Northern District of Illinois

CHICAGO — An Indiana man is facing federal charges for allegedly threatening to commit violence at women’s reproductive health services clinics in Chicago and northwest Indiana.

LUKE DANIEL WIERSMA, 33, of Dyer, Ind., is charged with transmitting threats to injure and using threats of force to intimidate or interfere with reproductive health services. 

Wiersma posted online threats of violence on at least seven occasions in October and November of last year, according to a criminal complaint and affidavit filed today in U.S. District Court in Chicago.  Wiersma submitted the threats through the clinics’ websites, the complaint states.  The clinic in Chicago provides reproductive health services, while the clinic in Hammond, Ind., provides counseling services related to women’s reproductive health. 

Wiersma was arrested on Tuesday.  A detention hearing is scheduled for Feb. 9, 2018, at 1:00 p.m., before U.S. Magistrate Judge Sidney I. Schenkier in Chicago.

The charges were 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., Office of the FBI and the Dyer, Ind., Police Department provided valuable assistance.

In one of the threats transmitted to the Chicago clinic on Oct. 29, 2017, Wiersma allegedly 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.”

Transmitting a threat to injure is punishable by a maximum sentence of five years in prison, while using threats of force to intimidate or interfere with reproductive health services is punishable by up to one year 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 a complaint is not evidence of guilt.  The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The government is represented by Assistant U.S. Attorneys Abigail Peluso and Georgia Alexakis.

ROCKFORD — A McHenry man was found guilty of child pornography charges following a four-day jury trial in federal court in Rockford. 

MICHAEL L. CHAPARRO, 29, was charged with one count of transporting child pornography via the internet, and two counts of accessing child pornography that had crossed state lines, including an image of a prepubescent minor and a minor under 12 years of age, with intent to view the child pornography.

According to the indictment and the evidence at trial, on Aug. 7, 2014, Chaparro knowingly transported to Pennsylvania and Texas materials depicting one or more actual minors engaged in sexually explicit conduct.  In addition, evidence at trial indicated that Chaparro accessed a smart phone on Nov. 24, 2014, and computer hard drive on July 30, 2013, with intent to view child pornography, knowing that one or more persons depicted in an image involved a prepubescent minor or a minor who had not attained 12 years of age.

Transporting child pornography carries a mandatory minimum sentence of five years and a maximum of 20 years in prison, and accessing child pornography carries a maximum of ten years in prison and up to 20 years in prison for an offense involving a minor under 12 years of age.  Each count carries a $250,000 maximum fine.  The court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.  A sentencing hearing will be set by the Court at a later date.

The conviction was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey Sallet, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Bill Prim, McHenry County Sheriff.  The Illinois Internet Crimes Against Children Task Force assisted in the investigation.

The government is represented by Assistant U.S. Attorneys Michael D. Love and Margaret J. Schneider.

CHICAGO — An aspiring rapper from Chicago has been sentenced to more than 15 years in federal prison for illegally possessing a handgun while filming a music video.

RICARDO BURGOS, 31, possessed the gun in January 2016 while filming the rap music video in a north suburban hotel room.  Burgos, who performs under the name “Nation,” can be seen in the video holding two firearms while rapping about selling drugs, committing acts of violence, and disrespecting law enforcement.  Burgos had previously been convicted of multiple felonies and was not legally allowed to possess a firearm.

Burgos pleaded guilty to one count of illegal possession of a firearm by a felon, and one count of distribution of a controlled substance.  U.S. District Judge Ronald A. Guzman on Tuesday imposed a 188-month prison sentence.

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; and Eddie T. Johnson, Superintendent of the Chicago Police Department.

Burgos admitted in a plea declaration that he possessed a .45-caliber semi-automatic pistol while filming the video in a hotel room in Deerfield.  Shortly thereafter, Burgos brought the gun to the Austin neighborhood on the West Side of Chicago, where Chicago Police officers arrested him. 

Law enforcement subsequently determined that the .45-caliber pistol had been stolen from a store in Indiana.  The gun was also used in a shooting in Chicago two days before the music video was filmed.

The drug charge arose from multiple illegal narcotic sales by Burgos in 2015.  Burgos sold 4 grams of crack cocaine and 1.4 grams of heroin to several individuals, all of whom were undercover police officers. 

The government is represented by Assistant U.S. Attorney Jordan M. Matthews.

CHICAGO — A Chicago man has been sentenced to four and a half years in federal prison for illegally buying 17 handguns in Indiana and bringing them across the border to Chicago.

 

RICKY HATCH, also known as “Rick Hatchet” and “Ricky Hatchet,” purchased the firearms from an unlicensed individual in a parking lot in Bloomington, Ind., on three occasions in February 2015.  In the first sale, Hatch recruited a resident of Indianapolis, Ind., to serve as the ostensible buyer.  The seller reviewed the Indiana resident’s driver’s license and listed some of her information on a purported “firearms bill of sale” before selling the guns to Hatch in exchange for cash.  Although the Indiana resident did not accompany Hatch to the next two transactions, Hatch used aliases in those deals to conceal his identity.

 

After each purchase, Hatch brought the guns to Chicago.  The Chicago Police Department has subsequently recovered five of the guns from individuals other than Hatch.

 

Hatch, 25, pleaded guilty last year to unlawful interstate transportation of firearms.  On Jan. 18, 2018, U.S. District Judge Ronald A. Guzman imposed a 55-month prison sentence.

 

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Celinez Nunez, 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 impact of firearms brought from Indiana and sold to individuals in Illinois is well documented,” Assistant U.S. Attorney Brian S. Wallach argued in the government’s sentencing memorandum.  “Defendant’s actions, and those like him who bring gun after gun into this city, are fueling the violence that we read about on a daily basis.”

 

The government was represented by Mr. Wallach and Assistant U.S. Attorney Katie M. Durick.

CHICAGO — An Indiana man has been indicted on a federal kidnapping charge for allegedly abducting a child from a Calumet City street in broad daylight last month.

On Dec. 20, 2017, at approximately 3:30 p.m., BRYAN PROTHO grabbed the child as she walked on the sidewalk near 153rd Street and Burnham Avenue in Calumet City, according to an indictment returned Thursday and a criminal complaint previously filed in the case.  Protho forced the minor into his red Ford Explorer sport-utility vehicle and drove away, the complaint states.  He then parked the vehicle in an alley and assaulted the child, the complaint states.  The victim was able to escape and flag down a passing vehicle, and law enforcement was contacted.

Protho, 38, of East Chicago, Ind., was arrested on Dec. 27, 2017, and he remains in federal custody.  The indictment charges him with one count of kidnapping.  Arraignment is set for Feb. 20, 2018, at 9:30 a.m., before U.S. District Judge Charles P. Kocoras.

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; Christopher Fletcher, Chief of the Calumet City Police Department; and Dennis Murrin, Jr., Chief of the Lansing Police Department.  The FBI and the local departments jointly investigated the case.

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 kidnapping charge is punishable by a minimum sentence of 20 years in prison and a maximum sentence of life.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Christopher V. Parente.

CHICAGO — A former teller at a South Side bank has been sentenced to 15 months in federal prison for gradually embezzling approximately $180,000 in bank funds.

 

PATRICK GALVAN worked as a teller at Chicago Community Bank in the city’s Bridgeport neighborhood.  Galvan pocketed cash from his teller drawer and concealed the theft by falsely inflating the amount of coins held in the bank’s vault.  Galvan took the money over a two-and-a-half year period, occasionally processing coins through a coin counter at his teller station in order to give the appearance that he was handling large amounts of coins from customers.

 

Galvan, 39, of Chicago, pleaded guilty last year to one count of embezzlement.  U.S. District Judge John Robert Blakey on Wednesday imposed the 15-month prison sentence.

 

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; and Joseph Moriarty, Special Agent-in-Charge of the Chicago Regional Office of the Federal Deposit Insurance Corporation - Office of Inspector General.

 

“This was a serious, calculated, and deliberate crime, and the defendant took advantage of the trust placed in him by his employer to pull it off,” Assistant U.S. Attorney Amarjeet S. Bhachu argued in the government’s sentencing memorandum.

 

In addition to his teller duties, Galvan managed the bank’s coin accounts and was responsible for reporting the total amount of coins present in the vault.  Galvan admitted in a plea declaration that he pocketed the cash and falsely reported the coin total from 2008 to 2010.

ROCKFORD — A Rockford man was indicted Tuesday in federal court on multiple counts of drug trafficking and firearm offenses.

 

ANTWAN D. MANLEY, 25, was charged with possessing with intent to distribute heroin, cocaine base and marijuana, in Rockford on Jan. 11, 2018.  Manley was also charged with possessing a 9-mm pistol as a convicted felon on Jan. 11, 2018, and possessing that firearm in furtherance of a drug-trafficking crime.  In addition, Manley was charged with distributing heroin in Rockford on Nov. 27, 2017, and Dec. 6, 2017.  

 

Manley, who has been in federal custody since his arrest on Jan. 11, 2018, will appear before U.S. Magistrate Judge Iain D. Johnston for his arraignment today at 3:30 p.m.

 

Each of the drug-trafficking charges carries a maximum sentence of 20 years in prison.  The charge of illegally possessing a firearm as a convicted felon carries a maximum sentence of ten years in prison, and the charge of possessing a firearm in furtherance of a drug-trafficking crime carries a mandatory minimum sentence of five years in prison and a maximum sentence of life imprisonment.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.  

 

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

 

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey Sallet, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; and Dan O’Shea, Chief of the Rockford Police Department.  The federal investigation was conducted by the FBI-led Rockford Area Violent Gang Task Force, which includes the above agencies as well as the Loves Park and Freeport Police Departments.  The Winnebago County Sheriff’s Office also assisted in the investigation.

 

The government is represented by Assistant U.S. Attorney Talia Bucci.

ROCKFORD — A Rockford man was indicted Tuesday by a federal grand jury in Rockford for the robberies of two Rockford banks. 

 

ALBERT K. STALLWORTH, 62, was charged with two counts of bank robbery.  According to the indictment, on Aug. 25, 2017, Stallworth robbed the Midwest Community Bank on North Perryville Road in Rockford of $4,989.  The indictment further alleges that on Jan. 9, 2018, Stallworth robbed the Associated Bank on Center Terrace in Rockford of $1,620. 

 

Stallworth appeared before U.S. Magistrate Judge Iain D. Johnston today for arraignment.  His case was set for a status hearing on March 8, 2018, at 11:00 a.m.

 

Each count of bank robbery carries a maximum potential penalty of up to 20 years in prison, to be followed by up to three years of supervised release.  Each count also carries a fine of up to $250,000.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines, and order the defendant to pay full restitution to Midwest Community Bank and Associated Bank. 

 

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

 

The investigation was conducted by the FBI-led Rockford Area Violent Gang Task Force consisting of law enforcement officers and agents from the FBI, Rockford Police Department, Loves Park Police Department, and Freeport Police Department. 

 

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey Sallet, Special Agent-in-Charge of the Chicago Field Office of Federal Bureau of Investigation; and Dan O’Shea, Chief of the Rockford Police Department. 

 

The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.

ROCKFORD — A Machesney Park man was indicted Tuesday by a federal grand jury in Rockford for the armed robberies of a convenience store and a bank. 

 

DAVID M. BANEY, 32, was charged with one count of armed robbery, one count of armed bank robbery, and two counts of using and carrying a firearm during a crime of violence.  According to the indictment, on Jan. 11, 2018, Baney used a semi-automatic pistol to rob Kelley’s Market/Mobil gas station on North Second Street in Machesney Park, of $170 in cash and two cartons of cigarettes.  The indictment further alleges that on the same day Baney used a revolver to rob a Chase Bank on North Alpine Road in Loves Park, of $24,402. 

 

Baney is currently in custody at the Winnebago County Jail on state charges related to the robbery of Kelley’s Market.  He will appear in federal court in Rockford today at 10:00 a.m. for an initial appearance before U.S. Magistrate Judge Iain D. Johnston.

 

Armed bank robbery carries a maximum potential penalty of up to 25 years in prison, to be followed by up to five years of supervised release, while armed robbery carries a maximum potential penalty of up to 20 years in prison, to be followed by up to three years of supervised release.  The first charge of using and carrying a firearm during a crime of violence carries a minimum consecutive sentence of seven years in prison, and the second charge of using and carrying a firearm during a crime of violence carries a minimum consecutive sentence of 25 years in prison.  Each charge also carries a fine of up to $250,000.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines, and order the defendant to pay full restitution to Kelley’s Market/Mobile gas station and Chase Bank. 

 

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

 

The investigation was conducted by the FBI-led Rockford Area Violent Gang Task Force consisting of law enforcement officers and agents from the FBI, Rockford Police Department, Loves Park Police Department, and Freeport Police Department.  Officers from the Loves Park Police Department and the Winnebago County Sheriff’s Department participated in the investigation.

 

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey Sallet, Special Agent-in-Charge of the Chicago Field Office of Federal Bureau of Investigation; Gary Caruana, Winnebago County Sheriff; and Chuck Lynde, Chief of the Loves Park Police Department.

 

The government is represented by Assistant U.S. Attorney John G. McKenzie.

CHICAGO — A Chicago futures trader admitted in federal court that he caused more than $13 million in losses through a fraudulent trading scheme that resulted in the collapse of his firm.

THOMAS LINDSTROM used deep out-of-the-money options on ten-year Treasury Note futures to make it fraudulently appear that his trading at Chicago-based Rock Capital Markets LLC was profitable, thereby obtaining greater financial compensation for himself.  Over a six-month period in 2014 and 2015, Lindstrom obtained compensation of $285,000, while his fraud scheme caused a loss of more than $13.7 million and led to the collapse of Rock Capital.

Lindstrom, 55, of Winnetka, pleaded guilty Tuesday to one count of wire fraud.  U.S. District Judge Harry D. Leinenweber set sentencing for June 19, 2018.  Lindstrom acknowledged in the plea agreement that at the time of sentencing, the Court will order him to make full restitution in the amount of $13,776,518.

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 Federal Bureau of Investigation.  The government is represented by Assistant U.S. Attorney Sunil Harjani and Special Assistant U.S. Attorney Lindsey Evans of the Securities and Commodities Fraud Section of the U.S. Attorney’s Office in Chicago.  The Commodity Futures Trading Commission, which filed a civil enforcement lawsuit against Lindstrom, provided assistance.

A tick is the minimum price increment at which an option on a futures contract could trade.  Prior to 2016, the Chicago Board of Trade set the minimum settlement value of all options on futures contracts at one tick, even if the actual value of the option was considerably less.  For options on ten-year Treasury Note futures contracts, one tick was approximately $15.63. 

Lindstrom admitted in a plea agreement that he acquired hundreds of thousands of deep out-of-the-money options on ten-year Treasury Note futures, and on certain occasions he used spread transactions to pay effectively less than one tick apiece.  Lindstrom made the trades knowing that these options would likely expire worthless – resulting in losses – but would temporarily appear to have substantial value in his trading account because the minimum settlement value was one tick.

Lindstrom concealed the scheme by telling Rock Capital’s owner that the options were profitable, when in reality Lindstrom’s trading was causing substantial losses.

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

CHICAGO — A north suburban businessman who operated a cellular telephone distributorship throughout Illinois and other Midwestern states has pleaded guilty to willfully failing to pay more than $800,000 in personal and corporate income taxes.

 

JORDAN ECKERLING, the owner of Pagecomm of Illinois Inc., admitted in a plea agreement that from 2008 to 2012 he caused tax losses to the United States and Illinois in the total amount of $806,099.  As the sole shareholder and officer of Pagecomm, Eckerling attempted to conceal income by causing the company to issue him “business checks” that he cashed and used for personal expenses, the plea agreement states.  Eckerling also caused the company to directly pay a housekeeper to regularly clean Eckerling’s boat and his primary and secondary residences, the plea agreement states.  Eckerling also charged personal expenses to Pagecomm’s credit card accounts, including for a family vacation to Cancun, Mexico.

 

Eckerling, 52, of Highland Park, pleaded guilty Wednesday to one count of tax evasion.  The conviction is punishable by up to five years in prison and a fine of up to $100,000.  U.S. District Judge Virginia M. Kendall set sentencing for May 17, 2018, at 10:00 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 Federal Bureau of Investigation; and Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

 

In addition to the tax evasion, Eckerling admitted in his plea agreement that he added a relative to the payroll of Pagecomm and its successor company, PCW Holdings Inc., even though the relative was employed elsewhere and did no work for either company.  Eckerling did this so that he could obtain health insurance for his family under the relative’s name instead of his own, thereby concealing that he was an income-earning employee of the companies, the plea agreement states.

 

The government is represented by Assistant U.S. Attorney Sheri H. Mecklenburg.

CHICAGO — An Indiana man has been sentenced to eight years in federal prison for bringing firearms and ammunition across the border into Chicago and illegally selling them.

 

DARICK HUDSON, 47, of Michigan City, Ind., sold six firearms and ammunition on three occasions in the fall of 2015.  The weapons included five handguns and a rifle.  Unbeknownst to Hudson, the buyer was cooperating with law enforcement. 

 

Hudson also agreed to sell to the cooperating individual four additional firearms – two shotguns, a rifle and a handgun – but he fled from the transaction location when Chicago Police officers approached his vehicle.  Hudson drove into Indiana, where law enforcement officers ultimately stopped his vehicle and apprehended him.

 

Hudson previously pleaded guilty to illegal possession of a firearm by a felon.  On Jan. 10, 2018, U.S. District Judge Rebecca R. Pallmeyer imposed a 96-month prison sentence.

 

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives; and Eddie Johnson, Superintendent of the Chicago Police Department.  The LaPorte County (Ind.) Sheriff’s Office and the Lake County (Ind.) Sheriff’s Office provided valuable assistance.

 

“The defendant trafficked in and attempted to profit from violence,” Assistant U.S. Attorney Brian S. Wallach argued in the government’s sentencing memorandum.  “There is a need to make clear to individuals who find themselves in a similar position that a decision to pick up firearms – whether for personal use or to sell – will have serious consequences.”

 

The three successful sales occurred in October and November 2015.  The transactions occurred in a store parking lot on Torrence Avenue in south suburban Lansing, a store on 83rd Street in Chicago, and a store parking lot on River Oaks Drive in south suburban Calumet City.  In exchange for the six firearms and ammunition, the informant paid Hudson a total of $2,550 in cash.

 

The fourth sale was supposed to have occurred in a store parking lot on 79th Street in Chicago.  When the informant arrived at the meeting, Hudson directed him to an alternative location – a store on 159th Street in Calumet City.  Shortly after Hudson arrived at the new location, Chicago Police officers approached his vehicle, and Hudson fled to Indiana.  Law enforcement officers subsequently stopped his vehicle in Michigan City, Ind., and took him into custody.

CHICAGO — A south suburban man has been sentenced to ten years in federal prison for manufacturing synthetic cannabinoids into a smokeable drug known as K2, or “spice.”

 

KHALID HAMDAN, 51, of Justice, mixed the synthetic cannabinoids with leaves and other substances to create the drug.  Hamdan then sold wholesale quantities of the drug to customers under various brand names, including “Diablo,” “Bomb Marley,” “Joker,” and “7H Hydro.”

 

U.S. District Judge Manish S. Shah on Tuesday sentenced Hamdan to ten years in prison.  It is the highest sentence to date in the Northern District of Illinois for manufacturing a synthetic cannabinoid.

 

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Robert Bell, Acting Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration.  The Bridgeview Police Department initiated the investigation with the DEA.  The Federal Bureau of Investigation’s Cryptanalysis and Racketeering Records Unit also assisted with the investigation.

 

“Synthetic cannabinoids are often falsely marketed as the ‘legal,’ equivalent alternative to marijuana, but the effects are much stronger, more adverse, and less predictable than marijuana,” Assistant U.S. Attorneys Kelly M. Greening and Matthew Schneider argued in the government’s sentencing memorandum.  “Defendant was a large-scale drug trafficker who manufactured and sold kilograms and kilograms of these drugs to customers across Illinois, Indiana and other states.”

 

A jury last year convicted Hamdan on one count of conspiracy to manufacture the synthetic cannabinoid XLR 11, and two counts of possessing XLR 11 with the intent to distribute. 

 

Evidence at trial showed that Hamdan used storage units in Bridgeview and Chicago Ridge to manufacture and store the XLR 11 chemical and the finished K2 product.  A law enforcement search of the Chicago Ridge storage unit in 2014 revealed tools and products for manufacturing the drugs, including the raw XLR 11 powder, cans of acetone, bottles of flavoring, boxes of untreated damiana tea leaves, and boxes for packaging. 

 

Once manufactured, the drug was sold to consumers in baggies with professionally printed, animated designer labels.

A Harvey, Illinois, man was sentenced to 63 months in prison today for his role in a stolen identity refund fraud scheme, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney John R. Lausch Jr. for the Northern District of Illinois.

 

According to documents filed with the court, from around November 2014 to March 2015, Jonathan Herring, 34, working with at least two others, prepared and filed income tax returns with the Internal Revenue Service (IRS) using stolen names and social security numbers of U.S. Air Force service members, and deposited the fraudulently obtained tax refunds into bank accounts that he controlled.  In total, Herring filed approximately 225 fraudulent returns seeking approximately $845,979 in tax refunds. 

 

In addition to the term of imprisonment, Herring was ordered to serve four years of supervised release and to pay $593,786 in restitution to the IRS.  Herring pleaded guilty to wire fraud and aggravated identity theft in February 2016. 

 

Principal Deputy Assistant Attorney General Zuckerman and U.S Attorney Lausch thanked agents of IRS Criminal Investigation, who conducted the investigation and Trial Attorneys Michael C. Boteler and Timothy M. Russo of the Tax Division, who prosecuted the case. 

 

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

CHICAGO — A convicted felon has been sentenced to more than 19 years in federal prison for illegally possessing a loaded handgun during a traffic stop on the West Side of Chicago.

 

DEMONE RULE, 37, of Chicago, possessed the gun on the evening of Dec. 27, 2015, in the city’s Austin neighborhood.  Rule had previously been convicted of several felonies, including attempted murder, and was not legally allowed to possess a firearm. 

 

A jury last year convicted Rule on one count of illegal possession of a firearm by a felon.  U.S. District Judge John Robert Blakey on Thursday imposed a 235-month prison sentence after determining Rule’s status as an Armed Career Criminal under federal law.  The Armed Career Criminal Act of 1984 provides for enhanced penalties for firearm offenses committed by felons who were previously convicted of certain crimes three or more times.

 

The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; and Eddie T. Johnson, Superintendent of the Chicago Police Department.  The Illinois Department of Corrections provided valuable assistance.

 

“Defendant kept a loaded gun in his waistband in Chicago, a city plagued by gun violence, endangering our communities,” Assistant U.S. Attorneys Misty N. Wright and Devlin Su argued in the government’s sentencing memorandum.  “Defendant and other felons who carry guns must understand that illegally possessing weapons on the streets of Chicago translates to real consequences and real punishment, including meaningful time in prison.”

 

According to evidence at trial, Chicago Police officers observed Rule commit a traffic violation by using an alley as a thoroughfare.  The officers pulled over the green Buick Rule was driving, but when they approached his car, Rule sped off.  Several blocks away, Rule stopped his car in the middle of the street with the keys still in the ignition, and fled on foot.  Officers caught up with Rule in a nearby vacant lot, put him in handcuffs and recovered the gun from his waistband.  The firearm had six live rounds in the magazine, and one in the chamber.

CHICAGO — Attorney General Jeff Sessions has selected the Northern District of Illinois to receive additional resources for the fight against violent crime.  The Northern District of Illinois will receive three additional Assistant U.S. Attorney positions to focus exclusively on violent crime.  Nationally, 40 new federal prosecutors will be assigned to 27 districts throughout the United States.

 

“Led by our 94 United States Attorney’s Offices, Project Safe Neighborhoods task forces are hitting the streets across America to apprehend and bring violent criminals to justice,” said Attorney General Sessions.  “I have asked Congress for additional PSN funding because I believe nothing will be more effective at reducing violent crime.  Under this program, I am asking a great deal of our United States Attorneys.  I am both empowering them and holding them accountable for results.  To put them in the best position to impact and reduce violent crime, it is my privilege to announce that through a re-allocation of resources, we will be enlisting and deploying 40 additional violent crime prosecutors across the United States."

 

“We welcome the additional resources,” said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois.  “Our Assistant U.S. Attorneys work tirelessly to prosecute violent offenders and reduce violent crime in Chicago and throughout northern Illinois, and these new positions will strengthen those efforts."

 

Under the Attorney General’s re-allocation, the Northern District of Illinois and the District of Maryland received the highest number of new Assistant U.S. Attorney positions.

 

New AUSA Positions by District

Northern District of Alabama - 1
Eastern District of Arkansas - 1
Northern District of California - 2
Southern District of California - 1
District of Connecticut - 1
District of Columbia - 1
Central District of Illinois - 1
Northern District of Illinois - 3
Southern District of Indiana - 1
Eastern District of Louisiana - 1
District of Maryland - 3
Western District of Michigan - 1
Eastern District of Missouri - 2
Western District of Missouri - 1
District of Nevada - 2
District of New Mexico - 1
Eastern District of New York - 2
Western District of New York - 1
Northern District of Ohio - 2
Eastern District of Pennsylvania - 1
Middle District of Tennessee - 2
Western District of Tennessee - 2
Eastern District of Texas - 1
Northern District of Texas - 1

CHICAGO — A federal jury has convicted a Chicago man of leading an armed robbery crew that targeted retail stores and businesses on the city’s North and Northwest Sides.

ROBERT L. BERRIOS, 50, committed the nine armed robberies in 2012.  His crew mainly struck at cellular telephone stores, often terrorizing store employees by wearing masks and brandishing firearms.  In some of the heists, the robbers physically restrained store employees with zip ties.  The heists netted the crew tens of thousands of dollars in cash and cell phones.

After an eight-day trial in federal court in Chicago, the jury on Thursday convicted Berrios on all twelve robbery, firearm and conspiracy charges against him.  U.S. District Judge Matthew F. Kennelly set sentencing for March 22, 2018, at 1:30 p.m.  Berrios faces a mandatory minimum sentence of 22 years in prison, and a maximum sentence of life in prison.

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 Federal Bureau of Investigation.  The Chicago Police Department provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Angel M. Krull and Georgia Alexakis.

All four charged members of the robbery crew have now been convicted.  The other charged members, JULIO RODRIGUEZ, 36, DAVID REVIS, 37, and LUIS DIAZ, 33, all of Chicago, previously pleaded guilty and admitted their roles in the heists.  Revis was sentenced to 15 years in prison and Diaz was sentenced to three years.  Rodriguez is awaiting sentencing.

Evidence at Berrios’ trial revealed that the crew worked together to identify businesses to target and obtain intelligence about the locations, including store hours and number of employees working at a given time.  The crew communicated with one another via cell phone to plan the robberies and procure the necessary tools, including the masks, zip ties, firearms and getaway vehicles.

The jury convicted Berrios of leading the crew in nine robberies:

July 1, 2012: Walgreens store, 5935 W. Addison St., Chicago.

July 28, 2012: Currency Exchange, 2753 N. Ashland Ave., Chicago.

Aug. 15, 2012: Currency Exchange, 2814 N. Milwaukee Ave., Chicago.

Sept. 19, 2012: T-Mobile store, 1552 W. Chicago Ave., Chicago.

Sept. 28, 2012: T-Mobile store, 1958 W. Irving Park Rd., Chicago.

Oct. 2, 2012: T-Mobile store, 4000 W. Fullerton Ave., Chicago.

Oct. 13, 2012: T-Mobile store, 3951 N. Kimball Ave., Chicago.

Oct. 16, 2012: Cricket store, 3200 W. Armitage Ave., Chicago.

Oct. 22, 2012: AT&T store, 3955 W. Belmont Ave., Chicago.

ROCKFORD — A man from Lake in the Hills has been indicted by a federal grand jury in Rockford on charges of child pornography. 

 

PAUL W. CHRISTMANN, 50, was charged Tuesday with two counts of transporting child pornography via the internet in 2013, and one count of possessing two computers in 2017 containing images of child pornography.

 

Each count of transporting child pornography carries a mandatory minimum sentence of five years and a maximum of 20 years in prison, and possessing child pornography carries a maximum of up to ten years in prison.  Each count carries a $250,000 maximum fine.  If Christmann is convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.  

 

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

 

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey Sallet, Special Agent-in-Charge of the Federal Bureau of Investigation in Chicago. The McHenry County Sheriff’s Office and Internet Crimes Against Children Task Force assisted in the investigation.

 

The government is represented by Assistant U.S. Attorney Michael D. Love.

CHICAGO — The United States has filed a civil lawsuit accusing a north suburban diagnostics company of defrauding Medicare out of millions of dollars through kickbacks and unnecessary home sleep testing.

The suit alleges that SNAP DIAGNOSTICS LLC, its founder, GIL RAVIV, and its marketing vice president, STEPHEN BURTON, violated the federal False Claims Act by fraudulently billing Medicare for medically unnecessary services and for services that were occasioned by kickbacks.   The suit alleges that Raviv directed SNAP to submit claims for Medicare recipients’ second and third nights of home sleep testing when, in fact, the company knew that only a single night of testing was needed to effectively diagnose obstructive sleep apnea and it routinely tested and claimed only the one night for non-Medicare beneficiaries.  SNAP’s business model also relied on several unlawful kickback schemes, which incentivized physicians and their staffs to refer all of their home sleep testing services to SNAP, the suit alleges.

The government’s complaint was filed Monday in U.S. District Court in Chicago.  On Oct. 18, 2017, the government notified the Court that it was intervening in two separate lawsuits, each initially filed under seal by a private citizen pursuant to the qui tam, or whistleblower, provisions of the False Claims Act.

The lawsuit 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 U.S. Department of Health and Human Services, the U.S. Railroad Retirement Board, and the U.S. Office of Personnel Management assisted in the investigation.  The government is represented by Assistant U.S. Attorney Sarah J. North.

Wheeling-based SNAP is a nationwide provider of home sleep testing diagnostic services.  SNAP’s home sleep tests are covered by Medicare when medically necessary to diagnose obstructive sleep apnea, a common disorder in which airflow is obstructed during sleep.  Home sleep testing utilizes a portable monitor, unattended and initiated by the patient, to collect information about breathing and oxygen levels while the patient sleeps at home.  The testing assists physicians in diagnosing apnea and establishing a treatment plan.

According to the government’s lawsuit, SNAP paid commissions and bonuses to its sales force for selling the multi-night testing to providers, and it gave free home sleep tests to physicians and their families to induce referrals.  After the testing was performed, SNAP personnel interpreted the results and gave unsigned reports to referring physicians, who in turn would bill as if the physicians had performed the professional service of interpreting the results themselves, the suit states.  The suit contends that SNAP intentionally allowed physicians to fraudulently bill for this service as a way of increasing referrals and driving the volume of SNAP’s business. 

Since Medicare began covering home sleep testing in 2009, SNAP has received nearly $9 million from Medicare, almost all of it the result of fraud and kickbacks, according to the suit.

The False Claims Act permits private individuals to sue for false claims on behalf of the government and to share in any recovery.  The Act also allows the government to intervene or take over the lawsuit, as it has done in this case, and to recover three times its damages plus civil penalties ranging from $5,500 to $11,000 for each false claim submitted by the defendants. 

The public is reminded that civil allegations are accusations only, and there has been no determination of liability.

CHICAGO — The U.S. Attorney’s Office in Chicago has charged two suburban mortgage brokers with fraudulently operating a purportedly independent appraisal management company to control property valuations, and brokering fraudulent loans to finance real estate transactions between themselves and nominees.

STEVEN L. GARCIA and his brother, MICHAEL R. GARCIA, operated American Financial Mortgage Services Inc., a licensed mortgage brokerage in Schaumburg.  According to a criminal information filed Wednesday in federal court in Chicago, the brothers fraudulently caused lenders to make mortgage loans brokered by American Financial by falsely representing that the supporting property appraisals were performed by independent appraisers, when, in fact, the Garcias and American Financial employees selected the appraisers, managed the appraisal process, influenced property valuation and paid the appraisers. 

Steven Garcia, 45, of Schaumburg, and Michael Garcia, 43, of Streamwood, are each charged with one count of mail fraud and one count of wire fraud.  Arraignments in federal court in Chicago have not yet been scheduled.

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Brad Geary, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development's Office of Inspector General in Chicago; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.

Federal Housing Administration regulations prohibit mortgage brokers from having substantive communications with appraisers relating to valuation of properties, including ordering or managing an appraisal assignment, and from paying appraisers.  Lenders rely on independent appraisals conducted within FHA regulations.

According to the charges, the Garcias bypassed FHA regulations by controlling a purportedly independent appraisal firm – Residential Appraisal Management Company Inc. – through a nominee.  The Garcias fraudulently used RAMCI to steer appraisals to hand-picked appraisers, including a relative of the Garcias, who would provide an appraised value sufficient to support a proposed loan, while falsely representing to lenders that RAMCI selected appraisers based on experience and skill, the information states.

The Garcias also fraudulently caused lenders to make mortgage loans to finance fraudulent real estate transactions in which the Garcias and their nominees purchased and re-sold residences at inflated prices to unqualified nominees who then defaulted on the loans, the information states.  The Garcias furnished lenders with false employment and income information to support the nominees’ loan applications, and then provided the nominees with the money to make the purchases, the information states.  The Garcias fraudulently obtained approximately $1.9 million that was disbursed at the closings of the fraudulent real estate transactions, and another $274,000 in commissions from those deals, the information states. 

The public is reminded that an information 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 in the information is punishable by up to 30 years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorneys Brian Netols and Matthew Ebert.

CHICAGO — An information technology specialist has been arrested on cyber hacking charges for allegedly damaging the servers of a north suburban company where he formerly worked as a contractor.

 

EDWARD SOYBEL illegally accessed the servers of Lake Forest-based W.W. Grainger Inc., on multiple occasions last year, according to an indictment returned Tuesday in federal court in Chicago.  Soybel intentionally caused damage to Grainger’s automated inventory management program, which operates on-site dispensing machines and has approximately 18,000 customers throughout the United States, the indictment states.  The dispensing machines provide customers with secure access to durable products, such as safety equipment.  Soybel had worked as a technical support contractor at Grainger’s facility in Niles until he was terminated in early 2016.

 

The indictment charges Soybel, 34, of Chicago, with ten counts of intentionally causing damage to protected computers, one count of attempting to cause damage to protected computers, and one count of attempting to access a protected computer without authorization.

 

Soybel was arrested Wednesday morning and he remains in federal custody.  He pleaded not guilty to the charges during a Wednesday afternoon arraignment before U.S. District Judge Matthew F. Kennelly in Chicago.  A status hearing is set for 1:30 p.m. today before Judge Kennelly.

 

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 Federal Bureau of Investigation.

 

According to the indictment, Grainger maintained computer servers related to the dispensing machines at its facility in Niles.  Soybel worked at the facility as a contractor from November 2014 to February 2016, after which his access to Grainger’s servers was deactivated.  Soybel hacked into the servers on several occasions in July 2016, the indictment states.

 

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

 

Intentionally causing damage to protected computers and attempting to cause damage are each punishable by up to ten years in prison, while attempting to access a protected computer without authorization is punishable by up to one year.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines. 

 

The government is represented by Assistant U.S. Attorney Nicholas J. Eichenseer.

CHICAGO — A federal judge today sentenced a former Chicago Police officer to five years in prison for notifying a high school friend that he was the target of a federal drug investigation.

In June 2014, RONALD COLEMAN was a Chicago Police officer assigned to work with the U.S. Drug Enforcement Administration on an undercover investigation dubbed “Operation Five Leaf Clover,” which targeted drug trafficking by a street gang on Chicago’s West Side.  As a trusted member of the investigative team, Coleman participated in all of facets of the probe, including court-authorized wiretaps of suspects’ phones, physical and electronic surveillance, and seizures of drugs and guns.  Coleman knew that a high school friend was involved in the sale of heroin supplied to the gang by RODNEY BEDENFIELD.  Coleman obstructed justice when he notified his friend's cousin that authorities were planning to search the friend’s home and a dozen other locations as part of the investigation.  After receiving word of Coleman’s tip, the friend passed it along to Bedenfield, who quickly moved contraband to an alternative location to avoid law enforcement.

A jury in August convicted Coleman, 47, of Chicago, on one count of obstruction of justice.  U.S. District Judge Charles Norgle 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 Chicago Police Department provided valuable assistance.

Evidence at Coleman’s trial revealed that law enforcement agents surveilling Bedenfield observed him, after receiving word of Coleman’s tip, transporting several large bags from a residence in the North Lawndale neighborhood to an alternative location around the corner.  On June 12, 2014, agents and officers executed a search warrant on the alternative location and discovered five handguns, a rifle, multiple handgun magazines, ammunition, approximately 400 grams of heroin, two containers of lactose, three digital scales, plastic baggies and a bill counter.

“Bedenfield chose to move his contraband in an attempt to hide it from law enforcement,” Assistant U.S. Attorney Shoba Pillay argued in the government’s sentencing memorandum.  “But he could also have chosen to protect his heroin trafficking operation, and used that significant amount of firepower on the police when they arrived to execute the arrest and search warrants.  Defendant’s actions could have gotten his fellow police officers killed.”

Bedenfield was indicted separately on multiple drug trafficking and firearms charges.  He pleaded guilty to the narcotics-related counts and was convicted of the firearms-related counts at a bench trial in federal court in Chicago.  Bedenfield was sentenced to 18 years in prison.

CHICAGO — A Chicago investment manager has been indicted for allegedly swindling more than $10 million from clients and lenders.

SHAWN BALDWIN, who owned and controlled various investment-related firms in Chicago, exaggerated his financial success and professional connections to fraudulently obtain more than $10 million from at least 17 investors and lenders, according to an indictment returned in federal court in Chicago.  Baldwin falsely claimed that their funds would be invested in stocks and other investment products, when, in fact, Baldwin spent the money for his own personal benefit, the indictment states.  The fraud scheme alleged in the indictment began in 2006 and continued until May of this year.

The indictment was returned on Dec. 7, 2017, and ordered unsealed on Monday.  It charges Baldwin, 51, of Olympia Fields, with eight counts of wire fraud.  Baldwin pleaded not guilty at a Monday arraignment in federal court in Chicago.  A status hearing is set for Dec. 28, 2017, at 1:00 p.m., before U.S. District Judge John Robert Blakey.

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 Federal Bureau of Investigation.

According to the indictment, Baldwin obtained funds from individual investors, as well as from corporate lenders who lent him money for use in business and personal dealings.  Baldwin claimed that compliance officers and professional advisors were affiliated with his firms, when, in fact, no such relationships existed, the indictment states.  Baldwin also deceived the investors and lenders by misrepresenting and minimizing the serious disciplinary actions taken against him by regulators, the indictment states.  The regulatory actions included the revocation of his certifications with the Financial Industry Regulatory Authority in 2009, and a permanent prohibition from offering securities sales or investment advice, which the State of Illinois imposed in 2013.

Baldwin attempted to conceal the scheme by furnishing victims with fraudulent account statements that misrepresented the value of their funds, the indictment states.  Baldwin also lulled his victims by falsely maintaining that he was working on lucrative business deals and developing new contacts that would lead to profits from initial public stock offerings, the indictment states.  In reality, Baldwin knew he could not pay back investors because he had lost or spent their money, the charges allege.

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

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

The government is represented by Assistant U.S. Attorney Matthew Getter.

CHICAGO — An Aurora man has been sentenced to two years in federal prison for manufacturing illegal steroids and distributing them to dozens of customers.

 

CHRISTOPHER C. HICKSON, 25, used bulk powders he had imported from China to manufacture anabolic steroid pills.  Hickson operated a makeshift laboratory in his Aurora residence and distributed the pills to more than 100 customers in the United States and Canada.

 

The case against Hickson was part of “Operation Cyber Juice,” a federal investigation that targeted the illegal importation of steroids purchased overseas and manufactured in the United States.

 

Hickson previously pleaded guilty to one count of drug conspiracy and one count of money laundering.  In addition to the 24-month prison term, U.S. District Judge Andrea R. Wood on Monday ordered Hickson to pay a $100,000 personal money judgment.

 

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; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.

 

In October 2013, U.S. Customs and Border Protection agents intercepted a Chinese parcel addressed to Hickson’s residence.  A laboratory analysis determined that the parcel contained approximately 436 grams of the powder Stanozolol, a steroid classified as a Schedule III controlled substance.  A court-authorized search of Hickson’s home in November 2014 revealed steroid powder, more than 1,000 vials filled with liquid steroids, and hundreds of steroid pills and capsules.  Hickson labeled his steroid brand “Rift Labs” and “truelab.”

 

The government is represented by Assistant U.S. Attorney Kartik K. Raman.

CHICAGO — A north suburban man who was free on bond while awaiting trial in a federal child pornography case has been arrested for allegedly furnishing sexually explicit images of children to an undercover law enforcement agent.

RONALD FEDER, 30, of Skokie, was arrested Thursday after he handed the undercover agent a thumb drive containing child pornography, according to a criminal complaint and affidavit filed in federal court in Chicago.  Feder met with the undercover agent in a coffee shop in Lincolnwood after the pair had communicated online for nearly three weeks, the complaint states.  The online communication and subsequent meeting occurred while Feder was free on bond while awaiting trial on a child pornography charge pending in federal court in Chicago.

The complaint charges Feder with two new counts of transporting and distributing child pornography.  A detention hearing is set for Dec. 13, 2017, at 9:00 a.m., before U.S. Magistrate Judge Jeffrey Cole in Chicago.

The complaint was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Wisconsin Attorney General Brad Schimel.  The Skokie Police Department provided valuable assistance.

According to the complaint, Feder used the online aliases “Tom Bradly” and “Jack Wayne” to communicate with the undercover agent, who was posing as an individual interested in “taboo” activities.  During online and telephone communications in late November and early December, Feder informed the undercover agent that his actual name was Ron, and he described his interest in child pornography, the complaint states.  Feder offered to trade images of child pornography with the undercover agent in exchange for the agent setting up an encounter between Feder and the agent’s minor nephew and niece, during which Feder would molest the children, the complaint states.

In the prior case, Feder was indicted in September 2016 for allegedly possessing a sexually explicit image of a minor under the age of twelve.  The conduct allegedly occurred while Feder was working as a civilian employee of the Armed Forces and living overseas.  Feder pleaded not guilty to that charge and was ordered released on bond in September 2016, with a condition of the release prohibiting him from accessing the internet.

The public is reminded that neither a complaint nor an indictment is 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 two charges in the complaint each carry a mandatory minimum sentence of five years’ imprisonment and a maximum sentence of 20 years’ imprisonment.  The count in the prior indictment is punishable by up to 20 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Andrew Dixon and Special Assistant U.S. Attorney Jennifer Maguire.

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 judge has sentenced a woman to five years in prison for bilking an elderly suburban man out of $4.1 million through a telephone sweepstakes scam.

CORINNE DZIESIUTA was working for a call center in Costa Rica when she made numerous telephone calls and sent letters to the elderly victim, who lived in Palatine.  The victim was told that he won millions of dollars in a sweepstake but had to pay various fees and taxes in order to collect.  Dziesiuta and her co-schemers tricked and bullied the man into transferring large sums of money to accounts she and her co-schemers controlled.  Dziesiuta knew the man had not actually won any money, yet she continued to participate in the scheme for more than six years, causing the man to pay more than $4.1 million. 

Dziesiuta, 39, who is originally from New Jersey, pleaded guilty in August to one count of wire fraud.  U.S. District Judge Thomas M. Durkin on Tuesday imposed the 60-month 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 government is represented by Assistant U.S. Attorney Nani M. Gilkerson.

 

The investigation revealed that Dziesiuta, using the name “Lisa Conti,” communicated with the victim from 2010 to 2016.  The man made 37 payments, ranging from $23,751 to $210,000. 

 

In 2016 the victim began cooperating with law enforcement, who directed him to inform Dziesiuta that he would only provide additional funds in person.  Dziesiuta agreed to travel to New York to meet the victim and collect additional money from him.  Dziesiuta was arrested when she arrived at LaGuardia Airport in New York City.

CHICAGO — A chiropractor who owned several clinics in the north suburbs of Chicago has been sentenced to 20 months in federal prison for billing an insurance carrier for medically unnecessary or nonexistent services.

As a licensed chiropractor and owner of the facilities, STEVEN PAUL required the clinics’ chiropractors and medical doctors to order x-rays, MRI scans and neurological diagnostic testing, without regard to medical necessity.  Paul billed Blue Cross Blue Shield of Illinois for the unnecessary services, and he also billed the carrier for physical therapy services that were never provided.

Paul, 46, of Northbrook, previously pleaded guilty to one count of health care fraud.  U.S. District Judge Ronald A. Guzman on Tuesday imposed the prison sentence in federal court in Chicago.  Judge Guzman cited Paul’s “extraordinary cooperation” in the government’s investigation as a basis for imposing what the Judge said was the lowest possible term of imprisonment he would consider for Paul’s fraud scheme.

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; and James Vanderberg, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Labor, Office of Inspector General.

 

Paul and a co-defendant, chiropractor BRADLEY MATTSON, jointly owned six chiropractic clinics in the north suburbs of Chicago: Hawthorn Physical Medicine, Woodfield Physical Medicine, Stratford Physical Medicine, Algonquin Physical Medicine, Northshore Physical Medicine, and Cumberland Physical Medicine.

 

Paul and Mattson admitted in plea agreements that they required patients to receive an initial x-ray and a pre-set schedule of clinic visits for a period of six months, without regard to the medical necessity of the visits.  Paul admitted that from 1999 to 2008, he directed billings to Blue Cross Blue Shield totaling $3.65 million for medically unnecessary tests or physical therapy services that were not provided, and his clinics collected $1.33 million in fraudulent reimbursements from the insurance company.

 

During the investigation, an undercover FBI agent visited the Hawthorn clinic for treatment of a purported back strain.  Mattson diagnosed the agent with a pinched nerve and ordered a pre-set treatment plan that began with daily visits for two weeks.  Mattson rendered his diagnosis despite the opinion of the clinic’s medical doctor and a physical therapist that the agent did not have a pinched nerve but rather a pulled muscle.

 

Mattson, of Lake Forest, pleaded guilty to health care fraud and was sentenced in 2012 to six and a half years in prison.

 

The government is represented by Assistant U.S. Attorney Renai S. Rodney.

CHICAGO — A LaSalle County physician admitted in federal court today that he illegally dispensed prescription medications, including opioids, to patients in exchange for cash or sex.

In the summer of 2013 CONSTANTINO PERALES, M.D., illegally prescribed Oxycodone and Xanax to a co-defendant, ANDREW STRANDELL, knowing that Strandell would sell the pills on the black market, according to Perales’ plea agreement.  Strandell would then pay Perales approximately $15-20 per pill for some of the pills that Strandell was able to sell, the plea agreement states.

Perales also admitted in the plea agreement that from 2011 to 2013 he illegally dispensed opioids and other controlled substances to three opioid-dependent patients in exchange for sex.  Perales required the individuals to have sex with him in order to continue receiving the medications, the plea agreement states.  Perales knew these patients were addicted to the pills, yet he dispensed the medications without performing a medical examination or ordering any diagnostic tests to manage their conditions, the plea agreement states.

Perales, 66, of Peru, Ill., pleaded guilty to conspiracy to possess a controlled substance with the intent to distribute.  The conviction is punishable by a maximum sentence of 20 years in prison and a maximum fine of $1 million.  U.S. District Judge Amy J. St. Eve set sentencing for March 22, 2018, at 10:15 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 Federal Bureau of Investigation; and Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration.  Substantial assistance was provided by the Peru, Ill., Police Department, and the LaSalle County State’s Attorney’s Office.

Perales’ Illinois medical license was suspended and he surrendered his DEA Registration Certificate after federal and local authorities executed a search warrant at his office in Peru, Ill., in August 2013.

Strandell, 36, of Sandwich, Ill., pleaded guilty earlier this year to the same conspiracy charge as Perales.  The Court has not yet scheduled Strandell’s sentencing hearing.

The government is represented by Assistant U.S. Attorneys Katherine Sawyer and Kathryn Malizia.

CHICAGO — Federal authorities have seized rifles, shotguns and ammunition from the Melrose Park home of a man who allegedly brought a gun to a drug deal.

JOSE MENDOZA illegally sold four rifles and ten rounds of ammunition on Nov. 21, 2017, in a parking lot of a fitness center in Melrose Park, according to a criminal complaint and affidavit filed in federal court in Chicago.  Unbeknownst to Mendoza, the buyer was an undercover law enforcement employee, the complaint states.

Mendoza and two co-defendants were arrested on Nov. 30, 2017, after they attempted to purchase two kilograms of cocaine from the undercover law enforcement employee in the parking lot of a home improvement store in Northlake, the complaint states.  At the time of the attempted drug deal, Mendoza was carrying a handgun in his jacket pocket, according to the complaint.  During a subsequent law enforcement search of Mendoza’s residence in Melrose Park, authorities discovered another handgun, two rifles, five shotguns, and ammunition, the complaint states.

The complaint charges Mendoza, 53, with possession of a firearm during a drug trafficking crime.  He and the two co-defendants, MIGUEL PINEDA, 48, of River Grove, and ALEJANDRO SANDOVAL, 25, of Waukegan, are also charged with conspiracy to possess cocaine with the intent to distribute.  Detention hearings for Pineda and Sandoval are scheduled for today before U.S. Magistrate Judge Susan E. Cox in Chicago.  A detention hearing for Mendoza is set for Dec. 7, 2017, at 2:30 p.m. before Judge Cox.

The complaint was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; and Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.  The Schiller Park Police Department and Elgin Police Department provided valuable assistance.

According to the complaint, the defendants attempted to purchase the cocaine for $57,000 in cash.  The money was hidden in a trap compartment in the trunk of a BMW X6 driven by one of the defendants, the complaint states.

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. 

Possessing a firearm during a drug trafficking crime is punishable by a maximum sentence of life in prison. The drug charge is punishable by up to 40 years in prison.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Christine M. O’Neill.

CHICAGO — The former mayor of south suburban Markham solicited and received bribes from vendors while in office in exchange for steering them city business, according to a 12-count indictment returned in federal court in Chicago.

The indictment accuses DAVID WEBB JR., who served as mayor of Markham from 2001 until earlier this year, of seeking and obtaining bribes from vendors in the construction and financial services industries.  Three vendors provided a total of at least $300,000 in bribes to Webb in the form of cash payments, campaign contributions, purported donations to city programs, and checks made payable to shell companies operated by Webb and his relatives, the indictment states.  As part of the bribery scheme, Webb allegedly used his influence as mayor to help the vendors maintain city business or procure new city contracts, including the renovation of a Markham park and the construction of a multi-million dollar senior living complex that would later be named in Webb’s honor.

The indictment was returned Thursday in federal court in Chicago.  It charges Webb, 69, of Markham, with one count of honest services wire fraud and one count of willfully filing a false tax return.  The indictment also charges an owner and an executive of two companies who allegedly paid bribes to Webb, as well as one of the companies itself.  Arraignments in U.S. District 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 Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.  The U.S. Securities and Exchange Commission provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Steven Dollear and Georgia Alexakis.

The indictment describes instances in which Webb personally solicited bribes from companies doing business with the city.  In 2008, Webb allegedly sought money from THOMAS SUMMERS, an owner of Alsterda Cartage and Construction Co., Inc., an Alsip-based sewer subcontractor.  Over the next five years, Summers and Alsterda issued at least seven checks to Webb totaling approximately $174,000, according to the indictment.  Webb directed Summers to make the checks payable to a Webb family member or one of the shell companies controlled by Webb and his family that performed no actual work, the indictment states.  Summers also delivered cash bribes to Webb and contributed to mayoral campaign events, the indictment states.

In exchange for the bribes, Webb allegedly used his position as mayor to take official action benefitting Alsterda, including causing Alsterda to be assigned city projects.  Summers, 65, of Homer Glen, is charged with one count of conspiracy to commit federal program bribery.

Webb also sought and received bribes from the general contractor on the senior center and park projects, the indictment states.  In early 2012, Webb met with MICHAEL JARIGESE, the president of TOWER CONTRACTING LLC, and asked for $100,000, the indictment states.  At the time, Tower was seeking to expand its portfolio of city business, which already included the nearly $15 million senior center.  Jarigese later delivered two Tower-issued checks to Webb totaling $85,000, the indictment states.  At Webb’s direction, Jarigese made the checks payable to one of the shell companies that Webb and his family controlled, which performed no actual work, and then fraudulently recorded them in Tower’s records as payment for contracting work and a donation to a Markham festival, the indictment states.  The purported festival payment was described in the company’s records as “Tower giving back to the community,” the indictment states.  Tower also contributed more than $150,000 to the mayor’s campaign and Markham events, the indictment states.

 In exchange for the bribes, Webb allegedly used his position as mayor to take official action that benefited Tower, such as awarding it the $3.4 million Roesner Park project.  Jarigese, 64, of Frankfort, and Tower, which is based in Mokena, are each charged with nine counts of honest services wire fraud and one count of federal program bribery.

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

Each count of honest services wire fraud is punishable by up to 20 years in prison.  The maximum sentence for federal program bribery is ten years.  The conspiracy count is punishable by up to five years, while the tax count carries a maximum of three years.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

ROCKFORD — A Chicago man was sentenced today by U.S. District Judge Frederick J. Kapala for his role in a conspiracy to manufacture and distribute marijuana. 

 

YOUSIF Y. PIRA, 65, was sentenced to ten years in federal prison, to be followed by five years of supervised release.  

 

On July 13, 2017, following a four-day jury trial in federal court in Rockford, Pira was found guilty of conspiring to manufacture, possess and distribute 1,000 or more marijuana plants.  According to the indictment and the evidence at trial, between Jan. 2, 2013, and Jan. 6, 2015, Pira conspired with JEREMIAH N. CLEMENT, 39, of Des Plaines, GEORGE H. BACUS, 54, of Niles, JUSTIN T. PAGLUSCH, 36, of Ingleside, SHLIMON SHIMON, 49, of Chicago, CASEY WILLIAMS, 30, of Great Falls, Mont., and DESTINY FREEMAN, 24, of Palmer, Alaska, to illegally grow, store and distribute marijuana in a warehouse at 1916 11th Street in Rockford.  The warehouse was destroyed by a fire on Jan. 6, 2015.  As part of the conspiracy, Pira purchased grow lights and other equipment and supplies for the illegal operation to grow marijauna in the warehouse and installed wiring for the lights used to grow marijuana.

 

Clement, Paglusch, Bacus, Williams, and Freeman previously pleaded guilty and admitted their roles in the conspiracy.  Clement was sentenced on June 3, 2016, to ten years in prison, to be followed by five years of supervised release; Paglusch was sentenced on June 23, 2016, to ten years in prison, to be followed by five years of supervised release; Bacus was sentenced on Sept. 22, 2017, to 33 months in prison, to be followed by two years of supervised release; Williams was sentenced on Aug. 23, 2017, to 57 months in prison, to be followed by three years of supervised release; and Freeman was sentenced on Aug. 24, 2017, to 23 months in prison, to be followed by two years of supervised release.  An arrest warrant was previously issued for Shimon, who is still at large.

 

Today's sentencing of Pira was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Celinez Nunez, Special Agent in Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; Derek Bergsten, Chief of the Rockford Fire Department; and Anthony Scarpelli, Chief of the Skokie Police Department.  The Winnebago County Sheriff’s Department Narcotics Unit and Rockford Police Department Narcotics Unit assisted in the investigation.

 

The government is represented by Assistant U.S. Attorneys Joseph C. Pedersen and Margaret J. Schneider.

CHICAGO — The chief executive officer of a suburban pharmaceutical company was arrested today on a federal fraud charge for allegedly pocketing at least $1.5 million from investors and spending the cash on a luxury lake house in Michigan and golf and yacht club dues.

 

ROBERT TOMLINSON, the CEO of Neurendo Pharma LLC in Hoffman Estates, misappropriated at least $1.5 million from individual and corporate investors from March 2016 to earlier this month, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  Tomlinson fraudulently advised investors that their funds would be used to operate Neurendo and to market an experimental drug, known as GNTI, to treat type II diabetes, the complaint states.  Tomlinson allegedly claimed investors would receive a substantial payment once Neurendo’s drug rights were purchased by a major pharmaceutical company.  In reality, Tomlinson used the majority of investor funds to support his family’s lavish lifestyle, which included a lake house in Bay Harbor, Mich., and annual dues at the Bay Harbor Golf Club and Bay Harbor Yacht Club, the complaint states.

 

Federal agents this morning arrested Tomlinson, conducted a court-authorized search of his residence in Hoffman Estates, and seized funds in one of his bank accounts.  Tomlinson, 68, is scheduled to make an initial court appearance today at 3:00 p.m., before U.S. Magistrate Judge Susan E. Cox in Chicago.  The complaint charges him with one count of wire fraud.

 

The complaint 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 government is represented by Assistant U.S. Attorney Sunil Harjani.

 

According to the complaint, Tomlinson attempted to raise money from existing investors as recently as this month.  Earlier this year he made approximately 47 cash withdrawals of $9,500 each from Neurendo’s bank account.  The structured withdrawals appear to have been made in an effort to avoid federal reporting rules, which require financial institutions to notify the U.S. Department of the Treasury about transactions of more than $10,000, the complaint states.

 

The charges also accuse Tomlinson of misappropriating at least $100,000 in investor money to fund his own futures trading account, and $33,000 to make payments to the Washington National Cathedral.  In addition to the Michigan lake house, Tomlinson used investor funds to make mortgage payments on properties in Petoskey, Mich., and the Georgetown neighborhood of Washington, D.C., the complaint states.

 

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

 

Wire fraud carries a maximum penalty of 20 years in prison.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — John R. Lausch, Jr., who served as a federal prosecutor in Chicago for more than a decade before entering private law practice, returned to government service today as the United States Attorney for the Northern District of Illinois.

 

U.S. District Chief Judge Ruben Castillo today administered the oath of office after President Donald J. Trump signed U.S. Attorney Lausch’s commission.  A public investiture ceremony will be held at a later date.

 

“I am excited to return to the U.S. Attorney’s Office in Chicago today,” said U.S. Attorney Lausch.  “I am humbled and honored to lead such a tremendous team of attorneys and staff.  I look forward to working with our law enforcement partners and continuing the office’s longstanding history of pursuing justice on behalf of the citizens of the Northern District of Illinois.”

 

Joel R. Levin, who for the past eight months served as Acting United States Attorney, will return to his role as the First Assistant United States Attorney.

 

As an Assistant U.S. Attorney from 1999-2010, U.S. Attorney Lausch tried more than twenty jury cases involving racketeering, fraud, narcotics, extortion, firearms and other offenses.  From 2005-2010, U.S. Attorney Lausch served as Deputy Chief in the Narcotics & Gangs Section, overseeing criminal prosecutions of drug trafficking organizations and street gangs.  U.S. Attorney Lausch also served as the office's Violent Crime Coordinator, leading the District’s Anti-Gang and Project Safe Neighborhoods programs.  He was twice awarded a Department of Justice Director's Award for Superior Performance. 

 

From 2010 until his appointment as United States Attorney, U.S. Attorney Lausch worked in private law practice in Chicago.

 

U.S. Attorney Lausch earned his law degree in 1996 from Northwestern Pritzker School of Law, and earned his Bachelor’s Degree in General Studies (Government Concentration) in 1992 from Harvard University.

CHICAGO — A Chicago Police Department officer was sentenced today to five years in federal prison for using unreasonable force against two individuals while on duty.

A federal jury in August convicted MARCO PROANO on two counts of deprivation of rights under color of law.  Proano used unreasonable force with his service weapon while on duty as an officer of the Chicago Police Department on Dec. 22, 2013.  Proano fired 16 shots into a vehicle that contained numerous people, wounding two individuals who suffered bodily injuries as a result of the unreasonable force.

U.S. District Judge Gary Feinerman imposed the 60-month sentence in federal court in Chicago.

The sentence was announced by Joel R. Levin, Acting 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 government is represented by Assistant U.S. Attorneys Georgia Alexakis and Erika Csicsila.

CHICAGO — A Chicago investment advisor stole more than $5 million from several clients, including his elderly in-laws, and used some of the cash on a mortgage and a luxury automobile, according to federal criminal charges filed today.

 

DANIEL GLICK, who owned three accounting and financial services firms in Orland Park, Ill., misappropriated at least $5.2 million from clients and financial institutions from 2011 to 2017, according to a criminal information filed in U.S. District Court in Chicago.  Glick furnished forged checks and other phony documents to financial institutions, and he lied to clients about the use and safety of their investments, the information states.  Most of the funds that Glick misappropriated belonged to elderly clients, including his mother-in-law and father-in-law and an individual in a nursing home, the information states.  Glick used some of the stolen funds to pay personal and business expenses, including the purchase of a Mercedes-Benz automobile, payment of his mortgage, and repayment of two business loans, according to the charges.

 

The information charges Glick, 64, of Chicago, with one count of wire fraud.  Arraignment in federal court in Chicago has not yet been scheduled.

 

The information was announced by Joel R. Levin, Acting 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 government is represented by Assistant U.S. Attorney Jacqueline Stern.  The U.S. Securities and Exchange Commission provided valuable assistance.

 

During the alleged scheme, Glick owned and operated Financial Management Strategies Inc., Glick Accounting Services Inc., and Glick & Associates Ltd.  Glick’s firms purported to provide accounting, tax, investment, and financial services. 

 

According to the charges, Glick forged his in-laws’ signatures on letters and checks, allowing for the transfer of hundreds of thousands of dollars from their checking account to his company’s checking account.  Glick also convinced another family to pay him $700,000 in fees, even though, unbeknownst to them, he had already misappropriated hundreds of thousands of dollars from them.

 

The charges also accuse Glick of misappropriating client funds to pay hundreds of thousands of dollars to two business associates, and to make Ponzi-type payments to clients.  Glick also provided false account statements to clients in an effort to conceal his misappropriation of their funds, the information states.

 

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

 

Wire fraud carries a maximum penalty of 20 years in prison.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

ROCKFORD — Three Rockford residents were arrested yesterday by federal and local law enforcement officers on charges of conspiracy to distribute heroin.

 

Arrested on charges of conspiracy to distribute heroin were TYSHON T. WATSON, 22; TERVARIE T. LOTTIE, 29; and JOHNIA WILSON, 39, all of Rockford.  Law enforcement yesterday also executed court-authorized search warrants at multiple locations in Rockford.  During the searches, authorities recovered more than a kilogram of heroin, more than $250,000 in cash, six cars, and four handguns.

 

Indictments returned this week in federal court in Rockford charged Watson, Lottie and Wilson with conspiracy to distribute heroin from May 2017 through October 2017.  Watson and Lottie were also charged with four individual counts of distributing heroin.  The charges also accuse Lottie of conspiring to distribute heroin during a separate three-month period from February 2017 through April 2017. 

 

A fourth defendant, JASMINE N. BRADLEY, 26, of Rockford, was also indicted on three counts of distributing heroin.  Bradley is currently being held in the Winnebago County jail on unrelated state charges.

 

In a separate but related case, DANIEL DAVENPORT, 38, of Rockford, was charged by a federal criminal complaint and arrested yesterday on the charge of being a felon in possession of a firearm.  In separate cases, WILLIAM EVANS, 67, of Rockford, was charged in state court with firearm and drug charges, and LATRESE LOTTIE, 44, was charged in state court for possession and manufacture/delivery of cocaine.

 

The charges were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; John P. Selleck, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; Dan O’Shea, Rockford Police Chief; Gary Caruana, Winnebago County Sheriff; and Joseph Bruscato, Winnebago County State’s Attorney.  The federal investigation was conducted by the FBI-led Rockford Area Violent Gang Task Force, which includes the above agencies as well as the Loves Park and Freeport Police Departments.  The government is represented by Assistant U.S. Attorney Talia Bucci.

 

“The charges announced today are the result of extraordinary cooperation between federal, state and local authorities, who worked together to dismantle a significant heroin distribution conspiracy,” said Acting U.S. Attorney Levin.  “We are grateful for the tremendous effort and support from our law enforcement partners as we work to stop the flow of illegal narcotics into Rockford and Winnebago County.”

 

"These arrests are just another example of law enforcement partners working together, pooling their resources, to further protect the citizens of Rockford from criminals who make their neighborhoods unsafe," said FBI Assistant Special Agent in Charge Jay Greenberg.  "Federal and local law enforcement will continue their efforts to rid the Rockford area of crime and that is what the public should expect; law enforcement on every level targeting those who break the law."

 

Winnebago County States Attorney Bruscato stated, “Collaboration, enhanced by technology and intelligence driven models are resulting in unprecedented enforcement and arrests. It’s just the beginning of what this community can expect to see and should send a message to other criminals that threaten our community.”

 

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

 

Each count of conspiracy to distribute heroin and of distributing heroin carries a maximum sentence of 20 years in prison, and illegally possessing a firearm as a convicted felon carries a maximum sentence of 10 years in prison.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

 

Defendants Watson, Lottie, Wilson, and Davenport appeared before U.S. Magistrate Judge Iain D. Johnston in federal court in Rockford on Nov. 2, 2017.  Each defendant pled not guilty and remains in custody pending detention hearings scheduled for Monday and Tuesday of next week.  Bradley is scheduled for arraignment on Tuesday, Nov. 7, 2017, at 11:00 a.m. in federal court before U.S. Magistrate Judge Johnston.

 

Lottie Watson Wilson Indictment.pdf

Lottie Bradley Indictment.pdf

A Chicago, Illinois, woman was sentenced to 30 months in prison today for conspiring to file fraudulent tax returns using stolen identities, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, and Acting U.S. Attorney Joel R. Levin of the Northern District of Illinois.

 

According to documents filed with the court, from 2012 to 2015 Dominique King, 27, conspired with Roxann Gist, 45, and another co-conspirator to file at least 858 fraudulent income tax returns, using stolen names and social security numbers.  Those fraudulent returns sought more than $2.7 million in refunds.  As part of the scheme, Gist and King acquired the personal identification information of thousands of unsuspecting individuals and directed others to receive and collect fraudulent income tax refund checks and to open up bank accounts to access direct deposits of such refunds.

 

In addition to the term of imprisonment imposed, King was ordered to serve two years of supervised release and to pay $1,332,935 in restitution to the IRS.  King also pleaded guilty in February to conspiracy to steal public money and aggravated identity theft.  In September Gist was sentenced to 36 months in prison.  She previously pleaded guilty in February to conspiracy to steal public money, theft of public money, and aggravated identity theft.

 

Acting Deputy Assistant Attorney General Goldberg commended the Special Agents of IRS Criminal Investigation who conducted the investigation, and Trial Attorney Timothy M. Russo of the Tax Division, who prosecuted this case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Northern District of Illinois for their substantial assistance in the case.

 

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

CHICAGO — A federal judge today sentenced a convicted felon to eleven years in prison for stealing more than a hundred firearms from a cargo train on the South Side of Chicago and selling more than a dozen of them.

 

On April 12, 2015, PATRICK EDWARDS and several acquaintances burglarized the cargo train while it was parked overnight in a railyard in Chicago’s Avalon Park neighborhood.  The cargo train was en route from a Ruger factory in New Hampshire to Spokane, Wash.  The thieves broke locks on a train car and walked off with approximately 104 firearms, with Edwards keeping 13 guns for himself.  He quickly sold the 13 firearms on the black market.

 

To date, law enforcement has recovered 34 of the 104 stolen firearms at various locations and crime scenes in Chicago and the surrounding area.

 

Edwards, 38, of Chicago, had previously been convicted of a felony and was not legally allowed to possess a firearm.  He pleaded guilty earlier this year to one count of illegal possession of a firearm by a felon, and one count of possession of a stolen firearm.  U.S. District Judge John J. Tharp Jr. imposed the 132-month sentence in federal court in Chicago.

 

The sentencing was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.  The Chicago Police Department and the Norfolk Southern Railroad Police Department provided valuable assistance.

 

“It is important for the community to know that getting involved in the theft and trafficking of firearms comes with significant criminal consequences,” Assistant U.S. Attorneys Christopher V. Parente and Eric Pruitt argued in the government’s sentencing memorandum.

 

The investigation into the theft and trafficking of the firearms resulted in charges against eleven defendants, including Edwards.

 

Nine other defendants have been convicted and either sentenced or are awaiting sentencing, including TERRY WALKER (scheduled to be sentenced by Judge Tharp on Dec. 6, 2017, at 2:00 p.m.); FREDERICK LEWIS (sentenced to 15 years in prison); ANDREW SHELTON (sentenced to ten years in prison); WARREN GATES (sentenced to five years and three months in prison); NATHAN DRIGGERS (sentenced to eight years in prison); LORI SHELTON (sentenced to three years of probation); ELGIN LIPSCOMB (awaiting sentencing); MARCEL TURNER (awaiting sentencing); and ALEXANDER PEEBLES (awaiting sentencing).

CHICAGO — The United States and the State of Illinois have jointly filed a civil lawsuit accusing the owners of a Chicago-area youth counseling center of defrauding Medicaid out of millions of dollars through a fraudulent billing scheme.

The suit alleges that LAYNIE FOUNDATION INC. and its owners, SUMMER MATHESON and TERRENCE EWING, violated the federal False Claims Act by fraudulently billing Medicaid for more mental health counseling services than the foundation actually provided.   The suit further alleges that Matheson and Ewing directed the Matteson-based foundation to seek payment from Medicaid for non-reimbursable activities such as internal case reviews, staff training, clinical supervision, and recordkeeping.

The government’s suit was filed Tuesday in U.S. District Court in Chicago.  The government is intervening in a lawsuit that a private citizen initially filed under seal in 2014 pursuant to the qui tam, or whistleblower, provisions of the False Claims Act.

The lawsuit was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Lisa Madigan, Illinois Attorney General; and 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.  The Illinois State Police assisted in the investigation.

According to the suit, Matheson and Ewing instructed Laynie Foundation employees to fraudulently inflate the mental health services they provided to youths.  Matheson and Ewing exploited the fact that most of the foundation’s counselors and social workers were new to the profession, and for many, working at Laynie Foundation was their first job in the mental health field, the suit alleges.  When multiple employees questioned Matheson about billing practices, Matheson warned that Laynie Foundation would lose its eligibility and funding from Medicaid if the employees did not bill as instructed.  If employees did not comply, the suit alleges, Matheson and Ewing would tell them “not to mess with [Matheson’s and Ewing’s] money.”

From January 2012 through February 2016, Laynie Foundation submitted approximately $8.2 million in claims for purported mental health services.  The foundation received approximately $6.3 million for these claims, the suit states.

In addition to the fraudulent billing scheme, the suit contends that Laynie Foundation violated state clinical supervision requirements by failing to have a licensed mental health professional certify that the services Laynie Foundation provided were medically necessary and met professional standards of care.

The False Claims Act permits private individuals to sue for false claims on behalf of the government and to share in any recovery.  The Act also allows the government to intervene or take over the lawsuit, as it has done in this case, and to recover three times damages plus civil penalties ranging from $5,500 to $11,000 for each false claim submitted by the defendants. 

Medicaid is a state-administered program, and each state sets its own guidelines regarding eligibility and services.  Funding for Medicaid is shared between the federal government and the State of Illinois for Illinois Medicaid recipients.

The public is reminded that civil allegations are accusations only, and there has been no determination of liability.  The government is represented by Assistant U.S. Attorney Prashant Kolluri of the U.S. Attorney’s Office, and Assistant Attorneys General Elisa C. Hamilton and Robert A. Barba of the Illinois Attorney General’s Office.

CHICAGO — A Wisconsin man has been indicted on federal sex trafficking charges for allegedly transporting an underage girl to Chicago from West Virginia to engage in prostitution.

A three-count indictment charges BLAKE STECKEL, 33, of Pleasant Prairie, Wisc., with sex trafficking of a minor, production of child pornography, and transporting an individual in interstate commerce for purposes of prostitution.

Steckel allegedly began communicating with the victim in July via Snapchat and text messages.  Steckel purchased the girl’s plane ticket from West Virginia after promising to arrange work for her as a model or escort in the Chicago area, according to a criminal complaint and affidavit previously filed in the case.  After the girl arrived in Chicago, Steckel took sexually explicit photographs of her and posted them in commercial sex advertisements on Backpage.com and ExplicitChicago.com, the complaint states.  He then arranged multiple meetings for her to engage in prostitution in various hotels in the Chicago suburbs, including Schaumburg, Elk Grove, Itasca and Rosemont, according to the complaint.  Steckel kept a portion of the money the girl earned performing commercial sex acts, the complaint states. 

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

The indictment was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; John P. Selleck, Acting Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation; James E. Lamkin, Chief of the Schaumburg Police Department; and Michael Nerheim, Lake County State’s Attorney.  The charges are the result of a joint investigation conducted by the Chicago and Milwaukee offices of the FBI and the Schaumburg Police Department.

The government is represented by Assistant U.S. Attorney Sean J.B. Franzblau.

According to the charges, Steckel threatened to post the victim’s sexually explicit photographs on Facebook and Instagram if she refused to engage in prostitution for him.  At one point the victim said she wanted to go home to West Virginia, but Steckel forced her to continue working for him, the complaint states.

Law enforcement rescued the girl in a Schaumburg hotel room on Aug. 21, 2017, after an undercover officer responded to an online posting for a “date” with the victim, the complaint states.  The undercover officer engaged in a series of text messages with Steckel to set up the meeting, the complaint states.

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

The sex trafficking count is punishable by a statutory minimum sentence of 15 years in prison and a maximum of life in prison.  Production of child pornography carries a minimum prison sentence of 15 years and a maximum of 30 years.  Transporting an individual for prostitution 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.

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 — The father-and-son executives of two suburban Chicago tutoring companies have been sentenced to federal prison for orchestrating an $11 million fraud scheme that bilked more than 100 school districts around the country, including Illinois.

 

From 2008 to 2012, JOWHAR SOULTANALI and his son, KABIR KASSAM, fraudulently obtained funds from the school districts by misrepresenting the nature of their companies’ tutoring services and falsely inflating invoices for tutoring work that was never performed.  Soultanali and Kassam also paid bribes to school officials and teachers to make sure the fraud was not detected.  The bribes included a Caribbean cruise for an assistant principal in Texas and an outing to a gentleman’s club for a state education official in New Mexico. 

 

Soultanali, 62, of Morton Grove, Ill., and Kassam, 38, of Wheeling, Ill., each pleaded guilty last year to one count of mail fraud.  U.S. District Judge Amy J. St. Eve on Friday sentenced Soultanali to six years in prison, and Kassam to five years and ten months in prison.

 

The sentencings were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; John P. Selleck, Acting Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Thomas D. Utz Jr., Special Agent-in-Charge of the North Central Region of the U.S. Department of Education Office of Inspector General.  The Chicago Public Schools Office of Inspector General assisted in the investigation.

 

“Defendants abused the trust that the Department of Education placed in them to carry out a massive fraud that was not merely extensive, but also egregious,” Assistant U.S. Attorneys Kruti Trivedi and Barry Jonas argued in the government’s sentencing memorandum.  “The fraud in this case had a significant impact on both the failing school districts that allocated their federal funds to defendants and on the students at those school districts.”

 

Soultanali served as director of operations for BRILLIANCE ACADEMY INC. and its wholly owned subsidiary, BABBAGE NET SCHOOL INC., both based on Niles, Ill.  Kassam was the president of both companies.  The firms contracted with school districts to provide tutoring services to students on-site at schools and via laptop computers.

 

According to the charges, Soultanali and Kassam furnished the school districts with false applications and marketing materials that fraudulently inflated the companies’ services.  The companies falsely stated that they provided pre-testing of enrolled students, created customized tutoring programs, provided ongoing progress reports to schools and parents, and compiled accurate student improvement results after the tutoring was completed.  In total, Brilliance and Babbage received $33 million from more than 100 school districts and small schools throughout the country.

 

The fraud scheme also involved numerous bribes paid to some school officials, with the expectation that the officials would assist in procuring federal funds for the tutoring services.

 

In addition to Soultanali and Kassam, the investigation resulted in criminal charges against Brilliance and Babbage, as well as three school officials in Texas and one state education official in New Mexico who pocketed the bribes.

Abdella Ahmad Tounisi, 23, of Aurora, Illinois, was sentenced today to 15 years in prison, and a lifetime of supervised release, for attempting to travel overseas to Syria to join Jabhat al-Nusrah, a designated foreign terrorist organization.

 

Acting Assistant Attorney General for National Security Dana J. Boente, Acting U.S. Attorney Joel R. Levin for the Northern District of Illinois and Acting Special Agent in Charge John P. Selleck of the FBI’s Chicago field office made the announcement.  The sentence was imposed by U.S. District Judge Samuel Der-Yeghiayan.

 

Tounisi was arrested at O’Hare International Airport in Chicago in April 2013 as he attempted to board a flight to Istanbul, Turkey.  Tounisi had spent four months conducting online research related to overseas travel and violent jihad, focusing specifically on Syria and the violent Jabhat al-Nusrah terrorist organization.

 

Tounisi pleaded guilty in 2015 to one count of attempting to provide material support to a foreign terrorist organization.  According to his plea agreement, Tounisi in early 2013 made online contact with an individual he believed to be a recruiter for Jabhat al-Nusrah.  He and the purported recruiter exchanged a series of emails, during which Tounisi shared his plan to go to Syria by way of Turkey, as well as his willingness to fight for the jihadist cause, the plea agreement states.  Unbeknownst to Tounisi, the purported recruiter was actually an FBI employee.

 

Tounisi, a U.S. citizen, requested an expedited passport and purchased an airline ticket for the flight from Chicago to Istanbul.  He arrived at O’Hare on the evening of April 19, 2013, and was arrested after passing through security in the international terminal.

 

The defendant was a close friend of Adel Daoud, of Hillside, Illinois, who was arrested on Sept. 14, 2012, for allegedly attempting to detonate a bomb outside a bar in downtown Chicago.  Tounisi recommended certain attack techniques to Daoud but ultimately decided against participating in the attack.  Daoud was charged separately and is awaiting trial in federal court in Chicago.

 

The investigation was led by the Chicago FBI’s Joint Terrorism Task Force, which is comprised of Special Agents of the FBI, officers of the Chicago Police Department and representatives from an additional 20 federal, state and local law enforcement agencies.

 

The government is represented by Assistant U.S. Attorney Barry Jonas of the Northern District of Illinois and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.

CHICAGO — A federal judge today sentenced a suburban Chicago man to 15 years in prison for attempting to travel overseas to join a jihadist militant group in Syria.

ABDELLA AHMAD TOUNISI, 23, of Aurora, Ill., was arrested at O’Hare International Airport in Chicago in April 2013 as he attempted to board a flight to Istanbul, Turkey.  Tounisi had spent four months conducting online research related to overseas travel and violent jihad, focusing specifically on Syria and the violent Jabhat al-Nusrah terrorist organization.

Tounisi pleaded guilty in 2015 to one count of attempting to provide material support to a foreign terrorist organization.  U.S. District Judge Samuel Der-Yeghiayan imposed the sentence in federal court in Chicago.

The sentence was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Dana J. Boente, Acting Assistant Attorney General for National Security; and John P. Selleck, Acting Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  The investigation was led by the Chicago FBI’s Joint Terrorism Task Force, which is comprised of Special Agents of the FBI, officers of the Chicago Police Department, and representatives from an additional 20 federal, state and local law enforcement agencies.

According to his plea agreement, Tounisi in early 2013 made online contact with an individual he believed to be a recruiter for Jabhat al-Nusrah.  He and the purported recruiter exchanged a series of emails, during which Tounisi shared his plan to go to Syria by way of Turkey, as well as his willingness to fight for the jihadist cause, the plea agreement states.  Unbeknownst to Tounisi, the purported recruiter was actually an FBI employee.

Tounisi, a U.S. citizen, requested an expedited passport and purchased an airline ticket for the flight from Chicago to Istanbul.  He arrived at O’Hare on the evening of April 19, 2013, and was arrested after passing through security in the international terminal.

Tounisi was a close friend of Adel Daoud, of Hillside, Ill., who was arrested on Sept. 14, 2012, for allegedly attempting to detonate a bomb outside a bar in downtown Chicago.  Tounisi recommended certain attack techniques to Daoud but ultimately decided against participating in the attack.  Daoud was charged separately and is awaiting trial in federal court in Chicago.

The government is represented by Assistant U.S. Attorney Barry Jonas of the Northern District of Illinois, and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.

CHICAGO — The United States today filed a civil lawsuit against the husband-and-wife owners of a suburban Chicago health care company for allegedly falsely billing Medicare for millions of dollars in unnecessary or nonexistent services.

The complaint alleges that GATEWAY HEALTH SYSTEMS INC. and its owners, AJIBOLA AYENI and JOY H. TURNER-AYENI, violated the federal False Claims Act by seeking and receiving Medicare payments for home health services purportedly rendered to homebound individuals who were not actually in need of such services.  The suit also alleges that DOCS AT THE DOOR P.C., a home-visiting physician company owned by Ajibola Ayeni, falsely certified the non-homebound individuals as in need of home-health services, and fraudulently “upcoded” home physician visits to the second highest billing level in order to increase compensation from Medicare.

The government’s complaint was filed today in U.S. District Court in Chicago.  The government is intervening in a lawsuit that a private citizen initially filed under seal in 2013 pursuant to the qui tam, or whistleblower, provisions of the False Claims Act.

The government’s complaint was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; John P. Selleck, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and 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.

Ajibola Ayeni, 58, of Flossmoor, also faces separate criminal charges relating to his conduct while operating Docs at the Door.  An eleven-count indictment returned earlier this year alleges that Ajibola Ayeni committed health care fraud from 2011 to 2015.  Ayeni has pleaded not guilty to the criminal charges, and a trial date in federal court in Chicago has not yet been set.

According to the government’s suit, Docs at the Door and Gateway each claimed and were paid millions of dollars for services purportedly provided to Medicare beneficiaries.  At the direction of the Ayenis, the companies created false documentation to cover up the fact they were claiming services not rendered, as well as services that were not medically necessary because the beneficiaries were not confined to the home, the suit states.  The Ayenis’ fraud scheme netted them millions of dollars in federal health care funds to which they were not entitled, the suit states.

In addition to the alleged fraud scheme, the government’s suit contends that the Ayenis attempted to conceal certain assets from the government after learning of the investigation.  In the summer of 2016, the Ayenis transferred several of their properties into trusts, the suit states.  The transfers involved apartments in the Oakland and Edgewater neighborhoods of Chicago, a residence in Flossmoor, and two properties in Frankfort, according to the suit.  The Ayenis “either intentionally transferred the properties to avoid paying a judgment to the United States for their fraud, or at a minimum, knew that they had incurred debts that they would not be able to pay,” the suit states.  The suit asks the Court to void the property transfers on the basis of fraud.

The False Claims Act permits private individuals to sue for false claims on behalf of the government and to share in any recovery.  The Act also allows the government to intervene or take over the lawsuit, as it has done in this case, and to recover three times damages plus civil penalties ranging from $5,500 to $11,000 for each false claim submitted by the defendants.

The public is reminded that civil allegations are accusations only, and there has been no determination of liability.  The government is represented in the civil case by Assistant U.S. Attorney Sarah J. North.

The public is reminded that the criminal charges against Ajibola Ayeni are not evidence of guilt.  He is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.  The government is represented in the criminal case by Assistant U.S. Attorney Stephen Chahn Lee.

CHICAGO — Federal authorities today arrested a west suburban man for allegedly enticing underage girls to produce sexually explicit images of themselves.

Using the screen name “davidbanks1014,” RICHARD BARNETT chatted with at least four underage girls on the social network musical.ly and enticed them to produce pornographic images of themselves and send them to him, according to a criminal complaint and affidavit filed in federal court in Chicago.  Barnett threatened at least one of the victims with physical harm, including threatening to shoot her, if she did not comply with his demands to send the sexually explicit images, the complaint states.

Barnett, 39, of Aurora, was arrested this morning.  During a court-authorized search of his residence, agents seized multiple electronic devices and several firearms.

The complaint charges Barnett with one count of producing child pornography and one count of transporting child pornography.  A detention hearing is set for Oct. 18, 2017, at 3:00 p.m., before U.S. Magistrate Judge Maria Valdez in Chicago.

The complaint was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and John P. Selleck, Acting Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  Valuable assistance in the investigation was provided by the New Orleans office of the FBI, the Buffalo office of the FBI, the Jacksonville (Fla.) Sheriff’s Office, and the Ouachita Parish (La.) Sheriff’s Office.

According to the complaint, some of the underage victims reported to police that earlier this year they received sexually explicit messages on musical.ly from an individual with the username davidbanks1014.  Some of the victims reported that davidbanks1014 claimed to be 13 years old when he corresponded with them, the complaint states.

The investigation revealed that the musical.ly account for davidbanks1014 was created on April 22, 2017, using Barnett’s cellular telephone number, 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. 

If convicted on the count of producing child pornography, Barnett faces a mandatory minimum sentence of 15 years’ imprisonment and a maximum potential sentence of 30 years’ imprisonment.  If convicted on the count of transporting child pornography, Barnett faces a mandatory minimum sentence of 5 years’ imprisonment and a maximum potential sentence of 20 years’ imprisonment.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Timothy J. Chapman.

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.

ROCKFORD — A Huntley businessman pleaded guilty today before U.S. District Judge Frederick J. Kapala to causing false statements to be made on forms required by the Employee Retirement Income Security Act (ERISA) to be filed, and failing to collect and pay Federal Insurance Contribution Act (FICA) taxes.

 

THOMAS MANNING, 60, president of T. Manning Concrete Inc. in Huntley, admitted in a written plea agreement that as president of T. Manning Concrete he hired union laborers and cement masons in northern Illinois.  The unions provided benefits to their members through various employee benefit plans.  Each benefit plan was required to file an annual report stating the total contributions received.  T. Manning Concrete was required by collective bargaining agreements to submit monthly reports to the benefit plans that stated the number of hours each covered employee worked, and to pay the company’s contributions to those benefit plans. 

 

According to the plea agreement, since at least 2007 Manning defrauded the benefit plans by understating the number of hours worked by T. Manning Concrete’s covered employees in the monthly reports, and under-paying the monthly contributions that were required on behalf of its covered employees.  Manning admitted that in order to conceal the understatement of hours and defraud the benefit plans, he caused the covered employees to be paid for the additional hours “under the table,” using checks drawn upon non-payroll bank accounts under Manning’s control. 

 

Manning admitted that between 2007 and 2010 he failed to report and pay almost $2 million due to the employee benefit funds.  Manning further admitted that by falsely reporting the number of hours worked by covered employees he caused the benefit plans to make false statements in their annual reports they were required by ERISA to file.

 

Manning also admitted that between 2007 and 2010, as president of T. Manning Concrete, he failed to collect, account for, and pay $600,680 for its employees’ share of FICA taxes due to the IRS on the wages paid using “under the table” checks.

 

The charge of filing a false statement and concealment of facts in relation to documents required by ERISA, and the charge of willful failure to collect or pay FICA taxes, each carry a maximum penalty of five years’ imprisonment and a $250,000 fine.  Each count also carries a maximum period of up to three years of supervised release following imprisonment.  The actual sentence will be determined by the United States District Court, guided by the Sentencing Guidelines.  Sentencing for Manning is set for Jan. 24, 2018, at 2:30 p.m.

 

The guilty plea was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; James Vanderberg, Special Agent-In-Charge of the Chicago Region of the U. S. Department of Labor, Office of Inspector General; Jeffrey A. Monhart, Regional Director for the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service - Criminal Investigation Division in Chicago; and Craig Goldberg, Postal Inspector-in-Charge of the Chicago Division of the U.S. Postal Inspection Service.

 

The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.

ROCKFORD — A Poplar Grove resident was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for distributing 448 grams of methamphetamine. 

 

ARMAN M. DINO, 46, who pleaded guilty to the charge on May 30, 2017, was sentenced to nine years in federal prison, to be followed by eight years’ supervised release.

 

According to the written plea agreement, on May 19, 2016, Dino was at his residence on Candlewick Lake when he sold more than a pound of methamphetamine to an individual who was cooperating with the government.  After the cooperating individual paid Dino $10,000 and left, law enforcement agents executed a search warrant on Dino’s residence and seized an additional 37 grams of methamphetamine and $10,790 in cash.  Dino was arrested that day.

 

The sentencing was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; John P. Selleck, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; Boone County Sheriff David Ernest; and Belvidere Police Chief Jan Noble. 

 

The multi-jurisdictional investigation was conducted by the Belvidere/Boone County Metro Narcotics Unit, along with agents from the FBI, DEA and Rockford Police Department.

 

The government was represented by Assistant U.S. Attorney Joseph C. Pedersen.

CHICAGO — The head of Amtrak transportation at Union Station in Chicago admitted in federal court today that he steered work to his wife’s company to photograph Amtrak’s “Polar Express” train event last holiday season.

BENJAMIN SHEETS, an Amtrak employee and superintendent of transportation at Union Station, admitted in a plea agreement that he steered work to his wife’s suburban photography company to photograph train riders and families at Amtrak’s “Polar Express” event.  Sheets also worked for his wife’s company as the business manager – a fact he failed to disclose to Amtrak.  When Sheets learned that Amtrak’s Office of Inspector General was investigating the contract, he created false records and made false statements to the Inspector General’s investigators.

Sheets, 50, of Downers Grove, pleaded guilty to making false statements to Amtrak’s Office of Inspector General.  U.S. District Judge Charles P. Kocoras set sentencing for Feb. 27, 2018, at 9:45 a.m.

The guilty plea was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Thomas Howard, Inspector General of Amtrak.

“The American people deserve fair and honest services from those entrusted to manage aspects of our nation’s passenger rail service,” said Inspector General Howard.  “Amtrak personnel who make false statements in an effort to achieve personal gain will be held accountable.  Our office will vigorously investigate and help bring to justice those who engage in such criminal activity as we work to protect Amtrak funds, American taxpayers, and the traveling public.”

Amtrak’s “Polar Express” event is a family-oriented holiday celebration that includes festively decorated trains departing Union Station on a daily basis in December, with actors re-enacting the train ride from the 2004 “Polar Express” film starring Tom Hanks. 

On Nov. 2, 2016, Sheets received an email from his wife that listed debts in excess of $25,000, prompting Sheets to respond, “We need to write an agreement for Polar Express,” according to a criminal information previously filed in the case.  Soon thereafter, Sheets steered the work for Polar Express photography to his wife’s Downers Grove-based company, without following Amtrak procurement procedures.  During the “Polar Express” event in December 2016, the wife’s company set up a photo booth in Union Station’s Great Hall and sold 3,679 photos for $10 each.

When Sheets learned in early 2017 that Amtrak Inspector General investigators were looking into the award of work, Sheets had the promotions company that staged the event prepare a back-dated, phony contract to make it appear that the wife’s photography business had been hired by the promotions company prior to the commencement of the Polar Express event.  Sheets tendered the contract to Inspector General investigators in March 2017, even though he knew it was phony. 

Making false statements is punishable by up to five years in prison.  The Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Terry M. Kinney.

CHICAGO — A lawyer licensed to practice in Illinois has been convicted on federal fraud charges for scheming to provide falsified documents to prevent foreclosure on a nearly $2 million parcel of land in Aurora.  The fraud left an elderly couple out of $300,000.

The jury in federal court in Chicago convicted ROBERT JON SCHLYER, 47, of Portage, Ind., of two counts of wire fraud affecting a financial institution, and one count of bank fraud. 

Schlyer’s fraud scheme occurred while representing two clients, co-schemers KEVIN LEBEAU and BRIAN BODIE, in connection with a foreclosure lawsuit.  Evidence at trial revealed that Schlyer provided false and fraudulent documents to an elderly couple and Amcore Bank in order to postpone foreclosure on the Aurora property. 

The jury returned the guilty verdicts on Oct. 6, 2017, after a four-day trial.  U.S. District Judge Amy J. St. Eve set sentencing for Jan. 31, 2018, at 9:15 a.m.  Each count carries a maximum sentence of 30 years in prison.

The conviction was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and John P. Selleck, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

According to evidence at trial, in 2004 Amcore Bank received a mortgage on the 10.4-acre property in Aurora after issuing a $1.9 million loan for the refinancing and redevelopment of the property.  Lebeau and Bodie executed a full personal guarantee for the loan.  By the fall of 2005, Lebeau and Bodie had failed to make the required payments, the loan was in default, and the bank filed a foreclosure lawsuit to seize the property.

During the scheme, Schlyer, who acted as Lebeau’s and Bodie’s attorney in the foreclosure suit, obtained $300,000 from an elderly retired couple by providing them with fake documents that made it seem like they were making a safe investment in the redevelopment and that it would be secured by a trust.  Schlyer also claimed to be the trustee of the purported trust.  In reality, there was no trust and Schlyer was not a trustee.  Schlyer and his co-schemers also concealed from the elderly couple the foreclosure suit and LeBeau’s and Bodie’s inability to pay the bank debt.  A portion of funds obtained from the elderly couple through the fraud was used to pay down the bank loan.

Together with his co-schemers, Schlyer furnished fraudulent and fabricated documents to the bank, including forged documents that made it appear that investors had committed approximately $1.5 million to the redevelopment of the property.  Eventually the foreclosure occurred, and the property was sold in 2010 at a significant loss to the bank. 

LeBeau, of Aurora, and Bodie, of Chicago, were previously convicted in the case and are awaiting sentencing before U.S. District Judge Robert W. Gettleman.

The government is represented by Assistant U.S. Attorneys Kartik K. Raman and Amarjeet S. Bhachu.

CHICAGO — Attorney General Jeff Sessions today announced several Department of Justice actions to reduce violent crime in America.  Foremost of these actions is the reinvigoration of “Project Safe Neighborhoods,” a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make neighborhoods safer for everyone.

 

In announcing this recommitment to Project Safe Neighborhoods, the Attorney General issued a memorandum directing United States Attorneys to implement an enhanced violent crime reduction program that incorporates the lessons learned since Project Safe Neighborhoods was first launched in 2001.

 

The reinvigoration includes a federal award of $499,443 to the City of Chicago to implement various crime-reduction strategies.

 

Joel R. Levin, Acting United States Attorney for the Northern District of Illinois, commented, “As part of a revitalized PSN, our office will continue to prioritize the prosecution of cases involving illegal firearms and violence.  We look forward to continuing our collaboration with our state and local partners to address the unacceptable level of violent crime in Chicago.”

 

“The Department of Justice today announces the foundation of our plan to reduce crime: prioritizing Project Safe Neighborhoods, a program that has been proven to work,” the Attorney General said.  “Let me be clear – Project Safe Neighborhoods is not just one policy idea among many; this is the centerpiece of our crime reduction strategy.  Taking what we have learned since the program began in 2001, we have updated it and enhanced it, emphasizing the role of our U.S. Attorneys, the promise of new technologies, and above all, partnership with local communities.  With these changes, I believe that this program will be more effective than ever and help us fulfill our mission to make America safer.”

 

The Attorney General also announced the following Department of Justice initiatives to help reduce violent crime:

 

-Additional Assistant United States Attorney Positions to Focus on Violent Crime: The Department is allocating 40 prosecutors to approximately 20 United States Attorney’s Offices nationwide to focus on violent crime reduction.

-More Cops on the Streets (COPS Hiring Grants): As part of our continuing commitment to crime-prevention efforts, increased community policing, and the preservation of vital law enforcement jobs, the Department will be awarding approximately $98 million in Fiscal Year 2017 COPS Hiring Grants to state, local, and tribal law enforcement agencies.

-Organized Crime and Drug Enforcement Task Force’s (OCDETF) National Gang Strategic Initiative: The National Gang Strategic Initiative promotes creative enforcement strategies and best practices that will assist in developing investigations of violent criminal groups and gangs into enterprise-level OCDETF prosecutions.  Under this initiative, OCDETF provides “seed money” to locally-focused gang investigations, giving state, local, and tribal investigators and prosecutors the resources and tools needed to identify connections between lower-level gangs and national-level drug trafficking organizations.

-Critical Training and Technical Assistance to State and Local Partners: The Department has a vast array of training and technical assistance resources available to state, local and tribal law enforcement, victims groups, and others.  To ensure that agencies in need of assistance are able to find the training and materials they need, the Office of Justice Programs will make available a Violence Reduction Response Center to serve as a “hot line” to connect people to these resources. 

-Crime Gun Intelligence Centers (CGIC): The Department has provided grant funding to support a comprehensive approach to identifying the most violent offenders in a jurisdiction, using new technologies such as gunshot-detection systems combined with gun crime intelligence from NIBIN, eTrace, and investigative efforts.  These FY 2017 grants were awarded to Phoenix, Ariz., and Kansas City, Mo. 

-Expand ATF’s NIBIN Urgent Trace Program: The Department will expand ATF’s NIBIN Urgent Trace Program nationwide by the end of the year.  Through this program, any firearm submitted for tracing that is associated with a NIBIN “hit” (which means it can be linked to a shooting incident) will be designated an “urgent” trace and the requestor will get information back about the firearm’s first retail purchaser within 24 hours, instead of 5 to 6 business days.