Northern District of Illinois

ROCKFORD — A Rockford man has been sentenced to eleven years in federal prison on a drug trafficking charge. 

ROMEO TRAMMELL, 32, pleaded guilty to the charge on Sept. 4, 2020.  According to a written plea agreement, Trammell distributed approximately 24.8 grams of cocaine base - in the form of crack cocaine - to an individual in Rockford on Apr. 5, 2018. 

U.S. District Judge John Z. Lee imposed the sentence Wednesday in federal court in Rockford.

The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; and Daniel O’Shea, Chief of the Rockford Police Department.  The government was represented by Assistant U.S. Attorney Talia Bucci.

CHICAGO — A suburban Chicago man pleaded guilty in federal court today to conducting an illegal sports gambling business and laundering the proceeds through an offshore company.

VINCENT DELGIUDICE, also known as “Uncle Mick,” 55, of Orland Park, pleaded guilty to one count of conspiracy to commit money laundering, which is punishable by up to 20 years in federal prison, and one count of conducting an illegal gambling business, which is punishable by up to five years.  U.S. District Judge Virginia M. Kendall did not immediately set a sentencing date.  A status hearing was set for March 8, 2021.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI; and Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.  The government is represented by Assistant U.S. Attorneys Terry Kinney, Ankur Srivastava, and Abigail Peluso.

The FBI’s Integrity in Sport and Gaming Initiative (ISG) is designed to tackle illegal sports gambling and combat threats of influence from criminal enterprises.

Delgiudice admitted in a plea agreement that from 2016 to 2019 he directed an illegal bookmaking business in Chicago, Lemont, Frankfort, Orland Park, and Woodridge.  Delgiudice and his agents accepted wagers on the outcome of professional football, basketball, baseball, and hockey games, as well as collegiate sporting events, the plea agreement states.  Delgiudice further admitted that he retained the services of a company in Costa Rica to manage the accounting, recordkeeping, and website management of his bookmaking operation, and that in 2018 and 2019 he sent the company at least $113,625 to promote the continued operation of the illegal gambling business.

CHICAGO — A federal grand jury has indicted a real estate developer and three others for allegedly participating in a mortgage fraud scheme that defrauded financial institutions out of at least $3 million.

ANDRZEJ LAJEWSKI, who owned Des Plaines-based Highland Consulting Corp., and Chicago-based Quality Management and Remodeling Inc., schemed with two mortgage professionals and the owner of a remodeling company to fraudulently obtain at least $3 million in mortgage loans by making and causing to be made materially false representations to financial institutions regarding the buyers’ qualifications for the loans, according to an indictment returned Jan. 28, 2021, in U.S. District Court in Chicago.  The false representations concerned the buyers’ employment history, income, assets, source of down payment, and intention to occupy the properties, the indictment states.  In some instances Lajewski fraudulently claimed to lenders that the buyers were employed by his companies – even though he knew that was untrue – to help the buyers qualify for the mortgage loans, the indictment states.

The alleged fraud scheme lasted from 2010 to 2016 and involved numerous properties on the South Side of Chicago.

The indictment charges multiple counts of financial institution fraud against Lajewski, 53, formerly of Wheeling, the two mortgage professionals – loan originator AGNIESZKA SIEKOWSKI, 46, of Northbrook, and loan processor ALDONA BOBROWICZ, 45, of Arlington Heights – and the home remodeler, ANDRZEJ BUKOWSKI, 66, formerly of Wheeling.  Arraignments for Siekowski and Bobrowicz are scheduled for Friday at 10:00 a.m. before U.S. District Judge Martha M. Pacold.  Arraignments for Lajewski and Bukowski have not yet been scheduled.  

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Brad Geary, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General.  The government is represented by Assistant U.S. Attorneys Kalia Coleman and Jason Yonan.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each count of financial institution fraud is punishable by up to 30 years in federal prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A Chicago man has been charged in federal court with carjacking for allegedly violently taking a vehicle from a victim last summer.

OMARION FRANKLIN, 18, carjacked an Infiniti G35 sedan from a victim in Skokie on July 12, 2020, according to an indictment returned Monday in U.S. District Court in Chicago.  The indictment charges Franklin with one count of carjacking, which is punishable by up to 15 years in federal prison.

Franklin is currently in law enforcement custody.  Arraignment in U.S. District Court in Chicago has not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  Valuable assistance was provided by the Cook County State’s Attorney’s Office, Skokie Police Department, and Chicago Police Department.  The government is represented by Assistant U.S. Attorney Michael Kelly.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The United States has filed a complaint seeking to bar a Chicago-area tax return preparer from preparing federal income tax returns for others, the Justice Department announced today.

The civil complaint against Lavon Boyd was filed in the U.S. District Court for the Northern District of Illinois and alleges that Boyd prepared federal income tax returns for Chicago-area taxpayers that significantly understated his customers’ tax liabilities by fabricating business losses. The suit alleges that Boyd fabricated or exaggerated his customers’ business expenses. The suit also charges that Boyd allegedly fabricated child care expenses on at least one of his customers’ tax returns.

According to the complaint, the Internal Revenue Service (IRS) interviewed 15 of Boyd’s customers, each of whom stated that they did not incur the business expenses reported on their returns prepared by Boyd on their behalf, nor did they give Boyd any reason to believe that such expenses were legitimate. The complaint further alleges that, by repeatedly understating his customers’ tax liabilities, Boyd has caused the United States to lose substantial tax revenue.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant (more information can also be found here). The IRS has information on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In addition, IRS Free File, a public-private partnership, offers free, online tax preparation and filing options on IRS-partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronic federal tax forms that can be filled out and filed online for free.

In the past decade, the Department of Justice's Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

CHICAGO — A Chicago investment manager who fled the country after being charged in a fraud scheme has been returned to the United States from Indonesia.

MARCUS BEAM was indicted in January 2020 on charges he fraudulently obtained money from women he met online.  According to the indictment, Beam falsely claimed to the women and other investors that their funds would be invested in stocks such as Uber and Lyft.  Beam instead spent the money for his own personal benefit, including rent, auto loans, and retail purchases, resulting in a loss to investors of at least $500,000, the indictment alleges.

Beam, 50, of Woodridge, fled the United States after being released on bond in January 2020.  The U.S. Marshals Service located Beam in Bali, Indonesia, and he was detained there in July 2020 on an INTERPOL Red Notice by the Indonesia National Police, National Central Bureau, and INTERPOL.  On Jan. 27, 2021, Beam was deported from Indonesia and returned in custody to Chicago.  He pleaded not guilty to ten counts of wire fraud and mail fraud during his arraignment Wednesday afternoon before U.S. Magistrate Judge Heather K. McShain in Chicago.

The arraignment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; William Hedrick, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago; Jeffrey A. Monhart, Regional Director of the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration; Tanya Solov, Director of the Illinois Securities Department of the Illinois Secretary of State; and David Gelement, Chief Deputy U.S. Marshal.  The government is represented by Assistant U.S. Attorney Jacqueline Stern.

The officials acknowledged the substantial assistance of the news media whose coverage generated leads prior to Beam’s apprehension in Indonesia.  The officials also acknowledged the substantial assistance of the Indonesian National Police, National Central Bureau, INTERPOL, the Directorate General of Immigration, and the Bali Regional Police.  The Justice Department’s Office of International Affairs provided assistance in securing the defendant’s return from Indonesia.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each count in the indictment is punishable by up to 20 years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

Download Beam indictment

CHICAGO — A federal grand jury has indicted a Chicago man on carjacking and firearm charges for allegedly violently taking vehicles in Chicago and Cicero and attempting to steal another in Oak Park.

JAHEIM HENYARD, 19, stole a Dodge Charger from an Uber Eats driver in Chicago on Aug. 14, 2020, and a Kia Optima Hybrid LX from a victim in Cicero on Aug. 20, 2020, according to a seven-count indictment returned Tuesday in U.S. District Court in Chicago.  Henyard also attempted to steal a Mercedes GLC 300 by brandishing a firearm at a victim in Oak Park on July 17, 2020, but was unsuccessful, the indictment states.

The indictment also accuses Henyard and two others – DARIUS YOUNG and XAVIER TATE – of participating in the robbery of a UPS truck in Oak Park on Aug. 21, 2020.  During the robbery, the UPS driver was ordered to lay face down in the street while the offenders removed boxes from the truck and drove off, according to a criminal complaint previously filed in the case.

The indictment charges Henyard with two counts of carjacking, two counts of robbery, one count of attempted carjacking, and one count of using, carrying, and brandishing a firearm during a crime of violence.  Young, 25, of Berwyn, and Tate, 23, of Chicago, are charged with robbery.  Tate also faces a firearm count for allegedly illegally possessing a semiautomatic handgun in Chicago on the same day as the UPS heist.  Arraignments in federal court in Chicago have not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The Chicago Police Department, Oak Park Police Department, and Cicero Police Department participated in the investigation.  The Cook County State’s Attorney’s Office provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Charles W. Mulaney, Timothy Storino, and Albert Berry III.

“Our message to would-be carjackers is simple: Committing a senseless act of violence like carjacking will earn you a home in federal prison for a long time,” said U.S. Attorney Lausch.  “Our office is working closely with our law enforcement partners to pursue, prosecute, and detain violent carjackers and gun offenders in Chicago and surrounding area.”

“Carjackers have long terrorized our local communities with acts of violence, but through the combined efforts of our police, federal, and prosecutorial partners we are bringing perpetrators to justice,” said FBI SAC Buie.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The carjacking and attempted carjacking counts are each punishable by up to 15 years in federal prison.  The charge against Henyard for brandishing a firearm during a crime of violence carries a minimum prison term of seven years and a maximum term of life, which must be served consecutive to the sentence imposed for the underlying carjacking offense.  The maximum sentence for robbery is 20 years.  The firearm charge against Tate is punishable by up to ten years.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A Lake County man has been charged in federal court with attempted carjacking for allegedly trying to violently carjack a vehicle at a north suburban golf course last summer.

ZAYVEON THOMAS, 19, of Beach Park, attempted to hijack a 2018 Lexus IS300 sedan from a victim in a parking lot of the golf course in Glencoe on July 2, 2020, according to an indictment returned Monday in U.S. District Court in Chicago.  The indictment charges Thomas with one count of attempted carjacking, which is punishable by up to 15 years in federal prison.  Thomas is currently in law enforcement custody.  Arraignment in federal court in Chicago has not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The Cook County State’s Attorney’s Office provided valuable assistance.  The government is represented by Assistant U.S. Attorney Michael Kelly.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO —A Chicago man has been indicted on federal criminal charges for allegedly conspiring with a U.S. Postal Service employee and others to sell U.S. government checks stolen from the mail.

An indictment returned Monday in federal court in Chicago charges AKEEM KOSOKO, 26, with one count of conspiracy to steal mail and government funds, three counts of embezzlement of government property, and three counts of receipt of stolen mail.  Arraignment has not yet been scheduled.

According to the indictment, Kosoko conspired with his brother, who worked as a postal carrier, and others to have U.S. Treasury checks taken from the mail and sold to others.  The checks were issued last year as part of the Coronavirus Aid, Relief, and Economic Security Act.  Kosoko’s brother, AHMED KOSOKO, 35, of Chicago, was previously charged by federal criminal complaint with one count of conspiracy to steal mail and government funds.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; Andre Martin, Special Agent-In-Charge of the Chicago Great Lakes Area Field Office of the U.S. Postal Service Office of Inspector General; William Hedrick, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago; and Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.  The government is represented by Special Assistant U.S. Attorney M. Claire Nicholson.

The public is reminded that an indictment is not evidence of guilt.  Defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

ROCKFORD — A former employee of the City of Rochelle was charged today with fraudulently obtaining at least $150,000 from a non-profit business association.

SCOTT KOTESKI, 58, of Rochelle, is charged with one count of wire fraud, according to a criminal information filed in U.S. District Court in Rockford.  Arraignment has not yet been scheduled. 

The charge was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The Illinois State Police assisted in the investigation.  The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.

According to the information, Koteski was selected by the city to sit on the board of directors of a non-profit business association that provided broadband internet technology to smaller municipalities in northern Illinois.  Starting in 2011, Koteski was selected as the treasurer of that association.  As treasurer, Koteski handled the invoicing and billing of the member municipalities, and as of February 2012 had signatory authority on the association’s bank account.  According to the information, from September 2012 through April 2018, Koteski fraudulently obtained from the association at least $150,000, which he used for his own benefit without the association’s knowledge or consent.  Koteski allegedly wrote numerous checks to himself from the association’s bank account and deposited them into his personal bank account for his personal benefit. 

Koteski concealed his acts by writing false information on the memo line to make it appear the checks were for reimbursement of personal monies Koteski spent for the association when, in fact, Koteski was not entitled to reimbursement, the information states.  In 2018, Koteski made online payments from the association’s bank account to a credit card company to pay balances on his personal credit card, and to an online loan financing company to pay balances on Koteski’s loan, the information states.

Wire fraud carries a maximum sentence of 20 years’ imprisonment.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an information is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

CHICAGO — A convicted felon from Chicago has been sentenced to eleven years in federal prison for illegally possessing a loaded gun and offering to pay witnesses to lie on his behalf.

RAMONE SHAFFERS illegally possessed the handgun and extended magazine on Oct. 16, 2016, in a parked car in the Woodlawn neighborhood on the South Side of Chicago.  Shaffers had previously been convicted of a felony and was not legally allowed to possess a firearm. 

Three passengers were in the car at the time of Shaffers’s illegal possession.  After Shaffers was arrested, he directed individuals to offer payment to the passengers in exchange for giving false testimony to law enforcement.

A federal jury in December 2019 convicted Shaffers, 38, on one count of illegal possession of a firearm by a felon, and one count of obstruction of justice.  U.S. District Judge John J. Tharp, Jr., imposed the sentence Tuesday in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; and David Brown, Superintendent of the Chicago Police Department.

“Standing alone, the defendant’s possession of a firearm with a serial number plate removed and an extended magazine, is a serious crime,” Assistant U.S. Attorneys Albert Berry III and Kavitha J. Babu argued in the government’s sentencing memorandum.  “However, the defendant went further.  In a selfish effort to absolve himself, the defendant attempted to disrupt the administration of justice.” 

Holding convicted felons accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods and Project Guardian – the Department of Justice’s violent crime reduction strategies.  In the Northern District of Illinois, U.S. Attorney Lausch and law enforcement partners have deployed the PSN and Guardian programs to attack a broad range of violent crime issues facing the district, particularly firearm offenses.

The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced a settlement today that will require Midwest Can Company, one of the largest manufacturers of portable fuel containers in the United States, to pay a $1.7 million civil penalty to resolve Clean Air Act violations.

The violations resulted from failure to disclose test results showing that Midwest’s portable fuel containers did not meet regulatory standards and emitted higher amounts of pollutants than allowed by federal law. Under the terms of the settlement, Midwest will also conduct two supplemental emission tests in the next four years on its currently certified co-extruded plastic portable fuel containers and submit complete results from those tests to the EPA.

“Today’s settlement with Midwest Can Company marks the Justice Department’s first enforcement action against portable fuel container manufacturers under the Clean Air Act,” said Jonathan D. Brightbill, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “This settlement helps maintain the integrity of regulations governing portable fuel containers and ensures that manufacturers who are responsible for complying with the rules do not gain an unfair competitive advantage from subverting regulatory requirements.”

“The defendant submitted false and incomplete information to the EPA and prevented EPA from timely implementing and enforcing regulations intended to protect public health and our air,” said Susan Bodine, EPA’s Office of Enforcement and Compliance Assurance Assistant Administrator. “EPA will continue to enforce against companies that fail to comply with information submission obligations.”

“We are pleased to announce this settlement with Midwest Can Company, one of the largest manufacturers of portable fuel containers in the United States,” said John Lausch Jr., U.S. Attorney for the Northern District of Illinois. “In paying a significant penalty and agreeing to perform supplemental testing, Midwest Can Company will be held accountable for its disregard of proper testing and reporting procedures in violation of the Clean Air Act.”

Clean Air Act regulations require that all portable fuel containers sold in the United States must be covered by a certificate of conformity issued by EPA confirming that the containers meet emission limits for volatile organic compounds (VOCs). The complaint filed simultaneously with the settlement alleges that Midwest violated the Clean Air Act because its 2014  applications for certificates of conformity failed to disclose test results showing that the portable fuel containers did not meet regulatory standards and emitted higher amounts of VOCs than allowed by federal law.

EPA discovered the violations following a series of investigative actions from 2016-2018. In 2016, EPA conducted emission testing on five of Midwest’s portable fuel containers sold under the 2014 certificates of conformity. All five containers failed the emission test. EPA proceeded in 2017 to inspect the test lab utilized by Midwest to conduct emission testing of its portable fuel containers. In 2018, EPA received and reviewed additional information from the test lab, which revealed the violations related to Midwest’s applications for certificates of conformity.

VOCs include a variety of chemicals that may produce adverse health effects such as eye, nose, and throat irritation, headaches, nausea, and damage to the liver, kidney, and the central nervous system. VOCs also contribute to the formation of ground level ozone. Breathing ozone can trigger a variety of health problems, particularly for children, the elderly, and anyone with lung diseases such as asthma. Ground level ozone can also have harmful effects on sensitive vegetation and ecosystems.  

The consent decree has been lodged with the U.S. District Court for the Northern District of Illinois and is subject to public comment for a period of at least 30 days. Notice of the lodging of the consent decree will appear in the Federal Register, allowing for a 30-day public comment period before the consent decree can be entered by the court as final judgment. The consent decree will be available for viewing at https://www.justice.gov/enrd/consent-decrees.

Members of the public can help protect our environment by identifying and reporting environmental violations.  Learn more here:  https://www.epa.gov/enforcement/report-environmental-violation-general-information.

WASHINGTON – The U.S. Environmental Protection Agency and the U.S. Department of Justice today announced a settlement that will require Midwest Can Company, one of the largest manufacturers of portable fuel containers in the United States, to pay a $1.7 million civil penalty to resolve Clean Air Act violations.

The violations resulted from failure to disclose test results showing that Midwest’s portable fuel containers did not meet regulatory standards and emitted higher amounts of pollutants than allowed by federal law. Under the terms of the settlement, Midwest will also conduct two supplemental emission tests in the next four years on its currently certified co-extruded plastic portable fuel containers and submit complete results from those tests to the EPA.

“We are pleased to announce this settlement with Midwest Can Company, one of the largest manufacturers of portable fuel containers in the United States,” said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois. “In paying a significant penalty and agreeing to perform supplemental testing, Midwest Can Company will be held accountable for its disregard of proper testing and reporting procedures in violation of the Clean Air Act.”

“Today’s settlement with Midwest Can Company marks the Justice Department’s first enforcement action against portable fuel container manufacturers under the Clean Air Act,” said Jonathan D. Brightbill, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “This settlement helps maintain the integrity of regulations governing portable fuel containers and ensures that manufacturers who are responsible for complying with the rules do not gain an unfair competitive advantage from subverting regulatory requirements.”

“The defendant submitted false and incomplete information to the EPA and prevented EPA from timely implementing and enforcing regulations intended to protect public health and our air,” said Susan Bodine, EPA’s Office of Enforcement and Compliance Assurance Assistant Administrator. “EPA will continue to enforce against companies that fail to comply with information submission obligations.”

Clean Air Act regulations require that all portable fuel containers sold in the United States must be covered by a certificate of conformity issued by EPA confirming that the containers meet emission limits for volatile organic compounds (VOCs). The complaint filed simultaneously with the settlement alleges that Midwest violated the Clean Air Act because its 2014 applications for certificates of conformity failed to disclose test results showing that the portable fuel containers did not meet regulatory standards and emitted higher amounts of VOCs than allowed by federal law.

EPA discovered the violations following a series of investigative actions from 2016 to 2018. In 2016, EPA conducted emission testing on five of Midwest’s portable fuel containers sold under the 2014 certificates of conformity. All five containers failed the emission test. EPA proceeded in 2017 to inspect the test lab utilized by Midwest to conduct emission testing of its portable fuel containers. In 2018, EPA received and reviewed additional information from the test lab, which revealed the violations related to Midwest’s applications for certificates of conformity.

VOCs include a variety of chemicals that may produce adverse health effects such as eye, nose, and throat irritation, headaches, nausea, and damage to the liver, kidney, and the central nervous system. VOCs also contribute to the formation of ground level ozone. Breathing ozone can trigger a variety of health problems, particularly for children, the elderly, and anyone with lung diseases such as asthma. Ground level ozone can also have harmful effects on sensitive vegetation and ecosystems.  

The consent decree has been lodged with the U.S. District Court for the Northern District of Illinois and is subject to public comment for a period of at least 30 days. Notice of the lodging of the consent decree will appear in the Federal Register, allowing for a 30-day public comment period before the consent decree can be entered by the court as final judgment. The consent decree will be available for viewing at https://www.justice.gov/enrd/consent-decrees.

Members of the public can help protect our environment by identifying and reporting environmental violations.  Learn more by logging on to https://www.epa.gov/enforcement/report-environmental-violation-general-information.

CHICAGO — The former chief financial officer of a suburban IT consulting firm has been indicted on federal fraud charges for allegedly embezzling more than $1.3 million in company funds.

ANTHONY FREMAREK fraudulently caused funds from two of the Schaumburg-based company’s bank accounts to be used to pay his personal credit cards, according to an indictment unsealed Jan. 14, 2021, in U.S. District in Chicago.  Fremarek attempted to conceal the embezzlement by falsifying entries in the company’s accounting system to disguise the payments as seemingly legitimate business expenses, the indictment states.  The alleged fraud scheme spanned from 2013 to 2019.

The indictment charges Fremarek, 49, of Plainfield, with four counts of wire fraud and two counts of making false statements to a financial institution.  Fremarek has pleaded not guilty to the charges. 

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Christopher Diiorio, Special Agent-in-Charge of the U.S. Secret Service Chicago Field Office.  The government is represented by Assistant U.S. Attorney Ashley A. Chung.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each false statement count carries a maximum sentence of 30 years in federal prison, while each count of wire fraud is punishable by up to 20 years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A former executive of a Silicon Valley video streaming service has been indicted by a federal grand jury in Chicago for allegedly engaging in a “pump and dump” stock fraud scheme.

While serving as a director of San Jose, Calif.-based Nanotech Entertainment Inc. (“NTEK”), DAVID FOLEY schemed with an investment manager to manipulate purchases and sales of shares in NanoTech Gaming Inc. (“NTGL”), a Las Vegas, Nev.-based business that had formerly operated as a division of NTEK, according to a ten-count indictment returned Jan. 11, 2021, in U.S. District in Chicago.  The indictment charges Foley, 55, of Los Gatos, Calif., and the investment manager, BENNIE BLANKENSHIP, 49, of New Carlisle, Ohio, with wire fraud and securities fraud.  Arraignments are scheduled for Jan. 19, 2021, at 10:00 a.m., before U.S. District Judge Steven C. Seeger.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government is represented by Assistant U.S. Attorney Matthew Getter.

According to the indictment, Foley acquired shares in NTGL and fraudulently caused them to be unrestricted.  Blankenship promoted the NTGL shares by exaggerating the stock’s prospects for success, thereby artificially inflating the share price, the indictment states.  Foley then schemed with others to sell the pumped-up stock to the investing public, the indictment states.  The fraud scheme lasted from 2013 to 2016, and during a portion of that time Foley was incarcerated in California on an unrelated criminal conviction, the indictment states.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

ROCKFORD — A Rockford man was arrested Thursday on a federal arson charge for allegedly setting fire to a local retail business. 

SEAN CARDENAS, 20, was indicted on Jan. 12, 2021, by a federal grand jury in Rockford on one count of maliciously damaging and destroying, and attempting to damage and destroy, by means of fire, a building at 6260 E. State St. in Rockford.  The alleged arson occurred on May 30, 2020.  

Cardenas pleaded not guilty at his arraignment Thursday afternoon before U.S. District Judge Steven C. Seeger.  Cardenas was ordered to remain in federal custody until a detention hearing on January 19, 2021, at 11:30 a.m.

The indictment and arrest were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives.  The Rockford Police Department and Rockford Fire Department assisted in the investigation.  The government is represented by Assistant U.S. Attorney Jessica S. Maveus.

The arson charge carries a mandatory minimum sentence of five years in federal prison and a maximum sentence of 20 years, in addition to a fine of up to $250,000.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

The public is reminded that an indictment contains only a charge and is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

ROCKFORD — A Rockford man was indicted Tuesday by a federal grand jury on charges of producing child pornography and committing felony sex offenses while he was required to register as a sex offender. 

GARY WILSON, 50, was charged with four counts of producing child pornography via the internet and one count of committing a felony offense involving a minor when he was required to be registered as a sex offender.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The Rockford Police Department assisted in the investigation.  The government is represented by Assistant U.S. Attorney Michael D. Love.

According to the indictment, between June 2018 and April 2019 Wilson knowingly enticed four minors to engage in sexually explicit conduct for the purpose of producing a visual depiction of the conduct, and then transmitting the depiction via the internet.  The indictment also alleges that the production of child pornography by Wilson occurred while he was required to be registered as a sex offender.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each count of producing child pornography carries a mandatory minimum sentence of 15 years in federal prison and a maximum of 30 years.  The count of committing a felony offense involving a minor carries a mandatory minimum sentence of ten years in federal prison that must be served after any sentence for production of child pornography is completed.

ROCKFORD — A Freeport man was indicted Tuesday by a federal grand jury on charges related to sexual conduct with a minor. 

ERICH M. BRINKMEIER, 25, was charged with two counts of travel with intent to engage in illicit sexual conduct with a minor and one count of committing a felony offense involving a minor when he was required to be registered as a sex offender.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; and Matt Summers, Chief of the Freeport Police Department.  The Rockford Police Department assisted in the investigation.  The government is represented by Assistant U.S. Attorney Michael D. Love.

According to the indictment, Brinkmeier on Oct. 28, 2019, and Nov. 4, 2019, traveled from Illinois to Iowa with the intent of engaging in a sexual act with a 14-year-old child.  The indictment also alleges that the interstate travel and sexual acts with a child by Brinkmeier occurred while he was required to be registered as a sex offender.

Each count of travel with intent to engage in illicit sexual conduct with a minor carries a maximum penalty of up to 30 years in federal prison, and a fine of up to $250,000.  The count of committing a felony offense involving a minor carries a mandatory minimum prison sentence of ten years that must be served after any sentence on the travel counts is completed.  If Brinkmeier is convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

ROCKFORD — A man from Lake in the Hills, Ill. was indicted Tuesday by a federal grand jury on charges of traveling in interstate commerce for the purpose of engaging in illicit sexual conduct with a minor. 

KEVIN R. DUFFY, 35, was charged with four counts of traveling in interstate commerce for the purpose of engaging in illicit sexual conduct with a minor who was 15 years old and at least four years younger than Duffy. 

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The Lake in the Hills Police Department assisted in the investigation.  The government is represented by Assistant U.S. Attorney Jessica S. Maveus.

According to the indictment, Duffy traveled from Illinois to Kentucky on June 25, 2020, July 3, 2020, Aug. 5, 2020, and Oct. 1, 2020, with the intent to engage in sexual conduct with the minor.  Duffy has been in law enforcement custody since his arrest on Nov. 18, 2020.

Each count in the indictment carries a maximum penalty of up to 30 years in federal prison, and a fine of up to $250,000.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

CHICAGO — An Elk Grove Village man has been sentenced to 16 years in federal prison for trying to kill a postal carrier on New Year’s Eve 2018.

CAMERON RUEBUSCH shot the U.S. Postal Service carrier on Dec. 31, 2018, in Elk Grove Village.  The mail carrier had recently completed a delivery in the 200 block of West Brantwood Avenue when Ruebusch approached the USPS vehicle and tapped on the front passenger side door.  The mail carrier attempted to drive away as Ruebusch fired multiple shots from a handgun.  The mail carrier was wounded but survived.

Ruebusch, 25, pleaded guilty last year to one count of attempted second-degree murder of an employee of the United States, and one count of knowingly discharging a firearm during a crime of violence.  In handing down the sentence on Jan. 8, 2021, U.S. District Judge Matthew F. Kennelly found that Ruebusch obstructed justice after the shooting by disposing of the gun, discarding the clothing he had been wearing, and instructing friends to lie to law enforcement about his whereabouts.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and William Hedrick, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The Elk Grove Village Police Department provided substantial assistance.

“The seriousness of defendant’s crime cannot be overstated — he nearly killed a USPS mail carrier who was merely carrying out his official duties in delivering mail on New Year’s Eve,” Special Assistant U.S. Attorney Chester Choi argued in the government’s sentencing memorandum.  “Defendant’s actions were brazen, callous, and cowardly, and demonstrated a complete disrespect for the law.”

CHICAGO — A suburban Chicago man was arrested today on a federal criminal charge for allegedly threatening to commit violence at the upcoming presidential inauguration in Washington, D.C.

LOUIS CAPRIOTTI, 45, of Chicago Heights, Ill., is charged with transmitting a threat in interstate commerce, according to a criminal complaint filed in U.S. District Court in Chicago.  Capriotti was arrested near his home this morning.  He is scheduled to make an initial court appearance today at 3:30 p.m. CST before U.S. Magistrate Judge Gabriel A. Fuentes.

The complaint and arrest were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; and Christopher Diiorio, Special Agent-in-Charge of the U.S. Secret Service Chicago Field Office.  The U.S. Capital Police provided valuable assistance in the investigation.  The government is represented by Assistant U.S. Attorney William Dunne.

In a Dec. 29, 2020, voicemail for a U.S. House member from New Jersey, Capriotti allegedly stated that if certain individuals “think that Joe Biden is going to put his hand on the Bible and walk into that [expletive] White House on January 20th, they’re sadly [expletive] mistaken.”  Capriotti further stated in the voicemail, “We will surround the [expletive] White House and we will kill any [expletive] Democrat that steps on the [expletive] lawn,” the complaint alleges.  According to the complaint, Capriotti has a history of leaving profane voicemails for members of Congress. 

“Our office takes the security of our public servants very seriously,” said U.S. Attorney Lausch.  “Individuals who cross the line of free speech by making unlawful threats will be held accountable.” 

The public is reminded that a complaint is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  The charge in the complaint is punishable by a maximum sentence of five years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A suburban Chicago man has pleaded guilty in federal court to laundering cash proceeds from a telemarketing scheme that defrauded elderly victims.

HIRENKUMAR P. CHAUDHARI, 27, of Des Plaines, Ill., pleaded guilty on Jan. 6, 2021, to one count of money laundering.  The conviction is punishable by up to 20 years in federal prison.  U.S. District Judge Sara L. Ellis set sentencing for April 1, 2021.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; J. Russell George, Inspector General of the Treasury Department Inspector General for Tax Administration; William Hedrick, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago; Gail S. Ennis, Inspector General of the Social Security Administration; and James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  The government is represented by Assistant U.S. Attorneys Kartik K. Raman and Rick D. Young.

Chaudhari admitted in a plea agreement that he used a phony Indian passport, false name, and false address to open multiple bank accounts in the United States to receive money from victims of the telemarketing scheme.  The scheme involved phone calls from people falsely claiming to be associated with, among other agencies, the Social Security Administration and U.S. Department of Justice, stating that a victim’s identity had been stolen and that it was necessary to transfer money to various bank accounts, including the accounts opened by Chaudhari.  One of the victims was an elderly woman from Massachusetts who transferred a total of more than $900,000 from her bank and retirement accounts to accounts controlled by Chaudhari or others. 

On April 19, 2018 – one day after Chaudhari opened an account and received a $7,000 transfer from the Massachusetts victim – Chaudhari entered a bank branch in Chicago and withdrew $6,500, the plea agreement states.  Chaudhari admitted in the plea agreement that he engaged in this financial transaction knowing that the money represented proceeds of unlawful activity.

If you believe you or someone you know is a victim of elder fraud, complaints may be filed with the Federal Trade Commission online at www.ftccomplaintassistant.gov, or by calling 877-FTC-HELP.  More information about the Department of Justice’s efforts to help seniors is available at its Elder Justice Initiative webpage.

CHICAGO – A suburban Chicago businessman has been indicted on federal fraud charges for allegedly fraudulently obtaining more than $420,000 in small business loans under the Coronavirus Aid, Relief, and Economic Security Act.

CARLOS SMITH, 56, of Park Forest, Ill., allegedly engaged in fraud related to the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan Program (EIDL), two sources of relief under the CARES Act.  Smith was charged in an indictment unsealed Tuesday in the Northern District of Illinois with two counts of wire fraud, one count of making false statements to a financial institution, and one count of money laundering.  Arraignment is set for Jan. 14, 2021, at 11:00 a.m., before U.S. District Judge Manish S. Shah.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; and Hannibal Ware, Inspector General of the U.S. Small Business Administration.  The government is represented by Assistant U.S. Attorney Kelly Greening.

“The Paycheck Protection Program and the Economic Injury Disaster Loan Program were designed as lifelines for small businesses struggling to survive the COVID-19 pandemic,” said U.S. Attorney Lausch.  “Our office is committed to working with our law enforcement partners to root out abuse of the important relief programs established under the CARES Act.”

Pursuant to the CARES Act, a PPP loan allows the interest and principal to be forgiven if businesses spend a certain amount of the proceeds on essential expenses, such as payroll, rent, and utilities, while the EIDL provides loan assistance or grants to cover working capital and other operating expenses.

According to the indictment, Smith applied for and obtained $270,000 in PPP funds for CLS Financial Services Inc., an Indiana-based company that he owned.  In his loan application, Smith stated that the company had 61 employees and an average monthly payroll of $108,000, even though Smith knew the company had no actual employees and no payroll expenses, the indictment states.  Smith also fraudulently represented in the application that he was not convicted of a felony criminal offense within the last five years, even though he knew he had been convicted of such an offense, the indictment states.

Smith similarly obtained $151,900 in EIDL loans by stating in the application that his company had two employees and $1.8 million in gross revenue last year, even though he knew the company had no such employees or revenue, the indictment states.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

Anyone with information about attempted fraud involving COVID-19 can report it to the Department of Justice by calling the National Center for Disaster Fraud Hotline at 866-720-5721, or filing an online complaint form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

CHICAGO — The former office manager of a southwest suburban construction company has been charged with fraud for allegedly embezzling more than $2.3 million in company funds.

MILDRED H. CROWLEY fraudulently opened a corporate credit card and used it to charge the Lemont-based company for personal expenses, according to a criminal information filed Dec. 29, 2020, in U.S. District in Chicago.  Crowley’s personal expenses included payments related to a private horse farm and horse show, as well as restaurant meals, department store purchases, and travel throughout the United States, the information states.  Crowley concealed the thefts by falsifying the company’s books and records to misrepresent her unauthorized use of the corporate card, the information states.  The alleged fraud scheme spanned from 2009 to 2020.

The information charges Crowley, 72, of Bourbonnais, Ill., with one count of wire fraud.  Arraignment in U.S. District Court in Chicago has not yet been scheduled.

The information was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government is represented by Assistant U.S. Attorney John D. Mitchell.

The public is reminded that an information is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Wire fraud is punishable by up to 20 years in federal prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A federal investigation into child labor trafficking has resulted in additional criminal charges against a couple residing in a Chicago suburb who allegedly forced two undocumented Guatemalan children to provide labor and services for the couple’s private financial gain.

SANTOS TEODORO AC-SALAZAR, 24, and OLGA CHOC LAJ, 31, both of whom resided in Aurora, are charged with conspiracy to conceal, harbor, and shield from detection the two children, who were 15 years old and approximately ten years old when they entered the United States in 2019, according to an indictment returned in U.S. District Court in Chicago.  The indictment also charges the defendants with individual harboring counts in connection with both victims, a forced labor charge relating to the younger victim, and a forced labor charge that was previously filed earlier this year in relation to the older victim.

The defendants are in law enforcement custody.  Arraignments are scheduled for Dec. 30, 2020, at 11:00 a.m., before U.S. Magistrate Judge M. David Weisman.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Irene Lindow, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General in Chicago.  Substantial assistance in the investigation has been provided by the Kane County State’s Attorney’s Office, the Aurora Police Department, and the Illinois Department of Children and Family Services.  The government is represented by Assistant U.S. Attorney Prashant Kolluri.

According to the indictment, Ac-Salazar and Choc Laj are Guatemalan citizens who agreed to separately enter the United States unlawfully.  The pair used smugglers and third parties to locate the victims in Guatemala as the children with whom the pair would unlawfully enter into the U.S., the indictment states.  Once in the U.S., Ac-Salazar and Choc Laj allegedly harbored the victims in a residence in Aurora by, among other things, failing to enroll the victims in school, prohibiting them from leaving the residence except in limited circumstances, and instructing them to provide false information to third parties, including law enforcement authorities.  Ac-Salazar and Choc Laj also are alleged to have forced the victims to provide labor and services for the couple’s private financial gain.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — With multiple Covid-19 vaccines recently becoming available, the U.S. Attorney’s Office is warning residents of northern Illinois to be on the lookout for fraud schemes.

Members of the public should be suspicious of unexpected or unsolicited contact from anyone unknown to them claiming to have information about a Covid-19 vaccine, said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois.  Scammers often use telemarketing calls, text messages, social media postings, and door-to-door visits to perpetrate fraud.  The fraudsters may falsely offer the vaccine or early access to it, in exchange for money or personal identifying information, such as Social Security numbers or medical history. 

“Unfortunately, ruthless criminals are attempting to take advantage of unsuspecting people anxious to receive a Covid-19 vaccine,” said U.S. Attorney Lausch.  “Any unsolicited offer to gain an advantage in connection with a Covid-19 vaccine is likely a scam.  My office is working closely with our law enforcement partners to hold accountable anyone who seeks to commit fraud in connection with Covid-19 vaccinations.”

To obtain accurate information about the vaccine, members of the public are encouraged to contact their health care provider directly.  U.S. Attorney Lausch also offered additional tips to help stay vigilant and avoid scammers:

• Do not click on links from sources you do not know.  These links could be attempts to download viruses onto your computer or cell phone.
• Ignore online or phone offers for Covid-19 vaccinations.  Actual health care providers will not ask you for money or personal identifying information over the phone or online.
• Never send money or disclose your Social Security number, date of birth, bank account or credit card numbers to unfamiliar persons.  The vaccine will likely be offered free of charge in the United States, and you cannot pay to put your name on a list to obtain it.

Additional information about Covid-19 can be found by logging on to http://www.justice.gov/coronavirus.  Anyone wishing to report fraud related to a Covid-19 vaccine can do so by logging on to http://www.oig.hhs.gov/coronavirus or by calling 1-800-447-8477.

CHICAGO —An employee of a Chicago company conspired with a New Jersey man to steal computer equipment from the company and sell it to businesses in California and Texas, according to charges in a federal indictment.

DONALD WILSON worked for the Chicago company as a data center engineer.  From 2015 to 2018, Wilson conspired with IVAN SIERRA to steal computer servers, hard drives, and other information technology equipment from the company’s facilities in Chicago and Secaucus, N.J., the indictment states.  Sierra then worked to sell the stolen equipment to businesses in Chatsworth, Calif., and Stafford, Texas, for a total of more than $500,000 the indictment states.

The indictment was returned Thursday in federal court in Chicago.  It charges Wilson, 42, of Carol Stream, Ill., and Sierra, 38, of Lincroft, N.J., with one count of conspiracy to transport stolen goods, and two counts of transportation of stolen goods.  Arraignments have not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government is represented by Assistant U.S. Attorney John Mitchell.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  The conspiracy count is punishable by a maximum sentence of five years in federal prison, while each transportation count carries a maximum sentence of ten years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

ROCKFORD — A South Beloit man has been sentenced to 26 years in federal prison, to be followed by a lifetime of supervised release, on charges of producing child pornography.

ADRIAN C. PETERS, 27, pleaded guilty to the charges on Dec. 12, 2019.  Peters admitted in a written plea agreement that from 2012 to 2014 he enticed seven minor victims, ranging in age from 14 to 17, to engage in sexually explicit conduct for the purpose of producing a recording on computers.  Peters then transmitted some of the videos via the internet.  The minor victims were from Illinois, Wisconsin, and Arizona.

U.S. District Judge Matthew F. Kennelly imposed the sentence Thursday in federal cout in Rockford.

The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The Winnebago County Sheriff’s Office and the South Beloit Police Department assisted in the investigation.  The government was represented by Assistant U.S. Attorney Michael D. Love.

CHICAGO — A former Illinois attorney withheld more than $137,000 in payroll taxes from his employees’ paychecks but failed to remit the money to the IRS, according to a criminal charge filed in federal court in Chicago.

ADAM TRACY, 43, of Wheaton, is charged with one count of willful failure to pay taxes to the IRS.  Arraignment is set for Dec. 21, 2020, at 11:00 a.m., before U.S. District Judge Edmond E. Chang.

The charge was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.  The government is represented by Assistant U.S. Attorney Matthew Getter.

According to a criminal information filed Tuesday in U.S. District Court in Chicago, Tracy operated Securities Compliance Group Ltd., a Wheaton-based law and consulting practice that also did business as “Clearing Link LLC,” “Wabash Capital Advisors Ltd.,” “Guanwei Recycling Corporation,” and “The Tracy Firm. Ltd.”  From 2014 to 2018, Tracy’s company withheld $137,403.76 in payroll taxes from employees’ paychecks but willfully failed to pay the money to the IRS, the information states.  For much of that time, the company also failed to file quarterly employment tax returns (Forms 941) with the IRS, the information states.

The public is reminded that an information is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  The tax charge is punishable by up to five years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A Chicago man has been sentenced to more than four years in federal prison for illegally possessing a loaded semi-automatic handgun in the city’s Chicago Lawn neighborhood.

LASHON NORFLEET, 43, illegally possessed the firearm in the 7100 block of South Albany Avenue on the evening of March 20, 2018.  Chicago Police officers pulled over Norfleet’s vehicle because it had inoperable brake lights.  Norfleet was unable to provide a valid driver’s license, and during further questioning the officers discovered the loaded gun in his waistband.

Norfleet had previously been convicted of multiple felonies, including two firearm-related offenses, and was not legally allowed to possess the gun.

Norfleet pleaded guilty last year to the federal charge of illegal possession of a firearm.  U.S. District Judge Manish S. Shah on Tuesday imposed a 54-month prison sentence.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; and David Brown, Superintendent of the Chicago Police Department.  The Cook County State’s Attorney’s Office provided valuable assistance.  The government was represented by Assistant U.S. Attorney Kalia Coleman.

Holding illegal firearm possessors accountable through federal prosecution is a centerpiece of Project Guardian and Project Safe Neighborhoods.  In the Northern District of Illinois, U.S. Attorney Lausch and law enforcement partners have deployed the Guardian and PSN programs to attack a broad range of violent crime issues facing the district, particularly firearm offenses.

CHICAGO — A Chicago man has been sentenced to more than eight years in federal prison for illegally possessing a loaded semi-automatic handgun in the city’s North Lawndale neighborhood.

MARKELL THOMAS, 35, illegally possessed the firearm in the 1300 block of South Spaulding Avenue on the morning of Feb. 5, 2019.  Chicago Police officers observed Thomas holding the gun and attempted to arrest him, but he fled in a vehicle.  During the pursuit, Thomas tossed the gun out of the car.  He later exited the vehicle and was arrested in the 2900 block of West Arthington Street, approximately one mile from where the chase began.  Police recovered the handgun along a sidewalk in the 3100 block of West Fillmore Street.  

As a four-time convicted felon, Thomas was not legally allowed to possess a firearm.

Thomas pleaded guilty in July to one count of illegal possession of a firearm.  In a plea agreement, Thomas admitted that he also illegally possessed a rifle on Sept. 29, 2018, at a gun range in Lombard, Ill. 

U.S. District Judge Robert W. Gettleman on Tuesday imposed a 100-month prison sentence.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; and David Brown, Superintendent of the Chicago Police Department.  The Cook County State’s Attorney’s Office provided valuable assistance.

“Defendant’s actions on that cold February day put at risk not only his own well-being but also the safety and well-being of the officers who pursued him, as well as dozens of other citizens of the Northern District,” Assistant U.S. Attorney Aaron R. Bond argued in the government’s sentencing memorandum.  “Such actions by defendant demonstrate a complete lack of respect for not only the law but also the community around him, especially the law-abiding citizens who must continually deal with the plague and despair that illegal firearms bring to their streets, schools, friends, family, and neighbors.”

Holding illegal firearm possessors accountable through federal prosecution is a centerpiece of Project Guardian and Project Safe Neighborhoods.  In the Northern District of Illinois, U.S. Attorney Lausch and law enforcement partners have deployed the Guardian and PSN programs to attack a broad range of violent crime issues facing the district, particularly firearm offenses.

CHICAGO — A suburban Chicago man was arrested on a federal firearm charge after law enforcement this week seized machine guns and more than 100 “switch” devices from his home.  Each device is capable of converting a semi-automatic pistol into a machine gun.

LEONARD D. JOHNSON, also known as “Scrap,” 32, of Robbins, is charged with one count of illegal possession of a machine gun.  Johnson was arrested Monday after agents from the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives executed a search warrant at his home.  The agents seized five firearms, including three machine guns, and approximately 117 “switch” devices, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago. 

Johnson made an initial court appearance Tuesday before U.S. Magistrate Judge Jeffrey T. Gilbert in Chicago and was ordered to remain in federal custody.  A detention hearing is scheduled for Friday at 1:00 p.m.

The arrest was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of ATF.  Valuable assistance was provided by the Lansing Police Department and Midlothian Police Department.  The government is represented by Assistant U.S. Attorney Charles W. Mulaney.

Holding illegal firearm offenders accountable through federal prosecution is a centerpiece of Project Guardian and Project Safe Neighborhoods.  In the Northern District of Illinois, U.S. Attorney Lausch and law enforcement partners have deployed the Guardian and PSN programs to attack a broad range of violent crime issues facing the district, particularly firearm offenses.

“Machine guns pose a dangerous threat to public safety and have no place on Chicago-area streets,” said U.S. Attorney Lausch. “Federal law enforcement will act swiftly to neutralize the threat posed by illegal machine guns and keep our communities safe.”

“This case is an excellent example of continued partnership,” said ATF SAC deTineo.  “ATF agents, in coordination with local law enforcement and federal prosecutors, will investigate and prosecute those in possession of these illegal firearms.”

The public is reminded that a complaint is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  The charge in the complaint is punishable by up to ten years in federal prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — Former Illinois attorney EDWARD R. VRDOLYAK was sentenced today to 18 months in federal prison for assisting another lawyer in evading taxes on income received from a multi-billion dollar legal settlement with tobacco companies.

U.S. District Judge Robert M. Dow, Jr., imposed the sentence after a hearing in federal court in Chicago.  Vrdolyak, 82, of Chicago, pleaded guilty last year to one count of tax evasion.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government was represented by Assistant U.S. Attorney Amarjeet S. Bhachu and Special Assistant U.S. Attorney Michael T. Donovan.

Vrdolyak admitted in a plea agreement that he assisted another lawyer, co-defendant DANIEL P. SOSO, in evading federal income taxes owed by Soso.  The income was derived from attorney fees received in connection with a $9.2 billion settlement between the State of Illinois and a number of tobacco companies in the 1990s.  At the time of the settlement, Vrdolyak and Soso were licensed Illinois attorneys.  The pair collected legal fees from the settlement pursuant to agreements with one of the attorneys that represented the State of Illinois.  Pursuant to these agreements, Vrdolyak made payments to Soso between 2000 and 2005 of approximately $1,925,830, representing Soso’s agreed-upon share of the fees from the litigation.

In August 2005, the IRS served a notice of levy on Vrdolyak, which required the turnover of all salary, wages and other amounts owed to Soso.  Over the next two years, Vrdolyak received approximately $262,854 due Soso, but he concealed receipt of these funds from the IRS, knowing such concealment would assist Soso in evading the payment of taxes and assessments.  Vrdolyak admitted in the plea agreement that he later caused approximately $170,242 to be paid to Soso instead of remitting the funds to the IRS.

Soso, of Alsip, also pleaded guilty to tax evasion.  Judge Dow in March sentenced Soso to two years in prison.

CHICAGO — A Chicago man was sentenced today to 14 months in federal prison for illegally structuring nearly $350,000 in cash deposits in an effort to evade federal reporting requirements.

In 2015 and 2016, ANTUANE KING made at least 37 deposits of less than $10,000 each at seven financial institutions, including the Chicago Firefighters Credit Union.  The deposits were structured in an effort to evade federal reporting rules, which require financial institutions to notify the U.S. Department of the Treasury about transactions of more than $10,000.  After making all of the structured cash deposits, King later combined all of the money to purchase three residences in the south suburbs of Chicago.

A federal jury earlier this year convicted King, 49, on two counts of structuring a currency transaction.  U.S. District Judge Jorge L. Alonso imposed the sentence after a hearing in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. 

“The structuring laws are in place for a good reason: they help law enforcement ferret out serious criminal activity that could otherwise go undetected,” Assistant U.S. Attorneys Christopher V. Parente and Esther S. Mignanelli argued in the government’s sentencing memorandum.  “The defendant knew he was committing a crime each time he went to a bank and structured the cash deposits.”

CHICAGO — A convicted felon has been sentenced to more than five years in federal prison for illegally possessing a loaded handgun in the West Garfield Park neighborhood of Chicago.

LARRY CARADINE, 30, of Chicago, illegally possessed the firearm in the 4700 block of West Monroe Street on the afternoon of Oct. 26, 2018.  Chicago Police officers observed Caradine drop the gun onto the ground.  As an eight-time convicted felon, Caradine was not legally allowed to possess a firearm.  Caradine was on parole at the time of the offense after recently serving a two-year sentence for a state narcotics conviction.

Caradine pleaded guilty to the federal charge last year.  U.S. District Judge John Robert Blakey imposed a 63-month prison sentence Wednesday after a hearing in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; and David Brown, Superintendent of the Chicago Police Department.  The Cook County State’s Attorney’s Office provided valuable assistance.

“The possession of illegal weapons by convicted felons is contributing to the cycle of violence that continues on a daily basis in this city,” Assistant U.S. Attorney Christopher V. Parente argued in the government’s sentencing memorandum.  “Despite repeated criminal convictions and repeated sentences of imprisonment, the defendant continues to escalate his criminal behavior and continues to break the law.”

Holding illegal firearm possessors accountable through federal prosecution is a centerpiece of Project Guardian and Project Safe Neighborhoods.  In the Northern District of Illinois, U.S. Attorney Lausch and law enforcement partners have deployed the Guardian and PSN programs to attack a broad range of violent crime issues facing the district, particularly firearm offenses.

CHICAGO — A north suburban man was sentenced today to a year in federal prison for operating an illegal sports bookmaking business and filing false income tax returns.

DOMENIC POETA, 63, of Highland Park, unlawfully operated a business that provided sports betting and wagering services, both domestically and abroad.  From 2012 to 2017, Poeta obtained more than $3.7 million from the operation of his bookmaking business.  Poeta failed to report his receipt of this income in the federal and state tax returns that he filed for each of those years, resulting in a federal and state tax loss of approximately $1,486,363.

Poeta pleaded guilty earlier this year to one count of transmission of wagering information and one count of filing a false tax return.  U.S. District Judge Matthew F. Kennelly imposed the sentence in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Tamera Cantu, Acting Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and John Crawford, Special Agent-in-Charge of the Chicago Regional Office of the Federal Deposit Insurance Corporation, Office of Inspector General.  The government is represented by Assistant U.S. Attorney Patrick King.

CHICAGO — The owner of Chicago-area child care centers and several of her employees fraudulently schemed to pocket more than $6.1 million from a State of Illinois program designed to help low-income families afford child care, according to an indictment returned in federal court.

ALEESHA McDOWELL owned child care providers A&A Kiddy Kollege Inc. in Calumet City, A&A Kiddy Kollege 2 in Calumet Park, and Kreative Kidz Academy Inc., Kreative Kidz Academy II Inc., and Kreative Kidz Academy III Inc. in Chicago.  From 2012 to 2020, McDowell schemed with four directors of her centers and others to defraud the Illinois Department of Human Services’ Child Care Assistance Program by submitting and causing the submission of materially false information, including fraudulent paystubs and income verification letters, regarding a parent’s eligibility to qualify for state subsidy payments, the indictment states.  McDowell and the co-schemers also assisted parents in completing false IDHS applications that fraudulently caused the state to issue subsidy payments to the centers, the indictment alleges.  As a result of the scheme, the defendants caused IDHS to suffer a loss of at least $6.1 million, the indictment states.

The charges accuse McDowell of spending some of the criminally derived money on a 2017 Bentley Bentayga and a house in Mokena, Ill.

McDowell, 41, of Mokena, is charged with 12 counts of wire fraud and two counts of money laundering.  Also charged with wire fraud are NICOLE LACEY, 36, of Burnham, Ill., who worked as director at AAKK and AAKK-2 (ten counts); STACY SIMS, 43, of Chicago, director at KKA-2 (two counts); JANELLE JORDAN, 40, of Chicago, director at KKA-3 (three counts); LAUREN COLEY, 40, of Phoenix, Ariz., director at AAKK and KKA (two counts); SHAVON JOHNSON, 47, of Country Club Hills, Ill. (four counts); and SEAN BLUNT, 44, of Matteson, Ill. (two counts).

The indictment was ordered unsealed on Monday.  Most of the defendants have made initial appearances in federal court in Chicago.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; and Anthony Mohatt, Special Agent-in-Charge of the Midwest Regional Office of the U.S. Department of Agriculture, Office of Inspector General in Chicago.  The government is represented by Assistant U.S. Attorneys Matthew Hernandez and Kate McClelland.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The Justice Department today filed a lawsuit against the Village of Hinsdale, Illinois, alleging disability discrimination in violation of the Fair Housing Act.  

The lawsuit, filed in the U.S. District Court for the Northern District of Illinois, alleges that Hinsdale has discriminated and continues to discriminate by prohibiting group homes for persons with disabilities from operating in single-family residential districts, and by failing to provide reasonable accommodations to its zoning code for such homes. The case arose when Hinsdale prohibited a group home for persons with disabilities in recovery from drug or alcohol addiction to operate and refused to consider the home’s request for an accommodation.

“Denying people access to housing because of their disabilities is not just wrong. It’s illegal,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The Fair Housing Act prohibits local governments from applying their zoning laws in a manner that discriminates against persons with disabilities. The Fair Housing Act also prohibits this kind of ‘not in my backyard’ attitude towards individuals with disabilities. The Civil Rights Division will continue to enforce the Fair Housing Act vigorously so that municipalities do not erect illegal barriers that preclude group homes for residents with disabilities from operating in single-family neighborhoods.”

“Access to housing free from discrimination is a right afforded to all Americans under the Fair Housing Act,” said U.S. Attorney John R. Lausch, Jr. of the Northern District of Illinois. “This lawsuit is an example of the Department’s continuing effort to enforce anti-discrimination laws that protect those rights.”

The department’s lawsuit seeks a court order prohibiting Hinsdale from discriminating against the home at issue in this case or other group homes for persons with disabilities. The lawsuit also seeks monetary damages for persons harmed by Hinsdale’s actions, as well as payment of a civil penalty.

The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the civil rights laws it enforces is available at www.justice.gov/crt. Individuals who believe that they have been victims of housing discrimination may call the Justice Department at 1-800-896-7743, email the Justice Department at fairhousing@usdoj.gov, or submit a report online at civilrights.justice.gov.

The complaint contains allegations of unlawful conduct. The allegations in the complaint must be proven in court.

CHICAGO — Three men have been indicted on federal kidnapping charges for allegedly abducting several victims at gunpoint in the Chicago suburbs.

The defendants last year carried out two kidnappings in Naperville and Westchester, and attempted a third in South Holland, according to a superseding indictment returned in U.S. District Court in Chicago.

Charged with participating in a kidnapping conspiracy are SEDGWICK WILLIAMS, 43, of Chicago; IVAN AYERS, 33, of Chicago; and TAI HON LA, 31, of Beach Park.  The charge carries a maximum sentence of life in federal prison.  All three defendants are currently detained in law enforcement custody.  Arraignments are scheduled for Tuesday at 1:00 p.m. before U.S. Magistrate Judge Beth W. Jantz.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; and Robert Marshall, Chief of the Naperville Police Department.  Valuable assistance in the investigation was provided by the Westchester Police Department and South Holland Police Department.  The government is represented by Assistant U.S. Attorneys Jared C. Jodrey and Corey B. Rubenstein.

According to the indictment and a recently unsealed federal search warrant, the first kidnapping occurred on Oct. 17, 2019, in Naperville, when the defendants posed as law enforcement officers to abduct a man outside of an electronics store he owned.  The defendants allegedly physically assaulted the victim, extorted his family, and burglarized his business.  The victim received medical treatment in a hospital.

The defendants carried out a second kidnapping on Nov. 16, 2019, in Westchester, the indictment states.  Again posing as law enforcement officers, the defendants abducted a man outside of his residence and forced him back inside his home, where they seized another victim and forced them both into the basement, the indictment and search warrant state.  Two other victims later arrived at the residence and were also forced into the basement at gunpoint, the search warrant states.  The defendants allegedly stole cash and jewelry before leaving the residence.

The defendants attempted a third kidnapping on Dec. 11, 2019, in South Holland, but were unsuccessful in gaining entry to the intended victim’s home, the search warrant states.  

In addition to the conspiracy count, the defendants are also charged with individual kidnapping and attempted kidnapping counts, as well as a count of illegal firearm and ammunition possession.  Each of the defendants was prohibited from legally possessing a firearm or ammunition due to a previous felony conviction.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory United States Sentencing Guidelines. 

CHICAGO — A former college professor has been indicted on federal fraud charges for allegedly embezzling more than $650,000 from a national student organization committed to improving minority representation in the pharmacy industry.

While serving as the volunteer Executive Director of the student association, CARMITA COLEMAN withdrew cash and issued checks from the group’s bank accounts for her and her family’s personal benefit, according to an indictment returned Thursday in U.S. District in Chicago.  Coleman attempted to cover up her scheme by submitting false and misleading reports that concealed her withdrawals, the indictment states.  When a new individual was appointed to replace Coleman as Executive Director, Coleman knowingly delayed turning over access to the organization’s bank accounts so that she could continue spending the money for her personal benefit, the indictment states. 

The fraud scheme allegedly lasted from 2011 to 2016.  Coleman, who separately during the scheme was a professor and interim dean at the Chicago State University College of Pharmacy, fraudulently misappropriated approximately $651,272 from the student association, the indictment states.

The indictment charges Coleman, 49, of Frankfort, with four counts of wire fraud.  Arraignment in federal court in Chicago has not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government is represented by Assistant U.S. Attorney Heidi Manschreck.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. 

Each count of wire fraud is punishable by up to 20 years in federal prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — An investment manager has been indicted on federal fraud charges for allegedly swindling a Chicago resident and other clients out of hundreds of thousands of dollars.

EUGENE Z. NOWAK, 57, of Jersey City, N.J., is charged in an indictment returned in U.S. District Court in Chicago with three counts of wire fraud, one count of mail fraud, and one count of money laundering.  Arraignment is scheduled for Friday at 10:00 a.m. before U.S. District Judge Matthew F. Kennelly.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; William Hedrick, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI.  The government is represented by Assistant U.S. Attorney Kartik K. Raman.

According to the indictment, Nowak served as president of Global Funding Partners, a Nevada-based company that purported to be an investment firm engaged in complex business dealings with large multinational banking and financial institutions.  From 2013 to 2016, Nowak, while then residing in Naples, Fla., falsely represented to investors that their funds would be used to provide “bridge funding,” or temporary funding, for Global Funding Partners to close a $33 million financial transaction involving Scotiabank, the indictment states.  Nowak falsely promised that investors, including the Chicago resident, would receive high-yield returns in a short amount of time, and that they could cancel their investment at any time for a full refund with interest, the indictment states.

In reality, Nowak and Global Funding Partners were not parties to a transaction with Scotiabank.  Nowak instead allegedly diverted investor funds to cover his personal expenses, including payments to a car dealership and pawn shop in Naples, Fla.  As a result of the scheme, Nowak caused investors, including the Chicago resident, to suffer hundreds of thousands of dollars in losses, the indictment states.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A special agent with Homeland Security Investigations, a criminal investigative unit within the U.S. Department of Homeland Security, has been indicted on federal tax, structuring, and concealment offenses.

ANTHONY SABAINI, who was assigned to HSI’s field office in Oakbrook Terrace, Ill., is charged with five counts of willfully filing a false federal tax return, one count of structuring a currency transaction, and one count of willfully engaging in a scheme to conceal a material fact in a matter within the jurisdiction of DHS, according to an indictment returned Wednesday in U.S. District Court in Chicago.  Sabaini, 38, of Naperville, Ill., will be arraigned on a date to be set by the Court.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; and Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.  The DHS Office of Inspector General's Chicago Field Office participated in the investigation.  Valuable assistance was provided by the U.S. Drug Enforcement Administration and the U.S. Immigration and Customs Enforcement’s Office of Professional Responsibility.  The government is represented by Assistant U.S. Attorney Nicholas Eichenseer.

According to the indictment, Sabaini from 2014 to 2018 deposited a total of approximately $251,371 in cash into a bank account for which he was the sole signatory.  He made the deposits via approximately 162 ATM or teller transactions, with the amount of each deposit being less than $10,000, the indictment states.  The deposits were structured in an effort to evade federal reporting rules, which require financial institutions to notify the U.S. Department of the Treasury about transactions of more than $10,000, the charges allege.

The tax charges allege that for each of those five calendar years, Sabaini willfully filed a false federal tax return that underreported his total income.

The concealment charge alleges that Sabaini in 2017 and 2018 knowingly submitted false memorandums to his HSI supervisors to seek approval to use and pay a confidential informant in a purported criminal investigation.  In the memorandums, Sabaini knowingly covered up material facts, including that the informant was a target of ongoing drug investigations conducted by the FBI and DEA, and that the informant had recently engaged in unauthorized criminal conduct that Sabaini knew would have affected his suitability as a paid HSI informant, the indictment states.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each tax charge is punishable by up to three years in federal prison, while the structuring and concealment charges are each punishable by up to five years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — Former Commonwealth Edison executives, including the former Chief Executive Officer, conspired with outside consultants to corruptly influence and reward a high-level elected official for the State of Illinois to assist with the passage of legislation favorable to the electric utility company, according to an indictment returned today in U.S. District Court in Chicago.

The indictment charges four individuals with bribery conspiracy, bribery, and willfully falsifying ComEd books and records:

• MICHAEL McCLAIN, 73, of Quincy, Ill.  McClain worked as a lobbyist and/or consultant for ComEd after serving in the Illinois House of Representatives in the 1970s and early 1980s.
• ANNE PRAMAGGIORE, 62, of Barrington, Ill.  Pramaggiore was CEO of ComEd from 2012 to 2018, and later served as a senior executive at an affiliate of Exelon Corp., of which ComEd was a subsidiary.
• JOHN HOOKER, 71, of Chicago, Ill.  Hooker served as ComEd’s executive vice president of legislative and external affairs from 2009 to 2012, after which he worked as an external lobbyist for ComEd.
• JAY DOHERTY, 67, of Chicago, Ill.  Doherty owned Jay D. Doherty & Associates, which performed consulting services for ComEd from approximately 2011 to 2019.

Arraignments in federal court in Chicago have not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; and Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.  The government is represented by Assistant U.S. Attorneys Amarjeet S. Bhachu, Diane MacArthur, Timothy J. Chapman, Sarah E. Streicker, Matthew L. Kutcher, and Michelle Kramer.

According to the charges, the defendants’ efforts to influence and reward the high-level elected official – identified in the indictment as “Public Official A” – began in or around 2011 and continued through in or around 2019.  During that time, Public Official A controlled what measures were called for a vote in the Illinois House of Representatives and exerted substantial influence over fellow lawmakers concerning legislation affecting ComEd, the indictment states.  The charges allege that the defendants conspired to corruptly influence and reward Public Official A by arranging for jobs and contracts for Public Official A’s political allies and workers, even in instances where those people performed little or no work that ComEd purportedly hired them to perform.  The defendants allegedly created and caused the creation of false contracts, invoices, and other books and records to disguise the true nature of some of the payments and to circumvent internal controls at ComEd.

In addition to the jobs and contracts, the indictment alleges that the defendants undertook other efforts to influence and reward Public Official A, including causing ComEd to retain a particular outside law firm favored by Public Official A and to accept into ComEd’s internship program a certain amount of students who resided in the Chicago ward associated with Public Official A.  Pramaggiore and McClain also allegedly took steps to have an individual appointed to ComEd’s Board of Directors at the request of Public Official A and McClain, the indictment states.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — More than 26 individuals have been charged with various narcotics trafficking or firearms offenses as part of a federal investigation into illegal activities on the West Side of Chicago.  As part of the investigation, law enforcement shut down a telephone drug hotline, according to a criminal complaint recently unsealed in U.S. District Court in Chicago.

Over a three-month period this summer, law enforcement made two dozen undercover purchases of fentanyl-laced heroin and crack cocaine from the defendants’ drug trafficking operation, according to the complaint.  In addition to shutting down the phone line used by the defendants to coordinate sales, law enforcement also seized narcotics, a drug mixer, and multiple firearms during a court-authorized search of a stash house in the 800 block of South Karlov Avenue in Chicago, the charges allege.

The complaint unsealed on Nov. 10, 2020, charges 13 defendants with drug conspiracy.  Twelve of those defendants were arrested and have begun making initial appearances in federal court.  One defendant remains at large, and a warrant has been issued for his arrest.

The federal investigation previously resulted in related drug or firearm charges this summer and fall against more than 13 other defendants.

The results of the investigation were announced today by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Robert J. Bell, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; and David Brown, Superintendent of the Chicago Police Department.  Substantial assistance in the investigation was provided by the Cook County State’s Attorney’s Office, U.S. Marshals Service, Cook County Sheriff’s Office, and IRS Criminal Investigation Division.  The government is represented by Assistant U.S. Attorneys Kalia Coleman, Katie Durick, Prashant Kolluri, and Ramon Villalpando, and Special Assistant U.S. Attorneys Elena Gottreich and Deborah Shutter.

The investigation was conducted with the support of the Organized Crime Drug Enforcement Task Force (OCDETF) and the Chicago High Intensity Drug Trafficking Task Force (HIDTA).  The task forces are comprised of federal, state, and local law enforcement agencies who work together to identify, disrupt, and dismantle the most serious drug trafficking organizations.

“These arrests send a clear message that anyone who sells dangerous drugs on the streets of Chicago faces the full weight of federal law enforcement,” said U.S. Attorney Lausch.  “Our office will continue to focus on individuals and groups who distribute fentanyl-laced drugs – a gravely potent mix – and prosecute those offenders in federal court.”

“This cooperative investigation targeted the distribution of narcotics, including heroin mixed with potentially lethal fentanyl, and violence in the East Garfield Park in Chicago,” said DEA SAC Bell.  “DEA Chicago is committed with our federal, state, and local partners to combat drug trafficking and associated drug related violence across the city and region.”

“Partnerships among local, state, and federal law enforcement and prosecutorial agencies is a force multiplier, focusing resources to stop violent crime including firearms and narcotics trafficking,” said ATF SAC deTineo.  “When law enforcement works together, as illustrated in this operation, the impact is visible throughout the communities of Chicago.”

“I am extremely proud of the partnership CPD has with our state and federal colleagues,” said CPD Supt. Brown.  “Working together makes Chicago a safer city.  Criminal networks that plague our city will not survive.  This multi-defendant, complex operation is an example of that commitment.  I also wish to thank those community members that assist law enforcement with valuable information every day.  This cooperative effort is how we will improve public safety in Chicago.”

According to the newly unsealed complaint, DEXSTIN BRYANT, 31, of Chicago, operated and managed the drug trafficking organization on the West Side of Chicago, with assistance from TREMAINE BRENT, 32, of Chicago.  Drug dealers in Bryant’s organization used the phone line to arrange deliveries of narcotics to customers, the complaint states.  Each dealer worked a shift on the phone to receive calls and organize the sales, the charges allege.  The complaint charges eleven alleged dealers, all of whom reside in Chicago: TEVIN ALVERIO, 26; JARVIS BLAIR, 36; ENRIQUE HOLLINS, 23, who remains at large; SHARONDA HOSEY, 20; JUSTIN JOHNSON, 19; TYJUAN MCDOWELL, 32; RIKITA MITCHELL, 34; ALLEN WASHINGTON, 27; PAUL WILKINS, 64; DOROTHY WILLIAMS, 54; and INA WILLIAMS, 38.

The previously charged cases include Chicago residents KENDRICK PEPPER, 29, and LAMONT HAGGARD, who allegedly distributed large quantities of heroin and crack cocaine in Chicago; CARLTON HARRIS, 28, who allegedly illegally possessed a handgun on May 8, 2020, in Chicago; LACJON LINK, 30, KELVIN ROSS, 39, and WILLIE ROSS, 60, who allegedly distributed more than 400 grams of fentanyl-laced heroin in Chicago; ERNEST RUSSELL, 35, DEVON LEE, 22, WONSHON DONAHUE, 21, DEMARLON CARROLL, 34, ERNEST ROSS, 62, SHAUNTRELL HARRIS, 31, and OSHAY KELLEY, 26, who allegedly distributed heroin, fentanyl, or crack cocaine in Chicago; and the alleged owner of the drug stash house, JOHNNIE GRANT, 32.

The public is reminded that charges contain only accusations and are not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A Grundy County man has been indicted in federal court in Chicago on charges he illegally possessed explosive devices and handguns.

JOHN FEENEY, 30, of Minooka, is charged with one count of illegal possession of a firearm by a convicted felon, one count of illegal possession of an explosive by a convicted felon, one count of possession of an unregistered destructive device, and one count of carrying explosives during the commission of a felony. 

According to the indictment, Feeney illegally possessed two handguns and three explosives on Jan. 25, 2020, in Morris.  The explosives included a 4-inch diameter cardboard aerial shell containing perchlorate explosives and black powder; a 2-inch diameter cardboard aerial shell containing perchlorate explosives; and a 2-inch diameter cardboard aerial shell secured to a plastic cup and containing metal Phillips head bits, cut copper wire, and perchlorate explosives, the indictment states.  Feeney was previously convicted of a felony and was legally prohibited from possessing a firearm or explosive.

The indictment was returned Tuesday in U.S. District Court in Chicago.  Feeney is currently in law enforcement custody.  Arraignment in federal court has not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives.  The Grundy County Sheriff’s Department provided valuable assistance.  The government is represented by Assistant U.S. Attorney Cornelius Vandenberg.

The count of carrying explosives during the commission of a felony includes a mandatory ten-year prison sentence that must be served consecutively to any sentence imposed for the three other counts, each of which is punishable by up to ten years.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A suburban Chicago businessman has been charged with fraud for allegedly swindling more than $2.6 million from hospitals who paid for scarce personal protective equipment amidst the COVID-19 pandemic.

A criminal complaint filed in U.S. District Court in Chicago charges DENNIS W. HAGGERTY, JR., the president of Illinois-based At Diagnostics Inc., with one count of wire fraud.  Haggerty, 44, of Burr Ridge, Ill., was arrested this morning.  He is scheduled to make an initial court appearance today at 2:45 p.m. before U.S. Magistrate Judge Jeffrey Cole in Chicago. 

Also today, federal law enforcement executed a court-authorized search of Haggerty’s office in Willowbrook, Ill.

The complaint and arrest were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government is represented by Assistant U.S. Attorney Nicholas J. Eichenseer.

According to the complaint, Haggerty and two business partners formed At Diagnostics in March 2020 to sell personal protective equipment.  Two large university hospitals – one in Chicago and the other in Iowa City, Iowa – ordered a combined one million N95 face masks from the company.  As a deposit on the masks, the hospitals paid more than $3 million into a bank account that Haggerty falsely represented as an At Diagnostics account but which was actually solely controlled by Haggerty, the complaint states.  The complaint alleges that Haggerty spent part of the hospitals’ funds for his own personal benefit, including purchasing two Maserati automobiles and a Land Rover sport-utility vehicle.

When At Diagnostics failed to deliver the masks on time, Haggerty allegedly falsely claimed to one hospital that his bank had no record of the payment being received.  After his business partners confronted Haggerty about the whereabouts of the money, Haggerty altered a bank statement to make it appear as if the funds had never been received, the complaint states. 

To date, Haggerty has failed to return more than $2.6 million paid by the hospitals for masks that were never delivered, the complaint states.

The charge in the complaint is punishable by up to 20 years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.  The public is reminded that a complaint is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

CHICAGO — Two men have been indicted on federal firearm offenses for allegedly trafficking multiple handguns from Indiana to Chicago.

BENJAMIN CORTEZ-GOMEZ, also known as “Bennie Blanco,” is charged with one count of dealing firearms without a license and one count of illegally possessing firearms as a convicted felon.  GUSTAVO URIEL GOMEZ-HIPOLITO, also known as “Uriel Gomez,” is charged with one count of aiding and abetting Cortez-Gomez in the illegal possession of the firearms. 

An indictment unsealed on Nov. 4, 2020, in U.S. District Court in Chicago accuses Cortez-Gomez of trafficking firearms over a four-month period earlier this year.  The indictment further alleges that Cortez-Gomez illegally possessed seven handguns on July 27, 2020, with Gomez-Hipolito’s assistance.  Cortez-Gomez purchased the seven guns in Indiana and transported them to Chicago, according to a criminal complaint filed against Cortez-Gomez earlier in the investigation.

Cortez-Gomez, 28, is currently detained in federal custody.  A date for his arraignment has not yet been scheduled.  Gomez-Hipolito, 24, pleaded not guilty and has been released on bond while awaiting trial.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; and David Brown, Superintendent of the Chicago Police Department.  Valuable assistance was provided by the Cook County Sheriff’s Office and U.S. Customs and Border Protection’s Air and Marine Operations.  Assistant U.S. Attorney Charles W. Mulaney represents the government.

The case was brought under Operation Legend, a Department of Justice initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement to fight violent crime.  As part of Operation Legend, the Department of Justice significantly increased resources in Chicago to help state and local officials investigate and prosecute violent crime, particularly firearm-related offenses.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Dealing firearms without a license is punishable by up to five years in federal prison, while the illegal possession count is punishable by up to ten years.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

ROCKFORD — A Crystal Lake resident pleaded guilty today before U.S. District Judge Iain D. Johnston to federal income tax evasion.

GARY T. PETERSEN, 55, was president and sole shareholder of Petersen Sealcoating and Paving, Inc., a business located in Crystal Lake.  According to a written plea agreement, Petersen in 2016 deposited checks received by PSPI as payment for its services and products into bank accounts Petersen held with family members and other accounts held by his family members that he controlled.  Petersen also cashed checks PSPI received and personally retained the cash, with the intention of excluding the money from income reported by PSPI to the IRS.

For the calendar year 2016, Petersen provided PSPI income information to his tax preparer, but concealed checks that he deposited into his joint and controlled accounts, and the checks he cashed.  On March 23, 2017, Petersen caused a false U.S. Individual Income Tax Return Form 1040 to be filed, stating the he and a co-filer had taxable income of $75,028 and that the amount of tax due was $10,919, when Petersen knew he and his co-filer had taxable income of approximately $1,174,261, and the additional amount of income tax due was approximately $402,431.

Petersen also admitted that during the calendar years 2012, 2013, 2014, and 2015, he engaged in the same acts, underreporting PSPI’s income and his personal income on tax forms that would have resulted in additional tax due of $33,216 in 2012, $82,388 in 2013, $146,853 in 2014, and $356,230 in 2015.

Petersen faces a maximum sentence of five years’ imprisonment, and a fine of up to $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.   The actual sentence will be determined by the U.S. District Court, guided by the Sentencing Guidelines.  Sentencing is set for Feb. 17, 2021, at 10:30 a.m.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, and Todd Martin, Acting Special Agent-In-Charge of the IRS Criminal Investigation Division in Chicago. The government is represented by Assistant U.S. Attorney Michael D. Love.

Beam Suntory Inc. (Beam), a Chicago-based company that produces and sells distilled beverages, has agreed to pay a criminal monetary penalty of $19,572,885 to resolve the department’s investigation into violations of the Foreign Corrupt Practices Act (FCPA). 

The resolution arises in part out of Beam’s scheme to pay a bribe to an Indian government official in exchange for approval of a license to bottle a line of products that Beam sought to market and sell in India, and related internal controls and books and records violations, which included efforts by a then-member of Beam’s legal department to affirmatively avoid uncovering information related to improper activities and practices by third-parties engaged by Beam in India that presented corruption risks.

Beam entered into a three-year deferred prosecution agreement with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Northern District of Illinois in connection with a criminal information unsealed today in the Northern District of Illinois charging Beam with one count of conspiracy to violate the anti-bribery, internal controls, and books and records provisions of the FCPA. 

“Beam and its Indian subsidiary not only paid bribes to Indian government officials, they intentionally failed to implement internal controls to prevent bribery and falsified their books and records to conceal the corrupt activity,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “Companies that use corrupt influence instead of competing in a fair, ethical, and honest manner should take note of today’s agreement: paying bribes to obtain and retain business is not business as usual, it is a crime.”

“U.S. companies that attempt to gain the upper hand in foreign business ventures by engaging in corruption must be held accountable,” said U.S. Attorney John R. Lausch Jr. for the Northern District of Illinois.  “The Foreign Corrupt Practices Act has a long reach, and for good reason.  It is critical that our global economy remain on a fair playing field.”

“Bribery undermines the public's trust in our markets, and the FBI will never stop fighting to hold corrupt companies accountable whenever and wherever they abuse that trust,” said Special Agent in Charge Emmerson Buie Jr. of the FBI’s Chicago Office.

According to its admissions, Beam conspired with others to violate the FCPA by, among other things, engaging in a scheme to pay a bribe of one million Indian Rupees (approximately equal to $18,000 at the then exchange rate) to a senior Indian government official in exchange for that official’s approval of a license to bottle “Ready-to-Drink” (RTD) products that Beam sought to market and sell in India through its subsidiary, Beam Global Spirits & Wine (India) Private Ltd. (Beam India).  The bribe was authorized by a high-ranking executive at Beam’s Asia Pacific/South America regional business unit, who directed that the payment be made through Beam India’s third-party bottler in order to conceal it.

According to its admissions, from the time Beam acquired the Indian business in 2006 through the end of the third quarter of 2012, Beam India paid bribes and made other improper payments to various Indian government officials, including corrupt payments to obtain or retain business in the Indian market.  Most of the corrupt payments were made through third-party sales promoters and distributors, who paid government officials to secure orders of Beam products at government controlled depots and retail stores, obtain prominent placement of Beam products in government retail stores, acquire and renew label registrations and licenses, and enable the distribution of Beam spirit products from Beam India’s Behror bottling facility to warehouses in other states throughout India. 

As part of the conspiracy, Beam also agreed with others to fail to implement and maintain an adequate system of internal accounting controls, which would have helped to detect and halt Beam India’s longstanding practice of making corrupt payments to Indian government officials, and to falsify its books and records.  On numerous occasions, Beam was cautioned by outside advisors regarding the need to implement sufficient internal accounting controls relating to risks associated with improper activities by third parties in India, but Beam failed to implement sufficient controls.  Beam also maintained falsely recorded expenses, including corrupt payments concealed as commission expenses, and falsified certifications, including false sub-certification letters submitted under the Sarbanes-Oxley Act of 2002, in its consolidated books, records, and accounts. 

As part of the deferred prosecution agreement, Beam agreed to continue to cooperate with the department in any ongoing or future criminal investigations concerning Beam, its executives, employees, or agents.  In addition, under the agreement, Beam agreed to enhance its compliance program and to report to the government on the implementation of its enhanced compliance program. 

The government reached this resolution with Beam based on a number of factors, including the failure to timely disclose the conduct that triggered the investigation; the nature and seriousness of the offense, including the involvement of a then-executive officer of Beam, a then-high-level employee in Beam’s Legal Department, and a then-high-level executive at Beam India; the lack of an effective compliance program at the time of the misconduct; the company’s failure to fully cooperate, including positions taken by Beam that were not consistent with full cooperation, as well as significant delays caused by Beam in reaching a timely resolution and its refusal to accept responsibility for several years; and Beam’s failure to fully remediate, including its failure to discipline certain individuals involved in the conduct.

The criminal monetary penalty for Beam reflects a 10 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range because Beam received partial credit for its remediation and cooperation with the government’s investigation.

In July 2018, in a related matter with the U.S. Securities and Exchange Commission (SEC), Beam agreed to pay the SEC disgorgement and prejudgment interest totaling approximately $6 million and a civil monetary penalty of $2 million but the department is not crediting any portion of the penalty paid to the SEC because Beam did not seek to coordinate a parallel resolution with the department.

The FBI’s Chicago Office investigated the case.  Trial Attorneys John-Alex Romano and Della Sentilles of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Tyler C. Murray of the U.S. Attorney’s Office for the Northern District of Illinois are prosecuting the case.

The Justice Department’s Office of International Affairs provided significant assistance in this case.

The Fraud Section is responsible for investigating and prosecuting all FCPA matters.  Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

WASHINGTON – Beam Suntory Inc., a Chicago-based company that produces and sells distilled beverages, has agreed to pay a criminal monetary penalty of $19,572,885 to resolve the Department of Justice’s investigation into violations of the Foreign Corrupt Practices Act. 

The resolution arises in part out of Beam’s scheme to pay a bribe to an Indian government official in exchange for approval of a license to bottle a line of products that Beam sought to market and sell in India, as well as related internal controls and books and records violations, which included efforts by a then-member of Beam’s Legal Department to affirmatively avoid uncovering information related to improper activities and practices by third parties engaged by Beam in India that presented corruption risks.

Beam entered into a three-year deferred prosecution agreement with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Northern District of Illinois in connection with a criminal information unsealed today in Chicago charging Beam with one count of conspiracy to violate the anti-bribery, internal controls, and books and records provisions of the FCPA. 

“U.S. companies that attempt to gain the upper hand in foreign business ventures by engaging in corruption must be held accountable,” said John R. Lausch Jr., United States Attorney for the Northern District of Illinois.  “The Foreign Corrupt Practices Act has a long reach, and for good reason.  It is critical that our global economy remain on a fair playing field.”

“Beam and its Indian subsidiary not only paid bribes to Indian government officials, they intentionally failed to implement internal controls to prevent bribery and falsified their books and records to conceal the corrupt activity,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “Companies that use corrupt influence instead of competing in a fair, ethical, and honest manner should take note of today’s agreement: Paying bribes to obtain and retain business is not business as usual, it is a crime.”

“Bribery undermines the public's trust in our markets, and the FBI will never stop fighting to hold corrupt companies accountable whenever and wherever they abuse that trust,” said Special Agent-in-Charge Emmerson Buie Jr. of the FBI’s Chicago Field Office.

The FBI’s Chicago Field Office investigated the case.  Assistant U.S. Attorney Tyler C. Murray of the U.S. Attorney’s Office for the Northern District of Illinois and Trial Attorneys John-Alex Romano and Della Sentilles of the Department of Justice's Criminal Division’s Fraud Section are prosecuting the case. The Department of Justice’s Office of International Affairs provided significant assistance in this case.

According to its admissions, Beam conspired with others to violate the FCPA by, among other things, engaging in a scheme to pay a bribe of one million Indian Rupees (equal to approximately $18,000 at the exchange rate at the time) to a senior Indian government official in exchange for that official’s approval of a license to bottle “Ready-to-Drink” products that Beam sought to market and sell in India through its subsidiary, Beam Global Spirits & Wine (India) Private Ltd.  The bribe was authorized by a high-ranking executive at Beam’s Asia Pacific/South America regional business unit, who directed that the payment be made through Beam India’s third-party bottler in order to conceal it.

According to its admissions, from the time Beam acquired the Indian business in 2006 through the end of the third quarter of 2012, Beam India paid bribes and made other improper payments to various Indian government officials, including corrupt payments to obtain or retain business in the Indian market.  Most of the corrupt payments were made through third-party sales promoters and distributors, who paid government officials to secure orders of Beam products at government-controlled depots and retail stores, obtain prominent placement of Beam products in government retail stores, acquire and renew label registrations and licenses, and enable the distribution of Beam spirit products from Beam India’s Behror bottling facility to warehouses in other states throughout India. 

As part of the conspiracy, Beam also agreed with others to fail to implement and maintain an adequate system of internal accounting controls, which would have helped to detect and halt Beam India’s longstanding practice of making corrupt payments to Indian government officials, and to falsify its books and records.  On numerous occasions, Beam was cautioned by outside advisors regarding the need to implement sufficient internal accounting controls relating to risks associated with improper activities by third parties in India, but Beam failed to implement sufficient controls.  Beam also maintained falsely recorded expenses, including corrupt payments concealed as commission expenses, and falsified certifications, including false sub-certification letters submitted under the Sarbanes-Oxley Act of 2002, in its consolidated books, records, and accounts. 

As part of the deferred prosecution agreement, Beam agreed to continue to cooperate with the department in any ongoing or future criminal investigations concerning Beam, its executives, employees, or agents.  In addition, under the agreement, Beam agreed to enhance its compliance program and to report to the government on the implementation of its enhanced compliance program. 

The government reached this resolution with Beam based on a number of factors, including the failure to timely disclose the conduct that triggered the investigation; the nature and seriousness of the offense, including the involvement of a then-executive officer of Beam, a then-high-level employee in Beam’s Legal Department, and a then-high-level executive at Beam India; the lack of an effective compliance program at the time of the misconduct; the company’s failure to fully cooperate, including positions taken by Beam that were not consistent with full cooperation, as well as significant delays caused by Beam in reaching a timely resolution and its refusal to accept responsibility for several years; and Beam’s failure to fully remediate, including its failure to discipline certain individuals involved in the conduct.

The criminal monetary penalty for Beam reflects a 10% reduction off the bottom of the U.S. Sentencing Guidelines fine range because Beam received partial credit for its remediation and cooperation with the government’s investigation.

In July 2018, in a related matter with the U.S. Securities and Exchange Commission, Beam agreed to pay the SEC disgorgement and prejudgment interest totaling approximately $6 million and a civil monetary penalty of $2 million.  The Department of Justice is not crediting any portion of the penalty paid to the SEC because Beam did not seek to coordinate a parallel resolution with the Department.