District of Connecticut

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DANIEL MONTEIRO, 36, of Wolcott, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 13 months of imprisonment, followed by three years of supervised release, for participating in two separate criminal conspiracies.

On March 20, 2013, MONTEIRO pleaded guilty to one count of conspiracy to make false statements to the FEC and to impede the FEC’s enforcement of federal campaign finance laws.  In pleading guilty to this charge, MONTEIRO admitted that participated in a scheme to conceal from the public the true origin of contributions that Roll-Your-Own (“RYO”) smoke shop owners were making to the Chris Donovan for Congress campaign during the 2012 election cycle. During the campaign, MONTEIRO agreed to serve as a conduit for a $2,500 campaign contribution by writing a check in that amount to the campaign and then accepting $2,500 in cash in return.  MONTEIRO knew that the purpose of the contributions was to obtain a commitment from Chris Donovan, who at the time was also the Speaker of the Connecticut House of Representatives, to defeat legislation that would strip RYO cigarettes of their tax exempt status.  He also understood that the conduit nature of the contribution would prevent the public from drawing a connection between the true source of the contributions and the ultimate failure of any harmful legislation.  MONTEIRO further understood that the RYO smoke shop owners had made several additional contributions through other conduits, including his brother and an employee.

On May 21, 2013, MONTEIRO pleaded guilty to one count of conspiracy to commit bank fraud, wire fraud, and money laundering.  In pleading guilty to this charge, MONTEIRO admitted that from May to September 2007, he helped recruit two straw borrowers to purchase a total of five houses from co-defendant Filippos Milios, the head of an extensive mortgage fraud conspiracy.  MONTEIRO referred these borrowers to Milios knowing that they would not be making down payments on their purchases or living in them as primary residences.  Milios used money obtained from the mortgages to pay private lenders.  MONTEIRO collected approximately $15,000 in referral fees from Milios, and knew that the fees paid to him were not being disclosed to lenders.  Lenders suffered a loss of approximately $783,000 as a result of the five fraudulent transactions in which MONTEIRO was a participant.

MONTEIRO was ordered to forfeit $15,000 and pay restitution in the amount of $783,000.

On January 6, 2015, Milios was sentenced to 97 months of imprisonment for orchestrating the mortgage fraud scheme that involved more than 50 properties and resulted in nearly $5.7 million in losses to lenders.

The conduit campaign contribution conspiracy was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Christopher M. Mattei.  The mortgage fraud conspiracy was investigated by the U.S. Department of Housing and Urban Development – Office of Inspector General, the Internal Revenue Service, and the United States Postal Inspection Service and the Federal Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorneys David T. Huang and William J. Nardini.

Deirdre M. Daly, United States Attorney for the District of Connecticut, and William Offord, Special Agent in Charge, IRS Criminal Investigation, today announced that HAI T. LE, 44, of West Hartford, waived his right to indictment and pleaded guilty yesterday in Bridgeport federal court to filing false tax returns.

According to court documents and statements made in court, LE prepared federal income tax returns for individuals in his community, many of whom were family or friends.  When undertaking the tax return preparation, LE would typically ask his clients to provide him their prior returns, purportedly so that LE could verify relevant information.  LE would prepare the current year return, but also make and keep copies of the prior returns.

In pleading guilty, LE admitted that after certain clients received the current year refund, he would improperly use the prior returns to prepare false amended returns purportedly on behalf of his clients.  The amended returns included false information, including unwarranted residential energy credits, education credits, and tuition and fees deductions, and incorrectly reflected that the taxpayer was entitled to an additional refund.  Unbeknownst to his clients, LE filed the amended returns with the Internal Revenue Service and included his own residence as the return address.  In most cases, the IRS sent a refund check to the listed address.  LE then endorsed his client’s name and his own on the reverse of the check to make it appear that the check had been signed over to him.  He then deposited the check into one of his bank accounts and used the funds for living expenses and the purchase of a $50,000 Certificate of Deposit.

Between March 2010 and August 2010, LE prepared and filed 28 fraudulent federal amended tax returns, utilizing his clients’ information without their knowledge in order to obtain a total of $138,826 in refunds.  Six refunds totaling $32,752 were stopped prior to a check being issued, resulting in an actual loss to the IRS of $106,074.

LE pleaded guilty to three counts of filing a false claim with the Internal Revenue Service.  He is scheduled to be sentenced by U.S. District Judge Jeffrey A. Meyer on September 1, 2015, at which time he faces a maximum term of imprisonment of 15 years, a fine of up to $250,000, and full restitution.

This matter was investigated by the Internal Revenue Service – Criminal Investigation Division, and is being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.

Deirdre M. Daly, United States Attorney for the District of Connecticut, Patricia Ferrick, Special Agent In Charge, Federal Bureau of Investigation, and William Offord, Special Agent in Charge, IRS Criminal Investigation announced that RYAN GEDDES, 43, of Litchfield, pleaded guilty today before U.S. District Judge Janet Bond Arterton in New Haven to multiple conspiracies involving a series of real estate transactions intended to shield assets from creditors.

According to court documents and statements made in court, GEDDES had accrued a series of debts as of late 2005, and was the subject of various lawsuits and collection efforts for the next several years.  A bank fraud conspiracy commenced in November 2005 when GEDDES sold a lakefront home located at 27 Palmer Road in Morris to Thomas Provenzano.  Lacking the funds to qualify for the $923,000 mortgage, Provenzano nonetheless obtained the loan based on an application that falsely listed his income as $20,000 per month, or $240,000 annually, and falsely listed his employment as the Operations Manager for one of GEDDES’s construction companies.  Provenzano was not employed at all by GEDDES.  The loan application also listed GEDDES’s company as having verified Provenzano’s employment.  In November 2006, Provenzano refinanced the loan, obtaining a $936,000 mortgage from a federally insured bank.  The new loan application, like the prior one, falsely listed Provenzano as employed by GEDDES’s construction company, and falsely listed his monthly income as $28,000, or $336,000 annually.  The application again listed GEDDES’s company as having verified Provenzano’s employment.  The loan is now in default, and the 27 Palmer Road property is in foreclosure.

The first of two mail and wire fraud conspiracies commenced in December 2009 and January 2010, in a series of discussions among GEDDES, Provenzano, and others about how to defraud a title insurance company.  The discussions focused on conducting a real property transfer based on a deliberately defective title search, in which liens against the property are omitted, and title insurance is obtained based on the defective title search report.  Later, a fraudulent claim is lodged against the title insurer.  The conspirators decided to attempt the scheme on a property controlled by GEDDES, located at 66 Donahue Road Extension in Litchfield.  After Provenzano assisted in a title search, GEDDES personally reviewed the report and crossed off several liens to be omitted from the title insurance application.  In March 2010 GEDDES arranged a straw transfer of the property to another individual, while continuing to reside in and pay the mortgage and expenses on the property.  Title insurance was issued on the property, with five liens, totaling about $990,000, deliberately omitted from the title search report.

The second of two mail and wire fraud conspiracies commenced in May 2009 when GEDDES arranged to transfer another property of his, located in Old Forge, N.Y., to Dustin Whitten.  GEDDES continued to use the property and pay the mortgage and maintenance expenses.  In March 2011, GEDDES and Whitten arranged to obtain a home insurance policy on the New York property in Whitten’s name.  On July 4, 2011, after a bankruptcy court meeting about seeking to compensate GEDDES’s creditors, the New York property was destroyed in a fire.  In September 2011, Whitten swore out an insurance claim on the property, representing himself as the owner and seeking compensation in the respective amounts of $515,038.50 for the destroyed structure and $92,974.47 for personal property allegedly lost in the fire.  The claim was eventually denied by the insurance company.  In pleading guilty, GEDDES admitted that the purpose of the scheme was to shield the insurance proceeds from his creditors.

GEDDES pleaded guilty to one count of conspiracy to commit bank fraud and two counts of conspiracy to commit mail and wire fraud.  Judge Arterton scheduled sentencing for July 21, 2015, at which time GEDDES faces maximum term of imprisonment of 70 years and a fine of up to $1.5 million.

Provenzano and Whitten previously pleaded guilty.  On December 1, 2014, Provenzano was sentenced to 18 month of imprisonment.  Whitten awaits sentencing.

This matter is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation Division.  The case is being prosecuted by Assistant U.S. Attorneys Henry Kopel and Michael Gustafson.

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that KISHA PERKINS, 43, of Waterbury, pleaded guilty yesterday before U.S. District Judge Michael P. Shea in Hartford to participating in a bribe scheme at the Federal Correctional Institution in Danbury (FCI Danbury) where she was employed.

“There is no tolerance for corrupt employees within the ranks of the Bureau of Prisons,” stated U.S. Attorney Daly.  “Prison officials, like this defendant, will be held accountable in federal court.  I commend the FBI and the Department of Justice’s Office of the Inspector General for their diligence in uncovering this corrosive bribery scheme.  The U.S. Attorney’s Office and our investigative partners are committed to rooting out corruption at all levels of government.”

According to court documents and statements made in court, PERKINS was employed as a case manager at FCI Danbury.  After receiving information about an alleged scheme to solicit and collect cash bribes from FCI Danbury inmates in exchange for a recommendation that inmates be released early to “halfway houses,” federal law enforcement initiated an undercover operation.  As part of the operation, another FCI Danbury employee, working in an undercover capacity, told PERKINS about a scheme in which an inmate was purporting to make a cash payment in exchange for the inmate’s early release to a halfway house.  In pleading guilty, PERKINS admitted to having participated in that scheme and also admitted that, in February 2014, she agreed to accept a pair of shoes or a Louis Vuitton pocketbook in return for aiding in the commission of the scheme by counseling the employee regarding the bribe scheme and failing to report the bribe scheme to prison officials.

PERKINS was arrested on March 14, 2014.

PERKINS pleaded guilty to one count of acceptance of a bribe by a public official, an offense that carries a maximum term of imprisonment of 15 years and a fine of up to $250,000.  She is scheduled to be sentenced on July 21, 2015.

This matter is being investigated by the Federal Bureau of Investigation and the Department of Justice Office of the Inspector General.  The case is being prosecuted by Assistant U.S. Attorney Susan Wines.

Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that ERNEST SYKU, 44, of the Bronx, N.Y., pleaded guilty today before U.S. District Judge Robert N. Chatigny in Hartford to a federal extortion charge.

According to court documents and statements made in court, SYKU and Robert Francella, also known as “Bobby Fingers,” of Yonkers, N.Y., threatened a Connecticut resident with violence in order to induce the victim to pay an alleged $240,000 debt.  SYKU claimed that this debt was owed to SYKU’s deceased uncle.  On one occasion, SYKU told the victim that SYKU was “the one who can break you in many pieces.” SYKU further told the victim “to have mercy on yourself” if the victim did not bring SYKU the money.  On another occasion, SYKU provided his cellular telephone to Francella, who left a threatening voice mail for the victim.

SYKU and Francella were arrested on March 13, 2014.

After he was arrested, SYKU confessed to law enforcement that he had directed Francella to scare the victim into paying the alleged debt.

SYKU pleaded guilty to one count of attempted collection of extension of credit by extortionate means, which carries a maximum term of imprisonment of 20 years and a fine of up to $250,000.  Judge Chatigny scheduled sentencing for July 15, 2015.

Francella pleaded guilty on November 17, 2014.  He awaits sentencing.

This matter was investigated by the FBI Fairfield County Organized Crime Task Force and the Bridgeport Police Department.  This case is being prosecuted by Assistant U.S. Attorneys Hal Chen and Heather Cherry.

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on April 24, 2015, LAWRENCE J. HERZING, 45, of Greenwich, was sentenced by U.S. District Judge Jeffrey Alker Meyer in Bridgeport to 48 months of imprisonment, followed by three years of supervised release, for embezzling more than $9 million from the hedge fund where he was employed.

According to court documents and statements made in court, HERZING was employed as the controller of Greenwich-based Contrarian Capital Management, L.L.C.  On 32 occasions between 2004 and 2013, HERZING used his position to wire $9,202,417.54 from his employer to accounts that he controlled.

Judge Meyer ordered HERZING to pay full restitution.  HERZING has forfeited his residence and funds seized from his accounts, totaling more than $5 million.

HERZING was arrested on October 29, 2014.  On January 29, 2015, he pleaded guilty to one count of wire fraud.

This matter was investigated by the Federal Bureau of Investigation, with the assistance of the Greenwich Police Department.  The case was prosecuted by Assistant U.S. Attorneys Heather Cherry and Jonathan Francis.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that GEORGE GALLO, 46, of East Hampton, waived his right to indictment and pleaded guilty today before U.S. District Judge Vanessa L. Bryant in Hartford to one count of mail fraud related to his receipt of more than $100,000 from a political campaign direct mail company to which he steered business.

According to court documents and statements made in court, GALLO was an employee of the State of Connecticut as the Chief of Staff to the Minority Leader of the Connecticut House of Representatives.  As part of his responsibilities, GALLO was responsible for designing and overseeing the campaign program of the House Republican Campaign Committee (“HRCC”), a state-registered political action committee that provides material and strategic support to Republican candidates for the Connecticut House of Representatives.

In 2008, GALLO and others developed a HRCC campaign program in anticipation of the first general election cycle in which candidates seeking election to the Connecticut General Assembly or statewide office would receive public financing through the state’s Citizens’ Election Program (“CEP”).  The purpose of the new program, in part, was to enable the HRCC to centrally coordinate CEP funded campaigns by providing Republican House candidates with access to comprehensive campaign related services, including direct mail services, voter information, polling, messaging advice and campaign management.  GALLO selected the campaign service vendors that were permitted to participate in the HRCC program.

In pleading guilty, GALLO admitted that he informed an employee of a Florida-based company that provided direct mail services to political campaigns of a new business opportunity in Connecticut.  GALLO indicated to the employee that the CEP would lead to greater numbers of well-funded Republican House candidates in need of direct mail services, and that the Florida company could serve as a HRCC sponsored vendor with access to CEP funded Republican candidates.  In exchange, the company would make payments to GALLO equal to 10 percent of the revenue that the company received from candidates participating in the HRCC program.  GALLO indicated to the employee that such an arrangement would be “good for [the company] and good for George Gallo.”  The employee agreed to GALLO’s proposal.

As part of the scheme, GALLO and the HRCC hosted “campaign schools” for House Republican candidates where HRCC sponsored vendors, including the Florida company, gave presentations marketing their services.  GALLO and others arranged for candidates to meet individually with the Florida company to discuss in greater detail the company’s services, prices and a direct mail plan.  These meetings occurred at several locations, including the State Capitol.

During the 2008 and 2012 election cycles, GALLO made false representations to the Minority Leader of the Connecticut House of Representatives that he did not have a financial relationship with or receive any compensation from any of the HRCC sponsored vendors.  During the 2008, 2010 and 2012 election cycles, GALLO made additional false representations to others, knowing that his statements would be communicated to House Republican candidates participating in the HRCC campaign program, that he did not receive any compensation from any HRCC sponsored vendor.

From 2008 through 2012, the Florida company mailed checks made payable to the Vinco Group, a Cromwell based limited liability company in which GALLO was the sole member, totaling approximately $117,266.63.

In pleading guilty, GALLO further admitted that he made multiple false statements to FBI special agents on October 1, 2013, when he was interviewed about his relationship with HRCC sponsored vendors.  In the interview, GALLO denied that either he or the Vinco Group had a business relationship with any vendors utilized by HRCC, and he denied that he had received any income through the Vinco Group since becoming Chief of Staff to the Connecticut House Minority Leader.

Judge Bryant scheduled sentencing for July 29, 2015, at which time GALLO faces a maximum term of imprisonment of 20 years.

Follow his guilty plea, GALLO was released on a $200,000 bond.

This matter is being investigated by the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigation Division, with the assistance of the Connecticut Public Corruption Task Force and the State Election Enforcement Commission.  The case is being prosecuted by Assistant U.S. Attorney Christopher M. Mattei.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that CEASAR ANQUILLARE, 87, of West Haven, waived his right to indictment and pleaded guilty yesterday before U.S. District Judge Michael P. Shea in Hartford to paying nearly $300,000 in bribes to the former Executive Director of the West Haven Housing Authority in exchange for government contracts and business.

According to court documents and statements made in court, Michael Siwek was the executive director of the West Haven Housing Authority (“WHHA”), an agency that received federal funding.  As parties of his duties, Siwek had substantial discretion over awarding WHHA business and contracts.  From about February of 2007 through February of 2012, Siwek knowingly received bribes from individuals, including ANQUILLARE, in order to award them business with WHHA and the entities that the housing authority controlled.  SIWEK received approximately $1.5 million in bribes, with about $290,000 coming from ANQUILLARE in connection with accounting services that ANQUILLARE’s firm provided to the WHHA.

ANQUILLARE pleaded guilty to one count of conspiracy to commit bribery in connection with a program receiving federal funds, which carries a maximum term of imprisonment of five years.  Judge Shea has scheduled sentencing for July 15, 2015.  As part of his plea, ANQUILLARE has agreed to restitution in the amount of $ 291,033.91.

On September 4, 2014, Siwek pleaded guilty to related charges and awaits sentencing.

U.S. Attorney Daly stated that the investigation is ongoing.

This matter is being investigated by the U.S. Department of Housing and Urban Development – Office of Inspector General, the Federal Bureau of Investigation, and Internal Revenue Service – Criminal Investigation.  The case is being prosecuted by Assistant U.S. Attorney Sarah Karwan.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MALGORZATA KARAS-GOLKA, also known as “Margaret,” 46, of Newington, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 30 months of imprisonment, followed by five years of supervised release, for her role in an extensive mortgage fraud conspiracy.  She was also ordered to pay $166,500 in restitution.

According to court documents and statements made in court, from approximately June 2005 to July 2010, KARAS-GOLKA, Filippos Milios, and others conspired to defraud banks and mortgage lenders in obtaining dozens of mortgages for the sale of properties owned by Milios, KARAS-GOLKA and others.  The conspiracy involved the use of straw borrowers, false mortgage applications, false HUD-1 forms and fraudulent down payments in connection with the purchase of nearly 50 houses primarily located in Hartford, New Haven and Middlesex counties.

As part of the scheme, Milios purchased properties, either in his own name, in a limited liability corporation in which he had an interest, or with KARAS-GOLKA.  Unbeknownst to the lenders who extended mortgages to the borrowers, KARAS-GOLKA submitted fraudulent documents in connection with the loan applications, including false HUD-1 forms, employment verification letters, and rental verification letters.

Many of the properties involved in the scheme ended up in foreclosure and lenders lost a total of approximately $5.6 million.

KARAS-GOLKA directly participated in nine fraudulent real estate transactions over a two-year period.  She falsely acted as a borrower, seller, landlord, and employer.

On November 5, 2014, KARAS-GOLKA pleaded guilty to one count of bank fraud.

Former attorney Gabriel Serrano, who performed many of the real estate closings as part of the conspiracy, and Carmelinda Marotta, who helped flip and sell some properties, previously entered guilty pleas for their participation in the mortgage fraud scheme.  Both await sentencing.

This matter was investigated by the U.S. Department of Housing and Urban Development – Office of Inspector General, the Internal Revenue Service – Criminal Investigation Division, the Federal Bureau of Investigation, and the United States Postal Inspection Service.  The case was prosecuted by Assistant U.S. Attorneys David T. Huang and William J. Nardini.

Deirdre M. Daly, United States Attorney for the District of Connecticut, Patricia Ferrick, Special Agent In Charge, Federal Bureau of Investigation, and William Offord, Special Agent in Charge, IRS Criminal Investigation announced that DUSTIN WHITTEN, 32, pleaded guilty on Friday, April 17, 2015, before U.S. District Judge Janet Bond Arterton in New Haven to conspiracy to commit mail and wire fraud.

According to the documents and statements presented in Court, in May 2009, an alleged co-conspirator of WHITTEN’s transferred to WHITTEN a residential property located in Old Forge, New York, while the co-conspirator continued to use the property and pay the mortgage and maintenance expenses.  At the time, the co-conspirator was being sued by a creditor who was seeking to collect a debt and identify the co-conspirator’s assets.  In March 2011, WHITTEN and the co-conspirator made arrangements for an insurance company to issue a policy on the New York property in WHITTEN’s name.  On July 4, 2011, after a bankruptcy court meeting about compensating the co-conspirator’s creditors, the New York property was destroyed in a fire.  In September 2011, WHITTEN swore out an insurance claim on the property, representing himself as the owner and seeking compensation of $515,038.50 for the destroyed structure and $92,974.47 for personal property allegedly lost in the fire.

The claim was eventually denied by the insurance company.  WHITTEN acknowledged that the co-conspirator, and not WHITTEN, was the true owner of the property, and that a goal of the scheme was to shield the anticipated insurance payout from the co-conspirator’s creditors.

WHITTEN is scheduled to be sentenced on July 13, 2015, before Judge Arterton.  He faces maximum penalties of twenty years of imprisonment and a fine of $250,000.  Other defendants in the case are scheduled to commence trials on June 4 and August 3, 2015.

This matter is being investigated by the Federal Bureau of Investigation, and Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorneys Henry K. Kopel and Michael J. Gustafson.

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that Stamford Pharmacy, located at 1055 High Ridge Road in Stamford, has entered into a civil settlement with the government to resolve allegations that it violated civil provisions of the Controlled Substances Act. Stamford Pharmacy has agreed to pay a total of $45,000.

The allegations against Stamford Pharmacy include claims that they failed to promptly file theft and loss reports of controlled substances with the DEA in at least 17 separate instances as required by law, and that they failed to keep current, complete, and accurate controlled substance records of each controlled substance purchased and dispensed.

Congress, with the passage of the Controlled Substances Act, took steps to create “a closed system” of distribution for controlled substances in which every facet of the handling of the substances, from their manufacture to their consumption by the ultimate user, was to be subject to intense governmental regulation. This mission was taken against the backdrop of trying to prevent the diversion and abuse of legitimate controlled substances while at the same time ensuring an adequate supply of those substances needed to meet the medical and scientific needs of the United States.

This investigation was conducted by investigators from the Drug Enforcement Administration’s Office of Diversion Control in Rocky Hill, and the State of Connecticut, Department of Consumer Protection, Drug Control Division. The prosecution was led by Assistant U.S. Attorney Alan M. Soloway.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that RYAN HARDING, 29, of Woodstock, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 144 months of imprisonment, followed by 15 years of supervised release, for receiving and possessing child pornography.

According to court documents and statements made in court, between July 16, 2013 and October 30, 2013, HARDING received images and videos of child pornography that he downloaded from individuals via the Internet using a peer-to-peer file sharing program.  During a search of the residence on October 30, 2013, law enforcement officers seized computers and a thumb drive.  Forensic analysis of HARDING’s computers and thumb drive revealed more than 600 image files and videos of child pornography.  He also possessed images of a partially naked 13-year old boy that he knew.

On November 20, 2014, HARDING pleaded guilty to one count of receipt of child pornography and one count of possession of child pornography.

After his arrest on November 26, 2013, HARDING was released on bond and placed on home confinement with GPS monitoring.  At the conclusion of today’s sentencing proceeding, he was remanded to custody to begin serving his sentence

This matter was investigated by Homeland Security Investigations and the Connecticut State Police Computer Crimes Unit.  The case was prosecuted by Assistant U.S. Attorney Neeraj N. Patel.

This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

To report cases of child exploitation, please visit www.cybertipline.com.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that WILLIAM DAVIS, 27, of Allentown, Pa., was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 176 months of imprisonment, followed by five years of supervised release for his involvement in a violent kidnapping and jewelry store robbery in April 2013.

According to court documents and statements made in court, at approximately 9:00 p.m. on April 11, 2013, DAVIS and three other men, all of whom were wearing masks and gloves and two of whom were armed with handguns, broke into an apartment on Gravel Street in Meriden, Conn., bound four victims with duct tape and covered their heads with pillowcases, towels and jackets.  DAVIS and others then forced two of the victims into a victim’s vehicle and drove to Lenox Jewelers in Fairfield, Conn., where the two victims worked.  At the store, the perpetrators stole jewelry, watches and loose diamonds with a total replacement value of more than $3 million.  They then fled in the victim’s car, leaving the two victims bound inside the store.

DAVIS was arrested at his Allentown residence on May 22, 2013.  On that date, a search of his residence revealed approximately $65,000 in cash, seven expensive watches, several pieces of diamond encrusted jewelry and a large quantity of crack cocaine.

DAVIS was ordered to pay restitution of more than $3.1 million

DAVIS has been detained since his arrest.  On December 15, 2014, he pleaded guilty to one count of interference with commerce by robbery and one count of use of a firearm during and in relation to a crime of violence.

Four other men have been charged with participating in this kidnapping and robbery.  Two have pleaded guilty and await sentencing, and two are awaiting trial.

This matter is being investigated by the U.S. Marshals Service, Federal Bureau of Investigation, Fairfield Police Department and Meriden Police Department.  U.S. Attorney Daly also acknowledged the assistance provided by the U.S. Marshals Service and FBI in New York and Pennsylvania; the York, Allentown and Bethlehem Police Departments in Pennsylvania, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania.

This case is being prosecuted by Assistant U.S. Attorney Tracy Lee Dayton.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JAQUAN PRICE, 24, of New Haven, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 30 months of imprisonment, followed by three years of supervised release, for illegally possessing a firearm.

According to court documents and statements made in court, on May 27, 2014, PRICE was arrested on state drug charges.  A subsequent search of PRICE’s residence revealed a Jimenez Arms, 9mm pistol, loaded with 8 rounds of ammunition, which was seized from his bedroom.

In August 2011, PRICE was convicted in state court of possession with intent to distribute narcotics.  It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition or ammunition that have moved in interstate or foreign commerce.

PRICE has been detained since June 18, 2014.  On August 21, 2014, he pleaded guilty to one count of possession of a firearm by a convicted felon.

This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, New Haven Police Department and Connecticut State Police.  The case was prosecuted by Assistant U.S. Attorney Peter D. Markle.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ROBERT GENTILE, 78, of Manchester, was arrested today and charged by federal criminal complaint with firearm offenses.

GENTILE appeared today before U.S. Magistrate Judge Thomas P. Smith in Hartford and is detained pending a hearing that is scheduled for April 20 at 10:00 a.m.

As alleged in the criminal complaint, on March 2, 2015, GENTILE sold a .38 Colt Cobra revolver, which was loaded with five rounds of Smith & Wesson .38 Special ammunition, to an individual he knew to be a convicted felon

The complaint further alleges that GENTILE has been previously convicted of multiple felony offenses.

The complaint charges GENTILE with possession of ammunition by a previously convicted felon, and sale of a firearm to a known convicted felon.  Both charges carry a maximum term of imprisonment of 10 years.

According to statements made in court, GENTILE is on supervised release from a prior federal conviction.  If he is found to have violated the terms and conditions of his supervised release, he faces additional penalties.

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

This matter is being investigated by the Federal Bureau of Investigation, with the assistance of the Bureau of Alcohol, Tobacco, Firearms and Explosives.  The case is being prosecuted by Assistant U.S. Attorney John H. Durham.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ALVARO ALVARADO, 27, of Hartford, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 36 months of imprisonment, followed by two years of supervised release, for trafficking heroin.

This matter stems from a joint investigation into heroin trafficking to combat the dramatic increase in heroin overdoses in Connecticut.

According to court documents and statements made in court, in March 2014, law enforcement made two controlled purchases of heroin from ALVARADO at his apartment building on Webster Street in Hartford.  On March 26, 2014, a court authorized search of ALVARADO’s apartment revealed approximately 700 grams of heroin, a small amount of cocaine, and approximately $3,200 in cash.

Seven hundred grams of heroin can produce approximately 28,000 individual dose bags when packaged for resale.

ALVARADO has been detained since his arrest on March 26, 2014.  On January 15, 2015, he pleaded guilty to one count of possession with intent to distribute 100 grams or more of heroin.

This matter was investigated by the Drug Enforcement Administration and Hartford Police Department.  The case was prosecuted by Assistant U.S. Attorney Brian Leaming.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MEHRAN ZAMANI, DDS, 50, of Pound Ridge, N.Y., pleaded guilty today in Hartford federal court to a federal health care fraud offense stemming from a multimillion Medicaid fraud scheme.

According to court documents and statements made in court, the Medicaid program is a joint federal-state program that provides funds for medical services to lower-income individuals who qualify for benefits.  The program is jointly administered by the U. S. Department of Health and Human Services and supervised by the Centers for Medicare and Medicaid Services.  In Connecticut, the Medicaid program is administered by the Connecticut Department of Social Services.

In the fall of 2008, ZAMANI was hired by Gary Anusavice to work as a dentist at Landmark Dental, a dental practice in West Haven that Anusavice had opened earlier in the year.  At the time, Anusavice was a convicted felon, former dentist, and excluded Medicaid provider.  Although Anusavice remained the primary decision maker for the business, ZAMANI became the dentist whose name and license were used as the front for the practice.

In approximately January 2009, ZAMANI signed an application for Landmark Dental to become a Medicaid provider.  The application failed to disclose that Anusavice had an ownership interest in Landmark Dental, that he was subject of prior disciplinary and criminal actions, and that he was excluded from the Medicaid program.  Even though ZAMANI was aware of Anusavice’s disciplinary history, ZAMANI subsequently signed Medicaid provider applications for two other dental practices operated by Anusavice, Dental Group of Stamford and Dental Group of Connecticut in Trumbull.  Both applications also failed to disclose Anusavice’s background and involvement in the practices.

Pursuant to these fraudulent provider applications, from approximately January 2009 to March 2011, ZAMANI submitted or caused to be submitted numerous claims to Connecticut Medicaid pursuant to which Medicaid reimbursement payments were made.

As a result of this fraud, the Connecticut Medicaid program reimbursed Anusavice’s dental practices nearly $21 million.

ZAMANI pleaded guilty to one count of obstructing the administration of a federal health care program.  He is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on July 6, 2015, at which time he faces a maximum term of imprisonment of three years.

In March 2015, ZAMANI signed a settlement agreement that resolved pending civil matters with the U.S. Attorney’s Office and the State of Connecticut, Office of the Attorney General.  Under the terms of the settlement agreement, ZAMANI agreed to pay $200,000, forfeit a dental office he owned at 18 Madison Street in Hartford, and give up all rights to approximately $1.9 million in Medicaid dollars that had been suspended by the Connecticut Department of Social Services.

ZAMANI also agreed to be excluded from all federal health care programs for a period of 10 years.

On June 3, 2013, Anusavice pleaded guilty to health care fraud and tax evasion offenses stemming from his involvement in this scheme.  On October 9, 2013, he was sentenced to 97 months of imprisonment.  In addition, he was ordered to pay restitution of more than $5.2 million, and back taxes of more than $1.8 million, plus applicable interest and penalties.  He also forfeited his Rhode Island residence, a 33-foot yacht, a Mercedes Benz automobile and approximately $91,700 in cash.

Anusavice also has agreed to pay the state $9.9 million, which represents treble damages under the Connecticut False Claims Act and restitution under the Connecticut Unfair Trade Practices Act.

This matter was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, the Internal Revenue Service-Criminal Investigation, and the Federal Bureau of Investigation.  The Connecticut Attorney General’s Office provided assistance and cooperation throughout the investigation.

This case is being prosecuted by Assistant U.S. Attorneys Susan Wines and Richard Molot.

U.S. Attorney Daly encourages individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force at (203) 777-6311 or 1-800-HHS-TIPS.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that GIOVANNI MASUCCI, also known as John Masucci, 44, of Woodbridge, was sentenced today by U.S. District Judge Jeffrey A. Meyer in Bridgeport to 51 months of imprisonment, followed by three years of supervised release, for stealing more than $1 million from a Connecticut company.

According to court documents and statements made in court, MASUCCI operated a financial consulting business in North Haven.  As part of his business, he provided financial consulting services to a company located in Milford and had access to the company’s checkbooks and financial ledgers.  From approximately September 2011 to February 2014, MASUCCI defrauded the Milford company by diverting company funds to his own bank account.  He also wrote checks from the company’s bank account to pay his personal credit card bills and the credit card bills of a personal acquaintance.  As part of the scheme, MASUCCI created false entries in the corporate check ledger that falsely indicated the checks were written for legitimate business purposes, and he typically forged the signature of the authorized company representative on the checks.  In order to conceal his crime, MASUCCI took the company’s check book.

The investigation revealed that MASUCCI used the stolen funds to pay for domestic and international travel, lodging, and to make purchases at several high-end retailers.

Judge Meyer ordered MASUCCI to pay restitution of at least $1.16 million.  A final restitution order will be issued after further court proceedings.

MASUCCI was arrested on July 13, 2014.  On November 13, he pleaded guilty to one count of wire fraud.

This matter was investigated by the Connecticut Financial Crimes Task Force, the United States Secret Service and the Greenwich Police Department.  The case was prosecuted by Assistant U.S. Attorney Ray Miller.

Deirdre M. Daly, United States Attorney for the District of Connecticut, and William P. Offord, Special Agent in Charge of IRS Criminal Investigation in New England, announced that AGOSTINO INCORVAIA, 47, of Danbury, waived his right to indictment and pleaded guilty today before U.S. District Judge Victor A. Bolden in Bridgeport to one count of tax evasion.

According to court documents and statements made in court, from 2007 to 2012, INCORVAIA failed to report to the Internal Revenue Service approximately $2.65 million in gross receipts generated by “Augie’s Numero #1,” a restaurant he operates in Danbury.

During the investigation of this matter, INCORVAIA admitted to an undercover IRS agent that he understated the restaurant’s gross receipts on his income tax returns and provided false numbers to his accountant, that he had a large group of “off the books” employees, and that a portion of the unreported receipts supported his business interests and properties, including those in the Dominican Republic.  INCORVAIA’s admissions, which were recorded, were corroborated by the restaurant’s “point of sale” system that was seized pursuant to a search warrant.

In pleading guilty, INCORVAIA admitted that he evaded payment of income taxes when filing his joint income tax returns for the 2007 through 2011 tax years.

Judge Bolden scheduled sentencing for July 7, 2015, at which time INCORVAIA faces a maximum term of imprisonment of five years and a fine of up to $100,000.  As part of his guilty plea, INCORVAIA has agreed to pay $396,650 in back taxes, as well as interest and penalties.

This case was investigated by the Internal Revenue Service – Criminal Investigation Division, and is being prosecuted by Assistant U.S. Attorney Hal Chen.

AMAURY VILLA, 40, a citizen of Cuba last residing in Miami, Florida, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 98 months of imprisonment, followed by three years of supervised release, for his role in the theft of pharmaceuticals from an Eli Lilly Company warehouse and storage facility in Enfield, Conn.  Judge Arterton ordered the sentence to run concurrently with a 140-month sentence that VILLA is serving on a related federal conviction.

According to court documents and statements made in court, in early 2010, AMAURY VILLA, Amed Villa, Yosmany Nunez and Alexander Marquez planned to steal pharmaceuticals from the Eli Lilly Company warehouse and storage facility in Enfield.  Prior to the theft, AMAURY VILLA and Nunez traveled from Florida to Connecticut to gather information about the warehouse facility and the surrounding area.  Shortly before the theft, Amed Villa and Rafael Lopez traveled to Flushing, N.Y., where they purchased tools needed to break into the warehouse facility, and then traveled to Connecticut.

In the evening of March 13, 2010, individuals involved in the theft dropped off a ladder in the rear parking lot of the warehouse facility and left.  That same night, Marquez drove a tractor trailer to the facility.  Thereafter, AMAURY VILLA and Amed Villa carried the ladder to the building, checked for security in the front area, climbed onto the roof, used the tools Amed Villa and Lopez had purchased to cut a hole in the facility roof, dropped down into the facility and disabled the alarm system.  AMAURY VILLA, Amed Villa and Nunez then loaded more than 40 pallets of pharmaceuticals into the tractor trailer, which had been backed up to the loading dock of the warehouse.

The pallets of pharmaceuticals included thousands of boxes Zyprexa, Cymbalta, Prozac, Gemzar and other medicines, valued between $50 and $100 million.

The individuals who participated in the theft split up in Connecticut.  Marquez then drove the tractor trailer to Florida, where he subsequently reunited with AMAURY VILLA, Amed Villa and Nunez so the pharmaceuticals could be transferred from the tractor trailer into self-storage units in the Miami area.

On October 14, 2011, law enforcement authorities searched a storage facility in Florida and recovered pharmaceuticals that had been stolen from the Enfield warehouse.

Judge Arterton ordered VILLA to pay restitution in the amount of $60,994,213.

VILLA has been detained since his arrest on May 3, 2012.  On May 2, 2014, he pleaded guilty to one count of conspiracy, four counts of theft from an interstate shipment, and one count of interstate transportation of stolen property.

VILLA previously pleaded guilty in the Southern District of Florida to conspiracy and possession of stolen goods charges and, on November 26, 2012, he was sentenced to 140 months of imprisonment.

Amed Villa pleaded guilty in the District of Connecticut to conspiracy and theft charges related to the Enfield theft and his participation in multimillion dollar warehouse burglaries in Illinois, Virginia, Florida and Kentucky.  He awaits sentencing.

Nunez, Marquez and Lopez pleaded guilty in the District of Connecticut and have been sentenced.

This matter is being investigated by the Federal Bureau of Investigation and the Enfield Police Department, with the assistance of several other U.S. Attorney’s Offices and federal, state and local law enforcement agencies that have been investigating large-scale thefts of pharmaceuticals and other products.

The case is being prosecuted by Assistant U.S. Attorneys Anastasia E. King and Douglas P. Morabito.

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that EDGARDO CENTENO, 43, of New London, was sentenced yesterday by U.S. District Judge Vanessa L. Bryant in Hartford to 30 months of imprisonment, followed by three years of supervised release, for distributing cocaine.

According to court documents and statements made in court, in early 2012, Homeland Security Investigations (“HSI”), the U.S. Secret Service and the New London Police Department initiated an investigation to combat the large-scale trafficking of heroin and cocaine from the Dominican Republic and Puerto Rico into and around southeastern Connecticut.  The investigation revealed that certain members of the conspiracy coordinated the shipment of heroin, and sometimes cocaine, via human couriers from the Dominican Republic to the United States.  Other members of the conspiracy obtained kilogram-quantities of cocaine in Puerto Rico and then mailed the drug to locations in and around New London where it was sold to distributors and customers.  Narcotics also were obtained from sources in New York City and Rhode Island.

CENTENO regularly purchased cocaine from Juan G. Cheverez, also known as “Guinchi,” who had received the drug from individuals in Puerto Rico via the U.S. Mail.  CENTENO then sold cocaine in smaller quantities to his own customers.

On August 20, 2014, CENTENO pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine.

On February 18, 2015, Cheverez was sentenced to 77 months of imprisonment.

This matter was investigated by Homeland Security Investigations; U.S. Secret Service; U.S. Postal Inspection Service; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection, Office of Air and Marine; Connecticut State Police; New London Police Department, Norwich Police Department, Waterford Police Department, Groton Town Police Department, East Lyme Police Department and Putnam Police Department.  The United States Marshals Service; ICE Enforcement and Removal Operations; Drug Enforcement Administration; HSI Assistant Attaché, Santo Domingo, Dominican Republic; HSI Arecibo, Puerto Rico Resident Office;  Internal Revenue Service – Criminal Investigation; Connecticut Department of Correction, Parole and Community Services; and the Groton City, Willimantic, New Haven and Bristol Police Departments have provided valuable assistance to the investigation.

The federal case is being prosecuted by Assistant U.S. Attorneys Sarah P. Karwan, Alina P. Reynolds and Henry K. Kopel.  The state cases are being prosecuted by the State’s Attorney for the New London Judicial District and Senior Assistant State’s Attorneys Paul Narducci and Stephen Carney.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that a federal grand jury in New Haven returned a 10-count indictment today charging CYNTHIA TANNER, 53, of Darien, with fraud and tax evasion offenses stemming from her alleged embezzlement of approximately $800,000 from a Connecticut-based veterans services organization.

As alleged in the indictment, TANNER was employed as a bookkeeper for the National Veterans Service Fund (“NVSF”) located in Darien.  The stated mission of the NVSF was to provide “case managed social services and limited medical assistance to Vietnam and Persian Gulf War veterans and their families, with a focus on families with disabled children.”  From approximately January 2009 through June 2014, TANNER used approximately $800,000 in NVSF funds to pay various personal expenses for her and her family members.  She also altered records to conceal her scheme and by falsely claiming that the stolen monies were being paid to veterans in need.

The indictment further alleges that TANNER failed to report $794,768.47 in embezzled income on her 2009 through 2013 federal tax returns, resulting in a tax loss of $270,026.

The indictment charges TANNER with five counts of wire fraud, an offense that carries a maximum term of imprisonment of 20 years on each count, and five counts of tax evasion, an offense that carries a maximum term of imprisonment of five years on each count.

TANNER has been detained on related state charges since her arrest on June 2, 2014.

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

This matter is assigned to Senior U.S. District Judge Warren W. Eginton in Bridgeport.

This investigation is being conducted by the U.S. Secret Service, Internal Revenue Service – Criminal Investigation Division, and Darien Police Department.  The case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that BERNARD PETTWAY, 39, of Bridgeport, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 12 months and one day of imprisonment, followed by three years of supervised release, for ramming a law enforcement vehicle and injuring an ATF special agent.

This matter stems from “Operation Samson,” a multi-layered initiative headed by the ATF and the Bridgeport and New Haven Police Departments that targeted violent criminals, illegal firearm possession and firearm trafficking.  In the spring of 2014, approximately 40 ATF special agents and personnel from Connecticut and across the country were deployed with New Haven and Bridgeport Police to conduct numerous covert operations.

According to court documents and statements made in court, between April and June 2014, investigators made three controlled purchases of crack cocaine from PETTWAY.  On June 16, 2014, an individual working with law enforcement called PETTWAY and placed an order for crack cocaine.  PETTWAY arranged to meet the drug purchaser at a location on Fairfield Avenue in Bridgeport.  After PETTWAY arrived at the meeting location, Bridgeport Police officers exited a marked car and approached his vehicle.  PETTWAY then attempted to evade law enforcement and drove away at a high rate of speed.  A Bridgeport Police officer and an ATF special agent who were in an unmarked vehicle nearby attempted to block PETTWAY’s escape by positioning their car to partially block the roadway.  PETTWAY then rammed into the back end of the unmarked vehicle, spinning it approximately 90 degrees and rendering it inoperable, and fled the scene.  He was apprehended later that day.

The ATF special agent suffered back and neck injuries and was taken to the hospital.

After his arrest, PETTWAY assisted law enforcement in the recovery of an illegal firearm.

On October 22, 2014, PETTWAY pleaded guilty to one count of assaulting a federal agent with a dangerous weapon.

This case was prosecuted by Assistant U.S. Attorney Rahul Kale.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that a federal grand jury in New Haven returned an 11-count indictment today charging ANTHONY SABATO, 57, of West Haven, and MIGUEL JOEL ROMAN, 25, of Hartford, with narcotics trafficking offenses.  SABATO is also charged with illegally possessing a firearm.

This matter stems from an investigation being conducted by the FBI’s New Haven Safe Streets Task Force, the West Haven Police Department and the Darien Police Department.  The investigation employed the use of an undercover law enforcement officer.

As alleged in previously-filed court documents, between January and March 2015, the undercover officer purchased crack cocaine from SABATO and ROMAN.  SABATO and ROMAN also negotiated the purchase of a handgun from the undercover officer, and arranged to sell him two ounces of crack cocaine at a price of $2,000 per ounce. SABATO and ROMAN were arrested on March 24, 2015, after they met the undercover officer at SABATO’s West Haven home to consummate the crack cocaine and firearm transactions.

The indictment charges SABATO and ROMAN with one count of conspiracy to distribute and to possess with intent to distribute 280 grams or more of cocaine base (“crack cocaine”), an offense that that carries a mandatory minimum term of imprisonment of 10 years and a maximum term of imprisonment of life.  SABATO and ROMAN are also charged with two counts of possession with intent to distribute and distribution of 28 grams or more of cocaine base, an offense that carries a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 40 years on each count, and four counts of possession with intent to distribute and distribution of cocaine base, an offense that carries a maximum term of imprisonment of 20 years on each count.

In addition, the indictment charges SABATO with one count of maintaining a drug-involved premises within 1000 feet of a school, an offense that carries a maximum term of imprisonment of 20 years, two counts of possession with intent to distribute and distribution of oxycodone, an offense that carries a maximum term of imprisonment of 20 years on each count, and one count of possession of a firearm by a previously convicted felon, an offense that carries a maximum term of imprisonment of 10 years.

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

This matter has been assigned to U.S. District Judge Vanessa L. Bryant in Hartford.

The FBI’s New Haven Safe Streets Task Force includes personnel from the FBI, West Haven Police Department, New Haven Police Department, Milford Police Department and Connecticut Department of Correction.

This case is being prosecuted by Assistant U.S. Attorney Tracy Lee Dayton.

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on April 3, 2015, WILLIE E. McKAY, 40, of New Haven, pleaded guilty in New Haven federal court to making a false claim to the Internal Revenue Service.

According to court documents and statements made in court, from as early as 2005 through 2008, McKAY was the pastor of The Love Temple Church, Inc., located at 75 Fresh Meadow Road in West Haven.  During that time, McKAY provided people, including those in his congregation, with income tax preparation services.  In February 2007, McKAY prepared and electronically filed a fraudulent individual U.S. Individual Income Tax Return, Form 1040, for 2006 of a taxpayer who was a member of his congregation.  The tax return listed the address of Love Temple Church as the taxpayer’s home address, which was not accurate, and included a fictitious Form W-2 reflecting inflated wages and withholdings.  The return also reflected fictitious deductions for state and personal property taxes, which reduced the taxpayer’s taxable income.

The fraudulent tax return that McKAY prepared reported wages of $47,900 from the State of Connecticut, withholdings of $14,952, and Schedule A deductions for state taxes of $4,359 and personal property tax of $852.  Based on the false claim, the IRS issued a refund check in the amount of $9,693.

McKAY knew that the taxpayer was a student working at school and was not entitled to the claimed refund.  McKAY also did not identify himself as the preparer of the tax return.

According to the IRS, the taxpayer was entitled to a federal tax refund of only $363.

McKAY is scheduled to be sentenced by Chief U.S. District Judge Janet C. Hall on June 26, 2015, at which time he faces a maximum term of imprisonment of five years and a fine of up to $250,000.  As part of the plea agreement, McKAY agreed to make restitution to the IRS of $9,693.  He also acknowledged that he prepared and filed other false tax returns for the 2005 through 2007 tax years, which Chief Judge Hall will consider in imposing a sentence.

This matter was investigated by the Internal Revenue Service – Criminal Investigation Division with the assistance of the U.S. Secret Service and U.S. Postal Inspection Service.  The case is being prosecuted by Assistant U.S. Attorney Peter S. Jongbloed.

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on April 2, 2015, BRIAN FLETCHER, 34, of Jewett City, pleaded guilty in Hartford federal court to possession of firearms by a convicted felon.

According to court documents and statements made in court, on November 22, 2013, a court-authorized search of FLETCHER’s residence revealed a .308 rifle, a Smith & Wesson .40 caliber VE Handgun, a .38 caliber Smith & Wesson Model 60 revolver, as well as multiple rounds of ammunition and weapon magazines.

The investigation revealed that the .308 rifle was purchased earlier in 2013 by another individual at a sporting goods store in Lisbon, the .40 caliber handgun had been stolen from an owner in Oakdale, and the .38 caliber revolver had been stolen from an owner in Waterford.

The investigation further determined that FLETCHER had previously been convicted of felonies in the Superior Court of the State of Connecticut, including accessory to robbery in the first degree, hindering prosecution in the second degree, possession of a pistol without a permit, and attempted assault in the first degree.

It is a violation of federal law to knowingly possess a stolen firearm, or for a convicted felon to possess a firearm or ammunition that has moved in interstate or foreign commerce.

FLETCHER has been detained since his arrest on November 22, 2013.  He is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on June 24, 2015, at which time he faces a maximum term of imprisonment of 10 years.

This case was investigated by the Federal Bureau of Investigation.  The Norwich Police Department and the Connecticut State’s Attorney’s Office in New London have assisted the investigation and prosecution of this matter.  The case is being prosecuted by Assistant U.S. Attorney Stephen B. Reynolds.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that SANDRA KIMBRO, 66, of Hamden, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to six months of imprisonment, followed by three years of supervised release, for stealing her deceased mother’s Social Security benefits for nearly 30 years.  KIMBRO also was ordered to serve the first six months of her supervised release in home confinement, and to perform 120 hours of community service.

According to court documents and statements made in court, KIMBRO’s mother, a Social Security benefits recipient, died in 1984.  At the time of her death, KIMBRO and her mother had a jointly-held bank account into which the mother’s monthly Social Security benefits were deposited.  Between April 1984 and February 2014, KIMBRO illegally obtained $160,457 in Social Security benefits that had been deposited into the account for her mother’s use.

Through the years, as she withdrew money from the bank account, KIMBRO described to bank employees how she was providing care to her mother.

KIMBRO was ordered to pay full restitution.

On November 19, 2014, KIMBRO pleaded guilty to one count of theft of public funds.

This matter was investigated by the Social Security Administration, Office of Inspector General – Office of Investigations, and was prosecuted by Assistant U.S. Attorney Ray Miller.

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in New Haven has returned an indictment charging ADAM M. SIMPSON, 28, a former member of the U.S. Navy who was stationed at the Naval Submarine Base New London in Groton, with enticing minors to perform sexually explicit acts during online video chats, and receipt and possession of child pornography.  The indictment was returned on March 24, 2015, and SIMPSON was arraigned today before U.S. Magistrate Judge Thomas P. Smith in Hartford. 

According to the indictment, between approximately January 2013 and November 2013, SIMPSON engaged in video chats with minors using online video chatting services such as Skype and Omegle.  During these video chats, SIMPSON enticed the minors to perform sexual acts and engage in sexually explicit conduct, which SIMPSON recorded, saved on his computer, and then shared with others.  In order to deceive and entice the minors, SIMPSON sometimes posed as a young boy.  He also coerced minors to perform more sexual acts for him by threatening to publicly release their sexually explicit videos.  In addition, the indictment alleges that SIMPSON possessed a collection of child pornography, which he downloaded over the Internet onto his computer.

SIMPSON has been detained since his arrest on related state charges on January 7, 2014.

If convicted of the charge of enticement, SIMPSON faces a mandatory minimum term of imprisonment of 10 years and a maximum term of imprisonment of life.  The charge of receipt of child pornography carries a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 20 years, and the charge of possession of child pornography carries a maximum term of imprisonment of 20 years.

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

This matter is being investigated by the Connecticut State Police Computer Crimes Unit, the Federal Bureau of Investigation and the Connecticut Child Exploitation Task Force, which includes federal, state and local law enforcement agencies.  The U.S. Naval Criminal Investigative Service also provided critical assistance in this investigation.  The case is being prosecuted by Assistant U.S. Attorney Neeraj N. Patel.

This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

To report cases of child exploitation, please visit www.cybertipline.com.

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that JOHN ZELEPOS, 48, of North Stonington, pleaded guilty yesterday in Bridgeport federal court to tax evasion and financial structuring offenses.

According to court documents and statements made in court, ZELEPOS is the sole owner of Mystic Pizza, LLC, a Schedule C retail restaurant business in Mystic, Connecticut.  From 2006 to 2010, ZELEPOS regularly diverted Mystic Pizza’s cash business gross receipts totaling approximately $567,435.  Approximately $330,005 in the diverted cash was deposited into his personal bank account ($113,360) and his and his wife’s personal checking account ($102,580) at Chelsea Groton Bank, his wife’s personal checking account at Washington Trust Company ($74,865), and passbook savings accounts in the name of each of his three minor children at Chelsea Groton Bank ($39,200). 

With respect to his 2006 tax return, on June 14, 2007, ZELEPOS willfully attempted to evade and defeat a large part of the income tax due and owing to the United States for 2006 by, among other things, (1) diverting approximately $130,060 in cash from Mystic Pizza, LLC, (2) depositing the diverted cash into his personal bank account and his and his wife’s personal checking account at Chelsea Groton Bank, his wife’s personal checking account at Washington Trust Company, and passbook savings accounts in the name of each of his three minor children at Chelsea Groton Bank at various times in amounts less than $10,000, (3) deducting as business expenses wages paid to two no-show employees, (4) not disclosing to his tax return preparer receipt of the diverted cash and the two no-show employees, and (5) filing and causing to be filed with the IRS a false and fraudulent 2006 federal tax return.  In his 2006 tax return, ZELEPOS stated that his taxable income was $388,957 when in fact, as he knew, in 2006 his total taxable income was $551,858 (an additional $162,901 which included the diverted income, deductions for no-show employees, and other statutory adjustments), upon which he owed the United States approximately $180,765 (an additional $54,655) in federal income tax.

As part of the plea agreement, ZELEPOS agreed that he similarly evaded the payment of his federal taxes in 2007, 2008, 2009, and 2010 and that the total federal tax loss for 2006 to 2010 based on his conduct is $234,407.  He has agreed to make restitution in the amount of $234,407, plus interest and penalties.

ZELEPOS also pleaded guilty to intentionally structuring financial transactions so as to avoid having the bank file Currency Transaction Reports (“CTRs”).  He engaged in 61 currency transactions in amounts less than $10,000 from January 5, 2010 through January 24, 2011, totaling $522,658.  He deposited cash into the business account, his personal account, his and wife’s personal bank account, and his three children’s bank accounts at Chelsea Groton Bank in amounts ranging from $3,000 to $9,998 on sequential days or multiple cash deposits on the same day.  ZELEPOS knew that the bank was required to issue a report for a currency transaction in excess of $10,000 and by conducting his financial transactions in amounts less than $10,000, he intended to evade the transaction reporting requirements.

Federal law requires all financial institutions to file a CTR for currency transactions that exceed $10,000.  To evade the filing of a CTR, individuals will often structure their currency transactions so that no single transaction exceeds $10,000.  Structuring involves the repeated depositing of amounts of cash less than the $10,000 limit, or the splitting of a cash transaction that exceeds $10,000 into smaller cash transactions in an effort to avoid the reporting requirements. Even if the deposited funds are derived from a legitimate means, financial transactions conducted in this manner are still in violation of federal criminal law.  Structured funds are subject to forfeiture to the United States.

As part of the plea agreement, ZELEPOS is forfeiting $522,658 of the money he intentionally structured between January 2010 and January 2011.

On January 2012, pursuant to a court-authorized federal seizure warrant, IRS Special Agents seized $63,084.49 from a payroll account Mystic Pizza held at Chelsea Groton Bank.  Those funds are being applied to the forfeiture, reducing the remaining forfeiture amount to $459,573.51.

"Our voluntary system of self-reported tax liability depends upon people to honestly report their income and pay their taxes," stated U.S. Attorney Daly.  "Those who willfully hide their income and purposefully evade paying their taxes steal from the public and damage our nation’s system of taxation.  Violators will be prosecuted, punished, and obligated to repay their taxes along with applicable penalties and interest.  The tax fraud was more egregious in this case because the defendant sought to hide some of the diverted business funds by depositing cash in amounts less than the reportable $10,000 so as to prevent the bank from filing currency transaction reports reporting the multiple cash transaction to the IRS."

U.S. District Judge Victor A. Bolden will sentence ZELEPOS on June 23, 2015, at which time ZELEPOS faces a maximum term of imprisonment of 15 years and a fine of up to $500,000.  He was released pending sentencing.

This matter was investigated by the Internal Revenue Service - Criminal Investigation Division.  The case is being prosecuted by Assistant U.S. Attorney Peter S. Jongbloed.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that LANGSTON XAVIER NEAL, 37, of Charlotte, North Carolina, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 18 months of imprisonment, followed by three years of supervised release, for his role in a check fraud ring.  NEAL was also ordered to pay $104,070.94 in restitution.

According to court documents and statements made in court, between July 2010 and May 2011, NEAL, Benjii Carr and Brandon Key Bentley obtained stolen checks, recruited “runners” who cashed the checks, and altered the checks to list the runners as the lawful payees.  The three individuals drove the runners to several Connecticut bank branches and directed them to enter the banks and cash the checks.  The runners were paid a small part of the cash proceeds.  Through this scheme, 39 checks totaling $114,102.34 were altered and presented to banks, and 37 of those checks totaling $104,070.94 were cashed by the banks.

On December 1, 2014, NEAL pleaded guilty to one count of conspiracy to commit bank fraud.

Carr and Bentley, both of New Haven, previously pleaded guilty to the same charge and await sentencing.

This matter was investigated by the U.S. Postal Inspection Service, along with the Connecticut Financial Fraud Task Force and the Branford, Madison, Middlebury, Milford, New Britain, New Haven, New Milford, North Branford, Waterbury, Woodbridge and Southbury Police Departments.  U.S. Attorney Daly also acknowledged the cooperation and assistance of the State’s Attorney’s Offices for the Judicial Districts of New Haven, Waterbury, Fairfield and Tolland.  The case is being prosecuted by Assistant U.S. Attorney Henry K. Kopel.

Deirdre M. Daly, United States Attorney for the District of Connecticut, Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, and Hartford Police Chief James C. Rovella, today announced that a federal grand jury sitting in Hartford has returned a 14-count second superseding indictment charging DOMINIQUE MACK, also known as “Lil Sweets,” 25, and TYQUAN LUCIEN, also known as “TQ” and “Frogger,” 22, both of Hartford, with a conspiracy to tamper with a witness by committing first degree murder.  LUCIEN was also charged with multiple attempts to commit witness tampering and attempts to commit witness retaliation by attempting to solicit another person to murder a witness who was to testify in the matter of United States v. Mack.

MACK is also charged with witness tampering by committing first degree murder of Ian Francis.  Keronn Miller was not charged in this indictment, as he already pleaded guilty for his role in the murder of Ian Francis.  According to court documents and statements made in court, on December 21, 2010, Ian Francis was shot multiple times while sitting in his vehicle on Sigourney Street in Hartford.  Francis succumbed to his injuries on January 15, 2011.  MACK and others, known and unknown to the grand jury, is alleged to have murdered Francis with the intent to prevent MACK’s attendance at a federal proceeding and to prevent Francis and another person from communicating with a federal law enforcement officer or judge about the commission or possible commission of a federal crime, namely, narcotics trafficking.  MILLER pleaded guilty to witness tampering by committing second degree murder in December, 2014.  At his guilty plea hearing, Miller admitted to luring Ian Francis to Sigourney Street knowing that Francis would be murdered.  Miller is awaiting sentencing.

This superseding indictment alleges that MACK and LUCIEN conspired to kill another witness to prevent him from appearing in the matter of United States v. Mack and from communicating with law enforcement information that the witness had about the Ian Francis murder and the unlawful use and possession of a firearm.   LUCIEN is alleged to have attempted to tamper with this same witness by attempting to solicit another person to murder the witness.  LUCIEN is also charged with attempting to solicit another person to murder the witness, and two other persons, including a minor victim, to retaliate against the witness for appearing before a federal grand jury and for providing information to law enforcement about the murder of Ian Francis and the unlawful use and possession of a firearm.

The second superseding indictment also charges MACK with two counts of possession of a firearm by a previously convicted felon.

The charges of witness tampering by committing first degree murder and conspiracy to commit witness tampering by committing first degree murder carry a mandatory lifetime term of imprisonment.  The charges of attempted witness tampering and attempted witness retaliation carry a maximum term of 30 years’ imprisonment.

MACK and LUCIEN are in federal custody.  MACK appeared today before U.S. Magistrate Judge Donna Martinez in Hartford and entered a plea of not guilty to the charges against him.  LUCIEN appeared on March 30, 2015, before Judge Martinez, and entered a plea of not guilty to the charges against him

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

This matter is being investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes and Gang Task Force and the Hartford Police Department’s Major Crimes Division.  The case is being prosecuted by Assistant U.S. Attorneys Brian Leaming and Jennifer Laraia.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DAYQUAN JACKSON, also known as “Quan” and “DaeDae,” 27, of Bridgeport, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 55 months of imprisonment, followed by three years of supervised release, for operating a mail fraud and bank fraud scheme.

According to court documents and statements made in court, JACKSON and others stole mail from residences in Fairfield County throughout 2013 and 2014 to obtain either blank checks or credit card “convenience checks.”  JACKSON and others then used some of the stolen checks to purchase cars, motorcycles, and all-terrain vehicles listed for sale on the Internet from unsuspecting victims in surrounding states.  Some of the stolen checks also were provided to “runners” who deposited the checks into their bank accounts.  JACKSON and others then withdrew the funds from the accounts.

The court calculated the intended loss to financial institutions and individual victims resulting from this scheme as more than $177,000.  JACKSON was ordered to pay restitution in the amount of $84,242.

JACKSON was arrested on August 22, 2014.  On October 29, 2014, he pleaded guilty to one count of conspiracy to commit mail fraud and bank fraud.

This matter is being investigated by the U.S. Postal Inspection Service, with substantial assistance from the Connecticut Financial Fraud Task Force and the Greenwich, Fairfield, Wilton, and Bridgeport Police Departments, as well as law enforcement in New Hampshire.  The case is being prosecuted by Assistant U.S. Attorney Marc Silverman.

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that MARIA PINHEIRO, 57, of Trumbull, waived her right to indictment and pleaded guilty yesterday in Bridgeport federal court to filing false tax returns.

According to court documents and statements made in court, PINHEIRO owns and operates the Dolphin’s Cove Marina (“DCM”), a seafood restaurant in Bridgeport. From 2007 through 2009, PINHEIRO was the sole shareholder and bookkeeper for DCM, and she handled all of the DCM finances. In pleading guilty, PINHEIRO admitted that instead of depositing all of the cash receipts from DCM into the DCM business checking account, she deposited substantial amounts of cash from business into her personal checking account. She then failed to provide her personal bank records to the firms that prepared the federal income tax returns for her and DCM.

Between 2007 and 2009, PINHEIRO deposited $352,437 in cash that DCM received into her personal bank account. Some of deposits were structured in amounts of less than $10,001 in order to evade her bank’s currency transaction reporting requirements. PINHEIRO caused the filing of false personal and corporate tax returns, resulting in a tax loss of $92,251.

PINHEIRO pleaded guilty to one count of filing a false tax return. She is scheduled to be sentenced by Chief U.S. District Judge Janet C. Hall in New Haven on June 15, 2015, at which time she faces a maximum term of imprisonment of three years and a fine of up to $100,000. PINHEIRO also has agreed to pay $243,956.98 in back taxes, interest and penalties.

This matter was investigated by the Internal Revenue Service – Criminal Investigation Division, and is being prosecuted by Assistant U.S. Attorney Sarah P. Karwan.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that ANTHONY SABATO, 57, of West Haven, and MIGUEL JOEL ROMAN, 25, of Hartford, were arrested yesterday on federal narcotics and firearm offenses. SABATO and ROMAN are scheduled to appear before U.S. Magistrate Judge William I. Garfinkel in Bridgeport at 12:30 p.m.

This matter stems from an investigation being conducted by the FBI’s New Haven Safe Streets Task Force, the West Haven Police Department and the Darien Police Department. The investigation employed the use of an undercover law enforcement officer.

As alleged in the criminal complaint, between January and March 2015, the undercover officer purchased crack cocaine from SABATO and ROMAN. SABATO and ROMAN also negotiated the purchase of a handgun from the undercover officer, and arranged to sell him two ounces of crack cocaine at a price of $2,000 per ounce. SABATO and ROMAN were arrested after they met the undercover officer at SABATO’s West Haven home to consummate the crack cocaine and firearm transactions.

The complaint charges SABATO and ROMAN with conspiring to distribute and to possess with intent to distribute cocaine base (“crack cocaine”), which carries a maximum term of imprisonment of 40 years, and conspiring to possess a firearm in furtherance of a narcotics trafficking offense, which carries a maximum term of imprisonment of 20 years.

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

The FBI’s New Haven Safe Streets Task Force includes personnel from the FBI, West Haven Police Department, New Haven Police Department, Milford Police Department and Connecticut Department of Correction.

This case is being prosecuted by Assistant U.S. Attorney Tracy Lee Dayton.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that two Bridgeport men have been sentenced for trafficking heroin. RASHAD HEARD, also known as “Shotty,” 25, was sentenced yesterday by Chief U.S. District Judge Janet C. Hall in New Haven to 60 months of imprisonment, followed by five years of supervised release. Today, Chief Judge Hall sentenced TYSHEEM WRIGHT, 28, to approximately 15 months of imprisonment, time already served, and five year of supervised release.

According to court documents and statements made in court, in January 2012, the FBI Bridgeport Safe Streets Task Force, Bridgeport Police Department and Connecticut State Police Statewide Narcotics Task Force began an investigation into narcotics trafficking and violent criminal activity in and around the Trumbull Gardens housing complex in Bridgeport. The investigation revealed that Ronell Hanks, also known as “Biz” and “Ace,” headed an organization that sold heroin, cocaine and crack cocaine 24-hours a day, seven days a week.

HEARD and WRIGHT received heroin from Hanks and sold the drug to their own customers.

During the course of the investigation, investigators seized approximately one kilogram of heroin, one-half kilogram of crack cocaine, approximately $100,000 in cash, three vehicles, jewelry, nine firearms, and more than 200 rounds of ammunition.

On December 18, 2013, a grand jury in Bridgeport returned an indictment charging HEARD, WRIGHT, Hanks and 11 other individuals with narcotics and firearms trafficking offenses.

HEARD and WRIGHT have been detained since their arrests in December 2013. Both defendants previously pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 100 grams or more of heroin.

HEARD’s criminal history includes a conviction in December 2007 for first-degree robbery and attempted murder. He served approximately seven years of imprisonment for those offenses.

Hanks pleaded guilty and, on February 26, 2015, was sentenced to 17 years of imprisonment.

This matter is being investigated by the FBI’s Bridgeport Safe Streets Task Force, in coordination with the Bridgeport Police Department, the Trumbull Police Department and the Connecticut State Police Statewide Narcotics Task Force. The Bureau of Alcohol, Tobacco, Firearms and Explosives, and the State’s Attorney for the Judicial District of Fairfield are assisting this investigation and prosecution. The case is being prosecuted by Assistant U.S. Attorneys Tracy Lee Dayton and Rahul Kale.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that SALVATORE FERRAIOLI, 33, of Staten Island, New York, pleaded guilty today in Hartford federal court to a federal tax charge stemming from his involvement in an illegal sports gambling operation.

According to court documents and statements made in court, FERRAIOLI was a bookmaker in a sports gambling operation run by Dean DePreta and Richard Uva, two alleged associates of the Gambino organized crime family. DePreta and Uva used sports-gambling websites, particularly 44wager.com based in Costa Rica, to conduct their bookmaking operation.

FBI analysis of 44wager.com website data determined that the total gross revenues of the Stamford-based gambling operation were nearly $1.7 million from October 2010 to June 2011.

In court, FERRAIOLI admitted to being a bookmaker in the operation, and for failing to register with the Internal Revenue Service or to file a wagering tax return in 2011.

FERRAIOLI pleaded guilty to one count of failing to file a wagering tax return. He is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on June 17, 2015, at which time he faces a maximum term of imprisonment of one year and a fine of up to $25,000. FERRAIOLI also has agreed to forfeit $160,988, and to pay back taxes, interest and penalties.

This matter was investigated by the FBI Fairfield County Organized Crime Task Force, the Internal Revenue Service – Criminal Investigation Division, the Stamford Police Department, the Bridgeport Police Department and the Connecticut State Police. The case is being prosecuted by Assistant U.S. Attorneys Hal Chen and Peter Jongbloed.

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U.S. ATTORNEY'S OFFICE
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that WILLIAM E. CHASE, 69, of Milford, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to six months of imprisonment, followed by three years of supervised release, for stealing his deceased mother’s social security benefits for more than 25 years.

According to court documents and statements made in court, CHASE’s mother, a Social Security benefits recipient, died in November 1988. At the time of his mother’s death, CHASE was a co-signor on the checking account into which his mother’s monthly Social Security benefits were deposited. Despite the fact that CHASE was identified as the informant on his mother’s death certificate in 1988, he failed to notify the Social Security Administration of her death or take any steps to stop the monthly benefit payments. From the time of his mother’s death until May 2014, $307,396 in Social Security benefits were direct deposited into the bank account controlled by CHASE. CHASE utilized more than $292,000 of the deposited benefits for his personal use and enjoyment.

In May 2014, the bank returned the remaining balance of the checking account, approximately $14,761, to the Social Security Administration.

CHASE was ordered to pay full restitution.

On December 3, 2014, CHASE pleaded guilty to one count of theft of public funds.

This matter was investigated by the Social Security Administration, Office of Inspector General – Office of Investigations, and was prosecuted by Assistant U.S. Attorney Anastasia Enos King.

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LISA WILSON-FOLEY, 55, of Simsbury, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven for violating federal campaign finance laws. Judge Arterton ordered WILSON-FOLEY to serve five months of imprisonment, followed by one year of probation, the first five months of which WILSON-FOLEY must serve in home confinement with electronic monitoring. WILSON-FOLEY also was ordered to pay a fine of $20,000, as well as the cost of her incarceration and electronic monitoring.

“While seeking election to the U.S. House of Representatives, Lisa Wilson-Foley conspired to hide from the electorate payments made to a shadow operative hired to assist her campaign both quietly and on the radio,” stated First Assistant U.S. Attorney Michael J. Gustafson. “It is troubling that she believed that there was nothing wrong with this criminal arrangement and it is equally disturbing that after pleading guilty, she chose to minimize her role in the scheme. Public officials, and candidates for public office, must be held accountable for criminal behavior. Hopefully, awareness that such conduct can result in jail will encourage other candidates and campaign workers to follow the law. I thank the U.S. Postal Inspectors for meticulously investigating this case in an effort to preserve fair and open elections.”

“The U.S. Postal Inspection Service is proud to have led this investigation that unearthed corrupt conduct by a candidate running for federal office,” stated Shelly A. Binkowski, Inspector in Charge for the Boston Division of the U.S. Postal Inspection Service. “Postal Inspectors will continue to work closely with the Connecticut U.S. Attorney’s Office and our federal law enforcement partners to investigate similar crimes that can corrode our trust in all public officials.”

According to court documents and statements made in court, in 2011 and 2012, LISA WILSON-FOLEY was a candidate for election to the U.S. House of Representatives from Connecticut’s Fifth Congressional District, and competing in a primary campaign for the nomination of the Republican Party. As a candidate for federal office, WILSON-FOLEY and her associates formed and registered with the Federal Election Commission (“FEC”) the “Lisa Wilson-Foley for Congress” committee in order to receive contributions and make expenditures on behalf of her campaign.

WILSON-FOLEY’s husband, Brian Foley, owns a Connecticut nursing home company and a number of other related companies, including a real estate company.

During the primary campaign, WILSON-FOLEY, Brian Foley, former Connecticut Governor John Rowland and others conspired to conceal from the FEC and the public that Rowland was paid money in exchange for services he provided to WILSON-FOLEY’s campaign. As part of the scheme, Rowland proposed to WILSON-FOLEY and Foley that he be hired to work on the campaign. WILSON-FOLEY wanted Rowland to work on the campaign, but believed that because Rowland was a previously convicted felon, public disclosure of his paid role in the campaign would result in substantial negative publicity for WILSON-FOLEY’s candidacy. In order to retain Rowland’s services for the campaign while reducing the risk that his paid campaign role would be disclosed to the public, WILSON-FOLEY, Foley and Rowland agreed that Rowland would be paid by Foley to work on the campaign.

Foley, Rowland and others created and executed a fictitious contract outlining an agreement purportedly for consulting services between Rowland and the law offices of an attorney who worked for Foley’s nursing home company. Foley made regular payments to Rowland for his work on behalf of WILSON-FOLEY’s campaign and routed those payments from his real estate company through the law offices of the attorney. Rowland provided nominal services to Foley’s nursing home company in order to create a “cover” that he was being paid for those nominal services when, in fact, he was being paid in exchange for his work on behalf of WILSON-FOLEY’s campaign.

Between September 2011 and April 2012, Rowland was paid approximately $35,000 for services rendered to WILSON-FOLEY’s campaign. The payments originated with Foley and constituted campaign contributions, but were not reported to the FEC in violation of federal campaign finance laws.

On March 31, 2014, WILSON-FOLEY and Foley each pleaded guilty to conspiring to make illegal campaign contributions. On January 9, 2015, Foley, who cooperated in the investigation and prosecution of this matter, was sentenced to three months in community confinement (halfway house), three years of probation and a $30,000 fine.

On September 19, 2014, a jury found Rowland guilty of two counts of falsification of records in a federal investigation, one count of conspiracy, two counts of causing false statements to be made to the FEC, and two counts of causing illegal campaign contributions. On March 18, 2015, he was sentenced to 30 months of imprisonment, three years of supervised release and a $35,000 fine.

This matter was investigated by the U.S. Postal Inspection Service and was prosecuted by Assistant U.S. Attorneys Liam Brennan and Christopher Mattei.

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U.S. ATTORNEY'S OFFICE
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that EILEEN BRENNAN, 78, of Branford, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to one year of probation, the first six months of which BRENNAN must serve in home confinement, for failing to pay taxes on money she received while participating in a “Gifting Tables” pyramid scheme. BRENNAN also was ordered to perform 50 hours of community service and pay back taxes, interest and penalties.

According to court documents and statements made in court, a Gifting Table is configured as a four-level pyramid, with eight participants assigned to the bottom row, four participants assigned to the third row, two participants assigned to the second row, and one participant assigned to the top row. The top row participant is referred to as the “Dessert,” the two participants on the second row as “Entrees,” the four participants on the third row as “Soup and Salads,” and the eight participants on the bottom row as “Appetizers.” To join a Gifting Table, new participants were required to pay $5,000, typically cash, to the Dessert, that is, the participant occupying the top position on the pyramid. The $5,000 payment, which was fraudulently characterized as a gift, secured the new participant a position as an Appetizer on the bottom row.

Participants progressed from the bottom row of the pyramid by recruiting additional people to join the Gifting Table. When eight new participants joined a Gifting Table, each having made a $5,000 “gift” to the person occupying the Dessert position at the top of the pyramid, the Dessert left the Gifting Table and kept the $40,000 paid by the eight new participants. That particular Gifting Table was then split, with the two participants occupying the Entree position on the second row moving to the top position (Dessert) of two new pyramids. The other incumbent members of the Gifting Table moved up a row on one of the two newly-formed pyramids, and the search for 16 new participants began. The success of the Gifting Tables depended on new participants joining and making the $5,000 “gift.”

In 2008, 2009 and 2010, BRENNAN received $100,000 while participating in the Gifting Tables scheme. Even though she had been advised by an attorney that the money was taxable income and not a gift, she failed to pay federal income taxes on the money she received.

On August 19, 2014, BRENNAN pleaded guilty to one count of willful failure to file a return, supply information or pay tax.

This matter is being investigated by the Internal Revenue Service – Criminal Investigation Division and prosecuted by Assistant U.S. Attorneys Douglas P. Morabito and Peter S. Jongbloed.

PUBLIC AFFAIRS CONTACT:

U.S. ATTORNEY'S OFFICE
Tom Carson
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The U.S. Attorney’s Office for the District of Connecticut and the U.S. Department of Health and Human Services, Office for Civil Rights (OCR), have entered into a voluntary resolution agreement with St. Francis Hospital and Medical Center in Hartford to ensure effective communication with and enhance the quality of services for persons who are deaf or hard of hearing.

The matter was initiated by a complaint filed with the Department of Justice (DOJ) alleging violations of Title III of the Americans with Disabilities Act (ADA). Specifically, the complainant alleged that St. Francis Hospital and Medical Center (“St. Francis Hospital”) failed to provide auxiliary aids and services when necessary to ensure effective communication with him during multiple admissions to St. Francis Hospital. Title III of the ADA prohibits public accommodations, including hospitals, from discriminating on the basis of disability in the full and equal enjoyment of their goods, services, facilities, privileges, advantages or accommodations.

In cooperation with DOJ, OCR initiated a compliance review of St. Francis Hospital with regard to the Hospital’s policies and procedures for ensuring effective communication with individuals who are deaf or hard of hearing to determine the Hospital’s compliance with Section 504 of the Rehabilitation Act of 1973. Section 504 of the Act prohibits discrimination on the basis of disability in any program or activity receiving federal financial assistance.

As a result of these investigative efforts, concerns were raised regarding whether St. Francis Hospital has been implementing adequate policies and procedures to ensure effective communication with deaf or hard of hearing individuals.

Under the agreement, which resolves both the DOJ complaint investigation and OCR compliance review, St. Francis Hospital is obligated to take several critical steps toward improving access to appropriate communication services for deaf and hard of hearing individuals, including revising its policies and procedures as necessary, revising its training as necessary, and performing an assessment of the need for auxiliary aids and services for patients and their companions.

St. Francis Hospital also agreed to pay the complainant $45,000 in compensatory relief.

The agreement is effective for three years, during which time both OCR and the U.S. Attorney’s Office will monitor St. Francis Hospital’s compliance.

A copy of the voluntary resolution agreement may be found here.

This matter was handled by Assistant U.S. Attorney Brenda Green.

To learn more about the ADA and its application to places of public accommodation, call the Justice Department’s toll-free ADA information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that PAUL WHITEHURST, also known as “Juice,” 25, of Bridgeport, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 48 months of imprisonment, followed by five years of supervised release, for kidnapping.

According to court documents and statements made in court, in January 2013 the Danbury Police Department began investigating a narcotics trafficking network that maintained a series of drug distribution locations, known as trap houses, in Danbury, out of which members of the organization sold crack and heroin. The organization also rented hotel rooms where they packaged and distributed narcotics. During the investigation, law enforcement learned that the individuals who headed the drug trafficking ring had organized and committed armed home invasion robberies of marijuana dealers.

WHITEHURST sold narcotics on behalf of the organization. He also oversaw two trap houses and rented hotel rooms for additional drug distribution.

In approximately May 2013, WHITEHURST and a co-defendant approached an individual who was walking in Danbury and directed the victim to get into their vehicle. At the time, the victim owed WHITEHURST a drug debt of approximately $100. In the car, WHITEHURST physically and verbally assaulted the victim as they drove to a nearby reservoir. At the reservoir, WHITEHURST pushed the victim into the water and then threw rocks at him. WHITEHURST and others then drove the victim to a liquor store and purchased a liter of vodka, which WHITEHUST forced the victim to drink in its entirety in approximately 15 minutes until the victim lost consciousness. The victim, still unconscious, was then driven to a trap house where he was locked in a bathroom overnight. The next day, WHITEHURST directed the victim to work off his drug debt by selling heroin to customers. After selling the drugs, the victim was released.

WHITEHURST has been detained since August 2013. On October 22, 2014, he pleaded guilty to one count of kidnapping.

This matter has been investigated by the Drug Enforcement Administration’s New Haven Task Force and the Danbury Police Department. The DEA Task Force includes personnel from the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia and Meriden Police Departments. The case is being prosecuted by Assistant U.S. Attorneys Tracy Dayton and Vanessa Richards.

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Former governor JOHN G. ROWLAND was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 30 months of imprisonment, followed by three years of supervised release, for attempting to conceal the extent of his involvement in two federal election campaigns.  ROWLAND also was ordered to pay a $35,000 fine.  ROWLAND, 57, of Middlebury, served as governor of Connecticut from 1995 to 2004, and in the U.S. House of Representatives from 1985 to 1991.

“It is disheartening that an individual who once held two of our country’s highest elected offices, and who also served time in prison for a previous federal conviction, chose to deceive voters and violate laws that were established to ensure fair and open elections,” stated First Assistant U.S. Attorney Michael J. Gustafson.  “Hopefully, today’s sentence will deter both this defendant from future criminal behavior and all who may consider ignoring campaign financing laws.  I want to thank the U.S. Postal Inspectors who diligently investigated this scheme, as well as our trial team who have expertly and fairly prosecuted this case.”

“Postal Inspectors dedicated two years to this complex fraud investigation” stated Shelly A. Binkowski, Inspector in Charge for the Boston Division of the U.S. Postal Inspection Service.  “John Rowland’s conviction and today’s sentence validate that the undertaking was well worth the effort.  Those who plot in secret to violate the public trust are not immune to the law and, as demonstrated in this case, will be prosecuted and punished to the fullest extent for unscrupulous behavior.”

According to the evidence introduced during his trial, in approximately October 2009, ROWLAND devised a scheme to work for the campaign of a candidate seeking election to the U.S. House of Representatives from Connecticut’s Fifth Congressional District during the 2009 and 2010 election cycle, and to conceal from the Federal Election Commission (“FEC”) and the public that he would be paid to perform that work.  To make the illegal arrangement appear legitimate, ROWLAND drafted a sham consulting contract pursuant to which he would purportedly perform work for a separate corporate entity owned by the candidate.

During the 2011 and 2012 election cycle, another candidate, Lisa Wilson-Foley, was seeking election to the U.S. House of Representatives from Connecticut’s Fifth Congressional District.  Wilson-Foley’s husband, Brian Foley, owns a Connecticut nursing home company and a number of other related companies, including a real estate company.  ROWLAND conspired with Wilson-Foley, Foley and others to conceal from the FEC and the public that ROWLAND was paid money in exchange for services he provided to Wilson-Foley’s campaign.

As part of the scheme, ROWLAND proposed to Wilson-Foley and Foley that he be hired to work on the campaign.  In order to retain ROWLAND’s services for the campaign while reducing the risk that his paid campaign role would be disclosed to the public, ROWLAND, Wilson-Foley and Foley agreed that ROWLAND would be paid by Foley to work on the campaign.  ROWLAND, Foley and others then created and executed a fictitious contract outlining an agreement purportedly for consulting services between ROWLAND and the law offices of an attorney who worked for Foley’s nursing home company.  Foley made regular payments to ROWLAND for his work on behalf of Wilson-Foley’s campaign and routed those payments from his real estate company through the law offices of the attorney.  ROWLAND provided nominal services to Foley’s nursing home company in order to create a “cover” that he was being paid for those nominal services when, in fact, he was being paid in exchange for his work on behalf of Wilson-Foley’s campaign.

Between September 2011 and April 2012, ROWLAND was paid approximately $35,000 for services rendered to Wilson-Foley’s campaign.  The payments originated with Foley and constituted campaign contributions, but were not reported to the FEC in violation of federal campaign finance laws.
On September 19, 2014, ROWLAND was found guilty of two counts of falsification of records in a federal investigation, one count of conspiracy, two counts of causing false statements to be made to the FEC, and two counts of causing illegal campaign contributions.

In December 2004, ROWLAND pleaded guilty to conspiracy to commit honest services mail fraud and tax fraud.  On March 18, 2005, he was sentenced to 12 months and one day of imprisonment and four months of home confinement.

On March 31, 2014, Foley and Wilson-Foley each pleaded guilty to conspiring to make illegal campaign contributions.  On January 9, 2015, Foley, who received credit for cooperating with the investigation, was sentenced to three months in community confinement (halfway house).  Wilson-Foley awaits sentencing.

This matter was investigated by the U.S. Postal Inspection Service and is being prosecuted by Assistant U.S. Attorneys Liam Brennan and Christopher Mattei.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that TIMOTHY G. GRIFFIN, 54, of Ridgefield, waived his right to indictment and pleaded guilty today before U.S. Magistrate Judge William I. Garfinkel in Bridgeport to one count of filing a false tax return.

According to court documents and statements made in court, GRIFFIN practiced law in Bronxville, New York, and his clients paid him for his legal services.  In 2006, the Internal Revenue Service sent letters to GRIFFIN about his having not filed income tax returns for 2002, 2003, and 2004 tax years.  In response to the IRS inquiry, GRIFFIN prepared and submitted fraudulent individual income tax returns for the 2003 and 2004 tax years. The 2003 return reported business income of $77,713, gross receipts from the law practice of $225,825, a net profit of $32,200, and a total tax of $10,981. The 2004 return reported business income of $67,983, gross receipts from the law practice of $234,894, a net profit of $39,767, and a total tax of $9,606.  A subsequent criminal investigation determined that GRIFFIN did not report on these two tax returns approximately $498,934 in additional gross receipts from his law practice, resulting in additional tax due of $136,844.

GRIFFIN is scheduled to be sentenced by U.S. District Judge Stefan R. Underhill on December 23, 2014, at which time he faces a maximum term of imprisonment of three years and a fine of up to $250,000.   GRIFFIN also has agreed to make restitution to the U.S. Department of Treasury in the total amount of $153,807 – which includes $136,844 for the 2003 and 2004 tax years and $16,963 for the 2005 and 2006 tax years – plus applicable penalties and interest. 

This matter is being investigated by the Internal Revenue Service – Criminal Investigation Division, and is being prosecuted by Assistant U.S. Attorney Peter S. Jongbloed.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on February 20, 2015, a federal grand jury in New Haven returned a 23-count indictment charging BRETT C. LILLEMOE, 45, of Minneapolis, Minn., PABLO CALDERON, 59, Darien, Conn., and SARAH ZIRBES, 39, Minneapolis, Minn., with conspiracy, fraud and money laundering offenses related to a multimillion dollar scheme to defraud banks participating in a USDA-backed export financing program.  The indictment alleges that the three defendants engaged in a conspiracy to defraud U.S. financial institutions that secured loans to Russian Banks based on altered documents.  The loans were backed by a credit guarantee program run by the U.S. Department of Agriculture (USDA), and when the loans went into default and were subsequently not paid back, the USDA lost millions of dollars.

LILLEMOE was arraigned on March 13 in Bridgeport federal court.  He entered a plea of not guilty to all of the charges against him and was released on a $250,000 bond.  ZIRBES was arraigned on March 6, pleaded not guilty and is released on a $100,000 bond.  CALDERON is scheduled to be arraigned this afternoon at in Bridgeport.

As alleged in the indictment, the USDA provides credit guarantees through the Export Credit Guarantee Program (GSM-102), which is designed to encourage financing of commercial exports of U.S. agricultural products.  The GSM-102 program guarantees credit extended by U.S. financial institutions in the U.S. to approved foreign banks, including banks in Russia. As part of the program, the Commodity Credit Corporation (CCC), which is an agency and instrumentality of the USDA, enters into payment guarantees (“credit guarantees”). 

The credit guarantees are designed to encourage exports to buyers in foreign countries – mainly developing countries.  The program operates in cases where credit is necessary to increase or maintain U.S. exports to a foreign market and where U.S. financial institutions might be otherwise unwilling to provide financing without the guarantee.  In providing the credit guarantee facility, the CCC seeks to expand market opportunities for U.S. agricultural exporters and assist long-term market development for U.S. agricultural commodities. 

In connection with the GSM-102 program, a foreign importer that has contracted to buy U.S. agricultural products can apply for a letter of credit (“LOC”) from a foreign bank that has been approved by the USDA’s Foreign Agricultural Service (FAS).  The foreign bank then issues a letter of credit in favor of the U.S. exporter.  The U.S. exporter then, consistent with the requirements of the GSM-102 program, presents proper shipping documents to an approved U.S. financial institution, including a copy of an original bill of lading, certificate of origin, and evidence of export.  The U.S. financial institution then provides funds to the U.S. exporter which, in exchange, assigns the rights to the proceeds payable under the letter of credit from the foreign bank to the U.S. financial institution in the same dollar-denominated amount, less any fees.  If the foreign bank defaults on its payments to the U.S. financial institution, the U.S. financial institution may submit a claim to the USDA FAS under the guarantee for up to 98 percent of the payment amount owed at the time of the default.  

The indictment alleges that between September 2007 and January 2012, LILLEMOE, CALDERON, ZERBES and others devised and executed a scheme to defraud various U.S. financial institutions, including Deutsche Bank A.G. and Colorado-based CoBank ACB, by presenting false and altered shipping documents, including altered bills of lading, in connection with securing funding on loans guaranteed by the GSM-102.

The indictment alleges that LILLEMOE, CALDERON, ZERBES established multiple entities with separate names for the purpose of obtaining a greater share of the allocation of guarantees from the GSM-102 program, and used multiple bank accounts in the names of the various entities in order to further create the appearance that the entities were operating as separate and unrelated entities.  The defendants then, in various ways, paid for or otherwise acquired bills of lading and other shipping documents for shipments of agricultural products that they did not physically ship and for which they did not participate in the physical movement of the products in any capacity.

It is further alleged that LILLEMOE entered into agreements with foreign banks, including International Industrial Bank (IIB) in Russia, to provide them capital that would be made available to them from a U.S. financial institution through the use of the GSM-102 program.  LILLEMOE subsequently obtained letters of credit from the foreign banks.  LILLEMOE, CALDERON, and ZIRBES and others then altered copies of certain shipping documents, including bills of lading marked “Copy non negotiable,” by whiting out portions of the documents, stamping the word “original” on the documents, and adding shading on certain sections of the bills of lading.  The defendants also prepared and executed documents termed “commercial invoices” purporting to represent sales of agricultural commodities between entities that they controlled, as well as between entities that they controlled and other entities. 

The defendants then used these fraudulent documents to obtain large amounts of capital from U.S. banks in connection with the GSM-102 program, and then provided the funds to the foreign banks in exchange for a percentage fee for themselves and their various entities.  Although the foreign banks were obligated to repay the funds to the U.S. financial institutions by virtue of the letters of credit issued to the U.S. financial institutions, in a number of instances, the foreign banks failed to do so. Nevertheless, LILLEMOE, CALDERON, ZIRBES and their various entities retained millions of dollars of fees they had collected in connection with the GSM-102 transactions.

Through this alleged scheme, the foreign banks defaulted on over $10 million of loans for which the USDA’s GSM-102 program had to pay out the guarantees. 

The indictment further alleges that, on November 17, 2011, CALDERON stated to federal agents investigating this matter that LILLEMOE was his “supplier” and that he, CALDERON, “purchased commodities from Lillemoe.”  In truth, LILLEMOE was not CALDERON’s supplier and CALDERON did not purchase commodities from LILLEMOE.  Rather, LILLEMOE was a partner and co-conspirator with whom CALDERON orchestrated paper-only transactions.

The indictment charges LILLEMOE, CALDERON and ZIRBES with one count of conspiracy to commit wire fraud and bank fraud, and multiple counts of wire fraud, offenses that carry a maximum term of imprisonment of 20 years on each count.  The indictment also charges each defendant with one count of bank fraud, which carries a maximum term of imprisonment of 30 years, and one count of money laundering, which carries a maximum term of imprisonment of 10 years.   In addition, CALDERON is charged with one count of making a false statement to federal law enforcement, which carries a maximum term of imprisonment of five years.

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

This matter is being investigated by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation Division and U.S. Department of Agriculture, Office of Inspector General.  The case is being prosecuted by Assistant U.S. Attorneys Michael S. McGarry and John H. Durham.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that GARRETT SANTILLO, 35, last residing in Hollywood, Fla., pleaded guilty today in Hartford federal court to mailing numerous threatening letters to individuals in Connecticut, including two federal judges and Connecticut’s governor.

According to court documents and statements made in court, on July 15, 2014, a federal judge received a threatening letter at his Connecticut residence via the U.S. Postal Service.  The letter was postmarked on July 11, 2014, from Miami, but did not bear a return address.  The letter writer made certain demands and stated “You (sic) home addresses in Conn. are public information and if you mask your identity by name or appearance, we can still track you to wherever you go and will kill you if you don’t follow what this letter instructs.”

Following the judge’s receipt of the threatening letter, approximately 14 other individuals in Connecticut, including another federal judge and the governor of Connecticut, also received letters containing death threats.  All of the letters were handwritten, were mailed from the Miami area to the victims’ home addresses in Connecticut, did not bear a return address, contained a demand for action and threatened death if the recipient failed to comply with the writer’s request.

The investigation revealed that SANTILLO wrote and mailed the threatening letters.  He was arrested at his Florida residence on September 29, 2014.

SANTILLO pleaded guilty to one count of mailing threatening communications, which carries maximum term of imprisonment of 10 years.  He is scheduled to be sentenced by U.S. District Judge Alvin W. Thompson on May 27, 2015.

SANTILLO, who has been detained since his arrest, has two prior federal convictions for sending threatening communications.

This matter has been investigated by the U.S. Marshals Service, Federal Bureau of Investigation, U.S. Postal Inspection Service, Connecticut State Police, the Yale University Police Department and the Broward County (Fla.) Sheriff’s Department, with the assistance of the U.S. Attorney’s Office for the Southern District of Florida.  The case is being prosecuted by Assistant U.S. Attorney Tracy Dayton.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ROBERT SANTOS, also known as “Scoot,” 33, of New Haven, was sentenced today by Senior U.S. District Judge Ellen Bree Burns in New Haven to 120 months of imprisonment, followed by eight years of supervised release, for distributing narcotics.

According to court documents and statements made in court, this matter stems from “Operation Bloodline,” a joint law enforcement investigation targeting narcotics trafficking and gang violence in the Dwight-Kensington and Fair Haven sections of New Haven.  Led by the DEA New Haven Task Force and the New Haven and Hamden Police Departments, the year-long investigation included the use of court-authorized wiretaps on numerous telephones, extensive physical surveillance, controlled purchases of narcotics, execution of search warrants, and seizures of narcotics and firearms.  Approximately 100 individuals were convicted of federal charges as a result of the investigation.

On February 6, 2014, a jury found SANTOS guilty of one count of conspiracy to possess with intent to distribute, and to distribute, 100 grams or more of heroin.

According to the evidence at trial, Kevin Wilson, also known as “Nature,” distributed narcotics, primarily in the Dwight/Chapel area of New Haven.  SANTOS partnered with Wilson, pooling money to acquire large quantities of heroin from a New York-based supplier, and then distributing the drug in greater New Haven.

Trial testimony also established that Wilson and other co-defendants shared a stash of firearms to use in furtherance of their drug trafficking activity. 

SANTOS was arrested on July 25, 2012, and is detained.

SANTOS’s criminal history includes multiple felony convictions, including three narcotics-related convictions and one firearm-related conviction. 

Wilson pleaded guilty and awaits sentencing.

This matter was investigated by the Drug Enforcement Administration’s New Haven Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia and Meriden Police Departments.  The United States Marshals Service, the Connecticut State Police, the Connecticut Department of Correction, Parole and Community Services and the Milford, Hartford, New Britain, North Branford and Stratford Police Departments provided valuable assistance to the investigation.

This case is being prosecuted by Assistant U.S. Attorneys S. Dave Vatti and Marc Silverman.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that KENYA MALCOLM, 36, of Surprise, Ariz., pleaded guilty today in Bridgeport federal court to operating a fraudulent federal income tax refund scheme.

According to court documents and statements made in court, between November 2012 and May 2013, MALCOLM, Charles Ross, Bernard Brantley and others conspired to file false federal income tax returns in the names of individuals without the individuals’ knowledge.  MALCOLM, who operated a business in Arizona called “Biggest Refund Taxes,” held herself out falsely to be a certified public accountant.  As part of the scheme, MALCOLM paid Ross, also a resident of Surprise, to recruit individuals to her tax preparation business.  Ross subsequently contacted Brantley, a resident of Waterbury, Conn., and offered him a portion of Ross’s recruitment earnings if Brantley would also recruit clients for MALCOLM.  Instead of recruiting clients for tax preparation services, Brantley and individuals that Brantley hired recruited victims under false pretenses, telling them that they were eligible for government funding and not telling them that tax returns would be filed in their names.  Brantley and his associates then collected victims’ Social Security numbers, dates of birth and other personal information and provided that information to MALCOLM.

MALCOLM and Ross knew that Brantley was recruiting individuals under false pretenses.

MALCOLM used the personal information she was provided, as well as false income and employment information for each victim, to file tax returns that generated large tax refunds.  She then directed a portion of the tax refunds to herself, a portion to Ross and Brantley, and a portion to the victim, usually through a prepaid debit card.

Approximately $2.5 million in fraudulent federal income tax refunds were sought through this scheme, and more than $1 million in refunds were disbursed.

MALCOLM pleaded guilty to one count of conspiracy, which carries a maximum term of imprisonment of five years.  She is scheduled to be sentenced by U.S. District Judge Jeffrey Alker Meyer on June 4, 2015.

Ross and Brantley have also pleaded guilty and are scheduled to be sentenced on May 12, 2015.

This matter is being investigated by the Internal Revenue Service – Criminal Investigation Division and the United States Postal Inspection Service, and is being prosecuted by Assistant U.S. Attorney Sarala V. Nagala and Senior Litigation Counsel Richard J. Schechter.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that MATTHEW KATKE, 34, of New York, New York, waived his right to indictment and pleaded guilty today in Hartford federal court to participating in a multimillion securities fraud scheme.  KATKE also entered into an agreement to cooperate in the government’s ongoing investigation.

According to court documents and statements made in court, between April 2008 and August 2013, KATKE was a registered broker-dealer and managing director at RBS Securities Inc.  RBS is a global securities firm with headquarters in Stamford, Connecticut.  RBS also has a trading floor in Stamford where KATKE and other members of RBS’s Asset Backed Products division traded fixed income investment securities such as residential mortgage-backed securities (RMBS) and collateralized loan obligations (CLOs).  In pleading guilty, KATKE admitted that he and others conspired to increase RBS’s profits on CLO bond trades at the expense of customers.  As part of the scheme, KATKE and his co-conspirators made misrepresentations to induce buying customers to pay inflated prices and selling customers to accept deflated prices for CLO bonds, all to benefit RBS.

The conspiracy was perpetrated in two ways.  In certain transactions, KATKE misrepresented the CLO seller’s asking price to the buyer (or vice versa), keeping the difference between the price paid by the buyer and the price paid to the seller for RBS.  In other transactions, KATKE misrepresented to the CLO buyer that bonds held in RBS’s inventory were being offered for sale by a fictitious third-party seller invented by KATKE, which allowed KATKE to charge the buyer an extra commission that RBS was not entitled to.

The investigation revealed numerous fraudulent transactions by KATKE that cost at least 20 victim customers, including firms affiliated with recipients of federal bailout funds through the Troubled Asset Relief Program, millions of dollars.

“Fraud in the fixed income markets is a secret and unfair tax on investors everywhere,” said U.S. Attorney Deirdre M. Daly.  “Broker-dealers, and the people who work for them, need to understand that a market practice that is at odds with the securities law is a crime that carries serious repercussions.  We urge others to follow Mr. Katke’s example and cooperate with investigators.  We want to thank SIGTARP and the FBI for their efforts to date in this continuing investigation.  Additionally, we acknowledge our other partners at the Department of Labor Office of the Inspector General, the Federal Housing Finance Administration Office of Inspector General and the Fraud Section of the Department of Justice for their hard work in the numerous ongoing investigations into this market.”

“As a result of an ongoing criminal investigation by SIGTARP, this afternoon, Katke, a former senior securities trader at investment bank RBS, pleaded guilty to conspiring to defraud bank customers—customers that included TARP banks—out of millions of dollars,” said Christy Romero, Special Inspector General for TARP (SIGTARP).  “Katke lied to customers about the status of and the true prices paid and offered for securities as a way to boost profits for himself, others, and RBS.  Defrauding a TARP recipient bank is the same as defrauding the American taxpayers who funded the TARP bailout.  I want to commend U.S. Attorney Deirdre Daly and the team of prosecutors who stand united with SIGTARP to combat TARP bailout-related crime.”

KATKE pleaded guilty to one count of conspiracy to commit securities fraud, which carries a maximum term of imprisonment of five years.  He was released on a $250,000 bond and is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on June 3, 2015.

This case is being investigated by the Federal Bureau of Investigation and the Special Inspector General for the Troubled Asset Relief Program, and is being prosecuted by Assistant United States Attorneys Jonathan Francis and Heather Cherry.

Today’s announcement is part of the ongoing efforts of the Financial Fraud Enforcement Task Force’s Residential Mortgage-Backed Securities (RMBS) Working Group, a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis and the federal government’s subsequent bailout.  The RMBS Working Group brings together attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice,  U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and state Attorneys General offices around the country.

The RMBS Working Group is led by Acting Associate Attorney General Stuart Delery, and co-chaired by Assistant Attorney General for the Criminal Division Leslie R. Caldwell, Acting Assistant Attorney General for the Civil Division Benjamin Mizer, U.S. Securities and Exchange Commission Director of Enforcement Andrew Ceresney, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric T. Schneiderman.

For more information about the RMBS Working Group and the Financial Fraud Enforcement Task Force, visit: www.stopfraud.gov.

PUBLIC AFFAIRS CONTACT:

U.S. ATTORNEY'S OFFICE
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U.S. Attorney Deirdre M. Daly of the District of Connecticut, Special Inspector General Christy Romero for the Troubled Asset Relief Program (SIGTARP) and Special Agent in Charge Patricia M. Ferrick of the FBI’s New Haven Division announced that Matthew Katke, 34, of New York City, waived his right to indictment and pleaded guilty today in Hartford federal court to participating in a multimillion securities fraud scheme.  Katke also entered into an agreement to cooperate in the government’s ongoing investigation.

According to court documents and statements made in court, between April 2008 and August 2013, Katke was a registered broker-dealer and managing director at RBS Securities Inc.  RBS is a global securities firm with headquarters in Stamford, Connecticut.  RBS also has a trading floor in Stamford, where Katke and other members of RBS’s Asset Backed Products division traded fixed income investment securities such as residential mortgage-backed securities (RMBS) and collateralized loan obligations (CLOs).  In pleading guilty, Katke admitted that he and others conspired to increase RBS’s profits on CLO bond trades at the expense of customers.  As part of the scheme, Katke and his co-conspirators made misrepresentations to induce buying customers to pay inflated prices and selling customers to accept deflated prices for CLO bonds, all to benefit RBS.

The conspiracy was perpetrated in two ways.  In certain transactions, Katke misrepresented the CLO seller’s asking price to the buyer (or vice versa), keeping the difference between the price paid by the buyer and the price paid to the seller for RBS.  In other transactions, Katke misrepresented to the CLO buyer that bonds held in RBS’s inventory were being offered for sale by a fictitious third-party seller invented by Katke, which allowed Katke to charge the buyer an extra commission that RBS was not entitled to.

The investigation revealed numerous fraudulent transactions by Katke that cost at least 20 victim customers, including firms affiliated with recipients of federal bailout funds through the Troubled Asset Relief Program, millions of dollars.

“Fraud in the fixed income markets is a secret and unfair tax on investors everywhere,” said U.S. Attorney Daly.  “Broker-dealers, and the people who work for them, need to understand that a market practice that is at odds with the securities law is a crime that carries serious repercussions.  We urge others to follow Mr. Katke’s example and cooperate with investigators.  We want to thank SIGTARP and the FBI for their efforts to date in this continuing investigation.  Additionally, we acknowledge our other partners at the Department of Labor Office of the Inspector General, the Federal Housing Finance Administration Office of Inspector General and the Fraud Section of the Department of Justice for their hard work in the numerous ongoing investigations into this market.”

“As a result of an ongoing criminal investigation by SIGTARP, this afternoon, Katke, a former senior securities trader at investment bank RBS, pleaded guilty to conspiring to defraud bank customers—customers that included TARP banks—out of millions of dollars,” said Special Inspector General Romero.  “Katke lied to customers about the status of and the true prices paid and offered for securities as a way to boost profits for himself, others and RBS.  Defrauding a TARP recipient bank is the same as defrauding the American taxpayers who funded the TARP bailout.  I want to commend U.S. Attorney Daly and the team of prosecutors who stand united with SIGTARP to combat TARP bailout-related crime.”

Katke pleaded guilty to one count of conspiracy to commit securities fraud, which carries a maximum term of imprisonment of five years.  He was released on a $250,000 bond and is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny of the District of Connecticut on June 3, 2015.

This case is being investigated by the FBI and the Special Inspector General for the Troubled Asset Relief Program, and is being prosecuted by Assistant U.S. Attorneys Jonathan Francis and Heather Cherry of the District of Connecticut.

Today’s announcement is part of the ongoing efforts of the Financial Fraud Enforcement Task Force’s Residential Mortgage-Backed Securities (RMBS) Working Group, a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis and the federal government’s subsequent bailout.  The RMBS Working Group brings together attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice,  U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG,  SIGTARP, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network and state Attorneys General offices around the country.

The RMBS Working Group is led by Acting Associate Attorney General Stuart Delery, and co-chaired by Assistant Attorney General Leslie R. Caldwell of the Criminal Division, Acting Assistant Attorney General Benjamin Mizer of the Civil Division, Director of Enforcement Andrew Ceresney for the SEC, U.S. Attorney John Walsh of the District of Colorado and New York Attorney General Eric T. Schneiderman.

For more information about the RMBS Working Group and the Financial Fraud Enforcement Task Force, visit: www.stopfraud.gov.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ROBERT E. LEE, JR., 51, of Oxford, was sentenced today by U.S. District Judge Jeffrey Alker Meyer in Bridgeport to 63 months of imprisonment for operating a Ponzi scheme that defrauded investors of more than $1.1 million.  Judge Meyer also ordered LEE to pay full restitution and a $10,000 fine.

According to court documents and statements made in court, LEE was employed as a broker and financial advisor for various financial investment firms until July 2013 when he was terminated by his most recent employer, Rockwell Global Capital, LLC.   Between January 2011 and March 2014, LEE defrauded individuals of approximately $1,150,815 by claiming that he was investing their money in various investment vehicles when, in fact, he was maintaining custody of their funds in his personal bank account.  He then used the money to make distributions to other investors, and for personal expenses.  To conceal the scheme, LEE fabricated account statements and other documents, which he delivered to his victims.

As part of the sentence, Judge Meyer ordered LEE to forfeit $358,077.17 that was held in an online trading account at the time of his arrest.

LEE was arrested on May 12, 2014.  On December 17, 2014, he pleaded guilty to five counts of wire fraud.

This matter was investigated by the Federal Bureau of Investigation was prosecuted by Assistant U.S. Attorneys David T. Huang and Christopher M. Mattei.

PUBLIC AFFAIRS CONTACT:

U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 thomas.carson@usdoj.gov