, the Council of State Governments is coordinating with Alabama state officials to develop solutions to reduce crime rates and corrections costs through a policy of justice reinvestment. CSG reports that similar justice reinvestment initiatives implemented in 20 other states have resulted in reduced crime rates, prison closures, and an approximate $5 billion in projected savings to state governments.

BIRMINGHAM -- A South Carolina National Guard official pleaded guilty today in federal court to wire fraud and accepting bribes to steer freight contracts to an Alabama broker, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and Frank Robey, director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit.

TIMOTHY WOOTEN, 52, a traffic management specialist for the National Guard Bureau, U.S. Property and Fiscal Office, in South Carolina, pleaded guilty before U.S. District Judge Madeline H. Haikala to three wire fraud counts and one bribery count involving freight transportation contracts totaling about $321,949. His sentencing is scheduled Oct. 15.

According to Wooten's plea agreement with the government, he overrode the electronic system that generated a list of "Best Value Carriers" for freight shipments so that he could manually select a company for a shipment. Between September 2011 and January 2012, Wooten manually awarded 55 contracts to two Tuscaloosa-area companies, identified as C.E. and U.S.T. The freight broker who worked as an agent for both companies paid Wooten about 25 percent of his commissions on the freight contracts in return for Wooten awarding them to his companies. The agent received about $115,882 in commission on the 55 contracts and paid about $29,742 in bribes to Wooten, according to the plea agreement.

The agent is identified in government documents by the initials, D.B. He attempted to conceal the bribes to Wooten by making the payments to Wooten's wife, who D.B. purportedly hired as a broker for one of his companies. Aside from making a few phone calls, Wooten's wife did no work for D.B., the plea agreement says. The payments to her "were in return for Wooten providing freight contracts to D.B.'s companies," it says.

Wooten directed government payment to D.B.'s two companies on completed transportation contracts by initiating wire transfers from U.S. Bank in Minneapolis, Minn., to a bank in Tuscaloosa, according to the plea agreement. Those payments constitute the wire fraud counts against Wooten.

Wire fraud carries a maximum penalty of 20 years in prison and $250,000 fine. The bribery count carries has a maximum penalty of 15 years in prison and a fine of $250,000 or three times the value of the bribe.

The FBI and Army CID, MPFU, investigated the case, which Assistant U.S. Attorney Tamarra Matthews Johnson is prosecuting.

BIRMINGHAM -- A federal judge late Thursday sentenced a former Birmingham attorney to five years and 11 months in prison for a securities fraud scheme through which he took more than $2.8 million from 12 investors and spent it on a lavish home, private jets, championship football trips and island vacations, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and Alabama Securities Commission Director Joseph Borg.

U.S. District Judge Virginia Emerson Hopkins sentenced CHRISTOPHER SHAWN LINTON, 35, of Alabaster, on one count each of wire fraud, mail fraud, securities fraud and money laundering as part of his investment fraud scheme. She also sentenced him on one bank fraud count for submitting a fraudulent commercial loan application to Iberia Bank for a $908,650 loan. Linton used fraudulently obtained investor funds to pay the down payment on the commercial loan, but then defaulted on the loan by writing a $78,960 bad check at closing for his remaining equity on the loan. Linton pleaded guilty to the charges in February.

As part of his plea agreement, Linton is required to pay $2.5 million in restitution to the investors he defrauded, and to pay Iberia Bank $19,850 in restitution. The government's sentencing memorandum notes, however, that the Alabaster house Linton bought with $560,000 in investor funds, and then lavishly improved, cannot be used as means to compensate Linton's victims because there is not enough equity to satisfy a court judgment because Linton used the house as collateral on business and personal loans, which take priority over any judgment.

Linton must report to prison Sept. 22.

"The victims in this case trusted that this defendant, an attorney, would protect their investments. Instead, he robbed them of their savings so he could live a fantasy life of luxury," Vance said. "I appreciate the hard work of the FBI and the Alabama Securities Commission in helping us bring Mr. Linton to justice."

"Mr. Linton risked his clients' retirement funds, money for their children's education, and for their livelihood," Schwein said. "His actions are a dishonor to those who practice law with the utmost commitment and integrity, and the sentence handed down today recognizes his deplorable conduct."

"This Commission feels strongly that the sentence imposed by the federal court is proper and just," said Borg, the ASC director. "We expect this sentence to send a powerful message that professional misconduct that causes damage to our citizens' financial security, and to public confidence in the integrity of the practice of law, will be dealt with swiftly and appropriately. We are very proud to successfully combine our efforts with the United States Attorney for the Northern District of Alabama, Joyce Vance, and the Federal Bureau of Investigation to ensure that justice is served on behalf of the victims."

Unlike Linton, the people who invested with him "worked hard and saved for years hoping to do a small remodeling project on their home," or to take grandchildren on vacations or leave money behind for their family, the government said in its sentencing memorandum. Some of the investors now need the money for assisted living and medical conditions, the government said.

"Linton's frivolous spending and reckless disregard for the investors' funds will have a lasting financial and emotional impact on the investors and their families for decades," the sentencing memorandum said.

According to the memorandum and Linton's plea agreement, he conducted the securities fraud scheme as follows:

In 2007, Linton became an officer, partner and part owner of a business known as Integrity Capital Inc., by purchasing stock in the company. Integrity Capital Inc. was located in the greater Birmingham area and its business was to make advance payments to lawyers who had submitted payment vouchers for work performed for the State of Alabama. Integrity Capital would then receive the voucher payments from the state and keep a percentage as a fee.

In 2009, Linton formed Integrity Capital LLC. Beginning about August 2009, Linton recruited advisors to solicit investments in Integrity Capital LLC in order to purchase the assets and capital stock of Integrity Capital Inc. Between September 2009 and December 2011, 12 individuals invested more than $2.8 million in Integrity Capital LLC. The investors mailed, wired or delivered money to Linton, who deposited the money into one of several bank accounts held by the law firm where he was a partner.

BIRMINGHAM -- A federal grand jury today indicted a former U.S. Postal Service clerk in Tuscaloosa on charges including stealing prescription painkillers from the mail, announced U.S. Attorney Joyce White Vance, Postal Service Office of Inspector General Special Agent in Charge Max Eamiguel, of the Southern Area Field Office, and Postal Inspection Service Team Leader Frank Dyer.

An indictment filed in U.S. District Court charges that NICHOLAS STEVEN DAVIS, 42, of Tuscaloosa, stole a medical parcel containing about 180 tablets of hydrocodone from the mail on July 6, 2012, while he worked as a distribution clerk at the Skyland Post Office. The parcel was addressed to someone on Lake Lurleen in Coker, Ala. The indictment also charges Davis with delaying or detaining packages intended for delivery by mail on July 6, 2012.

The two other counts of the indictment charge that, after Davis was fired from the Postal Service, he broke into the Skyland Post Office on June 7, 2014, and June 15, 2014, intending to commit theft.

The maximum penalty for each of the charges is five years in prison and a $250,000 fine.

The Postal Service OIG and the Postal Inspection Service investigated the case, which Assistant U.S. Attorney Frank Salter is prosecuting.

The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.

BIRMINGHAM -- A federal grand jury today indicted a former U.S. Postal Service clerk in Tuscaloosa on charges including stealing prescription painkillers from the mail, announced U.S. Attorney Joyce White Vance, Postal Service Office of Inspector General Special Agent in Charge Max Eamiguel, of the Southern Area Field Office, and Postal Inspection Service Team Leader Frank Dyer.

An indictment filed in U.S. District Court charges that NICHOLAS STEVEN DAVIS, 42, of Tuscaloosa, stole a medical parcel containing about 180 tablets of hydrocodone from the mail on July 6, 2012, while he worked as a distribution clerk at the Skyland Post Office. The parcel was addressed to someone on Lake Lurleen in Coker, Ala. The indictment also charges Davis with delaying or detaining packages intended for delivery by mail on July 6, 2012.

The two other counts of the indictment charge that, after Davis was fired from the Postal Service, he broke into the Skyland Post Office on June 7, 2014, and June 15, 2014, intending to commit theft.

The maximum penalty for each of the charges is five years in prison and a $250,000 fine.

The Postal Service OIG and the Postal Inspection Service investigated the case, which Assistant U.S. Attorney Frank Salter is prosecuting.

The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.

BIRMINGHAM -- A Florence couple pleaded guilty today in federal court to multiple charges that they exploited a minor child in their custody to produce child pornography, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.

PATRICIA ALLANA AYERS, 34, and her husband, MATTHEW DAVID AYERS, 42, entered their guilty pleas before U.S. District Judge L. Scott Coogler on charges related to 53 pornographic images of the child produced between the summer of 2010 and January 2013.

Patricia Ayers pleaded guilty to 53 counts of producing child pornography, and Matthew Ayers pleaded guilty to 25 counts of production. Their sentencing dates have not been set.

The Ayers could face a maximum penalty of 30 years in prison and a $250,000 fine, per count, for producing child pornography.

The couple has remained in jail in Lauderdale County since early last year on state child pornography, rape and sexual abuse charges.

Anyone with information about the potential sexual exploitation of children should report it to law enforcement immediately. The National Center for Missing and Exploited Children operates the Cyber Tip Line in partnership with the FBI and other federal authorities. If you have information, call the tip line at 1-800-THE-LOST.

The FBI investigated this case, which Assistant U.S. Attorney Mary Stuart Burrell is prosecuting.

HUNTSVILLE -- U.S. District Judge Virginia Emerson Hopkins today sentenced the Ball Cap Bandit to seven years and three months in prison for his string of 11 bank robberies in 2012 and 2013, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.

CEDRICK LAMOND HICKS, 33, of Huntsville, was dubbed the Ball Cap Bandit because he often wore such a cap during his crime spree. He pleaded guilty in December to the 11 bank robberies, 10 of which were in Alabama. One of the robberies was in Tennessee. Along with the prison sentence, the judge ordered Hicks to pay a total of $63,048 in restitution to the banks.

"Bank robbery is an extremely serious offense, not only because of the danger to human life that is involved but also because of the debilitating fear it creates for the victims," the government argued in a court filing opposing a defense motion for a downward variance from the federal sentencing guidelines range of 108 to 135 months in prison. "It is immaterial to many victims of bank robberies whether the perpetrator had a gun, brandished something that appeared to be a gun or simply stated he had a gun," the government said.

The court filing quotes several victims of Hicks' robberies including one who said it is still hard for her to do her job because she remains "paranoid when people walk into the bank that I don't recognize." Another victim said the effects of the robbery do not end on the day of the robbery. "Having a gun pulled on you is terrifying," she said. She has been diagnosed with Post Traumatic Stress Disorder and Acute Stress Disorder because of the crime, according to the government document.

The dates, locations and amount of money stolen in the robberies Hicks pleaded guilty to are as follows:

• Feb. 22, 2012, Regions Bank, Madison Street, Huntsville, $2,870.
• March 23, 2012, First Jackson Bank, Sutton Road, Huntsville, $1,894.
• April 30, 2012, Renasant Bank, U.S. 72 West, Madison, $3,500.
• Aug. 2, 2012, Peoples Bank, U.S. 431 South, Guntersville, $890.
• Aug. 8, 2012, Traditions Bank, Alabama 67 South, Decatur, $7,243.
• Sept. 19, 2012, First National Bank of Pulaski, South First Street, Pulaski, Tenn., $23,067.
• Nov. 27, 2012, Regions Banks, Lee Street, Rogersville, $8,009.
• Jan. 7, 2013, Peoples Trust Bank, Military Street South, Hamilton, $9,000.
• March 6, 2013, ServisFirst Bank, Meridian Street, Huntsville, $6,575.
• Sept. 18, 2012, Cadence Bank, U.S. 431, Albertville, no money taken.
• Nov. 26, 2012, Traditions Bank, Second Avenue NW, Cullman, no money taken.

        The FBI investigated the case. Assistant U.S. Attorney Mary Stuart Burrell of the Northern District of Alabama prosecuted the case.

BIRMINGHAM -- Five of seven people indicted late last month in overlapping identity theft and illegal gun-purchasing conspiracies were arraigned today in federal court. The two other defendants, including Quantrey Kantrell Bryant, who is charged with both conspiracies, were arraigned on their charges earlier. All seven were arrested June 10.

U.S. Attorney Joyce White Vance, U.S. Secret Service Special Agent in Charge Craig Caldwell, Bureau of Alcohol, Tobacco, Firearms and Explosives Assistant Special Agent in Charge Michael Durham, and U.S. Postal Inspector Frank Dyer announced the court appearances.

Chief U.S. Magistrate Judge John E. Ott today arraigned CHRISTINA LATASHA PEAVY, 34, of Bessemer, and MARQUETTE JERRELL HARRIS, 29, of Birmingham, on a charge of conspiracy to commit mail and wire fraud. Harris also was arraigned on several counts of aggravated identity theft.

DAVID MICHAEL CHAVIS, 30, CURTIS GLENN ROBINSON, 27, and NORMAN STANTON, 33, all of Bessemer, were each arraigned on a charge of conspiracy to illegally purchase guns.

U.S. Magistrate Judge T. Michael Putnam on June 13 granted bond to LANCE DARRELL ALEXANDER, 32, of Midfield, and on Monday ordered Bryant, 27, of Birmingham, detained pending trial.

Bryant is charged with conspiracy to commit mail and wire fraud in a scheme to defraud multiple credit card holders and issuers, aggravated identity theft, conspiracy to illegally obtain firearms and being a convicted felon in possession of a firearm.

Alexander is charged with the conspiracy to illegally obtain firearms, along with Bryant, Chavis, Robinson and Stanton.

According to the indictment, the mail and wire fraud scheme was carried out as follows: Bryant had a friend who worked as a customer-service representative for a California company. The friend supplied Bryant with information about the company's customers, including credit and debit card information. Bryant used the information in a variety of fraudulent ways, including using fraudulent credit cards to buy guns and cars. The indictment charges that Harris and Peavy helped Bryant conduct the credit fraud.

The indictment further charges that, because Bryant was a convicted felon prohibited from possessing guns, he had Chavis, Robinson and Stanton, who were not convicted felons, complete required background-check paperwork to convince gun sellers they were buying the weapons. Alexander helped Bryant resell the guns, according to the indictment.

Conspiracy to commit wire and mail fraud affecting federally insured financial institutions carries a maximum penalty of 30 years in prison and a $1 million fine. Aggravated identity theft carries a penalty of two years in prison, which must be served consecutively to any other sentence imposed for the crime. Conspiracy to obtain firearms illegally carries a maximum sentence of five years in prison and a $250,000 fine, and being a convicted felon in possession of a firearm carries a maximum penalty of 10 years in prison and a $250,000 fine.

The Secret Service, Postal Inspection Service and ATF investigated the case, with assistance from the Bessemer Police Department. Assistant U.S. Attorney Melissa Atwood is prosecuting the case.

An indictment contains charges. Defendants are considered innocent unless and until proven guilty.

Quantrey Bryant, et al Indictment

Birmingham: A day-long summit on the many issues surrounding the abuse of prescription painkillers, the resurgent use of heroin, and the sharp increase in heroin overdose deaths in our community was held June 10, 2014, in Birmingham. Video excerpts from that conference are provided here.

For more information about the Heroin Summit, contact Lyndon J. Laster at 205-244-2092 or via email at Lyndon.laster@usdoj.gov.

HEROIN SUMMIT PART ONE

HEROIN SUMMIT PART TWO

HEROIN SUMMIT PART THREE

HEROIN SUMMIT PART FOUR

HEROIN SUMMIT PART FIVE

HEROIN SUMMIT PART SIX

HEROIN SUMMIT PART SEVEN

HEROIN SUMMIT PART EIGHT

HEROIN SUMMIT PART NINE

BIRMINGHAM -- U.S. District Judge L. Scott Coogler last week sentenced a Fairfield man to 26 years in prison on drug distribution and gun charges, announced U.S. Attorney Joyce White Vance and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Jeffrey L. Fulton.

DAMIEN LARON McDANIEL, 33, pleaded guilty in February to one count of possession with intent to distribute cocaine, one count of using a firearm during a drug trafficking offense, two counts of being a convicted felon in possession of a firearm, and one count of possession with intent to distribute marijuana. Judge Coogler sentenced McDaniel to the 26 years in prison on those charges, and sentenced him to an additional 13 months in prison on a supervised release violation in a separate case.

The charges stemmed from a September 2012 controlled buy-bust operation in Fairfield conducted by the Alabama Alcoholic Beverage Control Board Drug Unit, according to court documents. McDaniel responded to a call from someone asking to buy heroin and showed up at the designated meeting place on Valley Road with packets of cocaine in his car and a Springfield 9mm pistol concealed in his waistband, according to his plea agreement.

At the time of that arrest, McDaniel already had been convicted of three felony offenses, according to the plea agreement.

In March 2013, a federal grand jury indicted McDaniel on charges arising from the September 2012 incident. When U.S. Marshals and other members of the Gulf Coast Regional Task Force arrested McDaniel in September 2013 on a warrant issued after the indictment, they observed numerous weapons and a large quantity of marijuana in plain view in the house where they found him, according to his plea agreement. Jefferson County Sheriff's Deputies followed up with a narcotics and weapons search warrant for the residence and recovered eight firearms and about a pound of marijuana.

The ATF, ABC, U.S. Marshals Service and Jefferson County Sheriff's Department investigated the case, which Special Assistant U.S. Attorneys E. Wilson Hunter and Daniel M. Murdock prosecuted.

BIRMINGHAM – A federal grand jury today indicted the former chief operating officer of Adams Produce Company in connection with fraud at the bankrupt Birmingham distributor of fresh fruits and vegetables, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.

STEVEN CRAIG FINBERG, 45, of Texas, is the seventh Adams Produce official charged in relation to a scheme to defraud the federal government of several hundred thousand dollars by creating false invoices and purchase orders in connection with government contracts.

In April, a grand jury indicted JOHN STEVEN ALEXANDER, 50, of Mountain Brook, for conspiracy and wire fraud. Alexander is the company's former chief financial officer. Five other Adams Produce officials have pleaded guilty and been sentenced on charges related to the fraud scheme. Four of the men have been ordered, jointly, to pay $481,000 in restitution the government. Adams' former chief executive officer, Scott David Grinstead, was ordered to pay restitution to the bankruptcy estate of Adams Produce to benefit the company's employees, who were not fully paid when Adams closed abruptly in 2012.

Finberg is charged with conspiring to defraud the government with Alexander, Grinstead, and the four other defendants -- David Andrew Kirkland, director of purchasing, Michael John O'Brien, general manager at an Adams' distribution center in Pensacola, Fla., Stanley Joel Butler, an Adams' purchasing agent, and Christopher Alan Pfahl, a purchasing program specialist. Finberg also faces 32 counts of wire fraud in connection with the scheme.

The federal government, through the Defense Supply Center Philadelphia, was one of Adams’ customers. The supply center contracted with Adams Produce to provide fresh fruits and vegetables to military bases, public school systems, junior colleges and universities. Adams Produce entered into contracts with the government worth millions of dollars, according to court records. The price paid by the government depended, in large part, on the cost to Adams Produce to purchase fruits and vegetables.

According to the indictment, Finberg engaged in a scheme to create false records that reflected an inflated cost to Adams Produce for fruits and vegetables it purchased from a national distributor. The higher costs were then presented to the U.S. Government.

According to today's indictment, Finberg met with the other officers and employees of Adams' Produce in July 2011 and they discussed ways to increase the company's profit margins on government contracts, including conducting transactions designed to create fraudulent purchase orders.

Finberg also was included in an Aug. 1, 2011, e-mail exchange with other Adams' officials, including Kirkland, about naming a company being created within Adams Produce to keep track of the fraudulent transactions, according to the indictment. O'Brien "suggested naming the company 'dsf (Dave's slush fund)... gbm (guranteed bonus maker).'," the indictment charges.

The FBI investigated the case, which Assistant U.S. Attorney George A. Martin Jr. is prosecuting.

BIRMINGHAM -- A federal judge today sentenced the former Clay County jail administrator to four years in prison for using his authority to sexually abuse or otherwise deprive inmates of their civil rights, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and Alabama Bureau of Investigation Division Chief Neil G. Tew.

JEFFREY SCOTT COTNEY, 48, of Ashland, pleaded guilty in February to four counts of deprivation of rights under color of law between May 2009 and spring 2010, while he worked as administrator of the Clay County Detention Center. U.S. District Judge L. Scott Coogler sentenced Cotney for the civil rights violations. Along with the prison term, Judge Coogler ordered Cotney to register as a sex offender and prohibited him from seeking or holding a law enforcement job or any position granting him custodial authority over others. Cotney agreed to all those conditions in his plea agreement with the government.

"We're committed to working with the FBI and ABI to ensure this kind of abuse is uncovered and prosecuted," Vance said.

While jails and prisons strip inmates of many individual rights, including freedom of movement, freedom of action and freedom of choice, the government notes in its sentencing memorandum, incarcerated individuals retain the right to be free of cruel and unusual punishment, to maintain bodily integrity, and to not be deprived of liberty without due process of law.

"The system of incarceration requires trustworthy, honorable individuals who will properly exercise the immense powers granted to them by the State," the government said in its memorandum. "Defendant Cotney violated individuals' constitutional rights, abused the public trust, and corrupted the judicial process."

Part of Cotney's job as Clay County's jail administrator was running the inmate worker program, recommending which inmates could participate in the program and supervising the inmate workers.

Cotney pleaded guilty to four counts of depriving three different inmates of their civil rights, but the conduct he admitted in his plea agreement also includes a fourth inmate.

In his plea, Cotney admitted to coercing one inmate to submit to a sexual act on four occasions in 2009, three times at Cotney's home and once on the side of the road during a trip to Oxford for automobile parts.

Cotney admitted to violating the civil rights of a second inmate in 2009, forcing that inmate to submit to a strip search with no law enforcement justification.

Cotney admitted that he repeatedly and improperly grabbed and touched a third inmate in 2009 and 2010. Cotney acknowledged he told the inmate that he needed to check whether the inmate had any new tattoos and ordered the inmate to remove all his clothing. The inmate had tattoos on his legs, chest, hipbones, arms and groin, and Cotney felt all the tattoos, according to his plea.

Cotney also admitted to falsely accusing a fourth inmate of possessing contraband and ordering that inmate into lockdown for 45 days and then having him transferred to a state prison, all in retaliation for the man rejecting a sexual proposition from Cotney.

The FBI and ABI investigated the case, which Assistant U.S. Attorneys Tamarra Matthews-Johnson and Elizabeth Holt prosecuted.

BIRMINGHAM -- A federal judge today sentenced a Birmingham man to 20 years in prison for selling heroin that caused the 2013 death of a Northport man, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.

HAROLD DONNELL MIMS, 31, pleaded guilty in February to selling heroin that resulted in the death of the 28-year-old man at a Tuscaloosa apartment complex. The charge carries a mandatory minimum 20-year sentence.

"Heroin is a deadly drug, and, as today's sentence illustrates, if you sell heroin that causes someone to overdose and die, you can be prosecuted and spend at least 20 years in prison," Vance said.

"Fighting the spread of heroin use and overdose deaths requires a community-wide commitment," Vance said. "On June 10, leaders in the medical, law enforcement and education communities will present a summit in Birmingham on the wide-ranging heroin problem so that the community can begin formulating a plan of action. We look forward to being part of that work," she said.

"Today’s sentence should send a clear message to the drug traffickers who sell poison to our children," Morris said. "That message is that law enforcement will tirelessly work to investigate those who sell any amount of heroin. The use, abuse and distribution of heroin is rising at alarming rates, and, unfortunately, so is the overdose death rate," he said. "The investigation and prosecution of heroin traffickers is one of many important steps in eliminating heroin from our communities."

Authorities arrested Mims during a roundup of heroin dealers in north Alabama in September. The roundup was part of an initiative launched in 2012 by the U.S. Attorney's Office, the DEA, district attorneys, and many federal, state and local law enforcement agencies to attack the supply of heroin in the Northern District of Alabama.

Mims' sold heroin to a confidential police source and to undercover officers in 2012 and 2013, and police were monitoring his actions when he sold heroin on Feb. 21, 2013, to the Northport man who ingested it and died later that night in Tuscaloosa, according to his plea agreement.

Mims was one of 49 people who had been indicted on drug distribution charges over the first several months of 2013 and were targeted for arrest in the September sweep. Of the 49 defendants, 39 have pled guilty and one was convicted at trial. One defendant remained a fugitive until April, when he was arrested in Atlanta.

The heroin community action summit, "Pills to Needles: The Pathway to Rising Heroin Deaths," will be from 8:30 a.m. to 4:30 p.m., June 10, at the University of Alabama at Birmingham National Alumni Society House, 1301 1st Ave. South. A registration form is available through the following link: http://go.usa.gov/8BGj.

The DEA investigated the cases in conjunction with many state and local agencies. Assistant U.S. Attorney L. James Weil Jr. is prosecuting the cases.

BIRMINGHAM -- “I have enormous confidence in the integrity of the federal agents with whom we work, but I also recognize that, increasingly, we live in a world where juries expect to see law enforcement make electronic recordings of defendants’ statements at the time of arrest,” said U.S. Attorney Joyce White Vance. “So, I am encouraged by this leap forward for the Department of Justice that will help us record the best evidence of a statement – a defendants’ own words and demeanor -- and allow juries to understand how deeply committed our agents are to carrying out their mission in a professional manner. This new policy will help us side step unwarranted allegations by defendants of agent misconduct and permit us to protect our communities in a fair and just manner.”

The Attorney General's Weekly Video Message

The U.S. Attorney's Office for the Northern District of Alabama, the University of Alabama at Birmingham School of Public Health, and the Jefferson County Department of Public Health will present a community awareness summit on the rising abuse of prescription opiates and heroin, and the epidemic of heroin deaths in our community on Tuesday, June 10, from 8:30 a.m. to 4:30 p.m., at the UAB National Alumni Society House, 1301 1st Ave. South, Birmingham. U.S. Deputy Attorney General James M. Cole will deliver the day's keynote address. Speakers and panel discussions will address topics including the link between a growing dependency on prescription painkillers and heroin addiction and overdose deaths; law enforcement efforts to combat the problem; challenges and availability of prevention and treatment resources; and school intervention and education efforts to combat use and addiction. The summit will conclude with a discussion and audience input on developing and implementing a community action plan to address the dangerous and deadly epidemic.

Attached is an information sheet on the summit, which includes the registration form and a draft agenda. A few spots on the agenda remained to be confirmed, but it reflects the day's solid lineup of officials and experts from the fields of public health, education, law enforcement and addiction who are participating, as well as family members willing to speak out about their loss and their desire to help other families avoid that tragedy and heartbreak.

Help from the media in advancing news of this summit to encourage attendance by parents, teachers, faith and other community leaders would be extremely valuable. Attendance is free, but seating is limited, so advance registration is required. Again, the registration form is included in the attached document.

Click HERE for Information Sheet

Click HERE for the Registration Form

Click HERE for the Agenda

For more information contact:

Peggy Sanford
Public Information Officer
United States Attorney's Office
Northern District of Alabama
Office: 205-244-2020
Cell: 205-903-1697
Peggy.sanford@usdoj.gov

Or

Lyndon J. Laster
Law Enforcement Coordination Manager
United States Attorney's Office
Northern District of Alabama
Office: (205) 244-2092
Cell: (205) 527-1645
Fax: (205) 244-2180
Lyndon.laster@usdoj.gov

BIRMINGHAM -- A federal judge this week sentenced a Birmingham man to nearly 47 years in prison for an armed bank robbery in Tarrant in October, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.

MICHAEL SCOTT THOMAS, 40, of Birmingham, pleaded guilty in January to one count each of armed robbery, brandishing a firearm during a crime of violence, and being a felon in possession of a firearm. All the charges stemmed from the Oct. 14 robbery at Wells Fargo Bank on Pinson Street in Tarrant.

U.S. District Judge Karon O. Bowdre sentenced Thomas to 21 years and 10 months in prison on the armed robbery and felon in possession counts, to be followed by 25 years in prison for brandishing a gun during the robbery.

According to court records, Thomas entered the Tarrant bank and robbed it as follows: He walked to the teller counter, brandished a handgun, pulled a black bag from behind his waistband and demanded the teller put money in it. Thomas also ordered other tellers to put money in the bag. He left the bank with $26,516, got into a car and drove away. Tarrant Police stopped the car he was driving, arrested Thomas and recovered the stolen money and a loaded Smith and Wesson .40-caliber pistol.

Judge Bowdre sentenced Thomas as an armed career criminal. He has been convicted for five previous violent robberies, according to court records.

The FBI investigated the case, which Assistant U.S. Attorney Joseph P. Montminy prosecuted.

BIRMINGHAM -- The U.S. Court of Appeals for the Eleventh Circuit this week vacated the probationary sentence a federal judge imposed last year on a former Birmingham police officer convicted of using excessive force on a handcuffed arrestee. The appeals court returned the case to U.S. District Court for resentencing, announced U.S. Attorney Joyce White Vance.

The 11th Circuit Court ruled that the district court's five-year probationary sentence for COREY L. HOOPER, 35, was "substantively unreasonable." Federal Sentencing Guidelines recommended a prison sentence of 70 to 87 months, and federal prosecutors recommended more than seven years in prison for Hooper's 2012 trial conviction for deprivation of rights under color of law.

The conviction stemmed from a 2007 incident in which Hooper, then a Birmingham police officer, struck a handcuffed man multiple times in the face while the man was in the back seat of a patrol car.
The U.S. Attorney's Office appealed U.S. District Court Judge Inge P. Johnson's probationary sentence as unreasonable, arguing that it did not satisfy the need for general deterrence of the crime of excessive use of force by police officers.

The Court of Appeals for the Eleventh Circuit held that the district court abused its discretion when it issued Hooper a five-year probationary sentence. The district court "expressly declined to consider the need for Hooper's sentence to adequately deter other police officers from using excessive force," thereby ignoring a legal factor that is one of the key purposes of sentencing, the appeals court wrote. Judge Johnson did not adequately consider the seriousness of Hooper's conviction, "particularly in light of Hooper's abuse of police power and the vulnerability of a restrained arrestee," the court wrote. It also held that Judge Johnson failed to cite "a sufficiently significant justification for granting a 100 %, 70-month downward variance," from the recommended guidelines sentence.

BIRMINGHAM -- The owners and operators of Richard Joseph SalonSpas in the Birmingham area have agreed to plead guilty to a tax fraud conspiracy for failing to pay employment taxes to the IRS that they withheld from employees' wages over eight years, announced U.S. Attorney Joyce White Vance and Internal Revenue Service Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.

RICHARD JOSEPH SMITH, 54, and TIMOTHY EUELL BROWN, 55, both of Hoover, together have agreed to pay $1.4 million in restitution to the IRS as part of their plea agreements with the government. Smith and Brown acknowledge in their plea agreements that they withheld employment taxes from salon employees but did not report and pay those taxes over to the IRS. They also acknowledge that they skimmed money from the businesses for personal use.

The $1.4 million represents only the payroll taxes withheld from employees, not the employer portion of payroll taxes, which also went unpaid. Smith and Brown have agreed to cooperate with the IRS in determining their liability for the employer taxes and for unpaid personal taxes.

"These defendants have lived lavish lifestyles at the expense of the employees in their salons, who they cheated out of more than $1 million worth of Social Security and Medicare contributions by keeping the payroll taxes they deducted from employees' wages," Vance said. "Hardworking Americans receive the protection they deserve with prosecutions like this."

"Richard J. Smith and Tim E. Brown had a significant obligation to collect and remit all IRS withholding taxes," Hyman-Pillot said. "The failure to pay over withheld taxes defrauds the tax system and impacts employee benefits such as Social Security, Medicare and Unemployment Compensation," she said. "IRS Criminal Investigation recognizes that employment tax fraud is a heinous offense and will aggressively pursue individuals who engage in these schemes to defraud the government."

The U.S. Attorney's Office charged Smith and Brown in an information filed today in U.S. District Court, along with plea agreements for both men. They both agree to plead guilty to one count of conspiracy to defraud the United States, which carries a maximum penalty of five years in prison and a $250,000 fine.

Richard Joseph SalonSpa has been a prominent business for more than two decades with several locations in north Alabama. Smith was a master stylist at the salon's original location in Mountain Brook, and Brown was the business manager who handled finances, including payroll, according to the plea agreements.

The plea agreements outline how Smith and Brown carried out their tax fraud conspiracy as follows:

Beginning in 1991, a company called Smith, Hobart & Brown operated Richard Joseph SalonSpa in Mountain Brook, and Brown was the sole owner and registered agent of SHB. SHB operated the spa from 1991 to July 2006. SHB owed more than $300,000 in employment taxes to the IRS by the third quarter of 2006. The IRS began notifying Brown of payroll tax deficits and requesting payment in 2004. When a revenue officer met with Brown and his accountant in 2007, Brown said he had closed his salon in July 2006 and no longer worked at Richard Joseph SalonSpa.

While the daily operation and management of Richard Joseph SalonSpa never changed, Smith incorporated a new company, RJSS Inc., in June 2006, listing himself as the registered agent. RJSS took over operation of Richard Joseph SalonSpa in Mountain Brook, and Smith and Brown opened a business checking account together for RJSS. Both men were listed as owners and had signature authority for RJSS.

In August 2008, Smith incorporated another business, Richard Joseph Redmont Group Inc., and he and Brown together opened a business checking account for it. In July 2009, Smith and Brown opened a Richard Joseph Salon on U.S. 280 in Inverness, and operated it through the Redmont Group.

"Between the third quarter of 2006 and the third quarter of 2013, Smith and Brown withheld from employees of RJSS Inc., and Redmont Group and failed to pay over a total of $1,408,504.68 in employment taxes to the IRS," the plea agreements states. Since RJSS's inception in 2006, Smith and Brown have not timely reported or paid to the IRS the taxes withheld from RJSS employees, and neither did they timely report or pay to the IRS the taxes withheld from Redmont Group employees since its inception in 2008, according to the plea agreements.

IRS Criminal Investigation Division investigated the case, which Assistant U.S. Attorney Robin Beardsley Mark is prosecuting.

BIRMINGHAM -- The owners and operators of Richard Joseph SalonSpas in the Birmingham area have agreed to plead guilty to a tax fraud conspiracy for failing to pay employment taxes to the IRS that they withheld from employees' wages over eight years, announced U.S. Attorney Joyce White Vance and Internal Revenue Service Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.

RICHARD JOSEPH SMITH, 54, and TIMOTHY EUELL BROWN, 55, both of Hoover, together have agreed to pay $1.4 million in restitution to the IRS as part of their plea agreements with the government. Smith and Brown acknowledge in their plea agreements that they withheld employment taxes from salon employees but did not report and pay those taxes over to the IRS. They also acknowledge that they skimmed money from the businesses for personal use.

The $1.4 million represents only the payroll taxes withheld from employees, not the employer portion of payroll taxes, which also went unpaid. Smith and Brown have agreed to cooperate with the IRS in determining their liability for the employer taxes and for unpaid personal taxes.

"These defendants have lived lavish lifestyles at the expense of the employees in their salons, who they cheated out of more than $1 million worth of Social Security and Medicare contributions by keeping the payroll taxes they deducted from employees' wages," Vance said. "Hardworking Americans receive the protection they deserve with prosecutions like this."

"Richard J. Smith and Tim E. Brown had a significant obligation to collect and remit all IRS withholding taxes," Hyman-Pillot said. “The failure to pay over withheld taxes defrauds the tax system and impacts employee benefits such as Social Security, Medicare and Unemployment Compensation,” she said. "IRS Criminal Investigation recognizes that employment tax fraud is a heinous offense and will aggressively pursue individuals who engage in these schemes to defraud the government.”

The U.S. Attorney's Office charged Smith and Brown in an information filed today in U.S. District Court, along with plea agreements for both men. They both agree to plead guilty to one count of conspiracy to defraud the United States, which carries a maximum penalty of five years in prison and a $250,000 fine.

Richard Joseph SalonSpa has been a prominent business for more than two decades with several locations in north Alabama. Smith was a master stylist at the salon's original location in Mountain Brook, and Brown was the business manager who handled finances, including payroll, according to the plea agreements.

The plea agreements outline how Smith and Brown carried out their tax fraud conspiracy as follows:

Beginning in 1991, a company called Smith, Hobart & Brown operated Richard Joseph SalonSpa in Mountain Brook, and Brown was the sole owner and registered agent of SHB. SHB operated the spa from 1991 to July 2006. SHB owed more than $300,000 in employment taxes to the IRS by the third quarter of 2006. The IRS began notifying Brown of payroll tax deficits and requesting payment in 2004. When a revenue officer met with Brown and his accountant in 2007, Brown said he had closed his salon in July 2006 and no longer worked at Richard Joseph SalonSpa.

While the daily operation and management of Richard Joseph SalonSpa never changed, Smith incorporated a new company, RJSS Inc., in June 2006, listing himself as the registered agent. RJSS took over operation of Richard Joseph SalonSpa in Mountain Brook, and Smith and Brown opened a business checking account together for RJSS. Both men were listed as owners and had signature authority for RJSS.

In August 2008, Smith incorporated another business, Richard Joseph Redmont Group Inc., and he and Brown together opened a business checking account for it. In July 2009, Smith and Brown opened a Richard Joseph Salon on U.S. 280 in Inverness, and operated it through the Redmont Group.

"Between the third quarter of 2006 and the third quarter of 2013, Smith and Brown withheld from employees of RJSS Inc., and Redmont Group and failed to pay over a total of $1,408,504.68 in employment taxes to the IRS," the plea agreements states. Since RJSS's inception in 2006, Smith and Brown have not timely reported or paid to the IRS the taxes withheld from RJSS employees, and neither did they timely report or pay to the IRS the taxes withheld from Redmont Group employees since its inception in 2008, according to the plea agreements.

IRS Criminal Investigation Division investigated the case, which Assistant U.S. Attorney Robin Beardsley Mark is prosecuting.

BIRMINGHAM -- A federal grand jury this week indicted a Florence couple on multiple charges that they exploited a minor child in their custody to produce child pornography, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.

A 107-count indictment filed in U.S. District Court charges PATRICIA ALLANA AYERS, 34, and her husband, MATTHEW DAVID AYERS, 42, in connection with 53 pornographic images of the child produced between the summer of 2010 and January 2013. The couple has remained in jail in Lauderdale County since early last year on state child pornography, rape and sexual abuse charges.

"I am committed to protecting children from exploitation and sexual abuse, and in no case more so than cases like this, where children are hurt by those closest to them," Vance said.

"This case emphasizes the need for anyone with information about the potential sexual exploitation of children to report it immediately," Schwein said. "The National Center for Missing and Exploited Children operates the Cyber Tip Line in partnership with the FBI and other federal authorities. If you have information call the tip line at 1-800-THE-LOST."

The indictment charges 106 counts of producing child pornography and one count of possessing child pornography. For each photograph involving sexual exploitation of the child, the defendant involved faces two charges: • enticing or coercing a minor to engage in sexually explicit conduct for the purpose of creating an image of the conduct, and
• as the parent, legal guardian or person having control of a minor, permitting that child to engage in sexually explicit conduct for the purpose of producing an image of it.

Patricia Ayers faces all 106 production counts and one count of possession of child pornography. Matthew Ayers faces 50 counts of producing child pornography and one count of possessing child pornography.

The FBI investigated the case, which Assistant U.S. Attorney Mary Stuart Burrell is prosecuting.

The public is reminded that an indictment contains only charges. A defendant is presumed innocent and it is the government's responsibility to prove guilt beyond a reasonable doubt.

BIRMINGHAM -- A federal grand jury this week indicted a Florence couple on multiple charges that they exploited a minor child in their custody to produce child pornography, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.

A 107-count indictment filed in U.S. District Court charges PATRICIA ALLANA AYERS, 34, and her husband, MATTHEW DAVID AYERS, 42, in connection with 53 pornographic images of the child produced between the summer of 2010 and January 2013. The couple has remained in jail in Lauderdale County since early last year on state child pornography, rape and sexual abuse charges.

"I am committed to protecting children from exploitation and sexual abuse, and in no case more so than cases like this, where children are hurt by those closest to them," Vance said.

"This case emphasizes the need for anyone with information about the potential sexual exploitation of children to report it immediately," Schwein said. "The National Center for Missing and Exploited Children operates the Cyber Tip Line in partnership with the FBI and other federal authorities. If you have information call the tip line at 1-800-THE-LOST."

The indictment charges 106 counts of producing child pornography and one count of possessing child pornography. For each photograph involving sexual exploitation of the child, the defendant involved faces two charges: • enticing or coercing a minor to engage in sexually explicit conduct for the purpose of creating an image of the conduct, and
• as the parent, legal guardian or person having control of a minor, permitting that child to engage in sexually explicit conduct for the purpose of producing an image of it.

Patricia Ayers faces all 106 production counts and one count of possession of child pornography. Matthew Ayers faces 50 counts of producing child pornography and one count of possessing child pornography.

The FBI investigated the case, which Assistant U.S. Attorney Mary Stuart Burrell is prosecuting.

The public is reminded that an indictment contains only charges. A defendant is presumed innocent and it is the government's responsibility to prove guilt beyond a reasonable doubt.

BIRMINGHAM – A federal grand jury on Wednesday indicted a Quinton man for threatening an African-American man at a restaurant in the Walker County town, and for threatening another person who ordered Higgins to leave the restaurant because of his behavior, announced U.S. Attorney Joyce White Vance and Acting Assistant Attorney General Jocelyn Samuels, head of the U.S. Department of Justice's Civil Division.

A three-count indictment filed in U.S. District Court charges JEREMY HEATH HIGGINS, 28, with one felony count and two misdemeanor counts of interference with a federally protected activity.  The indictment charges Higgins with approaching and threatening an African-American man on June 14, 2013, at the Alabama Rose Steakhouse because the man was at the restaurant with a white woman.  According to the indictment, another person ordered Higgins to leave the premises of the restaurant because of his behavior toward the African-American man, after which Higgins shouted a threat to burn down the restaurant. The indictment further charges that Higgins threatened the person who ordered him to leave the restaurant by painting graffiti on the restaurant’s exterior and fence.

"This case reaffirms our commitment to prosecuting hate crimes and holding people responsible for conduct motivated by racial animus," Vance said.

If convicted of the felony count, Higgins could face a maximum sentence of 10 years in prison and a $250,000 fine. For each of the misdemeanor charges, Higgins could face a maximum sentence of one year in prison and a $200,000 fine.  

The FBI is investigating the case and is being prosecuted by Assistant U.S. Attorney Robin Beardsley Mark and Justice Department Civil Rights Division Trial Attorney David Reese.

An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.  

BIRMINGHAM – A federal grand jury on Wednesday indicted a Quinton man for threatening an African-American man at a restaurant in the Walker County town, and for threatening another person who ordered Higgins to leave the restaurant because of his behavior, announced U.S. Attorney Joyce White Vance and Acting Assistant Attorney General Jocelyn Samuels, head of the U.S. Department of Justice's Civil Division.

A three-count indictment filed in U.S. District Court charges JEREMY HEATH HIGGINS, 28, with one felony count and two misdemeanor counts of interference with a federally protected activity.  The indictment charges Higgins with approaching and threatening an African-American man on June 14, 2013, at the Alabama Rose Steakhouse because the man was at the restaurant with a white woman.  According to the indictment, another person ordered Higgins to leave the premises of the restaurant because of his behavior toward the African-American man, after which Higgins shouted a threat to burn down the restaurant. The indictment further charges that Higgins threatened the person who ordered him to leave the restaurant by painting graffiti on the restaurant’s exterior and fence.

"This case reaffirms our commitment to prosecuting hate crimes and holding people responsible for conduct motivated by racial animus," Vance said.

If convicted of the felony count, Higgins could face a maximum sentence of 10 years in prison and a $250,000 fine. For each of the misdemeanor charges, Higgins could face a maximum sentence of one year in prison and a $200,000 fine.  

The FBI is investigating the case and is being prosecuted by Assistant U.S. Attorney Robin Beardsley Mark and Justice Department Civil Rights Division Trial Attorney David Reese.

An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.  

BIRMINGHAM -- A Birmingham man and federal fugitive charged in connection with a 2013 heroin overdose death in Tuscaloosa was arrested this month in Atlanta and arraigned today in U.S. District Court in Birmingham, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.

PATROPIUS FOSTER, 34, had been a fugitive since a law enforcement roundup aimed at heroin dealers in north Alabama in September. Foster is the last defendant to be arrested among 49 people indicted in 2013 as part of an ongoing initiative between law enforcement and the U.S. Attorney's Office to attack the supply side of the spiraling heroin problem.

U.S. Magistrate Judge John E. Ott arraigned Foster on the charges against him and ordered he remain in custody pending trial.

The charges include that Foster distributed heroin on March 19, 2013, that resulted in the death of a 20-year-old University of Alabama student the following day. The charge of distributing heroin that results in a death carries a minimum mandatory sentence of 20 years in prison.

"The U.S. Attorney's Office is fighting the growing availability of heroin and alerting the community that the problem is here and growing ever more deadly," Vance said. "The rising use of heroin is a public health crisis. It ruins lives and is killing our children. My office prosecutes heroin dealers. Those who sell heroin that causes a death are looking at a mandatory 20-year sentence in federal prison," she said.

Another Birmingham man arrested in the September roundup also was charged with selling heroin that resulted in a death. Harold Donnell Mims, 31, pleaded guilty in February to selling heroin that caused the death of a 28-year-old Tuscaloosa resident. Mims is scheduled for sentencing May 27.

The two overdose deaths Foster and Mims are charged with causing occurred at the same Tuscaloosa apartment complex within the span of one month in 2013.

As of today, 39 of the 49 people indicted in the 2013 sweep have pled guilty and 36 have been sentenced. The sentences have ranged from probation for first-time offenders to 12 1/2 years for the dealers who qualify as career offenders under the Federal Sentencing Guidelines.

Law enforcement agencies working with DEA in the months-long investigation leading to the 2013 indictments and arrests included the Hoover, Pelham, Gardendale, Vestavia Hills, Tuscaloosa, Hueytown, Bessemer and Pleasant Grove police departments, Marshall County Drug Task Force, Gulf Coast HIDTA Task Force, Alabama Beverage Control Board, Alabama Bureau of Investigation, Jefferson and Shelby County sheriff's offices, and district attorney's offices for Jefferson, Shelby and Tuscaloosa counties and the Bessemer Cutoff. Assistant U.S. Attorney L. James Weil Jr. is prosecuting the cases.

The public is reminded that an indictment contain only charges. Defendants are presumed innocent and it is the government's responsibility to prove guilt beyond a reasonable doubt at trial.

BIRMINGHAM -- A federal grand jury today indicted five men in connection with the production and distribution of counterfeit Social Security and Permanent Resident Alien cards in three Alabama counties, announced U.S. Attorney Joyce White Vance and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Special Agent in Charge Raymond R. Parmer Jr.

The men are charged in three separate indictments filed in U.S. District Court.

PEDRO MONTANEZ-MENDEZ, 39, is charged with providing counterfeit Social Security and Permanent Resident cards to three people in Calhoun County between Feb. 18 and March 26. Montanez-Mendez also is charged with illegally re-entering the United States after previously having been deported.

AMANCIO GONZALEZ-PEREZ, 44, of Tuscaloosa, is charged with transferring counterfeit Social Security and Permanent Resident cards to two individuals in Tuscaloosa on Feb. 5. He is charged with producing and transferring Social Security and Resident cards to a third individual on Feb. 26 in Tuscaloosa, and another set to a fourth individual in March.

Gonzalez-Perez and a co-defendant, ROBERTO ZAMUDIO-SANCHEZ, 25, of Tuscaloosa, face one count of possessing document-making implements on April 23, with the intent to produce counterfeit identification documents.

A third indictment charges EUTIQUIO FRANCO-IBARRA, 25, and JUAN BENITEZ-PACHECO, 33, both of Albertville, with counterfeiting the government identification documents in Marshal County.

Franco-Ibarra is charged with producing, and Benitez-Pacheco with transferring, counterfeit Social Security and Permanent Resident cards to an individual in Marshal County on Feb. 4.

Franco-Ibarra also is charged with transferring a false Social Security card to a second individual on Feb. 27, and Benitez-Pacheco is charged with providing both a Social Security and a Permanent Resident card to a third individual on March 27. Both men are charged with possessing document-making implements on April 22.

Benitez-Pacheco also is charged with illegally re-entering the United States after previously having been deported.

Homeland Security Investigations investigated the cases, which Assistant U.S. Attorney Melissa K. Atwood is prosecuting.

The public is reminded that an indictment contains only charges. It is the government's responsibility to prove guilt beyond a reasonable doubt at trial.