District of Connecticut

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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that six men pleaded guilty yesterday in New Haven federal court to heroin distribution offenses.  The defendants were arrested in April 2013 as part of a Homeland Security Investigations (“HSI”) and New London Police Department-led investigation into the large-scale trafficking of heroin and cocaine from the Dominican Republic and Puerto Rico into and around southeastern Connecticut.

According to court documents and statements made in court, Luis Ariel Capellan Maldonado, also known as “Ariel,” regularly procured multi-kilogram quantities of heroin from the Dominican Republic and worked with several individuals to distribute the drug in southeastern Connecticut.  Operating out of his apartment building on Hawthorne Drive in New London, Capellan Maldonado supplied customers with raw heroin, often in quantities of 50 to 150 grams.  He also had access to kilogram quantities of cocaine and sometimes supplied cocaine to wholesale cocaine distributors in New London.

The investigation revealed that Capellan Maldonado coordinated the shipment of heroin, and sometimes cocaine, via human couriers from the Dominican Republic to the United States.  He also obtained heroin from other sources in New York City and Rhode Island.

Capellan Maldonado, 27, a citizen of the Dominican Republic, pleaded guilty on November 6, 2013, and awaits sentencing.  Yesterday, the following six individuals pleaded guilty to heroin conspiracy charges:

MIGUEL MORALES, also known as “Neow,” 49, of New London, JOSE MORALES, 53, of New London, LESTER FANTAUZZI, 47, of Niantic, EMMANUEL BLANCO BALBUENA, 29, of New London, JOSE REYNOSO-MONEGRO, also known as “Culito,” 44, of New York, N.Y., EDWIN CEPEDA, 34, of Groton

More than 100 individuals have been charged with federal and state offenses as a result of this investigation.  To date, 26 of the 49 defendants charged with federal offenses have pleaded guilty.

This matter is being 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 United States Attorneys Alina P. Reynolds, Sarah P. Karwan 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.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that WILLIAM DONG, 23, of Fairfield, has been charged by federal criminal complaint with the unlawful transport into Connecticut of an assault weapon purchased in Pennsylvania.  The complaint was unsealed today during DONG’s appearance in New Haven federal court.

As alleged in the criminal complaint, in approximately September 2013, DONG traveled to Pennsylvania, purchased a Bushmaster model XM-15-E2S, .223 caliber semi-automatic rifle and transported the rifle back to Connecticut.  This firearm is considered a prohibited assault weapon under Connecticut state law.

On December 3, 2013, West Haven Police arrested DONG in the vicinity of the University of New Haven after he was found in possession of two handguns on his person, and the Bushmaster rifle, which was seized from his nearby car.  The complaint alleges that DONG told police that he had purchased the rifle from a seller in Pennsylvania in September 2013 through an advertisement placed on www.armslist.com.

Although it is not unlawful under federal law for an individual, who is not a prohibited person, to possess this Bushmaster firearm, it is a federal violation for an individual to purchase this firearm outside of Connecticut and travel into the state with it, since it is a prohibited firearm under Connecticut state law. 

The charge carries a maximum penalty of five years of imprisonment and a $250,000 fine.

DONG, who has been detained in state custody since his arrest on December 3, appeared today before U.S. Magistrate Judge Joan G. Margolis in New Haven.  He agreed to the entry of a federal order of detention and waived his right to a speedy indictment and a probable cause hearing.

This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, working together with the West Haven Police Department.  This case is being prosecuted by Assistant U.S. Attorney Robert M. Spector.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that SAMUEL VASQUEZ, 26, of Willimantic, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to approximately five months of imprisonment, time already served, and three years of supervised release, for escaping from the custody of the Attorney General.  VASQUEZ was ordered to spend the first six months of his supervised release in a halfway house.

According to court documents and statements made in court, in June 2011, VASQUEZ was sentenced to 24 months of imprisonment for illegally selling a stolen shotgun and two handguns.  On May 7, 2013, the Bureau of Prisons transferred VASQUEZ to Watkinson House Residential Reentry Center in Hartford, an offender re-entry facility for individuals transitioning out of prison and into society.  On July 12, 2013, less than three weeks before his release date, VASQUEZ walked away from Watkinson House and did not return.  On July 25, 2013, he was arrested in Willimantic by the U.S. Marshals Service and the Willimantic Police Department.

VASQUEZ has been detained since his arrest.  On September 17, 2013, he pleaded guilty to the escape charge.

VASQUEZ is also currently serving a state term of special parole based on an unrelated state court conviction.

This matter was investigated by the U.S. Marshals Service, with the assistance of the Willimantic Police Department, and was prosecuted by Assistant U.S. Attorney Robert M. Spector.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, Cheryl Garcia, Acting Special Agent-in-Charge, U.S. Department of Labor – Office of Inspector General, Susan A. Hensley, Regional Director, U.S. Department of Labor – Employee Benefits Security Administration’s Boston Office, and Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP), todayannounced that a federal grand jury in Hartford has returned a 33-count indictment charging DANIEL CARPENTER, 59, of Simsbury, and WAYNE BURSEY, 63, of Bloomfield, with wire fraud, mail fraud and conspiracy offenses stemming from a scheme to defraud insurance companies into issuing insurance policies on the lives of elderly people for the benefit of the defendants and other investors, also known as a stranger-originated life insurance scheme.  The indictment was returned on December 12, 2013, and unsealed on December 30.

According to the indictment, CARPENTER and BURSEY ran a series of companies, based in Simsbury and Stamford, that developed an employee welfare benefit plan and trust (the “Trust”) whose primary objective was to secure insurance policies on the lives of elderly individuals that could be held by the defendants and others as investments, or resold on the life settlement market, which is a third-party market for life insurance policies.  Typically, insurance agents working with, for, or on behalf of the defendants approached individuals who were over the age of 70 (the “Straw Insureds”).  The agents promised to provide the Straw Insureds with free life insurance for two years, and, at the end of the two years, would attempt to sell the policies on the life settlement market.  In most cases, the agents promised the Straw Insureds that they would receive a portion of any sale proceeds.  In other cases, the Straw Insureds were offered a cash inducement up front to participate.

The indictment alleges that CARPENTER and BURSEY, working with insurance agents, caused to be submitted to several insurance providers numerous insurance applications that contained several material misrepresentations, including falsely denying that third-parties were paying the premiums for the insurance, falsely denying discussions about the resale of the policies, falsely inflating the net worth and/or income of the insured, and falsely claiming that the insurance was being purchased for legitimate estate planning-related needs.  All applications were signed by BURSEY, who acted as trustee of the Trust, which was to be the “owner” of all policies in the Trust.  Moreover, the applications purported that the Trust was a bona fide welfare benefit trust under Internal Revenue Code Section 419(e), wherein employers would be making contributions to the Trust in order to fund the life insurance policies for the benefit of certain select employees.

The indictment further alleges that, in truth, no “employer” or Straw Insured ever paid a premium into the Trust, and the premiums were funded by loans, which typically came to the Trust from another company headquartered in Simsbury and controlled by CARPENTER.  In many cases, those loans were, in turn, financed by another third-party financing company based in Stamford.  The loan arrangements were withheld from the insurance providers, who would likely not have issued policies had they known the true nature of the Trust, and had the insurance applications been filled out truthfully.

CARPENTER and BURSEY are scheduled to be arraigned on January 17 before U.S. Magistrate Judge Donna F. Martinez in Hartford.

If convicted, CARPENTER and BURSEYface a maximum term of imprisonment of 20 years on each count of wire fraud and mail fraud.

This case is assigned to U.S. District Judge Robert N. Chatigny in Hartford.

This matter is being investigated by the U.S. Department of Labor – Office of the Inspector General, the U.S. Department of Labor – Employee Benefits Security Administration’s Boston Office, and the Special Inspector General for the Troubled Asset Relief Program.  The case is being prosecuted by Assistant U.S. Attorneys David E. Novick and Neeraj N. Patel.

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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 Bridgeport Police Chief Joseph L. Gaudett, Jr. today announced that 14 individuals have been charged by indictment with various narcotics and firearms offenses as part of joint investigation into drug trafficking and violence in Bridgeport.  The majority of the defendants were arrested on criminal complaints in early December and a federal grand jury in Bridgeport returned an 18-count indictment on December 18.

According to statements made in court, since January 2012, the FBI Bridgeport Safe Streets Task Force, Bridgeport Police Department and Connecticut State Police Statewide Narcotics Task Force has been conducting an investigation into narcotics trafficking and violent criminal activity in and around the Trumbull Gardens housing complex in Bridgeport.

Charged in the indictment are:

RONELL HANKS, a.k.a. “Biz” and “Ace,” 24, of Bridgeport
OMAR BAHAMONDE, a.k.a. “Dirk,” 29, of Bridgeport
JONATHAN BOHANNON, 25, of Bridgeport
JERMAINE BUCHANAN, a.k.a. “Hot Main,” 18, of Shelton
MOYAN FORBES, 22, of Bridgeport
RASHAD HEARD, a.k.a. “Shotty,” 23, of Bridgeport, SYBIL HOPKINS, 55, of Stratford
STEVEN HUTCHINSON, a.k.a. “L,” 24, of Bridgeport
TAVAR JOHNSON, 30, of Bridgeport
YAZMINE MORALES, 36, of Newington
CARLOS SOTO, a.k.a. “Machon,” 49, of Newington
EBONEY WOOD, a.k.a. “Sis,” 33, of New Haven
D’METRIUS WOODWARD, a.k.a. “Flea,” 29, of Bridgeport
TYSHEEM WRIGHT, 25, of Bridgeport

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.  One of the firearms was an assault-type rifle and four of the firearms were stolen.

The indictment charges each defendant with conspiracy to possess with intent to distribute narcotics.  If convicted of this charge, based on the type and quantity of narcotics charged, BAHAMONDE, BOHANNON, FORBES, HANKS, HEARD, HOPKINS, MORALES, SOTO, WOOD, WOODWARD and WRIGHT face a minimum term of imprisonment of 10 years and a maximum term of imprisonment of life.  BUCHANAN, HUTCHINSON and JOHNSON face a minimum term of imprisonment of five years and a maximum term of imprisonment of 40 years.

Certain defendants are also charged with possessing with intent to distribute, and distribution of, heroin and/or cocaine base (“crack cocaine”).

The indictment also charges HANKS and BOHANNON with one count of possession of a firearm and ammunition by a previously convicted felon, which carries a maximum term of imprisonment of 10 years; BOHANNON and BUCHANAN with one count of possession of a firearm in furtherance of drug trafficking crimes, which carries a mandatory five-year sentence; HANKS and BUCHANAN with one count of possession of a stolen firearm, which carries a maximum term of imprisonment of 10 years, and WOOD with transfer of a firearm to a convicted felon (HANKS), which carries a maximum term of imprisonment of five 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 case has been assigned to Chief U.S. District Judge Janet C. Hall in New Haven.

This matter is being investigated by the FBI’s Bridgeport Safe Streets Task Force, in coordination with the Bridgeport Police Department, Norwalk Police Department, Trumbull Police Department and 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, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that attorney JOSEPH P. HADDAD, 65, of Orange, pleaded guilty today before U.S. District Judge Stefan R. Underhill in Bridgeport to federal charges related to his participation in an extensive insurance fraud scheme.

This matter stems from “Operation Running Man,” a 14-month undercover fraud investigation headed by the Federal Bureau of Investigation.  The investigation included the use of recordings of an undercover special agent meeting with HADDAD, various doctors and chiropractors in relation to auto-accident personal injury litigation.

According to court documents, statements made in court and the admissions of his co-conspirators, HADDAD, a Bridgeport-based personal injury attorney, conspired with chiropractors and others to defraud several insurance companies by exaggerating the auto accident injuries of HADDAD’s clients, and the cost of their medical care, to justify larger monetary settlements with the insurance companies.  As part of the scheme, the co-conspirators fabricated medical records, prescribed unnecessary pain medication, performed unnecessary chiropractic treatment, ordered and billed for diagnostic tests of questionable medical value, and overstated injuries or permanent partial disabilities that were allegedly caused by the accidents.

“This extensive scheme was perpetrated by a corrupt attorney and equally corrupt doctors who brazenly chose illegal profits over professional ethics,” stated U.S. Attorney Daly.  “Their actions bilked insurance companies of millions of dollars inflating the cost of health insurance for all of us.  Prosecuting professionals who breach their duties for personal gain will always be a priority for our Office and the FBI.”

“Attorney Haddad was the centerpiece of a large-scale conspiracy to commit automobile insurance fraud in the Greater Bridgeport area,” stated FBI Special Agent in Charge Ferrick.  “As officers of the court, attorneys are held to a higher standard and expected to uphold its laws and ethics.  Instead, Mr. Haddad orchestrated an extremely lucrative criminal conspiracy.  The FBI and the U.S. Attorney’s Office are fully committed to investigating insurance fraud and those lawyers and doctors who put their own interests above that of their clients and patients.”

Between December 2006 and February 2010, HADDAD conspired in the scheme with Francisco R. Carbone, who had been licensed to practice medicine until his license was revoked by the State of Connecticut in March 2005, and with Dr. Marc Kirshner, who owned and operated two chiropractor offices in Bridgeport and one in Stamford.

As part of the scheme, HADDAD paid “runners” to locate and deliver to him clients for his personal injury practice.  Because state law barred attorneys from hiring runners in personal injury cases, HADDAD attempted to hide this practice by paying the runners in cash.  Dr. Kirshner regularly met with HADDAD to provide him with thousands of dollars in cash and, in return, HADDAD reimbursed Kirshner with checks written from his business account.  HADDAD often included on the checks false memo lines suggesting that the checks were for medical expenses incurred by his clients.  During the course of the conspiracy, Kirshner gave HADDAD more than $100,000 in cash.  HADDAD also paid runners with checks directly from his client trust account, often disguising these payments as “independent investigative services.”

HADDAD regularly instructed clients to see Carbone for purported medical treatment, even though HADDAD was aware that Carbone had lost his medical license.  Carbone provided HADDAD’s clients with prescription pain medication, even if the medication was not needed and, in reports, fabricated the clients’ injuries, medical conditions and permanent partial disability ratings.  In multiple instances, Carbone did no medical examination at all.  Carbone billed the victim insurance carriers in his name or in the name of another physician for services he allegedly rendered, and provided prescriptions, bills, medical reports and final reports to HADDAD, who submitted the documents to the victim carriers to support requests for settlement.

HADDAD also referred clients to Dr. Kirshner’s Bridgeport chiropractor offices, which operated under the name Health First Medical, P.C.  Kirshner often permitted HADDAD to influence the course of patients’ medical treatments by acquiescing to HADDAD’s instructions that a patient receive more treatment and diagnostic tests despite the questionable need for both.  Kirshner and other chiropractors at Health First, including Jennifer Netter, established a protocol to treat patients in HADDAD’s cases for six months, regardless of medical need, and would not resolve treatment of patients unless instructed to do so by HADDAD.  Netter and others at Health First often falsified medical records by indicating that they had examined the patients when they had not, and by misrepresenting that patients’ pain complaints and other symptoms continued.  After the six-month period, each patient would receive a permanent partial disability rating, regardless of the permanence of the medical condition.  If a patient had received a permanency rating for a prior accident, the protocol was to give a higher or different disability rating for the present accident.

Kirshner also owned a diagnostic testing company, Midas Medical LLC, and instructed his employees to conduct Nerve Conduction Velocity (NCV) tests whenever a patient’s symptoms could potentially implicate testing, even though he knew the test results would not change the course of treatment.  HADDAD and Kirshner arranged for Carbone to order the tests, believing that, if ordered by a doctor, the tests would be given greater weight by the victim insurance companies and increase the likelihood of higher settlement payments.  HADDAD summoned at least one chiropractor to his office so that Kirshner could explain that the chiropractor would receive a kickback of several hundred dollars for each referral of HADDAD’s clients for NCV testing.  Kirshner’s office would provide to HADDAD a bill of approximately $2,000 for each NCV test, and HADDAD would submit the bills to the victim carriers as part of settlement discussions.

More than 10 insurance carriers lost a total of up to $2.5 million as a result of this fraud scheme.

HADDAD pleaded guilty to one count of conspiracy to commit mail fraud and one count of mail fraud.  Judge Underhill scheduled sentencing for March 28, 2014, at which time HADDAD faces a maximum term of imprisonment of 20 years on each count, and a fine of up to approximately $3.5 million. HADDAD also has agreed to pay restitution of $1,758,368.

Carbone, Kirshner, Netter, two other chiropractors and a licensed doctor of osteopathic medicine have pleaded guilty to charges stemming from this scheme.  Each awaits sentencing.

This matter is being investigated by the Federal Bureau of Investigation, with the assistance of the National Insurance Crime Bureau, the Metropolitan Property and Casualty Insurance’s Special Investigation Unit and the Travelers Insurance Company.

The case is being prosecuted by Assistant U.S. Attorneys Christopher W. Schmeisser and David J. Sheldon.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MYRACHID ELQUAFAI, 52, a citizen of Morocco last residing in New Haven, was sentenced today by Chief U.S. District Judge Janet C. Hall in New Haven to 27 months of imprisonment, followed by three years of supervised release, for defrauding the federal Food Stamp Program while operating a Meriden grocery store.

On April 26, 2013, following a five-day trial, a jury found ELQUAFAI guilty of one count of conspiracy to commit food stamp fraud and one count of food stamp fraud.  According to the evidence disclosed during the trial, the federal Food Stamp Program, which is now known as the Supplemental Nutrition and Assistance Program (“SNAP”), is administered by the USDA’s Food and Nutrition Service and utilizes federal tax dollars to subsidize low-income households to provide them with the opportunity to achieve a more nutritious diet by increasing their food-purchasing power.  SNAP recipients purchase eligible food items at retail food stores through the use of an EBT card, which is similar to an ATM card.  SNAP benefits may be accepted by authorized retailers only in exchange for eligible items.  Items such as alcoholic beverages, cigarettes, paper goods and soaps are not eligible for purchase with Food Stamp benefits, and it is a violation of the rules and regulations governing the food stamp program to allow benefits to be used to purchase ineligible items.  SNAP benefits may not lawfully be exchanged for cash under any circumstances.  The program is designed so that the total amount of each purchase is electronically transferred to the retailer’s designated bank account.

ELQUAFAI operated CJ Express and Groceries, LLC, located at 145 West Main Street in Meriden.  From approximately June 2010 to July 2012, ELQUAFAI conspired with Carlos Dominguez, the owner of CJ Express and Groceries, to redeem SNAP benefits at the store at a significantly discounted rate in exchange for cash and cigarettes.  The investigation revealed that more than $820,000 in illegal SNAP benefits were redeemed at the store.

ELQUAFAI, who has been detained since his arrest on August 2, 2012, is subject to immigration proceedings after his release from prison.

Dominguez has pleaded guilty and awaits sentencing.

This matter was investigated by the U.S. Department of Agriculture, Office of Inspector General and the Office of the Chief State’s Attorney.  The case is being prosecuted by Assistant U.S. Attorneys Neeraj Patel and Anastasia King.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that three New Haven residents involved in a narcotics trafficking ring were sentenced today by Senior U.S. District Judge Ellen Bree Burns in New Haven.

TYRICE WHITE, also known as “Ears,” 38, was sentenced to 110 months of imprisonment, followed by five years of supervised release.  On April 17, 2013, WHITE pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, 100 grams or more of heroin.

JAMES MOORE, also known as “Coolie D,” 34, was sentenced to 41 months of imprisonment, followed by three years of supervised release.  On August 27, 2013, MOORE pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, heroin.

MARCUS WYLIE, 23, was sentenced to approximately 19 months of imprisonment, time already served, and three years of supervised release.  On October 7, 2013, WYLIE pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, heroin.

WHITE, MOORE, WYLIE and more than 100 other individuals were charged as a result of “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.

WHITE has been detained since his arrest on July 25, 2012.  MOORE and WYLIE have been detained since May 17, 2012.

This matter is being 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 have 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 BARBARA O’HARA-LEONE, 53, formerly of Norwalk, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 30 months of imprisonment, followed by three years of supervised release, for embezzling from a Stamford dental practice.

According to court documents and statements made in court, O’HARA-LEONE worked as an office manager for a dental practice in Stamford.  From approximately June 2012 to May 2012, O’HARA-LEONE stole insurance checks issued to the victim and deposited them into her personal bank account.  In addition, she submitted fraudulent claims to several insurance companies for work that was never completed in the names of existing patients, and then deposited the resulting insurance checks into her personal bank account.  As part of those fraudulent claims, O’HARA-LEONE used names, dates of birth, and Social Security numbers of the victim’s patients.  During the course of the scheme, O’HARA-LEONE stole more than $100,000.

O’HARA-LEONE was ordered to pay restitution in the amount of $100,979.89.

O’HARA-LEONE has been detained since her arrest in North Carolina on April 23, 2013.  On October 4, 2013, she pleaded guilty to one count of wire fraud.

This investigation was conducted by the Connecticut Financial Crimes Task Force, which includes members of the U.S. Secret Service, U.S. Postal Inspection Service, Internal Revenue Service – Criminal Investigation, Connecticut State Police, and the Greenwich, Hartford, Monroe, Stamford, Shelton, Stratford and Waterford Police Departments.  U.S. Attorney Daly specifically recognized the efforts of the Greenwich and Stamford Police Departments for their assistance in the investigation and prosecution of this matter.

This case was prosecuted by Assistant U.S. Attorney Douglas P. Morabito.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JONATHAN GRACIA, 25, formerly of Middletown, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 27 months of imprisonment, followed by three years of supervised release, for running an investment fraud scheme.

According to court documents and statements made in court, GRACIA falsely told friends and acquaintances that he was developing a website for which he had potential buyers, and that he had developed an “app” for the iPhone, and then solicited investments and loans from his victims in connection with both of these purported ventures.  GRACIA regularly told the victims that they would receive outsized returns on their investments.  As part of the scheme, GRACIA created bogus documents to deceive his victims, including fake checks, bogus bank account statements and a letter that he created on what appeared to be the letterhead of a prominent Connecticut hedge fund management company.  Through this scheme, GRACIA defrauded his victims of $390,000.

GRACIA was ordered to pay full restitution to his victims.

GRACIA was arrested on March 18, 2013, and is currently detained.  On June 18, 2013, he pleaded guilty to one count of wire fraud.

This matter was investigated by the Federal Bureau of Investigation, with the assistance of the Branford and Stamford Police Departments.  The case was prosecuted by Assistant U.S. Attorney Paul A. Murphy.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOSE GUZMAN, 53, of Waterford, was sentenced today by Senior U.S. District Judge Alfred V. Covello in Hartford to 51 months of imprisonment, followed by three years of supervised release, for operating an extensive mortgage fraud scheme in eastern Connecticut.

According to court documents and statements made in court, GUZMAN operated a fraudulent mortgage business first with Maurizio Lancia at Royal Financial Services, and then later with Stacey Petro at First Source Financial Services.  GUZMAN also owned and operated J.G. Property and Investment Management Company, which was a real estate property management company located in New London.  In addition, GUZMAN, Lancia, and William Athan formed and operated Broad Street Investment Group, which was purportedly a Real Estate Investment Company.  Through these companies, GUZMAN, Lancia, Athan, Petro and others arranged for individuals (“borrowers”) to purchase real estate, primarily residential housing properties located in New London County, by obtaining funding from various mortgage companies and mortgage originators after submitting false information on the borrowers’ mortgage loan applications.  The fraudulent information included information regarding the borrowers’ income, assets, employment, rent history, as well as the borrowers’ intention to make the properties their primary residence.  The borrowers, who typically were individuals who had good credit but were of modest means with low levels of income, were compensated for participating in the scheme.

For certain transactions, GUZMAN and his co-conspirators caused escrow checks to be issued to a contracting company purportedly to pay for work that had been done on the property prior to the closing, when no work had been performed.  The checks were converted to cashier’s checks, which were used during the closing as down payments from the borrower.

Through this conspiracy, GUZMAN and his co-conspirators collected large commissions and fees, and kept part of the money advanced by the lenders, which was intended to be used to finance the purchase of the properties, but instead was used for the benefit of GUZMAN, his co-conspirators and their various companies.

In addition, GUZMAN and others also falsified closing records that showed that money obtained from the financing would be used to improve the properties.  GUZMAN and his co-conspirators represented to the borrowers that they would properly manage the purchased properties, but failed to do so.  Instead, they converted the rent money to their own use, rather than use the money to pay the mortgages.

GUZMAN and his co-conspirators caused more than 200 mortgages to be funded during the period of the conspiracy.  As a result of defaults on the mortgages, the lenders suffered losses of more than $9 million.

As part of his sentence, Judge Covello ordered GUZMAN to pay restitution of approximately $7.8 million.

On September 9, 2008, GUZMAN pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud.  Sixteen other individuals, including Lancia, Athan and Petro, have pleaded guilty to various charges stemming from this scheme.  Lancia and Petro are currently serving prison terms of 27 months and 41 months, respectively.  Athan awaits sentencing.

This matter has been investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development, Office of Inspector General.  The case is being prosecuted by Assistant U.S. Attorneys Michael S. McGarry and David T. Huang.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JODI CHURCHILL, 45, of Orange, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 30 months of imprisonment, followed by three years of supervised release, for embezzling more than $600,000 from a Southbury synagogue.  CHURCHILL was also ordered to serve six months of home confinement and perform 120 hours of community service while on supervised release.

According to court documents and statements made in court, beginning in November 2010, while serving as the vice president of the Beth El Synagogue in Southbury, CHURCHILL began embezzling funds from the synagogue.  In June 2011, CHURCHILL became president of the synagogue and used her new position to open a checking account and a money market account in the name of the synagogue.  CHURCHILL was the only signatory on the accounts.  Initially, CHURCHILL opened the accounts using the synagogue’s business address in Southbury, but in 2011, she directed the bank to change the mailing address on the accounts to her residence in Orange.  Thereafter, all bank statements for accounts were mailed to CHURCHILL’s home address.

Between June 2011 and December 2011, CHURCHILL deposited bank checks totaling more than $300,000 into the accounts.  The checks reflected the proceeds of certificates of deposit held by the synagogue that had matured at other financial institutions.   

The investigation has revealed that CHURCHILL made more than 60 unauthorized ATM and over-the-counter withdrawals of synagogue funds in amounts ranging from $200 to $5,000.  CHURCHILL used embezzled funds to pay school-related expenses for her children, expenses for leasing a horse used by one of her children, vehicle expenses, airline tickets and hotel expenses for personal travel.  She also provided stolen funds to a relative.

During the course of this scheme, CHURCHILL embezzled more than $661,000 in synagogue funds.

After the embezzlement scheme was uncovered, the government seized approximately $104,000 from CHURCHILL’s bank accounts, and seized and sold, for approximately $22,000, an automobile she had purchased with synagogue funds.  The funds have been returned to the synagogue.

Judge Chatigny ordered CHURCHILL to pay restitution in the amount of $531,985.25 to the synagogue and its insurer.

On May 31, 2013, CHURCHILL waived her right to indictment and pleaded guilty to one count of mail fraud.

This matter was investigated by the United States Secret Service and was prosecuted by Assistant United States Attorney Christopher W. Schmeisser. 

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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that ROBERT RIVERNIDER, 48, of Wellington, Fla., was sentenced yesterday by U.S. District Judge Robert N. Chatigny in Hartford to 144 months of imprisonment, followed by five years of supervised release, for operating two investment schemes that caused a loss of more than $25 million to individuals and lending institutions.

According to court documents and statements made in court, between approximately June 2005 and April 2008, RIVERNIDER and Robert Ponte of Stonington, Conn., conspired to defraud several victim investors by misrepresenting that the investors’ monies would be invested in legitimate, high-return investments.  As part of the conspiracy, RIVERNIDER and Ponte used the Internet and other means to market a debt payment program typically called “No More Bills” through The Hudson Group, an entity that Ponte established.  With the “No More Bills” program, RIVERNIDER and Ponte sought victim investors to invest monies with them, funds that the victim investors typically would raise through home equity lines of credit, or would borrow from 401K plans.

RIVERNIDER and Ponte misrepresented that investors would receive a substantial investment return, typically a monthly repayment on the invested  monies of approximately seven to ten percent of their initial investment; that the returns would continue for a period substantially longer than needed to recoup the initial investment and result in a return substantially greater than the initial investment; that the victim investors’ existing debts and  home equity lines of credit, if taken out to fund the investment, would be repaid in full from investment returns, and that the victim investors’ monies were being invested offshore in legitimate high-return investments, including investments in foreign currency exchanges, hedge funds, or other high-yield ventures.  Instead of investing the funds as promised, RIVERNIDER and Ponte used the funds to pay their and their extended families’ living expenses, as well as the preexisting debts of other investors.

Through this first scheme, investors lost approximately $2.2 million.

In a second scheme, between approximately November 2006 and December 2007, RIVERNIDER, Ponte, and Loretta Seneca of Boynton Beach, Fla., engaged in a real estate investment conspiracy that defrauded both lenders and individuals they recruited.  Seneca is RIVERNIDER’s sister.  As part of the scheme, RIVERNIDER, Ponte and others recruited victim borrowers to take out financing to purchase various investment properties, primarily in Tennessee and Florida, with financing from victim lenders.  RIVERNIDER and Ponte typically represented to borrowers that these properties would be passive investments and that RIVERNIDER and Ponte would be responsible for the details of the purchase, rental, maintenance and payment of the mortgages on the properties.  The co-conspirators made false representations to the victim borrowers that RIVERNIDER and Ponte would arrange for the purchase of the properties by the borrowers at markedly discounted values.  In fact, RIVERNIDER and Ponte frequently marked up the purchase price of the properties to the victim borrowers, often by as much as 25 percent, without disclosing the increase in the purchase price.  RIVERNIDER, Ponte and others also falsely represented that the investment properties would return to the victim borrowers sufficient monies to cover the carrying costs, as well as reduce the borrowers’ other debt burden.

RIVERNIDER, Ponte, Seneca and others victimized lenders by making multiple false representations in loan applications and other documents provided to the victim lenders.  Seneca, a trained mortgage broker, was actively involved in the real estate transactions, including organizing and gathering many of the materials needed by the victim lenders, gathering certain information from the victim borrowers, providing certain comparables based on properties brokered by RIVERNIDER to be used for purportedly independent appraisals, and a range of other background tasks necessary for the lenders to make the loans.

This scheme involved at least 100 properties, and the investigation has revealed that the victim lending institutions suffered more than $23 million in losses.

Judge Chatigny will issue an order within 90 days requiring RIVERNIDER to pay full restitution to the victims of both schemes.

On February 25, 2013, RIVERNIDER pleaded guilty to two counts of conspiracy and 16 counts of wire fraud, and Seneca pleaded guilty to one count of conspiracy and one count of wire fraud.  On March 1, 2013, Ponte pleaded guilty to two counts of conspiracy, 14 counts of wire fraud and two counts of tax evasion.  All three guilty pleas occurred during the middle of a trial, and RIVERNIDER pleaded guilty to all counts of the indictment in which he was charged.

Ponte and Seneca await sentencing.

This matter has been investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation.  The case is being prosecuted by Assistant U.S. Attorneys John H. Durham and Christopher W. Schmeisser.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that PETER PINTO, 38, of East Quogue, N.Y., 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 his role in a multimillion dollar fraud scheme at Oxford Collection Agency, where PINTO served as Chief Executive Officer.

According to court documents and statements made in court, Oxford Collection Agency (“Oxford”) was a private financial services company that engaged in accounts receivables management, primarily debt collecting, with offices in New York, Pennsylvania and Florida.  Businesses and other entities contracted with Oxford to collect debts on their behalf.  Oxford’s clients included, among others, an educational institution, a laboratory, a computer company and various banks.  Oxford collected debts from consumers under the pretense that it would report all such collections to its clients and remit the appropriate amount to the client.  However, PINTO and other Oxford executives routinely caused Oxford to collect debts that were never remitted to its clients.  The co-conspirators referred to these unremitted collections as a client’s “backlog.”  To hide the backlog, co-conspirators would make periodic fraudulent collection reports to certain clients that under-reported the amount of funds collected.  PINTO and others diverted various funds from their client remittances and used them for their own ends.

Certain co-conspirators also transferred money from one client trust account to another client account, from Oxford’s operating account to a client account, or from a client account to Oxford’s operating account to cover various shortfalls and backlogs or to improperly use collections to directly fund Oxford’s operations.

Starting in April 2007, Oxford secured a line from credit from Connecticut-based Webster Bank, a bank that received funds through the Troubled Asset Relief Program (TARP), without informing Webster Bank about its significant client backlogs or outstanding payroll taxes.   PINTO and others sent falsified financial statements to Webster Bank, eventually increasing the credit line to $6 million, and laundered funds from the credit line to promote the ongoing fraud scheme against their clients.  During that same period, PINTO and others also solicited millions of dollars in investments from various investors, without ever disclosing to their investors the existence of their backlogs.  Some of the investor funds into PINTO’s personal bank account without investor knowledge.

Oxford’s victims lost more than $10 million as a result of this scheme.

The investigation also has revealed that Oxford sometimes obtained and retained business with its banking clients by paying bribes and kickbacks to bank officials.

On May 11, 2012, PINTO pleaded guilty to one count of conspiracy to commit wire fraud, bank fraud and money laundering, and one count of wire fraud.

Five other Oxford executives have pleaded guilty, including PINTO’s father and Chairman of the Board, Richard Pinto, PINTO’s brother and Oxford Vice-President, Patrick Pinto, Vice-President of Finance and Chief Financial Officer Randall Silver, Executive Vice President Charles Harris, and Chief Operations Officer Carlos Novelli.  Former Assistant Vice President at U.S. Bank, Wilbur Tate III, also pleaded guilty in relation to a conspiracy to accept bribes from executives at Oxford Collection Agency.

Richard Pinto was sentenced to five years of imprisonment.  The other defendants await sentencing.

This matter is being investigated by the Internal Revenue Service – Criminal Investigation, the Federal Bureau of Investigation, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Connecticut Securities, Commodities and Investor Fraud Task Force.  The case is being prosecuted by Assistant U.S. Attorney Liam Brennan and Special U.S. Attorney John McReynolds.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that CHESTER CAMERON, 32, of Bridgeport, was sentenced on Tuesday by U.S. District Judge Stefan R. Underhill in Bridgeport to 70 months of imprisonment for his role in a southwestern Connecticut narcotics trafficking ring. 

This matter stems from a six-month investigation spearheaded by the Drug Enforcement Administration and the Stamford Police Department’s Narcotics and Organized Crime Squad.  As a result of the investigation, 20 individuals have been charged in federal court with various offenses related to the distribution of cocaine and crack cocaine in Bridgeport, Norwalk and Stamford.  During the investigation, law enforcement officers seized more than $100,000 in cash, 500 grams of cocaine, 350 grams of crack cocaine, several vehicles and jewelry.

According to court documents and statements made in court, between November 2012 and February 2013, CAMERON regularly purchased half-kilogram quantities of cocaine from suppliers in New York and Jamaica, broke it down into smaller quantities and sold it to customers from Bridgeport and Stamford, some of whom converted it to crack cocaine for resale. In total, he purchased and redistributed more than five kilograms cocaine during this time period.

At the time of his arrest, CAMERON was found with nearly one-half kilogram of cocaine, more than $34,000 in cash, a Rolex watch, and other expensive jewelry, all of which he forfeited as part of his guilty plea.

Marvin Wooten, one of CAMERON’s highest volume drug customers, previously pleaded guilty and, on May 22, 2013, was sentenced to 120 months of imprisonment.  CAMERON’s brother, Cornel Cameron, also has pleaded guilty and is scheduled to be sentenced in January.

CAMERON is a citizen of Jamaica and faces deportation proceedings when he completes his federal sentence.

U.S. Attorney Daly noted that federal prisoners are required to serve at least 85 percent of their sentenced term of imprisonment and are not eligible for parole.

This matter is being investigated by the Drug Enforcement Administration’s Bridgeport High Intensity Drug Trafficking Area (HIDTA) Task Force – which is composed of members of the Bridgeport, Stamford, Norwalk, Milford, Westport, and Stratford Police Departments, and the Connecticut State Police – and the Stamford Police Department’s Narcotics and Organized Crime Squad.  The U.S. Marshals Service also assisted in the arrests of several of the defendants.

This case is being prosecuted by Assistant U.S. Attorneys Sarah Karwan and Robert Spector.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, and Michael E. Horowitz, Inspector General for the Department of Justice, announced that former FBI Assistant Director KENNETH W. KAISER was sentenced today by U.S. District Judge F. Dennis Saylor, IV in Boston for violating a federal ethics law that prohibits senior executive branch personnel from making professional contacts with the agency in which they were employed for one year after leaving government service.  KAISER, 57, of Hopkinton, Mass., was ordered to pay a fine of $10,000.

According to court documents and statements made in court, KAISER, a 27-year employee of the FBI, served as the Special Agent in Charge of the Boston office of the FBI from April 2003 through December 2006, and then as an Assistant Director of the FBI’s Criminal Investigative Division in Washington, D.C., until July 2009.  On July 3, 2009, the same day that he retired from the FBI, KAISER was hired as a consultant by LocatePlus to handle an internal investigation regarding corporate wrongdoing by the company’s former Chief Executive Officer and Chief Financial Officer, and to help generate government sales for the company’s products and services.  In March 2010, KAISER became a full-time employee of LocatePlus, holding the title Director of Government Sales.

Within a month of his retirement, KAISER began having prohibited electronic, telephonic and in-person contacts with FBI employees regarding a then-ongoing FBI investigation involving LocatePlus and the actions of its former executives.  During the one-year ban period, KAISER also had prohibited contacts with FBI employees in an effort to gauge the FBI’s interest in LocatePlus’ products and services in an attempt to generate sales to the FBI.

Also, in August 2009, KAISER was hired by a corporate executive living in Gloucester, Mass., who had received a threatening letter in the mail.  Working on behalf of this individual, KAISER had additional improper contacts with the FBI Boston office.

On October 3, 2013, KAISER pleaded guilty to a misdemeanor charge of making prohibited post-employment contacts.

This matter was investigated by the Department of Justice Office of the Inspector General and was prosecuted by Assistant U.S. Attorneys Diane C. Freniere of the District of Massachusetts and Michael J. Gustafson of the District of Connecticut. 

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that IONUT-IULIAN VLAD, 29, a citizen of Romania, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 18 months of imprisonment, followed by three years of supervised release, for his role in an ATM “skimming” scheme.

According to court documents and statements made in court, VLAD and others conspired to install “skimming” devices on automated teller machines (“ATMs”) at Bank of America locations in Connecticut.  The devices were able to capture the information encoded on the magnetic strips of bank cards used by ATM customers.  The co-conspirators also placed devices on the ATMs that contained hidden pinhole cameras, which recorded the personal identification numbers that bank customers keyed into the ATMs to gain access to their accounts.  The co-conspirators used the stolen information captured by the skimming devices and pinhole cameras to create counterfeit bank cards that allowed them to withdraw more than $100,000 in funds from the customers’ accounts.

In February 2013, surveillance video captured VLAD removing skimming devices and pinhole cameras from Bank of America ATMs in Wallingford and Greenwich.

VLAD has been detained since his arrest by the Stamford Police Department on March 2, 2013.  At the time of his arrest, he possessed ATM skimming tools and double-sided tape.

On August 19, 2013, VLAD pleaded guilty to one count of conspiracy to commit bank fraud.
VLAD was ordered to pay restitution in the amount of $105,404.75.

This investigation is being conducted by the Connecticut Financial Crimes Task Force, which includes members of the U.S. Secret Service, U.S. Postal Inspection Service, Internal Revenue Service – Criminal Investigation, Connecticut State Police, and the Greenwich, Hartford, Monroe, Stamford, Shelton, Stratford and Waterford Police Departments.  U.S. Attorney Daly specifically recognized the efforts of the Greenwich and Stamford Police Departments for their assistance in the investigation and prosecution of this matter.

This case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that NICHOLAS CALAMARAS, 30, of New Fairfield, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 63 months of imprisonment, followed by four years of supervised release, for trafficking marijuana.

According to court documents and statements made in court, this matter stems from a Drug Enforcement Administration and Connecticut State Police Statewide Narcotics Task Force investigation that revealed that CALAMARAS was a lead participant in a large-scale marijuana growing and trafficking organization that operated in the greater Danbury area and had ties to New York, Massachusetts, and Vermont.  Between June 2011 and June 2012, the drug trafficking organization conspired to manufacture, sell, and distribute more than 1,000 kilograms of marijuana.

The investigation, which included the use of court-authorized wiretaps, revealed that CALAMARAS obtained large quantities of marijuana from other members of the conspiracy and then redistributed the drug in the New Fairfield and Danbury areas.  He also partnered with co-conspirators to establish grow-house operations and to cultivate hundreds of marijuana plants.

CALAMARAS has been detained since his arrest on June 13, 2012.  On that date, law enforcement officers executed a court-authorized search of CALAMARAS’s Macbean Drive residence and seized marijuana plants, approximately 18 pounds of processed marijuana, more than $378,000 in cash and a .223 caliber, semi-automatic rifle.

CALAMARAS was ordered to forfeit the seized cash and firearm.

On June 5, 2013, CALAMARAS pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute more than 100 kilograms of marijuana.

The investigation resulted in charges against 13 individuals and the seizure of processed marijuana, approximately 140 marijuana plants, more than $520,000 in cash, 10 firearms, vehicles and real property.

This matter was investigated by the Drug Enforcement Administration and the Connecticut State Police Statewide Narcotics Task Force Northwest Office.  The case is being prosecuted by Assistant U.S. Attorneys Tracy L. Dayton and David X. Sullivan.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, and George Venizelos, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation, announced that former East Haven Police officer JASON ZULLO, 35, was sentenced today by United States District Judge Alvin W. Thompson in Hartford to 24 months of imprisonment, followed by one year of supervised release.  ZULLO also was ordered to perform 50 hours of community service.

According to court documents and statements made in court, this matter stems from a criminal investigation into members of the East Haven Police Department use of excessive force during arrests, unconstitutional searches and seizures, and the filing of false police reports.  As a result of the investigation, ZULLO, Sergeant John Miller and Officers Dennis Spaulding and David Cari were charged with various civil rights offenses.

On October 23, 2012, ZULLO pleaded guilty to one count of obstruction of justice, and admitted that on October 18, 2008, he struck a motorcycle with his police car at least three times during a chase, ultimately causing the motorcycle to crash and throwing the male driver and female passenger to the ground.  Both victims suffered injuries.  Following the incident, in order to obstruct any potential investigation of his use of excessive force, ZULLO prepared and filed a false police report that failed to mention that he struck the motorcycle during the chase.

“This defendant attempted to cover up his misconduct and obstruct a civil rights investigation by filing a false police report,” said U.S. Attorney Daly.  “His report failed to disclose that he had injured two civilians when he used his patrol car to repeatedly strike the motorcycle they were riding.  The evidence obtained during this long-term investigation also revealed other examples of this officer’s abuse of his police powers.  This prosecution and the resulting significant prison term demonstrate that criminal conduct by law enforcement officers will not be tolerated.”

“Maintaining the public’s trust in elected officials and particularly law enforcement is of the utmost importance,” said FBI Assistant Director-in-Charge Venizelos.  “It is our hope that today’s developments bring us closer to renewing confidence and respect for those, particularly in East Haven, who enforce the law.”

On September 21, 2012, Miller pleaded guilty to one count of violating an individual's civil rights by using unreasonable and excessive force during the course of an arrest.  On October 21, 2013, after a month-long trial, Spaulding and Cari were found guilty of conspiracy and various other charges related to their violating the civil rights of members of the East Haven community.

Miller, Cari and Spaulding await sentencing.

This matter has been investigated by the Civil Rights Squad of the FBI’s New York Field Office.   The case is being prosecuted by Assistant U.S. Attorney Krishna R. Patel and Senior Litigation Counsel Richard J. Schechter.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that RICHARD DOYLE, 64, of Litchfield, waived his right to indictment and pleaded guilty today before U.S. Magistrate Judge Thomas P. Smith in Hartford to one count of receipt and distribution of child pornography.  At the time of his arrest in December 2012, DOYLE was employed as a teacher at a private school in Connecticut.

“This defendant received thousands of images portraying the sexual abuse of children,” stated U.S. Attorney Daly.  “The fact that this heinous crime was committed by a teacher, whose profession is committed to the well-being of children, makes it especially disturbing.  I commend the FBI and the Connecticut Child Exploitation Task Force for investigating this matter, and the work they do every day to investigate these crimes and protect children.”

According to court documents and statements made in court, in late October 2012, a law enforcement agent logged into a publicly available Internet file sharing program and downloaded images of child pornography from shared directories maintained by DOYLE.  On December 4, 2012, the FBI executed a search warrant at DOYLE’s Litchfield residence.  DOYLE was arrested after he admitted that, for at least two years, he had used the identified peer-to-peer program to obtain and trade child pornography with other individuals over the Internet.  DOYLE further admitted that he had been viewing child pornography since the 1970’s, had used other computer programs to trade child pornography, and had purchased magazines containing child pornography.

DOYLE indicated that he had thousands of child pornography images in his collection, with some of boys as young as five, six or seven years old.  He directed the FBI to a plastic container hidden under his workbench in the basement of his home, and indicated that the thumb drives in that container comprised his collection of child pornography, with the exception of some magazines that were still in the attic.

DOYLE stated that he only used his home computer system to download and view child pornography and never used his computer at the school where he was employed.

Pursuant to the search warrant, law enforcement seized a desktop computer and seven thumb drives.  Examination of the computer and thumb drives revealed in excess of 4,000 image files and approximately six video files of child pornography.

DOYLE is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on March 10, 2014, at which time he faces a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 20 years.

This case is being investigated by the Federal Bureau of Investigation and the Connecticut Child Exploitation Task Force, which includes federal, state and local law enforcement agencies, including the New Haven Police Department.  The Connecticut State Police has assisted the investigation.  The case is being prosecuted by Assistant U.S. Attorney Ray Miller.

The Connecticut Child Exploitation Task Force, which is housed at the main FBI office in New Haven, investigates crimes against children occurring over the Internet, and provides computer forensic review services for participating agencies.  For more information about the Task Force, or to report child exploitation crimes, please contact the FBI at 203-777-6311.

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.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ARCOLAIN FOUNTAIN, 47, of Hamden, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to three years of probation for attempting to smuggle oxycodone into the prison where he was employed.  FOUNTAIN was also ordered to perform 300 hours of community service.

According to court documents and statements made in court, FOUNTAIN was a correction officer at Cheshire Correctional Institution in Cheshire.  On July 17, 2012, FOUNTAIN met with an undercover officer with the Statewide Narcotics Task Force at a commuter lot off Interstate 84 in Southington to accept what he believed were 90 oxycodone pills.  FOUNTAIN was planning to smuggle the oxycodone pills into the Cheshire Correctional Institute and deliver them to an inmate housed there.  During the meeting with the undercover officer, FOUNTAIN also accepted $450 in cash and a quantity of Ecstasy pills as payment for delivering the oxycodone to the inmate.  FOUNTAIN was arrested at that time.

On December 18, 2012, FOUNTAIN waived his right to indictment and pleaded guilty to one count of attempting to possess with the intent to distribute a controlled substance.

This matter was investigated by the Statewide Narcotics Task Force, the Connecticut Department of Correction and the Cheshire Police Department, with the assistance of the Federal Bureau of Investigation.  The case was prosecuted by Special Assistant U.S. Attorney Michael W. Ahearn.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MARIO MEJIA, 38, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 38 months of imprisonment for illegally reentering the U.S. after he was deported.

According to court documents and statements made in court, MEJIA, a citizen of Honduras last residing in Stamford, has never held legal status in the U.S.  In April 2003, he was convicted in Connecticut Superior Court of first degree assault, a conviction that stemmed from an incident that took place outside a restaurant in Stamford in July 2002, when MEJIA struck a victim in the head with what witnesses identified as a rock, causing a skull fracture, internal bleeding and other injuries.  After serving more than three years in prison, he was deported to Honduras in October 2006.  MEJIA illegally reentered the U.S. in approximately 2009.

MEJIA has been detained since March 6, 2013, when he was arrested by Stamford Police on a larceny charge.  He has been detained since his arrest.  On July 24, 2013, he pleaded guilty to one count of illegal reentry of a removed alien. 

This matter was investigated by U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations.  The case was prosecuted by Assistant U.S. Attorney Deborah R. Slater.

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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that HOWE’S PHARMACY of Milford and NELSON’S PHARMACY of Naugatuck have each entered into a civil settlement agreement with the government to resolve allegations that they violated civil provisions of the Controlled Substances Act.  Howe’s Pharmacy has agreed to pay a total of $50,000 and Nelson’s Pharmacy has agreed to pay a total of $40,000.

The allegations against Howe’s Pharmacy, located at 78 Broad Street in Milford, include claims that pharmacists filled prescriptions without exercising their corresponding responsibility to ensure that the prescriptions were issued for a medically appropriate reason, failed to verify that prescriptions issued for Schedule II controlled substances contained the signature of a prescribing physician, failed to ensure that a filled prescription contained the DEA number of the authorizing medical practitioner, filled a prescription for “office use” rather than issuing a prescription to an identifiable person and, in several instances, filled a postdated prescription.

The allegations against Nelson’s Pharmacy, located at 153 Maple Street in Naugatuck, include the failure to insure that prescriptions it filled contained an authorized practitioner’s DEA number, and the failure to account for accurate inventories of Oxycodone 10 mg. tablets, Oxycodone 15 mg. tablets, Oxycodone 30 mg. tablets and Endocet 10/325 tablets.

Congress, with the passage of the Controlled Substances Act, took steps to attempt 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 Connecticut Department of Consumer Protection, Drug Control Division.  The prosecutions were led by Assistant U.S. Attorney Alan M. Soloway.

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NEW HAVEN, Conn. – Babar Ahmad and Syed Talha Ahsan pleaded guilty today in New Haven federal court to conspiring to provide and providing material support, including funds, personnel and physical items, to terrorists.  The charges stem from their involvement in, and operation of, “Azzam Publications,” an entity in London that provided material support to the Chechen mujahideen, the Taliban and associated terrorist groups. 

Today’s guilty pleas were announced by Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, John Carlin, Acting Assistant Attorney General for National Security, John Sandweg, Acting ICE Director and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation.

“Today, Babar Ahmad and Syed Talha Ahsan admitted that they supported terrorists,” said Acting U.S. Attorney Daly.  “They acknowledged that they solicited funds, recruited personnel and provided additional support for acts of terror, including efforts based out of the United States and solicitations for support that were specifically targeted at U.S. residents.  In doing so, they also admitted that they knew that their efforts could result in the maiming and murder of individuals, including U.S. citizens.  This prosecution is a testament to the resolve of our prosecution team and our federal law enforcement partners, notably Homeland Security Investigations and the FBI, as well as our counterparts in the U.K. who have provided crucial assistance to this lengthy international investigation.”

“This is an early example of individuals using the internet not only to radicalize others and spread violent propaganda, but also to further the actions of terrorist groups by soliciting supplies and personnel,” said Acting Assistant Attorney General Carlin.  “This case demonstrates that the danger exists and our efforts to stop it are extensive.  These pleas are a direct result of the hard work of the prosecutors, agents and analysts who spent countless hours devoted to the case.”

“These guilty pleas deal a significant blow to the financial infrastructure that supports terrorism around the world and underscores Homeland Security Investigations’ vital role in the global law-enforcement community,” said acting ICE Director John Sandweg.  “This investigation further demonstrates law enforcement's resolve to bring to justice anyone who supports those who would target American interests at home or abroad.  We commend the extraordinary sophistication and collaboration with which our federal partners and British counterparts met and addressed this threat.”

“Today’s guilty pleas are particularly important because the material support of terrorism is the very lifeblood of complex global terrorist networks,” stated FBI Special Agent in Charge Ferrick.  “All terrorism investigations involve the identification, disruption and dismantling of material and financial support systems, for without financial support, terrorists and terrorist groups cannot survive or propagate.  This far-reaching investigation was worked deliberately and without fanfare, and truly underscores Homeland Security Investigations and the FBI’s lasting commitment to combating terrorism at all phases.”

On October 6, 2004 and June 28, 2006, federal grand juries in Connecticut returned separate indictments charging Ahmad and Ahsan, respectively, with terrorism-related offenses.  Ahmad, 39, and Ahsan, 34, both British citizens, have been detained since their arrests by British law enforcement authorities on August 5, 2004, and July 19, 2006, respectively, and both were extradited to Connecticut in October 2012 following lengthy extradition proceedings abroad.

The indictments allege that Ahmad and Ahsan were members of a group that supported the Chechen muhjahideen, the Taliban and associated terrorist groups through various means, including the operation of a series of websites under the name of “Azzam Publications,” including Azzam.com and Qoqaz.net, which promoted violent jihad and solicited support for such groups.  During the times relevant to the indictments, the Taliban allowed territory under its control in Afghanistan to be used as a safe haven and base of operations for Usama bin Laden and Al Qaeda, who had committed and threatened to continue to commit acts of violence against the U.S. and its nationals.  For a period of time, the Azzam websites were made possible through the unwitting services of a web-hosting company headquartered in Trumbull, Conn. 

According to court documents, Ahmad also made efforts to secure GPS devices, Kevlar helmets, night vision goggles, ballistic vests, and camouflage combat suits.  In addition, Ahmad and Ahsan recruited and arranged for individuals to travel to Afghanistan to train for violent jihad. According to court documents, a search of Ahmad’s residence in the United Kingdom in December 2003 revealed Ahmad in possession of an electronic document setting forth previously classified plans regarding the makeup, advance movements, and mission of a U.S. naval battle group as it was to transit from California to its deployment in the Middle East.  The document discussed the battle group’s perceived vulnerability to terrorist attack.  Ahsan was alleged to have possessed, accessed, and modified the electronic battle group document in April 2001.

Today, as part of their guilty pleas, Ahmad and Ahsan admitted that they conspired to provide and did provide material support for terrorism through Azzam.com by soliciting and conspiring to provide funds, personnel and physical items for the Taliban regime in Afghanistan, intending that such support or resources would be used in preparation for or in carrying out a conspiracy to commit murder, kidnaping, or maiming; or an attempt or conspiracy to kill nationals of the U.S. while such nationals were outside the U.S.

Ahmad admitted that he operated the family of websites collectively known as Azzam Publications, and that “the purpose of Azzam Publications [was] to ‘Incite the believers’ and also secondly to raise some money for the brothers.”  Ahsan admitted that in 2001, he assisted Ahmad by processing video orders and by providing Ahmad with correspondence sent to Azzam Publications’ post office box in London.    

Ahmad and Ahsan further admitted that Azzam Publications posted articles on how to train for and support the jihad and the mujahideen, posted biographies of “martyrs,” and also produced and/or sold a number of audio and video products that were advertised on the websites, including videos containing real combat footage and biographies and images of deceased mujahideen.  In 2001, Azzam Publications also posted on its websites an article entitled “What You Can Do to Help the Taliban,” which provided detailed instructions on how to raise, transport and personally deliver amounts over US$ 20,000 in cash to the Taliban government via its consulate in Pakistan.  Ahmad and Ahsan also admitted that Azzam Publications solicited personnel and physical items, including military suits and gas masks, for the Taliban.

Ahsan further admitted that, on one occasion, he received an unsolicited document sent to the Azzam post office box that described the makeup, capabilities, vulnerabilities and upcoming movements of a U.S. naval battle group from the U.S. to its deployment in the Middle East.  Ahsan admitted that he created and saved an electronic version of the document, and did not dispute that the electronic version of the document was subsequently found in Ahmad’s residence in December 2003.  Ahsan also did not dispute that, with the assistance of Ahmad, he traveled to and fought in Afghanistan, and attended terrorist training camps run by Al Qaeda.

Ahmad and Ahsan each pleaded guilty to one count of conspiracy to provide material support to terrorists and one count of providing material support to terrorists.  As part of their pleas, Ahmad and Ahsan specifically agreed, in writing, that they pleaded guilty freely and voluntarily, and without intimidation or coercion of any kind, because they are guilty of conspiring to provide and providing material support to terrorists.

Due to the statutory maximum penalties that were in place during the time frame of each defendant’s criminal conduct, Ahmad faces a maximum term of imprisonment of 30 years and Ahsan faces a maximum term of imprisonment of 15 years.  Pursuant to a binding plea agreement, if accepted by the court, Ahmad faces a maximum term of imprisonment of 25 years.  At sentencing, the government intends to offer additional evidence of both defendants’ conduct. 

U.S. District Judge Janet C. Hall scheduled sentencing for March 4, 2014.

This case has been investigated by a Task Force in Connecticut consisting of Special Agents from Homeland Security Investigations; law enforcement agents from the Federal Bureau of Investigation’s Joint Terrorism Task Force; the Internal Revenue Service – Criminal Investigation Division, Electronic Crimes Program; the Defense Criminal Investigative Service and the Naval Criminal Investigative Service.

Acting U.S. Attorney Daly praised the substantial efforts of law enforcement authorities from the Metropolitan Police Service’s Counter Terrorism Command and the Extradition Unit, both within New Scotland Yard, whose efforts and assistance have been essential in the investigation in this case.  Acting U.S. Attorney Daly also thanked the U.S. Marshals Service and the HSI, FBI and Justice Department attachés in London for their assistance in the matter.

The case is being prosecuted by a team of federal prosecutors including Assistant U.S. Attorneys Stephen Reynolds and Ray Miller from the U.S. Attorney’s Office for the District of Connecticut, Trial Attorney Alexis Collins from the Counterterrorism Section of the Justice Department’s National Security Division, and Trial Attorney Richard Green from the Computer Crime and Intellectual Property Section (CCIPS) of the Justice Department’s Criminal Division.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that found TYRON HAMMOND, 31, of New Haven, was sentenced today by U.S. District Judge Janet C. Hall in New Haven to 126 months of imprisonment for illegally possessing a firearm, and for violating the conditions of his supervised releases from a previous federal conviction.

According to the evidence presented during a trial in August, on December 11, 2012, the U.S. Marshals Service Violent Fugitive Task Force, executing a state arrest warrant, arrested HAMMOND at an apartment on Chambers Street in New Haven.  A subsequent court-authorized search of the apartment revealed a fully-loaded .22 caliber revolver with one expended casing.

The Connecticut Department of Emergency Services and Public Protection’s Forensic Science Laboratory determined that HAMMOND’s DNA was on both the firearm and the ammunition.

HAMMOND’s criminal history includes a 2004 federal conviction for possession of a firearm by a previously convicted felon.  That conviction stemmed from an incident in November 2003 when HAMMOND shot and injured an individual with a .44 caliber revolver in the Farnam Court housing complex in New Haven.  HAMMOND was also convicted in state court of first degree assault in relation to the shooting.  In December 2004, HAMMOND was sentenced in U.S. District Court to 10 years of imprisonment, followed by three years of supervised release.  He was released from federal prison in July 2012.

It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.

On August 28, 2013, a jury found HAMMOND guilty of possession of ammunition by a previously convicted felon.  The ammunition was manufactured in Idaho, but the revolver was manufactured in Connecticut and could not be traced due to its age.

Judge Hall sentenced HAMMOND to 108 months of imprisonment for the illegal possession of ammunition, and a consecutive 18-month prison term for violating the terms and conditions of his supervised release from the 2004 conviction.

This matter was investigated Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service Violent Fugitive Task Force, and the New Haven Police Department.  This case was prosecuted by Assistant U.S. Attorney Anthony E. Kaplan.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that HENRY J. PAPALE, 62, of Southington, was sentenced today by Senior U.S. District Judge Ellen Bree Burns in New Haven to 30 months of imprisonment, followed by three years of supervised release, for operating a mortgage fraud scheme.

According to court documents and statements made in court, in 2007, PAPALE convinced others to purchase four investment homes in Florida using mortgage loans.  To inflate the size of the mortgages above the purchase prices for the properties, PAPALE submitted fraudulent invoices, work authorizations and wire transfer instructions to a settlement agent in Florida, each purportedly from a construction company for restoration on the properties.  In fact, the construction company was fictitious and no work was performed on the properties.  Following the closing on each sale, the Florida settlement agent wired loan proceeds, in amounts that corresponded to the cost of the restoration work, to a bank account in Southington that it believed belonged to the fictitious construction company, but was actually held by certain of PAPALE’s family members.

A total of $360,307.23 was transferred to PAPALE’s family members in this manner.  Based on PAPALE’s representations, a member of PAPALE’s family then turned the majority of the fraudulently-obtained loan proceeds over to PAPALE, who deposited them into his own bank account.  PAPALE ultimately transferred $255,500 in fraudulently obtained loan funds from that bank account to an investment trading account he held.

On August 13, 2013, PAPALE pleaded guilty to one count of wire fraud and one count of money laundering.

This matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorneys Jonathan N. Francis and Michael S. McGarry.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that a federal jury in New Haven today found MICHAEL THOMPSON, 34, and TYLON VAUGHN, also known as “Bucky B,” 35, both of New Haven, guilty of narcotics distribution offenses.

THOMPSON and VAUGHN and more than one hundred other individuals were charged as a result of “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.

According to the evidence at trial, THOMPSON received kilogram quantities of cocaine from suppliers, including co-defendant Christopher “White Boy Chris” Morley, which THOMPSON converted into crack cocaine and then sold to other narcotics distributors and customers.  Morley also provided THOMPSON with quantities of oxycodone, which THOMPSON redistributed to others.  At times, THOMPSON supplied powder cocaine to Morley.

The trial evidence further established that VAUGHN received distribution quantities of crack cocaine from co-defendant Britt Martin, also known as “Big Baby,” and that he distributed crack and marijuana, among other controlled substances, to customers in Fair Haven.  In May and June 2011, investigators made two controlled purchases of crack from VAUGHN.

The jury found THOMPSON guilty of one count of conspiracy to possess with intent to distribute, and to distribute, five kilograms or more of cocaine, 280 grams or more of cocaine base (“crack cocaine”), and a quantity of oxycodone.  VAUGHN was found guilty of one count of conspiracy to possess with intent to distribute, and to distribute, 280 grams of more of cocaine base and a quantity of marijuana.  On these convictions, both defendants face a mandatory minimum term of imprisonment of 10 years and a maximum term of imprisonment of life.  VAUGHN also was found guilty of two counts of distributing cocaine base, which carries a maximum term of imprisonment of 20 years, on each count.

Senior U.S. District Judge Ellen Bree Burns scheduled sentencing for both defendants for February 28, 2014.

THOMPSON and VAUGHN have been detained since May 22, 2012.

Morley and Martin have pleaded guilty and await sentencing.

This matter is being 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 have 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, Acting United States Attorney for the District of Connecticut, Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance, and Commissioner Daniel C. Esty of the Connecticut Department of Energy and Environmental Protection announced that CONOPCO, INC., doing business as UNILEVER HOME & PERSONAL CARE USA, (“Unilever”) waived its right to indictment and pleaded guilty today in Hartford federal court to two felony violations of the Clean Water Act.  The charges stem from Unilever’s December 2008 illegal discharge of industrial wastewater at a manufacturing site in Clinton and the company’s failure to report the discharge in a timely manner.  As part of its plea agreement, Unilever agreed to pay a $1 million fine.  The company also intends to contribute $3.5 million to state and local environmental programs.

“The environmental integrity of Connecticut’s rivers and the Long Island Sound are of essential importance to our state,” said Acting U.S. Attorney Daly.  “As this case demonstrates, our Office will vigorously prosecute companies whose actions threaten Connecticut’s natural resources.  We recognize and thank the EPA for their invaluable work in this investigation.  In addition, it is entirely appropriate that Unilever has agreed to redress their violations by contributing $2.5 million to fund research, outreach and education projects related to the effects of rising sea levels, $500,000 to construct a fishway in Clinton, and $500,000 to the Town of Clinton for other environmentally beneficial projects.  The Company’s contributions will directly assist the State of Connecticut in its efforts to protect and preserve our environment.”

“America’s communities deserve clean water, free from containments in illegal wastewater discharges,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Protecting these communities means holding violators accountable, both for illegal discharges and for failure to report them.”

“This case sends the clear message that those who flaunt environmental laws designed to protect public health and natural resources will pay a price,” said DEEP Commissioner Esty.  “A portion of the funds will be directed to environmentally beneficial projects in the town of Clinton, the place where the violations took place.  The remaining dollars will be used to build on our efforts to increase the resiliency of coastal communities and interior floodplains – and their residents – so we are better prepared to face the more extreme and severe weather predicted for the future.”

According to court documents and statements made in court, Unilever’s Clinton manufacturing facility produced a variety of health and beauty products for sale in the United States.  The wastewater produced by the plant was regulated by a permit that prohibited the company from bypassing any portion of its wastewater treatment system unless the bypass was unanticipated, unavoidable, and necessary to prevent loss of life, personal injury or severe property damage.  The permit further required that Unilever notify authorities within two hours of becoming aware of any bypass, and submit a written report within five days setting forth the cause of the problem, the duration of the event including dates and times, and corrective actions taken or planned to prevent future occurrences.

On December 5, 2008, at approximately 3:00 p.m., a third party contract employee noticed that a hose was being used to bypass the industrial process wastewater treatment system by allowing the contents of a 4,500 gallon vacuum filter filtrate tank to discharge directly to a storm drain pipe that led to Hayden Creek.  Upon making this discovery, the contract employee alerted the junior wastewater treatment operator for the Clinton facility and showed him the hose and ongoing wastewater bypass.  These two individuals then shut off the hose at approximately 3:10 p.m.

At 3:30 p.m., the contract employee notified his non-Unilever supervisor about his observations, and was urged to notify the Safety, Health and Environmental (SHE) manager of the Clinton facility.  The SHE manager received a call from the contract employee between 3:30 and 3:45 p.m.  After asking the contract employee to send her an email describing his observations, the SHE manager went to the waste treatment area between 3:45 and 4:00 p.m. and observed foamy water and signs of recent discharge at the inlet of the storm drain pipe. The SHE manager notified the plant manager, took pictures, and observed the downstream oil/water separator.  Despite the requirement that the Connecticut Department of Energy and Environmental Protection (DEEP) be notified within two hours of the detection of such a bypass, Unilever chose not notify the DEEP within this two-hour window.

On December 6, 2008, the SHE manager referred the matter to counsel for Unilever for further investigation and notification of DEEP.  The next day, in response to the SHE manager’s request, the contract employee sent the SHE manager an email detailing his observations of the bypass and stating “[t]his is not the first time I’ve seen this done at your facility, I’ve seen this on two previous occasions.  At that time, however, I was still trying to learn the system as quickly as possible and didn’t understand the significance of what I was viewing.”  In the email, the contract employee opined that the senior operator had performed the intentional bypass and had “done this on several occasions, and perhaps more often than we care to know.”

On December 8, 2008, three days after being notified of the illegal discharge, the Unilever plant manager interviewed the two wastewater treatment operators and the contract employee who had initially discovered the bypass.  All three individuals denied any responsibility for the bypass and indicated that they did not know who was responsible, although the contract employee again stated that he believed that the senior operator was responsible.  From these interviews, the plant manager did not determine who was responsible for the bypass or confirm whether any prior bypasses had occurred.  Later that day, the plant manager sent an email to his superior within the organization indicating that “we had somebody by pass [sic] the waste treatment process and put water into the storm water system . . .working with legal on how to handle the DEP [sic], if at all.”

On December 8, a DEEP compliance inspector was on-site at the Clinton facility for an unrelated reason.  Unilever again failed to notify the on-site DEEP representative of the bypass that had occurred.  On approximately December 10, Unilever notified the DEEP for the first time of the discharge that occurred five days earlier on December 5.  This written notification occurred within the required five-day time period for the mandatory written report.  Unilever also disclosed the discharge to the U.S. Environmental Protection Agency (EPA) in a written submission dated December 16, 2008.

Unilever conducted its own internal investigation of the December 2008 incident.  In subsequent conversations and written communications with federal and state authorities throughout 2009 and 2010, Unilever claimed it was unable to conclusively determine who was responsible for the bypass, and mischaracterized the incident as an isolated, “one-off” incident that may have been the work of unknown “vandals.”

An extensive EPA investigation revealed the truth about what had happened.  The junior operator admitted to the EPA that he intentionally bypassed the system on December 5. EPA further concluded that for an extended period of time, perhaps as long as two years prior to December 2008, the wastewater treatment operators routinely bypassed the system on a weekly basis, discharging approximately 1,500 gallons of partially treated wastewater at a time to the storm drain that led to Hayden Creek.  EPA’s investigation established that these bypasses were concealed from and unknown to Unilever management, including the SHE manager and the plant manager.  Unilever’s management was aware, however, both that the operators were not properly overseeing the wastewater treatment system and that the system was not properly functioning:

• The strength, flow, and variability of the facility’s wastewater made it difficult to treat.    System upsets and capacity limitations often necessitated that wastewater be trucked off-site for treatment at a cost of approximately $1500 per truckload.  The treatment system operators had authority to call for trucking if needed for wastewater treatment.
• Portions of the treatment system were old and in need of repair and maintenance.  Equipment replacements and system improvements recommended by outside consultants were not fully implemented, although some corrective measures were completed.
• The treatment system required constant operator attention and adjustment.  Nevertheless, during 2008, the senior operator was often absent.  The junior operator did not possess the required license or training to qualify him to operate the system independently for extended periods of time without supervision, yet he was allowed by Unilever to do so.
• Although the waste treatment operators were licensed by the State of Connecticut and subject to applicable permit requirements, they required oversight to properly operate the plant.  That oversight was inconsistent and the operators were allowed to act autonomously.

            In December 2012, Unilever ceased manufacturing operations at the Clinton facility.

Unilever pleaded guilty to two counts of knowingly violating, or causing to be violated, the Clean Water Act.  Each of these counts carries a maximum term of probation of five years and a fine of up to $500,000.  U.S. District Judge Robert N. Chatigny scheduled sentencing for March 3, 2014.

Under the terms of a binding plea agreement, if accepted by the court, Unilever will be placed on probation for three years and pay a fine of $1 million.  At the time of sentencing, Unilever intends to bring to the court’s attention that it made a $3.5 million payment to the Connecticut Statewide Supplemental Environmental Project Account (SEP) administered by DEEP.  Of that money, $2.5 million will be used to fund the Connecticut Resiliency and Climate Adaptation Center, which will conduct research, outreach and education projects related to the effects of rising sea levels.  In addition, $500,000 will be used to design and construct a fishway at the Chapman Mill Pond in Clinton, and $500,000 will be used to fund environmentally beneficial projects proposed by the Town of Clinton, including the acquisition of open space.

Unilever also has agreed to periodic environmental compliance inspections by an outside auditor at all of its manufacturing locations in the U.S, and to certify, within one year of sentencing, that all of its employees at these facilities who perform or manage work subject to environmental compliance requirements have received basic environmental compliance training.  In addition, all Unilever employees who are responsible for advising these facilities with respect to mandatory notifications to be made to state and federal environmental agencies must complete additional training to ensure they understand the legal notification requirements under applicable environmental laws.

This matter has been investigated by the U.S. Environmental Protection Agency and the Connecticut Department of Energy and Environmental Protection.  The case is being prosecuted by Assistant U.S. Attorney Ray Miller and Special Assistant U.S. Attorney Peter Kenyon.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that STEVEN FINKLER, 49, of Torrington, was sentenced yesterday by U.S. District Judge Stefan R. Underhill in Bridgeport to 60 months of imprisonment, followed by five years of supervised release, for bank fraud, and for violating the conditions of his supervised release from a previous federal conviction.

According to court documents and statements made in court, on July 19, 2012, a fraudulent check from Fidelity Brokerage Services, LCC made payable to FINKLER in the amount of $10,000.46 was deposited into FINKLER’s bank account at Sovereign Bank in Torrington.  Over the course of the next week, $9,828.83 was withdrawn from the account through check card transactions, ATM withdrawals, and cashed checks made payable to FINKLER’s wife.

In June and July 2012, FINKLER deposited five additional fraudulent checks totaling more than $29,000 into accounts he maintained. In each of these instances, the financial institution discovered the fraud and the check did not clear.

FINKLER has a criminal history that spans 30 years and includes numerous convictions, including four federal convictions stemming from various fraud schemes.  In October 2005, he was sentenced in the Eastern District of New York to 92 months of imprisonment, followed by three years of supervised release, for engaging in three separate fraud schemes, two of which occurred while he was previously incarcerated.  FINKLER was released from prison on September 15, 2010.

FINKLER has been detained since his arrest on July 26, 2012.  On April 23, 2013, he pleaded guilty to one count of bank fraud and to violating the terms of his supervised release.  Judge Underhill sentenced FINKLER to 36 months of imprisonment on the fraud conviction, and a consecutive 24-month prison term for the supervised release violation.

This matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Vanessa Richards.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that DEREK JACKSON, 36, of Waterbury, waived his right to indictment and pleaded guilty today before Senior U.S. District Judge Alfred V. Covello in Hartford to conspiring to embezzle funds from the Connecticut Army National Guard.

According to court documents and statements made in court, JACKSON was serving in the Connecticut Army National Guard in 2004 when he began conspiring with his payroll supervisor to have supplemental, unauthorized National Guard payments transferred into his bank account.  JACKSON admitted that he periodically shared a portion of the unauthorized funds with his payroll supervisor.  JACKSON received a total of $89,595.44 in unauthorized payments until January 2010, when the payroll supervisor died.

Judge Covello scheduled sentencing for February 26, 2014, at which time JACKSON faces a maximum term of imprisonment of five years.

This matter is being investigated by the Defense Criminal Investigative Service.  The case is being prosecuted by Assistant U.S. Attorney Henry Kopel.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that CRAIG CAFFRO, 48, of Florida, pleaded guilty yesterday before U.S. Magistrate Judge Thomas P. Smith in Hartford to one count of money laundering and one count of operating an illegal gambling business.  As part of his guilty plea, CAFFRO has agreed to forfeit $50,000.

According to court documents and statements made in court, after a long-term investigation led by the FBI Fairfield County Organized Crime Task Force, the Internal Revenue Service – Criminal Investigation and the Stamford Police Department, CAFFRO and 19 other individuals were charged with various offenses related to their involvement in multiple illegal gambling businesses in southern Connecticut controlled by the Gambino organized crime family, including a large-scale, Internet-based sports bookmaking operation based in Stamford that had penetrated New Haven County and parts of metropolitan New York.

The investigation, which included the use of court-authorized wiretaps, revealed that Dean DePreta headed a large-scale sports bookmaking operation in which gamblers placed bets with offshore Internet sports-gambling websites, particularly www.44wager.com based in Costa Rica.  CAFFRO served as the bookmaking operation’s point person with the www.44wager.com website, and received regular payments from DePreta and co-defendant Richard Uva to pay for use of the website.  At CAFFRO’s direction, one of these payments was laundered through the bank account of the elderly mother of one of CAFFRO’s associates living in New Jersey.

FBI analysis of the sports-betting web site utilized by the co-defendants has determined that the total gross revenues of the Stamford-based gambling operation were nearly $1.7 million from October 2010 to June 2011.  As of this date, 19 defendants have agreed to forfeit approximately $1.5 million in illegal proceeds.

CAFFRO is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on February 26, 2014, at which time he faces a maximum term of imprisonment of 20 years.

DePreta and Uva each pleaded guilty to racketeering conspiracy.  On October 9, 2013, DePreta was sentenced to 71 months of imprisonment and ordered to forfeit $300,000.  On October 24, 2013, Uva was sentenced to 46 months of imprisonment and ordered to forfeit $250,000.

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

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that FRANK METE, 55, of Berlin, waived his right to indictment and pleaded guilty today before U.S. Magistrate Judge Donna F. Martinez in Hartford to fraud and tax evasion offenses stemming from an investment fraud scheme.

According to court documents and statements made in court, from approximately 2009 to November 2012, METE operated an investment fraud scheme in which he held himself out as a broker of hard money loans between investors and purported individual borrowers who were willing to borrow money at interest rates of 15 to 18 percent.  In fact, there were no such borrowers.  In order to induce the investors to extend loans to the purported borrowers through him as the broker, METE created false promissory notes, mortgage documents and other false records using the names of the fictitious borrowers.  After receiving from the victim investors checks that were made out to the purported borrowers, he forged the signatures on the checks and deposited the funds into several bank accounts he opened in the borrowers’ names.

Through this scheme, METE defrauded investors of approximately $1,191,610.50.  He used the funds to pay for various personal expenses.

METE also failed to file federal income tax returns from 2009 to 2012, causing a tax loss to the government of approximately $357,324.

METE pleaded guilty to one count of wire fraud, which carries a maximum term of imprisonment of 20 years, and one count of tax evasion, which carries a maximum term of imprisonment of five years.

This case is assigned to U.S. District Judge Robert N. Chatigny.  A sentencing date has not been scheduled.
METE has been detained in state custody on unrelated charges since November 8, 2013.

This matter is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation.  The case is being prosecuted by Assistant U.S. Attorney Eric J. Glover.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that XANG NAKHOUNE, 38, of Bridgeport, was sentenced today by U.S. District Judge Janet C. Hall in New Haven to 30 months of imprisonment, followed by three years of supervised release, for distributing crack cocaine.

According to court documents and statements made in court, in October 11, 2012, NAKHOUNE served as an intermediary in the sale of 38 grams of crack cocaine to an individual working with law enforcement. On November 9, 2012, NAKHOUNE contacted the same individual with an offer to sell two ounces of crack in exchange for $2,400.  NAKHOUNE was arrested after she arrived at the location that had been arranged for the intended sale.  A subsequent search of her vehicle revealed approximately 49 grams of crack.

NAKHOUNE has been detained since her federal arrest on March 1, 2013.  On September 10, she pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, cocaine base (“crack cocaine”).

This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with the assistance of the New Haven and Bridgeport Police Departments.  This case was prosecuted by Assistant U.S. Attorney Michael E. Runowicz.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that ELIEZER MALDONADO, 26, of Hartford, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 244 months of imprisonment, followed by 15 years of supervised release, for producing and distributing child pornography.

According to court documents and statements made in court, on June 8, 2012, Homeland Security Investigations and Hartford Police conducting a child exploitation investigation executed a state search warrant at MALDONADO’s residence.  On that date, MALDONADO admitted that on multiple occasions he had engaged in sexual acts with a minor victim who was under the age of 12, had used a smartphone to take several photographs of the minor victim engaged in sexually explicit poses, and then posted the images to an online file-sharing service.  He also admitted that he had traded additional images of child pornography with others via email and online storage accounts.

Subsequent forensic examination of MALDONADO’s smartphone revealed eight images of the minor victim engaged in sexually explicit conduct.  Examination of MALDONADO’s email and online storage accounts also revealed approximately 5,500 images and 267 videos of child pornography.  The vast majority of these images and videos depicted prepubescent children under the age of 12.

MALDONADO has been detained since his arrest on June 8, 2012.  On July 16, 2013, he pleaded guilty to one count of production of child pornography.

This matter was investigated by Homeland Security Investigations in Hartford, with the assistance of HSI in Philadelphia, the Connecticut State Police and the Hartford Police Department.  The case was prosecuted by Assistant U.S. Attorneys Sarala V. Nagala and Anastasia E. King.

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.projectsafechildhood.gov.

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

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that ERICK EVANS, also known as “E.J.” and “Hoov,” 23, of New Haven, was sentenced today by Senior U.S. District Judge Ellen Bree Burns in New Haven to 46 months of imprisonment, followed by three years of supervised release, for distributing crack cocaine.

EVANS is one of more than 100 individuals charged as a result of “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.

EVANS was arrested on May 17, 2012, after he was found in possession of crack cocaine that he intended to distribute.  On September 4, 2013, he pleaded guilty to one count of possession with intent to distribute and to distribute cocaine base (“crack cocaine”).  This is his first felony conviction.

EVANS was remanded to federal custody on November 14, 2013, after he violated the conditions of bond.

This matter is being 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 have 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, Acting United States Attorney for the District of Connecticut, announced that RYAN HARDING, 28, of Woodstock, was arrested today on a federal criminal complaint charging him with production, receipt, and possession of child pornography.

The criminal complaint alleges that, on October 14, 2013, HARDING drove a male child to a convenience store, accompanied the child into the store’s restroom, and then used his iPhone to take sexually explicit photographs of the child.  The victim is autistic and was approximately 13 years old when the pictures were taken.  The defendant had access to the child through his employment at an organization that provides services to people with intellectual and developmental disabilities.

In addition, the complaint alleges that between July 16, 2013 and October 30, 2013, HARDING received and possessed other images and videos of child pornography that he downloaded from individuals via the Internet using a peer-to-peer file sharing program.  Through a forensic examination of HARDING’s computer equipment, law enforcement officers found approximately 1,043 images and 144 videos of child pornography on HARDING’s laptop and thumb drive.

HARDING appeared today before U.S. Magistrate Judge Donna F. Martinez in Hartford and was ordered detained.

If convicted of the charge of production of child pornography, HARDING faces a mandatory minimum term of imprisonment of 15 years, a maximum term of imprisonment of 30 years and a fine of up to $250,000.  If convicted of the charge of receiving child pornography, HARDING faces a mandatory minimum term of imprisonment of five years, a maximum term of imprisonment of 20 years and a fine of up to $250,000.  If convicted of the charge of possession of child pornography, HARDING faces a maximum term of imprisonment of 20 years and a fine of up to $250,000.  The penalties for the possession charge are enhanced because it is alleged that the defendant possessed depictions of prepubescent minors and minors under the age of 12.

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

This matter is being investigated by Homeland Security Investigations and the Connecticut State Police Computer Crimes Unit.  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.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that NATHAN SNAPE, 37, of Enfield, was sentenced today by Chief U.S. District Judge Janet C. Hall in New Haven to 42 months of imprisonment, followed by five years of supervised release, for distributing crack cocaine and for violating the conditions of his supervised release from a previous federal conviction.

According to court documents and statements made in court, in December 2012, Enfield Police made three controlled purchases of crack cocaine from SNAPE.  On January 10, 2013, SNAPE was arrested at his Enfield apartment, where he was found in possession of an additional quantity of crack.

At the time of the offense, SNAPE was serving a period of federal supervised release stemming from a previous conviction for possession of a firearm by a convicted felon.  In 2003, SNAPE was sentenced to 84 months of imprisonment and three years of supervised release.  In 2011, he received an additional six months of imprisonment for violating the conditions of his supervised release.

On June 27, 2013, SNAPE pleaded guilty to one count of possession with intent to distribute cocaine base (“crack cocaine”), and he admitted to having violated the terms of his supervised release.

Judge Hall sentenced SNAPE to 24 months of imprisonment for the crack offense and a consecutive 18 months of imprisonment for violating his supervised release.

This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration and the Enfield Police Department.  This case was prosecuted by Assistant U.S. Attorney Robert M. Spector.

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Deirdre Daly, Acting United States Attorney for the District of Connecticut, announced that JENNIFER CHIRICO, 31, of West Haven, pleaded guilty today before U.S. District Judge Janet C. Hall in New Haven to making bomb threats against courthouses in Connecticut.

According to court documents and statements made in court, on the morning of March 8, 2013, CHIRICO and another individual placed a total of seven anonymous threat calls to courthouses, law enforcement agencies and media outlets, all claiming that bombs had been deployed and were going to explode that morning at one or more courthouses in Connecticut.  All seven calls mentioned or described the Waterbury Superior Court as either the one location, or as one of multiple locations, where bombs were about to explode.

The investigation, which included analysis of the originating phone numbers of the calls and previous police reports associated with the phone numbers, pointed to CHIRICO as a suspect.  A review of the Waterbury court docket records for March 8, 2013, disclosed that CHIRICO had been scheduled to appear at a hearing that day in a pending criminal case.  Investigating agents then located and interviewed CHIRICO, who confessed to making the bomb threat calls and explained that she had done so to cause court delays and thereby avoid being late for her own court appearance.

CHIRICO was arrested on May 17, 2013.  Today, she pleaded guilty to one count of maliciously conveying false information.

Judge Hall has scheduled sentencing for February 19, 2014, at which time CHIRICO faces a maximum term of imprisonment of 10 years.

This matter is being investigated by the Federal Bureau of Investigation’s Joint Terrorism Task Force, the U.S. Marshals Service and the Connecticut State Police.  The case is being prosecuted by Assistant U.S. Attorney Henry K. Kopel.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that BRIAN FARRELL, 36, of Orange, was sentenced today by U.S. District Judge Janet C. Hall in New Haven to 36 months of imprisonment, followed by three years of supervised release, for illegally possessing firearms.

According to court documents and statements made in court, on December 26, 2012, federal and state law enforcement officers searching for a federal fugitive at 75 Daggett Street in New Haven encountered FARRELL at an apartment at that location.  FARRELL was found in possession of two pistols, a sawed-off shotgun, assorted ammunition and body armor.

In 2001, FARRELL was convicted in U.S. District Court in Connecticut of conspiracy to import Ecstasy.  It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.

On June 7, 2013, FARRELL pleaded guilty to one count of possession of firearms by a previously convicted felon.

This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven Police Department.  The case was prosecuted by Assistant U.S. Anthony E. Kaplan.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that FREDRICK COX, SR., also known as “Bama-Lama,” 43, of New Haven, was sentenced today by Senior U.S. District Judge Ellen Bree Burns in New Haven to 115 months of imprisonment, followed by four years of supervised release, for distributing cocaine base (“crack cocaine”). 

COX is one of more than 100 individuals charged as a result of “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.  The investigation revealed that COX conspired with others to distribute crack cocaine. 

On April 17, 2013, COX pleaded guilty to one count of conspiracy to possess with intent to distribute and to distribute 28 grams or more of cocaine base.

COX has sustained at least 11 prior felony convictions and, since September 12, 2011, he has been serving an unrelated five-year state sentence.  Judge Burns imposed the 115-month federal sentence to run consecutively to COX’s state sentence.

This matter is being 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 U.S. 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 have 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, Acting United States Attorney for the District of Connecticut, announced that DAVID HANEY, 52, of Marlborough, was arrested today on a federal criminal complaint charging him with the armed robbery of prescription narcotics from a South Windsor CVS store in September.

HANEY was arrested this morning in Hamden.  He appeared this afternoon before U.S. Magistrate Judge Joan G. Margolis in New Haven and was ordered detained.

According to court documents, this matter stems from an investigation into a series of armed robberies occurring at pharmacies in the greater Hartford area and Western Massachusetts.  During each robbery, an assailant typically brandished a handgun and proceeded to steal large quantities of prescription narcotics.

As alleged in the criminal complaint, at approximately 7:45 p.m. on September 25, 2013, HANEY entered the CVS store located at 525 Buckland Road in South Windsor and proceeded to the pharmacy counter.   He then asked for the pharmacist by name, showed the pharmacist a firearm that was in his waistband and demanded oxycodone pills.  The pharmacist gave HANEY more than 2000 oxycodone pills of different strengths and HANEY exited the store.

The complaint charges HANEY with interference with commerce through threat of violence and conspiracy, possession of a firearm in furtherance of a crime of violence, and possession and conspiracy to possess narcotics with intent to distribute.

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

This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Drug Enforcement Administration and the South Windsor, East Hartford, Meriden, Vernon, and Manchester Police Departments, with the assistance of other state and local law enforcement agencies.  This case is being prosecuted by Assistant U.S. Attorney Anthony E. Kaplan.

Acting 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.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that WILBUR TATE III, 49, of Dacula, Ga., pleaded guilty today before U.S. District Judge Stefan R. Underhill in Bridgeport to receiving bribes while he was an executive at U.S. Bank in Ohio.

According to court documents and statements made in court, Oxford Collection Agency was a private financial services company that engaged in accounts receivables management, primarily debt collecting, with offices in New York, Pennsylvania and Florida.  Between 2007 and 2011, Oxford Collection Agency executives engaged in a multi-year scheme to defraud its lender, investors and clients.  The investigation also revealed that Oxford Collection Agency was actively involved in bribing bank officials.

TATE, an Assistant Vice President of U.S. Bank in Ohio from January 2004 through February 2011, was in charge of outsourcing collection accounts to collection agencies, including Oxford Collection Agency.  Beginning in approximately August 2008 and continuing for more than two years, Oxford Collection Agency executives engaged in a bribery scheme with TATE in order to obtain and retain the business of U.S. Bank.  As part of the scheme, Oxford executives initially provided TATE with boxes of expensive cigars, and subsequently sent TATE monthly cash payments of between $2,500 and $5,000, which were hidden in cigar boxes and mailed to TATE’s residence in Mason, Ohio.

U.S. Bank received funds through the Troubled Asset Relief Program (TARP).

TATE was arrested on February 27, 2013.  Today, he pleaded guilty to one count of conspiracy to commit bank bribery, which carries a maximum term of imprisonment of five years.  Judge Underhill has scheduled sentencing for February 18, 2014.

Six other individuals have been convicted as a result of this investigation and prosecution of criminal activity arising from Oxford Collection Agency and the debt collection industry. 

This ongoing investigation is being conducted by the Internal Revenue Service – Criminal Investigation, the Federal Bureau of Investigation, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Connecticut Securities, Commodities, and Investor Fraud Task Force.  The case is being prosecuted by Assistant U.S. Attorney Liam Brennan and Special U.S. Attorney John McReynolds

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that ROBERT LIQUINDOLI, 42, of Waterbury, pleaded guilty yesterday before U.S. Magistrate Judge Joan G. Margolis in New Haven to one count of obstruction of the administration of the Internal Revenue laws.

According to court documents and statements made in court, in December 2011, the Internal Revenue Service was conducting an investigation of Thomas Thorndike, a Waterbury tax preparer.  In connection with that investigation, the IRS requested to interview LIQUINDOLI, whose 2007 and 2008 tax returns had been prepared by Thorndike.  After being contacted by the IRS, LIQUINDOLI sought to obstruct the IRS’s investigation by obtaining false documents that he intended to present to the IRS in support of deductions he claimed on his tax returns in 2007 and 2008.  Between December 2011 and February 2012, LIQUINDOLI engaged in an effort to obtain false documents in support of false items on these tax returns, and lied to the IRS concerning the extent to which he possessed original and legitimate documents to support the deductions on his tax returns.  LIQUINDOLI also falsely denied that he had attempted to obtain false documents to support those deductions.

LIQUINDOLI was formerly employed as a detective with the Waterbury Police Department.

LIQUINDOLI is scheduled to be sentenced by U.S. District Judge Janet Bond Arterton on February 12, 2014, at which time he faces a maximum term of imprisonment of three years.

LIQUINDOLI has been released on a $200,000 bond since his arrest on December 7, 2012.

Thorndike pleaded guilty to tax offenses in October 2012 and, on March 12, 2013, was sentenced to 72 months of imprisonment.

This case is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation.  The case is being prosecuted by Assistant U.S. Attorneys Christopher Mattei and Eric Glover.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, and Robert L. Barrett, Resident Agent in Charge of the U.S. Secret Service, today announced that JOSHUA PHILLIP KLIMAS, 32, of Coventry, was arrested yesterday on a federal criminal complaint charging him with making threats against the President of the United States and the President’s family.

KLIMAS was arrested by the U.S. Secret Service at his residence.  He appeared yesterday before U.S. Magistrate Judge Donna F. Martinez in Hartford and was ordered to be admitted to a local hospital for psychiatric evaluation.

As alleged in the criminal complaint, on June 1, 2013, KLIMAS sent a message to the whitehouse.gov website that contained several threatening statements against President Obama and his family, including “If you do not resign by the end of the year I will kill you!”

The complaint further alleges that KLIMAS has also threatened other individuals.

This matter is being investigated by the U.S. Secret Service, with the assistance of the UConn Police Department and the Coventry Police Department.

Acting 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.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that THERESA SUTHERLAND, 33, of Enfield, pleaded guilty yesterday before Senior U.S. District Judge Alfred V. Covello in Hartford to conspiracy and identity theft offenses stemming from a scheme to defraud Mass Mutual.

According to court documents and statements made in court, SUTHERLAND was employed by Mass Mutual Financial Group as a claims examiner in the company’s Enfield office.  Mass Mutual offers full-time employees up to $8,500 in college tuition reimbursement and up to $5,000 reimbursement for the expenses associated with the adoption of a child.  In pleading guilty, SUTHERLAND admitted that she and other Mass Mutual employees defrauded the company by submitting numerous fraudulent claims for tuition reimbursement and adoption expenses.  In association with the fraudulent claims for adoption expenses, SUTHERLAND and her co-conspirators submitted birth certificates and Social Security numbers of actual children who were not their own.

SUTHERLAND and her co-conspirators received approximately $240,000 in fraudulent reimbursements during the conspiracy, and SUTHERLAND specifically received more than $75,000.

SUTHERLAND pleaded guilty to one count of conspiracy to commit wire fraud, which carries a maximum term of imprisonment of 20 years, and one count of aggravated identity theft, which carries a mandatory consecutive two-year term of imprisonment.  Judge Covello has scheduled sentencing for February 11, 2014.

Four other former employees of Mass Mutual have been charged as a result of this ongoing investigation. Tamika A. Barnett, 31, of West Palm Beach, Fla., and Marena Bennett-Smith, 41, of Chicopee, Mass., have pleaded guilty and await sentencing.

As to the two defendants who are awaiting trial, Acting 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 investigation is being conducted by the Connecticut Financial Crimes Task Force, which includes members of the U.S. Secret Service, U.S. Postal Inspection Service, Internal Revenue Service – Criminal Investigation, Connecticut State Police, and the Greenwich, Hartford, Monroe, Stamford, Shelton, Stratford and Waterford Police Departments.  The case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.

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Deirdre M. Daly, Acting 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 DAVID MILLER, 41, of Rockville Centre, N.Y., was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 30 months of imprisonment, followed by three years of supervised release, for his role in a fraudulent scheme to make large purchases of stock in Apple Inc. while employed as an institutional sales trader for Rochdale Securities LLC of Stamford.  Judge Chatigny also ordered MILLER to spend the first six months of his supervised release in home confinement, and to perform 200 hours of community service.

According to court documents and statements made in court, MILLER, while working as an institutional sales trader at Rochdale Securities LLC (“Rochdale”) in Stamford, conspired with another individual to execute a trade to buy 1,625,000 shares of stock in Apple Inc. (“Apple”) on behalf of a Rochdale customer whose account Miller handled.  As part of the scheme, MILLER and his co-conspirator had agreed that the co-conspirator would submit an order for Apple stock on October 25, 2012, the day Apple was scheduled to announce its earnings for the quarter, and would write the order in such a way that MILLER could later claim he misinterpreted it.  MILLER would then execute a trade for 1,000 times the number of shares written in the order.  If the trade proved profitable, MILLER and his co-conspirator would share in the profits.  If the trade proved unprofitable, MILLER would claim human error, leaving Rochdale holding the losing position.

At approximately 9:31 a.m. on October 25, 2012, MILLER’s co-conspirator submitted an order for Apple that read: “b 125 ok (per 1/2 hr).”  MILLER then began executing orders to buy 125,000 shares of Apple stock, purportedly on behalf of the Rochdale customer.  Over the course of the day, MILLER entered multiple, separate orders in Rochdale’s order management system in the amount of 125,000 shares.  After Apple announced its earnings later that day, the stock price began dropping and it became clear that the trade would not be profitable.  When confronted, MILLER falsely claimed that he had made a mistake in ordering many multiples of what was written in a client’s order.

As a result of this scheme, Rochdale was left holding approximately 1,623,375 shares of Apple.  It promptly traded out of the position, but suffered a loss $5,292,202.50.  Regulatory requirements subsequently prohibited Rochdale from continuing to trade securities, which led directly to its cessation of all business operations.

While he was executing the scheme at Rochdale, MILLER also defrauded another broker-dealer into taking on a significant short position in Apple stock.  Through a series of misrepresentations made over the course of several weeks, MILLER convinced the broker-dealer to sell 500,000 shares of Apple stock, falsely claiming that he was trading for the account of a company, which he had no relationship with and for which he was not authorized to trade.  MILLER engaged in this part of the scheme to hedge against the large purchase of Apple stock he was executing at Rochdale.  As a result of the scheme, MILLER placed the broker-dealer at risk of sustaining substantial losses.  In the end, the broker was able to trade out of the position at a profit.

MILLER was arrested on December 4, 2012.  On April 15, 2013, he pleaded guilty to one count of conspiracy to commit wire fraud and securities fraud, and one count of wire fraud. 

Judge Chatigny ordered MILLER to make full restitution to Rochdale.

This matter was investigated by the Federal Bureau of Investigation.  Acting U.S. Attorney Daly acknowledged the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) for their substantial assistance and cooperation during the investigation.

The case was prosecuted by Assistant U.S. Attorney Paul A. Murphy.

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Deirdre M. Daly, Acting 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 MICHAEL THOMAS, 45, the former Chairman of the Mashantucket Pequot Tribal Council, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 18 months of imprisonment, followed by three years of supervised release, for embezzling from the Mashantucket Pequot Tribal Nation. 

On July 24, 2013, a jury found THOMAS guilty of one count of theft from an Indian tribal organization and two counts of theft from an Indian tribal government receiving federal funds.

“Mr. Thomas’s embezzlement of more than $100,000 was not only an abuse of his position as Chairman of the Mashantucket Pequot Tribal Nation, but also a theft of federal funds,” stated Acting U.S. Attorney Daly.  “The U.S. Attorney’s Office is committed to prosecuting corrupt officials at all levels of government – federal, state, local and tribal – and I commend the FBI and Department of the Interior’s Office of Inspector General for their diligent investigation of this matter.”

“Today’s sentence is especially important because it holds Mr. Thomas accountable for stealing federal dollars to support a lifestyle which he could have legitimately afforded on his own,” stated FBI Special Agent in Charge Ferrick.  “During these particularly severe fiscal times, Mr. Thomas’ abuse of position and unauthorized use of tribal money were done with a sense of entitlement and without ambiguity.  The FBI is most appreciative of the efforts of the United States Attorney’s Office and the Department of the Interior’s Office of Inspector General for working with us to investigate and prosecute the corruption of public officials at all levels.”

According to the evidence at trial, between October 2007 and April 2009, THOMAS used an American Express card that was issued to him by the Mashantucket Pequot Tribal Nation (“MPTN”) for official MPTN government purposes to charge more than $100,000 in unauthorized personal expenses.  THOMAS used the card to pay for monthly satellite television service for his home, satellite radio service for his vehicle, mobile phone service for other individuals, car service to transport his mother to kidney dialysis treatments and the purchase of personal computers.  THOMAS knew that the expenses were personal, and that his use of the credit card was in violation of a Tribal Council Resolution.

Judge Arterton will issue a restitution order after further court proceedings.

This matter was investigated by the Federal Bureau of Investigation and U.S. Department of the Interior – Office of Inspector General.  The case was prosecuted by Assistant U.S. Attorneys Christopher Mattei and Douglas Morabito.

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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that JUAN VELEZ, 60, of Waterford, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 12 months and one day of imprisonment, followed by five years of supervised release, for his role in a mortgage fraud scheme.  Judge Chatigny also ordered VELEZ to spend the first six months of his supervised release in home confinement, and to perform 120 hours of community service.

According to court documents and statements made in court, in 2006 and 2007, VELEZ and others engaged in a mortgage fraud scheme involving multiple properties in New London.  As part of the scheme, VELEZ acquired properties from a co-defendant and other individuals and then sold the properties to another co-defendant, Flavia Mendoza, at inflated prices using fraudulently obtained mortgage loans.

On June 20, 2013, VELEZ pleaded guilty to one count of bank fraud.  In pleading guilty, VELEZ specifically acknowledged that he was involved in the fraudulent transaction of a property located at 624-626 Montauk Avenue in New London.  When VELEZ sold the property to Mendoza, the loan paperwork contained multiple false statements, including information related to Mendoza’s income, her intention to occupy the property as her primary residence, and the amount of money she was providing to purchase the property.  Additionally, the Housing and Urban Development Settlement Statement form (“HUD-1”), which VELEZ signed, falsely stated that Mendoza had provided VELEZ with approximately $29,760 for the purchase of the property when Mendoza had not, in fact,  provided any down payment money for the transaction.  Based on these false statements, Mendoza obtained a mortgage loan in the amount of $492,699 from the bank.

VELEZ, Mendoza and others shared the profits of this and other fraudulently obtained residential mortgage loans, which totaled more than $1.2 million.

Judge Chatigny ordered VELEZ to pay restitution in the amount of $908,695.64 to four victim financial institutions.

Mendoza has pleaded guilty and awaits sentencing.

This matter was investigated by the U.S. Postal Inspection Service, the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation.  The case is being prosecuted by Assistant U.S. Attorneys Michael S. McGarry and Peter S. Jongbloed.

PUBLIC AFFAIRS CONTACT:

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

Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that HARRY RAYMOND SOUCY, 61, of Naugatuck, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to three years of probation, the first six months of which SOUCY must spend in community confinement (a “halfway house”), for his role in a scheme to direct illegal contributions into the campaign of a candidate for the U.S. House of Representatives.  SOUCY was also ordered to pay a $5,000 fine.

According to court documents and statements made in court, in August 2011, the State of Connecticut applied for a court order enjoining Roll Your Own (“RYO”) smoke shops from continuing to operate without complying with state law governing tobacco manufacturers.  RYO smoke shops are retail businesses that sell loose smoking tobacco and cigarette-rolling materials and offer customers the option of paying a “rental” fee to insert the loose tobacco and the rolling materials into a RYO machine, which is capable of rapidly rolling large quantities of cigarettes.  Customers did not pay a tax on the RYO cigarettes when rolled by the RYO machines, in contrast to cigarettes purchased over-the-counter.

Fearing that the Connecticut General Assembly would enact legislation harmful to RYO smoke shop owners’ business interests during the 2012 legislative session, certain RYO smoke shop owners and their associates, including SOUCY, engaged in a scheme to direct conduit campaign contributions into the campaign of Christopher Donovan, a candidate for the U.S. House of Representatives.  At the time, Donovan was also the Speaker of the Connecticut House of Representatives.  As part of the scheme, the co-conspirators recruited multiple individuals to serve as conduit contributors to the campaign.  These individuals permitted checks to be written in their own names to the campaign and were then reimbursed with cash, thereby concealing the fact that RYO smoke shop owners were contributing to the campaign.

In November and December 2011, participants in the scheme made four $2,500 conduit contributions to the Chris Donovan for Congress campaign.  On approximately January 31, 2012, the campaign submitted to the Federal Election Commission (“FEC”) a report of campaign committee’s receipts and disbursements for the period October 1, 2011 through December 31, 2011.  The report falsely stated the source and amount of the four $2,500 contributions that were received and deposited by the campaign committee during that time period.

In late April 2012, SOUCY was approached by investigators and began cooperating with the investigation.  With his assistance, the RYO owners directed an additional $17,500 in conduit contributions to the Donovan for Congress Campaign, as well as a conduit contribution in the amount of $2,500 to a political party.

On July 24, 2012, SOUCY waived his right to indictment and pleaded guilty to one count of wire fraud deprivation of honest services, and one count of conspiracy to make false statements to the FEC and to defraud the United States.

Seven other individuals, including two employees of the Donovan for Congress campaign, have also been convicted of charges stemming from this scheme.

This matter was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorneys Christopher M. Mattei and Eric J. Glover.

PUBLIC AFFAIRS CONTACT:

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

Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that ANDREW PARENTE, 76, of Hartford, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to nine months of imprisonment, followed by three years of supervised release, for illegally distributing prescription narcotics.

According to court documents and statements made in court, in October and November 2011, PARENTE and Robert Gentile conspired to distribute and distributed Schedule II controlled substances, including oxycodone, in a form commonly known as OxyContin, and hydromorphone, in a form commonly known as Dilaudid.

PARENTE was arrested on February 10, 2012.  On January 2, 2013, he pleaded guilty to one count of conspiracy to possess with intent to distribute a Schedule II controlled substance, and one count of possession with intent to distribute, and distribution of, a Schedule II controlled substance.

In November 2012, Gentile pleaded guilty to multiple drug and firearms offenses and, on May 9, 2013, he was sentenced to 30 months of imprisonment.

This matter was investigated by the Federal Bureau of Investigation, with the assistance of the U.S. Department of Health and Human Services, Office of Inspector General, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Connecticut State Police.  The case was prosecuted by Assistant U.S. Attorney John H. Durham.

PUBLIC AFFAIRS CONTACT:

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