Northern District of Illinois

CHICAGO — A former high-ranking member of the Sinaloa drug cartel in Mexico was sentenced today to 28 years in federal prison for his role in transporting large amounts of illegal drugs to the Chicago area and throughout the United States.

From at least 2009 until his arrest in November 2014, JESUS RAUL BELTRAN LEON conspired with other Sinaloa Cartel members to transport multi-ton quantities of illegal drugs into the United States.  Beltran Leon invested in shipments comprising hundreds of kilograms of drugs that were purchased in Central and South America, imported into Mexico, and eventually smuggled into the U.S. for distribution in Chicago and throughout the country.  Beltran Leon also sought to acquire from other cartel members numerous kilograms of drugs that already had been imported into the U.S. so that he could further distribute those narcotics to his own wholesale drug customers in Chicago and throughout the country.

Beltran Leon, 35, of Culiacan, Sinaloa, Mexico, pleaded guilty earlier this year to a drug conspiracy charge.  U.S. District Judge Ruben Castillo 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; and Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration.  Valuable assistance was provided by the Internal Revenue Service Criminal Investigation Division in Chicago.  The government is represented by Assistant U.S. Attorneys Andrew C. Erskine and Erika L. Csicsila.

Beltran Leon is one of more than 20 members of the Sinaloa or Beltran-Leyva drug cartels to be charged in federal court in Chicago.  The investigation has resulted in seizures of approximately $30.8 million, approximately eleven tons of cocaine, 265 kilograms of methamphetamines, and 78 kilograms of heroin.

CHICAGO — Two Chicago men who carjacked a sport-utility vehicle at gunpoint in the city’s Goose Island neighborhood have each been sentenced to eleven years in federal prison.

JASON DORTCH, 20, and DAVONTAE JONES, 20, forcibly took the Jeep Grand Cherokee on Nov. 13, 2017.  During the carjacking, the Jeep’s owner was struck on the back of the head with a gun, while a second gun was pointed at the heads of both the owner and a passenger.

Dortch and Jones pleaded guilty earlier this year to carjacking and weapons offenses.  U.S. District Judge John J. Tharp, Jr., on Thursday sentenced Dortch and Jones to eleven years apiece in federal prison.

The sentencings were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Eddie Johnson, Superintendent of the Chicago Police Department.  The Cook County State’s Attorney’s Office, Cook County Sheriff’s Office, Oak Park Police Department, and Illinois State Police provided valuable assistance.

The case was investigated by the Chicago 11th District Violent Crimes Task Force, which consists of agents and officers from the FBI, CPD, U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Drug Enforcement Administration, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

“In a city that has seen carjackings and shootings in staggering numbers, violent crimes like the ones the defendants committed should not be tolerated,” Assistant U.S. Attorneys Jeannice W. Appenteng and Kalia Coleman argued in the government’s sentencing memorandum.  “The defendants’ conduct demonstrates profound disrespect for the law and complete disregard for fellow citizens and the community.”

According to evidence in the case, the owner of the Jeep complied with the defendants’ demands for the keys, and also handed over $40.  About 30 minutes later and a mile away, a CPD officer observed the defendants in the stolen Jeep.  Dortch and Jones refused to stop and instead led police on a high-speed chase onto the Eisenhower Expressway.  The defendants eventually lost control of the vehicle, crashing it just east of the Harlem Avenue exit in Oak Park.  They were arrested nearby after a foot chase.

CHICAGO — A Streamwood man has pleaded guilty to a federal child pornography charge and admitted enticing a 16-year-old boy to produce sexually explicit videos of himself.

MICHAEL LIEDTKE, 34, pleaded guilty Friday to one count of receipt of child pornography.  He faces a mandatory minimum sentence of five years in federal prison and a maximum sentence of 20 years.  U.S. District Judge Elaine E. Bucklo set sentencing for Oct. 28, 2019, at 10:30 a.m.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kevin Keithley, Deputy Special Agent-in-Charge of the Chicago office of the FBI; and Robert Berlin, DuPage County State’s Attorney.  The Carol Stream Police Department provided valuable assistance.  The government is represented by Assistant U.S. Attorney Abigail Peluso.

Liedtke admitted in a plea agreement that in December 2016 he enticed the 16-year-old boy to create two sexually explicit videos and send them to Liedtke via cellphone.  During a court-authorized search of Liedtke’s home earlier this year, law enforcement discovered an external disk drive that contained 29 images and six videos of children engaged in sexually explicit conduct, the plea agreement states.  Each of the children depicted in the images and videos was identified as a known child victim by the National Center for Missing and Exploited Children. 

Liedtke also admitted in the plea agreement that in January 2019 he possessed and operated a video camera that he intentionally hid in the ceiling of a public restroom at the DuPage County Training Academy in Carol Stream.  Recordings from the camera depicted the unclothed body parts of approximately 400 people using the restroom, including approximately 300 children under the age of 18, the plea agreement states.  Liedtke acknowledged in the plea agreement that he placed the video camera in the restroom to obtain the lewd images.

“This office will continue to prosecute and hold accountable those individuals who prey upon our youth,” said U.S. Attorney Lausch.  “This plea agreement does just that, as Mr. Liedtke now stands as a convicted felon.  We appreciate the outstanding work of our colleagues at the DuPage County State’s Attorney’s Office, as well as our federal, state, and local law enforcement partners, who worked together to bring justice to Mr. Liedtke.”

“Mr. Liedtke betrayed our community by victimizing children entrusted to his care,” said FBI Deputy Special Agent-in-Charge Keithley.  “The FBI is charged with protecting our most vulnerable citizens from exploitation, and this guilty plea demonstrates our commitment to working with law enforcement partners to ensure that predators like Mr. Liedtke answer for their crimes.”

“Mr. Liedtke violated the trust placed in him by the parents of the athletes he trained,” DuPage County State’s Attorney Berlin said.  “I would like to thank the U.S. Attorney’s Office for their work in holding Mr. Liedtke responsible for his vulgar behavior.  Today’s plea in federal court is an outstanding example of state and federal authorities working together to protect the public.”

As set forth in the federal plea agreement, now that the defendant has pleaded guilty and stipulated to a wide range of criminal conduct, the DuPage County State’s Attorney’s Office will move to dismiss the parallel state criminal charges pending against Liedtke.

If you believe you are a victim of sexual exploitation, you are encouraged to call the National Center for Missing and Exploited Children at 1-800-843-5678.  The hotline is available 24 hours a day, seven days a week.

CHICAGO — A federal grand jury in Chicago has indicted Illinois State Sen. THOMAS E. CULLERTON on embezzlement charges for allegedly fraudulently receiving salary and benefits from a labor union for which he did little or no work.

Cullerton, 49, of Villa Park, is charged with one count of conspiracy to embezzle from a labor union and employee benefit plans, 39 counts of embezzlement from a labor union, and one count of making false statements in a health care matter, according to an indictment returned Thursday in U.S. District Court in Chicago.  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; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Irene Lindow, Special Agent-in-Charge of the U.S. Department of Labor’s Office of Inspector General in Chicago.  The government is represented by Assistant U.S. Attorneys Amarjeet S. Bhachu and Abigail Peluso.

According to the indictment, Cullerton was a member of Teamsters Local Union 734 prior to assuming office as an Illinois State Senator.  After his election in November 2012, Cullerton was no longer an eligible participant in Local 734’s health and pension funds.  In March 2013, while Cullerton was serving in the Illinois Senate, the president of Teamsters Joint Council 25 hired him as a purported union organizer.  The full-time, salaried position included benefits from Local 734’s health and pension funds, due to an agreement Joint Council 25 entered into with Local 734 that same month, the indictment states.

The charges allege that for the next three years Cullerton did little or no work as an organizer.  When Joint Council 25 supervisors requested that he perform his job duties, Cullerton routinely ignored them, the indictment states.  From March 2013 to February 2016, Cullerton fraudulently obtained from Joint Council 25 and its members approximately $188,320 in salary, bonuses, and cellphone and vehicle allowances, as well as approximately $64,068 in health and pension contributions, according to the indictment.  Cullerton used the proceeds of the payments to pay personal expenses, such as his mortgage, utilities and groceries, the charges allege.

The indictment alleges that Cullerton also fraudulently obtained approximately $21,678 in reimbursed medical claims from Local 734’s Health and Welfare Fund.  Cullerton submitted or caused to be submitted to medical providers information that made it appear he was a “route salesman” for Local 734, the indictment states.  The false information concealed and covered up the fact that Cullerton was not eligible for participation in the fund since he was not regularly scheduled to work at least 30 hours per week for Local 734, Joint Council 25, or any other employer that participated in the fund, according to the indictment.

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.  The charges in the indictment are each punishable by up to five years’ imprisonment.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A former high-ranking official in a labor union admitted in federal court today that he accepted $325,000 in unlawful cash payments from a Chicago business and failed to report the payments on his federal tax returns.

JOHN T. COLI SR., 59, of Chicago, pleaded guilty to one count of receiving a prohibited payment as a union officer, and one count of making a false income tax return.  The charges are punishable by a combined maximum sentence of eight years in federal prison.  U.S. District Chief Judge Rebecca R. Pallmeyer did not immediately schedule a sentencing date.  A status hearing was set for Oct. 31, 2019, at 9:30 a.m.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; Irene Lindow, Special Agent-in-Charge of the U.S. Department of Labor’s Office of Inspector General in Chicago; and Tara Sullivan, Acting Special Agent-in-Charge of the Chicago office of the Internal Revenue Service Criminal Investigation Division.  The government is represented by Assistant U.S. Attorneys Amarjeet S. Bhachu and Abigail Peluso.

Coli served from 2000 to 2017 as the Secretary-Treasurer of Teamsters Local Union 727.  Coli admitted in a plea agreement that from 2014 to 2017, he received quarterly payments of $25,000 from a Chicago business that employed workers represented by Local 727.  The money was paid to Coli in cash in order to conceal Coli’s receipt of the payments, the plea agreement states.  Coli acknowledged in the plea agreement that had law enforcement not intervened, he expected to receive four more quarterly payments from the company and then retire from the union.

The tax count pertains to Coli’s knowing and willful failure to report the secret cash payments as income for the calendar years 2014 through 2016.  This conduct resulted in a federal tax loss of approximately $105,000, and a State of Illinois tax loss of approximately $12,500.  In addition, Coli acknowledged in the plea agreement that he received income and other benefits from representatives of businesses that dealt with Local 727 that were not properly disclosed to the U.S. Department of Labor.  According to the plea agreement, the benefits included meals in Las Vegas and other cities, free box seat tickets to National Football League and Major League Baseball games, use of a yacht in the U.S. and Italy, and periodic cash payments.

CHICAGO — A federal investigation that previously led to bank fraud and identity theft charges against a north suburban businessman has resulted in indictments against two additional defendants, including the businessman’s brother.

JASON SCHIFF, 40, of Lincolnwood, is charged with three counts of bank fraud, according to a superseding indictment returned July 24, 2019, in U.S. District Court in Chicago.  The superseding indictment also charges Jason Schiff’s brother, YALE SCHIFF, 44, of Riverwoods, with 12 counts of bank fraud and two counts of aggravated identity theft.  Yale Schiff was initially charged in the case last month.  The Schiffs pleaded not guilty today during arraignments before U.S. Magistrate Judge Young B. Kim in Chicago.

A separate indictment returned July 17, 2019, charges Yale Schiff’s business associate, DAVID IZSAK, 44, of Chicago, with eleven counts of bank fraud and one count of aggravated identity theft.  During the investigation, federal authorities seized Izsak’s 57-foot Carver 570 Voyager yacht known as the “Flying Lady.”  The indictment seeks forfeiture of the yacht, as well as a personal money judgment against Izsak of approximately $4 million.  Izsak pleaded not guilty at his arraignment earlier this month.

The indictments were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The government is represented by Assistant U.S. Attorney Sheri H. Mecklenburg.

According to the charges against the Schiffs, Yale Schiff made false statements in loan applications to obtain millions of dollars in mortgage loans secured by a variety of properties.  The charges allege that Yale Schiff filed with the Cook County Recorder of Deeds fraudulent letters from financial institutions claiming that loans on the properties were paid in full and that the mortgages were released, when, in fact, the loans were not paid in full and the mortgages had not been released.  Yale Schiff then kept the financing paid by the banks, as well as proceeds from the eventual sales of the properties, without paying the mortgages, the indictment states.  The fraud allegedly committed by Jason Schiff arose out of bank loans for vehicles and a loan secured by real estate purchased from Yale Schiff.

The charges against Izsak accuse him of fraudulently obtaining loans secured by real estate and vehicles.  Izsak allegedly submitted or caused to be submitted to the Cook County Recorder of Deeds fake letters purporting to be from the lender, purporting to congratulate Izsak for paying his loan in full and releasing the lien.  In reality, the letters were not from the lender, the loans were not paid in full, and the liens were not released, the indictment states. 

Izsak and Yale Schiff are each accused of fraudulently obtaining loans by using names, Social Security numbers and dates of birth that did not belong to them.  Izsak also used a stolen identity to obtain a credit card, while Yale Schiff used fake and stolen identities to fraudulently obtain a charge card at Nordstrom department store and loans for a Jeep Grand Cherokee and a Lexus RX350, 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.  Each bank fraud count is punishable by a maximum sentence of 30 years in prison, while each count of aggravated identity theft carries a mandatory sentence of two years.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A Chinese businesswoman has been indicted in Chicago on federal fraud charges for allegedly providing false verifications of employment for Chinese nationals seeking to stay in the United States on F-1 or H-1B visas.

WEIYUN HUANG, also known as “Kelly Huang,” 30, of Beijing, China, is charged with one count of conspiracy to commit visa fraud and five counts of visa fraud, according to an indictment returned Thursday in U.S. District Court in Chicago.  Huang has been in federal custody since March after her arrest in the Northern District of California.  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; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and James M. Gibbons, Special Agent-in-Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Chicago.  The government is represented by Assistant U.S. Attorney Shoba Pillay. 

An F-1 visa permitted a foreign national to study in the United States at a university or other academic institution.  An F-1 visa-holder could extend the visa by participating in a program that required the student to obtain temporary employment in their area of study.  An H-1B visa permitted U.S.-based employers to temporarily employ foreign nationals in specialty occupations. Foreign nationals with an H-1B visa were permitted to stay in the U.S. for three years, with the possibility of extending their stay to six years.

According to the indictment, Huang founded two companies – FINDREAM LLC and SINOCONTECH LLC – for the purported purpose of employing foreign nationals in the United States.  Huang advertised Findream as a “startup company in technology services and consulting,” with clients in China and the U.S.  Huang used a China-based website, “Chinese Looking for Job,” and a China-based WeChat platform, “Job Hunters of North America,” to advertise Findream and Sinocontech to F-1 visa-holders in the U.S. seeking employment and H-1B visas.

In reality, the companies did not deliver any technology or consulting services nor did they employ any of the individuals who responded to the advertisements, the indictment states.  In exchange for a fee, Huang and the companies provided written proof of employment to their customers, knowing that the companies did not actually employ them, the charges allege.  Huang, Findream and Sinocontech also provided false offer letters and verification of employment letters as purported evidence of employment, knowing the forms were bogus, the indictment states. 

The fraud scheme allowed at least approximately 2,685 customers to list Findream or Sinocontech as their employer in order to stay in the U.S. on the visas, according to the indictment.  Huang and her two companies received at least approximately $2 million from customers for whom they agreed to falsely certify employment, the indictment states.

Findream, which was incorporated in California, and Sinocontech, which was incorporated in Delaware, are also charged in the indictment.  Findream is charged with one count of conspiracy to commit visa fraud and four counts of visa fraud, while Sinocontech is charged with one count of conspiracy to commit visa fraud and one count of visa fraud.

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.  Each count of visa fraud is punishable by up to ten years in prison, while the conspiracy count carries a maximum sentence of five years.

CHICAGO — A con man who operated a fraudulent immigration services business that defrauded hundreds of undocumented immigrants has been sentenced to ten years in federal prison.

JAMES KEEGAN fraudulently offered immigration advocacy services, including guaranteed permanent resident status in the United States, in exchange for a fluctuating fee that averaged $3,000 per applicant.  Keegan falsely claimed that he formerly worked as an attorney for the U.S. Department of Homeland Security and that he still had connections there who could quickly approve the permanent resident applications for legal status.  More than 200 undocumented immigrants paid him more than $687,000, with many of the fees paid in cash at Keegan’s storefront office in Berwyn.  In reality, Keegan was never an attorney and had not worked for DHS, and he never filed any immigration applications on behalf of his undocumented immigrant “clients.”  Keegan spent all of the fees on personal expenses, including gambling losses.

Keegan, 57, of Cicero, pleaded guilty in March to one count of wire fraud.  U.S. District Judge John Robert Blakey imposed the sentence Wednesday in federal court in Chicago.

The sentence 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 U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Chicago; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  Special Assistant U.S. Attorney Christine M. Young represented the government.

According to evidence in the case, Keegan carried out the fraud scheme during a nine-month period in 2017.  He attempted to conceal his scam by creating fake approval notices and attempting to purchase bogus immigration documents.  A law enforcement search of Keegan’s computers and cell phone revealed that he sought to purchase 35 blank residency cards from an online provider of novelty identification documents. 

At the time of his immigration fraud scheme, Keegan was on court supervision after recently being released from federal prison for a prior conviction involving investment fraud.

CHICAGO — A former Chicago resident who laundered illegal drug proceeds on behalf of two cartels in Mexico has been sentenced to five years in federal prison.

MARIO HERRERA was a member of a Mexico-based conspiracy that laundered more than $100 million in narcotics proceeds on behalf of the Jalisco New Generation and Sinaloa cartels.  Herrera was personally responsible for laundering or attempting to launder at least $1.07 million in proceeds from the sale of cartel narcotics.  Herrera was among 30 defendants charged as part of the Chicago-based federal investigation dubbed “Operation King’s Gold.”

Herrera, 55, of Michoacán, Mexico, and formerly of Chicago, pleaded guilty last year to one count of conspiracy to commit money laundering.  U.S. District Judge Andrea R. Wood imposed the five-year sentence Wednesday in federal court in Chicago.

The sentence 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; Tara Sullivan, Acting Special Agent-in-Charge of the Chicago office of the Internal Revenue Service Criminal Investigation Division; and Timothy Jones, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives.  Substantial assistance was provided by the U.S. Drug Enforcement Administration, Cook County Sheriff’s Office, DuPage County Sheriff’s Office, Chicago Police Department, Buffalo Grove Police Department, Joliet Metropolitan Area Narcotics Squad, and the U.S. Marshals Service.

The probe was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies, whose principal mission is to identify, disrupt and dismantle the most serious drug trafficking and money laundering organizations.

“Money is the lifeblood that allows cartels to poison U.S. streets and wage war on innocent men, women, and children on both sides of the border,” Assistant U.S. Attorneys Peter M. Flanagan, Sean K. Driscoll and Aaron R. Bond argued in the government’s sentencing memorandum.  Herrera “took part in an organization that shuttled over $100 million in drug proceeds from street corners of the United States to the pockets of the individuals in Mexico who control the drug trade.  The people who import these narcotics do so for money, and that is exactly what the defendant delivered.”

“This sentence sends a resounding message that transnational criminal organizations will be investigated and their operatives brought to justice,” said HSI Special Agent-in-Charge Gibbons.  “The amount of cooperation between HSI and our state, federal, and international partners is invaluable to halting the deadly actions of complex drug organizations.”

“The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs,” said IRS-CI Acting Special Agent-in-Charge Sullivan.  “Without these ill-gotten gains, the traffickers could not finance their organizations.  IRS Criminal Investigation, along with the Department of Justice, is committed to taking the profit away from the drug traffickers and putting those individuals in jail.”

The leader of the money laundering organization, DIEGO PINEDA SANCHEZ, of Guadalajara, Mexico, was sentenced last fall to 15 years in federal prison for laundering more than $61 million in drug proceeds.  Pineda Sanchez personally negotiated agreements with cartel members in Mexico to launder drug profits in exchange for percentages of the laundered proceeds, keeping the largest percentages for himself and co-defendant CARLOS PARRA-PEDROZA. 

Parra-Pedroza, of Guadalajara, Mexico, directed members of the conspiracy to collect drug proceeds from dozens of couriers throughout the U.S., use those proceeds to purchase scrap and fine gold from local U.S. businesses, and then ship the gold to refineries in Florida and California.  The refineries, in turn, transmitted the cash value of the gold to Parra-Pedroza and co-conspirators in Mexico.  From 2011 to 2014, Parra-Pedroza personally managed the movement of more than $100 million in drug proceeds from the U.S. to cartel members in Mexico who controlled the drug trade on both sides of the U.S.-Mexico border. 

Parra-Pedroza was repeatedly heard in undercover recordings boasting about his organization’s connections with the violent cartels.  During a June 2013 meeting in which Parra-Pedroza urged an informant to more quickly launder the cartel’s money, Parra-Pedroza told the informant about an incident in which drug dealers punished a man who had lost their money by taking his personal possessions and “chopp[ing] off his fingers.”  Parra-Pedroza endorsed this maiming, stating, “[Expletive] had to, even I would’ve agreed.”  In another meeting with the same informant and an undercover law enforcement agent who posed as a gold supplier, Parra-Pedroza explained that the couriers who transport cartel money are entrusted to do so because they “leave their families and everyone over there” in Mexico, and cartel members there tell them, “‘If you take off, I will kill your entire family here.’”

Judge Wood in December sentenced Parra-Pedroza to 13 years in federal prison.

CHICAGO — The former Chief Executive Officer of a publicly traded engine manufacturer in a northwest suburb of Chicago has been indicted on federal fraud charges for allegedly deceiving investors about the company’s financial performance.

GARY S. WINEMASTER served as CEO and Chairman of the Board of Directors of a Wood Dale-based manufacturing company.  He was also the company’s largest shareholder.  From 2014 to 2016, Winemaster schemed with the company’s vice president of sales, CRAIG M. DAVIS, its general manager, JAMES F. NEEDHAM, and others to fraudulently inflate – by millions of dollars – the revenue reported by the company to the investing public, according to an indictment returned Thursday in U.S. District Court in Chicago.  In doing so, the trio deceived shareholders and other investors about the company’s financial health and performance, the indictment states.

The indictment charges Winemaster, 61, of Mundelein, with one count of securities fraud, ten counts of wire fraud, two counts of making false statements to an auditor, and one count of failing to certify financial reports.  Davis, 45, of Batavia, and Needham, 57, of Leavenworth, Kansas, are each charged with one count of securities fraud and ten counts of wire fraud.  U.S. Magistrate Judge M. David Weisman scheduled arraignments for July 25, 2019, at 10:00 a.m.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI.  The U.S. Securities and Exchange Commission, which filed a civil enforcement lawsuit against Winemaster, Davis, and Needham, provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Paul Tzur and Heidi Manschreck.

According to the indictment, the defendants schemed to defraud shareholders and other investors in connection with the company’s common stock, which was listed on the Nasdaq Stock Market.  The defendants concealed material information about special terms of sales to customers, causing the company’s accounting department to recognize inflated revenue figures for those transactions, the indictment states.  Winemaster and Davis also authorized shipments of products to customers who had not agreed to accept delivery, the indictment states.  The shipments falsely supported the accounting department’s treatment of the transactions as final sales, thus fraudulently causing the company to book revenue from the deals, the charges allege. 

The defendants also arranged additional transactions by the company’s customers that were meant to fraudulently support the company’s accounting for earlier sales, 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. 

The maximum sentence for securities fraud is 25 years in prison, while wire fraud and making false statements to an auditor are each punishable by up to 20 years.  Failing to certify financial reports is punishable by up to ten years and a fine of up to $1 million.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A convicted felon has been sentenced to more than six years in federal prison for illegally possessing a loaded assault rifle on an elevated train platform in Chicago’s Lakeview neighborhood.

JORDAN WATKINS, 31, of Chicago, illegally possessed the gun on the morning of July 29, 2017, at the Chicago Transit Authority’s Belmont Station, which serves multiple elevated train lines.  The rifle was strapped across Watkins’s chest underneath his grey sweatshirt.  It was loaded and had one live round in the chamber.  Watkins was also carrying a messenger bag that contained two 30-round magazines, one of which was loaded with four rounds.  After a 911 call reported a man who “has a gun on him and like a really big clip,” multiple Chicago Police officers responded to the station and arrested Watkins on the southbound platform.

Watkins, who was on parole at the time he possessed the rifle, had previously been convicted of multiple felonies and was not legally allowed to possess a firearm.  He pleaded guilty last year in the federal case to one count of illegal possession of a firearm by a felon.  U.S. District Judge Andrea R. Wood on Wednesday sentenced Watkins to six years and four months in federal prison.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Eddie Johnson, Superintendent of the Chicago Police Department.  The Illinois Department of Corrections provided valuable assistance.

“By carrying a loaded assault rifle into a CTA station, Watkins committed a serious offense that jeopardized public safety,” Assistant U.S. Attorney Grayson S. Walker argued in the government’s sentencing memorandum.

Holding convicted felons accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods – the Department of Justice’s violent crime reduction strategy.  In the Northern District of Illinois, U.S. Attorney Lausch and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, including by prosecuting individuals who illegally possess firearms.

CHICAGO — A convicted felon has been charged with a federal firearm violation for allegedly illegally possessing a loaded semiautomatic handgun in the Old Town neighborhood on Chicago’s North Side.

GASTON TUCKER, 32, of Chicago, is charged with one count of illegal possession of a firearm by a convicted felon.  Tucker illegally possessed the gun on Feb. 17, 2019, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  On July 9, 2019, U.S. Magistrate Judge Maria Valdez ordered Tucker detained in federal custody without bond.

The complaint and detention order were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Eddie Johnson, Superintendent of the Chicago Police Department.

Holding convicted felons accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods – the Department of Justice’s violent crime reduction strategy.  In the Northern District of Illinois, U.S. Attorney Lausch and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, including by prosecuting individuals who illegally possess firearms.

According to the complaint, Tucker was a backseat passenger in a sedan that was parked in front of a fire hydrant in the 1300 block of North Sedgwick Street in Chicago.  A Chicago Police officer approached the vehicle and obtained identification from the vehicle’s occupants.  As the officer walked back to her car to review the identifications, Tucker got out and ran down the street, the complaint states. 

As officers began searching the area, security guards from a nearby housing complex reported seeing a man run through the complex and drop an object underneath a dumpster, the complaint states.  Officers later searched underneath the dumpster and recovered the handgun, according to the complaint.

Tucker was previously convicted in state court of aggravated battery with a firearm, a felony for which he was on parole at the time of the alleged federal offense.

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.  Illegal possession of a firearm by a convicted felon is punishable by up to ten years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — Chicago recording artist ROBERT SYLVESTER KELLY, also known as “R. Kelly,” has been arrested on federal child pornography and obstruction charges.

A 13-count indictment returned Thursday in U.S. District Court in Chicago charges Kelly with producing and receiving child pornography, and enticing minors to engage in criminal sexual activity.  The charges accuse Kelly of engaging in sex acts with five minors and recording some of the abuse on multiple videos.  The indictment also charges Kelly with conspiring to intimidate victims and conceal evidence in an effort to obstruct law enforcement, including an investigation in the 2000s that resulted in his trial in 2008 in Cook County on state child pornography charges. 

Kelly, 52, of Chicago, was arrested Thursday night.  He is scheduled to appear for an arraignment and detention hearing on Tuesday at 1:00 p.m. before U.S. District Judge Harry D. Leinenweber in Chicago.  Kelly is charged with one count of conspiracy to receive child pornography, two counts of receiving child pornography, four counts of producing child pornography, five counts of enticement of a minor to engage in criminal sexual activity, and one count of conspiracy to obstruct justice.

The indictment also charges two former employees of Kelly’s music business: DERREL MCDAVID, 58, of Chicago (one count of conspiracy to receive child pornography, two counts of receiving child pornography, one count of conspiracy to obstruct justice), and MILTON BROWN, also known as “June Brown,” 53, of Chicago (one count of conspiracy to receive child pornography).  McDavid is scheduled to make an initial court appearance today at 11:00 a.m. before U.S. Magistrate Judge Young B. Kim in Chicago, while Brown is scheduled to make an initial appearance before Judge Kim on July 19, 2019, at 11:00 a.m. 

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 U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Chicago; and Tara Sullivan, Acting Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.  Substantial assistance was provided by the Cook County State’s Attorney’s Office and the Chicago Police Department.  Assistant U.S. Attorneys Angel Krull, Abigail L. Peluso and Jeannice W. Appenteng represent the government.

“This indictment demonstrates our office’s commitment to holding individuals such as Kelly accountable for criminal sexual abuse of minors, protecting the victims of such crimes, and punishing those who obstruct law enforcement investigations,” said U.S. Attorney Lausch.  “I thank the courageous individuals who provided law enforcement with important information related to these allegations, and I encourage others with helpful information to do the same.  Together with our law enforcement partners and with the help of victims and other witnesses, we will continue to vigorously investigate and prosecute individuals who sexually exploit children.”

“Today’s arrest serves as a reminder of HSI’s commitment to protecting the most vulnerable members of our society – our children,” said HSI Special Agent-in-Charge Gibbons.  “We will continue to work in partnership with fellow law enforcement agencies and prosecutors to bring those engaged in child exploitation to justice.”

A separate federal indictment was unsealed today in the Eastern District of New York charging Kelly with racketeering for allegedly operating a criminal enterprise that promoted Kelly’s music and recruited women and girls to engage in illegal sexual activity.  Kelly will appear for a removal hearing on the New York charges today at 1:45 p.m. before U.S. Magistrate Judge Sheila Finnegan in Chicago.

Kelly is an award-winning recording artist and record producer who has operated various music businesses in Chicago.  According to the indictment in the Northern District of Illinois, Kelly met the five victims in the late 1990s.  Kelly engaged in sex acts with the victims while they were all under the age of 18, and he created numerous explicit videos with four of them, the indictment states.  The charges allege that Kelly and McDavid in 2001 began paying an acquaintance hundreds of thousands of dollars to collect the videos for the purpose of concealing and covering up their existence.  When the acquaintance later planned to hold a news conference to publicly announce that he recovered the videos, Kelly, McDavid and others paid him approximately $170,000 in exchange for agreeing to cancel the event, the indictment states.

Kelly and McDavid also agreed to pay one of the minors and another individual for their efforts to return the videos, but only after they took polygraph examinations to confirm they returned all copies in their possession, the charges allege.

The indictment seeks forfeiture of a personal money judgment of approximately $1.55 million.

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. 

Producing child pornography carries a mandatory minimum sentence of ten years in prison and a maximum of 20 years.  Receiving child pornography and conspiring to receive child pornography are each punishable by a mandatory minimum sentence of five years in prison and a maximum of 20 years.  The maximum sentence for enticement of a minor is ten years.  Conspiracy to obstruct justice is punishable by up to five years.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

If you believe you are a victim of sexual exploitation by Robert Sylvester Kelly, you are encouraged to contact HSI’s confidential tip line by calling 1-866-DHS-2-ICE (1-866-347-2423) or by logging on to https://www.ice.gov/webform/hsi-tip-form.  The service is available 24 hours a day, seven days a week.

CHICAGO — A software engineer at a suburban Chicago locomotive manufacturer stole proprietary information from the company and took it to China, according to an indictment unsealed this week in federal court in Chicago.

XUDONG YAO, also known as “William Yao,” 57, is charged with nine counts of theft of trade secrets.  Yao is currently at large.  He is believed to be residing in China.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; John C. Demers, Assistant Attorney General for National Security; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  The government is represented by Assistant U.S. Attorney Peter M. Flanagan.

According to the indictment, Yao began working for the suburban Chicago manufacturer in August 2014.  Within two weeks, Yao downloaded more than 3,000 unique electronic files containing proprietary and trade secret information relating to the system that operates the manufacturer’s locomotives, the indictment states.  Over the next six months, Yao downloaded numerous other electronic files containing proprietary and trade secret information, including technical documents and software source code, the indictment states.  During that time, Yao allegedly sought, negotiated, and accepted employment with a business in China that provided automotive telematics service systems.

The suburban Chicago manufacturer terminated Yao in February 2015 for reasons unrelated to the alleged theft, which at that time had not been discovered.  Shortly thereafter, Yao made copies of the stolen trade secret information, the indictment states.  He allegedly traveled to China in July 2015 and began working for the Chinese company.

On Nov. 18, 2015, Yao traveled from China to O’Hare International Airport in Chicago, according to the indictment.  At the time, he had in his possession the stolen trade secret information, including nine complete copies of the suburban Chicago company’s control system source code and the systems specifications that explained how the code worked, the indictment states.  Yao returned to China at some point thereafter.

The indictment was returned in December 2017 and ordered unsealed Wednesday.

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.  Theft of trade secrets is punishable by a maximum sentence of ten years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

A software engineer at a suburban Chicago locomotive manufacturer stole proprietary information from the company and took it to China, according to an indictment unsealed this week in federal court in Chicago.

Xudong Yao, also known as “William Yao,” 57, is charged with nine counts of theft of trade secrets.  Yao is currently at large and believed to be residing in China.

The indictment was announced by Assistant Attorney General for National Security John C. Demers, U.S. Attorney John R. Lausch Jr. for the Northern District of Illinois and Special Agent-in-Charge Jeffrey S. Sallet of the FBI’s Chicago Field Office.  The government is represented by Assistant U.S. Attorney Peter M. Flanagan of the Northern District of Illinois.

According to the indictment, Yao began working for the suburban Chicago manufacturer in August 2014.  Within two weeks of being hired, Yao downloaded more than 3,000 unique electronic files containing proprietary and trade secret information relating to the system that operates the manufacturer’s locomotives, the indictment states.  During the next six months, Yao downloaded numerous other electronic files containing proprietary and trade secret information, including technical documents and software source code, the indictment states.  During the time of this illicit downloading of trade secrets, Yao allegedly simultaneously sought, negotiated, and accepted employment with a business in China that provided automotive telematics service systems.

The suburban Chicago manufacturer terminated Yao in February 2015 for reasons unrelated to the alleged theft, which at that time had not been discovered.  Shortly thereafter, according to the indictment, Yao made copies of the stolen trade secret information and then traveled to China in July 2015 and began working for the Chinese company.

On Nov. 18, 2015, Yao traveled from China to O’Hare International Airport in Chicago, according to the indictment.  At the time, he had in his possession the stolen trade secret information, including nine complete copies of the suburban Chicago company’s control system source code and the systems specifications that explained how the code worked, the indictment states.  Yao returned to China at some point thereafter.

The indictment was returned in December 2017 and ordered unsealed Wednesday. 

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.  Theft of trade secrets is punishable by a maximum sentence of 10 years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines. 

CHICAGO — A former technician at a Chicago pharmacy has been sentenced to a year and a day in federal prison for stealing thousands of pills of Hydrocodone and selling them for a profit.

JACQUELINE GREEN worked at Allcare Discount Pharmacy, located in the 2700 block of West North Avenue in Chicago.  From October 2015 to December 2017, Green and a co-defendant, ELIZABETH CRUZ, conspired to steal approximately 56,108 pills of Hydrocodone and sell them outside the pharmacy for a profit.  Green and Cruz received at least $10,800 in proceeds from the sale of the stolen pills.

Green, 28, of Chicago, pleaded guilty earlier this year to one count of conspiracy to possess a controlled substance with the intent to deliver.  U.S. District Judge Ronald A. Guzman imposed the prison sentence Wednesday in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration. 

“The opioid epidemic has devastated the lives of countless individuals through addiction and overdose,” Assistant U.S. Attorney Nani M. Gilkerson argued in the government’s sentencing memorandum.  “Defendant contributed to this national crisis by helping make opiates available on the street to individuals who otherwise would not and should not have access to them.”

“Pharmacies and their employees are trusted to handle dangerous pharmaceutical medications responsibly,” said DEA Assistant Special Agent-in-Charge Robert Bell.  “When pharmacy employees illegally divert potent pain medications for illegitimate purposes, they put individuals and their families at risk of drug dependence and overdoses.  The DEA will continue to work closely with the U.S. Attorney’s Office to bring violators to justice.”

The government was represented by Ms. Gilkerson and Assistant U.S. Attorney David Rojas.

Cruz, of Stone Park, pleaded guilty earlier this year to the same charge as Green.  Cruz admitted in a plea agreement that she concealed the theft by falsifying the pharmacy’s inventory to make it look like the pills had either not been received from the distributor or had been dispensed to patients.  Judge Guzman set Cruz’s sentencing for Sept. 5, 2019, at 2:00 p.m.

ROCKFORD — The former director of operations of a Rockford non-profit organization was sentenced Tuesday by U.S. District Judge Philip G. Reinhard to 37 months in prison for mail fraud and tax fraud.

LEILANI HILLIS, 60, formerly of Rockford, was also ordered to pay restitution of $632,718.99 on the mail fraud charge and $151,186.91 on the tax fraud charge.  Hillis pleaded guilty to the charges in March.

The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Tara Sullivan, Acting Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The government was represented by Assistant U.S. Attorney Scott R. Paccagnini.

According to a written plea agreement, since 2001 Hillis was an employee of a non-profit organization whose mission was to attract, retain and expand jobs in the Rockford area.  The organization received funding from private sources and local governments. During her employment, Hillis handled the organization’s payroll, human resource matters and accounting, and oversaw the annual audit.  As of 2009, Hillis had signatory authority on the organization’s bank account and access to the organization’s PayPal account.  The organization issued employees, including Hillis, a credit card in the employee’s name.  From 2009 through April 2018, Hillis used her employee issued credit card to make unauthorized purchases for her personal benefit totaling $632,718.99.  Hillis concealed her crime by using the organization’s accounting codes to make it appear the purchases were for the organization’s benefit, and she forged the initials of the organization’s president on the expense reports.  Hillis issued and signed checks from the organization’s account to the bank, knowing the payments included money to pay for her unauthorized purchases made with the organization’s credit card.

Hillis also admitted that she did not report as income the money from the organization that she used to pay the organization’s credit card for her unauthorized personal purchases.  As a result, for the tax years 2014 to 2017, Hillis failed to pay $151,186.91 in federal income taxes.

CHICAGO — A federal grand jury in Chicago has indicted an Evanston man on robbery and firearm charges in connection with three violent gas station heists in the north suburbs.

MARIO BANKS JR., 24, is charged with three counts of robbery and three counts of using, carrying, and brandishing a firearm during a crime of violence.  The indictment accuses Banks of robbing three gas stations at gunpoint:

• Nov. 4, 2018: Bucky’s Express Mobil, 6400 block of North Cicero Avenue, Lincolnwood.
• Feb. 16, 2019: Shell Oil, 3300 block of Howard Street, Skokie.
• Feb. 19, 2019: Bucky’s Express Mobil, 6400 block of North Cicero Avenue, Lincolnwood.

The indictment was returned June 20, 2019, in federal court in Chicago.  Banks has pleaded not guilty to the charges and he remains detained in federal custody.  A status hearing is set for Sept. 12, 2019, before U.S. District Judge Virginia M. Kendall.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Demitrous Cook, Chief the Evanston Police Department; Jay Parrott, Chief of the Lincolnwood Police Department; Anthony F. Scarpelli, Chief of the Skokie Police Department; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI.  The government is represented by Assistant U.S. Attorney Eric S. Pruitt.

The firearm counts each carry a mandatory minimum sentence of five years in prison and a maximum sentence of life, while each robbery count 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. 

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.

CHICAGO — A Michigan man has been arrested on federal criminal charges for allegedly conducting illegal charter boat operations on Chicago waterways.

CHRISTOPHER MIKE GARBOWSKI used a 40-foot powerboat known by the names “Anchorman,” “Sea Hawk” and “Manaje III,” to conduct illegal commercial charter operations on Chicago waterways, including Lake Michigan and the Chicago River, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  Garbowski charged money to charter the boat to various groups of passengers, such as bachelorette parties and family celebrations.  Garbowski conducted the charter operations during the 2017 and 2018 boating seasons even though the vessel had not been inspected and certified by the U.S. Coast Guard, as required by federal regulations, the complaint states.  Garbowski also captained the charters even though he lacked the proper Coast Guard credentials to do so, the charges allege.

Garbowski, also known as “Christopher Michael Garbowski” and “Michael Gunnman,” 33, of Sterling Heights, Mich., is charged with one count of violating an order of the captain of the port.  Garbowski was arrested Saturday.  He made an initial court appearance Saturday afternoon before U.S. Magistrate Judge Young B. Kim, who ordered Garbowski released on a $10,000 unsecured bond.  Garbowski’s next court date was set for July 8, 2019.

The complaint was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Neal R. Marzloff, Special Agent-in-Charge of the Coast Guard Investigative Service, Central Region; and Jerry Costello, Director of the Illinois Department of Natural Resources Conservation Police.  The government is represented by Assistant U.S. Attorney Timothy J. Chapman.

“The safety of the boating public is a top priority for the Coast Guard,” said CGIS Special Agent-in-Charge Marzloff.  “Illegal charters pose a safety risk to passengers, but also impact the livelihood of licensed mariners that abide by the rules.  The Coast Guard Investigative Service (CGIS), in coordination with our partners, is committed to investigating those who knowingly violate maritime laws and regulations.”

According to the complaint, Garbowski advertised his charter business on websites and apps such as Get My Boat and Boatbound.  The Coast Guard notified Garbowski about the federal regulations on multiple occasions, including at Monroe Harbor in Chicago on Aug. 19, 2017, when Coast Guard personnel boarded the boat moments before Garbowski was set to begin a five-hour charter for eight female passengers who booked the “Sea Hawk” for $2,400, the complaint states.  As the women were walking down the dock to board the boat, Garbowski called one of them on her cell phone and told her to lie to Coast Guard personnel by pretending they were all friends with Garbowski, the complaint states.

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 — The U.S. Attorney’s Office in Chicago has charged two Chicago teenagers with robbing a Near North Side sandwich shop earlier this week.  Law enforcement is also investigating whether the pair committed other robberies this month in the city’s downtown Loop neighborhood.

BRANTEZ EVANS, 18, and LAMARR BROWN, 19, are charged with one count of robbery for allegedly taking $307 during a heist Tuesday at a Subway restaurant, 1234 N. Halsted St. in Chicago, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  According to the complaint, Evans and Brown entered the restaurant, and Brown approached the counter, lifted the right side of his shirt and displayed what appeared to be a firearm.  Brown then told a clerk, “give me the money,” the complaint states.  When the clerk briefly hesitated, Brown allegedly stated, “Come on man you don’t want to get shot.”

Evans and Brown fled the restaurant with the cash but were arrested about 15 minutes later by officers from the Chicago Police Department’s 18th District.  The officers recovered a black BB gun that was consistent with the weapon described by the robbery victims, the complaint states.  Evans and Brown are also suspected of robbing two other Subway restaurants, a Dunkin Donuts, and a Mini-Mart, all in the downtown Loop neighborhood this month, according to the complaint.  The investigation remains ongoing.

Brown was scheduled to appear for a detention hearing this afternoon before U.S. Magistrate Judge Young B. Kim in Chicago.  Evans is set to appear for a detention hearing before Judge Kim on Monday at 1:00 p.m.

The complaint and arrests were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; Jason R. Wojdylo, Acting Chief Deputy U.S. Marshal for the Northern District of Illinois; and Eddie Johnson, Superintendent of the Chicago Police Department.  The Federal Protective Service provided valuable assistance.  The government is represented by Assistant U.S. Attorney Charles W. Mulaney.

The robbery charge is punishable by up to 20 years in prison.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.  The public is reminded that a complaint 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.

CHICAGO — Former City of Chicago Alderman WILLIE B. COCHRAN was sentenced today to a year and a day in federal prison for pocketing money from a charitable fund intended to help families and children in his South Side ward.

Cochran, 67, of Chicago, pleaded guilty earlier this year to one count of wire fraud.  U.S. District Judge Jorge L. Alonso 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; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  The FBI initiated the investigation after receiving information from the former City of Chicago Legislative Inspector General’s Office, which was headed at that time by Faisal Khan.  The government is represented by Assistant U.S. Attorneys Heather McShain and Christopher Stetler.

While representing the 20th Ward in the Chicago City Council, Cochran operated the “20th Ward Activities Fund,” which he purported to use for charitable endeavors to help families and children living in the ward.  Cochran controlled a bank account connected to the fund.  When soliciting donations to the fund, Cochran falsely represented that all contributions would be used for charitable events, including a back-to-school picnic, a Valentine’s Day party for senior citizens, and events during the holiday season in November and December.

Cochran admitted in a plea agreement that he used some of the contribution money for his own personal use, including paying his daughter’s college tuition, withdrawing cash at casino ATMs, and purchasing items for his home.  From January 2010 to April 2014, Cochran pocketed approximately $14,285 from the fund and converted the money to his own personal use, the plea agreement states.

CHICAGO — Two men from a north suburb of Chicago have been convicted of conspiring to provide material support to the Islamic State of Iraq and al Sham, a foreign terrorist organization also known as ISIS.

The jury in federal court in Chicago on Thursday convicted JOSEPH D. JONES, 37, and EDWARD SCHIMENTI, 37, both of Zion, on one count of conspiring to provide material support and resources to ISIS.  Schimenti was also convicted on one count of making false statements to the FBI.

The material support charge is punishable by a maximum sentence of 20 years in prison, while the false statement count carries a maximum sentence of eight years.  U.S. District Judge Andrea R. Wood did not immediately set a sentencing date.  A status hearing was scheduled for Aug. 14, 2019.

The case was investigated by the Chicago Joint Terrorism Task Force, which is comprised of numerous federal, state and local law enforcement agencies.

The convictions were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; John C. Demers, Assistant Attorney General for National Security; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI.  The Zion Police Department provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Barry Jonas, Rajnath Laud and David Rojas of the Northern District of Illinois, and Trial Attorney Alexandra S. Hughes of the National Security Division’s Counterterrorism Section.

Evidence at trial revealed that Jones and Schimenti advocated on social media for violent extremism in support of the terrorist group.  In 2015, Jones and Schimenti began meeting with undercover FBI employees and individuals who were cooperating with law enforcement.  During the meetings, Jones and Schimenti discussed their devotion to ISIS and their commitment to ISIS principles.  Many of these meetings occurred in the north suburbs of Chicago.  Jones and Schimenti at one point shared photographs of themselves holding the ISIS flag at the Illinois Beach State Park in Zion.

In 2017, the pair furnished cellular phones to a cooperating individual, believing the phones would be used to detonate explosive devices in ISIS attacks overseas.  On April 7, 2017, Jones and Schimenti drove the cooperating individual to O’Hare International Airport in Chicago, with the understanding that the cooperating individual would be traveling to Syria to fight with ISIS.

The false statement conviction against Schimenti stems from the materially false statements he gave to the FBI after his arrest.  During the interview, Schimenti said he had never engaged in conversations about bomb detonators, and that he was under the impression the phones would be repaired and re-sold and not used for any other purpose.

Two men from a north suburb of Chicago have been convicted of conspiring to provide material support to the Islamic State of Iraq and al Sham, a foreign terrorist organization also known as ISIS. Assistant Attorney General for National Security John C. Demers, U.S. Attorney John R. Lausch Jr. and Special Agent-in-Charge Jeffrey S. Sallet of the FBI’s Chicago Field Office made the announcement.

The jury in federal court in Chicago on Thursday convicted Joseph D. Jones, 37, and Edward Schimenti, 37, both of Zion, Illinois, on one count of conspiring to provide material support and resources to ISIS.  Schimenti was also convicted on one count of making false statements to the FBI.

The material support charge is punishable by a maximum sentence of 20 years in prison, while the false statement count carries a maximum sentence of eight years.  U.S. District Judge Andrea R. Wood did not immediately set a sentencing date.  A status hearing was scheduled for Aug. 14, 2019.

The case was investigated by the Chicago Joint Terrorism Task Force, which is comprised of numerous federal, state and local law enforcement agencies.

Evidence at trial revealed that Jones and Schimenti advocated on social media for violent extremism in support of the terrorist group.  In 2015, Jones and Schimenti began meeting with undercover FBI employees and individuals who were cooperating with law enforcement.  During the meetings, Jones and Schimenti discussed their devotion to ISIS and their commitment to ISIS’ violent extremist principles.  Many of these meetings occurred in the north suburbs of Chicago.  Jones and Schimenti at one point shared photographs of themselves holding the ISIS flag at the Illinois Beach State Park in Zion.

In 2017, the pair furnished cellular phones to a cooperating individual, believing the phones would be used to detonate explosive devices in ISIS attacks overseas.  On April 7, 2017, Jones and Schimenti drove the cooperating individual to O’Hare International Airport in Chicago, with the understanding that the cooperating individual would be traveling to Syria to fight with ISIS.

The false statement conviction against Schimenti stems from the materially false statements he gave to the FBI after his arrest.  During the interview, Schimenti said he had never engaged in conversations about bomb detonators, and that he was under the impression the phones would be repaired and re-sold and not used for any other purpose.

The Zion Police Department provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Barry Jonas, Rajnath Laud and David Rojas of the Northern District of Illinois and Trial Attorney Alexandra S. Hughes of the National Security Division’s Counterterrorism Division.

CHICAGO — A federal judge has sentenced a man to life in prison for forcing women and children to engage in commercial sex acts in Chicago and the suburbs.

SAMUEL NICHOLS led a sex trafficking operation that violently forced at least 12 women and children into the commercial sex trade.  Some of the minors were as young as 13 years old when Nichols trafficked them.  Nichols kept the money earned by his victims, often taking in $1,000 per day.  He openly flaunted his role as a trafficker, flashing money in Instagram posts, having “#1 Pimp” tattooed on his stomach, and using the trafficking proceeds to fund a Chicago-area rap group that posted music videos on websites such as YouTube. 

Nichols, 34, formerly of Chicago, has been in law enforcement custody since October 2014.  A federal jury in Chicago last year convicted Nichols on multiple counts of sex trafficking.  U.S. District Judge Virginia M. Kendall on Monday sentenced Nichols to life in prison.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI.  The Carol Stream Police Department provided valuable assistance.

“The depth and breadth of defendant’s crimes are horrific,” Assistant U.S. Attorneys Sarah Streicker, Michelle Petersen and Elizabeth Pozolo argued in the government’s sentencing memorandum.  “While these women and children had sex with dozens of strangers, defendant took the money they earned and used it to fund his own extravagant lifestyle.”

A co-defendant, CHARLES FEARS, 26, of Chicago, pleaded guilty last year to conspiracy and sex trafficking charges.  Fears is scheduled to be sentenced by Judge Kendall on July 16, 2019.

Evidence in the case revealed that Nichols and Fears carried firearms and would often hit, slap and choke the victims who worked for them, including one incident in which Nichols beat a female so badly she had to be hospitalized.  The pair also supplied the victims with drugs and alcohol while coercing them to participate in the commercial sex acts.

If you believe you are a victim of sexual exploitation, you are encouraged to contact the National Center for Missing and Exploited Children by logging on to www.missingkids.com/home or by calling 1-800-843-5678.  The service is available 24 hours a day, seven days a week.

CHICAGO — A federal jury has convicted a Chicago man of shooting an agent from the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives.

ERNESTO GODINEZ shot the agent on May 4, 2018, in the Back of the Yards neighborhood of Chicago.  At the time of the early morning shooting, the agent and several other law enforcement officers were conducting a covert law enforcement activity in the 4300 block of South Hermitage Avenue.  The agent was wounded but survived, and he testified at the trial.

The jury returned its verdict on Monday in federal court in Chicago.  Godinez, 29, was found guilty on both counts against him, including one count of assault of a federal officer, which is punishable by up to 20 years in prison, and one count of discharging a firearm during a crime of violence, which is punishable by a minimum sentence of ten years in prison that must be served after any term of imprisonment imposed on the assault conviction.  U.S. District Judge Harry D. Leinenweber set sentencing for September 19, 2019.

The conviction was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Timothy Jones, Special Agent-in-Charge of the Chicago Field Division of ATF; and Eddie Johnson, Superintendent of the Chicago Police Department.  Substantial assistance was provided by the Chicago Police Department, U.S. Marshals Service, Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Drug Enforcement Administration, and Illinois State Police.  The government is represented by Assistant U.S. Attorneys Kavitha J. Babu and Nicholas J. Eichenseer.

CHICAGO — At the request of the U.S. Food and Drug Administration, U.S. Marshals have seized more than 300,000 containers of dietary supplements, including tablets, capsules and teas, from a suburban Chicago company.

The containers were held by Life Rising Corp., a Willowbrook-based manufacturer and distributor of dietary supplement products bearing the brand names Life Rising, Holicare, and HopeStream, among others.  The goods were seized Friday at Life Rising’s facilities in the 7800 block of South Quincy Street in the southwest suburb.  The seized goods consisted of more than 500 products, valued at approximately $3.5 million.

The products were seized after the U.S. Attorney’s Office in Chicago filed a civil forfeiture complaint on behalf of the FDA.  The U.S. District Court for the Northern District of Illinois determined there was probable cause that Life Rising prepared, packed and/or held dietary supplements under conditions that do not conform to the dietary supplement current good manufacturing practice (cGMP) requirements.

The complaint and seizures were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Melinda K. Plaisier, the FDA’s Associate Commissioner for Regulatory Affairs; and Jason R. Wojdylo, Acting Chief Deputy U.S. Marshal for the Northern District of Illinois.  The government is represented by Assistant U.S. Attorney Ernest Y. Ling.

“When dietary supplement manufacturers deviate from proper manufacturing requirements, they put the public health at risk,” said U.S. Attorney Lausch.  “The U.S. Attorney’s Office will continue to work closely with the FDA to prevent dietary supplement manufacturers from jeopardizing public health.”

“This seizure underscores the agency’s commitment to taking aggressive action when manufacturers distribute adulterated dietary supplements that have the potential to put consumers at risk,” said Associate FDA Commissioner Plaisier.  “The FDA has a variety of enforcement tools at its disposal, and when products don’t comply with FDA regulations, we will not hesitate to take appropriate action.”

“Were it not for civil asset forfeiture, these products would remain in commerce and a danger to the community,” said Acting Chief Deputy U.S. Marshal Wojdylo.  “Civil forfeiture ensures that no individual or company profits from misconduct, especially when that profit comes from putting the citizens of our communities at risk.”

According to the civil complaint, the FDA earlier this year conducted an inspection of Life Rising’s facility and observed, among other things, significant and continuing deviations from the dietary supplement manufacturing regulations, many of which were similar or identical to violations noted during a prior FDA inspection of Life Rising in 2016 and in a warning letter the FDA issued to Life Rising in 2017.  The FDA inspection found that the company failed to establish product specifications for the identity, purity, strength, and composition of each finished batch of dietary supplement.  The company also lacked written procedures for pest control, and for maintaining, cleaning, and sanitizing equipment that came in contact with the dietary supplements, according to the FDA.

The FDA last month issued an Administrative Detention Order to prevent the products from reaching consumers until they could be seized.  The FDA also issued a safety alert for three Life Rising products (Life Rising Holder-W Holder Warmer capsules, Life Rising NECK-ND Neck Clear capsules, and HoliCare Metabolism Cleansing tablets) because those products may be contaminated with lead.  These products were recalled by Life Rising on May 2, 2019, shortly before the FDA’s safety alert.

The FDA discourages consumers from purchasing or using dietary supplement products bearing brand names Life Rising, Holicare, or HopeStream.  Health care professionals and consumers should report to the FDA any adverse events related to Life Rising’s products by completing and submitting the report online at www.fda.gov/medwatch/report.htm, or by downloading the form, completing it, and faxing it to 1-800-FDA-0178.

The public is reminded that a complaint contains only allegations and is not evidence of liability.  The government has the burden of proving the civil case by a preponderance of the evidence.

CHICAGO — The former president of the village of Posen pleaded guilty in federal court today to charges he embezzled money from the south suburb and spent it at casinos.

DONALD W. SCHUPEK, 79, of Posen, pleaded guilty to one count of embezzlement.  The conviction carries a maximum penalty of ten years in prison and a fine of up to $250,000, plus mandatory restitution.  U.S. District Judge Robert W. Gettleman set sentencing for Sept. 12, 2019, 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 Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI.  The government is represented by Assistant U.S. Attorney Terry Kinney.

According to his plea agreement, Schupek, while serving as Posen president, directed the village bookkeeper to issue checks on the village’s checking account made payable to Schupek.  From June 2014 to August 2016, Schupek directed the issuance of nine checks, totaling $27,000, the plea agreement states.  At the time, Schupek did not inform the village treasurer nor the village board that he had issued these checks to himself.

Schupek admitted in the plea agreement that he converted the funds to his own use, including gambling expenses at two casinos in Joliet.

CHICAGO — The former Chief Executive Officer of a northwest suburban nutrition company has pleaded guilty to securities fraud for engaging in a market manipulation scheme to artificially inflate the company’s stock price.

ANDREW J. KANDALEPAS, 67, of Schaumburg, pleaded guilty Tuesday to one count of securities fraud.  U.S. District Judge Gary Feinerman set sentencing for Sept. 5, 2019.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI.  The U.S. Securities and Exchange Commission provided valuable assistance.  The government is represented by Assistant U.S. Attorneys John D. Mitchell and William Hogan.

Kandalepas was the CEO, President and Chairman of the Board for Wellness Center USA Inc., whose principal place of business was in Hoffman Estates.  The company raised more than $19 million from investors through the sale of common stock, and Kandalepas himself held more than three million shares.  Kandalepas admitted in a plea agreement that from December 2012 to June 2015, he bought and sold Wellness Center shares for the purpose of artificially inflating the stock price. 

Many of his trades occurred at or near the close of normal trading hours in a form of market manipulation known as “marking the close.”  According to an example cited in the plea agreement, Kandalepas, using a brokerage account in the name of an acquaintance, executed a trade to buy 300 Wellness Center shares within the last five seconds of the trading day on May 4, 2015.  The trade artificially raised Wellness Center’s share price by 4%, from $0.27 to $0.28, causing a profit for Kandalepas of approximately $30,000.

In all, Kandalepas netted at least $136,176 in trading profits for his personal use.

Securities fraud is punishable by up to 20 years in prison.  The Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

ROCKFORD — A Rockford man was convicted today of aggravated bank robbery after a 3-day jury trial in federal court. 

EDWARD EVERETT JOHNSON III, also known as “Edward Everett,” 34, was found guilty of robbing Chase Bank, 4425 Harrison Ave. in Rockford, on April 20, 2016.

Johnson faces a maximum penalty of 25 years in prison, up to three years of supervised release following imprisonment, a fine of up to $250,000, and full restitution.  The Court must impose a reasonable sentence guided by the advisory United States Sentencing Guidelines.  Sentencing for Johnson is set for Sept. 9, 2019, at 11:30 a.m.

The conviction was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Daniel O’Shea, Rockford Police Chief.  The Rockville City, Md., Police Department, Montgomery County, Md., Police Department, and Amtrak Police Department assisted in the investigation.  The government is represented by Assistant U.S. Attorneys Monica V. Mallory and Scott R. Paccagnini.

According to the indictment and evidence at trial, Johnson arrived in the parking lot at Chase Bank mid-afternoon on April 20, 2019, driving a taxi mini-van.  At approximately 3:00 p.m., Johnson entered the bank and approached a bank teller, pulled out a handgun and a backpack and told the teller he wanted all the money in her money drawer.  After the teller emptied her drawer and placed the money in the backpack, Johnson left the bank, jumped through the sunroof of the taxi mini-van, and drove it out of the parking lot.  The mini-van was found abandoned in Rockford a few hours later. Later the same day Johnson left the Rockford area and was driven to Chicago by taxi.  

Evidence at trial indicated that Johnson was identified as the suspect, and an arrest warrant was issued.  Johnson then travelled by Amtrak train for Washington, D.C.  When the train stopped in Rockville, Md., Johnson exited the train.  Amtrak Police Department Officers tracked Johnson’s movements and identified him when he left the train station.  The officers attempted to stop Johnson when he fled on foot.  Johnson was apprehended shortly thereafter and placed into the custody of the Rockville City Police Dept.  The Rockville City Police Dept., assisted by a canine unit from the Montgomery County Police Dept., recovered evidence of the bank robbery at the scene of Johnson’s arrest.

CHICAGO — The U.S. Attorney’s Office in Chicago today announced that a Chicago-area physical therapy center and four nursing facilities have agreed to pay $9.7 million to resolve civil allegations that they violated the False Claims Act by providing unnecessary services to increase Medicare payments.

The settlements and consent judgments resolve allegations that skilled therapy service provider QUALITY THERAPY & CONSULTATION INC. and its owner, FRANCES PARISE, worked with the four skilled nursing facilities — THE CARLTON AT THE LAKE INC., RIDGEVIEW REHAB AND NURSING CENTER, LAKE SHORE HEALTHCARE AND REHABILITATION CENTRE LLC, and BALMORAL HOME INC. — to increase Medicare reimbursements by “upcoding” their patients’ “Resource Utilization Group” scores.  A “RUG” score indicates a patient’s care requirements based on the level of physical-, occupational-, and speech-rehabilitation therapy the patient receives, and the complexity of the skilled nursing care the patient requires.  The higher the RUG score, the higher the amount paid by Medicare to the nursing facility.  The allegations also contend that the providers rendered skilled therapy to patients who did not need it or could not benefit from it, as part of an effort to bill the highest possible amount to Medicare.

The settlements and consent judgments resolve a civil lawsuit filed in U.S. District Court in Chicago by a former employee of Quality Therapy and Consultation under the qui tam, or whistleblower, provisions of the False Claims Act.  The Act permits private citizens to bring lawsuits on behalf of the United States for false claims, and to share in any recovery.  The United States intervened in the lawsuit prior to the settlements and consent judgments.

The settlements and consent judgments were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services Office of Inspector General; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI.  The government is represented by Assistant U.S. Attorney Sarah J. North.

Per the terms of the settlements and consent judgments, Parise and the companies agreed to pay the following amounts:

• Carlton at the Lake, located in the Buena Park neighborhood of Chicago: $3.63 million.
• Lakeshore Healthcare, located in the Rogers Park neighborhood of Chicago: $2.73 million.
• Balmoral Home, located in the Bowmanville neighborhood of Chicago: $1.17 million.
• Quality Therapy and Consultation, formerly located in suburban Orland Park: $1.09 million.
• Ridgeview Rehab, located in the Rogers Park neighborhood of Chicago: $1 million.
• Frances Parise: $160,000.

Frances Parise also agreed to be excluded from all participation as a provider in Medicare, Medicaid and all federal health care programs for a period of five years.

The public is reminded that civil allegations are accusations only, and there was no determination of liability as part of the settlements and consent judgments.

CHICAGO — A north suburban businessman has been indicted on bank fraud and identity theft charges for allegedly fraudulently obtaining millions of dollars in mortgage and vehicle loans and using stolen identities to secure credit from financial institutions.

YALE SCHIFF made false statements in loan applications to obtain mortgage loans secured by a variety of properties, according to an indictment returned in U.S. District Court in Chicago.  The charges allege that Schiff filed with the Cook County Recorder of Deeds fraudulent letters from financial institutions claiming that loans on the properties were paid in full and that the mortgages were released, when, in fact, the loans were not paid in full and the mortgages had not been released.  Schiff then kept the financing paid by the banks, as well as proceeds from the eventual sales of the properties, without paying the mortgages, the indictment states.

The indictment was returned Wednesday.  It charges Schiff, 44, of Riverwoods, with eleven counts of bank fraud and two counts of aggravated identity theft.  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; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The government is represented by Assistant U.S. Attorney Sheri H. Mecklenburg.

The identity theft charges pertain to Schiff’s alleged use of multiple fake and stolen identities to fraudulently obtain loans for vehicles, including a Jeep Grand Cherokee and a Lexus RX350.  The indictment accuses Schiff of submitting to the Recorder’s office fake letters from financial institutions and false releases of the vehicle liens, claiming that the loans were paid in full.  In reality, Schiff knew the letters were bogus and that the loans were not paid in full, the indictment states.  Schiff then allegedly sold the vehicles, keeping the proceeds without paying the loans. 

Schiff also used stolen identities to obtain lines of credit and credit cards, including a charge card at Nordstrom department store that he used for personal use, the indictment states.  He then allegedly left large unpaid balances on the cards and the credit lines.

The charges allege that three of Schiff’s relatives and a business associate aided him in the schemes.  The indictment seeks forfeiture of a personal money judgment of approximately $4.7 million, as well as a property in Riverwoods.

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 bank fraud count is punishable by a maximum sentence of 30 years in prison, while each count of aggravated identity theft carries a mandatory minimum sentence of two years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

ROCKFORD — A Rockford man was sentenced Tuesday by U.S. District Judge Philip G. Reinhard to 139 months in prison for attempted robbery and using, carrying, and brandishing a firearm during a crime of violence.

DARNELL LEAVY, 28, admitted in a written plea agreement that at approximately 7:00 p.m. on Nov. 5, 2015, he and others attempted to rob the Zake Convenience store, 824 7th St. in Rockford. As stated in Leavy's plea agreement, co-defendant RICKEY CLAYBRON, 33, of Rockford, entered the store first with a gun pointed at two clerks who were behind a glass enclosure. Leavy then entered and also began pointing a gun at the clerks. A third individual entered the store carrying a bag meant for the proceeds of the robbery. The employees of the store barricaded themselves in the glassed-in area where the registers were located. Leavy's plea agreement further states that Leavy tried to kick the door open, but was unsuccessful. In the meantime, Claybron came around the front of the glass enclosure and pointed his gun through the small hole in the front that is used to conduct business with customers, Leavy's plea agreement states. Eventually, Leavy and the other robbers gave up on the robbery and walked out of the store.

Leavy pleaded guilty to the charges on Feb. 22, 2019.

Leavy's sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. The federal investigation was conducted by the FBI-led Rockford Area Violent Gang Task Force, which includes law enforcement officers and agents from the FBI, Rockford Police Department, Loves Park Police Department and Freeport Police Department. The government is represented by Assistant U.S. Attorney Margaret J. Schneider.

Claybron is charged with one count of conspiracy to commit robbery, three counts of robbery, one count of attempted robbery, and four counts of using, carrying, and brandishing a firearm during a crime of violence. Also charged in the case is DEANDRE R. HAYWOOD, also known as "Duke," 28, of Rockford. Haywood is charged with one count of conspiracy to commit robbery, three counts of robbery, and three counts of using, carrying, and brandishing a firearm during a crime of violence. Claybron and Haywood have pleaded not guilty to the charges and are in custody pending trial. The public is reminded that an indictment contains only charges and is not evidence of guilt. Claybron and Haywood are 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 has been sentenced to more than seven years in federal prison for illegally possessing a loaded semi-automatic handgun and pointing it at a car full of people, including a 4-year-old child, outside a Chicago convenience store.

ANTHONY DRAYTON, 37, of Berwyn, illegally possessed the gun on the night of Feb. 27, 2018, in the Austin neighborhood on the West Side of Chicago.  Drayton approached a vehicle outside a convenience store and pointed the gun at two occupants in the front seat.  The child was sitting in the back seat.  After the victims told Drayton there was a child in the car, Drayton lowered the gun and walked away.  Chicago Police officers were called to the area and quickly arrested Drayton nearby.

Drayton, who was on parole at the time of the offense, had previously been convicted of multiple felonies, including two shootings, and was not legally allowed to possess a firearm. 

Drayton pleaded guilty last year in the federal case to one count of illegal possession of a firearm by a felon.  U.S. District Judge John Z. Lee on Monday sentenced Drayton to seven years and three months in federal prison.

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

“The defendant is the poster child for why guns in the hands of felons are so dangerous and destructive,” Assistant U.S. Attorney Christopher V. Parente argued in the government’s sentencing memorandum.  “It is important for everyone in Chicago to know that gun crime will not be tolerated as a norm in this city, and that if someone possesses an illegal firearm there will be consequences and they will be swift and severe.”

Holding convicted felons accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods – the Department of Justice’s violent crime reduction strategy.  In the Northern District of Illinois, U.S. Attorney Lausch and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, including by prosecuting individuals who illegally possess firearms.

CHICAGO — A federal judge has sentenced a Chicago man to 32 years in prison for arranging commercial sex encounters for a 16-year-old girl and related crimes.

JOSEPH HAZLEY, 35, posted the girl’s information in sexually explicit online advertisements, and arranged multiple meetings for her to engage in commercial sex.  Hazley drove the girl to several meetings in the Chicago area in December 2016.  One of the meetings occurred in the early morning hours of Christmas Eve, after a customer had responded to Hazley’s posting.  Hazley drove the girl to Markham and waited in his car while the girl met with the customer in a nearby garage.  During the encounter, the customer allegedly murdered the girl.  The suspected customer was subsequently arrested by the Chicago Police Department and charged with murder in Cook County Criminal Court.

A jury earlier this year convicted Hazley on federal sex trafficking charges.  U.S. District Judge Sharon Johnson Coleman 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; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; Thomas J. Dart, Cook County Sheriff; and Eddie Johnson, Chicago Police Superintendent.  The case was investigated by the Chicago FBI South Resident Agency and the Cook County Sheriff’s Police.  Substantial assistance was provided by the Cook County State’s Attorney’s Office, Markham Police Department, and FBI Field Offices in Tampa, Fla., and Cleveland, Ohio.  The government is represented by Assistant U.S. Attorneys Christopher Parente and Kelly Greening.

“The defendant targeted young, vulnerable women to traffic and exploit,” said U.S. Attorney Lausch.  “Our office will continue to seek justice on behalf of sex trafficking victims for whom individuals like the defendant show no remorse.”

“The horror of this case brought to light the plight of thousands of vulnerable young women, taken advantage of via online sex trafficking every year,” said Sheriff Dart.  “This sentence represents justice in this case and for all victims, and so does all that’s happened since – including federal legislation against online sex trafficking and the shuttering of the largest online sex trafficking platform in the country.  My office will continue to fight for all of the victims of this heinous crime.”

If you believe you are a victim of sexual exploitation, you are encouraged to contact the National Center for Missing and Exploited Children by logging on to www.missingkids.com/home or by calling 1-800-843-5678.  The service is available 24 hours a day, seven days a week.

CHICAGO — A federal jury in Chicago has convicted a Silicon Valley businessman of defrauding investors in his computer companies after soliciting and obtaining some of the money via crowdfunding.

JEFFREY BATIO, 50, of Santa Clara, Calif., was found guilty Friday of all 12 counts against him, including six counts of mail fraud and six counts of wire fraud.  Each count is punishable by a maximum sentence of 20 years in prison.  U.S. District Judge Rebecca R. Pallmeyer set sentencing for Sept. 3, 2019.

The conviction was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI.  The government is represented by Assistant U.S. Attorneys Jacqueline Stern and Matthew Schneider.

Batio owned and controlled two computer businesses, Armada Systems LLC and Idealfuture Inc.  The companies claimed to produce a portable computer that would combine a laptop, tablet and smart phone into one device.  The 3-in-1 apparatus was known at various times by the names Stealth, IF Convertible, and Dragonfly Futurefon.  The companies also claimed to produce a device called the Radian, which was billed as a multi-screen laptop computer.

Evidence at trial revealed that for more than a decade Batio made material misrepresentations about his companies and products.  For example, Batio falsely claimed that Armada and Idealfuture had completed the engineering on the 3-in-1 computer and the multi-screen system, and that the products were close to being brought to market.  In reality, Batio knew the products were not complete and that production would not start within the promised timeframe.  Batio also claimed to be involved in discussions with large technology companies concerning partnership deals, licensing arrangements and marketing agreements, when, in fact, Batio’s contacts with those companies typically consisted of nothing more than his opening sales pitch.

The fraud scheme began in 2003 and continued until 2016.  Batio originally sold membership shares in his companies and offered his products for advance sales that were never fulfilled.  From 2003 to 2014, Batio defrauded victims out of $5 million.  As the years passed and he failed to produce or license any products, Batio in 2014 began to solicit funds on the crowdfunding website Indiegogo.com.  From 2014 to 2016, Batio raised more than $700,000 on Indiegogo from investors all over the world by fraudulently promoting and selling the 3-in-1 device.

CHICAGO — A south suburban chiropractor has been indicted on federal fraud charges for allegedly submitting reimbursement claims to private insurers for nonexistent treatment.

JOHN KOSLOSKI operated his own practice, Diagnostic & Therapeutic Rehab, also known as Diagnostic & Therapeutic Rehab Services, in Dolton.  From 2011 to 2018, Kosloski submitted fraudulent claims to private insurers for chiropractic services that were not rendered, the indictment states.  At least five individuals purported to be Kosloski’s patients and allowed their personal identifying information and their family members’ information to be cited by Kosloski in the fraudulent claims, according to the indictment.  After Kosloski received money from the private insurers, he would pay the co-schemers via envelopes of cash, the indictment states.

The indictment charges Kosloski, 55, of Beecher, with six counts of health care fraud.  He pleaded not guilty today at his arraignment before U.S. District Judge Rebecca R. Pallmeyer.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Inspector General Kevin H. Winters of the Amtrak Office of Inspector General.  The government is represented by Assistant U.S. Attorney Kelly Greening.

Each count of health care fraud is punishable by up to ten years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

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.

CHICAGO — A federal judge has sentenced a north suburban man to 27 and a half years in prison for attempting to transport a minor to Wisconsin to engage in prostitution.

DERONARTE NORWOOD, 32, of North Chicago, physically and emotionally harmed the 15-year-old girl after meeting her in 2015.  He exploited the girl in graphic online advertisements offering commercial sex, and then sent her to have sex with strangers, leaving her alone in hotel rooms.  Norwood pocketed all of the money she made.

Norwood was arrested in October 2016 in Waukegan, and he has remained in custody since then.  A federal jury in Chicago last year convicted him of attempting to transport a minor to Wisconsin from Illinois to engage in prostitution.  U.S. District Judge Gary Feinerman imposed the 330-month sentence Thursday in federal court.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  Substantial assistance was provided by the Lake County Special Investigations Group, Winthrop Harbor Police Department, and New Albany, Ind., Police Department.

“Defendant is among those criminals who destroy the lives of our communities’ most precious resource – children,” Assistant U.S. Attorneys Nicole M. Kim and Abigail Peluso argued in the government’s sentencing memorandum.  “Defendant was a predator who targeted, assaulted, and repeatedly exploited [the victim].”

If you believe you are a victim of sexual exploitation, you are encouraged to contact the National Center for Missing and Exploited Children by logging on to www.missingkids.com/home or by calling 1-800-843-5678.  The service is available 24 hours a day, seven days a week.

Two Chicago, Illinois, women pleaded guilty for their roles in a scheme to defraud the U.S. Department of Labor Office of Workers’ Compensation Programs (OWCP) of $1.7 million by falsely billing for services on a 24-hour, seven-day-a-week basis for over seven years.  

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney John R. Lausch Jr. of the Northern District of Illinois, Special Agent in Charge Andre M. Martin of the U.S. Postal Service Office of Inspector General (Postal-OIG), Acting Special Agent in Charge Irene Lindow of the U.S. Department of Labor Office of Inspector General (DOL-OIG) and Special Agent in Charge Jeffrey S. Sallet of the FBI’s Chicago Field Office made the announcement.

Ella Garner, 62, pleaded guilty yesterday to one count of conspiracy to commit health care fraud before U.S. District Judge Elaine Bucklu of the Northern District of Illinois.  On May 24, 2019, Chante Carrothers, 40, pleaded guilty to one count of conspiracy to commit health care fraud for her role in the conspiracy.  Sentencing for Carrothers has been scheduled for August 16 and for Garner on September 6, both before Judge Bucklu.

As part of their guilty pleas, Carrothers and Garner each admitted that from June 2010 through April 2018, they conspired to defraud OWCP by falsely billing for 24-7 services purportedly provided by Garner to a single person in the home.  Garner was not, in fact, providing constant care, the defendants admitted.  OWCP paid Carrothers approximately $1.7 million for the bills she submitted for a single patient, purportedly under Garner’s care.  Carrothers paid Garner approximately $4,500 per month for her role in the conspiracy, the defendants admitted.

This case was investigated by Postal OIG, DOL-OIG and the FBI.  Trial Attorneys Leslie S. Garthwaite and Patrick Mott of the Criminal Division’s Fraud Section are prosecuting the case. 

The Medicare Fraud Strike Force is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Husband and wife co-owners of a Chicago-area home health agency pleaded guilty today for their roles in a scheme to obtain millions of dollars in Medicare reimbursements through the payment of kickbacks for patient referrals.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney John R. Lausch Jr. of the Northern District of Illinois, Special Agent in Charge Jeffrey S. Sallet of the FBI’s Chicago Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.  

Carmencita Agno, 52, and Emmanuel Agno, 54, both of Streamwood, Illinois, each pleaded guilty to one count of conspiracy to offer and pay kickbacks before U.S. District Court Judge Sharon Coleman of the Northern District of Illinois.  Sentencing has been scheduled for Sept. 19, 2019, before Judge Coleman.

As part of their guilty pleas, Carmencita Agno and Emmanuel Agno each admitted that they caused Renaissance Home Health Services Inc. (Renaissance) of Elk Grove Village, Illinois, a home health agency they both co-owned, to make concealed kickback payments to patient marketers and other sources of Medicare patient referrals.  As a result of these illegal kickback payments, Renaissance improperly obtained approximately $1.6 million in profits.  Carmencita Agno and Emmanuel Agno further admitted that they caused Axis Healthcare Services Inc. (Axis) of Rolling Meadows, Illinois, another home health agency co-owned by Carmencita Agno and for which Emmanuel Agno served as the administrator, to make approximately $365,000 in illegal kickback payments to Maristel Canete, 49, formerly of Streamwood, a patient marketer.  In order to conceal the illegal nature of the payments to Canete, the conspirators caused Axis to enter into sham contracts with companies set up by Canete for receiving the payments.

Carmencita Agno and Emmanuel Agno were charged along with Canete and Antonio Clavero, age 50, of Schiller Park, Illinois, in a superseding indictment returned on June 16, 2016.  Clavero pleaded guilty on Sept. 29, 2017, and is awaiting sentencing; Canete is a fugitive. 

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.   

This case was investigated by the FBI and HHS-OIG.  Trial Attorney Patrick Mott of the Criminal Division’s Fraud Section is prosecuting the case. 

The Medicare Fraud Strike Force is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

 

CHICAGO — A high-level member of the Four Corner Hustlers street gang has been arrested on federal drug charges for allegedly selling wholesale quantities of heroin on the West Side of Chicago.

RAYMOND BETTS, 52, of Riverdale, is charged with conspiracy to possess a controlled substance with the intent to distribute.  A criminal complaint filed in federal court in Chicago accuses Betts of selling or directing sales of heroin on eight occasions from December 2018 to March 2019.  Seven of the alleged sales occurred in the Austin neighborhood of Chicago, while one deal was allegedly conducted in south suburban Riverdale. 

Two other alleged members of the gang are also charged in the conspiracy: ANGELA BELL, 48, of Chicago, and MAURICE WILLIAMS, 50, of Riverdale.  All three defendants were arrested Wednesday.  Bell will appear for a detention hearing on Friday at 1:30 p.m. before U.S. Magistrate Judge Sunil R. Harjani in Chicago.  Judge Harjani scheduled detention hearings for Williams and Betts for Monday at 2:45 p.m.

The charges and arrests were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Timothy Jones, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; Thomas J. Dart, Cook County Sheriff; and Eddie Johnson, Superintendent of the Chicago Police Department.  Assistant U.S. Attorneys Katie M. Durick and Kalia Coleman represent the government.

The multi-year investigation was conducted with the Organized Crime Drug Enforcement Task Force (OCDETF) and the High Intensity Drug Trafficking Area Task Force (HIDTA).  The mission of the task forces, which are comprised of agents and officers from numerous federal, state and local law enforcement agencies, is to identify, disrupt, and dismantle the most serious drug trafficking organizations.

According to the complaint, Betts operates a drug trafficking organization comprised of members or associates of the Four Corner Hustlers.  Betts is a high-ranking member of the gang and the only one to hold the title of “Prince,” according to the complaint.  Betts is also the founder and leader of an enforcement or security faction of the Four Corner Hustlers known as the “Body Snatchers,” the complaint states.

The complaint describes eight transactions for a total of approximately 136 grams of heroin.  The seven deals in Chicago allegedly occurred in the 5300 block of West Washington Boulevard, while the Riverdale transaction occurred in an alley near the 13800 block of South Edbrooke Avenue in the south suburb, according to the complaint.  Unbeknownst to the defendants, the buyer was confidentially working on behalf of law enforcement, the complaint states.

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.  The conspiracy charge is punishable by up to 40 years in prison.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — The former owner of a Chicago medical clinic was sentenced today to more than six years in federal prison for selling opioid prescriptions to patients whom he knew lacked a legitimate medical need for the drugs.

MOHAMMED SHARIFF, who owned Midtown Medical Center in Chicago’s Uptown neighborhood, conspired with a physician to sell oxycodone, hydrocodone, and other medications to patients whom they knew lacked a medical reason for taking the drugs.  At Shariff’s direction, the physician, DR. THEODORE GALVANI, wrote prescriptions for the powerful opioids without conducting an appropriate physical examination or performing any medical tests.  Dr. Galvani often met with more than 70 patients per day, sometimes seeing them in groups of two or more at the same time.  At Shariff’s direction, a “crew leader” organized groups of people to obtain opioid prescriptions from Dr. Galvani, often leading to long lines that stretched beyond the clinic’s door.

Shariff, 68, of Lincolnwood, pleaded guilty last year to one count of conspiracy to knowingly dispense controlled substances outside the usual course of professional practice and without a legitimate medical purpose.  U.S. District Judge Harry D. Leinenweber imposed a 75-month sentence in federal court in Chicago.

Dr. Galvani, of Spring Grove, previously pleaded guilty to drug conspiracy charges.  He is awaiting sentencing.

Shariff’s sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; Jeffrey Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; Tara Sullivan, Acting Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General.

“The defendant chose to make his living in a vitally important industry,” Assistant U.S. Attorney Peter M. Flanagan argued in the government’s sentencing memorandum.  “Rather than devote himself to people in need of fundamental care, however, he showed an abject disregard of patients and perverted his companies into engines of unlawful profit.”

“This announcement sends a clear message to the medical professionals who exploit their power, prey on the vulnerable, and violate controlled substance laws: you will be investigated and held accountable to the fullest extent,” said DEA SAC McKnight.  “It also highlights the significance of federal law enforcement and prosecutors working together.”

According to Shariff’s plea agreement, individuals paid $100 to $200 in cash to Shariff and Galvani in exchange for the improper prescriptions.  For individuals insured by Medicare, Shariff and Dr. Galvani prescribed the opioids and then submitted or caused others to submit false claims to Medicare, seeking reimbursement for purported office visits with those individuals, the plea agreement states.  From February 2012 to March 2013, Shariff and Dr. Galvani received a total of at least $584,188 through the improper prescription scheme.  During the same period, the pair was responsible for prescribing more than two kilograms of oxycodone, more than 595,000 hydrocodone pills, and more than 190,000 alprazolam pills (commonly known as Xanax), to individuals whom they knew had no legitimate medical need for those drugs.

In addition to the improper prescriptions, Shariff attempted to carry out a separate fraud scheme involving a home health care company that he owned, Elgin-based Home Health Resource LLC.  In a May 2016 meeting in Chicago, Shariff offered to pay a physician $500 each time the doctor certified a Medicare beneficiary as eligible for home health care and referred the patient to Shariff’s company.  Unbeknownst to Shariff, the physician was cooperating with law enforcement, and their conversation was surreptitiously recorded.  Shariff told the cooperating physician that Shariff instructed nurses at the company to “tell the patient you are homebound,” and that “when the doctor come, don’t say that you go out and drive and this and that.  Don’t tell anybody you drive, don’t tell anybody you’re taking the bus, even going to the groceries.  If anybody asks, ‘I stay home.  I’m homebound.’”

CHICAGO — A former high-ranking member of the Sinaloa drug cartel in Mexico was sentenced today to 15 years in prison for his role in trafficking large amounts of illegal drugs to the Chicago area.

VICENTE ZAMBADA-NIEBLA conspired with other Sinaloa members to import and distribute large quantities of illegal drugs into the United States.  From approximately 1996 to 2008, Zambada-Niebla oversaw shipments of narcotics from Central and South America into Mexico and eventually into the U.S.  The cartel covertly transported the drugs via private aircraft, submarines, container ships, fishing vessels, buses, tractor-trailers, automobiles, and other methods.  Zambada-Niebla also oversaw the corresponding transfer of drug proceeds back to Mexico.

Zambada-Niebla, 44, has been in law enforcement custody since March 2009.  He pleaded guilty in 2013 to a drug conspiracy charge and agreed to cooperate with the U.S. government in its efforts to dismantle the Sinaloa Cartel and one of its rivals, the Beltran-Leyva organization, and hold their leaders accountable in U.S. courts.

U.S. District Chief Judge Ruben Castillo imposed the 15-year sentence in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration.  Valuable assistance was provided by the Internal Revenue Service Criminal Investigation Division in Chicago, and the Chicago Police Department.

“Zambada-Niebla played a major role in flooding the streets of Chicago with dangerous narcotics,” said U.S. Attorney Lausch.  “Not only has he been brought to justice for his actions, but his extensive cooperation led to charges against dozens of other high-level drug traffickers in courts throughout the United States.”

“The DEA law enforcement team and prosecutorial partnerships continue to thrive and this sentencing is just one result of those great partnerships,” said SAC McKnight.  “Members of the Sinaloa Cartel’s leadership have been held accountable for their actions.  DEA will continue to focus investigative efforts to arrest the remainder of the Sinaloa Cartel leaders who are operating in Mexico to face justice in the United States.”

Zambada-Niebla is one of more than 20 members of the Sinaloa and Beltran-Leyva cartels to be indicted in federal court in Chicago.  The investigation has resulted in seizures of approximately $30.8 million, approximately eleven tons of cocaine, 265 kilograms of methamphetamines, and 78 kilograms of heroin.

CHICAGO — A federal grand jury today indicted City of Chicago Alderman EDWARD M. BURKE on racketeering and bribery charges for allegedly abusing his position to solicit and extort private legal work and other benefits from companies and individuals with business before the city.

The 19-count indictment accuses Burke of corruptly soliciting work for his private law firm from companies involved in redevelopment projects at the Old Main Post Office in downtown Chicago and a fast food restaurant in Burke’s ward on the Southwest Side.  It also alleges that he corruptly attempted to assist a business owner with a development on the Northwest Side shortly after the business owner told Burke that he would engage Burke’s law firm.  The firm, Klafter & Burke, specialized in seeking property tax reductions for corporate clients. 

The charges also allege that Burke threatened to oppose a Chicago museum’s admission fee increase because the museum failed to respond to Burke’s inquiry about an internship at the museum for a child of Burke’s friend.  

The indictment was returned today in U.S. District Court in Chicago.  It charges Burke, 75, of Chicago, with one count of racketeering, two counts of federal program bribery, two counts of attempted extortion, one count of conspiracy to commit extortion, and eight counts of using interstate commerce to facilitate an unlawful activity. 

The indictment also charges two other individuals: PETER J. ANDREWS, an employee in Burke’s 14th Ward office; and CHARLES CUI, a Chicago real estate developer.  Andrews is accused of conspiring with Burke to extort the operator of the fast food restaurant, while Cui allegedly steered private legal work to Burke in an effort to influence and reward the alderman in connection with permitting and tax increment financing for the Northwest Side development.  Andrews, 69, of Chicago, is charged with one count of attempted extortion, one count of conspiracy to commit extortion, two counts of using interstate commerce to facilitate an unlawful activity, and one count of making a false statement to the FBI.  Cui, 48, of Lake Forest, is charged with one count of federal program bribery, three counts of using interstate commerce to facilitate an unlawful activity, and one count of making a false statement to the FBI.

Arraignments for Burke and Andrews are scheduled for June 4, 2019, at 10:00 a.m., before U.S. Magistrate Judge Jeffrey Cole.  Arraignment for Cui has not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI.  The City of Chicago Inspector General’s Office and the Amtrak Office of Inspector General provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Amarjeet Bhachu, Diane MacArthur, Matthew Kutcher, Sarah Streicker and Timothy Chapman.

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.

Racketeering, attempted extortion, and conspiracy to commit extortion are each punishable by up to 20 years in prison.  Federal program bribery is punishable by up to ten years.  Using interstate commerce to promote unlawful activity and making a false statement to the FBI are each punishable by up to five years.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A southwest suburban man who described himself as a “one stop shop” for narcotics and firearms has been sentenced to eleven and a half years in federal prison.

ANTOINE JACKSON, 42, of Tinley Park, sold heroin, three guns and ammunition to an individual in the summer of 2017.  The sales netted Jackson a total of $6,565 in cash.  Unbeknownst to Jackson, the buyer was an informant working on behalf of law enforcement.  Jackson also sold heroin to the informant on later occasions, earning an additional $4,500.

Jackson pleaded guilty last year to one count of dealing firearms without a license, one count of distribution of a controlled substance, and one count of using and carrying a firearm during a drug trafficking crime.  U.S. District Judge Ronald A. Guzman on May 23, 2019, imposed a 138-month prison sentence.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Timothy Jones, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives.  Substantial assistance was provided by the Chicago Police Department, Matteson Police Department, Tinley Park Police Department, and Will County Metropolitan Area Narcotics Squad.

“In a city that has seen shootings and homicides in astronomical numbers, illegal dealing of firearms should not be tolerated,” Assistant U.S. Attorney Tobara S. Richardson argued in the government’s sentencing memorandum.  “The collateral effect of drug trafficking is to flood the streets with these substances that breed addiction and violence and that undermine the safety of communities.”

Jackson admitted in a plea agreement that he sold heroin and guns to the informant in three transactions in June 2017.  Two deals occurred at Jackson’s residence in Tinley Park, while a third transaction was held in a Tinley Park forest preserve.  During the deal in the forest preserve, Jackson showed the informant a gun that was tucked in Jackson’s waistband. 

The guns sold by Jackson included an AK-47 rifle and two handguns, with extended magazines for each of them.  While arranging one of the deals with the informant, Jackson referred to himself as a “one stop shop” for firearms and narcotics.

Jackson also admitted in his plea agreement that he sold the informant heroin in December 2017 and March 2018.  Those sales netted Jackson $4,500.  The March 2018 deal occurred in a restaurant parking lot in Oak Forest.

Holding gun traffickers and drug dealers accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods – the Department of Justice’s violent crime reduction strategy.  In the Northern District of Illinois, U.S. Attorney Lausch and federal law enforcement agencies have deployed the PSN program to attack a broad range of violent crime issues facing the district, including by prosecuting individuals who illegally traffic firearms or who carry firearms in connection with drug trafficking offenses.

CHICAGO — Eight Chicago-area residents are among ten individuals charged as part of an international investigation into online fraud schemes, including “romance scams” and “mystery shopper scams.”

The Chicago-based investigation, dubbed “Operation Gold Phish,” identified a variety of cyber-enabled fraud schemes allegedly carried out by individuals in the United States and Nigeria.  One of the alleged schemes involved “romance scams,” in which a defendant builds trust with a victim through a purported online romance before convincing the victim to send money to a predetermined recipient.  The defendants contacted victims via websites such as Match.com, Facebook, and Instagram.

Another cyber-enabled fraud allegedly carried out by the defendants involved a “mystery shopper scam,” in which victims were fraudulently offered opportunities to receive commissions for evaluating services such as Western Union and MoneyGram.  The victims received a check with instructions to deposit it in their bank accounts, withdraw the money in cash, and wire it to a predetermined third party.  The check turned out to be fake, and the victims were defrauded of the money they had withdrawn from their accounts, the charges allege.

Nine of the defendants were originally charged last year with conspiracy to commit wire fraud.  A federal indictment, returned May 16, 2019, added a tenth defendant and expanded the charges against the others.  The original defendants are in law enforcement custody – eight in the U.S. and one in Nigeria – while the newly added defendant remains at large.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  Valuable assistance was provided by the Nigerian Economic and Financial Crimes Commission.  Assistant U.S. Attorneys Peter S. Salib and Charles W. Mulaney represent the government.

Charged in the indictment are:

• Newly added defendant OLANIYI NASIRU OJIKUTU, 39, of Chicago (three counts of wire fraud)
• DANIEL SAMUEL ETA, also known as “Captain” and “Etaoko,” 35, of Skokie (12 counts of wire fraud, one count of conspiracy to commit a computer intrusion, one count of passport fraud)
• BABATUNDE LADEHINDE LABIYI, also known as “Junior,” 26, of Chicago (one count of wire fraud, one count of making a false statement to a financial institution, one count of passport fraud)
• BARNABAS OGHENERUKEVWE EDJIEH, 29, of Chicago (one count of wire fraud, one count of making a false statement to a financial institution, one count of passport fraud)
• SULTAN OMOGBADEBO ANIFOWOSHE, also known as “Ayinde,” 27, of Chicago (one count of wire fraud, one count of mail fraud, one count of making a false statement to a financial institution, one count of passport fraud)
• BABATUNDE IBRAHEEM AKARIGIDI, also known as “AK,” 39, of Chicago (one count of wire fraud, one count of making a false statement to a financial institution, one count of passport fraud)
• MIRACLE AYOKUNLE OKUNOLA, 21, of Chicago (one count of wire fraud, one count of making a false statement to a financial institution, one count of passport fraud)
• OLUROTIMI AKITUNDE IDOWU, also known as “Idol,” 55, of Chicago (one count of wire fraud, one count of making a false statement to a financial institution, one count of passport fraud)
• ADEWALE ANTHONY ADEWUMI, 28, of Richardson, Texas (two counts of wire fraud)
• OLANIYI ADELEYE OGUNGBAIYE, also known as “DonChiChi,” 26, of Lagos, Nigeria (one count of wire fraud, one count of conspiracy to commit a computer intrusion).  Ogungbaiye is in law enforcement custody in Nigeria.

The eight defendants in U.S. custody pleaded not guilty during arraignments last week before U.S. Magistrate Judge Jeffrey Cole in Chicago.

In addition to the romance and mystery shopper schemes, the indictment accuses the defendants of engaging in other cyber-enabled scams.  In a scheme known as a “business email compromise,” the defendants fraudulently obtained usernames and passwords or sent spoofing email messages to employees claiming to be from a known business contact, instructing victims to change the wire instructions for bank payments, the charges allege.  Per the instructions given in the fraudulent emails, the victim then unknowingly wired funds to a bank account controlled by the defendants that had been opened in a fictitious name utilizing a fake passport, the indictment states.

The public is reminded that charges contains 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.  Making a false statement to a financial institution carries a maximum sentence of 30 years in prison; wire fraud is punishable by up to 20 years; passport fraud is punishable by up to ten years; and conspiracy to commit computer fraud is punishable by up to five years.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — With the summer months approaching, John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, today announced continued progress in combating violent crime through a series of targeted strategies as part of the revitalized Project Safe Neighborhoods (PSN) initiative.

The Department of Justice recently strengthened and enhanced PSN, an evidence-based program that serves as the centerpiece of the Department’s violent crime reduction strategy.  In the Northern District of Illinois, U.S. Attorney Lausch has deployed the enhanced PSN program to attack a broad range of violent crime issues facing the district.  Northern District of Illinois prosecutors target criminal organizations, leading to prosecutions of complex racketeering and drug trafficking enterprises, while also removing the most violent offenders from the community through prosecution of individual violent crime, drug, and firearm possession cases.  PSN resources are also invested in local prevention and reentry programs that seek to implement lasting reductions in crime through community engagement.

“Anyone thinking of engaging in gun violence or trafficking dangerous narcotics in Chicago this summer needs to know that a federal prosecution could await them,” said U.S. Attorney Lausch.  “A primary goal of our office is to reduce violent crime, and we will continue to use every available federal law enforcement tool to keep people safe this summer and beyond.”

The PSN program has enabled the U.S. Attorney’s Office to sustain and expand upon significant increases in the prosecution of violent crime and gun offenders.  For example, in the first seven months of the 2019 Fiscal Year (FY),[1] the U.S. Attorney’s Office charged more federal firearm offenses than were charged in each of the entire fiscal years of 2004 through 2016.  The number of charged firearm defendants in 2019 will likely substantially exceed the numbers charged in 2018 and 2017, which saw the most and second-most firearm defendants, respectively, in more than a decade. 

Crime statistics from the Chicago Police Department (CPD) reveal significant reductions in violent crime in Chicago this year.  In the first four months of 2019, violent crime in Chicago was down 10%, according to CPD statistics.  CPD reported double-digit reductions in murders, robberies, burglaries, and carjackings, compared to the same four-month period in 2018.  Shooting incidents were down 8% in that period, which also marked a 41% reduction compared to 2016.

“We are working closer than ever with our federal, state, and local law enforcement partners to increase prosecutions of trigger-pullers and carjackers, and those who illegally use and possess firearms,” said U.S. Attorney Lausch.  “While we are making progress, we realize that a great deal of work remains to be done, especially in the summer months ahead.” 

Enforcement Actions

The U.S. Attorney’s Office works closely with U.S. law enforcement agencies, including the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Drug Enforcement Administration (DEA), Federal Bureau of Investigation (FBI), Homeland Security Investigations (HSI), Postal Inspection Service (USPIS), Internal Revenue Service (IRS) and U.S. Marshals Service (USMS) to investigate and prosecute violent offenders.   State and local partners in this effort include CPD, Illinois State Police (ISP), Illinois Department of Corrections (IDOC), Cook County State’s Attorney’s Office, Cook County Sheriff’s Office, and numerous county and local departments throughout the district.

As part of these efforts, law enforcement in the Northern District frequently use an important tool for investigating violent crime and firearms cases:  ATF’s National Integrated Ballistic Information Network (NIBIN).  NIBIN is the only national network that allows for the capture and comparison of ballistic evidence to aid in solving and preventing violent crimes involving firearms.  NIBIN is a proven investigative and intelligence tool that can link firearms from multiple crime scenes, allowing law enforcement to quickly disrupt shooting cycles.

Thus far in Fiscal Year 2019, the U.S. Attorney’s Office has prosecuted hundreds of defendants for firearms offenses, drug trafficking, and other violent crimes.

• Racketeering Prosecutions

• “Combating violent street gangs is a top priority in our office,” said U.S. Attorney Lausch.
• This month, racketeering and murder charges were unsealed against four alleged members of a Chicago street gang known as the Milwaukee Kings.  The charges allege that each of the defendants committed murder, while one of them also committed two attempted murders.  The defendants have pleaded not guilty to the charges.  The U.S. Attorney’s Office worked closely in the investigation with FBI and CPD.
• Racketeering charges were also brought this month against LUIS CONTRERAS, of Chicago, for allegedly committing murder to maintain and increase his position in the Latin Saints street gang.  The indictment alleges that members of the Latin Saints boasted about the gang on social media and intimidated rival gang members through acts of violence.  Arraignment is set for May 23, 2019.  ATF, HSI and CPD led the probe.
• Last month, two alleged members of the Evans Mob street gang were charged with committing murder in aid of racketeering.  The indictment describes the Evans Mob as a criminal organization whose members and associates engaged in numerous acts of violence, including murder, attempted murder and assault, to acquire and preserve the gang’s territory on Chicago’s South Side.  The defendants have pleaded not guilty.  The case was investigated by ATF and CPD.
• In October 2018, a joint federal and state investigation resulted in racketeering and murder charges against five alleged members of a Chicago street gang faction known as the Goonie Boss.  The federal indictment alleges that Goonie members and their associates terrorized the Englewood neighborhood on Chicago’s South Side and were responsible for eleven murders.  The defendants have pleaded not guilty.  The case was investigated by FBI and CPD.

• Firearm Trafficking and Firearm Theft Prosecutions

• “Straw purchasers and firearms traffickers enable unlawful possession of guns and the violence that may follow,” said U.S. Attorney Lausch.  “We will continue to work with our law enforcement partners to hold accountable those who engage in illicit firearm transactions.”
• Earlier this month, a federal jury in Chicago convicted OMRAN ISMAIL, of Burbank, of conspiring to straw purchase several handguns on behalf of someone else.  Ismail faces up to ten years in prison when he is sentenced later this year.  HSI, CPD, and U.S. Customs and Border Protection participated in the probe.
• In February 2019, four defendants were charged as part of an investigation that disrupted a Missouri-to-Chicago firearms pipeline.  The probe, led by ATF and CPD, revealed that two Missouri residents brought numerous handguns to Chicago and supplied them to a convicted felon for eventual sale on the streets.  The defendants have pleaded not guilty.  One of the defendants who allegedly purchased some of the guns in Chicago, DERRICK CLAIBORNE, was also charged in a separate federal indictment with possessing multiple firearms and fentanyl-laced heroin in his residence in the South Loop neighborhood of Chicago.  Claiborne has pleaded not guilty in that case.
• In December 2018, JYMIL CAMPBELL, a convicted felon from Chicago, was sentenced to six and a half years in prison for illegally selling more than a dozen firearms in the city’s North Lawndale neighborhood.  Campbell sold ten handguns, three rifles, and four large-capacity magazines for $8,700.  Unbeknownst to Campbell, the two buyers were confidential informants working on behalf of law enforcement.  ATF led the probe.
• In October 2018, MONICA NAVEJAR, of Chicago, was indicted on firearm charges for conspiring to “straw purchase” handguns in Indiana on behalf of a convicted felon in Chicago.  The charges accuse Navejar of purchasing the guns from licensed dealers in Indiana and falsely certifying on federal forms that she was the actual buyer.  Navejar pleaded not guilty.  ATF, FBI, and CPD conducted the probe.

• Carjacking Prosecutions

• “Our message to would-be carjackers this summer is simple: Committing a senseless act of violence like carjacking could earn you a stay in federal prison for a long time,” said U.S. Attorney Lausch.
• Earlier this month, four teenagers were indicted on carjacking or weapons offenses in connection with a vehicle theft at gunpoint in Chicago’s Edgewater neighborhood.  Three of the defendants were charged with using, carrying and brandishing a firearm in connection with a violent crime - an offense punishable by a maximum sentence of life in prison.  Arraignments are set for May 29, 2019.  The probe was led by FBI and CPD, with assistance from the Cook County State’s Attorney’s Office.
• In February 2019, the U.S. Attorney’s Office announced federal carjacking charges against five individuals in connection with violent carjackings in Chicago or the suburbs.  The defendants have pleaded not guilty.  The investigations were conducted by CPD, ATF and FBI, with assistance from ISP and the Cook County State’s Attorney’s Office. 

• Illegal Possession of Firearm Prosecutions

“If you are a felon and you are thinking about picking up a gun this summer, you should expect to be prosecuted to the fullest extent of the law, and face the possibility of going to federal prison for a long time,” said U.S. Attorney Lausch.

The U.S. Attorney’s Office has brought numerous firearm cases as part of PSN and the recent addition of its Gun Crimes Prosecution Team strategy, which was created to enhance the prosecution of illegal firearm cases in certain police districts in Chicago.  Working collaboratively with federal and local law enforcement, and state prosecutors, the team focuses on charging Chicago’s most dangerous criminals quickly after arrest, endeavoring to disrupt the cycle of violence in the neighborhoods most in need.  As noted above, over the past two years and during the current fiscal year, the U.S. Attorney’s Office has increased its prosecution of illegal possession and illegal use of firearms cases – charging more gun defendants in each of the past two years than in any single year in more than a decade.  More than 175 individuals have been charged with federal gun crimes thus far in FY 2019, according to preliminary data – an increase of over 80% from the number of firearm defendants charged federally during the same period in 2018.

“Our goal as prosecutors is not simply to bring more cases against more defendants, but to reduce the number of homicides and shootings in the Northern District.  We work with our law enforcement partners to identify cases that will have the greatest impact on the communities most plagued by violence, and where prosecutions and federal prison time are most likely to disrupt cycles of shootings and retaliation,” said U.S. Attorney Lausch.  “We recognize there are presently far too many gun crimes in the Chicago area, and we have increased our enforcement efforts in order to charge as many impactful cases as possible.”

Examples of felon-in-possession sentencings in federal court during FY19 include:

• GLENN WATKINS, of Chicago, was sentenced to six and a half years in prison for illegally possessing a .380-caliber semiautomatic handgun in the city’s Hermosa neighborhood.  Watkins was arrested in May 2017 for a traffic violation.  After being taken into custody, CPD officers discovered that Watkins had hidden the gun inside a cloth holster that was tied to his testicles with a white shoelace.
• KEESHON SAMSON, of Chicago, was sentenced to nearly six years in prison for illegally possessing a loaded semiautomatic handgun in the city’s South Chicago neighborhood.  The gun had been reported stolen in a burglary of a licensed firearms dealer a month earlier.  At the time he possessed the gun, Samson was on probation for a kidnapping offense.  CPD and ATF led the probe.
• IESHA STANCIEL, of Willowbrook, was sentenced to six years in prison for illegally possessing two firearms in DuPage County.  Stanciel also threatened an individual who was cooperating with law enforcement in the case.  In a message on the cooperating individual’s Facebook page, Stanciel posted emojis of a handgun and referred to the individual as a “snitch.”  FBI and ATF led the probe, with assistance from the Cook County Sheriff’s Office and Bolingbrook Police Department.
• LUIS REYNOSO, of Chicago, was sentenced to more than seven years in prison for illegally possessing two loaded semi-automatic handguns in a park in the Little Village neighborhood of Chicago.  Reynoso had previously been convicted of multiple felonies, including attempted murder.  The probe was conducted by FBI and CPD.
• MICHAEL SMITH, of Chicago, was sentenced to five and a half years in prison for illegally possessing a semiautomatic handgun with an obliterated serial number on the city’s Near West Side.  CPD officers observed Smith retrieve the gun from a parked vehicle and place it in his waistband.  When officers approached, Smith ran but was apprehended on the second-floor porch of a nearby residence.  At the time of the offense, Smith was on probation for a felony narcotics conviction.
• DIANTE DAVIS, of Chicago, was sentenced to ten years in prison for brandishing a loaded handgun while dealing drugs in Chicago’s Homan Square neighborhood.  During a deal with an undercover law enforcement officer, Davis pointed the gun at the officer and accused him of working for law enforcement, saying, “You’re probably recording me right now.”  As it turned out, the drug deal was indeed surreptitiously recorded by law enforcement.  Davis was arrested, and the undercover officer was not harmed.  DEA and CPD led the investigation, with assistance from ISP.
• Two days after being released from custody for a felony conviction, DAVID HOLLY, of Chicago, was arrested for illegally possessing a loaded handgun on a street on Chicago’s Far South Side.  He was convicted after a bench trial and sentenced to five years in federal prison.  CPD led the probe.
   
• Narcotics Trafficking Prosecutions

The U.S. Attorney’s Office targets traffickers who bring illegal drugs into Illinois from other states or countries, with a particular focus on traffickers who use guns, violence and threats of violence to protect and promote their illegal businesses.  The office also investigates and prosecutes dealers who distribute powerful opioids like fentanyl and heroin. 

“Fentanyl is a dangerously potent drug,” said U.S. Attorney Lausch.  “Anyone who sells fentanyl on the streets of Chicago this summer will endure the full weight of law enforcement, and that includes a possible federal prosecution.”

The U.S. Attorney’s Office often works directly with the Cook County State’s Attorney’s Office to ensure that individuals trafficking drugs are charged with appropriate offenses in either federal or state court.  Examples of recent federal prosecutions include:

• This month, eleven individuals, including a woman and two of her sons, were charged as part of a federal drug and gun investigation in Chicago.  During the multi-year probe, law enforcement seized 29 firearms and associated ammunition, a machete and sheath, approximately a kilogram of cocaine, and 78 pounds of marijuana.  Law enforcement also seized from one of the defendants a Rolex watch and two necklaces.  Attached to the necklaces were 14-carat gold pendants with the initials “LAFA” written in diamonds.  The initials are an apparent reference to the defendant’s suspected affiliation with LAFA, a Chicago street gang.  Arraignments have not yet been scheduled.  FBI and CPD led the investigation, with assistance by IRS, Cook County Sheriff’s Department, Evergreen Park Police Department, Joliet Police Department, Orland Park Police Department, and Bolingbrook Police Department.
• Ten defendants were charged in March 2019 as part of a multi-year federal probe into drug trafficking in the East Garfield Park neighborhood of Chicago.  Law enforcement seized approximately 13 pounds of suspected methamphetamines, a half-kilogram of suspected heroin, approximately 13,000 pills of suspected ecstasy, and 18 firearms.  The defendants have pleaded not guilty.  The investigation was led by ATF and CPD, with assistance from ISP. 
• In March 2019, 35 individuals were charged as part of a joint federal and state investigation into heroin and fentanyl trafficking on the West Side of Chicago.  Many of the defendants allegedly distributed heroin and fentanyl-laced heroin to customers in the Chicago area, with drivers dispatched to make drug deliveries after customers placed orders on a telephone hotline.  The defendants have pleaded not guilty.  The investigation was jointly conducted by the Organized Crime Drug Enforcement Task Force (OCDETF) and the Chicago High Intensity Drug Trafficking Task Force (HIDTA).  The task forces, which are comprised of agents and officers from the above-mentioned federal, state and local law enforcement agencies, identify, disrupt and dismantle the most serious drug trafficking organizations.
• In December 2018, a father and son from Chicago were among 18 individuals charged as part of an investigation into cocaine trafficking.  The defendants allegedly distributed cocaine to hundreds of customers in the Chicago area, with drivers dispatched to make door-to-door deliveries.  The defendants have pleaded not guilty.  The OCDETF investigation was led by FBI and DEA, with the assistance of police departments from Evanston, Skokie, Lincolnwood, Palatine, and Des Plaines.
• In “Operation Dirty Ice,” 12 individuals were charged with trafficking heroin on the West Side of Chicago.  During the probe, authorities seized one and a half kilograms of heroin, a half-kilogram of crack cocaine, more than $892,000 in illicit cash proceeds, and a stolen handgun.  The defendants have pleaded not guilty.  The OCDETF investigation was led by FBI and CPD, with assistance from IRS and ISP.
• Sales of fentanyl and fentanyl-laced heroin were the target of a joint federal and state investigation that resulted in charges against more than 25 individuals.  The federal charges described drug sales in the Tri-Taylor, Humboldt Park and West Garfield Park neighborhoods on Chicago’s West Side, as well as deals in the Chatham neighborhood on the city’s South Side.  The defendants have pleaded not guilty.  The probe was led by CPD, with assistance from numerous federal agents assigned to a HIDTA task force.

Community Partnerships

The revitalized PSN program continues to invest resources in many violence-prevention initiatives.  Members of the U.S. Attorney’s Office have participated in parolee forums and youth outreach forums, and these efforts will continue this summer.

The monthly parolee forums, also known as offender notification meetings, rotate among various Chicago neighborhoods.  Recent parolees who have moved back into the neighborhoods are offered the chance to make an informed choice not to engage in further criminal activity.  Researchers at Yale University found that ex-offenders who attend a forum are 30% less likely to commit a new offense than those who did not attend a forum.

The quarterly youth forums assist children aged 13-17 to identify a path other than gang membership.  The youth forums are conducted in partnership with CPD, the Cook County Juvenile Temporary Detention Center, and the University of Chicago Crime Lab, which tracks the progress of the children to assess results.

CHICAGO — Eleven individuals, including a woman and two of her sons, are facing criminal charges as part of a federal drug and gun investigation in Chicago.

During the multi-year investigation, law enforcement seized 29 firearms and associated ammunition, a machete and sheath, approximately a kilogram of cocaine, 78 pounds of marijuana, more than $190,000 in suspected illicit cash proceeds, and diamond jewelry, Rolex watches and designer clothing appraised at more than $300,000.  Much of the alleged drug trafficking occurred on the South Side of Chicago.

All eleven defendants were arrested last week.  Detention hearings for many of the defendants are being held this week in U.S. District Court in Chicago.

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Eddie Johnson, Superintendent of the Chicago Police Department.  Substantial assistance was provided by the Internal Revenue Service Criminal Investigation Division, Cook County Sheriff’s Department, Evergreen Park Police Department, Joliet Police Department, Orland Park Police Department, and Bolingbrook Police Department.  Assistant U.S. Attorneys Ankur Srivastava and Sheri Wong represent the government.

According to charges filed in federal court, RAKIM ASAD, 26, of Chicago, and his mother, HARRIETTE MCPHERSON, 46, of Chicago, conspired with each other and DERRICK MCNEAL, 46, of Chicago, to possess cocaine and marijuana with the intent to deliver.  Asad is also charged with knowingly possessing a loaded handgun in furtherance of a drug trafficking crime.

During the investigation, law enforcement seized from Asad a Rolex watch and two necklaces, according to the indictment against him.  Attached to the necklaces were 14-carat gold pendants with the initials “LAFA” written in diamonds, the indictment states.  The initials are an apparent reference to Asad’s suspected affiliation with LAFA, a Chicago street gang.

Four of the defendants are charged with conspiring to rob a drug dealer of marijuana in Chicago and Bridgeview in the summer of 2017.  The charges allege that KELVIN EVERETT, 38, of Chicago, GREGORY BLACKWELL, 29, of Chicago, QUINCY WRIGHT, 37, of Chicago, and JERRY PEOPLES, 42, of Chicago, possessed a loaded rifle and handgun during an attempted robbery of the dealer on June 13, 2017, in Bridgeview.  Everett, Blackwell, Wright and Peoples are also charged with illegal possession of the rifle and handgun, due to having prior felony convictions that prohibited them from lawfully possessing a firearm.

The charges further allege that RACHAD LUCAS, 38, of Calumet City, stored controlled substances in a storage unit in Calumet City.  Lucas is also charged with possessing marijuana with the intent to distribute, knowingly possessing a handgun in furtherance of a drug trafficking crime, and illegally possessing the handgun as a previously convicted felon.

Three other defendants face various drug charges: RACHAD UNDERWOOD, 42, of Chicago, CALVIN WOODS, 28, of Chicago, and SINCERE BRANNON, 19, of Chicago.  Brannon, who is also McPherson’s son, faces an additional charge of knowingly possessing a firearm in furtherance of a drug trafficking crime.

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.  The charges carry maximum penalties ranging from 20 years to life in prison.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A federal grand jury has indicted four teenagers on carjacking or weapons offenses in connection with the theft of a vehicle at gunpoint in Chicago’s Edgewater neighborhood.

JAMAR JARVIS, 18, RAYNELL LANFORD, 19, and JAMAAL ASHSAHEED, 19, all of Chicago, forcibly took a Lexus sport-utility vehicle from a victim early in the morning of Oct. 18, 2018, according to an indictment returned Tuesday in U.S. District Court in Chicago.  The fourth defendant, JAVION BUSH, 19, of Chicago, provided assistance to the others after the carjacking, the indictment states.

All four defendants are currently in law enforcement custody.  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; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Eddie Johnson, Superintendent of the Chicago Police Department.  The Cook County State’s Attorney’s Office provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Albert Berry III and Shy Jackson, and Special Assistant U.S. Attorneys Yvette Loizon and Maureen McCurry.

After taking the Lexus, Jarvis, Lanford and Ashsaheed drove it to a gas station in the South Loop neighborhood of Chicago, where they purchased gas and a gas can, the indictment states.  CPD officers later arrested the trio, as well as Bush. 

The indictment charges Jarvis, Lanford and Ashsaheed with conspiring to commit carjacking.  The three are also charged with using, carrying and brandishing a firearm during a crime of violence.  Bush is charged with being an accessory after-the-fact to the carjacking.

In addition to the Oct. 18, 2018, carjacking, the indictment charges Jarvis, Lanford and Ashsaheed with conspiring to commit an attempted carjacking late the prior evening.  In the attempted carjacking, Lanford allegedly displayed a firearm while unsuccessfully attempting to take an Acura sedan in Chicago’s Uptown neighborhood.

Using, carrying and brandishing a firearm in connection with a carjacking carries a maximum sentence of life in prison, while carjacking and attempted carjacking are each punishable by up to 15 years, and the conspiracy charge is punishable by up to five years.  The accessory after-the-fact charge is punishable by up to seven and a half years.

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 — A grand jury has indicted a Chicago man on federal racketeering charges for allegedly committing murder to maintain and increase his position in a violent street gang.

LUIS CONTRERAS, 39, is charged with one count of murder in aid of racketeering, one count of attempted murder in aid of racketeering, and two counts of illegally possessing multiple firearms and ammunition.  The indictment accuses Contreras of murdering Andre Franzell on Feb. 18, 2018, for the purpose of maintaining and increasing Contreras’s position in the Latin Saints street gang.  Franzell, 23, was fatally shot in the 7700 block of South Kilbourn Avenue in Chicago’s Scottsdale neighborhood.

The indictment was returned Wednesday in federal court in Chicago.  Arraignment has not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Timothy Jones, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; James M. Gibbons, Special Agent-in-Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Chicago; and Eddie Johnson, Superintendent of the Chicago Police Department.  The government is represented by Assistant U.S. Attorneys Kavitha Babu and Nicholas J. Eichenseer.

The indictment alleges that the Latin Saints is a criminal organization whose members and associates engaged in narcotics trafficking and committed acts of violence, including murder and assault, to acquire and preserve the gang’s territory on the South Side of Chicago.  Members of the Latin Saints publicly claimed responsibility for their activities, boasted about the gang on social media, and intimidated rival gang members through acts and threats of violence, according to the indictment.

The attempted murder count accuses Contreras of trying to kill a man on the same day as the Franzell murder.  The illegal firearm possession counts allege that Contreras is a convicted felon who was not lawfully allowed to possess a firearm or ammunition.

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.  Murder in aid of racketeering is punishable by a mandatory sentence of life in prison, and the death penalty is also possible.   The attempted murder count and the illegal gun possession counts are each punishable by up to ten years in prison.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — An Indiana man has been sentenced to 18 months in federal prison for threatening to commit violence at women’s reproductive health services clinics in Chicago and northwest Indiana.

LUKE DANIEL WIERSMA, 35, of Dyer, Ind., pleaded guilty last year to posting online threats of violence on at least seven occasions in October and November of 2017.  Wiersma submitted the threats through the clinics’ websites.  The clinic in Chicago provided reproductive health services, while the clinic in Hammond, Ind., provided counseling services related to women’s reproductive health.

U.S. District Judge Manish S. Shah 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; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  The Indianapolis, Ind., Field Office of the FBI and the Dyer, Ind., Police Department provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Kelly M. Greening and Georgia N. Alexakis.

“The defendant’s transmission of numerous death threats to the Chicago clinic and the Hammond clinic is an extraordinarily serious offense that threatens public safety and terrorizes both medical communities and the women who utilize reproductive health clinics,” Assistant U.S. Attorney Kelly M. Greening argued in the government’s sentencing memorandum.  “These types of threats have a significant, lasting impact on the lives of many, including the employees and volunteers of the clinics and the patients who visit the clinics for medical care.”

In one of the threats transmitted to the Chicago clinic on Oct. 29, 2017, Wiersma stated, “I will do anything and everything to stop the unmitigated murders of fetuses.  I will do anything to stop the atrocities committed by your clinic every minute of every day at your clinic.  You are all pieces of [expletive] and I will kill to stop these atrocities.  I will blow you up if I have to, burn the clinic down.  I will do whatever is necessary I swear to God I will.  After that you are in God’s hands and He will do His thing.”