District of Delaware

WILMINGTON, DE – Michael A. Stortini, the former managing member and part owner of the Frank Robino Companies (“FRC”) – a Delaware real estate development company – was sentenced yesterday by United States District Court Judge Richard G. Andrews to 24 months of imprisonment for embezzling $606,500 in retirement savings from his employees’ 401(k) plan, as well as failing to pay hundreds of thousands of dollars in payroll taxes to the Internal Revenue Service (“IRS”).  In addition to the prison term, Judge Andrews ordered Stortini to pay restitution, with interest, to the 401(k) plan beneficiaries, as well as $638,468 to the IRS.

According to facts disclosed at Stortini’s plea and sentencing hearings, when FRC encountered difficult financial times in 2009, Stortini misappropriated funds from the employees’ retirement plan to pay operating expenses associated with the company, as well as fund real estate projects with which FRC and Stortini were involved.  Around the same time, Stortini took approximately $900,000 for himself from bank accounts linked to FRC and its projects – $500,000 of which he spent at casinos – and failed to pay nearly half a million dollars in payroll taxes to the IRS.

Judge Andrews stated that he believed the two-year sentence was necessary to promote respect for the law and deter others from committing similar breaches of trust.   Recalling an adage that he heard in law school, Judge Andrews stated in imposing sentence:  “when you have a fiduciary relationship for money like that, your money is white, the money you control is black.  And if you mix the two of them together, you’re going to be wearing black and white stripes.”

Acting United States Attorney David C. Weiss praised the collaborative work of the agencies involved –the IRS Criminal Investigation division, United States Department of Labor, and Employee Benefits Security Administration – and highlighted the investigation as an “example of our commitment to find individuals who criminally exploit positions of trust within our community and bring them to justice.”   

"It is a serious crime when employers abuse their fiduciary responsibilities to their employees by lining their pockets with tax dollars intended to protect their employees’ futures," said Akeia Conner, Special Agent in Charge, IRS Criminal Investigation. "Mr. Stortini's actions not only caused negative ramifications to those financially connected to him, but also to the honest taxpayer who suffers from the stress to the tax system that Mr. Stortini’s actions caused. Tax crimes have erroneously been referred to as victimless, but that position could not be more wrong since we all end up paying when someone attempts to evade our tax system."

The case was prosecuted by Assistant United States Attorney Shawn A. Weede.  For further information, please contact Public Information Officer Kim Reeves at (302) 573-6277, ext. 16287.

WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Dawn Chamberlain, age 36, of Claymont, Delaware, was sentenced today by the Honorable Leonard P. Stark, Chief Judge of the United States District Court for the District of Delaware, to 51 months imprisonment and full restitution.  The sentence follows Chamberlain’s plea of guilty to violations of 18 USC § 286 (False Claims Conspiracy) and 18 USC § 1341 (Mail Fraud). 

From 2009 through 2012, Chamberlain prepared nearly 450 false and fraudulent U.S. Individual Federal Income Tax Returns for clients she solicited in Delaware and elsewhere.  In the returns, the defendant claimed an average of approximately $3,500 in fraudulent credits.  She often claimed the American Opportunity Tax Credit and the Earned Income Tax Credit for clients who were not eligible for those credits.  The defendant’s actions are estimated to have caused at least $1.5 million in losses to the United States Department of Treasury.

The defendant also stole from her own clients.  She kept a portion of their refunds without their consent, and she used her clients’ names, dates of birth, and social security numbers to file more than $210,000 in false and fraudulent New York State Resident income tax returns.  Her clients did not live or work in New York.  The defendant did not share any of the New York tax refunds with her clients. 

U.S. Attorney Oberly stated:  “This case should send a clear signal that individuals who file false claims against the United States Treasury will be prosecuted.  I am committed to working with the Internal Revenue Service to pursue these cases and seek incarceration wherever possible.”

“The American tax system is designed to provide vital government services to our people. It is not a slush fund for thieves and fraudsters,” said Akeia Conner, Special Agent in Charge, IRS Criminal Investigation. “This sentence today declares that those who illegally target our nation’s tax dollars for personal financial gain, along with others who assist them, are themselves potential targets for criminal prosecution."

“Taxpayers put their trust in paid tax preparers – and the defendant willfully violated that trust,” said New York State Commissioner of Taxation and Finance Thomas H. Mattox.  “In doing so, she not only stole tax refunds from the State of New York, she victimized innocent people who called on her to help them meet their tax obligations.”

WILMINGTON, Del. - Kirk A. Simmons, age 60, of Newark, Delaware, was sentenced earlier today to 10 years in federal prison for attempted coercion and enticement of a minor, in violation of Title 18, United States Code, Section 2422(b).  Simmons also was sentenced to 10 years of supervised release following his prison sentence.  He also will be required to register as a sex offender in any jurisdiction in which he lives, works, or attends school. 

At the time of his criminal conduct, Simmons was employed as a Vice President, Market Information Manager II at Bank of America’s Newark, Delaware facility.  Bank of America terminated Simmons’s employment following notification of his criminal conduct. 

According to court documents and statements made in court, Simmons was arrested by the Delaware Child Predator Task Force on July 18, 2013, after he arrived at a Newark hotel to engage in sex acts with two persons he believed to be a 13-year-old girl and her biological father.  Approximately one month earlier, in June 2013, Simmons responded to a “personals” advertisement on an adult social networking website.  Simmons believed the advertisement had been posted by the father of a 13-year-old girl who the father would make available for sex with adult males.  In fact, the “father” was actually an undercover Delaware State Police detective assigned to the Delaware Child Predator Task Force. 

Over the course of the next month, Simmons and the undercover detective engaged in numerous online chat conversations in which Simmons indicated and graphically described that he wanted to engage in sexual activity with the purported “father” and his child.  After a number of online conversations, Simmons and the “father” agreed to meet at a Newark hotel on July 18, 2013, where they both would engage in sex acts with the “13-year-old daughter.”

On the morning of July 18, 2013, Simmons left his office at Bank of America’s Deerfield facility and drove to a Newark hotel, where he was arrested by Child Predator Task Force members.  In a recorded interview with a Delaware State Police detective, Simmons admitted that he intended to engage in sexual activity with the fictitious “father” and “13-year-old daughter” at the hotel.  Simmons also admitted that he brought a digital camera with him to photograph the sexual activity.

Following the sentencing hearing, United States Attorney Charles M. Oberly, III stated: “I want to thank the Delaware Child Predator Task Force for its outstanding work in this case.  This was a time-intensive, month-long, online undercover investigation that resulted in the capture of a seemingly upstanding and successful businessman who planned to rape a child with her father’s help.  I would also like to thank the U.S. Department of Homeland Security for its continued and successful partnership with our State law enforcement partners on this critically important work.”

“The Delaware Child Predator Task Force works hard every day to identify and arrest dangerous predators like this defendant who are searching our communities for young victims,” Delaware Attorney General Beau Biden said.  “Our children are safer today because of that work and the shared commitment of our local, state, and federal law enforcement partners.  Our work to protect kids never ends.”

“Today’s sentencing serves as a powerful reminder of the consequences of sexually exploiting children,” said John Kelleghan, special agent in charge of HSI Philadelphia. “HSI and our law enforcement partners are relentless in our pursuit of those who prey on children and engage in this perverse behavior.”

The case is being prosecuted by Assistant United States Attorney Edward J. McAndrew and investigated by the Delaware State Police and the United States Department of Homeland Security, Homeland Security Investigations. 

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Brian Bailey entered a guilty plea before the Honorable Richard G. Andrews to  conspiracy to commit an offense against the United States, as charged in a previously-filed Indictment and to a one count felony Information, also charging him with conspiracy to commit an offense against the United States, both in violation of Title 18, United States Code, Section 371.

According to the criminal Information and plea agreement, Bailey, who was employed by Wilmington Trust Company (the “Bank”) as the Delaware Market Manager, overseeing all lending in the state, conspired with Joseph Terranova and others to conceal the Bank’s true financial condition.  The conspiracy involved, among other things, extending credit to keep existing loan interest payments current, thereby causing the Bank to misrepresent its reporting of past due and non-performing loans.  The misrepresentations extended to, among others, the Federal Deposit Insurance Corporation, agents and examiners appointed to examine the Bank, and the Board of Governors of the Federal Reserve System.  The criminal conduct enabled the Bank to file false statements of condition, or “Call Reports,” with federal financial regulators on a quarterly basis throughout 2009.  As set forth in the Information, the Bank underreported its past due and nonperforming loans by approximately $186,000,000 in the first quarter of 2009; $234,000,000 in the second quarter of 2009; $463,000,000 in the third quarter of 2009; and $373,000,000 in the fourth quarter of 2009.  Terranova previously entered a plea of guilty to the same underlying conduct in a separate case.

According to the Indictment and plea agreement, Bailey participated in a separate conspiracy with James Ladio, the former chief executive officer of MidCoast Community Bank, whereby over a twelve-year period they provided multiple loans to each other, through their respective financial institutions, under terms and conditions that would be unavailable to the general public.

Bailey, age 51, is a resident of Middletown, Delaware.  He faces a maximum penalty of 5 years imprisonment and a $250,000 fine for each count.

United States Attorney Oberly said, “With today’s guilty plea we take another step forward in bringing to justice individuals whose criminal conduct contributed to the failure of Wilmington Trust.  Mr. Bailey’s participation in both conspiracies demonstrates an abuse of power and betrayal of public trust.  Mr. Bailey’s underlying conduct of approving supplemental financing for failing borrowers contributed substantially to the Bank’s demise.  His conduct, and that of others, further enabled the Bank to falsely underreport its level of nonperforming loans to federal regulators and the public by hundreds of millions of dollars throughout 2009.  We hope that this conviction serves to demonstrate my office’s commitment to protecting the integrity of financial institutions and makes clear the consequences to those contemplating similar conduct.”

“With today’s plea, former Wilmington Trust bank official Brian Bailey admitted that before and during the time the bank held taxpayer bailout funds, he and others at the TARP recipient bank conspired in criminal ‘extend and pretend’ and ‘delay and pray’ schemes to hide hundreds of millions of dollars in non-performing, past-due commercial real estate loans from federal bank examiners in order to conceal the true financial condition of the bank,” said Christy Romero, Special Inspector General for TARP (SIGTARP).  “Over a 12-year period, Bailey also authorized bank loans for purported commercial real estate projects to a bank official, James A. Ladio, at another bank in exchange for sweetheart loans from Ladio’s bank.  SIGTARP will bring justice for crimes related to the taxpayer-funded TARP bailout.”

“The outstanding efforts put forth by the FBI, IRS, and SIGTARP investigators assigned to this case should send a message to those involved in criminal fraud conspiracies that their actions will not go unpunished.  We take these matters very seriously and will continue our efforts to protect the public by relentlessly pursuing white collar criminals,” said Stephen Vogt, Special Agent in Charge of FBI’s Wilmington office.

“High-ranking corporate officials hold positions of trust not only in their companies but also in the eyes of the public. That trust is broken when such officials abuse their power and commit crimes,” stated Akeia Conner, Special Agent in Charge, IRS Criminal Investigation. “Mr. Bailey conspired with others to conceal actions and misrepresentations that undermined the stability of Wilmington Trust.  IRS Criminal Investigation is proud to work with our law enforcement partners and the United States Attorney’s Office in protecting and defending the public trust.”

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Office of Inspector General, Board of Governors of the Federal Reserve System and is being prosecuted by Assistant United States Attorneys Robert Kravetz and Lesley Wolf.

Plea Agreement

Information

WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Stephanie Patterson, age 41, of Royersford, Pennsylvania, was sentenced yesterday by the Honorable Leonard P. Stark, Chief Judge for the United States District Court for the District of Delaware, to 42 months imprisonment and full restitution.  Earlier this year, Patterson pled guilty to violations of 18 USC § 286 (False Claims Conspiracy), 18 USC § 1341 (Mail Fraud), and 42 U.S.C. § 408(a)(7)(B) & 18 U.S.C. § 2 (Aiding and Abetting Social Security Fraud) in connection with her use of stolen identities in a tax fraud conspiracy. 

The defendant participated in a tax fraud conspiracy involving the filing of more than 180 false individual federal income tax returns with the Internal Revenue Service, using stolen identities.  The returns sought refunds of more than $1.8 million.  The defendant and her co-conspirators received more than $800,000 in refunds to which they were not entitled,on account of the fraudulently filed returns.  Among other things, the scheme jeopardized the Social Security Disability benefits of at least some of the identity theft victims.  The defendant’s role in the conspiracy involved providing names and social security numbers to another co-conspirator, who used the information to file the fraudulent returns.  The defendant also acted as a conduit of information between other members of the scheme.

U.S. Attorney Oberly gave the following comments:  “Individuals who conspire with others to file false claims against the United States Treasury will face significant penalties, as this case demonstrates.  My office is committed to prosecuting these cases, and I will seek incarceration wherever possible and appropriate.”

IRS Criminal Investigation Special Agent in Charge Akeia Conner said, “Individuals who commit refund fraud and identity theft deserve to be punished to the fullest extent of the law. IRS Criminal Investigation, along with our law enforcement partners and the United States Attorney's Office, remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud the United States Treasury and blatantly disregard the victims of their schemes.”

This case is the result of an investigation conducted by the Internal Revenue Service Criminal Investigation, the United States Postal Inspection Service, the Social Security Administration Office of the Inspector General, and the Federal Bureau of Investigation.  The case is being prosecuted by Assistant United States Attorney Lauren Paxton.

WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Kimberly Y. Drummond, age 47, of Middletown, Delaware, was sentenced yesterday to 12 months and full restitution for her years-long embezzlement from Discover Financial Services, a federally insured financial institution, in New Castle, Delaware.

Ms. Drummond had worked for Discover for nearly 20 years in a check processing role.  In or around November 2008, Drummond began falsifying entries in Discover’s books and records, resulting in the issuance of duplicate checks from Discover Bank.  Drummond deposited these duplicate checks into her personal bank accounts, and she used the checks to pay her mortgage lender and purchase luxury consumer items for herself and her family.  She continued until her fraud until it was discovered, in August 2012.  During the course of her almost four year scheme, Drummond embezzled more than $350,000 from Discover.

U.S. Attorney Oberly commented, “While defense counsel argued for a probationary sentence and the government requested a guideline sentence of 27 months, the Court’s sentence sends a clear message that incarceration is appropriate in situations where individuals abuse their positions of trust within the local banking community.”

WILMINGTON, Del. – David C. Weiss, Acting United States Attorney for the District of Delaware, announced today that Qiydaar Miller, age 34, the leader of a Wilmington-based drug organization, known as the “30th Street Crew,” was sentenced in U.S. District Court to 78 months in prison and 4 years supervised release, for conspiracy to distribute heroin, crack cocaine, cocaine, and marijuana, in violation of Title 21, United States Code, Sections 841(a)(1) and 846. 

Miller has been incarcerated since June 13, 2013, when he and eight other 30th Street Crew members were arrested and held without bail, on federal drug trafficking charges.  In total, fourteen individuals were ultimately indicted on federal drug trafficking charges in connection with this investigation.  Of the eight co-defendants listed on Miller’s indictment, which included Albari Malik Johnson, Tamir Collins, Keenan Williams, Walter Thomas, Ibrahim Sesay, Andre Cephas, Harry Coverdale, and Corey Pendergrass, all but Thomas have pleaded guilty to federal drug charges.  Tamir Collins, Miller’s brother was sentenced to six years in jail in April 2014.   Other co-defendants are now serving jail terms of between two and four years. 

According to court documents, following a nearly five month wire-tap investigation, law enforcement identified and dismantled the 30th Street Crew, which was led by Miller and Collins, and which was a dominant drug trafficking organization throughout Wilmington, with their center of operations located in the northside of Wilmington.  The 30th Street Crew used a residence at 3000 N. Madison Street, Wilmington – situated just blocks away from P.S. DuPont Middle School – as its headquarters for many years.  That house served as a retail center for drug distribution, with a regular influx of customers and sub-distributors arriving to make drug purchases from conspiracy members.  The house was also a target of violence, including at least two shootings which occurred outside the residence in November and December 2011. 

Law enforcement further determined that Johnson regularly received shipments of heroin from a New York-based source, and then distributed the heroin to Miller and other co-conspirators.  Miller ultimately admitted to being responsible for the distribution of at least 700 grams of heroin.  Miller was also responsible for the sale of cocaine and crack cocaine – purchasing as much as kilogram of cocaine at a time, which he and his co-conspirators would “break down” into smaller, distribution quantities for further sale. 

The Indictment and arrests of these individuals was the product of a long-term investigation into the drug-trafficking organization, led by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Wilmington Police Department, and the State of Delaware Department of Corrections Division of Probation and Parole.  Critical support for the investigation and arrests was provided by Delaware State Police, Delaware Division of Gaming Enforcement, New Castle County Police Department, United States Marshals Service, and the United States Department of Agriculture.

Acting United States Attorney David C. Weiss thanked the federal, state, and local law enforcement agencies for their participation in this investigation, and stated, “This investigation dismantled a large-scale, violent drug trafficking organization that had heretofore operated with near-impunity on the streets of Wilmington.” 

“Street violence has become a normal way of life for many people living in Wilmington.  These career criminals are holding communities hostage, and gang members think they can keep beating the system.  But not anymore,” said Steve Vogt, Special Agent in Charge of the FBI Baltimore Division which covers Delaware.  “This case and others to follow will show these violent offenders that we are not going away.”

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Pacific and Atlantic (Shipmanagers), Inc. (“Pacific and Atlantic”), incorporated in the Marshall Islands with its main offices in Athens, Greece, was sentenced today to a $500,000 fine by United States District Court Judge Gregory M. Sleet for violating the Act To Prevent Pollution From Ships.

According to court documents and statements made in court, Pacific and Atlantic  operated the M/V Bulk Victory, a 13,697 gross ton ocean-going cargo ship.  On March 7, 2014, the U.S. Coast Guard boarded the vessel in the Delaware Bay Big Stone Anchorage to conduct an inspection.  The inspection and subsequent criminal investigation revealed that from January through September 2013, the M/V Bulk Victory discharged overboard, in the open ocean, no less than 34 metric tons of oily bilge water and waste sludge.  

The Act To Prevent Pollution From Ships is a codification of international treaties known as the “MARPOL Protocol.”  To insure that oily waste is properly stored and processed at sea, all ocean going ships entering U.S. ports must maintain an Oil Record Book in which all transfers and discharges of oily waste, regardless of the ship’s location in international waters, are fully recorded.  During the Coast Guard boarding on March 7, 2014, crewmen presented the ship’s Oil Record Book, which did not record the relevant overboard discharges.

Pacific and Atlantic was ordered to pay the $500,000 fine immediately, and also placed on probation for three years, during which time the M/V Bulk Victory will be banned from calling on ports of the United States.

“The defendant violated environmental laws that protect our marine environment from harmful pollution,” said U.S. Attorney Oberly.  “This conviction ensures that the defendant is held accountable with a criminal fine, as well as a three-year ban from United States ports.  The message to the shipping industry is clear: environmental crimes at sea will not be tolerated.”  

“I’m so proud of the work of the Coast Guard personnel, particularly those from MSD Lewes, Sector Delaware Bay, and the Coast Guard Investigative Service, who all put in long hours on this case.  I’m grateful too, for the support of our District and Headquarters and that of DOJ and others that brought this matter to resolution so quickly,” said Captain Kathy Moore, Commander, Sector Delaware Bay.

This case was investigated by the U.S. Coast Guard Sector Delaware Bay, Coast Guard Marine Safety Detachment Lewes and the Coast Guard Investigative Service.  The case was prosecuted by Trial Attorney Stephen Da Ponte in the Environmental Crimes Section of the Department of Justice and Assistant U.S. Attorney Edmond Falgowski from the U.S. Attorney’s Office for the District of Delaware.

WILMINGTON, Del. – Christopher Joseph Dondero, age 36, of New Castle, Delaware, was sentenced today to a statutory maximum term of 20 years in federal prison for Possession of Child Pornography, in violation of federal law.  Dondero also was sentenced to a life term of supervised release following his prison sentence.  He must continue to register as a sex offender in any jurisdiction in which he lives, works, or attends school.

Dondero was previously convicted in Delaware of the state crimes of Unlawful Sexual Contact Third Degree in 2001 and Dealing in Child Pornography in 2010.  The child pornography involved in the 2010 case featured prepubescent females.  At the time of the instant offense, Dondero was on probation for his 2010 child pornography offense and was registered as a sex offender as required by Delaware and federal law.

According to statements made and documents filed in court, Dondero used a cell phone to take photographs of an 8-year-old girl while the child was showering.  The child saw Dondero doing so and later told her mother, who reported the incident to state authorities.  At the time of the incident, Dondero’s girlfriend was babysitting the child.  Officers from the New Castle County Police Department and the Office of Probation and Parole subsequently searched Dondero’s residence and recovered his cell phone, which contained the images of the child.

United States District Judge Gregory M. Sleet cited a number of factors in imposing the statutory maximum sentence and life term of supervision.  They included, but were not limited to, the seriousness of the offense against a young child, Dondero’s past sex offenses and violations of probation, the need to protect children from child sex offenders, and the need to deter Dondero and others from committing future child sex offenses.

Following the sentencing hearing, United States Attorney Charles M. Oberly, III stated:  “Those, like Mr. Dondero, who repeatedly victimize children should expect to feel the full and combined weight of Delaware’s federal, state and local law enforcement authorities.  They also should expect to receive very long sentences when they are brought into a Delaware court.”

“This case demonstrates the danger that our kids face from predators,” Attorney General Beau Biden said. “Unfortunately, experience has shown that predators pose ongoing risks of committing new offenses against children and that’s why our Child Predator Task Force, along with our local, state, and federal law enforcement partners, work hard every day to take individuals who create, possess and distribute child pornography off the streets.”

HSI resident agent in charge for Delaware Jonathan D. Free stated:  "Today's sentencing brings into shape focus the danger that child predators represent and the concerted and continuing efforts of Delaware's federal, state and local law enforcement to take these individuals out of circulation in order to protect America's children."

This case was investigated by the Delaware Child Predator Task Force, the New Castle County Police Department, and the United States Department of Homeland Security, Homeland Security Investigations.  It was prosecuted by Assistant United States Attorney Edward J. McAndrew.

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Peter W. Hayes, age 48 of Newark, Delaware, was charged on July 15, 2014, in a seven-count Indictment with the following offenses:

• Counts 1 and 2 charge the defendant with Fraudulently Benefiting in a Loan Transaction, in violation of Title 18, United States Code, Sections 1005 and 2.  The maximum penalties for each of Counts 1 and 2 are a term of imprisonment of thirty years; a fine of $1,000,000.00; a term of supervised release of five years; a $100 special assessment; and mandatory restitution.
• Counts 3 and 4 charge the defendant with Soliciting or Accepting for His Own Benefit Anything of Value in Connection With the Transaction and the Business of a Financial Institution, in violation of Title 18, United States Code, Sections 215(a)(2) and 2.  The maximum penalties for each of Counts 3 and 4 are a term of imprisonment of 30 years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution.
• Counts 5 through 7 charge the defendant with Bank Fraud, in violation of Title 18, United States Code, Sections 1344 and 2.  The maximum penalties for each of Counts 5-7 are a term of imprisonment of thirty years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution. 

The Indictment alleges that Mr. Hayes, a former Relationship Manager (“RM”), or lender, in the Delaware Commercial Real Estate (“CRE”) Division at the Wilmington Trust Co. (“WTC”) engaged in several fraudulent transactions with one of his customers, identified in the Indictment as “Customer A.”  According to the Indictment, Hayes engaged in the following conduct in his dealings with Customer A: (1) Hayes accepted and solicited from Customer A investment opportunities in Customer A’s real estate developments, in which Hayes received monthly rental income sufficient to pay his mortgage plus expenses on investment properties purchased from Customer A;

                (2) Hayes later solicited and accepted a favorable loan from Customer A to pay off Hayes’ investment losses;

                (3) Hayes knowingly causing WTC loan funds to be disbursed to Customer A for purposes that were not authorized by WTC’s loan agreements with Customer A, and submitted false information in support of draw requests to provide funding to Customer A, including to cover overdrafts in Customer A’s operating bank account; and

                (4) Hayes caused WTC to lend funds without loan committee approval to an investment company founded by Customer A’s President, so that the investment company could purchase model homes that would be leased back to Customer A or others.

“The indictment alleges that the defendant, a former Wilmington Trust lender, engaged in multiple fraudulent schemes to benefit one of Wilmington Trust’s largest clients, as well as himself,” stated United States Attorney Oberly.  “The client ultimately suffered millions of dollars in losses, which were shouldered by the Bank and its shareholders.  Our office will continue to vigorously investigate alleged fraudulent schemes, such as those charged in today’s Indictment, related to the downfall of Wilmington Trust.”

Christy Romero, Special Inspector General for TARP (SIGTARP) said, “Hayes stands charged with bank fraud, bribery, and fraudulently benefitting from loan transactions for a multitude of various offenses.  This type of fraud and self-dealing is unacceptable, and SIGTARP and our law enforcement partners will pursue any offenders whose conduct jeopardizes taxpayers’ TARP investments to hold perpetrators accountable for their crimes.”

The case was investigated by the Federal Bureau of Investigation and the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and is being prosecuted by Assistant United States Attorneys Robert F. Kravetz, Lesley F. Wolf, and Ilana H. Eisenstein.

Members of the public are reminded that an Indictment is only an allegation and that a defendant is presumed innocent until proven guilty.

Wilmington, DE - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Dmitry Ustinov, of Moscow, Russia, pled guilty in federal court for the District of Delaware to conspiring to export high-tech military technology, including night vision devices and thermal imaging scopes, outside the United States, in violation of Title 18, United States Code, Section 371.  The military technology listed in the conspiracy offense was designated on the United States Munition List as defense articles and was prohibited from export outside the United States pursuant to the Arms Export Control Act and the International Traffic in Arms Regulations.

U.S. Attorney Oberly stated:  “The export of items designated on the U.S. Munitions List as defense articles is a serious federal crime that could jeopardize the safety and well-being of United States’ service members or our allies.  Individuals engaging in this activity can and will be prosecuted even if we have to reach across the ocean to make the arrest.”

"HSI will continue to pursue individuals who are willing to put America's national security at risk,” said John P. Kelleghan, special agent in charge of HSI in Philadelphia. “The illegal export of technology to prohibited countries is controlled so that it cannot be used to harm America or its allies. Enforcing export laws are one of HSI's top priorities and we will continue to work with our law enforcement partners to stop these criminals in their tracks.”

Following a lengthy investigation, the defendant was indicted by a grand jury sitting in Wilmington, Delaware, on March 25, 2013, for offenses related to violating the Arms Export Control Act and the International Traffic in Arms Regulations.  On April 15, 2013, at the request of the United States Government, the defendant was arrested in Vilnius, Lithuania after entering the country from Russia.  On May 7, 2013, the grand jury issued a Superseding Indictment with additional offenses related to smuggling arms outside the United States.  Following the Superseding Indictment, the defendant was subsequently extradited from Lithuania to Delaware on August 23, 2013. 

According to court documents filed in this case, between July 2010 and April 2013, Ustinov worked with a supplier based in Virginia to purchase and export night vision equipment from the United States to Russia without obtaining any export licenses from the U.S. Department of State.  Ustinov further arranged for international wire transfers to occur so that money could be provided to the supplier’s bank account as payment for this equipment.  The conspiracy offense alleged that various types of high-tech night vision devices were part of the scheme, including an L3 Insight Mini Thermal Monocular, Night Optics D-740 Night Vision Scopes, and Forward Looking Infrared Tau 640 Thermal Imaging Cameras, among other targeting devices. 

The defendant faces a maximum penalty of up to five years in prison, three years of supervised release, and a $250,000 fine.  A sentencing hearing has been scheduled by the District Court for October 2, 2014.

This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  It is being prosecuted by Assistant United States Attorney Jamie M. McCall and Trial Attorney Mariclaire Rourke of the Counterespionage Section of the U.S. Department of Justice, National Security Division.  For further information, please contact AUSA McCall at 302-573-6079.

United States Attorney Charles M. Oberly, III, announced today that a federal grand jury last week returned two superseding indictments charging a total of fourteen men with various violations of federal law.  The first indictment contains twenty-three counts and alleged conduct that includes conspiracy to distribute cocaine, in violation of Title 21, United States Code, Sections 841(a)(1) and 846; distribution of cocaine, in violation of Title 21, United States Code, Sections 841(a)(1); possession of cocaine with the intent to distribute, in violation of Title 21, United States Code, Sections 841(a)(1); and possession of firearms by prohibited persons, in violation of Title 18, United States Code, Section 922(g).  The second indictment contains charges relating to the Sponsoring of Animals in Dogfighting Ventures, in violation of Title 7, United States Code, Sections 2156(a)(1).

The charged defendants are Edward Sturgis, age 38 of Dover; Leshawn Ingram, age 28 of Smyrna; Christopher Glover, age 40 of Dover; Robert Ingram, age 30 of Dover; James Wilson, age 49 of Magnolia; Terah Moore, age 36 of Dover; Keith Adkins, age 36 of Dover; William Chapman, age 42 of Dover; Deshawn Groce, age 39 of Dover; Tyshi Hazzard, age 36 of Rehoboth Beach; Dwyane Dixon, age 46 of Dover; Jamar Cannon, age 31 of Dover; Corey Curtis, age 38 of New Castle; and Aaron Cannon, age 27 of Hartley, Delaware. 

The drug indictment alleges that between January 2014 and March 2014, in Delaware, Defendants Strugis, Leshawn Ingram, Glover, Robert Ingram, Wilson, and Curtis conspired to possess cocaine with the intent to distribute.  The drug indictment also alleges that, on various dates, Defendants Sturgis, Leshawn Ingram, Glover, Robert Ingram, Wilson, Moore, Adkins, Dixon, Jamar Cannon, Corey Curtis, and Aaron Cannon engaged in the distribution of cocaine and/or the possession of cocaine with the intent to distribute it in Delaware.  If convicted of any of the conspiracy, distribution or the possession counts, the charged Defendants face up to 20 years imprisonment in addition to fines, and supervised release.  Defendants Strugis, Leshawn Ingram, Glover, Robert Ingram, Wilson, and Curtis also face a mandatory minimum sentence of at least five years of imprisonment, and up to forty years in prison, in addition to fines, and supervised release for their alleged conduct.

The dogfighting indictment alleges that between the dates of January 17, 2014 through February 19, 2014, Defendants Sturgis, Robert Ingram, Chapman, Hazzard, and Groce, engaged in a conspiracy and two substantive offenses alleging violations of the federal dogfighting statute.  If convicted of any of these offenses, the charged defendants could face up to five years imprisonment, in addition to fines and supervised release.

The indictments and arrests of these individuals were the product of a long-term investigation, led by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Dover Police Department that culminated in the execution of eighteen search warrants, and the seizures of several firearms and controlled substances.  Critical support for the investigation and arrests was also provided by the Drug Enforcement Agency, the United States Marshals Service, the United States Department of Agriculture, the Delaware State Police, the Delaware Department of Corrections, the Smyrna Police Department, the Milford Police Department, the New Castle County Police Department, and the American Society for the Prevention of Cruelty to Animals (the “ASPCA”).

Acting ATF Special Agent in Charge William P. McMullan said, “I am confident that the execution of multiple arrest and search warrants by ATF and its law enforcement partners has made a significant impact on crime in Delaware, and specifically in the city of Dover.   ATF continues to work complex investigations with its federal, state, and local law enforcement partners in Delaware in order to bring violent criminals to justice.”

“The victims of dog fighting suffer horrific abuse, forced to fight for their lives at the hands of their owners,” said Tim Rickey, vice president, ASPCA Field Investigations & Response. “We commend the local and federal authorities for pursuing this case and are proud to work with them to put an end to this violent crime.”

The charges in the Indictments are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and is being prosecuted by Assistant United States Attorney Mark M. Lee.

WASHINGTON – Jordan-based Arab Ship Management Ltd. pleaded guilty today in federal court in Wilmington, Delaware, to one count of violating the Act to Prevent Pollution from Ships, the Justice Department and the U.S. Coast Guard announced.

In accordance with the terms of the plea agreement, Arab Ship Management Ltd. was sentenced to pay a criminal penalty totaling $500,000 and be placed on probation for two years, during which time ships operated by the company will be banned from calling on ports of the United States.

“The defendant violated environmental laws that protect our marine environment from harmful pollution,” said U.S. Attorney for the District of Delaware Charles M. Oberly III.  “This conviction ensures that the defendant is held accountable with a criminal fine and a contribution to conservation efforts in coastal Delaware, as well as a two-year ban from United States ports.  The message to the shipping industry is clear: environmental crimes at sea will not be tolerated.”  

“This case demonstrates one way the Coast Guard acts to protect the environment,” said Captain Kathy Moore, U.S. Coast Guard Commander of Sector Delaware Bay.  “Marine Inspectors detected serious problems with the ship’s operations.  They dove into the details and worked with the Department of Justice and the Coast Guard Investigative Service to bring this case to an appropriate resolution.”

According to court documents and statements made in court, Arab Ship Management Ltd. operated the M/V Neameh, a 6,398 gross ton ocean-going livestock carrier.  On March 28, 2013, the U.S. Coast Guard boarded the vessel in the Delaware Bay Big Stone Anchorage to conduct an inspection.  The inspection and subsequent criminal investigation revealed heavy oil sludge inside the piping on the discharge side of the pollution prevention equipment leading directly overboard, where no oil sludge should be if the pollution prevention equipment is operated properly.  Inspectors also discovered that the vessel’s piping arrangement had been modified in a prohibited manner so as to allow oil sludge to be pumped directly overboard.  This prohibited piping arrangement was removed prior to the vessel’s arrival in Delaware.  Also during the inspection, Coast Guard officers were presented with two oil record books which are required by law to be accurately maintained onboard the vessel.  These two oil record books contained different and contradictory entries for the time period of Nov. 30, 2011, through Jan. 2, 2012, as well as fake oily waste disposal receipts.      

This case was investigated by the U.S. Coast Guard Sector Delaware Bay, Coast Guard Marine Safety Detachment Lewes and the Coast Guard Investigative Service.  The case is being prosecuted by Trial Attorney Stephen Da Ponte in the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice and Assistant U.S. Attorney Edmond Falgowski from the U.S. Attorney’s Office for the District of Delaware.

WILMINGTON, Del. – William Zimmerman, age 64, of Georgetown, Delaware, was sentenced today to 15 years in federal prison for Receipt of Child Pornography, in violation of federal law.  Zimmerman also was sentenced to 10 years of supervised release following his prison sentence.  He also will be required to continue to register as a sex offender in any jurisdiction in which he lives, works, or attends school. 

Zimmerman was previously convicted in Delaware of Unlawful Sexual Contact Second Degree in 1988 and Possession of Child Pornography in 1993.  He served 4 years in prison for the child pornography offense, and was released from custody in 1997.  At the time of the instant offense, he was registered as a sex offender as required by Delaware and federal law. 

According to statements made and documents filed in court, Zimmerman came to the attention of the Delaware Child Predator Task Force (the “Task Force”) during its investigation of  Roger Cordero and David Pennington, two other registered child sex offenders living in Delaware, who had met while incarcerated at the Smyrna Correctional Institution for other child sexual offenses.  In December 2012, the Task Force conducted residential searches at Cordero and Pennington’s residences.  They recovered computers containing thousands of images of child pornography and handwritten stories relating to child sexual abuse from Cordero’s residence, and found a cell phone referencing child pornography images at Pennington’s residence.   

Pennington, who was then wearing an electronic monitoring device due to a state probation violation, provided the Task Force officers with information about Zimmerman, whom Pennington met in sex offender therapy.  In particular, Pennington admitted that he and Zimmerman viewed child pornography together on a computer located at Zimmerman’s residence. They did this  at Zimmerman’s residence because Pennington was on active probation and was prohibited from possessing a computer in his residence.  Pennington also admitted that Zimmerman had sent him cell phone text messages attaching images of child pornography. 

On January 8, 2013, Task Force officers executed a state search warrant at Zimmerman’s Georgetown residence.  They recovered several pieces of computer equipment found to contain over 2,300 images of child pornography.  The images featured children, mostly boys, ranging in age from infancy to mid-teen, who were  posed or engaged in sexual acts with adult males. 

In the spring of 2013, the Delaware Attorney General’s Office referred the Cordero and Zimmerman cases to the United States Attorney’s Office for federal prosecution.  The Delaware Attorney General’s Office proceeded with a state prosecution of David Pennington, which resulted in Pennington being sentenced to 28 years in prison in October 2013.

Following today’s sentencing hearing, United States Attorney Charles M. Oberly, III stated:  “With the active cooperation of State and Federal authorities, three serious child predators have been taken into custody.  Zimmerman and Pennington have pled guilty and received sentences of 15 and 28 years. Cordero is scheduled for trial in June 2014 and faces  a mandatory minimum term of 35-60 years of incarceration if convicted.  These cases serve as an example of what can be achieved through the mutual cooperation of state and federal law enforcement.”

Delaware Attorney General Beau Biden credited the Delaware Child Predator Task Force with identifying all three defendants after receiving a CyberTip in late 2012 from the National Center for Missing and Exploited Children.  

“These individuals will never again be a threat to children. After receiving a CyberTip the Child Predator Task Force worked quickly to uncover a child pornography network operating locally in our State and took three dangerous predators off the streets. Thanks to its excellent investigation and to our strong partnership with state and federal law enforcement agencies we’re using the full force of the law to protect children.”

“Homeland Security Investigations (HSI) special agents in Wilmington will continue to work tirelessly with our partners of the Delaware Child Predator Task Force and the U.S. Attorney’s Office in bringing child sexual predators to face justice and to ensure that those victims who are identified are rescued from this plight,” said HSI Special Agent in Charge in Philadelphia John P. Kelleghan. “This sentencing is a reminder to those who exploit our most innocent citizens, children: We will identify, investigate and arrest you for committing these horrendous crimes.”
All three cases were brought as part of the United States Department of Justice’s Project Safe Childhood Program, which was launched in May 2006 to combat the growing epidemic of online child sexual exploitation and abuse.  Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue child victims.  Under this program, the Delaware Attorney General’s Office, the United States Attorney’s Office, the Delaware State Police and the United States Department of Homeland Security have worked together to investigate and prosecute Zimmerman, Cordero and Pennington. 

For more information about the Project Safe Childhood Program, please visit http://www.justice.gov/psc/.  For more information about reporting online child exploitation to the national CyberTipline, visit the National Center for Missing and Exploited Children’s website at: www.missingkids.com.

WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Tendayi Mandere, a citizen of Zimbabwe, pled guilty today to violations of 18 USC § 286 (False Claims Conspiracy) and 18 USC § 1028A(a)(1) (Aggravated Identity Theft).  Mandere will be sentenced on August 22, 2014 at 10:00 a.m. by the Honorable Richard G. Andrews, United States District Judge for the District of Delaware.  For his violation of 18 USC § 286, Mandere faces a maximum sentence of ten years in prison, a fine of $250,000, and 3 years of supervised release.  His violation of 18 U.S.C. § 1028A(a)(1) carries a mandatory two year term of imprisonment consecutive to any other term of incarceration, a maximum fine of $250,000, and a maximum of 3 years of supervised release. 

According to statements made at the plea hearing and documents filed in court, the defendant participated in a tax fraud conspiracy involving the filing of more than 130 false individual federal income tax returns with the Internal Revenue Service.  The defendant obtained the names and social security numbers of real individuals from his co-conspirators, and he used them to electronically file false tax returns via the Internet.  The defendant fabricated the wage and withholding information on the returns, which sought refunds of more than $600,000.  Most of these fraudulent returns were rejected by the Internal Revenue Service.  As part of the defendant’s plea agreement, he agreed that he was responsible to pay restitution to the Internal Revenue Service in the amount of at least $114,000, the amount obtained by the defendant and his co-conspirators during the course of the scheme. 

U.S. Attorney Oberly gave the following comments:  “I want to specifically extend thanks to the IRS and its agents who work so diligently ferretting and developing evidence allowing my office to prosecute tax cheats. Tax fraud is a huge problem, and all of us who work and pay our taxes are victims. These cases are of particular interest to me and will be prosecuted to the fullest extent possible.”

“Investigating refund fraud and identity theft is a priority for IRS Criminal Investigation," said Akeia Conner, Special Agent in Charge, Philadelphia Field Office.  “Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers. Today’s plea should serve as a strong deterrent to those who are considering similar conduct. Law enforcement is serious about investigating these crimes and holding to account those who would defraud the government.”

This case is the result of an investigation conducted by the Internal Revenue Service Criminal Investigation, the United States Postal Inspection Service, and the Social Security Administration, Office of the Inspector General.  The case is being prosecuted by Assistant United States Attorneys Lauren Paxton and Jennifer Hall.

WILMINGTON, Del. – Harry K. Roche, age 43, of Millsboro, Delaware, pled guilty today to Production and Transportation of Child Pornography, in violation of federal law.  Charles M. Oberly, III, United States Attorney for the District of Delaware, announced the guilty plea following a hearing in the United States District Court for the District of Delaware.

            Roche was previously convicted in Delaware of Using a Computer to Depict a Child Engaging in a Prohibited Sexual Act and Possession of Child Pornography in 2003, which involved Roche producing sexually explicit images of children in his Magnolia, Delaware apartment.  In 1994, Roche had been convicted of sexual harassment of a minor boy.  At the time of the instant offense, Roche was registered as a sex offender as required by Delaware and federal law. 

            As a result of his prior convictions, Roche faces enhanced sentencing penalties under federal law, including a mandatory minimum sentence of 25 years, and a maximum sentence of 50 years, in prison.  Roche also faces a term of supervised release of five years to life following his prison sentence, and he will be required to continue to register as a sex offender in any U.S. jurisdiction in which he lives, works, or attends school.  Roche will be sentenced on a date to be determined by United States District Judge Sue L. Robinson.

According to statements made and documents filed in court, Roche came to the attention of the Delaware Child Predator Task Force after it received a cybertip from the National Center for Missing and Exploited Children (NCMEC).  The cybertip reported that an AOL user, subsequently identified as Harry K. Roche, a registered child sex offender from Millsboro, Delaware, had distributed files containing child pornography through an AOL server.   

On January 31, 2013, Delaware Child Predator Task Force officers executed a state search warrant at Roche’s apartment, which was located above the Bluewater Grill restaurant, in Millsboro, Delaware.  Roche and a roommate were present for the search, during which officers seized numerous computers, cellular phones and external digital storage devices.  A subsequent forensic examination of that computer equipment revealed that Roche had collected and distributed hundreds of pictures and movies of child pornography, virtually all of which featured prepubescent boys engaged in sexual acts.  In a number of these images and movies, the child victims were bound, gagged or blindfolded as they were violently raped by adult males.

            Also during the forensic examination of Roche’s iPhone, a forensic examiner discovered a series of photographs of Roche in the bedroom of his residence engaged in a sexual act with a young boy.  Metadata associated with the digital files indicated that the images were saved to the iPhone on January 30, 2013, the day before the residential search occurred.  The Delaware Child Predator Task Force and the United States Department of Homeland Security, Homeland Security Investigations, worked together to identify the child victim, who resides in Delaware.  The investigation further revealed that Roche met the child victim near the Bluewater Grill and subsequently lured the child into his apartment.  Roche subsequently distributed the images that he had produced, along with other images of child pornography, to other child sex offenders. 

            Following the plea hearing, United States Attorney Charles M. Oberly, III stated:  “By today’s plea, this twice-convicted sexual predator will be removed from society for likely the remainder of his life.  Upon his sentencing later this year, the deserved severe sentence, a minimum mandatory of 25 years, should serve as a deterrent to others that a long prison sentence is the price to pay for engaging in such activity.”

“There is a clear and deeply disturbing link between those who possess child pornography and those who commit physical offenses against children,” Attorney General Beau Biden said.  “That’s why the work of the Delaware Child Predator Task Force, along with our close cooperation with federal law enforcement partners, is so critical to finding these dangerous predators and taking them off the streets.”

This case was brought as part of the United States Department of Justice’s Project Safe Childhood Program, which was launched in May 2006 to combat the growing epidemic of online child sexual exploitation and abuse.  Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue child victims.  As intended by the United States Department of Justice’s Project Safe Childhood Program, federal and state child exploitation prosecutors and investigators have worked together to investigate and prosecute Roche. 

            For more information about the Project Safe Childhood Program, please visit http://www.justice.gov/psc/.  For more information about reporting online child exploitation to the national CyberTipline, visit the National Center for Missing and Exploited Children’s website at: www.missingkids.com.

            This case is being investigated by the Delaware Child Predator Task Force and the United States Department of Homeland Security, Homeland Security Investigations.  It is being prosecuted by Assistant United States Attorney Edward J. McAndrew.

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Patrick Henry Procino, age 66, of Laurel, Delaware, was sentenced today by United States District Court Judge Richard G. Andrews to one year probation, a $50,000 fine and a $100 special assessment for one count of illegal storage of hazardous waste without a permit. 

On October 15, 2013, as the owner/operator of Procino Plating, Inc. (Procino Plating), Procino entered a guilty plea on behalf of that corporation to one count of violating the Clean Water Act.  Procino was also sentenced today on the Clean Water Act violation to five years’ probation, a $400 special assessment.

According to statements made at the plea hearing and documents filed in court, Procino owned and operated Procino Plating, Inc. ("the facility"), at 901 South Market Street in Blades, Delaware. Until the fall of 2007, the facility was utilized for plating and electroplating-related operations.

The Resource Conservation and Recovery Act (RCRA) defines hazardous waste to include chemical waste which due to its chemical characteristics presents a hazard to human health or the environment.  RCRA mandates that producers of hazardous wastes may not store such wastes without first obtaining a storage permit from the Environmental Protection Agency (EPA).  From December 2007 through May 2010, Patrick Procino stored a tank containing approximately 450 gallons of liquid hazardous waste which originally had been used at the facility on its decorative chrome plating line.  This chemical waste had a ph. of 0.8 and, therefore, was a corrosive waste under RCRA.

As to Procino Plating, in the course of its operations it produced wastewater, and pursuant to a pretreatment industrial wastewater permit issued by Sussex County, Procino Plating was permitted to discharge its industrial wastewater to the Seaford, Delaware treatment plant which, in turn, discharges into the Nanticoke River.  Pursuant to the Clean Water Act, the permit set limits on the amount of various pollutants that Procino Plating could discharge in its industrial waste water to the Seaford treatment plant, including limits on various metals.

On or about June 1, 2009, Sussex County modified Procino Plating’s industrial user permit to specifically prohibit the discharge of waste water generated as a result of electroplating operations, and any waste or bi-products of the electroplating processes then in storage at the facility.  This modification was made based upon statements and representations by Procino Plating to Sussex County officials, indicating that the business has ceased electroplating-related operations at the facility.  However, from June 2009 through March 2010, Procino Plating processed, through its wastewater treatment plant, stored drums of chemicals which were leftover from its former electroplating operations and, in violation of its Clean Water Act mandated permit, discharged resulting wastewater to the Seaford treatment plant.

Following the sentencing, Charles M. Oberly, III, United States Attorney for the District of Delaware, stated, “Environmental crimes endanger the welfare of our citizens and natural resources, and where appropriate will be prosecuted to ensure the safety of our citizens.”

“For years the defendant knowingly disregarded federal and state environmental laws,” said David G. McLeod, Jr., Special Agent in Charge of EPA's criminal enforcement program for the Middle Atlantic States. "Improperly handling hazardous wastes and industrial pollutants can threaten the environment and put the public at serious risk.  Today's sentencing demonstrates our resolve to collaborate with our state and federal counterparts to vigorously investigate and prosecute any credible allegation that a company and its leaders treat our nation's environmental laws with contempt.”

“Sentencing for Mr. Procino culminates another environmental protection partnership effort between Delaware, EPA and the U.S. Attorney's Office,” said DNREC Secretary Collin O’Mara. “Delaware companies demonstrate every day that they can be successful while complying with environmental standards to protect public health, and DNREC works hard to assist the state's businesses in achieving these goals. Mr. Procino continually demonstrated a blatant disregard for the state’s hazardous waste regulations, and we appreciate the great efforts of the EPA and U.S. Attorney’s Office in bringing this case to a close.”

WILMINGTON, Del. – Blair Thomas, Jr., 29, formerly of New Castle, Del., was indicted by a federal grand jury today on one count of bank robbery, announced Charles M. Oberly, III, United States Attorney for the District of Delaware. 

According to the indictment, on January 23, 2014, Thomas robbed the M&T Bank located at 4899 Limestone Road in Wilmington, of $17,531.  The defendant faces a maximum penalty of 20 years imprisonment, up to three years of supervised release, a fine of up to $175,000 and a $100.00 special assessment, if convicted.

The U.S. Attorney’s Office for the Eastern District of Pennsylvania indicted Thomas on similar charges today (go to www.justice.gov/usao/pae for more information).

The case is being investigated by the Wilmington Field Office of the FBI with the assistance of the Delaware State Police and the Philadelphia Division of the United States Postal Inspection Service.  Special Assistant United States Attorney Elizabeth L. Van Pelt is prosecuting the case on behalf of the United States.

Indictments are only charges and are not evidence of guilt.  A defendant is presumed to be innocent until and unless proven guilty.

WILMINGTON, Del. – Michael J. Barndt, a/k/a “mikecoach73,” age 40, of Sellersville, Pennsylvania, was sentenced today to 10 years in federal prison for Attempted Coercion and Enticement of a Minor, in violation of federal law.  Barndt also was sentenced to five years of supervised release following his prison sentence.  He also will be required to register as a sex offender in any jurisdiction in which he lives, works, or attends school. 

Prior to his arrest, Barndt had been employed as a chef manager at the Lakeside School in Horsham Township, Pennsylvania since 2009.  Barndt also served for six years as the football coach at Springfield Township Middle School, in Montgomery County, Pennsylvania.  He last coached in 2012 – the last football season prior to his arrest.  During the summer months, Barndt worked as a camp counselor at “Blue Bell Camp,” in Blue Bell, Pennsylvania, where his duties including coaching football and driving children home from camp.

According to court documents and statements made in court, Barndt was arrested on June 19, 2013, after he traveled from his Pennsylvania home to the Concord Mall, in Wilmington, Delaware, to meet a person he believed to be a 14-year-old girl for sexual activity.  Barndt identified this supposed 14-year-old girl, who was actually an undercover federal agent, after he posted an on-line personals ad on www.craigslist.com.  In the ad, which he entitled, “Real Teen Fantasy,” Barndt expressed interest in a sexual liaison with a teenage girl.  Using the screen name “mikecoach73,” Barndt engaged in a series of explicit online chat conversations with the undercover agent, during which he transmitted explicit photos of himself.  Through the chats, Barndt and the “teen” planned to meet at the Concord Mall and then travel to a Wilmington hotel for a sexual encounter on June 19, 2013.

On the morning of June 19, 2013, Barndt drove from his Sellersville residence to Wilmington, Delaware, where he checked into a local hotel.  Barndt then drove to the Concord Mall, where he was met by a team of federal agents shortly after purchasing items at Victoria’s Secret.  Federal agents seized a smartphone from Barndt, which was later found to contain approximately 15,000 images of teenage females who are either suggestively dressed or partially or completely nude.  Most of these images appear to have been self-produced by the teenagers with smartphones.

Following the sentencing hearing, U.S. Attorney Charles M. Oberly, III stated:  “This case serves as yet another example of the danger that lurks in cyber world.  Mr. Brandt was ready, willing, and able to assault an underage child to fulfill his own twisted desires.  Fortunately, he was taken off before he could carry out his criminal acts.  Every parent should carefully monitor their child's use of the Internet so as to protect him or her from predators looking for vulnerable victims.”

"Predators like Mr, Barndt, stalk and attack the most vulnerable in our society, our children,” said John Kelleghan, special agent in charge of HSI Philadelphia. “As today’s sentencing shows, he will now answer for his despicable actions. HSI will not tolerate such acts, we will relentlessly and aggressively track down child predators to ensure our communities are safe."          

This case is being investigated by the Department of Homeland Security, Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Edward J. McAndrew.

Former Bank Vice President Pleads Guilty To Attempted Online Enticement of a Minor

WILMINGTON, Del. – Kirk A. Simmons, age 59, of Newark, Delaware, pled guilty today to Attempted Coercion and Enticement of a Minor, in violation of federal law.  Charles M. Oberly, III, United States Attorney for the District of Delaware, announced the guilty plea following a hearing in the United States District Court for the District of Delaware, where Simmons will be sentenced by United States District Judge Leonard P. Stark on June 24, 2014.

Simmons faces a mandatory minimum sentence of ten years, and a maximum sentence of life, in prison.  He also faces a fine of up to $250,000 and a term of supervised release following his prison sentence of at least five years to life.  Simmons also will be required to register as a sex offender in any U.S. jurisdiction in which he lives, works, or attends school. 

At the time of his arrest in this case, Simmons was employed as a Vice President, Market Information Manager II at Bank of America’s Newark, Delaware facility.  Bank of America terminated Simmons’s employment following notification of his arrest and criminal conduct.  According to his LinkedIn profile, at the time of his arrest, Simmons also was working as a “Professional private tutor” through WyzAnt Tutoring, “providing private in-home tutoring at the high school and college levels.”       

According to the indictment and court documents, Simmons was arrested by the Delaware Child Predator Task Force on July 18, 2013, after he arrived at a Newark hotel to engage in sex acts with two persons he believed to be a 13-year-old girl and her biological father.  Approximately one month earlier, in June 2013, Simmons responded to a “personals” advertisement for “fam love/taboo” on an adult social networking website.  Simmons believed the advertisement had been posted by the father of a 13-year-old girl who the father would make available for sex with adult males.  In fact, the “father” was actually an undercover Delaware State Police detective assigned to the Delaware Child Predator Task Force. 

Over the course of the next month, Simmons and the undercover detective engaged in numerous online chat conversations in which Simmons indicated and graphically described that he wanted to engage in sexual activity with the purported “father” and his child.  After a number of online conversations, Simmons and the “father” agreed to meet at a Newark hotel on July 18, 2013, where they both would engage in sex acts with the “13-year-old daughter.”
Shortly before that meeting, Simmons was under surveillance by the Delaware State Police and was observed driving directly from his workplace to the hotel.  He was arrested by Child Predator Task Force members when he arrived in the hotel parking lot.  In a recorded interview with a Delaware State Police detective, Simmons admitted that he intended to engage in sexual activity with the fictitious “father” and “13-year-old daughter” at the hotel.  Simmons also admitted that he brought a digital camera with him to photograph the sexual activity.

Following the plea hearing, United States Attorney Charles M. Oberly, III stated:  “I want to thank the Delaware Child Predator Task Force for its outstanding work in this case.  This was a time-intensive, month-long, online undercover investigation that resulted in the capture of a seemingly upstanding and successful businessman who planned to rape a child with her father’s help.  I would also like to thank the U.S. Department of Homeland Security for its continued and successful partnership with our State law enforcement partners on this critically important work.” 

"Protecting children from predators requires cooperation among law enforcement agencies," said Delaware State Prosecutor Kathleen Jennings.  "That's why under Attorney General Biden's leadership the Delaware Child Predator Task Force, which is co-led by the Delaware Department of Justice and the Delaware State Police, regularly works across jurisdictional lines with local, state, and federal partners to track down and stop those who are seeking to hurt our kids."

"This case shows that exploitation of children has severe consequences for those who engage in these depraved activities,” said John Kelleghan, special agent in charge of HSI Philadelphia. “HSI is committed to investigating these cases, working alongside our agency partners to help protect the citizens of our neighboring communities.”

The case is being prosecuted by Assistant United States Attorney Edward J. McAndrew and investigated by the Delaware State Police and the United States Department of Homeland Security, Homeland Security Investigations. 

WILMINGTON, Del. – Kirk A. Simmons, age 59, of Newark, Delaware, pled guilty today to Attempted Coercion and Enticement of a Minor, in violation of federal law. Charles M. Oberly, III, United States Attorney for the District of Delaware, announced the guilty plea following a hearing in the United States District Court for the District of Delaware, where Simmons will be sentenced by United States District Judge Leonard P. Stark on June 24, 2014.

Simmons faces a mandatory minimum sentence of ten years, and a maximum sentence of life, in prison. He also faces a fine of up to $250,000 and a term of supervised release following his prison sentence of at least five years to life. Simmons also will be required to register as a sex offender in any U.S. jurisdiction in which he lives, works, or attends school. 

At the time of his arrest in this case, Simmons was employed as a Vice President, Market Information Manager II at Bank of America’s Newark, Delaware facility. Bank of America terminated Simmons’s employment following notification of his arrest and criminal conduct. According to his LinkedIn profile, at the time of his arrest, Simmons also was working as a “Professional private tutor” through WyzAnt Tutoring, “providing private in-home tutoring at the high school and college levels.”

According to the indictment and court documents, Simmons was arrested by the Delaware Child Predator Task Force on July 18, 2013, after he arrived at a Newark hotel to engage in sex acts with two persons he believed to be a 13-year-old girl and her biological father. Approximately one month earlier, in June 2013, Simmons responded to a “personals” advertisement for “fam love/taboo” on an adult social networking website. Simmons believed the advertisement had been posted by the father of a 13-year-old girl who the father would make available for sex with adult males. In fact, the “father” was actually an undercover Delaware State Police detective assigned to the Delaware Child Predator Task Force. 

Over the course of the next month, Simmons and the undercover detective engaged in numerous online chat conversations in which Simmons indicated and graphically described that he wanted to engage in sexual activity with the purported “father” and his child. After a number of online conversations, Simmons and the “father” agreed to meet at a Newark hotel on July 18, 2013, where they both would engage in sex acts with the “13-year-old daughter.”
Shortly before that meeting, Simmons was under surveillance by the Delaware State Police and was observed driving directly from his workplace to the hotel. He was arrested by Child Predator Task Force members when he arrived in the hotel parking lot. In a recorded interview with a Delaware State Police detective, Simmons admitted that he intended to engage in sexual activity with the fictitious “father” and “13-year-old daughter” at the hotel. Simmons also admitted that he brought a digital camera with him to photograph the sexual activity.

Following the plea hearing, United States Attorney Charles M. Oberly, III stated: “I want to thank the Delaware Child Predator Task Force for its outstanding work in this case. This was a time-intensive, month-long, online undercover investigation that resulted in the capture of a seemingly upstanding and successful businessman who planned to rape a child with her father’s help. I would also like to thank the U.S. Department of Homeland Security for its continued and successful partnership with our State law enforcement partners on this critically important work.” 

"Protecting children from predators requires cooperation among law enforcement agencies," said Delaware State Prosecutor Kathleen Jennings. "That's why under Attorney General Biden's leadership the Delaware Child Predator Task Force, which is co-led by the Delaware Department of Justice and the Delaware State Police, regularly works across jurisdictional lines with local, state, and federal partners to track down and stop those who are seeking to hurt our kids."

"This case shows that exploitation of children has severe consequences for those who engage in these depraved activities,” said John Kelleghan, special agent in charge of HSI Philadelphia. “HSI is committed to investigating these cases, working alongside our agency partners to help protect the citizens of our neighboring communities.”

The case is being prosecuted by Assistant United States Attorney Edward J. McAndrew and investigated by the Delaware State Police and the United States Department of Homeland Security, Homeland Security Investigations. 

WILMINGTON, Del.  – Charles M. Oberly, III, United States Attorney for the District of Delaware, and Stephen E. Vogt, Special Agent in Charge of the Baltimore Field Office of the Federal Bureau of Investigation, announced today that defendants, DARRELL WILLIAMS, a/k/a “Blue,” age 43 of Philadelphia, DAVID STORY, a/k/a “Dawoo,” age 46 of Philadelphia, RUFUS LAWSON, a/k/a “Ru,” “Alonzo Nowell,” age 48 of Philadelphia, and WILLIE HAWKINS SMITH, age 22 of Philadelphia, have been charged with one count of conspiracy to commit Hobbs Act Robbery, in violation of Title 18, United States Code, Section 1951; one count of committing Hobbs Act Robbery; and one count of possessing and using a firearm in furtherance of a crime of violence, in violation of Title 18, United States Code, Section 924(c), for their roles in the November 1, 2011, armed robbery of Stuart Kingston Jewelers, located in Wilmington, Delaware. Jackie Howard, an unindicted co-conspirator in this robbery, was separately indicted in the Eastern District of Pennsylvania.

If convicted, Darrell Williams, David Story, Rufus Lawson, and Willie Hawkins Smith each face a maximum sentence of life in prison.  Darrell Williams, David Story, Rufus Lawson, and Willie Hawkins Smith also face a mandatory minimum sentence of 7 years.  All defendants also face possible fines, supervised release and special assessments.

 According to the Indictment, which was unsealed yesterday in Delaware’s District Court, in the weeks leading up to the robbery, the defendants targeted Stuart Kingston Jewelers.  Prior to the robbery, the defendants cased the jewelry store so that they would be familiar with the store’s lay-out.   On November 1, 2011, the defendants drove to Stuart Kingston Jewelers in two separate vehicles.  One car was a rented white U-Haul cargo van, which displayed a stolen New York State license plate to conceal the U-Haul van’s true license plate.  The other car was a rented Nissan Sentra, which was used to conduct counter-surveillance during the armed robbery.  Upon arriving at the store, four of the defendants, armed with a handgun, hammers, zip-ties, and duct tape, conducted a take-over style robbery of Stuart Kingston Jewelers.  A fifth defendant remained outside the store in the Nissan Sentra acting as a look-out.

 At the time of the robbery, surveillance cameras were operating throughout Stuart Kingston Jewelers, and the front door to the store was locked.  One of the defendants, however, was able to gain entry by showing his face to the security camera, which caused an employee to unwittingly and remotely unlock the door.  Once the front door was unlocked, all of the defendants entered the jewelry store.  The remaining defendants wore coats, gloves, and masks to conceal their identities.

Two of the defendants immediately tied up three store employees with zip-ties and duct tape, while the remaining defendants smashed the display cases, removed the jewelry, and placed the jewelry into bags.  The defendants robbed the store of hundreds of pieces of jewelry, including valuable earrings, brooches, necklaces, and rings, all of which possessed an estimated retail value of approximately $2,427,216.50.  The defendants also forced an employee to open and empty the jewelry store’s vault, which was located in the back of the store.  The defendants took possession of, among other items, a piece of jewelry known as the “Liberty Bell Ruby.”   The “Liberty Bell Ruby is the largest mined ruby in the world, found in east Africa in the 1950s.  It weighs approximately four pounds, is approximately eight and a half thousand carats, and is sculpted into the Liberty Bell. It has approximately fifty diamonds set in it and possessed an estimated retail value of approximately $2,000,000.00.

This case was investigated by the FBI, Wilmington Resident Agency.  Assistant United States Attorney Jamie M. McCall is prosecuting this case.

For further information, contact Assistant United States Attorney Jamie M. McCall or United States Attorney Charles M. Oberly, III.

An Indictment is an accusation.  A defendant is presumed innocent unless and until proven guilty.

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Brian D. Bailey, age 51 of Middletown, DE, was charged on February 4, 2014, in a fourteen-count Indictment with the following offenses:

• Count 1 charges the defendant with Conspiracy to Commit Bank Fraud, in violation of Title 18, United States Code, Sections 1344 and 1349.  The maximum penalties for Count 1 are a term of imprisonment of thirty years; a fine of $1,000,000.00; a term of supervised release of five years; a $100 special assessment; and mandatory restitution.

• Count 2 charges the defendant with Conspiracy to Commit Bank Bribery, in violation of Title 18, United States Code, Sections 215 and 371. The maximum penalties for Count 2 are a term of imprisonment of five years; a fine of $250,000.00; a term of supervised release of two years; a $100.00 special assessment; and mandatory restitution.  

• Counts 3 through 11 charge the defendant with Bank Fraud, in violation of Title 18, United States Code, Sections 1344 and 2.  The maximum penalties for each of Counts 3-11 are a term of imprisonment of thirty years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution. 

• Count 12 charges the defendant with receipt of a gift for procuring a loan, in violation of Title 18, United States Code, Sections 215(a)(2) and 2.  The maximum penalties for Count 12 are a term of imprisonment of 30 years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution.

• Count 13 charges defendant with unlawfully providing a gift with an intent to influence a bank employee, in violation of Title 18, United States Code, Sections 215(a)(1) and 2.  The maximum penalties for Count 13 are a term of imprisonment of 30 years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution.

• Count 14 charges the defendant with money laundering, in violation of Title 18, United States Code, Section 1957.  The maximum penalties for Count 14 are a term of imprisonment of ten years; a fine of $250,000.00; a term of supervised release of three years; and a $100 special assessment. 

 Mr. Bailey made his initial appearance today before Chief United States Magistrate Judge Mary Pat Thynge.  His next court appearance, an arraignment on the charges, is set for Wednesday, February 19, 2014, at 1:00 p.m.

The Indictment alleges that Mr. Bailey, the former head of Commercial Real Estate and Delaware Market Manager of the Wilmington Trust Co., engaged in a twelve-year lending relationship with James A. Ladio, the former Chief Lending Officer at Artisans’ Bank and Chief Executive Officer of MidCoast Community Bank.  According to the Indictment, the defendant and Ladio approved approximately twenty-three loans and modifications to each other through their positions at Wilmington Trust, Artisans, and MidCoast, respectively.  The loan relationship, as alleged in the Indictment, is summarized in the attached chart.  The Indictment further alleges that the aggregate amount of all the loan facilities was in excess of $1.5 million. 

United States Attorney Oberly said, “The Indictment alleges that the defendant entered into a long-term scheme with another banker to provide multiple loans to each other on terms not available to the general public, all the while failing to disclose their relationship to their respective banks.  This Office remains steadfast in its continuing commitment to combat financial fraud and corruption, and to deter other individuals from similar alleged misconduct.”

“Brian Bailey is the second officer charged with bank fraud conspiracy at Wilmington Trust, a TARP bank that ended up being acquired by another TARP bank,” said Christy Romero, Special Inspector General for TARP (SIGTARP).  SIGTARP and our law enforcement partners will aggressively investigate allegations of fraud by officers of TARP banks, and perpetrators will be held accountable for their crimes.”

"The indictment of this bank official alleges the misuse of his position of trust within his corporation," said Special Agent in Charge Akeia Conner, IRS Criminal Investigation.  "The IRS, along with our law enforcement partners, is committed to investigating individuals who use  their position to commit fraud and to abuse public trust.”

The case was investigated by the Federal Bureau of Investigation; the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and the Internal Revenue, Service Criminal Investigation Division, and is being prosecuted by Assistant United States Attorneys Robert F. Kravetz, Lesley F. Wolf, and Ilana H. Eisenstein.

Members of the public are reminded that an Indictment is only an allegation and that a defendant is presumed innocent until proven guilty.

APPENDIX A

Date          Recipient   Bank/Loan No.          Loan Amt.                    Description

July 9, 2001

Ladio

WTC
(9003)

$29,000.00

Interest-only, six-month commercial demand line of credit 

Jan. 4, 2002

Bailey

Artisans

$34,000.00

Automobile Loan for Ford F-150 Truck

Jan. 22, 2002

Bailey

Artisans

$40,000.00

Automobile Loan for Mercedes E-Series Sedan

Jan. 30, 2002

Ladio

WTC
(9004)

$22,000.00

Interest-only, six -month commercial demand loan

Feb. 6, 2002

Bailey

Artisans

$33,000.00

Automobile Loan for Porsche Boxster

July 3, 2002

 Ladio

WTC
(9005)

$27,000.00

Interest-only, six month commercial demand loan (extension of Jan. 2002 loan, adding $5,000.00 in additional funds; extended again, at same terms, on Dec. 23, 2002)

Oct. 8, 2003

Bailey

Artisans

$15,000.00

Unsecured consumer demand loan

Nov. 18, 2003

Ladio

WTC
(9006)

$69,138.46

Five-year term loan issued to pay- off $29K and $27K loans, set forth above, and for working capital

 Date               Recipient   Bank/Loan No.    Loan Amt.                    Description

June 30, 2004

Bailey

Artisans

$20,000.00

Interest-only commercial working capital line of credit

Aug. 13, 2004

Ladio

WTC

$9,000.00
(1001/1099)

Interest-only, commercial working capital demand line of credit

Sept. 29, 2004

Ladio

WTC

$20,000.00
(1101/1199)

Interest-only, unsecured working capital line of credit

April 4, 2005

Ladio

WTC

$150,000.00
(1201/1299)

Interest-only unsecured commercial demand line of credit

May 3, 2006

Bailey

Artisans

$175,000.00
(3281)

Two-year, interest-only, commercial line of credit

May 3, 2006

Ladio

WTC

$165,000.00
(5001)

Interest-only, commercial demand line of credit with three-year expiration

March 14, 2007

Ladio

WTC

$225,000.00
(5101)

Unsecured, interest-only commercial line of credit

Dec. 4, 2007

Bailey

MidCoast

$200,000.00
(1003)

Five year commercial loan, the proceeds of which were used to pay-off May 2006 Artisans loan.

May 30, 2008

Bailey

MidCoast

$33,000.00
(1011)

Consumer Loan to refinance a 2007 Mercedes E-Class Sedan

Sept. 9, 2008

Ladio

WTC

$285,000.00
(5101)

Increase in March 2007 line, adding $60,000.00 and changing to a demand loan

Date                Recipient   Bank/Loan No.    Loan Amt.                    Description

Nov. 10, 2008

Bailey

MidCoast

$37,000.00
(1016)

Eighteen-month, unsecured consumer term loan

Aug. 7, 2009

Bailey

MidCoast

$70,000.00
(1000)

Three-year, interest-only, unsecured consumer line of credit

March 31, 2010

Bailey

MidCoast

$100,000.00
(1000)

Increase in Aug. 2009 line of credit by $30,000.00

July 12, 2010

Ladio

WTC

$615,162.13

Forbearance agreement between Ladio and WTC after WTC called four outstanding Ladio demand loans

Oct. 29, 2010

Ladio

MidCoast Cust. A

$650,000.00

Private loan secured by Ladio, in part, to make payments under Forbearance Agreement obligations with WTC

July 14, 2011

Ladio

MidCoast Cust. B

$650,000.00

Private loan secured by Ladio to pay off outstanding balance under Forbearance Agreement to WTC

May 23, 2013

Bailey

MidCoast

$90,000.00

Secured, home equity line of credit, the proceeds of which were used to pay-off $100,000.00 unsecured MidCoast line of credit

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Brian D. Bailey, age 51 of Middletown, DE, was charged on February 4, 2014, in a fourteen-count Indictment with the following offenses:

• Count 1 charges the defendant with Conspiracy to Commit Bank Fraud, in violation of Title 18, United States Code, Sections 1344 and 1349.  The maximum penalties for Count 1 are a term of imprisonment of thirty years; a fine of $1,000,000.00; a term of supervised release of five years; a $100 special assessment; and mandatory restitution.

• Count 2 charges the defendant with Conspiracy to Commit Bank Bribery, in violation of Title 18, United States Code, Sections 215 and 371. The maximum penalties for Count 2 are a term of imprisonment of five years; a fine of $250,000.00; a term of supervised release of two years; a $100.00 special assessment; and mandatory restitution.  

• Counts 3 through 11 charge the defendant with Bank Fraud, in violation of Title 18, United States Code, Sections 1344 and 2.  The maximum penalties for each of Counts 3-11 are a term of imprisonment of thirty years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution. 

• Count 12 charges the defendant with receipt of a gift for procuring a loan, in violation of Title 18, United States Code, Sections 215(a)(2) and 2.  The maximum penalties for Count 12 are a term of imprisonment of 30 years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution.

• Count 13 charges defendant with unlawfully providing a gift with an intent to influence a bank employee, in violation of Title 18, United States Code, Sections 215(a)(1) and 2.  The maximum penalties for Count 13 are a term of imprisonment of 30 years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution.

• Count 14 charges the defendant with money laundering, in violation of Title 18, United States Code, Section 1957.  The maximum penalties for Count 14 are a term of imprisonment of ten years; a fine of $250,000.00; a term of supervised release of three years; and a $100 special assessment. 

 Mr. Bailey made his initial appearance today before Chief United States Magistrate Judge Mary Pat Thynge.  His next court appearance, an arraignment on the charges, is set for Wednesday, February 19, 2014, at 1:00 p.m.

The Indictment alleges that Mr. Bailey, the former head of Commercial Real Estate and Delaware Market Manager of the Wilmington Trust Co., engaged in a twelve-year lending relationship with James A. Ladio, the former Chief Lending Officer at Artisans’ Bank and Chief Executive Officer of MidCoast Community Bank.  According to the Indictment, the defendant and Ladio approved approximately twenty-three loans and modifications to each other through their positions at Wilmington Trust, Artisans, and MidCoast, respectively.  The loan relationship, as alleged in the Indictment, is summarized in the attached chart.  The Indictment further alleges that the aggregate amount of all the loan facilities was in excess of $1.5 million. 

United States Attorney Oberly said, “The Indictment alleges that the defendant entered into a long-term scheme with another banker to provide multiple loans to each other on terms not available to the general public, all the while failing to disclose their relationship to their respective banks.  This Office remains steadfast in its continuing commitment to combat financial fraud and corruption, and to deter other individuals from similar alleged misconduct.”

“Brian Bailey is the second officer charged with bank fraud conspiracy at Wilmington Trust, a TARP bank that ended up being acquired by another TARP bank,” said Christy Romero, Special Inspector General for TARP (SIGTARP).  SIGTARP and our law enforcement partners will aggressively investigate allegations of fraud by officers of TARP banks, and perpetrators will be held accountable for their crimes.”

"The indictment of this bank official alleges the misuse of his position of trust within his corporation," said Special Agent in Charge Akeia Conner, IRS Criminal Investigation.  "The IRS, along with our law enforcement partners, is committed to investigating individuals who use  their position to commit fraud and to abuse public trust.”

The case was investigated by the Federal Bureau of Investigation; the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and the Internal Revenue, Service Criminal Investigation Division, and is being prosecuted by Assistant United States Attorneys Robert F. Kravetz, Lesley F. Wolf, and Ilana H. Eisenstein.

Members of the public are reminded that an Indictment is only an allegation and that a defendant is presumed innocent until proven guilty.

APPENDIX A

Date            Recipient       Bank/Loan No.    Loan Amt.                    Description

July 9, 2001

Ladio

WTC
(9003)

$29,000.00

Interest-only, six-month commercial demand line of credit 

Jan. 4, 2002

Bailey

Artisans

$34,000.00

Automobile Loan for Ford F-150 Truck

Jan. 22, 2002

Bailey

Artisans

$40,000.00

Automobile Loan for Mercedes E-Series Sedan

Jan. 30, 2002

Ladio

WTC
(9004)

$22,000.00

Interest-only, six -month commercial demand loan

Feb. 6, 2002

Bailey

Artisans

$33,000.00

Automobile Loan for Porsche Boxster

July 3, 2002

 Ladio

WTC
(9005)

$27,000.00

Interest-only, six month commercial demand loan (extension of Jan. 2002 loan, adding $5,000.00 in additional funds; extended again, at same terms, on Dec. 23, 2002)

Oct. 8, 2003

Bailey

Artisans

$15,000.00

Unsecured consumer demand loan

Nov. 18, 2003

Ladio

WTC
(9006)

$69,138.46

Five-year term loan issued to pay- off $29K and $27K loans, set forth above, and for working capital

  Date                Recipient     Bank/Loan No.   Loan Amt.                  Description

June 30, 2004

Bailey

Artisans

$20,000.00

Interest-only commercial working capital line of credit

Aug. 13, 2004

Ladio

WTC

$9,000.00
(1001/1099)

Interest-only, commercial working capital demand line of credit

Sept. 29, 2004

Ladio

WTC

$20,000.00
(1101/1199)

Interest-only, unsecured working capital line of credit

April 4, 2005

Ladio

WTC

$150,000.00
(1201/1299)

Interest-only unsecured commercial demand line of credit

May 3, 2006

Bailey

Artisans

$175,000.00
(3281)

Two-year, interest-only, commercial line of credit

May 3, 2006

Ladio

WTC

$165,000.00
(5001)

Interest-only, commercial demand line of credit with three-year expiration

March 14, 2007

Ladio

WTC

$225,000.00
(5101)

Unsecured, interest-only commercial line of credit

Dec. 4, 2007

Bailey

MidCoast

$200,000.00
(1003)

Five year commercial loan, the proceeds of which were used to pay-off May 2006 Artisans loan.

May 30, 2008

Bailey

MidCoast

$33,000.00
(1011)

Consumer Loan to refinance a 2007 Mercedes E-Class Sedan

Sept. 9, 2008

Ladio

WTC

$285,000.00
(5101)

Increase in March 2007 line, adding $60,000.00 and changing to a demand loan

Date                Recipient      Bank/Loan No.   Loan Amt.                  Description

Nov. 10, 2008

Bailey

MidCoast

$37,000.00
(1016)

Eighteen-month, unsecured consumer term loan

Aug. 7, 2009

Bailey

MidCoast

$70,000.00
(1000)

Three-year, interest-only, unsecured consumer line of credit

March 31, 2010

Bailey

MidCoast

$100,000.00
(1000)

Increase in Aug. 2009 line of credit by $30,000.00

July 12, 2010

Ladio

WTC

$615,162.13

Forbearance agreement between Ladio and WTC after WTC called four outstanding Ladio demand loans

Oct. 29, 2010

Ladio

MidCoast Cust. A

$650,000.00

Private loan secured by Ladio, in part, to make payments under Forbearance Agreement obligations with WTC

July 14, 2011

Ladio

MidCoast Cust. B

$650,000.00

Private loan secured by Ladio to pay off outstanding balance under Forbearance Agreement to WTC

May 23, 2013

Bailey

MidCoast

$90,000.00

Secured, home equity line of credit, the proceeds of which were used to pay-off $100,000.00 unsecured MidCoast line of credit

WILMINGTON, Del. – James O. Plumley, the former Town Manager of Camden, Delaware, was sentenced today by United States District Court Judge Richard G. Andrews to 24 months of imprisonment for his role in a kickback scheme to unlawfully defraud the State of Delaware of over $200,000 dollars in years 2004 through 2008.  In addition to the prison term, Judge Andrews ordered Plumley to repay over $204,000 to the State of Delaware.

Prior to his position as the Camden Town Manager, Plumley was employed at Roofing Resources, Inc., and was responsible for assisting the State of Delaware’s Division of Facilities Management select qualified contractors to repair and maintain roofs at state-owned facilities.  Plumley used this position to steer roofing contracts to his co-defendant, contractor William P. Mahon.  In return and at Plumley’s direction, Mahon inflated his project bids by a specified amount, which he later deposited into Plumley’s checking account as a kickback.  Over the course of the scheme, the FBI was able to identify $204,000 in kickbacks that Plumley received from Mahon between 2004 and 2008.

This case was made possible through substantial cooperation by the Camden Police Department, including Chief of Police William E. Bryson and Captain Gary Melvin, who conducted the initial investigation of Plumley and provided the FBI with a strong foundation for its case here.

Charles M. Oberly, III, United States Attorney for the District of Delaware stated, “This is an example of our commitment to work tirelessly with our law enforcement partners to investigate and prosecute individuals who criminally exploit positions of trust within our community.  This is especially true when individuals abuse the government’s trust for their own benefit.  Hopefully, this prison sentence will serve as a deterrent to others who elevate their own benefit above the duty they owe to the citizens of Delaware.”

“Tax payers trust their tax money will be used wisely, and not stuffed into the pockets of corrupt people.  The reason people who serve governments are held to a higher standard is because they have access to incredible power and influence.  It can’t be abused, and the FBI and U.S. Attorney’s Office won’t let it be,” said FBI Baltimore Division Special Agent in Charge Stephen Vogt. 

The case was prosecuted by Assistant United States Attorneys Shawn A. Weede and Jennifer L. Hall.  For further information, please contact Public Information Officer Kim Reeves at (302) 573-6277, ext. 16287.         

See Also:  United States v. William P. Mahon, Criminal Action No. 13-33-RGA

WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Arthur Robinson, age 39, of Frederick, Maryland, has been charged by a federal grand jury with two counts of bank fraud (18 U.S.C. § 1344), one count of social security fraud (42 U.S.C. § 408), one count of wire fraud (18 U.S.C. § 1343), and three counts of aggravated identity theft (18 U.S.C. § 1028A), by Indictment unsealed yesterday.  The defendant faces up to 30 years in prison on each count of bank fraud, up to 20 years in prison on the count of wire fraud, up to 5 years in prison the count of social security fraud, and consecutive 2-year terms of imprisonment on each of the aggravated identity theft charges, in addition to possible fines and restitution. 

According to the Indictment, from January 2002 through October 2013, the defendant devised a scheme to defraud multiple federally insured financial institutions, including Delaware-based Barclays Bank and Chase Bank.  The defendant is alleged to have used multiple identities, including the identity of a minor child, to submit false and fraudulent credit applications to the banks.  The Indictment further alleges that the defendant made purchases on the fraudulently obtained lines of credit and did not pay the balances.  In addition, the defendant is alleged to have disputed the lines of credit with at least one credit agency, and he filed lawsuits against the lenders to fend off collection efforts.  Moreover, the defendant is alleged to have obtained a new social security number, claiming to be an identity theft victim, which he then used on further fraudulent credit applications.

U.S. Attorney Oberly gave the following comments: “This case should send a clear signal that individuals who repeatedly abuse the credit services offered by the federally-backed lenders here in Delaware will be prosecuted, and false statements to the Social Security Administration in furtherance of such abuse will not be tolerated.  Specifically, I want to thank officials at Barclays Bank for initially bringing its concerns about Mr. Robinson to the attention of the United States Attorney’s office in Delaware, and I thank the other institutions that cooperated in the investigation.”

This case is the result of an investigation conducted by the Social Security Administration, Office of the Inspector General, and the United States Postal Inspection Service, with cooperation from the State of Maryland.  The prosecution is being handled by Assistant United States Attorney Lauren Paxton, District of Delaware. 

The charges in the Indictment are only allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

WILMINGTON, Del. – William Zimmerman, age 64, of Georgetown, Delaware, pled guilty today to Receipt of Child Pornography, in violation of federal law.  Charles M. Oberly, III, United States Attorney for the District of Delaware, announced the guilty plea following a hearing in the United States District Court for the District of Delaware.

Zimmerman was previously convicted in Delaware of Unlawful Sexual Contact Second Degree in 1988 and Possession of Child Pornography in 1993.  He served 4 years in prison for the child pornography offense, and was released from custody in 1997.  At the time of the instant offense, he was registered as a sex offender as required by Delaware and federal law. 

As a result of his prior convictions, Zimmerman faces enhanced sentencing penalties under federal law, including a mandatory minimum sentence of fifteen years, and a maximum sentence of forty years, in prison.  Zimmerman also faces a term of supervised release of five years to life following his prison sentence, and he will be required to register as a sex offender in any U.S. jurisdiction in which he lives, works, or attends school.  Zimmerman will be sentenced on April 22, 2014 by Chief United States District Judge Gregory M. Sleet.

According to statements made and documents filed in court, Zimmerman came to the attention of the Delaware Child Predator Task Force (the “Task Force”) after it began an investigation into two other registered child sex offenders living in Delaware.  That investigation began in October 2012, after the Task Force received a cybertip from the National Center for Missing and Exploited Children (NCMEC).  The cybertip reported that an AOL user, subsequently identified as Roger Cordero, a registered child sex offender from New Castle, Delaware, had uploaded files containing child pornography through an AOL server.

On December 20, 2012, Task Force officers executed a state search warrant at Roger Cordero’s New Castle residence, where they found computers containing thousands of images of child pornography featuring mostly prepubescent and adolescent children.  They also found that Cordero had been trading child pornography with David Pennington, another registered child sex offender whom Cordero had met while both were incarcerated in the Smyrna Correctional Institution for child sex offenses.  The men shared the images of child pornography by mailing digital photographs saved to thumb drives back and forth to one another.

 Later on the day of December 20, 2012, Task Force officers executed a state search warrant at Pennington’s Georgetown residence.  Pennington, who was then wearing an electronic monitoring device due to a state probation violation, was present for the search.  During the search, Task Force members recovered evidence relating to the mailing of child pornography and child sexual abuse stories between Pennington and Cordero.  A Delaware State Police forensic examiner also recovered from Pennington’s cell phone two images of child pornography and related text messages between Pennington and Zimmerman.  The images depicted a prepubescent boy engaged in a sex act with an adult male.  During a January 2013 interview with Task Force detectives, Pennington told investigators that he received the two images of child pornography found on his cell phone from Zimmerman, whom Pennington had met in a child sex offender therapy group.  Pennington also told investigators that he would go to Zimmerman’s house, where Zimmerman had a computer that they used to access child pornography.

On January 8, 2013, Task Force officers executed a state search warrant at Zimmerman’s Georgetown residence.  They recovered several pieces of computer equipment found to contain hundreds of images of child pornography.  The images featured children ranging in age from infancy to mid-teen being posed or engaged in sexual acts with adult males. 

As intended by the United States Department of Justice’s Project Safe Childhood Program, federal and state child exploitation prosecutors and investigators have worked together to investigate and prosecute Zimmerman, Cordero and Pennington.  On October 11, 2013, David Pennington was sentenced to 28 years in prison by Delaware Superior Court Judge T. Henley Graves after pleading guilty to Dealing in Child Pornography, in violation of Delaware law.  On June 13, 2013, a federal grand jury indicted Roger Cordero on various child pornography crimes, including production, transportation, receipt and possession of child pornography, in violation of federal law.  If convicted of the most serious charges, Cordero faces a mandatory minimum sentence of 35 years in prison, to a maximum sentence of 60 years in prison.  Cordero’s case remains pending before the United States District Court for the District of Delaware.

 All three cases were brought as part of the United States Department of Justice’s Project Safe Childhood Program, which was launched in May 2006 to combat the growing epidemic of online child sexual exploitation and abuse.  Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue child victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about reporting online child exploitation to the national CyberTipline, visit the National Center for Missing and Exploited Children’s website at: www.missingkids.com.

WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Beverly Newton, age 52, of Middletown, Delaware, was sentenced yesterday by the Honorable Leonard P. Stark, United States District Judge for the District of Delaware, to 63 months imprisonment and full restitution.  The defendant pleaded guilty to violations of 18 USC § 286 (False Claims Conspiracy), 18 USC § 1341 (Mail Fraud), and 42 U.S.C. § 408(a)(7)(B) & 18 U.S.C. § 2 (Aiding and Abetting Social Security Fraud), in September 2013.

The defendant participated in a tax fraud conspiracy involving the filing of more than 180 false individual federal income tax returns with the Internal Revenue Service, using stolen identities.  The returns sought refunds of more than $1.8 million.  The defendant and her co-conspirators received more than $800,000 on account of the fraudulent returns.  The defendant’s role in the conspiracy involved providing names and social security numbers to another co-conspirator, who used the information to file the fraudulent returns.  The defendant received more than $300,000 for her part in the scheme.

U.S. Attorney Oberly gave the following comments:  “This case should send a clear signal that individuals who conspire with others to file false claims against the United States Treasury will face significant penalties.  My office is committed to working with the Internal Revenue Service to prosecute these cases, and I will seek incarceration wherever possible and appropriate.”

“The sentencing of Beverly Newton again emphasizes that IRS Criminal Investigation, the United States Attorney’s Office and its law enforcement partners will continue their aggressive pursuit of those who use fraudulent methods in an attempt to corrupt our nation's tax system.” said Akeia Conner, IRS Criminal Investigation Special Agent in Charge.  “Ms. Newton is being held accountable for her involvement in this elaborate criminal action.” 

WILMINGTON, Del. – U.S. Attorney Charles M. Oberly, III announced today that the District of Delaware collected $1,725,357.29 in criminal and civil actions in Fiscal Year 2013.  Of this amount, $448,253.63 was collected in criminal actions and $1,277,103.66 was collected in civil actions. 

Additionally, the District of Delaware worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $304,172.89 in cases pursued jointly with these offices.  Of this amount, $304,172.89 was collected in civil actions.         

Moreover, the District of Delaware, working with partner agencies and divisions, collected $3,587,857.00 in asset forfeiture actions in FY 2013.  Specifically, in the case of United States v. Bruce E. Costa, the district recovered almost $2.5 million.  Costa, a former pharmacist and former owner of Renaissance Family Pharmacy in Claymont, Delaware, was found guilty of unlawfully distributing approximately 45,000 oxycodone pills.  Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

Attorney General Eric Holder announced on Thursday that the Justice Department collected approximately $8.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2013.  The more than $8 billion in collections in FY 2013 represents nearly three times the appropriated $2.76 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.

“The department’s enforcement actions help to not only ensure justice is served, but also deliver a valuable return to the American people,” said Attorney General Holder. “It is critical that Congress provide the resources necessary to match the department’s mounting caseload. As these figures show, supporting our federal prosecutors is a sound investment.”

“During this time of economic recovery, these collections are more important than ever,” said U.S. Attorney Oberly.  “The U.S. Attorney’s Office is dedicated to protecting the public and recovering funds for the federal treasury and for victims of federal crime.  We will continue to hold accountable those who seek to profit from their illegal activities.”

 The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

 The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

WILMINGTON, Del. – Sean Lawrence, a 40-year-old, twice-convicted child sex offender from Kansas City, Missouri, was sentenced today to over 23 years in prison for transportation of child pornography, in violation of federal law.  Lawrence also was sentenced to a life term of supervised release following his prison sentence.  He also will be required to continue to register as a sex offender in any jurisdiction in which he lives, works, or attends school. 

Lawrence was previously convicted in Missouri in 1995 and 2005 of sodomizing two young boys.  He was sentenced to five years in prison for each offense and was required to register as a sex offender upon his release.  He also was required to participate in sex offender therapy, from which he was twice discharged as non-compliant.

As a result of his prior convictions for child sex offenses, Lawrence faced an enhanced federal sentencing penalty that required imposition of a mandatory minimum sentence of 15 years, to a maximum sentence of 40 years, in prison.

According to statements made and documents filed in court, Lawrence came to the attention of a Wilmington-based Homeland Security Investigations special agent in February 2013, during an online undercover investigation into non-public, peer-to-peer networks being used to distribute child pornography.  Lawrence provided the undercover agent, who was posing as a man interested in trading images of child pornography, with access to his non-public, peer-to-peer network.  The undercover agent then downloaded 11 video files of child pornography from Lawrence’s computer. 

During the investigation, law enforcement agents determined that Lawrence was distributing child pornography from various locations via a wireless mobile device.  On February 14, 2013, Special Agents of the Wilmington, Delaware and Philadelphia HSI offices partnered with Kansas City-based agents to apprehend Lawrence while he was actually transmitting and receiving images of child pornography via the Internet.  The local agents conducted simultaneous online sessions with Lawrence in an effort to geo-locate him.  Data associated with those online sessions indicated that Lawrence was then accessing the Internet from the second floor of Metropolitan Community College Library, in Kansas City, Missouri.  The local agents quickly relayed this information to the Kansas City-based HSI Special Agents, who then found Lawrence in the back corner of the campus library.  Lawrence had an open laptop in front of him and was downloading a video of child pornography set to music when he was apprehended. 

A subsequent forensic examination of computer equipment seized from Lawrence in the library and at his residence resulted in the discovery of over 10,000 still images and 200 videos of child pornography that Lawrence had downloaded to those devices.  The depictions of child pornography featured mostly prepubescent boys engaged in sexual acts with adult males or other boys.  A number of the files depict violence, sadistic or masochistic abuse or bondage.  In addition, forensic evidence established that Lawrence distributed child pornography to over 850 other individuals.

During an interview with law enforcement agents, Lawrence stated that he had traded hundreds of child pornography images and videos via file sharing programs and email each day since 1999, except during his time in prison.  Lawrence estimated that he has traded 100-1,000 images of child pornography a day since 1998-1999.  He further estimated that he traded child pornography files with an average of about 1-3 people per day via email.  Lawrence also told the agents that he went to the Metropolitan Community College campus approximately 3-4 days a week to use the wireless Internet to receive and distribute child pornography.  Lawrence said that he also utilized the wireless networks at the public library, and in McDonalds and Burger King locations to distribute and receive child pornography.

After today’s sentencing hearing before United States District Judge Sue L. Robinson, United States Attorney Charles M. Oberly, III stated, “This two-time offender will now have over 23 years in a federal prison to think about his crimes and children throughout this country will have one less predator stealing their youthful innocence. Again, I strongly urge parents to closely monitor their children’s use of computers. The rapid expansion of social media and the ease at which predators can contact children has never been easier. The best defense is to monitor as closely as possible what your children are doing on their computers and iPads and iPhones.”

"This case is a clear reminder of HSI’s determination to pursue predators who sexually exploit children, wherever they may be," said John Kelleghan, special agent in charge for the HSI Philadelphia. "The defendant expected the shield of anonymity to protect him in cyberspace, he was wrong.  HSI and our law enforcement partners will unremittingly investigate these crimes and bring perpetrators to justice."
       
This case is being investigated by the Department of Homeland Security, Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Edward J. McAndrew.

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that James A. Ladio, entered a guilty plea before the Honorable Richard G. Andrews to a four-count felony information charging him with bank fraud, in violation of Title 18, United States Code, Section 1344 (Counts 1 and 3); and money laundering, in violation of Title 18, United States Code, Section 1957 (Counts 2 and 4).

According to the criminal Information and plea agreement, Ladio was the founder and former President and Chief Executive Officer of MidCoast Community Bank, Inc. (“MidCoast”).  MidCoast, headquartered in Wilmington, has four branch locations across the State of Delaware.  The four-count Information describes two occasions in which Ladio convinced existing MidCoast customers to apply for commercial loans, ostensibly for valid business purposes.  The true purpose of the loans, however, was to allow those MidCoast customers to loan money to Ladio. 

The first bank customer (Bank Customer A) applied in October 2010 to transform an existing commercial mortgage at MidCoast into a $700,000.00 line of credit.  Although the loan package indicated that the purpose of the line of credit was to make capital improvements on a particular building project, the actual purpose of the request was for Bank Customer A to obtain funds which could be used to make a short-term loan to Ladio.  After MidCoast’s loan committee approved the request, Bank Customer A drew $650,000.00 from the line, which was deposited into Bank Customer A’s account on or about October 28, 2010.  That same day, approximately $629,240.00 was wired from the account controlled by Bank Customer A to Ladio’s personal checking account.

Similarly, the second bank customer (Bank Customer B) applied to MidCoast in July 2011 for a working capital line of credit in the amount of $700,000.00.  Although the loan package indicated that the purpose of the loan was for “working capital for Bank Customer B’s various business interests,” the actual purpose of the request was for Bank Customer B to obtain funds which could be used to make a short-term loan to Ladio.  After MidCoast’s loan committee approved the request, MidCoast wired $650,000.00 into a bank account held by Bank Customer B at another financial institution.  That same day, $639,000 was wired from Bank Customer B’s account to Ladio’s personal bank account. 

Because on each occasion the proceeds of the loan fraud activity resulted in more than $10,000.00 being deposited into Ladio’s personal bank account, Ladio also faces two counts of money laundering.

Ladio, age 57, is a resident of Wilmington, Delaware.  For the bank fraud charges (Counts 1 and 3), Ladio faces a maximum penalty of 30 years imprisonment; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution. For the money laundering charges (Counts 2 and 4), Ladio faces a term of imprisonment of ten years; a fine of $250,000.00; a term of supervised release of three years; and a $100 special assessment.  Sentencing has been scheduled for April 17, 2014 at 9:00 a.m.

United States Attorney Oberly said, ?Mr. Ladio’s serious fraudulent conduct betrayed the trust of MidCoast’s shareholders, its employees, and its customers.  Our office will continue to vigorously investigate and enforce criminal conduct relating to bank fraud, particularly with respect to Delaware-based financial institutions.”  

Ladio’s fraud was uncovered after it was discovered that he had failed to notify his lender, a TARP bank, that he had sold an investment property for which he had taken out a mortgage loan at the bank,” said Christy Romero, Special Inspector General for TARP (SIGTARP).  “Ladio’s failure to comply with his loan requirements was an initial step in a continued course of misconduct culminating in bank fraud against MidCoast Community Bank, where he was president and CEO.  SIGTARP and our law enforcement partners will hold accountable and bring to justice those responsible for fraud related to TARP.”

The FBI works diligently to protect the integrity of the United States banking industry by identifying and securing evidence to prosecute white collar criminals such as Mr. Ladio. This case should serve as a warning to others that such conduct will not be tolerated by the FBI and our law enforcement partners.

"Professionals, including bankers, who promote fraudulent schemes to abuse our financial systems, will be held accountable," said Special Agent in Charge Akeia Conner, IRS Criminal Investigation.  “This joint endeavor continues to demonstrate our efforts to ensure that the financial services industry will not be used for personal financial gain and will be challenged to operate in a fair and honest manner to promote the public interest.”

The case was investigated by the Federal Bureau of Investigation, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Internal Revenue Service Criminal Investigation Division, and is being prosecuted by Assistant United States Attorneys Robert F. Kravetz, Lesley F. Wolf, and Ilana H. Eisenstein.

WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Kimberly Y. Drummond, age 47, of Middletown, Delaware, pled guilty to one count of embezzlement from a federally insured financial institution.  Drummond, who will be sentenced on April 3, 2014, by the Honorable Leonard P. Stark, United States District Judge for the District of Delaware, faces a maximum sentence of thirty years in prison, a fine of $1,000,000, and 6 years of supervised release following her prison sentence.
According to statements made at the plea hearing on December 12, 2013, and documents filed in court, Drummond was employed by Discover Financial Services, in New Castle, Delaware, for nearly 20 years.  In or around November 2008, Drummond began falsifying entries in Discover’s books and records, resulting in the issuance of duplicate checks from Discover Bank.  Drummond deposited the checks into her personal bank accounts and she used the checks to pay her mortgage lender.  Drummond embezzled more than $349,000 from Discover from November 2008 through August 2012.

U.S. Attorney Oberly lamented, “Yet another breach of trust by someone entrusted to protect financial resources.  These cases will be vigorously prosecuted by this office and appropriate punishments will be sought.”

This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Lauren Paxton.

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Barrett Staton, 36, of Nokomis, Florida and his brother, Matthew Staton, 37, of Perkiomenville, Pennsylvania, were sentenced on December 13, 2013, in federal court for defrauding numerous Pennsylvania and Florida-based churches, non-profit organizations, and small businesses.  Barrett Staton was sentenced to 108 months in prison, five years supervised release, and ordered to pay $2,070,529.74 in restitution.  Matthew Staton was sentenced to 60 months in prison, three years supervised release, and ordered to pay $1,967,926.10 in restitution.  Following a thirteen-day jury trial in July 2012, the defendants were convicted of conspiracy to commit wire fraud, as well as various counts of wire and mail fraud.  Barrett Staton was also convicted of making a false statement in a loan document.  The defendants, led by Barrett Staton, operated businesses that supplied copy machines to churches, non-profit organizations, and other small businesses throughout Harrisburg, Lancaster, Montgomery, and Philadelphia counties in Pennsylvania, as well as in and around Sarasota, Florida. 
The defendants engaged in a multifaceted scheme to defraud businesses and organizations by: (1) altering signed lease agreements to include additional copy machines or features that the customers did not order and never received, thus increasing the lump sum payment received from the financing companies; (2) enticing customers into agreeing to a new lease by offering to pay off any old copy machine leases and to provide free maintenance and service, and then failing to either pay off the customer’s old lease or to provide free maintenance or service; and (3) inducing existing customers to complete new leasing applications under the guise of “refinancing” the lease on existing copy machines, and then submitting the new leasing application to an entirely different leasing company, thereby collecting a second lump sum payment and obligating the customer to two separate lease payments on the same copy machine.

The court found that there were over fifty institutional victims, mostly churches, non-profit organizations, and other small businesses, with losses exceeding $2 million. Evidence introduced at sentencing showed that the defendants operated a sophisticated scheme that employed sham companies, used fictitious names to conceal the defendants’ identities, and relocated the scheme from Pennsylvania to Florida to avoid law enforcement.  In total, the defendants ran this fraudulent scheme for over seven years until law enforcement successfully ended their fraud.

U.S. Attorney Oberly congratulated both the FBI and Assistant United States Attorneys Jaime M. McCall and Mark M. Lee for the complex investigation and prosecution of this case, which took several years and the review of thousands of documents.  The Staton brothers preyed upon vulnerable churches and non-profits, as well as small businesses in a particularly devious manner in an attempt to enrich themselves.  Now both will have years in prison to contemplate their crimes. 
The investigation was handled by the Federal Bureau of Investigation. The prosecution of the case was handled by Assistant United States Attorneys Jamie M. McCall and Mark M. Lee.

David Kevin Schultz, age 54, of Laurel, Delaware, was sentenced today to 210 months in prison for receipt of child pornography.  Schultz also was sentenced to 10 years of supervised release following his prison sentence.  He also will be required to register as a sex offender in any jurisdiction in which he lives, works, or attends school.  United States Attorney Charles M. Oberly, III made the announcement following Schultz’s sentencing hearing before United States District Judge Sue L. Robinson. 

Schultz is a previously convicted and registered child sex offender.  On October 31, 1995, Schultz was convicted of Unlawful Sexual Intercourse Third Degree and Unlawful Sexual Penetration Third Degree involving a female victim who was 13 years old. 

 According to the indictment and court documents filed in the current case, the current investigation began when Department of Homeland Security agents received information relating to Schultz’s involvement with child pornography from a man who was arrested in a separate child sexual assault investigation in Maryland.  Federal law enforcement agents executed a federal search warrant at Schultz’s Laurel, Delaware residence in April 2012, seizing over 30 computers and other physical evidence.  During a forensic examination of the computer equipment, agents found a video of Schultz directing a female minor and a young adult male to engage in various sex acts in his Laurel home.  Agents also found other images of a female minor engaged in sex acts, which Schultz had edited into “compilation” videos.  The forensic examination also revealed that Schultz had used the computers to receive and possess numerous images of child pornography featuring adolescent and prepubescent females via the Internet. 

 Following the sentencing hearing, United States Attorney Charles M. Oberly, III stated:  “The pervasiveness of David Schultz’s involvement with child pornography is shocking.  His actions over an extended period of time have caused grievous harm to his own family and others.  He has single-handedly corrupted his victims to further his own perversions.  He deserves every day of the sentence imposed today.”

"HSI is committed to holding child predators accountable for their actions,” said John Kelleghan, special agent in charge of HSI Philadelphia. “These heinous crimes cause irreparable damage to our children and society.  HSI will continue to pursue those who commit such crimes until justice is served.”

WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Dawn Chamberlain, age 36, of Claymont, Delaware, pled guilty today to violations of 18 USC § 286 (False Claims Conspiracy) and 18 USC § 1341 (Mail Fraud).  Chamberlain, who will be sentenced on April 3, 2013, by the Honorable Leonard P. Stark, United States District Judge for the District of Delaware, faces a maximum sentence of twenty years in prison, a fine of $250,000, and 3 years of supervised release.

According to statements made at the plea hearing and documents filed in court, the defendant acted as a tax preparer in Delaware.  From 2009 through 2012, she filed more than 450 false and fraudulent U.S. Individual Federal Income Tax Returns for other people.  In the returns, the defendant claimed more than $730,000 in credits to which her clients were not entitled, including the American Opportunity Tax Credit and the Earned Income Tax Credit.

The defendant directed the taxing authorities to deposit the refunds generated by the fraudulent federal income tax returns into her own bank accounts, and bank accounts of her family members.  She returned less than the full amount of the refunds to her clients, converting the remaining proceeds to her personal use. 

The defendant also used her client’s names, dates of birth, and social security numbers to file false and fraudulent New York State Resident income tax returns, requesting refunds of more than $210,000. 

U.S. Attorney Oberly gave the following comments:  “This case should send a clear signal that individuals who file false claims against the United States Treasury will be prosecuted.  I find fraud upon the government to be particularly troubling, and I am committed to working with the Internal Revenue Service to prosecute these cases and seek incarceration wherever possible.”

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Carl McBride, age 48, of Claymont, Delaware, was arrested earlier today and charged by criminal complaint with transportation of child pornography, in violation of Title 18, United States Code, Section 2252A(a).  This federal criminal charge results from an online undercover operation in which McBride utilized a non-public, peer-to-peer computer network to distribute child pornography to over 100 individuals from his Claymont home.   

If convicted of the charges, McBride faces a mandatory minimum sentence of at least five years, and up to twenty years, in prison, a fine of up to $250,000, and a term of supervised release of at least five years to life following his prison sentence.  He also will be required to register as a sex offender in any jurisdiction in which he resides, works or attends school. 

After identifying McBride through computer network records, investigators discovered that another person residing at his Claymont residence has been providing daycare services out of the home for at least three years under the name “Little Tykes Day Care.”  The Office of Child Care Licensing suspended the operator’s license today. 

Early this morning, law enforcement agents executed a federal search warrant at McBride’s residence, seizing multiple computers, cell phones, cameras and other digital equipment.  In particular, agents seized a laptop computer found next to a diaper changing table in a room used for daycare services.  A forensic preview of that laptop revealed hundreds of images and movies of child pornography depicting prepubescent females engaged in sex acts.  In a number of the images, the young children are bound and violently assaulted by adult males.

McBride was arrested by U.S. Homeland Security special agents, and made his initial appearance in United States District Court this afternoon.  McBride waived his rights to a preliminary and detention hearing, and will remain in custody pending further proceedings.

Any person possessing information about this matter are encouraged to contact the United States Department of Homeland Security’s Tip Line at 302-428-0104, extension 3.

The case is being prosecuted by Assistant United States Attorney Edward J. McAndrew and investigated by the Delaware State Police and the United States Department of Homeland Security, Homeland Security Investigations. 

The charge in the Complaint is only an allegation and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Stephanie Patterson, age 41, of Royersford, Pennsylvania, pled guilty today to violations of 18 USC § 286 (False Claims Conspiracy), 18 USC § 1341 (Mail Fraud), and 42 U.S.C. § 408(a)(7)(B) & 18 U.S.C. § 2 (Aiding and Abetting Social Security Fraud).  Patterson, who will be sentenced on March 13, 2014, by the Honorable Leonard P. Stark, United States District Judge for the District of Delaware, faces a maximum sentence of twenty years in prison, a fine of $250,000, and 3 years of supervised release.

According to statements made at the plea hearing and documents filed in court, the defendant participated in a tax fraud conspiracy involving the filing of more than 180 false individual federal income tax returns with the Internal Revenue Service, using stolen identities.  The returns sought refunds of more than $1.8 million.  The defendant and her co-conspirators received more than $800,000 on account of the fraudulent returns.  The defendant’s role in the conspiracy involved providing names and social security numbers to another co-conspirator, who used the information to file the fraudulent returns.  The defendant also acted as a facilitator between the co-conspirators responsible for filing the tax returns, and those who provided additional compromised identities.  The defendant received more than $55,000 in fraud proceeds for her part in the scheme.

U.S. Attorney Oberly gave the following comments:  “This case should send a clear signal that individuals who conspire with others to file false claims against the United States Treasury will face significant penalties.  My office is committed to working with the Internal Revenue Service to prosecute these cases, and I will seek incarceration wherever possible and appropriate.”

“These unscrupulous defendants thought they had figured out a clever scheme to thwart the IRS and steal from American taxpayers,” said Akeia Conner, IRS Criminal Investigation Special Agent in Charge. “The IRS has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system. We are obliged to our law enforcement partners and the United States Attorney’s office for their continued support of our endeavors.”

This case is the result of an investigation conducted by the Internal Revenue Service Criminal Investigation, the United States Postal Inspection Service, the Social Security Administration Office of the Inspector General, and the Federal Bureau of Investigation.  The case is being prosecuted by Assistant United States Attorney Lauren Paxton.

WILMINGTON, Del. – Michael J. Barndt, a/k/a “mikecoach73,” age 39, of Sellersville, Pennsylvania, pled guilty today to Attempted Coercion and Enticement of a Minor, in violation of federal law.  Charles M. Oberly, III, United States Attorney for the District of Delaware, announced the guilty plea following a hearing in the United States District Court for the District of Delaware, where Barndt will be sentenced by United States District Judge Leonard P. Stark on February 25, 2014. 

Barndt faces a mandatory minimum sentence of ten years, and a maximum sentence of life, in prison.  He also faces a fine of up to $250,000 and a term of supervised release following his prison sentence of at least five years to life.  Barndt also will be required to register as a sex offender in any U.S. jurisdiction in which he lives, works, or attends school. 

Prior to his arrest, Barndt was employed as a cook at the Lakeside School in Horsham Township, Pennsylvania.  Barndt also served for a number of years as a youth football coach for the Springfield School District, in Montgomery County, Pennsylvania.  He last coached in 2012 – the last football season prior to his arrest.  During the summer months, Barndt was employed as a camp counselor at “Blue Bell Camp,” in Blue Bell, Pennsylvania, where his duties including coaching football and driving children home from camp.

According to the indictment and court documents, Barndt was arrested on June 19, 2013, after he traveled from his Pennsylvania home to the Concord Mall, in Wilmington, Delaware, to meet a person he believed to be a 14-year-old girl for sexual activity.  Barndt identified this supposed 14-year-old girl, who was actually an undercover federal agent, after he posted an on-line personals ad on www.craigslist.com.  In the ad, which he entitled, “Real Teen Fantasy,” Barndt expressed interest in a sexual liaison with a teenage girl and engaged in a series of online chats with the undercover agent, which involved Barndt transmitting naked pictures of himself.

Barndt drove to the mall, where he was met by a team of federal agents shortly after purchasing items at Victoria’s Secret.  Federal agents seized a smartphone from Barndt, which was later found to contain approximately 15,000 images of teenage females who are either suggestively dressed or partially or completely nude.  Most of these images appear to have been self-produced by the teenagers with smartphones.

Following the plea hearing, U.S. Attorney Oberly stated:  “While Mr. Barndt will be appropriately punished for his crimes, young people must be especially cautious as to the types of images they produce of themselves on their smartphones.  Inappropriate pictures, once in cyberspace, live on forever and can have damaging consequences even years later.”

"Homeland Security Investigations  is committed to stopping predators in their tracks.  This defendant will no longer be a threat to our children" said John P. Kelleghan, special agent in charge of HSI in Philadelphia. "This case is yet another example of the extraordinary collaborative efforts among law enforcement in Delaware, to protect the most vulnerable among us."

This case is being investigated by the Department of Homeland Security, Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Edward J. McAndrew.

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware announced that Michael A. Stortini – the managing member of the Frank Robino Companies, LLC, (“FRC”) a real estate development company in Wilmington, Delaware – pleaded guilty yesterday before United States District Court Judge Richard G. Andrews to charges of Theft from an Employee Pension Benefit Plan and Willful Failure to Pay Over Tax.  Sentencing has been scheduled for March 11, 2014. 

From facts disclosed at the plea hearing, in 2009, Stortini diverted over $600,000 in funds from an employee 401(k) account to pay business expenses associated with the company. Moreover, in 2009 and 2010, Stortini failed to pay over $450,000 in payroll taxes to the Internal Revenue Service for entities related to FRC.  Over the same time period, Stortini transferred over $900,000 from company accounts for his personal use.  

WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Carolyn Wall, age 37, of Newark, Delaware, was sentenced yesterday by the Honorable Sue L. Robinson, United States District Judge for the District of Delaware, to 81 months imprisonment and full restitution, after being convicted by a jury of 30 counts of fraud and identity theft.  The defendant was convicted of violations of 18 U.S.C. § 1349 (Conspiracy to Commit Wire Fraud), 18 U.S.C. § 1343 (Wire Fraud);  18 U.S.C. § 1028(a)(7) (Identity Theft), 18 U.S.C. § 1029(a)(3) and (c)(1)(a) (Access Device Fraud),  42 U.S.C. § 408(a)(7)(B) (Fraudulent Use of a Social Security Number), and 18 U.S.C. §1028A (Aggravated Identity Theft).

From in or around July 2010 through in or around May 2011, the defendant engaged in a check fraud and identity theft scheme.  The defendant used a sophisticated computer software program, specialty check paper, and a particular type of “MICR compliant” check-writing ink to make hundreds of counterfeit checks.  The defendant also utilized real bank names and routing numbers, but the account numbers on the checks were fabricated.  The defendant and other members of the scheme then presented these fraudulent checks at area retail stores, including Acme, Wal-Mart, Happy Harry’s, Lowe’s, Boscov’s, Target, Safeway, Best Buy and Kohl’s.  Checks created by the defendant were presented to retail stores more than 700 times, and more than 250 of the checks were honored, costing the stores more than $100,000 in less than a year. 

In order to bypass the stores’ security systems, the defendant and the other members of the scheme amassed more than 200 names and social security numbers of individuals in Delaware and elsewhere.  More than 65 social security numbers were used in attempts to cash the fraudulent checks.  The defendant also collected a significant amount of driver’s licenses and other identification documents for the members of the scheme to use in cashing the fraudulent checks. 

The defendant also used the Social Security number of another person to obtain the lease on her residence, as well as to obtain cable and power service.

The defendant admitted during the trial that she had been involved in creating fraudulent checks for nearly ten years.  The defendant was arrested for her role in check fraud activities in 2008, in Stafford County, Virginia.  The defendant was convicted of felony forgery and false statement charges in Virginia, and she served nearly two years in prison.  The defendant was released and placed on probation in early June 2010.  She began making fraudulent checks within a few weeks, in July 2010.

The defendant was convicted of all thirty counts of the Indictment, following a six-day jury trial in April, 2013.  The sentence handed down by Judge Robinson yesterday represents a mandatory consecutive 24-month term of imprisonment on the Aggravated Identity Theft charges (18 U.S.C. §1028A), and a 57- month term of imprisonment on the remaining counts.

U.S. Attorney Oberly said of the sentence, “This case should send a clear signal that the U.S. Attorney’s Office for the District of Delaware takes this type of persistent, organized, and far-reaching identity theft scheme very seriously.  I applaud the commitment of the United States Postal Inspection Service and the Social Security Administration, Office of the Inspector General, to vigorously investigate identity theft and financial fraud cases that harm innocent citizens. We will seek incarceration where necessary to deter offenders such as Ms. Wall and to protect the community from future harm.”

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Kevin Morris, age 24 of Franklin Township, Pennsylvania (Chester County), was sentenced to 57 months imprisonment for his role in a drug conspiracy centered in Wilmington that involved the importation of cocaine and heroin from Panama and Afghanistan.  United States District Judge Richard G. Andrews further imposed a three year term of supervised release and ordered Morris to forfeit the sum of $22,172.00 in drug proceeds.

Morris pleaded guilty on July 25, 2012, to conspiracy to smuggle five kilograms of cocaine and one kilogram of heroin from the Republic of Panama into the United States, in violation of Title 21, United States Code, Sections 841 and 846; and money laundering, in violation of Title 18, United States Code, Section 1957.  According to facts introduced during the plea hearing, Morris admitted that he acted as a recruiter, facilitator, and financier for the organization, and that he was involved on multiple occasions in which couriers smuggled or attempted to smuggle heroin and cocaine from Panama to Delaware.  He acknowledged making cocaine and heroin sales to customers based primarily in Pennsylvania, including to confidential informants under the control of the Pennsylvania State Police.  Morris further admitted his involvement in purchasing approximately one-half kilogram of cocaine in Washington, D.C., which had been smuggled into the United States through a military contractor based in Afghanistan. 

In connection with his plea agreement Morris accepted responsibility for at least five (5) kilograms of cocaine and five (5) kilograms of heroin.  He also admitted that he laundered his drug proceeds in part by purchasing two vehicles. 

To date, the government has charged twenty-three individuals in the United States with drug trafficking offenses as a result of the investigation.  All but four of those defendants – each of whom remain abroad in Panama – have pleaded guilty, or have agreed to plead guilty, to drug-related offenses.  A listing of the charged defendants and their current status is set forth in Attachment A.

United States Attorney Charles M. Oberly, III, stated, “The Court’s sentence appropriately punishes the defendant for his important role in an international drug conspiracy that had a negative impact on Wilmington and its surrounding communities.  I applaud the exceptional efforts of our law enforcement partners in dismantling the organization of which Mr. Morris played a significant role.”

The investigation was led by the Drug Enforcement Administration, the Department of Homeland Security – Homeland Security Investigations, the Internal Revenue Service – Criminal Investigation Division, and the Wilmington Police Department. 

Investigators also received invaluable assistance from the Panamanian National Police; the United States Attorney’s Office for the Southern District of Texas; the United States Marshals Service for the District of Delaware; the Newark (Delaware) Police Department; the Delaware State Police; the New Castle County Police Department; the Delaware Department of Corrections, Probation and Parole; the Cecil County (Maryland) Drug Task Force; the Pennsylvania State Police; the Maryland State Police; and the Elkton (Maryland) Police Department.

This case is being prosecuted by Assistant United States Attorney Robert F. Kravetz.  For further information, contact Press Information Officer Kimberlynn Reeves at (302) 573-6277, ext. 16287.

ATTACHMENT A
Status of Defendants Charged in Panama/Afghanistan Drug Investigation
        Defendant                    District           Case No.                                            Status

Ronaldo Edmund

Delaware

11-63-RGA

Sentenced on September 9, 2013, to 180 months imprisonment

Tissany Buckham

Delaware

11-63-RGA

Sentenced on April 10, 2013, to 22 months imprisonment

Kimberly Fowler

Delaware

11-63-RGA

Completed pretrial diversion on November 6, 2012

Kelvin Cook

Delaware

11-63-RGA

Sentenced on June 20, 2013, to 180 months imprisonment

Julio Archer

Delaware

11-63-RGA

Sentenced on June 11, 2013, to 60 months imprisonment

Roumik Banerjee

Delaware

11-63-RGA

Sentenced on April 3, 2013, to 57 months imprisonment

Mia Poteat

Delaware

11-63-RGA

Sentenced on April 3, 2013, to 37 months imprisonment

Tina Simmons

Delaware

11-63-RGA

Sentenced on May 7, 2013, to three years’ probation and six months home detention

Tessa Snyder

Delaware

11-63-RGA

Pleaded guilty on May 18, 2012; pending sentencing

Dynisha Revel

Delaware

11-63-RGA

Charged defendant, currently incarcerated in Panama

Raabia Munir

Delaware

11-63-RGA

Pleaded guilty on October 16, 2013, pending sentencing

Sharon Butera

Delaware

11-63-RGA

Charged defendant, currently incarcerated in Panama

Efrain Dixon

Delaware

11-63-RGA

Charged defendant, Panamanian national

Benjamin Carpenter

Delaware

11-63-RGA

Charged defendant, Panamanian national

Tara Resto

Delaware

09-102-GMS

Pleaded guilty on April 13, 2010; sentencing hearing to be determined

Kevin Morris

Delaware

12-41-RGA

Sentenced on October 22, 2013 to 57 months imprisonment

Saleem A. Sharif

Delaware

12-53-RGA

Sentenced on September 4, 2013, to 120 months imprisonment

Charles Richardson

Delaware

12-44-RGA

Sentenced on January 29, 2013, to 60 months imprisonment

Darrold Thomas

Delaware

12-65-RGA

Sentenced on August 27, 2013, to 54 months imprisonment

Sayeed A. Behrooz

Delaware

13-93-RGA

Pleaded guilty on October 15, 2013; pending sentencing on February 26, 2014

Neisha Miller

Southern Dist. of TX

5: 11-43-01

Sentenced on September 20, 2011 to 36 months imprisonment

Gloria Miller

Southern Dist. of TX

5: 11-43-02

Sentenced on September 20, 2011 to 36 months imprisonment

Christine A. Blevins

Southern Dist. of TX

5: 09-388-01

Sentenced on March 4, 2010, to 60 months imprisonment

Bridgette Davidson

Southern Dist. of TX

5: 09-388-02

Sentenced on March 12, 2010, to 60 months imprisonment

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announces that Jeffrey Justison, age 44, of Elkton, Maryland, was sentenced today by United States District Court Judge Richard G. Andrews to six months incarceration, followed by six months house arrest, for failure to collect, and pay over to the IRS, federal income taxes from his employees.

According to statements made at the sentencing hearing and documents filed in court, Jeffrey Justison owns Double J Concrete, Inc., which he operates from his Elkton home.  From June 2007 through December 2010, Justison performed concrete jobs in Delaware and surrounding states, maintaining approximately 20 workers.  Justison paid his employees in cash, failing to collect from them, and to pay over to the IRS, Federal Income Tax and Federal Insurance Contribution Act (FICA) taxes.  He further failed to pay to the IRS his matching employer’s portion of FICA taxes, resulting in a total of $184,829 in unpaid taxes.

Following the sentencing, Charles M. Oberly, III, United States Attorney for the District of Delaware, stated, “The criminal tax laws are designed to protect the public interest in preserving the integrity of our nation’s tax system.  Today’s sentence should serve as a deterrent to would-be violators.”

"IRS Criminal Investigation realizes the detrimental consequences of employment tax evasion. It results in the loss of tax revenue to the United States government and the loss of future social security or Medicare benefits for the employees," stated Akeia Conner IRS Special Agent in Charge.  "Today's sentencing should serve as a deterrent to employers that take lightly their responsibility to collect and pay over employment taxes."

This case was investigated by the Internal Revenue Service - Criminal Investigation Division and prosecuted by Assistant United States Attorney Edmond Falgowski.

Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Patrick Henry Procino, age sixty-six, of Laurel, Delaware, pled guilty today before United States District Court Judge Richard G. Andrews to one count of illegal storage of hazardous waste without a permit, punishable by five years incarceration, a $250,000 fine, and three years supervised release. As the owner/operator of Procino Plating, Inc., Patrick Procino also entered a guilty plea on behalf of that corporation to one count of violating the Clean Water Act, which subjects the corporation to a maximum fine of $500,000 and five years probation.

According to statements made at the plea hearing and documents filed in court, Patrick Procino owned and operated Procino Plating, Inc. (Athe facility@), at 901 South Market Street in Blades, Delaware. Until the fall of 2007, the facility was utilized for plating and electroplating-related operations.

The Resource Conservation and Recovery Act (RCRA) defines hazardous waste to include chemical waste which due to its chemical characteristics presents a hazard to human health or the environment. RCRA mandates that producers of hazardous wastes may not store such wastes without first obtaining a storage permit from the Environmental Protection Agency (EPA).

From December 2007 through May 2010, Patrick Procino stored a tank containing approximately 450 gallons of liquid hazardous waste which originally had been used at the facility on its decorative chrome plating line. This chemical waste had a ph of 0.8 and, therefore, was a corrosive waste under RCRA.

As to Procino Plating, Inc. (Procino Plating), in the course of its operations it produced wastewater, and pursuant to a pretreatment industrial wastewater permit issued by Sussex County, Procino Plating was permitted to discharge its industrial wastewater to the Seaford, Delaware treatment plant which, in turn, discharges into the Nanticoke River. Pursuant to the Clean Water Act, the permit set limits on the amount of various pollutants that Procino Plating could discharge in its industrial waste water to the Seaford treatment plant, including limits on various metals.

On or about June 1, 2009, Sussex County modified Procino Plating=s industrial user permit to specifically prohibit the discharge of waste water generated as a result of electroplating operations, and any waste or bi-products of the electroplating processes then in storage at the facility. This modification was made based upon statements and representations by Procino Plating to Sussex County officials, indicating that the business has ceased electroplating-related operations at the facility. However, from June 2009 through March 2010, Procino Plating processed, through its wastewater treatment plant, stored drums of chemicals which were leftover from its former electroplating operations and, in violation of its Clean Water Act mandated permit, discharged resulting wastewater to the Seaford treatment plant.

United States District Court Judge Richard G. Andrews scheduled sentencing for February 27, 2014.

Following the guilty plea, Charles M. Oberly, III, United States Attorney for the District of Delaware, stated, AMy office will continue to prioritize the investigation and prosecution of those environmental offenses which present a present or potential hazard to human health or the environment.@

"For years the defendant knowingly disregarded federal and state environmental laws,” said David G. McLeod, Jr., Special Agent in Charge of EPA's criminal enforcement program for the Middle Atlantic States. "Improperly handling hazardous wastes and industrial pollutants can threaten the environment and put the public at serious risk. Today's guilty plea demonstrates our resolve to collaborate with our state and federal counterparts to vigorously investigate and prosecute any credible allegation that a company and its leaders treat our nation's environmental laws with contempt.”

“This case is another example of effective partnership between Delaware, EPA and the U.S. Attorney's Office to protect public health and the environment,” said DNREC Secretary Collin O=Mara. ADelaware companies demonstrate every day that they can be successful while complying with environmental standards, and DNREC works hard to assist the state's smaller businesses to achieve these goals. However, we have no tolerance for those who continually demonstrate a blatant disregard for the state’s hazardous waste regulations. We appreciate the great efforts of the U.S. Attorney’s Office and EPA in this matter.

This case was investigated by the Environmental Protection Agency, Criminal Investigation Division, and the Department of Natural Resources and Environmental Control-Criminal Investigations. This case was prosecuted by Assistant United States Attorney Edmond Falgowski and Special Assistant United States Attorney Joseph Lisa.

Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Salvatore J. Leone, entered a guilty plea before the Honorable Gregory M. Sleet to a one count felony Information charging him with conspiracy to commit bank fraud, in violation of Title 18, United States Code, Section 1349.

According to the criminal Information and plea agreement, Leone was a project manager for and partner with Michael A. Zimmerman in several limited liability companies formed for the purpose of developing real estate in or around Dover, Delaware.

Between September 24, 2007 and February 27, 2009, Leone and others, including Zimmerman and an employee of Zimmerman’s real estate development company, BBC Enterprises, submitted or caused to be submitted false draw requests to Wilmington Trust Company. In particular, Leone admitted to the following acts during his plea hearing:

• On or about September 24, 2007, Leone agreed to create a bill for Zimmerman for $231,000.00 purportedly for work performed on the Compass Pointe project, with intent to submit the bill to WTC for payment. However, as defendant and Zimmerman knew, the payment was not for work actually performed on Compass Pointe, but was to be used by Leone to fund a capital call on at least one unrelated real estate project.
   
• On or about October 28, 2008, Leone and Zimmerman submitted to WTC a fraudulent construction draw request for $8,568.00. The conspirators represented that these loan proceeds would be used to fund a change order associated with the Salt Pond project. Instead, Leone and Zimmerman used the loan proceeds for construction costs associated with an unrelated project.
   
• On or about January 3, 2008, Leone and Zimmerman submitted to WTC a fraudulent construction draw request for approximately $170,000.00. Leone and Zimmerman represented that these loan proceeds would be used to fund construction costs associated with the Compass Pointe project, but $100,000.00 of these proceeds were instead converted into a check made payable to Zimmerman.
   
• On or about January 15, 2008, Leone and Zimmerman submitted to WTC a fraudulent construction draw request for $375,000.00. Leone and Zimmerman represented that these loan proceeds would be used to fund architectural and engineering costs associated with the Shoppes at Fieldstone project. Instead, Leone and Zimmerman each received a check for $120,000.00, while the project account received only $135,000.00.

• On or about February 27, 2009, Leone and Zimmerman misappropriated approximately $260,000.00 in escalated lease payments received from a lessee for the Shoppes at Fieldstone project. In the loan agreement for the Shoppes at Fieldstone project, it had been represented that the escalated lease payments would be reinvested back into that project. Rather than comply with the terms of the loan agreement, Leone and Zimmerman used the loan proceeds for another purpose, namely the payment of a checks to Leone and Zimmerman, each in the amount of $130,000.00.Leone, age 50, is a resident of Dover, Delaware. He faces a maximum penalty of 30 years imprisonment, a $1,000,000.00 fine, and mandatory restitution.

Leone, age 50, is a resident of Dover, Delaware. He faces a maximum penalty of 30 years imprisonment, a $1,000,000.00 fine, and mandatory restitution.

United States Attorney Oberly said, “The charge against Mr. Leone and today’s guilty plea represent another step forward in this Office’s investigation into the demise of the Wilmington Trust Corporation. We, and our investigative partners, remain determined to identify and prosecute abuses like this one that compromise the integrity of Delaware financial institutions.”

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue
Service Criminal Investigation Division, the Special Inspector General for the Troubled Asset
Relief Program (SIGTARP), and the Office of Inspector General, Board of Governors of the Federal Reserve System, and is being prosecuted by Assistant United States Attorneys Robert F. Kravetz and Lesley F. Wolf.

Leone Plea Agreement.pdf

Leone Felony Information.pdf

Charles Smith, age 54, of Bear, Delaware, was sentenced to thirty months imprisonment by the Honorable Gregory M. Sleet, Chief Judge of the United States District Court for the District of Delaware on Friday, October 4th, after pleading guilty to failing to account for and pay over his employees’ payroll taxes.  Charles M. Oberly, III, United States Attorney for the District of Delaware, announced the sentence today.  Smith pled guilty to ten counts of Failure to Truthfully Account For and Pay Over Payroll Taxes, in violation of Title 26, United States Code § 7202.

Smith was the Chief Executive Officer of eShowings, a company which provides online and telephone appointment services for real estate professionals.  eShowings has offices in Newark, Delaware, North Carolina, and Kansas.  As the founder and CEO of eShowings, Smith was responsible for ensuring that employees’ payroll tax withholdings were paid over to the government.  Instead, Smith took money deducted from employees’ paychecks and spent it personal items for himself and his family.  At the sentencing hearing, the Court noted that Smith had spent the money on vacations, gambling, a pontoon boat, and other personal expenses.

United States Attorney Charles M. Oberly stated of the prosecution, “My office is committed to protecting the hardworking wage earners who think they are meeting their tax obligations from unscrupulous employers who victimize them and fail to pay their share to the government.”

“Business owners have a responsibility to withhold income taxes for their employees and then remit those taxes to the Internal Revenue Service,” said IRS Special Agent in Charge Akeia Conner.  “The failure to pay over withheld taxes is a serious offense.  Friday’s sentencing shows that IRS Criminal Investigation, the United States Attorney's Office and the District Court of Delaware are all in accord regarding the seriousness of this offense.”

WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Beverly Newton, age 52, of Middletown, Delaware, pled guilty today to violations of 18 USC § 286 (False Claims Conspiracy), 18 USC § 1341 (Mail Fraud), and 42 U.S.C. § 408(a)(7)(B) & 18 U.S.C. § 2 (Aiding and Abetting Social Security Fraud).  Newton, who will be sentenced on January 14, 2014, by the Honorable Leonard P. Stark, United States District Judge for the District of Delaware, faces a maximum sentence of twenty years in prison, a fine of $250,000, and 3 years of supervised release.

According to statements made at the plea hearing and documents filed in court, the defendant participated in a tax fraud conspiracy involving the filing of more than 180 false individual federal income tax returns with the Internal Revenue Service, using stolen identities.  The returns sought refunds of more than $1.8 million.  The defendant and her co-conspirators received more than $800,000 on account of the fraudulent returns.  The defendant’s role in the conspiracy involved providing names and social security numbers to another co-conspirator, who used the information to file the fraudulent returns.  The defendant received more than $300,000 in refunds for her part in the scheme.

U.S. Attorney Oberly gave the following comments:  “This case should send a clear signal that individuals who conspire with others to file false claims against the United States Treasury will face significant penalties.  My office is committed to working with the Internal Revenue Service to prosecute these cases, and I will seek incarceration wherever possible and appropriate.”

“Investigating identity theft and refund fraud is a priority for IRS Criminal Investigation,” said Akeia Conner, IRS Special Agent in Charge, Philadelphia Field Office. “Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers. Today’s plea signifies a surrendering to the resolve of IRS Criminal Investigation and the United States Attorney’s Office to combat and bring to justice those who dare to abuse our tax system and victimize our innocent taxpayers.”

This case is the result of an investigation conducted by the Internal Revenue Service Criminal Investigation, the United States Postal Inspection Service, and the Social Security Administration Office of the Inspector General.  The case is being prosecuted by Assistant United States Attorney Lauren Paxton.

Jason Jay Mills, age 36, of Wilmington, Delaware, was sentenced today to six years in prison for receipt of child pornography via a website discovered by Italian law enforcement authorities.  Mills also was sentenced to five years of supervised release following his prison sentence.  He also will be required to register as a sex offender in any jurisdiction in which he lives, works, or attends school.  United States Attorney Charles M. Oberly, III made the announcement following Mills’ sentencing hearing before United States District Judge Richard G. Andrews.

According to statements made at today’s hearing and documents filed in court, Mills was a user of a child pornography website discovered by the National Centre for Combating Pedophilia Online (Centro Nazionale per il Contrasto alla Pedopornografia On-line, or C.N.C.P.O.) located within the Italian State Police Postal and Communication Service.  After executing a search warrant on the website servers, the C.N.C.P.O. was able to identify over 900 U.S.-based users of the website.  The C.N.C.P.O. provided the identities of these users to the U.S. Department of Homeland Security, Homeland Security Investigations, which has been conducting investigations of the identified individuals across the United States. 
On November 30, 2012, Wilmington-based Homeland Security Investigations agents arrested Mills and searched his North Wilmington residence, which was located just two blocks from Carrcroft Elementary School.  They found computers containing over 40,000 still images and movies of some of the most graphic and violent depictions of child sexual abuse uncovered by investigators who routinely work child pornography cases in Delaware.  The images featured mostly infants, toddlers and girls under age 8 being violently raped and assaulted.  In some images, the children appear to be deceased following the violent sexual abuse.  One image depicts a prepubescent girl with the following words over her naked torso:  CHILD PORNOGRAPHY
BEHIND EVERY PICTURE IS
A CHILD HAVING A HELL OF
A GOOD TIME!

 In addition to the computers containing extremely violent child pornography featuring girls of elementary school age and younger, federal agents also found various dolls the size of toddlers, some of which had been used as sexual props or mutilated, in Mills’ residence.  Located with the computer equipment to which Mills downloaded tens of thousands of images of violent sexual abuse was a cache of assault weapons that Mills legally owned, including AR-15, M-4, and AK-47 assault rifles. 
Following the sentencing hearing, United States Attorney Charles M. Oberly, III thanked the Department of Homeland Security and the Italian State Police Postal and Communication Service for their collaborative efforts to work across an ocean to protect children:  “Two weeks before the tragedy that occurred at Sandy Hook Elementary School, in Newtown, Connecticut, HSI agents removed Mills from his residence located two blocks from a local elementary school.  Mills, who openly expressed his hatred of children to investigators, was fixated on imagery depicting depraved violence inflicted upon school-aged girls and young women, and he was armed with a cache of some of the most fearsome assault weapons legally available for purchase by private citizens, including the same model rifle used in the Sandy Hook tragedy.  We are extremely grateful that the excellent work of our Homeland Security agents and our Italian law enforcement partners led to his arrest before he could harm children in ways beyond his online victimization of those depicted in the horrific images that he spent over a decade collecting.”  
This case is being investigated by the United States Department of Homeland Security, with assistance from Italy’s Centro Nazionale per il Contrasto alla Pedopornografia On-line, which is part of the Italian State Police Postal and Communication Service.  This case is being prosecuted by Assistant United States Attorney Edward J. McAndrew.

For more information about reporting online child exploitation to the national CyberTipline, visit the National Center for Missing and Exploited Children’s website at: www.missingkids.com.  For more information about the United States Department of Justice’s Project Safe Childhood program, visit http://www.justice.gov/psc/.

WILMINGTON, Del. – Sean Lawrence, age 40, of Kansas City, Missouri, pled guilty today to Transportation of Child Pornography, in violation of federal law.  Charles M. Oberly, III, United States Attorney for the District of Delaware, announced the guilty plea following a hearing in the United States District Court for the District of Delaware.

Lawrence was previously convicted in Missouri in 1995 and 2005 of sodomizing two young boys.  He was sentenced to five years in prison for each offense and was required to register as a sex offender upon his release.

As a result of his prior convictions for child sex offenses, Lawrence faces enhanced sentencing penalties under federal law, including a mandatory minimum sentence of fifteen years, and a maximum sentence of forty years, in prison.  Lawrence also faces a term of supervised release following his prison sentence of five years to life, and will be required to register as a sex offender in any U.S. jurisdiction in which he lives, works, or attends school.  Lawrence will be sentenced on January 6, 2014 by United States District Judge Sue L. Robinson.

According to statements made and documents filed in court, Lawrence came to the attention of a Wilmington-based Homeland Security Investigations special agent in February 2013, during an online undercover investigation into non-public, peer-to-peer networks being used to distribute child pornography.  Lawrence provided the undercover agent, who was posing as a man interested in trading images of child pornography, with access to his non-public, peer-to-peer network.  The undercover agent then downloaded 11 video files of child pornography from Lawrence’s computer. 

During the investigation, law enforcement agents determined that Lawrence was distributing child pornography from various locations via a wireless mobile device.  On February 14, 2013, Special Agents of the Wilmington, Delaware and Philadelphia HSI offices partnered with Kansas City-based agents to apprehend Lawrence while he was actually transmitting and receiving images of child pornography via the Internet.  The local agents conducted simultaneous online sessions with Lawrence in an effort to geo-locate him.  Data associated with those online sessions indicated that Lawrence was then accessing the Internet from the second floor of Metropolitan Community College Library, in Kansas City, Missouri.  The local agents quickly relayed this information to the Kansas City-based HSI Special Agents, who then found Lawrence in the back corner of the campus library.  Lawrence had an open laptop in front of him and was downloading a video of child pornography set to music when he was apprehended. 

A subsequent forensic examination of computer equipment seized from Lawrence in the library and at his residence resulted in the discovery of over 10,000 still images and 200 videos of child pornography that Lawrence had downloaded to those devices.  The depictions of child pornography featured mostly prepubescent boys engaged in sexual acts with adult males or other boys.  A number of the files depict violence, sadistic or masochistic abuse or bondage. 

During an interview with law enforcement agents, Lawrence stated that he had traded hundreds of child pornography images and videos via file sharing programs and email each day since 1999, except during his time in prison.  Defendant estimated that he has traded 100-1,000 images of child pornography a day since 1998-1999.  He further estimated that he traded child pornography files with an average of about 1-3 people per day via email.  Lawrence also told the agents that he went to the Metropolitan Community College campus approximately 3-4 days a week to use the wireless Internet to receive and distribute child pornography.  Lawrence said that he also utilized the wireless networks at the public library, and in McDonalds and Burger King locations to distribute and receive child pornography.    

This case is being investigated by the Department of Homeland Security, Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Edward J. McAndrew.

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Ronaldo Edmund, age 38, of Wilmington, Delaware, was sentenced on September 9, 2013, to a term of imprisonment of fifteen (15) years for his role as a leader of an international drug trafficking conspiracy.

 According to facts introduced in prior hearings, Edmund was the leader of an organization which recruited multiple drug couriers to travel to Panama in order to smuggle cocaine and heroin into the United States.  Edmund, a Panamanian national, facilitated and coordinated the travel of the couriers to Panama, and he maintained and managed contact with the Panamanian sources of supply.  Agents identified a total of at least nineteen (19) couriers who took smuggling trips to Panama on behalf of the organization, and who smuggled, or attempted to smuggle, more than thirteen (13) kilograms of cocaine and five kilograms of heroin from Panama to Wilmington. 

The investigation also uncovered a separate source of supply, Saleem A. Sharif, a former West Point graduate and Captain in the United States Army, who shipped multiple kilograms of heroin from Kabul, Afghanistan, to the United States.  Sharif and three other individuals – Charles Richardson, Darrold Thomas, and Sayeed A. Behrooz – have pleaded, or are scheduled to plead guilty, to offenses relating to the shipment of heroin from Afghanistan.

To date, the government has charged twenty-three individuals in the United States with drug trafficking offenses as a result of the investigation.  All but four of those defendants – each of whom remain abroad in Panama – have pleaded guilty, or have agreed to plead guilty, to drug-related offenses.  A listing of the charged defendants and their current status is set forth in Attachment A.

United States Attorney Charles M. Oberly, III, stated, “I commend the hard work and relentless dedication of our law enforcement partners over the past four years in dismantling two major drug trafficking organizations that imported cocaine and heroin from Panama and Afghanistan into the United States.  The fact that these drugs made it onto the streets of Wilmington and our surrounding communities demonstrates the reach of international drug trafficking organizations – and the importance of utilizing all necessary resources to stop them.  The sentence imposed on Mr. Edmund is significant, reflects his leadership role in the offense, and should serve as a serious deterrent for others in the community who would consider getting involved in international drug smuggling.”

The investigation was led by the Drug Enforcement Administration, the Department of Homeland Security – Homeland Security Investigations, the Internal Revenue Service – Criminal Investigation Division, and the Wilmington Police Department. 

Investigators also received invaluable assistance from the Panamanian National Police; the United States Attorney’s Office for the Southern District of Texas; the United States Marshals Service for the District of Delaware; the Newark (Delaware) Police Department; the Delaware State Police; the New Castle County Police Department; the Delaware Department of Corrections, Probation and Parole; the Cecil County (Maryland) Drug Task Force; the Pennsylvania State Police; the Maryland State Police; and the Elkton (Maryland) Police Department.

This case is being prosecuted by Assistant United States Attorney Robert F. Kravetz.  For further information, contact Press Information Officer Kimberlynn Reeves at (302) 573-6277, ext. 16287.

ATTACHMENT A
Status of Defendants Charged in Panama/Afghanistan Drug Investigation

Tissany Buckham

Delaware

11-63-RGA

Sentenced on April 10, 2013, to 22 months imprisonment

Kimberly Fowler

Delaware

11-63-RGA

Completed pretrial diversion on November 6, 2012

Kelvin Cook

Delaware

11-63-RGA

Sentenced on June 20, 2013, to 180 months imprisonment

Julio Archer

Delaware

11-63-RGA

Sentenced on June 11, 2013, to 60 months imprisonment

Roumik Banerjee

Delaware

11-63-RGA

Sentenced on April 3, 2013, to 57 months imprisonment

Mia Poteat

Delaware

11-63-RGA

Sentenced on April 3, 2013, to 37 months imprisonment

Tina Simmons

Delaware

11-63-RGA

Sentenced on May 7, 2013, to three years’ probation and six months home detention

Tessa Snyder

Delaware

11-63-RGA

Pleaded guilty on May 18, 2012; pending sentencing

Dynisha Revel

Delaware

11-63-RGA

Charged defendant, currently incarcerated in Panama

Raabia Munir

Delaware

11-63-RGA

Charged defendant; a plea hearing is scheduled for October 16, 2013

Sharon Butera

Delaware

11-63-RGA

Charged defendant, currently incarcerated in Panama

Efrain Dixon

Delaware

11-63-RGA

Charged defendant, Panamanian national

Benjamin Carpenter

Delaware

11-63-RGA

Charged defendant, Panamanian national

Tara Resto

Delaware

09-102-GMS

Pleaded guilty on April 13, 2010; sentencing hearing scheduled for September 26, 2013

Kevin Morris

Delaware

12-41-RGA

Pleaded guilty on July 25, 2012; sentencing hearing scheduled for October 22, 2013

Saleem A. Sharif

Delaware

12-53-RGA

Sentenced on September 4, 2013, to 120 months imprisonment

Charles Richardson

Delaware

12-44-RGA

Sentenced on January 29, 2013, to 60 months imprisonment

Darrold Thomas

Delaware

12-65-RGA

Sentenced on August 27, 2013, to 54 months imprisonment

Sayeed A. Behrooz

Delaware

13-93-RGA

Charged defendant; plea hearing scheduled for October 15, 2013

Neisha Miller

Southern Dist. of TX

5: 11-43-01

Sentenced on September 20, 2011 to 36 months imprisonment

Gloria Miller

Southern Dist. of TX

5: 11-43-02

Sentenced on September 20, 2011 to 36 months imprisonment

Christine A. Blevins

Southern Dist. of TX

5: 09-388-01

Sentenced on March 4, 2010, to 60 months imprisonment

Bridgette Davidson

Southern Dist. of TX

5: 09-388-02

Sentenced on March 12, 2010, to 60 months imprisonment

WILMINGTON, Del. – Gary Crawford, age 42, of Bridgeton, New Jersey, was sentenced to 97 months in prison today for his role in a conspiracy to file hundreds of false federal income tax returns seeking First Time Home Buyer Credits for the 2008 tax year.  Crawford also was order to pay $1,020,388.00 in restitution to the United States Treasury, and was sentenced to three years of supervised release, which will commence following his prison term. 

According to statements made at today’s hearing and documents filed in court, Crawford and his co-conspirators used at least 47 Internet service accounts to file at least 358 fraudulent returns seeking the payment of $3,060,770 in tax refunds which were transferred into at least 30 bank accounts and more than 100 prepaid debit card accounts.  All of the Internet service accounts and virtually all of the financial accounts were in names other than Crawford’s.  The United States Treasury actually paid out $2,265,254 in refunds on 293 fraudulent returns filed by Crawford and his co-conspirators.

The tax fraud scheme was uncovered in 2009, when the IRS’s Fraud Detection Center flagged a large number of false, electronically filed 2008 personal income tax returns seeking First Time Home Buyer Credits by individuals claiming to have purchased homes in Salem and Penns Grove, New Jersey.  The First Time Home Buyer Credit permitted a taxpayer to receive a credit of up to $8,000 if the individual purchased a qualifying home between April 8, 2008 and December 1, 2009.  To receive the credit, the taxpayer must have been employed and have owed taxes against which the credit could be applied.  The IRS confirmed that the individuals listed in the fraudulent returns had not actually purchased homes and, in many cases, had not been employed by the companies listed in their tax returns during 2008. 

Following the sentencing hearing, United States Attorney Charles M. Oberly, III, stated, Tax frauds, such as that committed by Gary Crawford, hurt all those who pay their taxes and claim legitimate refunds.  Fortunately, the IRS has programs in place to flag schemes like Crawford’s.  When identified, such criminal activity will be prosecuted by this office and incarceration sought whenever justified.”

IRS Criminal Investigation Special Agent in Charge Akeia Conner said, “Individuals who commit refund fraud and identity theft of this magnitude and with this degree of trickery, dishonesty and deceit, deserve to be punished to the fullest extent of the law. IRS Criminal Investigation and the United States Attorney's Office, remain vigilant in identifying, investigating and prosecuting those individuals who seek to undermine the integrity of the U.S. tax system.” 

This case is being investigated by the Internal Revenue Service and is being prosecuted by Assistant United States Attorneys Edward J. McAndrew and Ilana H. Eisenstein.

Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Kirk A. Simmons, age 59, of Newark, Delaware, was arrested earlier today and charged by criminal complaint with attempted coercion and enticement of a minor, in violation of Title 18, United States Code, Section 2422(b).  This federal criminal charge results from an online sting operation conducted in June and July 2013 by an undercover Delaware State Police detective posing as a father who posted an online advertisement seeking other men to join him for sex with his 13-year-old daughter. 

At the time of the sting operation, Simmons was employed as a Vice President, Market Information Manager II at Bank of America’s Newark, Delaware facility.  Bank of America terminated Simmons’s employment following notification of his alleged conduct.  According to his LinkedIn profile, Simmons also currently works as a “Professional private tutor” through WyzAnt Tutoring, “providing private in-home tutoring at the high school and college levels.”         

If convicted of the charges, Simmons faces a mandatory minimum sentence of at least ten years of imprisonment and up to life in prison, a fine of up to $250,000, and a term of supervised release of at least five years to life following his prison sentence.  He also will be required to register as a sex offender in any jurisdiction in which he resides, works or attends school. 

Simmons began his online relationship with the undercover “father” in June 2013, when Simmons responded to a “personals” advertisement for “fam love/taboo” on an adult social networking website.  Through online chats, Simmons indicated and graphically described that he wanted to engage in sexual activity with the purported “father” and his child.  After a number of online conversations, the “father” agreed to bring his “13-year-old daughter” to a Newark hotel on July 18, 2013, where Simmons would meet them for sexual activity.

Simmons was arrested by the Delaware State Police Child Predator Task Force on July 18, 2013, after he arrived at a Newark hotel to engage in sex acts with the fictitious “father” and “13-year-old daughter.”  Shortly before that meeting, Simmons was under surveillance by Delaware State Police and was observed driving directly from his workplace to the hotel.  In a recorded interview with a Delaware State Police detective, Simmons admitted that he intended to engage in sexual activity with the fictitious “father” and “13-year-old daughter” at the hotel.  Simmons also admitted that he brought a digital camera with him to photograph the sexual activity.

Simmons was released from state custody after posting bail in July 2013 on a state charge of Attempted Rape Third Degree of a Minor filed in Delaware Superior Court.  The Delaware Child Predator Task Force thereafter referred the case to the United States Department of Homeland Security and the United States Attorney’s Office for possible federal prosecution.  The state charge remains pending.   

 Simmons will remain in federal custody pending a detention hearing scheduled for Tuesday, September 3, 2013, at 8:30 a.m., before Chief United States Magistrate Judge Mary Pat Thynge.  At that hearing, the court will determine whether to detain Simmons or to release him on bail conditions pending trial.