Northern District of Illinois

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.

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

 

On April 12, 2015, ANDREW SHELTON 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 111 firearms, with Shelton keeping 13 guns for himself.  He quickly sold the 13 firearms on the black market.

 

To date, law enforcement has recovered 19 of the 111 stolen firearms at various locations and crime scenes in Chicago and the surrounding area.

 

Shelton, 43, of Riverdale, 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 120-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.

 

“No efforts by law enforcement to stop the senseless killings in this city by keeping guns out of the hands of felons will be successful when there are individuals like the defendant and his codefendants who are willing to profit off of illegal arms trafficking in Chicago,” 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 Shelton.  Ten have been convicted, while one defendant, DANDRE MOODY, is awaiting a jury trial on Dec. 11, 2017.

 

The ten convictions include FREDERICK LEWIS (scheduled to be sentenced by Judge Tharp on Oct. 5, 2017, at 2:00 p.m.); PATRICK EDWARDS (scheduled to be sentenced by Judge Tharp on Oct. 12, 2017, at 2:00 p.m.); TERRY WALKER (scheduled to be sentenced by Judge Tharp on Dec. 6, 2017, at 2:00 p.m.); 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 — Nine defendants, including four Chicago-area men, have been indicted on fraud charges for allegedly using inside information about an impending corporate acquisition to earn illegal trading profits.

 

The indictment alleges that SHANE FLEMING, a vice president of corporate sales at Minnesota-based Life Time Fitness Inc., obtained material, non-public information about the potential sale of the company to two private equity firms in 2015.  Fleming learned that the sale would likely cause an increase in the company’s stock price, and he shared the inside information with BRET BESHEY, a longtime friend and business partner, the indictment states.  Beshey and Fleming agreed to use the information to execute financial trades, and further agreed to share the profits, the indictment charges.  Beshey then allegedly shared the information with his girlfriend CHASITY CLARK, his friend and business partner PETER KOURTIS, and Clark’s friend CHRISTOPHER BONVISSUTO.

 

Kourtis and Bonvissuto agreed to use the information to purchase Life Time Fitness stock options and share the profits with Beshey and Clark, the indictment states.  Kourtis then shared the material, non-public information with friends ERIC WELLER, AUSTIN MANSUR, ALEX CARLUCCI and DIMITRI KANDALEPAS, all of whom knew the information came from an insider at Life Time Fitness, and they agreed to use the information to make trades, according to the charges.

 

The securities purchases were executed before news of the potential sale became public via a media report, which caused the stock price to increase substantially, the indictment states.  The defendants earned approximately $866,629 in illegal profits from the trades, the indictment states.

 

The indictment was returned Sept. 28, 2017, in federal court in Chicago.  It charges all nine defendants with conspiracy to commit securities fraud.  Arraignments have not yet been scheduled.

“Our economy relies on the integrity of the markets, which is a core principle upon which the American financial system is built,” said Joel R. Levin, Acting United States Attorney for the Northern District of Illinois.  “The U.S. Attorney’s Office is committed to aggressively using federal securities laws to hold insiders and investors accountable for using market-moving information to line their own pockets.”

 

Acting U.S. Attorney Levin announced the charges along with Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The U.S. Securities and Exchange Commission provided valuable assistance.

 

Charged in the conspiracy are Fleming, 54, of Chanhassen, Minn.; Beshey, 44, of Puerto Vallarta, Mexico; Clark, 34, of Puerto Vallarta, Mexico; Bonvissuto, 41, of Buffalo, N.Y.; Kourtis, 51, of Niles, Ill.; Weller, 52, of Hermosa Beach, Calif.; Mansur, 46, of Chicago, Ill.; Carlucci, 51, of Clarendon Hills, Ill.; and Kandalepas, 28, of Schaumburg, Ill.

 

Each of the defendants also faces individual counts of securities fraud.  Fleming and Beshey are each charged with nine counts; Kourtis eight; Weller three; Mansur two; and one each for Clark, Bonvissuto, Carlucci and Kandalepas.

 

Life Time Fitness owned a chain of fitness centers in the United States and Canada.  The company’s common stock traded on the New York Stock Exchange, and options in its stock were traded on the Chicago Board Options Exchange.  According to the indictment, Fleming learned on Feb. 23, 2015, that the company was in advanced acquisition negotiations with the private equity firms.  Fleming shared the information with Beshey later that day, the indictment states.  As other conspirators became aware of the inside information, they made arrangements to execute securities transactions and pay a portion of the proceeds to the fellow conspirator who passed them the tip, the indictment states.

 

From Feb. 25, 2015, to March 3, 2015, the defendants purchased hundreds of call options in Life Time Fitness stock, the indictment states.  On March 5, 2015, the company’s share price was $57.67.  After markets closed for the day, the Wall Street Journal published an article about the acquisition discussions.  On March 6, 2015, the share price increased to a high of $69.13.  On March 16, 2015, Life Time Fitness issued a news release announcing that two private equity firms were purchasing all of the company’s shares for $72.10 per share.

 

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

 

The conspiracy charge carries a maximum sentence of five years in prison.  Each count of securities fraud is punishable by up to 20 years in prison.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

 

The government is represented by Assistant U.S. Attorneys John D. Mitchell and William R. Hogan.

CHICAGO — The U.S. Attorney’s Office in Chicago today charged a financial analyst and a former investment banker with securities fraud for allegedly earning profits from trades they made with non-public information.

JASON NAPODANO, a former Managing Director of a Chicago investment research firm, used material, non-public information he obtained while preparing equity research reports about companies to purchase and sell stock in those companies, according to a criminal information filed in federal court in Chicago. The illegal trading profits netted Napodano approximately $143,000, the information states.  

In a related case, BILAL BASRAI, a former Managing Director of a Chicago investment banking firm, used material, non-public information to earn approximately $37,157 in illegal profits from the purchase and sale of stock in three companies.  Through his legal counsel, Basrai authorized the U.S. Attorney’s Office to disclose that Basrai has cooperated with the government’s investigation and intends to plead guilty to the charge contained in the information.

Napodano, 43, of Waxhaw, N.C., and Basrai, 43, of Naperville, Ill., are each charged with one count of securities fraud.  Arraignments in federal court in Chicago have not yet been scheduled.

The charges were filed by the Securities and Commodities Fraud Section of the U.S. Attorney’s Office in Chicago.  The charges were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The U.S. Securities and Exchange Commission provided valuable assistance.

According to the charges, Napodano’s alleged fraud scheme began in October 2012 and continued through May 2015.  The charges allege that, prior to the public release of equity research reports that contained positive recommendations about the companies, Napodano purchased stock in those companies.  He then allegedly sold the stock for a profit after his reports were publicly released and the stock prices of the companies increased.  In doing so, Napodano allegedly misappropriated material, non-public information – the timing and contents of the research reports – that belonged to his employer.  Napodano also traded based on inside knowledge of a company’s announcement of an in-licensing agreement, the information states.

Basrai’s fraud scheme spanned the first seven months of 2014.  Basrai allegedly learned non-public information about a secondary stock offering, an in-licensing agreement, and the release date of a research report, and used it to make profitable trades of three companies’ stock. 

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. 

Securities 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. Attorneys Jason Yonan and Matthew Kutcher.

CHICAGO — A federal indictment unsealed this week charges nine alleged members of the Four Corner Hustlers street gang with participating in a criminal organization that murdered six people and violently protected drug-dealing territories on the West and Southwest Sides of Chicago.

 

Authorities uncovered the alleged gang activity through a lengthy investigation conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF), with assistance from the Chicago FBI’s Safe Street Task Force, the High Intensity Drug Trafficking Area Task Force (HIDTA), the ATF’s Chicago Crime Gun Strike Force, and the Chicago Police Gang Investigations Division.

 

The indictment charges that the Four Corner Hustlers dealt drugs and robbed rival dealers, used violence and intimidation to prevent victims and witnesses from cooperating with law enforcement, and tried to avoid detection by monitoring police scanners and outfitting its members with a security detail.  The gang engaged in numerous acts of violence, including murder, robbery, extortion and aggravated battery, according to the indictment. 

 

The gang operated primarily in the Chicago neighborhoods of West Garfield Park and Humboldt Park on the West Side, and in the former LeClaire Courts public housing development on the Southwest Side, the indictment states.

 

Nine alleged Four Corner Hustlers are charged with racketeering conspiracy.  Two other defendants are charged in the indictment with participating in an extortion conspiracy, bringing the total number of charged defendants to eleven.  The indictment identifies three Four Corner Hustlers who engaged in the racketeering conspiracy but died before they could be charged.

 

The indictment was returned Sept. 14, 2017, and ordered unsealed after several of the defendants were arrested this week.  The defendants have begun making initial appearances in federal court in Chicago.

 

The indictment was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, 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 U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; and Eddie T. Johnson, Superintendent of the Chicago Police Department.  Substantial assistance was provided by the Illinois Secretary of State Police Department, the U.S. Bureau of Prisons, the Illinois Department of Corrections, and the Illinois State Police.

 

Charged with racketeering conspiracy are LABAR SPANN, 38; SAMMIE BOOKER, 43; TREMAYNE THOMPSON, 33; JUHWUN FOSTER, 37; MARCHELLO DEVINE, 30; RONTRELL TURNIPSEED, 24; KEITH CHATMAN, 29; STEVON SIMS, 27; and DEANDRE SPANN, 40; all of Chicago.

 

The indictment holds all nine members of the racketeering conspiracy criminally responsible for the murders of six people: Carlos Caldwell on Jan. 19, 2000; Maximillion McDaniel on July 25, 2000; Levar Smith on Aug. 14, 2000; George King on April 8, 2003; Willie Woods on April 16, 2003; and Rudy Rangel on June 4, 2003.  Specifically, the indictment charges that Labar Spann participated in all six slayings, with assistance in five of them from at least one other member of the conspiracy.  Individual counts in the indictment charge Labar Spann, Thompson and Foster with committing the murder of Woods; and Labar Spann with committing the murder of Rangel.  The charges allege that the Woods and Rangel murders were carried out for the purpose of maintaining and increasing position in the Four Corner Hustlers.

 

Charged with participating in an extortion conspiracy are Labar Spann; Thompson; MIKAL JONES, 33, of Chicago; and ANTONIO DEVINE, 25, of Chicago.

 

The investigation was conducted under the umbrella of the OCDETF program, a partnership between federal, state and local law enforcement agencies.  The principal mission of OCDETF is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations.

 

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

 

The racketeering conspiracy charge generally carries a maximum sentence of 20 years in prison, but a life sentence is possible for certain underlying racketeering activities referenced in the indictment.  The murder counts in connection with the slayings of Woods and Rangel each carry a mandatory minimum sentence of life imprisonment and a maximum potential sentence of the death penalty.  The extortion conspiracy is punishable by up to 20 years in prison.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

 

The government is represented by Assistant U.S. Attorneys Peter S. Salib, Timothy J. Storino and William Dunne.

ROCKFORD — A former Huntley man was indicted today by a federal grand jury on charges of bankruptcy fraud.

 

TRACY L. SUNDERLAGE, 71, was charged with one count of making false statements in a bankruptcy case and one count of making false statements under oath in a bankruptcy proceeding.

 

As alleged in the indictment, Sunderlage filed a Chapter 11 Bankruptcy Petition on Aug. 12, 2011. On Aug. 30, 2011, Sunderlage filed various bankruptcy schedules and a Statement of Financial Affairs, both signed under penalty of perjury. According to the indictment, Sunderlage made false statements on his Statement of Financial Affairs, concealing fraudulent transfers of 100,000 shares of Gulf Keystone Petroleum Ltd. and approximately $63,242 and $109,493 to a relative, and concealing his receipt of $241,000 of income from the sale of ownership interest in Gulf Keystone Petroleum, his receipt of $25,000 of income from the sale of ownership interests in other companies, his personal property interests in various financial accounts, and his 2002 Jaguar vehicle.

 

It is further alleged in the indictment that on May 14, 2012, Sunderlage falsely testified under oath at a meeting of creditors, fraudulently concealing assets from the bankruptcy trustee, creditors, and the United States Trustee, including complete information on a transfer of $63,242 Sunderlage made to a relative.

 

Each charge in this case carries a maximum potential penalty of up to five years in prison, a term of supervised release of up to three years following imprisonment, and a fine of up to $250,000 or twice the gross gain or gross loss resulting from that offense, whichever is greater. 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 entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

 

The indictment 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 Regional Office of the U.S. Department of Labor, Office of Inspector General; Jeffrey A. Monhart, Director for the Chicago Region of the U.S. Department of Labor - Employee Benefits Security Administration; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

 

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

CHICAGO — A Chicago man has been charged with a federal drug violation after agents seized more than 50 kilograms of heroin and cocaine from his attic apartment on the South Side.

MARCELINO NUNEZ-HURTADO, 47, is charged with possession of a controlled substance with the intent to distribute. On Aug. 22, 2017, agents searched an attic apartment Nunez-Hurtado rented in Chicago’s Gage Park neighborhood and discovered tools used to measure and package narcotics, according to a criminal complaint and affidavit filed in federal court in Chicago. After noticing a screwdriver on the floor just inside the attic door, agents discovered an access panel above the landing of the stairs leading to the attic, the complaint states. The panel led to a compartment where agents discovered numerous rectangular bricks of heroin weighing more than 41 kilograms, and multiple bricks of cocaine weighing more than nine kilograms, the complaint states.

Nunez-Hurtado was arrested on Sept. 13, 2017. A detention hearing is scheduled for Sept. 26, 2017, at 2:30 p.m., before U.S. Magistrate Judge Michael T. Mason in Chicago.

The complaint was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and James M. Gibbons, Special Agent-in-Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Chicago.

According to the complaint, ICE uncovered the alleged drug trafficking through the use of a confidential informant and extensive surveillance. The informant provided information in July that Nunez-Hurtado was involved in drug trafficking activities throughout the Chicago area, the complaint states. Hours before the attic search, agents observed Nunez-Hurtado hand suspected cocaine to an individual sitting in the passenger seat of a Cadillac Escalade parked in an alley behind the Gage Park residence, the complaint states.

The drug charge carries a maximum sentence of life 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 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. Attorney Rebekah Holman.

CHICAGO — The former superintendent of Lincoln-Way Community High School District 210 has been indicted on federal fraud charges for allegedly misappropriating school funds for his own benefit and concealing the district’s true financial deficit from the public.

LAWRENCE WYLLIE fraudulently used at least $50,000 in school district funds to build and operate Superdog, a dog obedience training school that provided no benefit to the four high schools in the southwest suburban district, according to the indictment. Wyllie also misappropriated at least $16,500 of school district funds by paying himself a retirement stipend that was not in his employment contract, the indictment states. Wyllie fraudulently pocketed another $14,000 of school district funds by falsely describing it as compensation for unused vacation days – another benefit that was not in his contract, the charges state.

Wyllie also fraudulently inflated the district’s financial health by using bond funds to pay the district’s general operating expenses, causing the district to assume at least $7 million in additional debt.

The indictment was returned Wednesday in federal court in Chicago. It charges Wyllie, 79, of Naperville, with five counts of wire fraud and one count of embezzlement. Arraignment in U.S. District Court has not yet been scheduled.

The indictment was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Kathleen S. Tighe, Inspector General of the U.S. Department of Education.

District 210 operated four high schools that drew students from New Lenox, Frankfort, Mokena, Manhattan, Tinley Park and Orland Park. According to the indictment, one of the factors the district’s seven-member school board considered in renewing Wyllie’s employment contract was the financial performance of the district. In 2009, at the request of Wyllie and with approval of the school board, the district issued $29 million in bonds. Wyllie represented to the school board and bond purchasers that $10 million of the bond proceeds would be used for capital expenditures, including construction or renovation of the high schools, when in fact Wyllie knew that he would spend the money on the district’s general operating expenses and payroll, the charges allege. Wyllie transferred millions of dollars from a bank account where the district maintained its bond funds to a separate account that the district used for paying general operating expenses.

As a result, the district’s net operating expenditures and cost-per-pupil calculation appeared lower than they actually were, thus fraudulently inflating the district’s financial health, the charges state. Wyllie’s fraud scheme caused the district to assume at least $7 million in additional debt from the bond issuance, on which Lincoln-Way continues to pay interest, the indictment states.

Wyllie retired as district superintendent in June 2013.

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, while embezzlement carries a maximum sentence of ten years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

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

CHICAGO — A federal jury has convicted a U.S. Customs and Border Protection agent of pocketing $5,000 in cash from an overseas passenger at a screening station of O’Hare International Airport.

SALVATORE PICARDI took the cash on Feb. 22, 2016, after the female passenger had arrived at O’Hare on a flight from China. The woman noticed her money was missing when the customs inspection ended and she was allowed to leave. As other officers began searching for the money, Picardi tried to avoid detection by stuffing the cash into a jacket belonging to the woman and claiming he had discovered it.

The jacket, however, had been searched multiple times before Picardi’s purported discovery.

Picardi, 38, of Park Ridge, was convicted of one count of embezzlement by a federal officer under color of law. The jury returned its verdict on Wednesday after a three-day trial in the Chicago courtroom of U.S. District Judge Thomas M. Durkin.

The conviction was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Armando Lopez, Special Agent-in-Charge of the U.S. Department of Homeland Security - Office of Inspector General (DHS-OIG) Chicago Field Office; and Aaron Poyer, Special Agent-in-Charge of the U.S. Customs and Border Protection - Office of Professional Responsibility (CBP-OPR).

The conviction is punishable by up to ten years in prison. Judge Durkin scheduled a sentencing hearing for Dec. 12, 2017, at 12:00 p.m.

The government is represented by Assistant U.S. Attorneys Laurie J. Barsella and Lindsay C. Jenkins.

CHICAGO — A convicted felon was sentenced today to eight years in federal prison for illegally possessing 30 guns that had been stolen from a shipment of firearms at a railyard on the South Side of Chicago.

 

NATHAN DRIGGERS possessed the guns on April 12, 2015, at his store in the 12700 block of South Halsted Street in Chicago’s West Pullman neighborhood. Driggers had previously been convicted of a felony and was not legally allowed to possess a firearm.

 

All 30 of the guns were among approximately 111 firearms stolen from a railroad car in Chicago earlier that day. The firearms were aboard a cargo train en route from a Ruger factory in New Hampshire to Spokane, Wash. The train was parked overnight on the South Side of Chicago when thieves broke locks on a train car and walked off with the guns.

 

A jury in April convicted Driggers, 44, of Richton Park, on one count of illegal possession of a firearm by a felon. U.S. District Judge John J. Tharp Jr. imposed the 96-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.

 

A co-defendant, WARREN GATES of Chicago, was sentenced in January to five years and three months in prison for illegally possessing 24 firearms, 17 of which had been stolen from the train. Gates admitted purchasing the 17 stolen firearms for purposes of reselling them for a profit, and he sold eleven of them prior to his arrest.

 

To date, law enforcement has recovered 19 of the 111 stolen firearms at various locations and crime scenes in the Chicago area.

 

The government is represented by Assistant U.S. Attorneys Christopher V. Parente and Eric Pruitt.

ROCKFORD — A Rockford man pleaded guilty today before U.S. District Judge Frederick J. Kapala to mail fraud.

 

CHARLES R. (“CHUCK”) HANSEN, 63, a financial planner, admitted that he schemed to defraud investors out of more than $700,000, using the mail to further his scheme.

 

According to a written plea agreement Hansen between 1996 and 2014 operated financial planning and real estate companies, including Senior Securities of Rockford LLC and Chicago Wealth Partners LLC. As part of his financial planning business, Hansen sold fixed annuities to retirement-age investors. In 2008, Hansen began to encourage some individuals to whom Hansen had previously sold fixed annuities to move their money from the secure investments to investments in Senior Securities and Chicago Wealth Partners, which Hansen told investors were real estate companies in which the investors could make a higher rate of return on their investment. Hansen used the investments in those two companies to rehab and sell homes in the Rockford and Chicago areas. Hansen admitted that he did not explain the risky nature of that sort of investment, and he told investors that their investments would remain secure.

 

Hansen further admitted that he entered into promissory notes with investors promising a high rate of return and that he convinced investors to renew their promissory notes for additional terms. At the time of the renewals, Hansen did not disclose to the investors that Senior Securities and Chicago Wealth Partners were failing and that he lacked sufficient funds to repay the investors the amounts owed to them pursuant to the original promissory notes.

 

Hansen admitted that as a result of his scheme, he caused investors to invest approximately $842,150 in Senior Securities and Chicago Wealth Partners, and that only $109,792 of that amount was returned to investors, causing the investors to suffer losses totaling approximately $732,257.

 

Hansen faces a maximum sentence of 20 years’ imprisonment, a term of supervised release of up to 3 years following imprisonment, and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from that offense, whichever is greater, as well as full restitution. The sentence will be determined by the United States District Court, guided by the Sentencing Guidelines.

 

The guilty plea was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; E. C. Woodson, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago; and Tanya Solov, Director of the Illinois Securities Department of the Illinois Secretary of State.

The government is represented by Assistant U.S. Attorney Margaret J. Schneider.

CHICAGO — Five defendants have been indicted on federal firearms violations for conspiring to “straw purchase” handguns in Michigan and re-sell them in Chicago.

Michigan residents CORNELIUS BATTLE and DALRICK DRAIN purchased firearms from federally licensed dealers in Kalamazoo, Mich., and falsely certified on required forms that they were the actual buyers of the guns, the indictment states. Battle and Drain purchased the guns on behalf of NATHANIEL McELROY, a Chicago resident who identified which firearms he wanted and had paid Battle and Drain a premium over the stores’ prices, according to the indictment. In the first six months of 2017, the trio and two other defendants, REGINALD JOHNSON and LASHON MOORE, caused at least nine handguns to be purchased in Michigan and transported to Chicago, the indictment states.

The two-count indictment was returned Aug. 31, 2017, in federal court in Chicago, and ordered unsealed on Sept. 7, 2017. It charges the defendants with one count of conspiracy to willfully deal firearms without a license, to willfully transfer firearms to non-Michigan residents, and to knowingly make false statements in connection with the acquisition of a firearm; and one count of willfully dealing firearms without a license.

“The United States Attorney’s Office is committed to aggressively using federal firearm laws to keep illegal guns off the streets,” said Joel R. Levin, Acting United States Attorney for the Northern District of Illinois. “We will use whatever federal tools are appropriate to prosecute straw purchasers and hold them accountable for bringing illegal firearms into Chicago.”

Acting U.S. Attorney Levin announced the charges along with Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. The Chicago Police Department provided valuable participation in the investigation.

McElroy, 21, was arrested on Aug. 31, 2017. During a detention hearing in federal court in Chicago last week, U.S. Magistrate Judge Susan E. Cox ordered McElroy detained in federal custody pending trial. McElroy’s next court date has not yet been set.

Battle, 23, of Kalamazoo, Mich., was arrested in Michigan on Sept. 1, 2017. During a detention hearing in federal court in Kalamazoo last week, U.S. Magistrate Judge Phillip J. Green ordered Battle released on home confinement. Judge Green ordered Battle to appear in Chicago on a future date to be determined by the Court.

Moore, 28, of Kalamazoo, Mich., is currently in custody in Michigan on an unrelated state charge. The U.S. Attorney’s Office will seek his removal to Chicago at a future date.

Arrest warrants have been issued for Drain, 27, and Johnson, 24, both of Kalamazoo, Mich. They were not custody as of today.

The indictment describes two purchases made at the Kalamazoo firearm businesses. On Feb. 28, 2017, Drain bought two guns at On Target; and on March 30, 2017, Drain bought two guns from Dunham Sports, the indictment states. Other defendants and an unindicted member of the scheme later conspired to transfer the guns to Chicago, the indictment states. The charges allege that the defendants’ straw purchasing scheme violated a federal law that requires individuals purchasing certain firearms from an out-of-state dealer to first have the firearms transferred to a dealer in the buyer’s state of residency before the individual can legally take possession.

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

The government is represented by Assistant U.S. Attorneys Albert Berry III and Ankur Srivastava.

CHICAGO — The self-proclaimed “Grand Sheik” of a Moorish temple in Chicago has been sentenced to nearly six years in federal prison for causing the Internal Revenue Service to issue more than $3.2 million in fraudulent tax returns.

 

MARCEL A. WALTON filed three fraudulent returns seeking $900,000 in refunds, causing the IRS to issue him more than $300,000. Walton also recruited individuals, including the elderly and homeless, to join a Chicago branch of the Moorish Science Temple of America and file similarly fraudulent returns on the false pretense that temple members were entitled to remuneration from the United States government for its purported use of Moorish lands. Walton claimed to be the “Grand Sheik” of the Chicago branch of the temple. At least 17 individuals filed nearly 50 returns seeking more than $15 million in refunds, ultimately obtaining more than $3.2 million from the IRS.

 

Walton, 47, of Chicago, pleaded guilty last year to one count of mail fraud. U.S. District Judge Thomas M. Durkin on Friday imposed the 68-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 Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

 

“Walton exploited a vulnerability in our tax system and filed blatantly false trust tax returns,” Assistant United States Attorney Carol A. Bell argued during the sentencing hearing. “He used his position to recruit individuals to further his tax scheme.”

 

In 2010 and 2011, Walton told numerous individuals that, if they became members of the temple, they could claim the money purportedly owed to the Moors by the federal government. Walton told the potential recruits that the Moors were the original discoverers of America and that a Moorish prophet was given a deed to lands making up North America. Walton executed the scheme by preparing and causing the preparation of trust or estate tax returns for himself and the others that contained false information regarding the purported trust’s income, fiduciary fees, exemptions and federal tax withheld.

 

Walton stood to gain from the returns filed by his temple members because he instructed them to pay him ten percent of the money they received from the IRS through the filing of the fraudulent returns. One of the temple members paid Walton $90,000 after receiving $900,000 in refunds from the IRS in 2010.

CHICAGO — An Arkansas man was charged today with federal firearms violations for illegally selling numerous handguns, rifles and a shotgun in Chicago and nearby suburbs.

KLINT KELLEY brought the firearms from Arkansas to Chicago and illegally sold them to a convicted felon, according to a criminal complaint and affidavit filed today in federal court in Chicago. Kelley sold the guns to the felon on three occasions this year, including over the Fourth of July and Labor Day weekends, the complaint states. The most recent sale occurred Sunday in Chicago Ridge, after which authorities arrested Kelley.

Kelley, 27, of Malvern, Ark., is charged with three counts of dealing firearms without a license and across state lines, and one count of selling firearms to a known felon. An initial court appearance is scheduled for today at 1:30 p.m., before U.S. Magistrate Judge M. David Weisman in Chicago.

The charges were 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 Illinois State Police participated in the investigation.

The complaint describes the three occasions when Kelley allegedly sold firearms to the felon. On April 3, 2017, in a residence in southwest suburban Frankfort, Kelley sold the felon five handguns and three semi-automatic rifles in exchange for $4,750 in cash, the complaint states. On July 3, 2017, near the United Center on Chicago’s West Side, Kelley sold the felon four handguns and one semi-automatic rifle in exchange for $3,000 in cash, the complaint states. On Sept. 3, 2017, in a commercial area of southwest suburban Chicago Ridge, Kelley sold the felon four semi-automatic rifles, three handguns and one semi-automatic shotgun in exchange for $7,000 in cash, the complaint states.

Kelley grew up in Illinois and moved to Arkansas several years ago, the complaint states.

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

The charge of dealing firearms without a license and across state lines is punishable by a maximum sentence of five years in prison, and the charge of selling firearms to a known felon is punishable by a maximum sentence of ten years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Tobara Richardson.

CHICAGO — A Chicago man is facing federal firearms charges for allegedly dealing ammunition and gun accessories on the city’s South Side.

BRENT TURPIN illegally supplied an extended handgun magazine, a laser sight and two boxes of ammunition to a convicted felon who, unbeknownst to Turpin, was cooperating with the Federal Bureau of Investigation, according to a criminal complaint and affidavit filed in federal court in Chicago. Turpin supplied the materials to the informant earlier this month in Turpin’s residence on the South Side of Chicago, the complaint states.

Turpin, 53, was arrested Tuesday. A detention hearing is scheduled for today at 3:00 p.m., before U.S. Magistrate Judge M. David Weisman in Chicago. The complaint charges Turpin with one count of conspiracy to dispose of a firearm and ammunition to a known felon, and one count of disposing of ammunition to a known felon.

The charges were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the FBI. The Chicago Police Department participated in the investigation.

In addition to the disposal of the ammunition and materials, the complaint also describes Turpin’s efforts to secure a firearm for the informant at a gun show in Indiana. As the pair traveled together to the show earlier this summer, Turpin allegedly instructed the informant on what to say and do. “If they ask you if you’re from Indiana, say yes,” Turpin told the informant, according to the complaint. “If they say where [are] you from, say like, say South Bend or something, or Indianapolis,” Turpin said, according to the complaint. Turpin and the informant met with a gun dealer at the show, but it did not result in a deal because Turpin declined to present his driver’s license, the complaint states.

Turpin is employed as a teacher at a school on the South Side of Chicago, the complaint states.

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

The charge of conspiring to distribute firearms and ammunition is punishable by a maximum sentence of five years in prison, and the charge of distributing ammunition is punishable by a maximum sentence of ten years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorneys Ankur Srivastava and Albert Berry.

CHICAGO — A federal jury today convicted a Chicago police officer of federal civil rights violations for using unreasonable force against two individuals while on duty.

MARCO PROANO was convicted on both 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.

The jury returned its verdict against Proano, of Chicago, after a week-long trial in the courtroom of U.S. District Judge Gary Feinerman.

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

Each count of the indictment is punishable by up to ten years in prison. Judge Feinerman scheduled a sentencing hearing for Nov. 20, 2017, at 2:00 p.m.

The government is represented by Assistant U.S. Attorneys Georgia Alexakis and Erika Csicsila.

ROCKFORD — Two out-of-state residents were sentenced this week by U.S. District Judge Frederick J. Kapala for their roles in a conspiracy to manufacture and distribute marijuana.

 

DESTINY FREEMAN, 24, of Palmer, Alaska, was sentenced today to 23 months in federal prison, to be followed by two years of supervised release.

 

CASEY S. WILLIAMS, 30, of Great Falls, Montana, was sentenced Wednesday to 57 months in federal prison, to be followed by three years of supervised release.

 

The sentencings were announced by Joel R. Levin, Acting 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 & 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 the Rockford Police Department Narcotics Unit assisted in the investigation.

 

In 2016, Williams and Freeman pleaded guilty to conspiring with five other individuals to manufacture, possess and distribute marijuana plants. The superseding information alleged that between Jan. 2, 2013, and Jan. 6, 2015, the pair conspired to illegally grow and store marijuana in a warehouse at 1916 11th St. in Rockford. The warehouse was destroyed by fire on Jan. 6, 2015.

 

The five co-defendants are YOUSIF Y. PIRA, 64, of Chicago, JEREMIAH N. CLEMENT, 39, formerly of Des Plaines, GEORGE H. BACUS, 53, of Niles, JUSTIN T. PAGLUSCH, 36, of Ingleside, and SHLIMON SHIMON, 49, of Chicago.

 

According to Williams’ and Freeman’s written plea agreements, in August 2014 Williams’ former employer, Jeremiah N. Clement, asked Williams to travel to Rockford to assist Clement with cleaning out a building and some irrigation construction inside a building in Rockford. At the time, Williams was living in Montana and dating Freeman. Clement recruited Williams to join the conspiracy, and Williams in turn recruited Freeman. Williams and Freeman lived in the warehouse while they assisted in the marijuana-growing operation by watering and caring for the marijuana crop and later assisting in harvesting and processing the marijuana.

 

In July 2017, following a four-day jury trial in U.S. District Court in Rockford, Pira was found guilty of conspiring to manufacture, possess and distribute 1,000 or more marijuana plants. Pira is scheduled to be sentenced on Oct. 17, 2017, at 2:30 p.m.

 

Bacus pleaded guilty on July 6, 2016, and is scheduled to be sentenced on Sept. 22, 2017, at 2:30 p.m.

 

Clement pleaded guilty and was sentenced to ten years’ imprisonment on June 3, 2016.

 

Paglusch pleaded guilty and was sentenced to ten years’ imprisonment on June 23, 2016.

 

An arrest warrant has been issued for Shimon, who is still at large.

 

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

ROCKFORD — A Rockford man was sentenced Tuesday in federal court by U.S. District Judge Frederick J. Kapala for illegally possessing a firearm as a convicted felon.

 

DEONTA M. NEWTON, 29, was sentenced to 103 months in prison, to be followed by three years of supervised release. Newton pleaded guilty to the charge on March 17, 2017.

 

According to a written plea agreement, Newton on July 18, 2016, was a passenger in a vehicle driven by another individual on the way to a convenience store on the west side of Rockford. When the other individual went into the store, a blue minivan pulled in the store’s parking lot and someone inside the van fired several shots at Newton while he was in the car. Newton grabbed a .45-caliber semi-automatic pistol, got out of the car with the gun in hand, and ran away. The minivan left and shortly thereafter Newton returned to the parking lot and got back in the passenger side of the vehicle. The other individual got back in the vehicle and drove to his residence with Newton, where Newton took the pistol inside and hid it in the basement. The pistol was later located and seized by officers of the Rockford Police Department.

 

Newton was charged in federal court as part of the Project Safe Neighborhoods program. Project Safe Neighborhoods is an intensive, cooperative effort between local, state and federal law enforcement to attack gun crimes. Additional information about Project Safe Neighborhoods may be found at: www.psn.gov.

 

The sentencing was announced by Joel R. Levin, Acting 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 & Explosives; Joseph Bruscato, Winnebago County State’s Attorney; and Dan O’Shea, Chief of the Rockford Police Department.

 

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

ROCKFORD — A federal grand jury in Rockford today increased the number of fraud charges previously brought against TODD J. FENDLER, 41, of Rockford.

 

Fendler was initially charged on Feb. 28, 2017, with one count of mail fraud and one count of wire fraud. Today, the grand jury returned a superseding indictment charging Fendler with a total of 19 counts of wire fraud and one count of mail fraud, all in connection with a scheme to defraud former insurance clients of Fendler’s businesses. The superseding indictment alleges that Fendler defrauded over 100 clients of more than $800,000.

 

According to the superseding indictment, Fendler controlled and operated several insurance-related businesses in Rockford, including Surplus Market Solutions LLC, Northern Underwriting Managers Inc., and Northern Illinois Insurance Agency Inc. The superseding indictment alleges that Fendler obtained bank account information from businesses and individuals who had applied for insurance policies through Fendler’s companies, and used that information to withdraw funds from those businesses and individuals. Fendler did so, the superseding indictment states, by causing ACH and EFT withdrawals to be taken from the victims’ accounts without the victims’ knowledge or permission. The superseding indictment also alleges that Fendler created fictitious checks purportedly issued by the insurance applicants and deposited those fictitious checks into bank accounts he controlled.

 

Each count in the superseding indictment carries a maximum penalty of 20 years in prison, and a maximum fine of $250,000. If convicted, the Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines, as well as restitution.

 

Arraignment on the superseding indictment will be set for a later date before U.S. Magistrate Judge Iain D. Johnston in Rockford.

 

The superseding indictment was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and E. C. Woodson, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.

 

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

 

The public is reminded that a superseding indictment is only a charge 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 the defendant’s guilt beyond a reasonable doubt.

ROCKFORD — A Rockford man was indicted today by a federal grand jury on a charge of armed bank robbery.

 

DEMONTRION D. PHILLIPS, 23, was charged with robbing Alpine Bank, located at 2642 Charles St., in Rockford, on July 17, 2017. The indictment alleges that Phillips used a BB gun to commit the robbery and that during the robbery he obtained $28,309 from bank employees.

 

A federal arrest warrant has been issued for Phillips, who is currently in custody in the Winnebago County Jail on unrelated charges. Arraignment in federal court in Rockford has not yet been scheduled.

 

Armed bank robbery carries a maximum penalty of 25 years in prison, to be followed by up to five years of supervised release, and a maximum 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 the defendant would be required to pay restitution to Alpine Bank. The public is reminded that an indictment contains only a charge 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 Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the 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 Lakewood man was indicted today by a federal grand jury on fraud charges.

 

VALENTINO VALERIU AGIGNOAE, 50, was charged with two counts of wire fraud, one count of stealing Social Security disability insurance funds that he and his dependents were not entitled to, and four counts of making false statements or concealing facts with the intent to fraudulently secure Social Security benefit payments.

 

As alleged in the indictment, Agignoae began receiving Social Security disability insurance benefits in 1996. The benefits were paid via direct deposit to Agignoae’s bank account. The indictment alleges that from approximately January 2007 through April 2015, Agignoae schemed to defraud and to obtain money from the U.S. Social Security Administration by failing to notify the Social Security Administration that he was managing Valentino’s Club Café in Chicago, even though he knew that he was required to do so. It is also alleged that Agignoae’s misrepresentations and concealment of facts caused the U.S. Government, through the Social Security Administration, to suffer losses of approximately $157,503, in the form of monthly disability insurance payments to Agignoae and his dependents, to which Agignoae was not entitled.

 

Each count of wire fraud carries a maximum potential penalty of up to 20 years in prison; stealing disability insurance funds carries a maximum potential penalty of up to ten years in prison; and each count of making a false statement or concealing facts for use by the Social Security Administration in determining rights to Social Security disability insurance benefits payments carries a maximum potential penalty of up to five years in prison. Each count also carries a fine of up to $250,000, and full restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

 

Agignoae will appear for arraignment in Rockford before U.S. Magistrate Judge Iain D. Johnston on a date yet to be determined.

 

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 Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Tracey Thanos, Special Agent-in-Charge of the Chicago Office of the Social Security Administration – Office of Inspector General.

 

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

CHICAGO — A federal judge today sentenced a Chicago real estate developer to three years in prison in connection with a fraud scheme related to a $105 million line of credit secured by city and suburban properties, including the Streets of Woodfield Mall in Schaumburg.

The fraud perpetrated by LAURANCE H. FREED, the president of Joseph Freed & Associates LLC, also involved the theft of millions of dollars from his business partner, Kimco Realty Corp. Freed also fraudulently obtained more than $575,000 in publicly funded loans from the city of Chicago, and attempted to fraudulently obtain an additional $1 million from the city.

A federal jury last year convicted Freed, 54, of Chicago, on three counts of bank fraud, one count of mail fraud, and four counts of making a false statement to a financial institution. In addition to the 36-month prison term, U.S. District Judge Robert M. Dow also fined Freed $250,000, and ordered him to pay $575,759 in restitution to a victim bank.

The sentence was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Joseph M. Ferguson, Inspector General for the City of Chicago.

“These were serious offenses that merit serious punishment,” Assistant U.S. Attorney Matthew F. Madden argued in the government’s sentencing memorandum. “The defendant was at the heart of this scheme to defraud and the lies told in furtherance of it.”

The investigation also resulted in the conviction of JFA’s vice president, CAROLINE WALTERS. Walters, of Palatine, pleaded guilty last year to one count of making a false statement to a financial institution. Judge Dow previously sentenced Walters to six months in prison.

According to evidence at Freed’s trial, the city of Chicago in 2002 issued two Tax Increment Financing notes to Uptown Goldblatts Venture LLC, a company formed by JFA to redevelop the former Goldblatt’s store in the Chicago’s Uptown neighborhood. The TIF notes had a combined principal of $6.7 million, and Freed pledged one of the notes to Cole Taylor Bank as collateral.

Four years later, JFA-affiliated entities entered into agreements with a bank consortium for a revolving line of credit worth up to $105 million. Uptown Goldblatts became a borrower under the revolving loan agreement through a subsequent deal with LaSalle Bank, which was one of the banks in the consortium and had recently been acquired by Bank of America. In the LaSalle deal, Uptown Goldblatts pledged the two TIF notes as collateral and also represented that the notes were owned free of other secured interests. The deal did not mention that one of the notes had already been pledged to Cole Taylor.

Evidence at trial also revealed that in 2009 and 2010 Freed signed false affidavits seeking to obtain more than $1.5 million in TIF payments from the city, knowing that he was not entitled to the payments.

As Freed’s business experienced financial difficulties, he withdrew more than $7 million from the Streets of Woodfield partnership without the knowledge and consent of his business partner Kimco, which owned 45% of the venture. Freed fraudulently recorded the money as “loans.”

CHICAGO — Two Chicago men today became the fifth and sixth members of the violent “Hobos” street gang to be sentenced to life in prison on federal racketeering charges.

 

The Hobos were a criminal enterprise in Chicago that dealt narcotics, robbed from other drug dealers, retaliated against rival gangs, and violently prevented witnesses from cooperating with law enforcement. For nearly a decade the gang committed murders, attempted murders and robberies, primarily on the city’s south and west sides. All ten Hobos charged in the federal investigation were either convicted by a jury or pleaded guilty prior to trial. An eleventh Hobo died shortly before charges were brought.

 

DERRICK VAUGHN and WILLIAM FORD today became the fifth and sixth members of the gang to receive life sentences. Three others previously received sentences ranging from seven to 40 years in prison. One defendant, RODNEY JONES, cooperated with the government and will be sentenced later this year.

 

The sentencings were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Eddie T. Johnson, Chicago Police Superintendent; and Gabriel L. Grchan, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division. The Illinois State Police, Illinois Department of Corrections and Illinois Secretary of State Police provided assistance.

 

Federal, state and local authorities uncovered the gang activity through an extensive investigation conducted by the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI Chicago Safe Streets Gang Unit. The Task Forces have been responsible for disrupting some of the Chicago area’s most sophisticated drug-trafficking organizations.

 

Evidence at the 15-week trial last year revealed that the Hobos were comprised of former members of other gangs that were once rivals. The Hobos allied together in order to more profitably distribute narcotics and establish control of territories on the south and west sides of Chicago. The Hobos were violent and ruthless, often using high-powered guns and assault rifles. From 2004 to 2013 the Hobos engaged in narcotics trafficking, home invasions and armed robberies, often of rival drug dealers. Members of the gang shared the wealth with each other, buying luxury items and taking trips to Hawaii and Florida.

 

In addition to today’s sentencings of Ford and Derrick Vaughn, U.S. District Judge John J. Tharp Jr. previously sentenced four other Hobos to life in prison on racketeering conspiracy charges: ARNOLD COUNCIL, PARIS POE, GABRIEL BUSH, and BYRON BROWN, all of Chicago. Judge Tharp previously sentenced GREGORY CHESTER, of Richton Park, to 40 years in prison; STANLEY VAUGHN, of Chicago, to 20 years in prison, which must be served consecutively to a 23-year prison term previously imposed in a separate case; and Gregory Chester’s cousin, GARY CHESTER, of Chicago, to seven years in prison.

 

The sentencing for Jones, of Chicago, is set for Nov. 20, 2017, before Judge Tharp. The eleventh Hobo, Byron Brown’s twin brother, BRANDON BROWN, was identified in the indictment as a coconspirator, but he died before the charges were brought.

 

Although the Hobos lacked a traditional hierarchy, Gregory Chester was recognized as its leader. When the Hobos learned that individuals were cooperating with law enforcement, the gang resorted to murder in order to prevent it. In 2006 Council and Poe fatally shot Wilbert Moore, whose cooperation with Chicago Police had led to state gun and drug charges against Council. In 2013 Poe shot and killed Keith Daniels after Daniels cooperated with the federal investigation that led to these convictions.

 

The government is represented by Assistant U.S. Attorneys Patrick Otlewski, Derek Owens and Timothy Storino.

ROCKFORD — A Rockford man was arrested today on charges of child pornography.

 

GREGORY GREENE, 57, was indicted by a federal grand jury in Rockford on Aug. 8, 2017, on two counts of transporting child pornography via the internet in 2016, and one count of possessing a computer and thumb drive in 2016 containing child pornography, including an image of a minor under 12 years of age.

 

Each count of transporting child pornography carries a mandatory minimum sentence of five years in prison and a maximum of 20 years in prison.  Possessing 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. 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 arrest was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and James M. Gibbons, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Chicago. The U.S. Postal Inspection Service in Chicago assisted in the investigation.

 

The government is represented by Assistant U.S. Attorney Margaret J. Schneider.

CHICAGO — An investment manager has been indicted for allegedly swindling nearly $1 million from a retired school teacher.

TYRIS D. MAXEY, the owner of RB Mister Enterprises LLC, a Wyoming company with an office in Chicago, persuaded the retired teacher to give him approximately $950,000 for purported investments, according to an indictment returned in federal court in Chicago. Maxey claimed that his investment firm was highly successful and that he put up his own money in the firm’s investments. In reality, Maxey’s investment activity was minimal, and he spent nearly all of the victim’s money to cover personal expenses, the indictment states. The few real investments that Maxey purchased with the victim’s money sustained heavy losses, the indictment states.

The indictment was returned Aug. 10, 2017, and ordered unsealed after Maxey’s arrest on Monday morning. The indictment charges Maxey, 43, of Chicago, with six counts of wire fraud.

Maxey pleaded not guilty at a Monday afternoon arraignment before U.S. Magistrate Judge Sidney I. Schenkier in Chicago. Maxey was ordered released from custody on a $10,000 appearance bond, and a status hearing was set for Sept. 12, 2017, before U.S. District Judge Harry D. Leinenweber.

The indictment was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and E.C. Woodson, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.

According to the indictment, Maxey fraudulently represented to the victim that RB Mister Enterprises invested in various sectors, including medical marijuana, construction, oil, real estate, sugar and concerts. Maxey attempted to conceal the scheme by returning some of the victim’s money and fraudulently describing it as a positive return on investment, the indictment states. Maxey also furnished the victim and the victim’s accountant with fraudulent account statements that purported to relate to investments.

The fraud scheme alleged in the indictment began no later than January 2010 and continued until at least November 2013.

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

The government is represented by Assistant U.S. Attorney Yusef Dale.

CHICAGO — A convicted felon from Chicago has been sentenced to seven years in federal prison for illegally brokering the sale of more than 75 guns.

JOHN THOMAS illegally brokered at least 23 transactions involving the total sale of 77 guns, including rifles, shotguns and handguns. Some of the guns had obliterated serial numbers or were previously reported stolen. The case against Thomas arose out of a larger federal investigation that has removed more than 100 illegal guns from the streets of Chicago. The federal probe involved controlled firearm sales to cooperating individuals.

Thomas, 33, also known as “Batman,” pleaded guilty earlier this year to two counts of illegal possession of a firearm by a felon, and one count of dealing firearms without a license. U.S. District Judge Andrea R. Wood on Friday imposed the 84-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 Celinez Nunez, Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.

Thomas admitted in a plea agreement that he either obtained the firearms himself and then sold them to individuals, or he arranged for the owner of the firearms to sell the guns in exchange for a fee to Thomas for setting up the transaction. Unbeknownst to Thomas, the individuals who purported to purchase the guns were cooperating with law enforcement.

Thomas was previously convicted of a felony and was not legally authorized to possess any firearms.

One of the sales occurred on July 23, 2014, when Thomas arranged a meeting between a man identified in court records as Individual A, along with JAMEL DAVIS and a cooperating individual. The transaction, which took place in Davis’ garage in the Auburn Gresham neighborhood on Chicago’s South Side, involved the sale of two .38-caliber revolvers. A federal jury last year convicted Davis of illegal possession of a firearm by a felon, and he was sentenced to two years in prison.

CHICAGO — A federal judge has sentenced a violent drug trafficker to 37 years in prison for supplying large amounts of heroin to Chicago’s West Side and murdering a friend who cooperated with law enforcement.

 

For seven years DAVID PRICE operated a violent drug operation responsible for supplying more than 90 kilograms of heroin to numerous open-air markets. Price used his drug proceeds to fund a lavish lifestyle that included luxury homes in Chicago and the suburbs, high-end vehicles, diamond jewelry and designer fashion. He ruthlessly protected his heroin operation through violence, including by personally murdering a former business partner who cooperated with law enforcement. Price also ordered the murder of another former drug partner, who was shot but survived and testified against Price at trial.

 

A federal jury in 2014 convicted Price, 38, of Brookfield, on all 13 counts against him, including charges of heroin conspiracy, money laundering and illegally possessing an Uzi-style, semi-automatic pistol with an extended magazine. U.S. District Judge Harry D. Leinenweber imposed the sentence Thursday in federal court in Chicago.

 

The sentence was announced by Joel R. Levin, Acting 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; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; 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. Substantial assistance was provided by the Woodridge Police Department and the DuPage County Major Crimes Task Force.

 

“Defendant’s senseless violence was motivated by greed and his love for money,” Assistant U.S. Attorneys Angel M. Krull and Erik Hogstrom argued in the government’s sentencing memorandum. “Defendant is a lifelong criminal, becoming a millionaire by pushing heroin on a suffering community, and putting money, power, and unspeakable violence above his family, above his childhood friends, above his community, and above everything.”

 

Evidence at trial showed that Price ran the heroin distribution ring from 2005 through 2011. Price used the profits to purchase or lease luxury residences, including a high-rise apartment on South Michigan Avenue in Chicago and homes in Naperville, Country Club Hills, Bolingbrook, Lombard, Darien and Brookfield. Price also owned numerous vehicles, including a Chevrolet Corvette and a Harley-Davidson “Touring” motorcycle.

 

Price and others involved in the conspiracy used an apartment in the Austin neighborhood to mix heroin with a sleeping pill and package it for sale on the street. Price then “fronted” wholesale quantities of the drug to be sold at locations on the West Side of Chicago, including at open-air drug markets in various neighborhoods. Price shared the profits with supervisors of those locations.

 

Evidence at trial established that one of the supervisors, James Brown, 35, of Chicago, was wounded in a shooting ordered by Price. Price directed two members of his crew to shoot and kill Brown on Jan. 25, 2008, because Price believed Brown was cooperating with law enforcement. Brown survived the shooting and testified against Price at trial.

 

After hearing two days of evidence during the sentencing hearing, Judge Leinenweber found that, in addition to ordering Brown’s shooting, Price also personally murdered Greg Holden, a lifelong friend and business partner who cooperated with law enforcement. On Dec. 8, 2011, Price broke into Holden’s apartment in Woodridge and shot him approximately 20 times while Holden was home with his two young daughters.

 

The federal investigation resulted in the convictions of several other conspirators, including Price’s cousin, KEITH CARR, 35, of Chicago. Carr was sentenced in 2016 to 20 years in prison. Two others, RASHID BOUNDS and CHRISTOPHER SAUNDERS, were convicted at trial and are serving prison terms of 17 and a half years apiece.

CHICAGO — A federal jury today convicted a Chicago Police officer on an obstruction charge for notifying a high school friend that he was the target of a federal drug investigation.

RONALD COLEMAN notified his friend's cousin that police were planning to search 10-12 houses in the friend's neighborhood, including the friend's house, as part of an investigation into drug sales. The probe involved surveillance and wiretaps and centered on the primary drug supplier, RODNEY BEDENFIELD, who was an associate of Coleman’s friend. Coleman, a Chicago Police officer working the case with the U.S. Drug Enforcement Administration, knew that his friend was involved in Bedenfield’s drug trafficking activities. On June 9, 2014, Coleman contacted the friend’s cousin about the impending search. Upon learning of it, the friend in turn passed along the information to Bedenfield, who quickly moved drugs and other contraband to an alternative location.

After a four-day trial in federal court in Chicago, the jury on Thursday convicted Coleman, 46, of Chicago, on one count of obstruction of justice. The conviction is punishable by up to 20 years in prison. U.S. District Judge Charles Norgle set sentencing for Nov. 15, 2017, at 11:30 a.m.

The verdict was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.

As a result of the leaked information, Bedenfield was observed via law enforcement surveillance carrying large bags out of a residence in the North Lawndale neighborhood and transporting them to an alternative location around the corner. On June 12, 2014, agents and officers executed an additional search warrant on the alternative location and discovered approximately 400 grams of heroin, two containers of lactose, five handguns, one rifle, multiple handgun magazines, ammunition, three digital scales, two heat sealers, a hand mixer, plastic baggies and a bill counter.

Bedenfield, 43, of Chicago, 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. He was sentenced to 18 years in prison.

The government is represented by Assistant U.S. Attorneys Shoba Pillay and Megan Cunniff Church.

CHICAGO — A convicted felon who fired a handgun near Wrigley Field was sentenced today to seven years in federal prison.

HOYTUAN PIERCE discharged the handgun on Oct. 13, 2015, during a dispute with several individuals in the 3400 block of North Clark Street in Chicago. No one was injured. Pierce had previously been convicted of a felony and was not legally allowed to possess the gun.

The incident occurred at approximately 11:30 p.m., while the area was crowded with baseball fans. Earlier that evening at nearby Wrigley Field, the Chicago Cubs defeated the St. Louis Cardinals to clinch the National League Division Series.

Pierce, 33, of Chicago, pleaded guilty last year to one count of illegal possession of a firearm by a felon. U.S. District Judge Elaine E. Bucklo imposed the 84-month sentence in federal court in Chicago.

The guilty plea was announced by Joel R. Levin, Acting 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, Chicago Police Superintendent.

“Gun-related deaths and injuries have taken an immeasurable toll on the citizens of the Northern District of Illinois over the past couple of years,” Assistant U.S. Attorney Cornelius Vandenberg argued in the government’s sentencing memorandum. “Defendant’s actions on October 13, 2015, showed a blatant disregard for the safety of those around him.”

Mr. Vandenberg represented the government along with Assistant U.S. Attorney Ankur Srivastava.

CHICAGO — Two cousins from Chicago are facing federal firearms charges for allegedly dealing guns on the city’s South Side.

Over a four-month period earlier this year, BENJAMIN VASQUEZ JR. illegally sold 16 firearms, including a sawed-off shotgun and an AK-47 rifle, according to criminal complaints and affidavits filed in federal court in Chicago. Unbeknownst to him, the buyer was cooperating with law enforcement and had secretly recorded the transactions, the complaints state. One of the deals occurred in a residence in the New City neighborhood of Chicago on Feb. 21, 2017, involving the sale of a .22-caliber pistol, the complaints state.

Benjamin Vasquez’s cousin, JORGE VASQUEZ, has also been involved in dealing illegal firearms, the charges state. On Feb. 13, 2017, Jorge Vasquez sold a rifle to an individual who was cooperating with law enforcement, the complaints state. The deal, which occurred in an alley in the West Englewood neighborhood of Chicago, netted Jorge Vasquez $1,000, according to the complaints.

Benjamin Vasquez Jr., 26, was arrested Aug. 4, 2017, on a charge of knowingly possessing a firearm with an altered, removed or obliterated serial number. A preliminary hearing is set for Aug. 10, 2017, at 9:30 a.m., before U.S. Magistrate Judge Jeffrey Cole.

Jorge Vasquez, 27, is charged with illegal possession of a firearm by a felon. He was arrested last month and remains in federal custody. His next court date has not been set.

The complaints were announced by Joel R. Levin, Acting 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 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.

Knowingly possessing a firearm with an altered, removed or obliterated serial number is punishable by a maximum sentence of five years in prison. Possession of a firearm by a felon is punishable by up to ten years in prison. If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Matthew L. Kutcher.

CHICAGO — An employee of a Rosemont auto dealership has been charged with arson for allegedly setting a fire that heavily damaged the dealership’s vehicles and office equipment.

BRYANT CAMERON set the fire at Epic Motorsports, 9739 Farragut St. in Rosemont, on the evening of July 24, 2017, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago. Cameron poured gasoline in the front office, reception and warehouse areas, and lit it on fire with the embers from his cigarette, the complaint states. He then quickly drove away from the scene, according to the complaint.

Fire departments from five different municipalities worked to extinguish the blaze. One firefighter suffered injuries consistent with dehydration, the complaint states. The fire damaged multiple vehicles, tools, office equipment, files and miscellaneous goods, according to the complaint.

Cameron, 28, of Broadview, was arrested on July 27, 2017. The complaint charges him with one count of arson. The charge is punishable by a minimum sentence of seven years in prison and a maximum of 40 years. A detention hearing is set for Aug. 7, 2017, at 1:30 p.m. before U.S. Magistrate Judge Michael T. Mason in Chicago.

The complaint 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. Substantial assistance was provided by the Rosemont Public Safety Department; Chicago Police Department’s Bomb and Arson Unit; Chicago Fire Department’s Office of Fire Investigation; and the Broadview Police Department.

The government is represented by Assistant U.S. Attorney Aaron R. Bond.

According to the complaint, Cameron’s duties at Epic Motorsports involved cleaning and moving cars, and picking up vehicles from neighboring states. Cameron was the last person to leave the facility on the night of the fire, the complaint states. A court-authorized search of Cameron’s vehicle on July 27, 2017, revealed items that had been reported stolen from Epic Motorsports, 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, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A former member of the United States Air Force was sentenced today to four years in federal prison for stealing the personal identifying information of fellow service members and distributing it to others.

 

On the eve of his dismissal from the military, RONNIE ALLEN II stole a personnel roster containing the names, dates of birth, Social Security numbers and other personal identifying information of more than 1,400 Air Force members stationed at Mountain Home Air Force Base in Idaho. Hoping to make money, Allen distributed the stolen information to others, including co-defendant ANTORONDI BENION. The Air Force members’ information was then fraudulently used to open accounts at various financial institutions, and to file tax returns with the Internal Revenue Service in the names of the Air Force members.

 

A federal jury earlier this year convicted Allen, 28, of Greensboro, N.C., on two counts of identity theft, two counts of access device fraud, and two counts of aggravated identity theft. U.S. District Judge Matthew F. Kennelly imposed the 48-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 Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. Valuable assistance was provided by the Air Force Office of Special Investigations.

 

“Identity theft is a serious crime,” Special Assistant U.S. Attorney Jared Jodrey and Assistant U.S. Attorney Brian Hayes argued in the government’s sentencing memorandum. “Allen betrayed his fellow service members and displayed an alarming indifference to the financial havoc they would experience.”

 

Allen was an enlisted member of the Air Force who held a clerical position in the maintenance group. The position gave him access to the Alpha Roster, a database of detailed personal identifying information for Air Force members assigned to the base. Evidence presented at trial showed that two weeks prior to his discharge on Jan. 31, 2013, Allen downloaded the Alpha Roster and sent a copy from his work e-mail account to his personal e-mail account. Allen then asked an acquaintance if he knew anyone who could help him make money using the Alpha Roster.

 

Eventually Allen was put in touch with Benion, and on April 30, 2014, Allen e-mailed Benion the entire Alpha Roster. In the email to Benion, Allen wrote, “Man here is the whole list i trust u if u make money off of it u will pay me for the info.”

 

Benion used the Alpha Roster identities to fraudulently open financial accounts and to conduct “account takeovers,” which involved adding himself and others as authorized users on existing accounts and causing the banks to issue credit cards in their names. From April 2013 to January 2016, Benion was involved in establishing at least 63 accounts at various financial institutions in the names of 35 Alpha Roster victims, which resulted in losses totaling approximately $163,389.

 

Benion, of Bellwood, Ill., pleaded guilty earlier this year to one count of access device fraud and one count of aggravated identity theft. On May 30, 2017, Judge Kennelly sentenced Benion to 70 months in prison.

CHICAGO — A former Melrose Park Police Detective has been sentenced to eleven years in federal prison for dealing narcotics stolen from the police evidence room.

 

In the spring of 2014, GREGORY SALVI obtained a kilogram of cocaine that the Melrose Park Police Department had stored in the evidence room after seizing it during an investigation. He then sold the cocaine to an individual for cash. Later in 2014 and early 2015, Salvi sold additional grams of heroin and cocaine that he had removed from the evidence room.

 

Salvi, 44, of Melrose Park, pleaded guilty earlier this year to one count of attempted possession of cocaine with the intent to distribute, and one count of carrying a firearm during a drug trafficking crime. U.S. District Judge Amy J. St. Eve on Wednesday sentenced Salvi to 72 months in prison on the drug charge and 60 months in prison for the firearm charge, to be served consecutively.

 

The sentence was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

 

“There is no question that defendant’s actions were a disgrace to his police department and a significant breach of the public trust,” Assistant U.S. Attorneys Patrick M. Otlewski and Nicole Kim argued in the government’s sentencing memorandum. “Salvi not only breached the trust that his local police department gave him when he swore to uphold and protect the law, but he also breached the community’s trust in him as an officer and in his local police community.”

 

The gun charge stemmed from an incident in April 2015, when Salvi, carrying a loaded handgun and driving a law enforcement vehicle, went to a storage facility in Hanover Park to obtain approximately five kilograms of cocaine. Salvi intended to transport the cocaine to two individuals in exchange for cash. Unbeknownst to Salvi, the individuals were cooperating with law enforcement.

CHICAGO — A Chicago man who shared dozens of images of child pornography was sentenced today to 15 years in federal prison.

From August 2012 to September 2014, DONALD BOWEN used an electronic file-sharing network to trade the pornographic images with others via the Internet. In September 2014, Bowen granted access to his password-protected folder to an individual with whom he was chatting online. Unbeknownst to Bowen, the individual was actually an undercover law enforcement officer. The officer downloaded 39 images of child pornography from Bowen’s folder. The images viewed by the officer included young children engaging in sexually explicit conduct.

A subsequent forensics search of Bowen’s computer revealed more than 4,000 videos and 6,000 images of child pornography.

Bowen, 54, of Chicago, pleaded guilty last year to one count of transportation of child pornography. Bowen’s prior conviction for a misdemeanor offense related to child abuse triggered the mandatory minimum sentence of 15 years imposed by U.S. District Judge Charles Norgle.

The sentence was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and James M. Gibbons, special agent-in-charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Chicago.

“Defendant used his computer to share images of child pornography with others and, in doing so, continued the cycle of exploitation,” Assistant U.S. Attorney Elizabeth R. Pozolo argued in the government’s sentencing memorandum. “The public needs to be protected from individuals like the defendant.”

In addition to trading the pornographic images, Bowen admitted in a plea agreement that he possessed images of child pornography on various electronic devices, including a cellular phone and 15 optical discs. Bowen also admitted possessing a three-ring binder with a white cover that contained hundreds of printed photographs depicting child pornography.

CHICAGO — More than a dozen individuals are facing federal narcotics charges for their alleged roles in distributing cocaine, heroin and fentanyl on Chicago’s Northwest Side and western suburbs.

 

The federal investigation spanned more than two years and resulted in the seizures of approximately 52 kilograms of cocaine, 45 kilograms of heroin, more than 13 kilograms of fentanyl, and a pound of methamphetamines. Authorities used extensive undercover surveillance to uncover the alleged criminal activities. The probe was jointly led by the U.S. Drug Enforcement Administration and the Federal Bureau of Investigation, and conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF) Chicago Strike Force.

 

Thirteen defendants are charged with various narcotics offenses in federal court in Chicago. Five of the defendants were arrested Wednesday, while five others were arrested earlier this year. Three defendants are considered fugitives and are being sought by law enforcement.

 

The charges were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the DEA; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the FBI. Substantial assistance was provided by the Chicago Police Department; U.S. Marshals Service; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Berwyn Police Department; Illinois State Police; DuPage County Metropolitan Enforcement Group; LaSalle County Sheriff’s Office; Downers Grove Police Department, and Peru, Ill., Police Department.

 

Authorities since 2015 have been investigating drug trafficking activities on the city’s Northwest Side and western suburbs, according to criminal complaints and affidavits filed in U.S. District Court in Chicago. The investigation uncovered numerous illegal drug transactions, including the distribution of three kilograms of cocaine on a street in Melrose Park, and the distribution of five kilograms of fentanyl at a gas station in Aurora.

 

The investigation revealed that AURELIO ABREGO, 45, of Chicago, and JOSE MIGUEL PEREZ, 54, of Chicago, worked together to obtain wholesale quantities of cocaine and heroin from others, and distributed the drugs to wholesale customers. The pair received the drugs from, among others, JAVIER MORENO, 49, of Chicago, and RICHARD ALVARADO, 28, of Chicago, for distribution to Abrego’s and Perez’s customers, the complaints state. FERNELLY LLANOS, 51, of Chicago, and PEDRO SAAVEDRA-FITZ, 28, of Chicago, served as brokers, supplying smaller distribution quantities of the narcotics to wholesale customers on credit – a practice known as “fronting” – and collected proceeds after the customers sold the narcotics, the charges state. The complaints identify one of the wholesale customers as FERNANDO GOMEZ, 30, of Schiller Park.

 

The complaint describes several drug transactions on the Northwest Side of Chicago. On July 17, 2015, Abrego and Perez distributed a kilogram of heroin to a customer of Saavedra-Fitz, the complaint states. At the time, a kilogram of heroin retailed in the Chicago area for approximately $49,000 to $54,000, the complaint states. On Sept. 29, 2015, Abrego allegedly distributed a kilogram of heroin to Llanos during a meeting in an alley in the Belmont Gardens neighborhood of Chicago. Authorities later seized the heroin after Llanos distributed it to another individual, according to the charges.

 

Abrego, Perez, Alvarado, Gomez and Llanos were arrested Wednesday on charges of drug distribution. U.S. Magistrate Judge Michael T. Mason scheduled detention hearings for July 28, 2017, Aug. 1, 2017, and Aug. 2, 2017.

 

Four defendants were charged in May: RICARDO CASTANEDA, 31, of Peru, Ill.; SANTOS GODINA, 32, of West Brooklyn, Ill.; EUGENE ALEXANDER, 44, of Bensenville; and JENNIFER REPPIN, 33, of Peru, Ill. They are awaiting trial on drug distribution charges.

 

One defendant, CARLOS FUENTES, 40, of Riverside, was charged in an indictment with drug distribution. Fuentes, who remains in federal custody since his arrest in January, has pleaded not guilty and is awaiting trial.

 

Saavedra-Fitz and Moreno are considered fugitives, as is ROLANDO ESTRADA, 41, of Elmwood Park. The three are facing drug distribution charges and are being sought by law enforcement.

 

The investigation was conducted under the umbrella of the OCDETF program, a partnership between federal, state and local law enforcement agencies. The principal mission of OCDETF is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations.

 

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

 

The government has been represented by Assistant U.S. Attorneys Eric Pruitt, Matthew Kutcher, John Mitchell and Patrick Otlewski.

CHICAGO — A Chicago trader was sentenced today to more than five and a half years in federal prison for defrauding clients out of more than $1.7 million by pocketing their money instead of investing it.

RANDALL RYE, the owner of Faster Than Light Trading LLC, promised substantial profits from his proprietary trading program. Rye claimed that he would invest his clients’ money in options and futures contracts using a computer algorithm. In reality, Rye misappropriated the investors’ funds for his own personal use. He made large cash withdrawals and spent heavily on travel expenses to St. Lucia and Bali. Rye also used investor funds to purchase expensive tickets to several events, including $47,000 for five tickets to the 2016 Lollapalooza music festival in Chicago, $110,000 for 14 tickets to the 2016 World Series, and $75,000 for one premium package ticket to the 2016 Masters golf tournament in Augusta, Georgia.

As a result of the scheme, Rye fraudulently misappropriated a total of $1.72 million from approximately 20 investors.

Rye, 26, of Chicago, pleaded guilty earlier this year to one count of wire fraud. U.S. District Judge Ronald A. Guzman imposed the 70-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 Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.

“Randall Rye is a con man,” Assistant U.S. Attorney Sunil Harjani argued in the government’s sentencing memorandum. “His brazen scheme, executed with little regard for his victims, is truly appalling. His victims, many of whom gave him part of their retirement savings, are suffering the consequences of his fraud.”

According to the charges, Rye attempted to conceal the fraud by sending his investors false account statements purporting to show that their funds were invested and profitable. In reality, there was no proprietary algorithmic trading program, and the client funds were not actually maintained at any financial services companies. Rye often spent his clients’ funds soon after they were invested with him.

CHICAGO — A 30-year employee of a McHenry County manufacturing firm stole proprietary information from the company while planning to move to China to begin work for a rival firm, according to an indictment returned in federal court in Chicago.

 

On Sept. 13, 2015, ROBERT O’ROURKE allegedly downloaded electronic data belonging to his employer, a Woodstock-based manufacturer of cast-iron products. At the time, O’Rourke had already accepted a new job with a rival firm in Jiangsu, China, according to the indictment. Two days later he officially resigned from the Woodstock company, the indictment states. The following week O’Rourke packed up the proprietary information and went to O’Hare International Airport in Chicago to board a flight to China, the indictment states. Federal authorities intervened and seized the stolen electronic data, along with stolen paper documents, before O’Rourke traveled to China to begin work for the new firm.

 

The 13-count indictment was returned Wednesday in U.S. District Court in Chicago. It charges O’Rourke, 57, of Lake Geneva, Wisc., with theft of trade secrets. Arraignment is set for July 25, 2017, at 10:15 a.m., before U.S. District Judge Andrea R. Wood in Chicago.

 

The indictment was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.

 

According to the charges, O’Rourke worked for the Woodstock company since 1984, holding the positions of plant metallurgist, quality assurance manager and salesperson. He also helped the company develop international business in, among other places, China, the indictment states. In December 2013, O’Rourke allegedly began discussions with a Chinese firm to take a similar job there. After several months of discussions and negotiations, O’Rourke accepted the position of Vice President at the Chinese company, the indictment states.

 

O’Rourke initially advised the Woodstock company on Aug. 12, 2015, that he intended to resign, according to the indictment. At that time, O’Rourke did not mention that he was negotiating employment with the Chinese firm, and he continued to work for the Woodstock company for another month, the indictment states. During that month he purchased his plane ticket to China and stole the proprietary trade secrets, the charges state.

 

The indictment does not identify the name of the Woodstock company or the Chinese firm.

 

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 the indictment is punishable by a maximum penalty of ten 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 Shoba Pillay.

CHICAGO — Joel R. Levin, Acting United States Attorney for the Northern District of Illinois, today announced the creation of a new unit dedicated to the prosecution of criminal health care fraud violations.

 

The newly created Health Care Fraud Unit will operate within the office’s Criminal Division. The unit will be tasked with prosecuting defendants in all types of health care fraud, from providers who engage in fraudulent billing schemes to doctors who falsify patients’ diagnoses to justify expensive tests or procedures that aren’t medically necessary.

 

“Every year, health care fraud causes millions of dollars in losses to Medicare and private insurers,” said Acting U.S. Attorney Levin. “Health care fraud also often exploits patients through unnecessary or unsafe medical procedures. Health care providers who cheat the system must be held accountable. Our office has successfully prosecuted numerous health care fraud cases in recent years. The new Health Care Fraud Unit will build on that success and bring even greater focus, efficiency and impact to our efforts in this important area.”

 

The unit will include five prosecutors, led by Assistant U.S. Attorney Heather McShain. Assistant U.S. Attorney Stephen Chahn Lee will serve as the unit’s Senior Counsel.

 

The office has a long history of prosecuting significant health care fraud cases, and the new unit is expected to expand on those efforts. Last week the office participated in the largest health care fraud enforcement action in Department of Justice history. The national takedown involved more than 400 defendants, including 15 individuals charged in the Northern District of Illinois.

 

Other significant health care fraud prosecutions include a north suburban chiropractor and his brother and father, each of whom was sentenced to prison in connection with a phony billing scheme that bilked insurance carriers out of more than $10.8 million. DR. VLADIMIR GORDIN JR., VLADIMIR GORDIN SR. and ALEXSANDER GORDIN used their chiropractic clinic, Gordin Medical Center S.C., to falsely bill for medical services that were either not provided or weren’t medically necessary. The Gordins were sentenced to prison terms earlier this year. Vladimir Gordin Jr. was sentenced to seven years; Vladimir Gordin Sr. was sentenced to two and a half years; and Alexsander Gordin was sentenced to two years.

 

The office also recently secured ten criminal convictions as part of a multi-year investigation into Sacred Heart Hospital in Chicago. For more than a decade, Sacred Heart executives conspired to pay kickbacks and bribes to physicians to induce them to refer patients for services that would be reimbursed by Medicare and Medicaid. The fraud scheme earned Sacred Heart millions of dollars from Medicare and Medicaid. The convictions include EDWARD NOVAK, the hospital’s owner and chief executive officer; ROY PAYAWAL, the chief financial officer; CLARENCE NAGELVOORT and ANTHONY J. PUORRO, chief operating officers; DR. VENKATESWARA R. “V.R.” KUCHIPUDI, a physician; as well as four other physicians. Sacred Heart closed in 2013.

 

Fraud in the home health care and hospice industries have also been the subject of prosecutions, and the Health Care Fraud Unit will continue those efforts. The office’s investigation of home health care fraud has resulted in convictions of doctors, nurses, marketers, and executives at multiple companies, including DIKE AJIRI, the former owner of Chicago-based Mobile Doctors; BANIO KOROMA, a physician at Mobile Doctors; and DIANA JOCELYN GUMILA, the former clinical head of Schaumburg-based Doctor at Home. An investigation of PASSAGES HOSPICE in Lisle recently resulted in prison sentences for multiple defendants, including owner SETH GILLMAN, who was sentenced earlier this year to six and a half years in prison; and ANGELA ARMENTA, Passages’ former director of certified nursing assistants, who was sentenced last month to 20 months in prison.

 

The Health Care Fraud Unit will also focus on prosecutions related to the diversion of controlled substances, which is an area of emphasis for the office as it continues to battle the opioid crisis. The office has previously prosecuted significant diversion cases, including procuring the guilty plea of DR. SATHISH NARAYANAPPA BABU, who formerly owned Anik Life Sciences Medical Corp. in southwest suburban Darien. Dr. Babu prescribed controlled substances, including OxyContin and Hydrocodone, to certain patients without having examined them. Dr. Babu was sentenced in 2015 to 18 months in prison.

 

In announcing the new unit, Acting U.S. Attorney Levin acknowledged the cooperation and determination of the office’s investigative partners, including, among others, the Chicago offices of the Federal Bureau of Investigation, U.S. Department of Health and Human Services Office of Inspector General, U.S. Department of Labor’s Office of Inspector General, U.S. Food and Drug Administration, and U.S. Postal Inspection Service.

ROCKFORD — A McHenry County man was sentenced today by U.S. District Judge Frederick J. Kapala on four charges of robbery.

 

SHAWN M. RANK, 48, of Woodstock, was sentenced to 70 months in federal prison, to be followed by three years of supervised release, for the 2016 robberies of the Heartland Bank and Trust Company in Genoa, the Cash Store in Belvidere, the Harvard Savings Bank in Harvard, and the Alpine Bank in Belvidere. Rank was also ordered to pay restitution totaling $6,972 to the banks and the Cash Store.

 

Rank pleaded guilty to the robbery charges on March 10, 2017.

 

According to a written plea agreement, Rank admitted that on Jan. 15, 2016, he walked into the Heartland Bank and Trust Company, 327 W. Main St. in Genoa, pushed a blue zippered bank bag across the counter to a teller and told the teller to fill the bag with $50s and $100s. Rank opened his jacket and showed the teller a gun tucked in his waistband. The teller put $1,250 in the bank bag. Rank took the bag and fled.

 

In his plea agreement, Rank also admitted to robbing the Cash Store, 1479 N. State St. in Belvidere, of $1,232 on April 1, 2016, and to the armed robbery of the Harvard Savings Bank, 58 N. Ayer St. in Harvard, of $2,700 on May 6, 2016. Finally, Rank pleaded guilty and admitted to robbing the Alpine Bank, 600 S. State St. in Belvidere, of $1,790 on June 13, 2016.

 

The sentencing was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois, and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The DeKalb County Sheriff’s Office, and the Harvard, Genoa, and Belvidere Police Departments, assisted in the investigation.

 

The government was represented by Assistant U.S. Attorney Margaret J. Schneider.

CHICAGO — Several Chicago-area medical professionals, including two licensed physicians, are facing federal criminal charges as part of the largest health care fraud enforcement action in Department of Justice history, federal authorities announced today.

 

The national enforcement action taken by the Medicare Fraud Strike Force involved more than 400 defendants charged in 41 federal districts across the country, including 115 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $1.3 billion in false billings. More than 20 state Medicaid Fraud Control Units participated in today’s arrests. In addition, the HHS Centers for Medicare & Medicaid Services (CMS) is suspending payment to 295 providers, including doctors, nurses and pharmacists.

 

The national enforcement action was announced by U.S. Attorney General Jeff Sessions and U.S. Department of Health and Human Services Secretary Tom Price, M.D., along with Acting Assistant U.S. Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division; Acting Federal Bureau of Investigation Director Andrew McCabe; Acting Drug Enforcement Administration Administrator Chuck Rosenberg; Inspector General Daniel Levinson of the HHS Office of Inspector General (OIG); IRS-Criminal Investigations Chief Jon Fort; CMS Administrator Seema Verma; and Deputy Director Kelly P. Mayo of the Defense Criminal Investigative Service (DCIS).

 

Today’s enforcement actions were led and coordinated by the Criminal Division Fraud Section’s Health Care Fraud Unit, in conjunction with its Medicare Fraud Strike Force partners – a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the participation of the DEA, DCIS, and State Medicaid Fraud Control Units.

 

“Too many trusted medical professionals like doctors, nurses, and pharmacists have chosen to violate their oaths and put greed ahead of their patients,” said Attorney General Sessions. “While today is a historic day, the Department's work is not finished. In fact, it is just beginning. We will continue to find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers wherever they are.”

 

Several Chicago-area medical professionals, including two doctors, were charged as part of investigations in the Northern District of Illinois, announced Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the FBI; Gabriel L. Grchan, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; and Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General.

 

“Health care fraud is a serious crime that can have devastating consequences,” said Acting U.S. Attorney Levin. “Our office will continue to vigorously investigate and prosecute those who seek to enrich themselves through fraudulent health care schemes.”

 

“This week, we arrested once trusted doctors, nurses, and other medical professionals who were corrupted by greed and preyed on the vulnerable utilizing them to bill for services or drugs that were unnecessary or never provided,” said FBI Chicago Special Agent-in-Charge Anderson.

 

One of the Illinois cases involved BEATTA KABBANI, a licensed physical therapist, who was charged in a 13-count indictment with health care fraud and aggravated identity theft. Kabbani is the owner of MedCare Medical Group in Glenview. The indictment charges Kabbani with submitting more than $2 million in false claims to Blue Cross Blue Shield of Illinois and United Health Care. The charges state that Kabbani used a physician’s National Provider Identification number to substantiate some of those false claims. Kabbani is scheduled to be arraigned on July 26, 2017, before U.S. District Judge Gary Feinerman. The Kabbani case is being handled by Assistant U.S. Attorneys Heather McShain and Matthew Kutcher.

 

Another Illinois case involved JEFFREY WITEK and STEPHEN HOESLEY, licensed chiropractors who were charged in an 18-count indictment with health care fraud. The charges stem from their alleged participation in a scheme to defraud Blue Cross Blue Shield of Illinois. Witek and Hoesley submitted at least approximately $1.1 million in fraudulent claims to Blue Cross Blue Shield of Illinois that falsely represented that certain health care services were provided to patients, knowing that those services were not actually provided. Witek and Hoesley are scheduled to be arraigned on Aug. 2, 2017, before U.S. District Judge Matthew F. Kennelly. The Witek and Hoesley case is being handled by Special Assistant U.S. Attorney Jared Jodrey.

 

One of the Illinois investigations involved multiple medical professionals. ZOSIMA VICTUELLES, MYLENE MASICLAT, MARIBEL CABRERA, YASEEN ODEH and MOHAMMAD RAZA KHAN were charged in a 28-count indictment with conspiracy to offer and pay, and to solicit and receive, kickbacks and bribes for the referral of Medicare beneficiaries to Sure Care Home Health Corp. The indictment also charges substantive violations of the anti-kickback statute. Victuelles, Masiclat and Cabrera were the owners of Sure Care, a home health agency with offices in Glendale Heights and Rockford. Victuelles and Cabrera are also licensed nurses, while Odeh and Khan are licensed medical doctors. The charges stem from Victuelles, Masiclat, Cabrera and others paying Dr. Odeh, Dr. Khan and others more than $435,000 in kickbacks and bribes for the referral of Medicare beneficiaries to Sure Care. Arraignments in federal court in Chicago have not yet been scheduled. The case is being handled by Assistant U.S. Attorney Matthew Madden.

 

The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged more than 3,500 defendants who collectively have falsely billed the Medicare program for more than $12.5 billion.

 

The public is reminded that an indictment is merely an allegation, and all defendants are presumed innocent until proven guilty.

ROCKFORD — A Chicago man was found guilty of conspiracy to manufacture and distribute marijuana following a four-day jury trial in federal court in Rockford.

YOUSIF Y. PIRA, 64, was found guilty of conspiring to manufacture, possess and distribute 1,000 or more marijuana plants.

The conviction was announced by Joel R. Levin, Acting 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 & 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 the Rockford Police Department Narcotics Unit assisted in the investigation.

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, 53, of Niles, JUSTIN T. PAGLUSCH, 36, of Ingleside, SHLIMON SHIMON, 49, of Chicago, and CASEY WILLIAMS, 30, and DESTINY FREEMAN, 23, both of Great Falls, Mont., 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, among other things, 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.

Conspiring to manufacture 1,000 or more marijuana plants carries a maximum sentence of life imprisonment, and a statutory mandatory minimum sentence ten years’ imprisonment. The charge also carries a term of supervised release following imprisonment of at least five years and up to life, and a maximum fine of $10 million.

Clement pleaded guilty and was sentenced to ten years’ imprisonment on June 3, 2016. Pagluach pleaded guilty and was sentenced to ten years’ imprisonment on June 23, 2016. Bacus, Williams and Freeman have pleaded guilty and are awaiting sentencing. An arrest warrant was issued for Shimon, who is still at large.

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

CHICAGO — A high-ranking official in a Chicago-area labor union threatened a local business with economic loss if it didn’t pay him quarterly cash payments of $25,000, according to a federal indictment returned today.

 

JOHN T. COLI SR. used the threat of economic harm to extort quarterly payments of $25,000 from a local company, according to the indictment. The attempted extortion occurred from approximately October 2016 to April 2017, while Coli served as President of Teamsters Joint Council 25, a labor organization that represents more than 100,000 workers in the Chicago area and northwest Indiana. The organization has approximately 26 local union affiliates, including Teamsters Local Union 727, where Coli also served as Secretary-Treasurer during the time period referenced in the indictment.

 

The indictment was returned today in U.S. District Court in Chicago. It charges Coli, 57, of Chicago, with one count of attempted extortion and five counts of demanding and accepting a prohibited payment as a union official. The indictment seeks forfeiture from Coli of at least $100,000.

 

Arraignment in federal court in Chicago will be held at a future time to be set by the Court.

 

The indictment was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor’s Office of Inspector General in Chicago.

 

According to the charges, Coli accepted a $25,000 cash payment on July 7, 2016; two cash payments totaling $25,000 on Oct. 4, 2016, and Nov. 29, 2016; and $25,000 cash payments on Dec. 22, 2016, and April 4, 2017. The indictment does not identify the individual who made the payments nor the company Coli allegedly extorted.

 

Coli previously served as International Vice President of the Central Region of the International Brotherhood of Teamsters, 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.

 

Attempted extortion is punishable by a maximum penalty of 20 years in prison. Each count of demanding and accepting a prohibited payment is punishable by up to five years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

 

The government is represented by Assistant U.S. Attorneys Amarjeet S. Bhachu and Abigail Peluso.

CHICAGO — A former benefits authorizer at the Social Security Administration in Chicago was sentenced today to five years in federal prison for authorizing more than $1.9 million in fraudulent benefits.

 

JAYSON CRUZ, 41, who worked at the SSA’s Great Lakes Program Service Center in Chicago, authorized the fraudulent payments from 2009 to 2013 to more than 150 recipients. In exchange, the recipients kicked back approximately half of the fraudulent payments to Cruz or to others whom Cruz had recruited into the scheme. As a result of his fraud scheme, Cruz caused the SSA to pay approximately $1,908,290 in fraudulent benefits.

 

Cruz used the proceeds of the fraud to, among other things, purchase his home in the South Chicago neighborhood of Chicago, shop at Gucci, Bloomingdale’s and Saks Fifth Avenue, and travel to the National Basketball Association’s All-Star Game and the Black Entertainment Television awards show.

 

Cruz pleaded guilty last year to one count of wire fraud. U.S. District Judge Virginia M. Kendall 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 Tracey Thanos, Special Agent-in-Charge of the Chicago Social Security Administration’s Office of Inspector General.

 

“Defendant abused a position of public trust,” Special Assistant U.S. Attorney Daniel W. Glad argued in the government’s sentencing memorandum. “The 165 million people who pay into the system expect that their hard-earned tax dollars are appropriately allocated.”

 

“This investigation was one of the most egregious employee cases we have ever investigated,” said Special Agent-in-Charge Thanos. “This type of dishonesty and deceit from government employees cannot be tolerated. I would like to thank the U.S. Attorney’s Office for their efforts in prosecuting this case.”

 

According to the charges, Cruz and his co-schemers recruited recipients of Old-Age, Survivors, and Disability Insurance Benefits to receive additional payments on top of what they were legitimately owed. Cruz authorized the fraudulent payments by entering false codes into the SSA’s electronic system. Cruz made sure that each of the fraudulent payments was for slightly less than $6,000 in order to avoid triggering the need for his supervisor’s approval.

 

Including Cruz, all five defendants charged in the federal investigation have been convicted.

CHICAGO — A federal grand jury in Chicago has indicted two former executives of a Florida technology company for allegedly conspiring to obstruct an investigation by the U.S. Securities and Exchange Commission.

CHRISTOPHER YOUNG, the former President of Tampa-based M2 Interactive Group Inc., and JOSHUA CARLUCCI, M2 Interactive’s former Chief Executive Officer, are charged with conspiracy to obstruct, influence, and impede an official proceeding. The pair allegedly conspired with executives from Schaumburg-based Quadrant 4 System Corp. to obstruct an SEC investigation into Quadrant 4’s 2013 purchase of M2 Interactive.

The indictment was returned Thursday in federal court in Chicago. In addition to the conspiracy count, Young, 35, of Norwich, N.Y., and Carlucci, 39, of Tampa, Fla., are also charged with attempting to obstruct, influence, and impede an official proceeding. Carlucci also faces a charge of making false statements to the Federal Bureau of Investigation. The Court will schedule arraignments for Young and Carlucci at a later date.

New and expanded criminal charges were also filed Thursday against the two Quadrant 4 executives, NANDU THONDAVADI and DHRU DESAI. A criminal information filed in federal court in Chicago charged them with wire fraud. Arraignments for Thondavadi, 63, of North Barrington, and Desai, 55, of Barrington, have been scheduled for July 6, 2017, at 10:00 a.m., before U.S. District Judge Charles Norgle.

The charges were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago office of the FBI. The Chicago office of the SEC provided valuable assistance.

M2 Interactive was a technology company that developed applications for mobile devices and conducted business under the name Momentum Mobile. Quadrant 4 provides software products, platforms and consulting services to customers in the healthcare and education sectors. As a public company, Quadrant 4 is required to provide to the SEC a detailed report of its financial condition.

In 2015 the SEC launched an investigation of Quadrant 4 based on indications that the firm may have violated federal securities laws. The FBI initiated an investigation of Quadrant 4 in 2016. As set forth in the information against Thondavadi and Desai, the investigation revealed that Thondavadi and Desai engaged in a wide-ranging scheme to defraud Quadrant 4’s shareholders by misappropriating more than $3 million from the company, fraudulently inflating Quadrant 4’s revenue, and regularly concealing Quadrant 4’s liabilities. The information charges that Thondavadi and Desai certified false SEC reports, including Quadrant 4’s 2014 Form 10-K, in which the defendants fraudulently inflated Quadrant 4’s revenue by more than $4.2 million – nearly 10% of Quadrant 4’s reported income that year.

The fraud scheme also involved numerous misrepresentations related to Quadrant 4’s acquisitions, including misrepresentations about the terms of Quadrant 4’s purchase of Momentum Mobile in 2013. Quadrant 4 purchased Momentum Mobile for $100,000 in cash and 250,000 shares of Quadrant 4 stock, plus assumption of approximately $165,000 in Momentum Mobile liabilities, according to the indictment against Young and Carlucci. Federal authorities discovered that Thondavadi and Desai later concealed the true terms of the deal from Quadrant 4’s auditor and its shareholders, according to the charges. The pair furnished the auditor with a fictitious agreement that Thondavadi created, the charges state. The bogus document inflated the purchase price and failed to mention the liabilities Quadrant 4 assumed, according to the charges.

As set forth in the charges, the investigation further revealed that Thondavadi and Desai attempted to obstruct the SEC’s investigation of Quadrant 4 as it related to the Momentum Mobile acquisition. In July 2016 SEC attorneys sought to question Young and Carlucci, who were unaware of the fictitious acquisition agreement that Thondavadi created. Carlucci notified Thondavadi and Desai of the SEC’s inquiry, and the Quadrant 4 executives responded by striking a deal with Young and Carlucci to pay them cash in exchange for their agreement to send Thondavadi an e-mail falsely stating that Momentum Mobile had previously authorized the terms of the fictitious agreement, according to the charges. The defendants attempted to disguise the payments – $102,900 to Young and $60,000 to Carlucci – as “consulting” fees, the charges state.

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

The conspiracy, obstruction and wire fraud charges are each punishable by up to 20 years in prison, while making false statements to the FBI is punishable by up to five years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

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

ROCKFORD — A Rockford man was sentenced today by U.S. District Judge Frederick J. Kapala to 13 years in federal prison for bank robbery, robbery affecting interstate commerce, and a related firearm charge.

 

DAVID J. SANDERS, 34, was sentenced to 96 months for the robbery of BMO Harris Bank, 1480 South Alpine Rd., in Rockford, on May 31, 2016, and the robbery of Rockford Coin and Stamps, 4402 Center Terrace, in Rockford, on June 11, 2016, to be served concurrently. In addition, the Court sentenced Sanders to serve a consecutive term of 60 months’ imprisonment for using and carrying a firearm in furtherance of the robbery on June 11, 2016. After serving his sentence in federal prison, Sanders will be placed on three years of supervised release.

 

Sanders pleaded guilty to the charges on March 1, 2017. According to the written plea agreement, on May 31, 2016, Sanders attempted to rob a different BMO Harris Bank branch, located at 2510 South Alpine Rd. in Rockford. Sanders approached the branch manager and pulled a note out of his pocket that stated he had a gun and demanded money. However, when a bank employee came out of a door into the lobby, Sanders took the note and walked out.

 

A short time later, Sanders entered the BMO Harris Bank at 1480 South Alpine, approached the teller counter and was greeted by the bank manager. Sanders handed the bank manager a note that stated, “I have a gun give me 1000.” The bank manager said she could not give Sanders money, and when she attempted to keep the note, Sanders took it away from the manager and said, “I want $1,000.” The manager opened the teller drawer and gave Sanders $2,260. Sanders then left the bank.

 

Sanders further admitted in the plea agreement that on June 11, 2016, he entered Rockford Coin and Stamps, 4402 Center Terr., in Rockford. Sanders admitted he walked behind the display counter and obtained a Remington pistol-grip shotgun with five live shells attached to the side of it. Sanders admitted that while holding the shotgun he demanded money. An employee gave Sanders approximately $500. Sanders then fled with the money and the shotgun.

 

Sanders also stipulated and admitted in the plea agreement to robbing PNC Bank, 4615 East State St., in Rockford, of approximately $3,010, on June 14, 2016.

 

As part of his sentence, Sanders was also ordered to pay restitution of $2,260 to BMO Harris Bank, $500 to Rockford Coin and Stamps, and $3,010 to PNC Bank.

 

The sentencing was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Dan O’Shea, Chief of the Rockford Police Department. The investigation was conducted under the auspices of the FBI Safe Streets Task Force, which includes representatives from the FBI, ATF, Loves Park Police Department, Winnebago County Sheriff’s Department, and Rockford Police Department.

 

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

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

 

JUSTIN T. PAGLUSCH, 35, of Ingleside, was sentenced to ten years in federal prison, to be followed by five years of supervised release.

 

On Oct. 6, 2015, a federal grand jury in Rockford charged Paglusch and six other individuals with conspiring to manufacture, possess and distribute 1,000 or more marijuana plants. The indictment alleged that between Jan. 2, 2013, and Jan. 6, 2015, the defendants conspired to illegally grow and store marijuana in a warehouse at 1916 11th Street in Rockford. The warehouse was destroyed by fire on Jan. 6, 2015.

 

Paglusch pleaded guilty to the charge on March 3, 2017. He stated in a plea agreement that in November 2014, Paglusch’s cousin, Jeremiah N. Clement, 39, formerly of Des Plaines, asked Paglusch to work with others in a marijuana growing operation at the warehouse. Paglusch agreed, and during the time of the conspiracy he lived at the warehouse. When Paglusch arrived at the warehouse in November 2014, over 1,000 marijuana plants growing on the fourth floor in the warehouse were almost ready to be harvested. There was also a smaller room on the fourth floor of the warehouse that housed the baby or "clone" marijuana plants.

 

As stated in the plea agreement, Paglusch and Clement, along with three other co-defendants, started harvesting the crop of finished marijuana plants in December 2014. The harvested marijuana was weighed and packaged into one pound amounts and vacuum sealed. The processed marijuana was stored in a vault at the warehouse, which had a combination lock. Paglusch admitted that during the period of the conspiracy, he was aware that Clement kept a .357 Ruger revolver at the warehouse.

 

The sentencing was announced by Joel R. Levin, Acting 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 & 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 the Rockford Police Department Narcotics Unit assisted in the investigation.

 

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

CHICAGO — A Chicago businessman has been arraigned on federal fraud charges for his alleged role in a scheme to bilk elderly homeowners out of millions of dollars.

MARK STEVEN DIAMOND, a mortgage loan originator with offices in Chicago and Calumet City, engaged in a home repair and loan fraud scheme that targeted elderly homeowners and lenders, according to the indictment. Diamond fraudulently caused lenders to make reverse-mortgage loans to homeowners who either did not sign up for the loans or did so unwittingly after Diamond intentionally misrepresented the terms, the indictment states. Diamond fraudulently pocketed the loan checks by causing title company representatives, including an unindicted co-schemer, to provide the checks to Diamond rather than the homeowners. The indictment seeks forfeiture of $7 million from Diamond.

Diamond, 60, of Chicago, pleaded not guilty at his arraignment Wednesday to seven counts of wire fraud. U.S. District Judge Robert M. Dow Jr. scheduled a status hearing for Aug. 28, 2017, at 9:00 a.m.

The indictment was announced by Joel R. Levin, Acting 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 Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.

According to the indictment, Diamond targeted his victims, who ranged in age from 62 to 97, based on the equity in their homes and their relative lack of financial sophistication. If a victim’s relative questioned Diamond on the need for a reverse mortgage, Diamond would schedule a time to visit the victim’s home when he knew the relative would not be there, the indictment states.

Also charged in the indictment is CYNTHIA WALLACE, 47, of Chicago. Wallace solicited homeowners to have home repairs performed by Diamond, knowing that Diamond would not actually perform the work, the indictment states. Wallace, who used the aliases “Shree Box,” “Regina Johnson,” and “Sherry Rice,” also posed as a representative of the U.S. Department of Housing and Urban Development to fraudulently obtain money from victims, the indictment states.

Wallace has pleaded not guilty to nine counts of wire fraud and two counts of falsely pretending to be an employee of the United States.

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

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

CHICAGO — A Chicago man was arrested today on a federal sex trafficking charge for allegedly arranging a commercial sex encounter for a 16-year-old girl that ended in the child’s murder in a south suburban garage on Christmas Eve.

JOSEPH HAZLEY, 33, posted the girl’s information in commercial sex advertisements on Backpage.com, and arranged multiple meetings in December 2016 for her to engage in prostitution, according to a criminal complaint filed in U.S. District Court in Chicago. Hazley drove the girl to several meetings in the Chicago area, including an encounter in the early morning hours of Christmas Eve in a garage in south suburban Markham, the complaint states. During this encounter, the customer allegedly murdered the girl.

Hazley was arrested this morning at his home in Chicago. The complaint charges him with one count of sex trafficking. The charge is punishable by a minimum sentence of ten years in prison and a maximum of life in prison.

Hazley made an initial court appearance this morning before U.S. Magistrate Judge Daniel G. Martin in Chicago. Judge Martin ordered Hazley to remain in federal custody until a detention hearing on June 23, 2017, at 10:30 a.m.

The complaint was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation; Cook County Sheriff Thomas J. Dart; and Chicago Police Superintendent Eddie T. Johnson. Substantial assistance was provided by the Markham Police Department and the Cook County State’s Attorney’s Office.

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

According to the complaint, the customer responded to Hazley’s Backpage.com posting to arrange the Christmas Eve meeting with the minor. Hazley drove the girl to Markham and waited in his car a few yards from the garage while she met with the customer, the complaint states. During the encounter in the garage, the customer allegedly murdered the girl, the complaint states.

The customer was subsequently arrested by the Chicago Police Department and charged with murder in Cook County Criminal Court.

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, 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, 7 days a week.

CHICAGO — Six suburban men have been indicted on fraud charges for their alleged roles in a “card cracking” scheme that targeted members of the U.S. military and defrauded a federally-insured savings bank out of more than $830,000.

The defendants deposited counterfeit checks into accounts at USAA Federal Savings Bank belonging to military members and others who had been recruited to provide their account information, according to the 53-count indictment. After depositing the checks, the defendants withdrew funds from the accounts which the bank had advanced before it learned the checks were counterfeit, the indictment states. The scheme spanned more than two years and defrauded the bank out of more than $830,000, the indictment states.

The indictment was returned June 15, 2017, in federal court in Chicago. Charged with bank fraud are KIERRE PERKINS, 22, of South Holland; STEVEN VANCE, 22, of Calumet City; IAN MYVETT, 23, of South Holland; LAMONTE POWELL, 24, of Calumet City; TOREY MARTIN, 24, of Calumet City; and JERMEL SANDERS, 29, of Matteson. Arraignments in federal court in Chicago have not yet been scheduled.

The indictment was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and John A. Koleno, Special Agent-in-Charge of the Chicago office of the U.S. Secret Service.

According to the charges, the defendants used postings on social media sites, such as Instagram, Twitter and Facebook, among other means, to recruit USAA Federal Savings Bank customers to provide their debit cards and PINs. The postings, which featured individuals in camouflage military uniforms holding large amounts of cash, advertised opportunities to earn money in a short amount of time, according to criminal complaints and affidavits previously filed in the case. When a USAA Federal Savings Bank customer responded to a posting, the schemers would falsely reply that the customer could receive money if they provided their account information, including usernames, passwords, PINs and answers to security questions, according to the charges. In some instances the bank customers provided their actual debit cards to the defendants as well, the charges state.

After obtaining the account information, some of the defendants deposited counterfeit checks into the accounts, the charges state. They would then withdraw the portion of the purported funds that the bank had credited shortly after the deposit, leaving the bank to bear the loss, the charges state.

Some of the defendants created the counterfeit checks and used account and routing information from other, unsuspecting bank account holders, the charges state. Others posted pictures and videos on their social media accounts containing bank receipts from victim bank account holders, the charges state.

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.

Bank fraud is punishable by up to 30 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Brian S. Wallach and Special Assistant U.S. Attorney Jared C. Jodrey.

 

ROCKFORD — A Dolton, Illinois man was indicted Tuesday, June 13, 2017, by a federal grand jury in Rockford on gun charges. KELVIN CULPS, 20, of Dolton, Ill., also known as “Forty,” was charged with stealing twelve firearms from a licensed firearms dealer in Loves Park, Ill., on May 8, 2017, illegally possessing stolen firearms, and illegally possessing those firearms as a convicted felon. Culps, who has been in federal custody since his arrest on May 30, 2017, was arraigned before U.S. Magistrate Iain D. Johnston today and has pleaded not guilty. Culps remains in federal custody awaiting trial.

 

Each count of stealing firearms from a licensed firearms dealer, illegally possessing stolen firearms, and illegally possessing firearms as a convicted felon carries a maximum potential penalty of up to 10 years in prison, to be followed by up to 3 years of supervised release, and a fine of up to $250,000. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines, and the defendant shall be required to pay restitution to any victims of the alleged theft of the firearms.

 

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 Joel R. Levin, Acting 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; and Chuck Lynde, Chief of the Loves Park Police Department.

 

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

 

Indictment.pdf