Northern District of Illinois

CHICAGO — A former sergeant in the Chicago Police Department was sentenced today to six months in federal prison for taking cash payments from a liquor store clerk in exchange for disclosing government information.

RAY M. RAMIREZ served as a sergeant in the 12th Police District on the city’s Near West Side.  Ramirez admitted in a plea agreement that he obtained information from law enforcement databases and passed it to the store clerk in exchange for cash payments of $150 to $200.  The information included a criminal background check on a prospective store employee, a vehicle registration check, and a review of police incidents occurring in and around the store.

Ramirez also admitted that he shook down the clerk and other store employees for cash payments ranging from $70 to $200.  Ramirez often wore his police uniform and was on duty when he demanded the payments.

Ramirez, 53, of Chicago, pleaded guilty last year to one misdemeanor count of exceeding his authorized use a police department computer.  U.S. District Judge Ronald A. Guzman imposed the six-month sentence in federal court in Chicago.

The sentencing was announced by Zachary T. Fardon, 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 government is represented by Assistant U.S. Attorney Megan Cunniff Church.

CHICAGO — A convicted felon who sold guns out of his garage in the Auburn Gresham neighborhood of Chicago has been found guilty of illegally possessing firearms.

On July 23, 2014, JAMEL DAVIS participated in a gun transaction involving two .38-caliber revolvers in the garage of his home in the 7600 block of South Seeley Avenue in Chicago.  Davis was previously convicted of a felony and was not legally authorized to possess the firearms.

The case against Davis arose during the course of a larger federal investigation that has removed more than 100 guns from the streets of Chicago.  The probe involved controlled firearm sales to cooperating individuals.

The jury on Wednesday convicted Davis, 28, of illegal possession of a firearm by a felon.  The conviction carries a maximum sentence of ten years in prison.  U.S. District Judge Sara L. Ellis scheduled a sentencing hearing for March 14, 2017.

The verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and George Lauder, Acting Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.

Evidence at trial revealed that Davis provided one of the firearms to an individual in the garage of Davis’ home.  Unbeknownst to Davis, the individual was cooperating with law enforcement and had surreptitiously recorded the transaction.

The government is represented by Assistant U.S. Attorneys Nicole Kim and Carol Bell.

CHICAGO — The CEO of a Florida-based financial firm has pleaded guilty to fraud charges in connection with the sale of $179 million in sham loans to a Milwaukee investment company.

NIKESH A. PATEL was the Chief Executive Officer of First Farmers Financial LLC when the company sold three fabricated loans totaling approximately $20 million to a Tennessee-based investment firm, and 26 fabricated loans to a Milwaukee investment firm for $179 million.  Between November 2012 and September 2014, Patel created and assisted in creating false documents sent to the investment firms in support of these loans.  Patel submitted documents to the Milwaukee investment firm that falsely created the appearance that his company had lent money to borrowers in Florida and Georgia – in amounts ranging from $2.5 million to $10 million – and that a portion of the loans were guaranteed by the federal government under a program administered by the U.S. Department of Agriculture.  All 26 loans were completely fabricated with no actual borrower, no pre-existing loan, and no government guarantee.

Patel, 33, of Windermere, Fla., pleaded guilty on Tuesday to five counts of wire fraud.  The conviction carries a maximum sentence of 100 years in prison and a fine of $1,250,000.  U.S. District Judge Charles P. Kocoras set sentencing for April 6, 2017, at 9:45 a.m.

The guilty plea was announced by Zachary T. Fardon, 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 Jeffrey A. Monhart, Regional Director of the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration.

First Farmers’ president, TIMOTHY G. FISHER, was also convicted in connection with the fraud.  Fisher, of Pasadena, Calif., pleaded guilty last month to one count of money laundering.  Fisher faces up to ten years in prison when he is sentenced by Judge Kocoras on May 4, 2017, at 9:45 a.m.

Evidence in the case revealed that Patel created fictitious business names and false USDA loan identification numbers, and forged the signatures of USDA employees and purported borrowers.  Patel also assisted in creating false financial documents, including what purported to be a certified audit by a fictitious accountant that he submitted to the investment firm to obtain the funds. 

Based upon the false statements, the Milwaukee firm’s clients, which included community banks, retirement plans, municipalities and subdivisions in Illinois and elsewhere, suffered a loss of $179 million.  Although a portion of the funds were used to make interest payments to the investors, the bulk of the funds were used to pay existing debts, acquire assets, pay personal expenses, invest in other unrelated businesses, and repurchase loans that Patel had previously sold to the Tennessee investment advisor.

The government is represented by Assistant U.S. Attorneys Patrick King and Rick Young.

ROCKFORD — A Solon Mills man was indicted today by a federal grand jury on charges of child pornography. 

WAYNE GIBBONS, 66, was charged with two counts of transporting child pornography via the Internet in June 2013. 

Each count of transporting child pornography carries a mandatory minimum sentence of five years in prison and a maximum of 20 years, as well as 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 indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.

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

ROCKFORD — A Rockford man pleaded guilty today before U.S. District Court Judge Frederick J. Kapala to robbery and a gun charge. 

JAMES T. WOODFORD, 25, of Rockford, pleaded guilty to the July 30, 2015, robbery of the Phillips 66 gas station at 4402 Linden Rd. in Rockford, and to possessing a firearm in furtherance of the robbery. 

Also charged with the robbery was co-defendant DAKOTA DIEHL, 21, formerly of Janesville, Wisc.

According to Woodford’s written plea agreement, at approximately 1:13 a.m. on July 30, 2015, Woodford and Diehl ran into the Phillips 66 gas station.  Woodford, who was wielding a 12-gauge shotgun, jumped over the cashier’s counter next to the gas station employee and demanded that the employee give him money from the store’s two cash registers.  Diehl went behind the counter and stole various tobacco products from the store, while Woodford held the firearm next to the employee and forced the employee to empty the cash registers.  Taking approximately $209 and various tobacco products, Woodford and Diehl fled from the Phillips 66 gas station and ran to a getaway vehicle parked nearby.  

Woodford faces a maximum sentence of 20 years’ imprisonment, followed by a term of supervised release of up to three years, for the robbery, and a mandatory minimum sentence of five years and a maximum sentence of life imprisonment for the firearms offense.  The sentence imposed for the firearms offense is required to be consecutive to any other sentence imposed.  Each charge also carries a potential fine of up to $250,000.  Sentencing for Woodford is set for March 6, 2017, at 2:30 p.m.

Diehl previously pleaded guilty to robbing the Phillips 66 gas station with Woodford and to possessing a firearm in furtherance of that robbery.  Diehl also pleaded guilty to robbing a Mobil gas station at 6536 11th St. in New Milford, on two occasions in July 2015.

The guilty plea was announced by Zachary T. Fardon, 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; Gary Caruana, Winnebago County Sheriff; and Daniel O’Shea, Chief of the Rockford Police Department.

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

CHICAGO — A high-ranking associate of two Mexican drug trafficking organizations has been sentenced to 27 years in U.S. prison for his role in transporting large amounts of cocaine to the Chicago area.

MANUEL FERNANDEZ-VALENCIA, also known as Manuel Fernandez-Navarro, used the shared resources of the Sinaloa Cartel and the Beltran-Leyva Organization to smuggle large quantities of narcotics into the United States from Mexico.  The cartels covertly transported the drugs via private aircraft, submarines, container ships, fishing vessels, buses, tractor-trailers and automobiles.  The narcotics were initially stashed in safe houses in southern California before being shipped to various parts of the United States, including the Chicago area.  The drug trade was protected by guards armed with handguns and assault rifles.

Fernandez-Valencia, 48, pleaded guilty last year to one count of conspiracy to possess with the intent to distribute controlled substances.  U.S. District Judge Ronald A. Guzman on Wednesday imposed the 324-month sentence in federal court in Chicago.

“The defendant was operating at the very highest levels of large and violent international drug trafficking organizations,” Assistant U.S. Attorney Erika Csicsila argued in the government’s sentencing memorandum.  “The damage that those drugs, and the violence resulting from the drug trade, have caused to communities in Chicago and elsewhere is immeasurable.”

Fernandez-Valencia’s sentence was announced by Zachary T. Fardon, 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; James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Chicago Police Superintendent Eddie Johnson.

The U.S. Attorney’s Office in Chicago has worked closely with federal and local law enforcement agencies to target senior leadership of the Sinaloa Cartel and the Beltran-Leyva Organization.  Fernandez-Valencia is one of more than 20 alleged members of the cartels to be indicted in federal court in Chicago, including the Sinaloa Cartel’s leader, JOAQUIN “CHAPO” GUZMAN, and the former head of the Beltran-Leyva Organization, the late ARTURO BELTRAN-LEYVA.  The Chicago-based investigations have resulted in seizures of approximately $30.8 million, approximately eleven tons of cocaine, 265 kilograms of methamphetamine and 78 kilograms of heroin. 

Fernandez-Valencia has been in custody since his arrest in his native Mexico in 2010.  In his plea declaration, he admitted conspiring with twin brothers from Chicago to distribute cocaine in the fall of 2008.  The twins, PEDRO FLORES and MARGARITO FLORES, operated a Chicago-based wholesale distribution network for both the Sinaloa Cartel and the Beltran-Leyva Organization.  The cocaine was purchased in South America and delivered to Fernandez-Valencia in Mexicali, a city in northwest Mexico, before being smuggled into the U.S., according to his plea declaration.  In three separate raids in November 2008 federal agents seized from Fernandez-Valencia more than a ton of cocaine and more than 93 kilograms of methamphetamine.

The Flores brothers pleaded guilty to federal drug charges in 2012 and were each sentenced to 14 years in prison. 

The government is represented by Ms. Csicsila and Assistant U.S. Attorneys Michael Ferrara, Kathryn Malizia, Georgia Alexakis, Sean Franzblau, and James Durkin.

ROCKFORD — A former Rockford physician was sentenced today by U.S. District Judge Frederick J. Kapala for making false statements in a bankruptcy case. 

LYNN Y. ZOIOPOULOS, also known as Lynn Shelton-Zoiopoulos, 60, now of Chicago, was sentenced to 30 months in federal prison, to be followed by six months of supervised release, and was also ordered to pay restitution of $858,765.68.  Zoiopoulos pleaded guilty to the charge on Feb. 8, 2016. 

According to the written plea agreement, Zoiopoulos filed a Chapter Seven Bankruptcy Petition on Aug. 11, 2009, signing a declaration under penalty of perjury that the schedules she filed in the bankruptcy case were true and correct to the best of her knowledge, information, and belief.  However, as Zoiopoulos admitted in the plea agreement, she had an interest in the estate of her deceased grandmother that she had intentionally concealed in order to deceive the bankruptcy trustee.

In the plea agreement, Zoiopoulos also admitted to defrauding her grandmother’s estate.  According to the plea agreement, Zoiopoulos was appointed Executor of her deceased grandmother’s estate in 2001.  As Executor, Zoiopoulos opened a bank account for the estate with the balance reaching $855,178 in May 2006.  In October 2008, Zoiopoulos used $550,000 of the estate’s money in that account to purchase an annuity contract.  She later embezzled all of the funds in the annuity.  Between June 2008 and November 2012, with the intent to deceive and defraud the estate, Zoiopoulos embezzled assets of the estate by converting them to her own use, knowing she had a fiduciary duty not to use the assets of the estate for her personal benefit.  Zoiopoulos further admitted she tried to conceal her embezzlements by not filing the required inventory, accounting, tax returns, and status reports for the estate.

Zoiopoulos also admitted she intended to conceal her embezzlements by sending $35,000 to her sister for the purpose of lulling her sister into believing the estate was being properly administered.  Along with the payment, Zoiopoulos sent a letter indicating she had invested the rest of the estate money.  Zoiopoulos admitted in the plea agreement that she had not reinvested the money, but had embezzled it, and had sent the letter to her sister for the purpose of preventing her sister from making further inquiries into the status of the estate.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.  

Zoiopoulos must surrender to the authorities on Jan. 27, 2017.

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

CHICAGO — The chief executive of a publicly-traded consulting firm has been charged in federal court with fraudulently misrepresenting the company’s financial condition and lying to regulators.

NANDU THONDAVADI, the CEO of Schaumburg-based Quadrant 4 System Corp., intentionally misrepresented the firm’s cash flow and concealed its liabilities in filings with the U.S. Securities and Exchange Commission, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  Thondavadi certified filings that misrepresented and concealed from the company’s auditors and shareholders the terms of certain acquisitions and the amount of a liability stemming from a lawsuit, the complaint states.  The misrepresentations and concealments were intended to artificially inflate the company’s share price, according to the complaint.

The complaint charges Thondavadi and Quadrant 4’s chief financial officer, DHRU DESAI, with one count of wire fraud and one count of willfully certifying false financial reports.  Thondavadi faces an additional charge of making false statements to the SEC.

Thondavadi, 62, of North Barrington, and Desai, 55, of Barrington, were arrested this morning.  They are scheduled to make initial court appearances today at 11:30 a.m. before U.S. Magistrate Judge Michael T. Mason.

Also this morning, federal authorities executed a search warrant at Quadrant 4’s corporate headquarters in the 1500 block of East Woodfield Road in Schaumburg.

The complaint and arrests were announced by Zachary T. Fardon, 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 SEC assisted in the investigation.

Quadrant 4 has offices in seven U.S. states as well as India.  It provides software products, platforms and consulting services to customers in the healthcare and education sectors.  As a publicly traded company, Quadrant 4 is required to provide to the SEC on a quarterly and annual basis a detailed report of its financial condition.

Federal authorities launched an investigation of the company earlier this year based on indications that the firm’s recent annual reports to the SEC contained false information, the complaint states.  The investigation revealed that Thondavadi and Desai certified the reports even though they knew the documents did not fairly present the true financial condition of the company, according to the complaint.  Thondavadi then lied under oath when questioned by the SEC in May about some of the falsehoods, the complaint states.

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

Wire fraud and willfully certifying false financial reports are each punishable by up to 20 years in prison, while making false statements to the SEC 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 has been indicted by a federal grand jury on child pornography charges. 

NATHAN R. TAUCK, 25, was charged Thursday with one count of enticing and coercing a minor victim to engage in sexually explicit conduct that exhibited the minor’s genitals and pubic area for the purpose of producing a visual depiction of the sexually explicit conduct; and four counts of transporting child pornography via the internet. 

The indictment was announced by Zachary T. Fardon, 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 charge of enticing a minor victim to engage in sexually explicit conduct carries a mandatory minimum sentence of 15 years in prison and a maximum of 30 years, and a $250,000 maximum fine; each count of transporting child pornography carries a mandatory minimum sentence of five years in prison and a maximum of 20 years, as well as $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 government is represented by Assistant U.S. Attorney Michael D. Love.

WASHINGTON – The Justice Department filed a civil lawsuit today against the village of Tinley Park, alleging that the southwest suburb violated the Fair Housing Act when it refused to approve a low-income housing development in response to race-based community opposition.

The suit alleges that in 2015, the Buckeye Community Hope Foundation sought to build a 47-unit apartment complex for low-income individuals just outside of Tinley Park’s downtown.  The project would be financed through Low Income Housing Tax Credits administered by the Illinois Housing and Development Authority.  The suit alleges that Tinley Park discriminated against prospective tenants of the proposed development when it refused to approve the project despite the Tinley Park Planning Department’s finding that the project was in “precise conformance” with the applicable building requirements.  Under Tinley Park’s zoning ordinances, Tinley Park’s Plan Commission should have approved the project and allowed construction to begin.  Instead, the lawsuit alleges that in response to vocal and, at times, race-based community opposition, Tinley Park trustees requested the Plan Commission table consideration of the project.  The Plan Commission did so, stalling the project indefinitely.      

“Our office is committed to fighting unlawful discrimination wherever it occurs, including in fair housing,” said United States Attorney Zachary T. Fardon of the Northern District of Illinois.  “Where appropriate, we will pursue local governments that try to reduce affordable housing opportunities for discriminatory purposes.”

“The Fair Housing Act requires that cities make housing-related zoning and land use decisions based on the merits – not on race,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department's Civil Rights Division.  “When discrimination interferes with the housing and zoning approval process, entire communities suffer.”

The lawsuit was filed in the U.S. District Court for the Northern District of Illinois.  The suit seeks a court order requiring Tinley Park to approve the development and to take other action to ensure compliance with the Fair Housing Act.  It also seeks monetary damages for persons harmed by Tinley Park’s actions as well as a civil penalty.  A separate suit brought by Buckeye against Tinley Park is also pending in the Northern District of Illinois.

The lawsuit is an allegation of unlawful conduct.  The allegations must still be proven in federal court. 

The Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status and disability.  More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.  Individuals who believe that they may have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, email the Justice Department at fairhousing@usdoj.gov or contact HUD at 1-800-669-9777.

The Justice Department filed a civil lawsuit today against the village of Tinley Park, Illinois, alleging that the suburb of Chicago violated the Fair Housing Act when it refused to approve a low-income housing development in response to race-based community opposition.

The suit alleges that in 2015, the Buckeye Community Hope Foundation sought to build a 47-unit apartment complex for low-income individuals just outside of Tinley Park’s downtown.  The project would be financed through Low Income Housing Tax Credits administered by the Illinois Housing and Development Authority.  The suit alleges that Tinley Park discriminated against prospective tenants of the proposed development when it refused to approve the project despite the Tinley Park Planning Department’s finding that the project was in “precise conformance” with the applicable building requirements.  Under Tinley Park’s zoning ordinances, Tinley Park’s Plan Commission should have approved the project and allowed construction to begin.  Instead, the lawsuit alleges that in response to vocal and, at times, race-based community opposition, Tinley Park trustees requested the Plan Commission table consideration of the project.  The Plan Commission did so, stalling the project indefinitely. 

“The Fair Housing Act requires that cities make housing-related zoning and land use decisions based on the merits – not on race,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division.  “When discrimination interferes with the housing and zoning approval process, entire communities suffer.”          

“Our office is committed to fighting unlawful discrimination wherever it occurs, including in fair housing,” said U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.  “Where appropriate, we will pursue local governments that try to reduce affordable housing opportunities for discriminatory purposes.” 

The lawsuit was filed in the U.S. District Court for the Northern District of Illinois.  The suit seeks a court order requiring Tinley Park to approve the development and to take other action to ensure compliance with the Fair Housing Act.  It also seeks monetary damages for persons harmed by Tinley Park’s actions as well as a civil penalty.  A separate suit brought by Buckeye against Tinley Park is also pending in the Northern District of Illinois.
  
The lawsuit is an allegation of unlawful conduct.  The allegations must still be proven in federal court.  

The Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status and disability.  More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.  Individuals who believe that they may have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, email the Justice Department at fairhousing@usdoj.gov or contact HUD at 1-800-669-9777.

CHICAGO — An Arlington Heights man was sentenced today to five years in federal prison for receiving sexually explicit images of a ten-year-old girl with whom he communicated online.

In several online conversations in 2014, DANIEL SANTIAGO attempted to persuade the girl to engage in sexually explicit conduct.  Santiago eventually received an image over the internet that depicted the child’s private area.  He then uploaded the image to an online file-sharing application that allowed others to view the image.   

Santiago, 25, pleaded guilty in August to one count of knowingly receiving child pornography.  U.S. District Judge Robert W. Gettleman imposed the sentence in federal court in Chicago.

“The evidence shows that Santiago actively sought out child pornography,” Special Assistant U.S. Attorney Jared C. Jodrey argued in the government’s sentencing memorandum.  “The images that are the subject of the charges in this case concern a ten-year-old girl whom Santiago exploited.” 

According to his written plea agreement, Santiago used the file-sharing application to store, access and share other images of child pornography.  He amassed a collection of approximately 2,210 pictures and 25 videos, the plea agreement states.  Santiago admitted that his collection included images of prepubescent minors, as well as sadistic and masochistic conduct, according to the plea agreement.

The sentence was announced by Zachary T. Fardon, 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 investigation was conducted by the FBI’s Child Exploitation Task Force.  The CETF is part of a nationwide effort known as the Innocence Lost National Initiative targeting the commercial sexual exploitation of children in the United States.  In Chicago, the CETF is composed of FBI special agents and investigators from the Chicago Police Department, the Cook County Sheriff’s Office, and the Cook County State’s Attorney’s Office.

The government is represented by Mr. Jodrey.

CHICAGO — The president of a Florida-based financial firm has pleaded guilty to a money laundering charge in connection with the sale of $179 million in sham loans to a Milwaukee investment company.

TIMOTHY G. FISHER was the president and chief operating officer of First Farmers Financial LLC when the company sold 26 non-existent loans to a Milwaukee investment firm for $179 million.  The company submitted documents to the Milwaukee investment firm that falsely created the appearance that the loans had been issued to borrowers in Florida and Georgia and were guaranteed in part by the federal government.  In fact, the sham loans, which purportedly had principal amounts ranging from $2.5 million to $10 million, did not exist.  The Milwaukee firm, which purchased the loans as an investment vehicle for its clients, which included community banks, retirement plans, municipalities, and subdivisions in Illinois and elsewhere, suffered a loss of $179 million.

Fisher, 39, of Pasadena, Calif., pleaded guilty on Thursday to one count of money laundering.  The conviction carries a maximum sentence of ten years in prison and a maximum fine of $900,000.  U.S. District Judge Charles P. Kocoras set sentencing for May 4, 2017, at 9:45 a.m.

The guilty plea was announced by Zachary T. Fardon, 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 Jeffrey A. Monhart, Regional Director of the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration.

According to his plea agreement, Fisher created fictitious financial statements that were sent to the Milwaukee company.   After receiving money from the Milwaukee firm, Fisher unlawfully engaged in monetary transactions with a portion of the fraudulently obtained funds, including a wire transfer of $450,000 of scheme proceeds.  Fisher caused these proceeds to be transferred from First Farmers’ account in Florida to his personal bank account in California.  He then transferred these funds to the bank account belonging to a business in Nevada in connection with an investment in that business.

First Farmers’ chief executive officer, NIKESH A. PATEL, has also been charged in connection with the fraud on the Milwaukee investment business.  Patel allegedly submitted false statements to the U.S. Department of Agriculture to obtain certification in a USDA program that guarantees a percentage of loans issued to borrowers who improve the economic and environmental climate in rural communities.  First Farmers, which has offices in Florida, Georgia and California, obtained USDA certification after Patel submitted the false statements about the company’s assets and officers, according to his indictment returned last year.

Patel, of Windermere, Fla., has pleaded not guilty to five counts of wire fraud.  His next court appearance before Judge Kocoras is set for Dec. 6, 2016, at 9:45 a.m.

The government is represented by Assistant U.S. Attorneys Patrick King and Rick Young.

Mohammed Hamzah Khan, 21, of Bolingbrook, Illinois, was sentenced to 40 months in federal prison and 20 years supervised release, for attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, by attempting to travel overseas to Syria to join ISIL.

The announcement was made by Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Zachary T. Fardon for the Northern District of Illinois and Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Field Office.

U.S. District Judge John J. Tharp Jr. imposed the 40-month prison term and ordered that it be followed by 20 years of intensive supervised release.  Among the special terms of supervised release, Khan must participate in a mental health treatment program; consent at any time to a search by a probation officer or designated law enforcement official of his home, property and electronic communication devices in his possession and control; attend violent extremism counseling; and comply with the requirements of a computer monitoring program, which includes the installation of computer-monitoring software on all devices in Khan’s possession and control that are capable of accessing the Internet.

Pursuant to the plea agreement, Khan agreed to fully and truthfully cooperate in any matter in which he is called upon by the U.S. Attorney’s Office for the Northern District of Illinois.

Khan, a U.S. citizen from southwest suburban Bolingbrook, has been detained in federal custody since his arrest on Oct. 4, 2014, at O’Hare International Airport in Chicago, Illinois. Khan pleaded guilty to these charges in 2015. According to his plea agreement, beginning no later than about February 2014, Khan used the internet to obtain introductions to ISIL members in Syria and to assist him with traveling there to join the terrorist group. Khan admitted to then speaking with ISIL members to coordinate the logistics of his admission into ISIL-controlled territory.

Khan further admitted in the plea agreement that he knew ISIL had been designated by the U.S. as a foreign terrorist organization. Khan intended to work in Syria under the direction and control of ISIL, and to be under the requirement to take any assignment ISIL gave him.

The case was investigated by the FBI-led Joint Terrorism Task Force (JTTF). The Chicago JTTF is comprised of FBI special agents, the Chicago Police Department officers and representatives from an additional 20 federal, state and local law enforcement agencies. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement Homeland Security Investigations, and the Illinois State Police provided significant assistance in the investigation.

This case was prosecuted by Assistant U.S. Attorneys Matt Hiller, Angel Krull and Sean Driscoll of the Northern District of Illinois, and Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section.

CHICAGO — The owner of several Chinese restaurants in the Chicago area was sentenced today to a year and a day in federal prison for withholding taxes by underreporting receipts paid in cash.

HU XIAOJUN, also known as “Tony Hu,” owns and operates several restaurants in Chicago and the suburbs, including the eateries operating under the Lao Sze Chuan brand.  From January 2010 to September 2014, Hu intentionally withheld sales taxes from the Illinois Department of Revenue and the city of Chicago for receipts that customers paid in cash.  Hu deposited the unreported cash into his personal bank account and used the money to pay personal expenses.

All told, Hu hid more than $1 million in taxes from state and local government from more than $9.8 million in cash sales.

Hu, 49, of Chicago, pleaded guilty in May to one count of wire fraud and one count of money laundering.  In addition to the prison term, U.S. District Judge Amy J. St. Eve also fined Hu $100,000.

“Business leaders like the defendant owe a special obligation to abide by our tax laws and pay their fair share,” Assistant U.S. Attorney William Ridgway argued in the government’s sentencing memorandum.  “When they fraudulently hide income it erodes the public’s trust in the tax system.”

The charges were announced by Zachary T. Fardon, 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 D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division.

The government is represented by Mr. Ridgway.

CHICAGO — A Bolingbrook man was sentenced today to 40 months in federal prison, followed by 20 years of supervised release, for attempting to travel overseas to join a foreign terrorist organization in Syria.

MOHAMMED HAMZAH KHAN, 21, pleaded guilty last year to one count of attempting to provide material support to a foreign terrorist organization.  The organization is identified in a written plea agreement as the Islamic State of Iraq and the Levant (“ISIL”).

U.S. District Judge John J. Tharp Jr. imposed the 40-month prison term and ordered that it be followed by 20 years of intensive supervised release.  Among the special terms of supervised release, Khan must participate in a mental health treatment program; consent at any time to a search by a probation officer or designated law enforcement official of his home, property and electronic communication devices in his possession and control; attend violent extremism counseling; and comply with the requirements of a computer monitoring program, which includes the installation of computer-monitoring software on all devices in Khan’s possession and control that are capable of accessing the Internet.

Pursuant to the plea agreement, Khan agreed to fully and truthfully cooperate in any matter in which he is called upon by the U.S. Attorney’s Office for the Northern District of Illinois.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Mary B. McCord, Acting Assistant Attorney General for National Security; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

Khan, a U.S. citizen from southwest suburban Bolingbrook, has been detained in federal custody since his arrest on Oct. 4, 2014, at O’Hare International Airport in Chicago.  According to his plea agreement, beginning no later than approximately February 2014, Khan used the Internet to obtain introductions to ISIL members in Syria and to assist him with traveling there to join the terrorist group.  Khan admitted speaking with ISIL members to coordinate the logistics of his admission into ISIL-controlled territory, the plea agreement states.

Khan further admitted in the plea agreement that he knew ISIL had been designated by the United States as a foreign terrorist organization.  Khan intended to work in Syria under the direction and control of ISIL, and be required to take any assignment ISIL gave him.

The case was investigated by the Chicago Joint Terrorism Task Force, which is comprised of FBI special agents, Chicago Police Department officers, and representatives from an additional 20 federal, state and local law enforcement agencies.  U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), and the Illinois State Police provided significant assistance in the investigation.

The government is represented by Assistant United States Attorneys Matt Hiller, Angel Krull and Sean Driscoll; and U.S. Department of Justice Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section.

CHICAGO — A north suburban man who operated a manufacturing business in Wisconsin was sentenced to nine months in federal prison for failing to pay taxes on more than $2.3 million in cash receipts.

HERBERT C. WATTS, the owner and president of Branko Perforating FWD Inc., of Bristol, Wisc., failed to report cash receipts as income on his taxes for the calendar years 2009 to 2014.  During those years, Branko received more than $2.3 million in cash from the sale of scrap metal to a Cicero-based company.  The scrap sales were not reported in Branko’s business records, and the cash income was concealed from accountants who prepared tax returns for Watts and the company.

The case is part an ongoing investigation of cash transactions in the local scrap metal industry that has resulted in several other convictions.

Watts, 70, of Grayslake, pleaded guilty earlier this year to filing a false tax return.  In addition to the nine-month prison term, U.S. District Judge John Robert Blakey on Tuesday fined Watts $10,000.  Prior to sentencing, Watts paid the taxes he owed to the federal government and the state of Illinois.

“Defendant’s conduct was little more than repetitive evasion motivated by greed,” Assistant U.S. Attorney Patrick King argued in the government’s sentencing memorandum.  “Evasion feeds on itself, reducing respect for the integrity of the tax system and leading to more cheating.”

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

CHICAGO — A property manager has been charged in federal court with fraudulently pocketing more than $150,000 in illegal fees from a condominium association in Chicago’s Edgewater neighborhood.

ALAN P. GOLD, the owner and operator of Chicago-based A.P. Gold Realty & Management Inc., overbilled the Edgewater condo association for management services that were never performed, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  He also skimmed from the association’s reserve account by paying himself monies to which he was not entitled, the complaint states.

Gold is suspected of pilfering an additional $750,000 from eight other Chicago condominium associations, according to the complaint.

The complaint charges Gold, 65, of Chicago, with one count of mail fraud.  He was arrested on Nov. 9, 2016, and made an initial appearance that day before U.S. Magistrate Judge Susan E. Cox. Judge Cox ordered Gold released on a $10,000 personal recognizance bond.

The complaint was announced by Zachary T. Fardon, 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 complaint, Gold had signature authority over the Edgewater condo association’s bank accounts and was supposed to draw a monthly fee of $650 for management services, which included collecting special assessments and paying utility providers.  Gold overbilled the association by withdrawing multiple $650 checks in the same month, and he tapped into its reserve fund to write substantially higher checks to himself, the complaint states.  All told, Gold stole approximately $154,271 from the Edgewater condo association between 2010 and 2014. 

Gold defrauded the other associations in a similar manner, the complaint states.  He concealed the frauds by furnishing fraudulent monthly statements to the condo associations that showed their balances to be higher than they actually were, according to the complaint.

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

The government is represented by Assistant U.S. Attorney Vikas Didwania.

CHICAGO — A drug dealer who sold crack cocaine and heroin on Chicago’s West Side and western suburbs was sentenced today to 35 years in prison for trying to murder a federal informant who was assisting law enforcement.

KELSEY JONES and his associates tried to kill the informant on two occasions in the spring of 2014 in retaliation for the informant’s cooperation with the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives.  In the first attempt, Jones’ younger brother, TOBY JONES, fired several shots through the front door of an apartment in the informant’s building in Oak Park.  The informant was not injured, but an innocent victim was wounded.  The second attempt occurred a week later, when Kelsey Jones approached the informant’s vehicle outside of the same building and fired several shots, wounding the informant and another occupant.  Both victims survived, as did the victim of the first shooting.

Kelsey Jones, 40, and Toby Jones, 39, both of Chicago, were convicted earlier this year of conspiring with each other in the attempted murder of the informant, as well as gun and drug charges.  Toby Jones was sentenced in May to 40 years in prison.

“Defendant’s crimes are among the most serious of federal offenses,” Assistant U.S. Attorney Sean J.B. Franzblau argued in the government’s sentencing memorandum in Kelsey Jones’ case.  “When a federal undercover operation disrupted his drug trade, defendant had the audacity to join his brother Toby in an attempt to murder the informant.”

In handing down the sentence today for Kelsey Jones, Judge Amy J. St. Eve also found that he obstructed justice by lying at a 2015 suppression hearing in a failed effort to prevent the jury from hearing about admissions he made to ATF agents after his arrest.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and George Lauder, Acting Special Agent in Charge of the Chicago Field Division of ATF.  The Oak Park Police Department assisted in the investigation.

Testimony at trial revealed that Toby Jones led a small group of cocaine and heroin dealers, and actively sought to obtain firearms in connection with his drug dealing activities.  In December 2013, a confidential informant introduced an undercover ATF agent to Toby Jones, and for the next several months the agent and the informant purchased crack cocaine from him.  Toby Jones also planned to purchase from the undercover agent a firearm with a high-capacity magazine in exchange for crack cocaine. 

On March 26, 2014, Toby Jones sent one of his drug dealers, WESLEY FIELDS, to meet with the undercover agent and purchase the gun.  Fields was arrested by federal authorities shortly after he arrived at the meeting.  Toby Jones thereafter began a week-long effort to track down and murder the confidential informant who set up the deal, culminating in the shootings in Oak Park.

Fields, of Chicago, pleaded guilty to participating in a drug conspiracy and possessing a firearm.  He was sentenced in May to nine years and nine months in prison.

The government is represented by Mr. Franzblau and Assistant U.S. Attorney Brian Hayes.

CHICAGO — The former chief executive of Chicago’s first red-light camera vendor was sentenced today to 30 months in federal prison and over $2 million in restitution for paying bribes to a city official to help procure the contracts.

 

As the CEO of Redflex Traffic Systems Inc., KAREN FINLEY would funnel cash and other financial benefits to the city official, JOHN BILLS, and his friend, MARTIN O’MALLEY, in exchange for improper assistance in awarding city red-light camera contracts to Redflex. The benefits included golf trips, hotels and meals, as well as hiring O’Malley as a highly compensated contractor for Redflex, some of which compensation was passed on to Bills.

The benefits flowed for nearly a decade, during which time the city expanded the Digital Automated Red Light Enforcement Program by awarding millions of dollars in contracts to Phoenix-based Redflex.

 

Finley, 57, of Cave Creek, Ariz., pleaded guilty last year to one count of conspiracy to commit bribery in a federal program. U.S. District Judge Virginia Kendall imposed the sentence in federal court in Chicago.

 

The sentencing was announced by Zachary T. Fardon, 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; Joseph M. Ferguson, Inspector General for the City of Chicago; and James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

 

All three defendants in the federal case have now been convicted and sentenced. Bills was sentenced in August to ten years in prison, while O’Malley was sentenced in September to six months in prison.

 

Redflex’s technology uses cameras to automatically record and ticket drivers who run red lights. The company was awarded its first contract with the city of Chicago in 2003. Over the next eight years, Bills used his influence as a transportation official to expand Redflex’s business with the city, resulting in millions of dollars in contracts for the installation of hundreds of red-light cameras.

 

Finley hired O’Malley as a contractor to ensure that Bills would continue to provide assistance to Redflex in obtaining and expanding contracts with the city. Finley personally signed O’Malley’s contract, which included provisions for lucrative increases in O’Malley’s compensation as new cameras were added. O’Malley testified at Bills’ trial that O’Malley often stuffed money he received from Redflex into envelopes and gave it to Bills during meals in Chicago restaurants. O’Malley also used some of the Redflex money to purchase and pay all expenses on a condo in Arizona that Bills used as his own.

 

The government is represented in the case by Mr. Fardon and Assistant U.S. Attorneys Laurie Barsella and Timothy Storino.

CHICAGO — Two Chicago men have been charged with federal drug and firearm violations for allegedly selling heroin out of a backyard in the North Lawndale neighborhood.

DIANTE DAVIS and MARKIEASE COUSINS were arrested on Oct. 17, 2016, after they sold four zip-lock bags of heroin to an undercover law enforcement officer in the backyard of a residence in the 3400 block of West Lexington Avenue in Chicago, according to a criminal complaint filed in U.S. District Court.  After purchasing the heroin, the undercover officer turned to leave, but Davis called him back and pointed a handgun in the officer’s face, the complaint states.  Davis accused the officer of working for law enforcement, saying “You’re probably recording me right now,” according to the complaint.

As it turned out, the drug deal was indeed surreptitiously videotaped by law enforcement, according to the complaint.  Davis and Cousins were placed under arrest shortly thereafter, the complaint states.  The undercover officer was not harmed.

Davis, 27, and Cousins, 19, are each charged with one count of conspiracy to distribute a controlled substance and one count of carrying a firearm during a drug trafficking crime.  Davis is scheduled to make an initial appearance on Nov. 10, 2016, before U.S. Magistrate Judge Susan Cox.  Cousins is scheduled to appear for a detention hearing on Nov. 14, 2016, before Judge Cox.

The complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; and Chicago Police Superintendent Eddie Johnson.  The Illinois State Police assisted in the investigation, which was conducted with the U.S. Organized Crime Drug Enforcement Task Force (OCDETF) Chicago Strike Force and the Chicago High Intensity Drug Trafficking Task Force (HIDTA).

According to the complaint, when Davis was taken into custody he was found to be in possession of a second firearm and additional zip-lock bags of narcotics.  Some of the drugs contained a mix of heroin and fentanyl, while some was cocaine, the complaint states.

The drug conspiracy charge carries a maximum sentence of 20 years in prison, while the firearm count is punishable by a minimum sentence of five years and a maximum of life.  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 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 government is represented by Assistant U.S. Attorney Erik Hogstrom.

CHICAGO — A Milwaukee man was sentenced today to more than 21 years in federal prison for transporting an underage girl to the Chicago area from Wisconsin to engage in prostitution.

DAJUAN KEY, 31, brought the girl to the Chicago area from Madison, Wisc., in September 2013.  At the time, the victim was 15 years old.  Once in the Chicago area, Key forced the girl to engage in commercial sex acts, with Key keeping all of the money.

A jury in February convicted Key on one count of knowingly transporting a minor from Wisconsin to Illinois to engage in prostitution.  U.S. District Judge Virginia M. Kendall imposed the 262-month sentence in federal court in Chicago.

“All of the defendant’s reprehensible conduct in this case evidences a person driven by greed, willing to engage in manipulation, deception, and psychological abuse, solely for his own personal profit,” Assistant U.S. Attorney Katherine Sawyer argued in the government’s sentencing memorandum. 

Evidence at Key’s trial revealed that Key encountered a minor online and travelled to Madison to pick her up and bring her to southwest suburban Romeoville.  Key took photographs of the girl, provided her with lingerie to wear, and posted advertisements on the website Backpage.com.  Key rented multiple hotel rooms that were used for encounters with individuals who responded to the advertisements.  Key then collected all of the money earned by the minor victim.

The victim was rescued by officers of the Romeoville Police Department on Sept. 10, 2013, and Key was arrested.

The sentence was announced by Zachary T. Fardon, 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 Romeoville Police Department and the Madison, Wisc., Police Department assisted in the case.

The investigation was conducted by the FBI’s Child Exploitation Task Force.  The CETF is part of a nationwide effort known as the Innocence Lost National Initiative targeting the commercial sexual exploitation of children in the United States.  In Chicago, the CETF is composed of FBI special agents and investigators from the Chicago Police Department, the Cook County Sheriff’s Office, and the Cook County State’s Attorney’s Office.

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

CHICAGO — The founder of a Geneva investment firm has been sentenced to five years in federal prison for using client funds to purchase a yacht and luxury vehicle and to trade his own stocks.

STEPHEN C. BROWERE, the founder of Geneva-based Stephens Capital Management Inc., used the promise of lucrative and guaranteed returns to persuade several clients to purchase $1.66 million in promissory notes in Douglas Capital Corp., located in Lisle.  Many of the investors pledged their life savings or funds from retirement plans.  Browere did not tell investors that his relative was the president of Douglas Capital, and that Browere ran Douglas Capital’s day-to-day operations and had access to its lines of credit.  Instead of investing the funds in the promissory notes, Browere used the money to perform trades within his own investment portfolio, and to cover personal purchases such as a yacht and a BMW automobile.

Browere, 57, of Geneva, pleaded guilty in June to one count of mail fraud.  U.S. District Judge Matthew F. Kennelly on Friday sentenced Browere to 60 months in prison.  Judge Kennelly also ordered Browere to pay $3.7 million in restitution to the victims.

“Each investor thought defendant was investing his or her money in safe, stable investments that would provide income well into retirement,” Assistant U.S. Attorney Patrick Otlewski argued in the government’s sentencing memorandum.  “They did not agree to give defendant free reign to use the savings as his personal slush fund to support a lavish lifestyle.”

Browere’s scheme began no later than 2007 and continued until approximately February 2014.  In addition to spending the victims' funds on himself, Browere concealed the fraud by using principal payments from some investors to make interest payments to others in a Ponzi-like fashion.

Browere also obtained the power of attorney on behalf of an elderly client who was infirm and suffering from dementia.  The power of attorney gave Browere access to the client’s cash and property, which were valued at more than $2.1 million.  Browere misappropriated some of this money to purchase four vacant lots in Lisle and to make interest payments to other clients.  After the client died, Browere maintained control over the estate and continued to misuse the estate’s assets.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffrey A. Monhart, Regional Director of the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration; and E.C. Woodson, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The Illinois Secretary of State’s Office provided valuable assistance in the investigation.

The government is represented by Mr. Otlewski.

CHICAGO — A federal grand jury in Chicago has indicted a Naperville man on charges of possessing child pornography, obstruction of justice and conversion of government property.

FLOYD O’HARA, 62, is charged with one count of possessing child pornography, one count of conversion of government property, and two counts of obstruction of justice.  Arraignment is scheduled for Nov. 10, 2016, at 9:30 a.m., before U.S. District Judge Rebecca R. Pallmeyer in Chicago.

According to the indictment, O’Hara possessed child pornography, which was discovered on a laptop computer and a flash drive.  O’Hara obstructed justice by altering, destroying and concealing two hard drives in an effort to prevent their use in a prosecution against him, according to the indictment.

O’Hara was formerly employed by the U.S. Environmental Protection Agency.  The indictment alleges O’Hara converted for his own use eight devices owned by the EPA without the EPA’s authorization.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Acting Special Agent in Charge Joseph Gonzales of the EPA Inspector General’s Office. 

The public is reminded that an indictment 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 charges in the indictment are punishable by a total maximum sentence of 70 years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

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

Indictment

CHICAGO — A federal jury has convicted an Indiana man on fraud charges for holding himself out as a psychiatrist while prescribing medications to a nine-year-old child and dozens of others.

SCOTT C. REDMAN, 37, of Hammond, Ind., used the identity of an Illinois physician to see patients and prescribe medications at a clinic on Chicago’s Near North Side.  The real physician is employed by a different Illinois medical facility.

Redman assumed the physician’s name to prescribe medications to more than 40 individuals from September 2015 to February 2016.  The purported patients included a nine-year-old child, for whom Redman prescribed a 30-day supply of Vyvanse, a medication that treats attention deficit hyperactivity disorder.

After a four-day trial in federal court in Chicago, the jury Thursday convicted Redman on three counts of wire fraud, one count of aggravated identity theft, one count of furnishing false information to the Drug Enforcement Administration, and five counts of distributing a controlled substance.

U.S. District Judge Samuel Der-Yeghiayan set sentencing for Feb. 8, 2017, at 10:30 a.m.

The verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the DEA.

Evidence at trial revealed that Redman maintained office hours at the clinic to treat his supposed patients.  A purported profile of Redman on the clinic’s website contained the name of the real physician, alongside a photograph of Redman and fraudulent biographical and educational information.  In addition to the Vyvanse, Redman prescribed other controlled substances, including Adderall, Clonazepam and Xanax.

The conviction carries a maximum sentence of 166 years in prison.  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 Katie M. Durick and Matthew F. Madden.

CHICAGO — A criminal complaint unsealed in federal court today charges a Chicago man with sex trafficking for allegedly engaging in paid sexual acts with an underage girl.

WILLIAM WHITLEY paid the minor to engage in sex acts with him on multiple occasions last year, according to the complaint.  Whitley paid the girl between $60 and $150 for each of the sexual encounters, the complaint states.  Whitley also took nude photographs of the girl and sent the pictures to her via text message, the complaint states.

Whitley, 60, was arrested Tuesday afternoon.  He made an initial appearance today before U.S. Magistrate Judge Maria Valdez, who ordered him to remain in federal custody.  Judge Valdez scheduled a detention hearing for Nov. 7, 2016, at 11:00 a.m.

The two-count complaint charges Whitley with sex trafficking and production of child pornography.

The complaint was announced by Zachary T. Fardon, 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 Carol Stream Police Department assisted in the investigation.

The government is represented by Assistant U.S. Attorneys Sarah Streicker, Elizabeth Pozolo and Michelle Petersen.

According to the charges, a woman identified in the complaint as “Individual A” introduced the girl to Whitley.  The victim was 14 years old when Whitley paid her to engage in sex acts with him, according to the complaint.

The complaint also describes how Individual A introduced another female victim to Whitley.  This other victim was 16 years old when she encountered Whitley at a party hosted by Individual A, according to the complaint.  Individual A’s party was attended by older men and young runaway girls, the complaint states.  Whitley paid the 16-year-old girl to engage in sex acts, 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 sex trafficking count is punishable by a statutory minimum sentence of ten years in prison, and a maximum of life.  Production of child pornography carries a minimum sentence of 15 years, and a maximum of 30 years.  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 — A Tennessee man was sentenced today to nearly four years in federal prison for launching cyber-attacks on corporations, universities and governmental entities throughout the world.

As a member of the hacking group “NullCrew,” TIMOTHY JUSTEN FRENCH exploited computer vulnerabilities to obtain unauthorized access and steal confidential information, including encrypted personal data of thousands of individuals.  French’s cyber-attacks caused at least $792,000 in monetary loss to victim companies, universities and governmental bodies.

U.S. District Judge Gary Feinerman imposed the 45-month sentence today in federal court in Chicago.

“The defendant played a central role in an extensive, deliberate, and destructive hacking campaign that inflicted widespread and serious harm to businesses, governments, non-profits, and thousands of individuals,” Assistant U.S. Attorney William Ridgway argued in the government’s sentencing memorandum.  “He disseminated online the usernames, email accounts, and passwords for thousands of individuals, which not only violated their privacy and sense of online security, it exposed them to financial fraud and identity theft.”

French, 22, of Morristown, Tenn., pleaded guilty last year to one count of intentionally damaging a protected computer without authorization. 

NullCrew is a group of computer hackers who carried out a series of cyber-attacks in the United States and throughout the world.  To publicize their intrusions, French and other members of NullCrew maintained Twitter accounts, including @NullCrew_FTS and @OfficialNull, which they used to announce their cyber-attacks and ridicule their victims by publicly disclosing the confidential information they had stolen, according to French's plea declaration.  French hid his true identity by using Internet aliases, including “Orbit,” “@Orbit_g1rl,” “crysis,” “rootcrysis,” and “c0rps3.”

French participated in at least seven cyber-attacks while a member of NullCrew from 2012 to 2014.  One of the attacks was carried out against a large Canadian telecommunications company, while another attack targeted a U.S. state, according to the plea declaration.

The sentencing was announced by Zachary T. Fardon, 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 government is represented by Mr. Ridgway.

CHICAGO — Federal charges unsealed today accused 24 individuals of various drug offenses for allegedly using Amtrak trains to transport heroin and cocaine to Chicago from California.

One of the defendants is an Amtrak employee who allegedly stole a package of cocaine upon arrival at Chicago’s Union Station.

Authorities uncovered the alleged drug trafficking through a multi-year investigation dubbed Operation Derailed.  During the course of the probe and other closely related enforcement actions, authorities confiscated more than 60 kilograms of cocaine, more than 30 kilograms of heroin, a kilogram of fentanyl, five handguns, two rifles, and more than $1.8 million in cash.  The charges seek forfeiture of approximately $9.3 million in illegal profits.

The indictments and complaints allege that wholesale quantities of heroin and cocaine were obtained from traffickers in Mexico and southern California, and transported from Los Angeles to Chicago aboard Amtrak’s commercial train line, Amtrak Express.  Some of the drugs were concealed in automobile parts and pool filters, according to the charges.  The drugs were picked up at Chicago’s Union Station and sold throughout the Chicago area, with some of the profits laundered back to southern California.

Several of the defendants were arrested this week.  Arraignments and initial appearances in federal court in Chicago have not yet been scheduled.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent in Charge of the Chicago Field Division of the Drug Enforcement Administration; and James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division.  Substantial assistance was provided by the Amtrak Inspector General’s Office and the Amtrak Police Department.

The investigation was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force, 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.

“Our Office is working harder than ever with the DEA and other federal, state and local law enforcement partners to stop the flow of dangerous narcotics and opioids into Chicago,” said U.S. Attorney Fardon.  “We will continue to aggressively investigate and prosecute the drug traffickers responsible for bringing these drugs into our communities.”

"Too many families are forever scarred by heroin,” said Special Agent in Charge Wichern.  “I'm proud of the work done by these agents, officers and prosecutors who worked tirelessly to achieve these results, and I’m confident that with our continued partnership we will have increasing success."

“When IRS Criminal Investigation gets involved, the drug dealer's profits get derailed," said Special Agent in Charge Robnett.  “IRS Criminal Investigation is committed to providing the resources and working together with the DEA and the United States Attorney's Office to fight the war on drugs.  IRS CI brings and will continue to bring our money laundering expertise to disrupt and dismantle the trafficking of drugs into our communities.”

In U.S.A. v. Roque et al, 15 CR 485, 12 defendants were indicted for conspiracy to possess with the intent to distribute controlled substances: EDGAR ROQUE, 30, of Paramount, Calif.; RICHARD ROQUE, 32, of Paramount, Calif.; ANGELICA CERVANTES, 31, of Chicago; JUAN J. CERVANTES, 30, of Chicago; IVAN DIAZ, 26, of Downey, Calif.; PHILLIP DIAZ, 26, of Paramount, Calif.; MARTELL JACKSON, 33, of Chicago; ANTHONY KOON, 55, of Pueblo, Colo.; JOSÉ ANTONIO MIRELES, JR., 31, of Paramount, Calif.; JORGE LUIS OCHOA-CANELA, 36, of Paramount, Calif.; OMAR RAMIREZ, 24, of Compton, Calif.; and GERARDO SANCHEZ, 23, of Los Angeles, Calif.  A 13th defendant, JESUS VALENCIA, 34, of Chicago, is charged in the indictment with attempting to possess with the intent to distribute a controlled substance.  The indictment seeks forfeiture of approximately $5 million in cash.

In U.S.A. v. Aragon Contreras et al, 15 CR 447, six defendants were indicted for conspiracy to possess with the intent to distribute controlled substances, and conspiracy to commit money laundering: MANUEL ARAGON CONTRERAS, 32, of Paramount, Calif.; CESAR CARRILLO, 24, of South Gate, Calif.; EDUARDO FRANCO, 30, of Pico Rivera, Calif.; JOSE DAVILA, 33, of Pico Rivera, Calif.; RAFAEL COLLAZO, 22, of Paramount, Calif.; and BRIAN RIOS, 23, of Long Beach, Calif.  The indictment seeks forfeiture of approximately $4.3 million in cash.

According to the charges, some of the defendants also transported the narcotics via FedEx from the Los Angeles area to hotels and other locations in Chicago.  In the Amtrak shipments, some of the defendants placed GPS tracking devices inside parcels to allow them to monitor the narcotics as the packages travelled aboard trains to Chicago. 

One of the packages containing cocaine was allegedly stolen by an Amtrak employee when it arrived in Chicago’s Union Station on July 31, 2014.  The Amtrak employee, ROY J. GRIFFIN, 45, of Calumet City, and an acquaintance, DANIEL DOUGLAS, 43, of Blue Island, were indicted in U.S.A. v. Griffin et al, 15 CR 484, with theft of goods from a railroad car and possession with the intent to distribute a controlled substance.

Three defendants were charged in individual criminal complaints.  ROY W. BURRIS, 36, of Hawaiian Gardens, Calif., was charged with possession with the intent to distribute cocaine.  Authorities seized more than $144,000 in cash and five kilograms of cocaine after Burris allegedly sold the drugs to a buyer in the Los Angeles area on March 30, 2016, according to the complaint.  STEVEN MENDOZA, 24, of Lynwood, Calif., was charged with conspiracy to possess a controlled substance with intent to distribute.  Mendoza travelled to Chicago’s Union Station on at least four occasions in 2015 to pick up packages containing narcotics, according to the complaint.  JULIO ANDRADE, 35, of Paramount, Calif., was charged with conspiracy to possess a controlled substance with intent to distribute.  Andrade picked up a package of narcotics at Chicago’s Union Station in July 2014, according to the complaint.

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

Assistant U.S. Attorneys Paul Tzur and Kavitha Babu are representing the government in Roque et al and Griffin et al, and Mr. Tzur is representing the government in the cases against Burris and Mendoza.  Assistant U.S. Attorney Sean J.B. Franzblau represents the government in Aragon Contreras et al, and the case against Andrade.

CHICAGO — A federal grand jury in Chicago has indicted a Morris man on attempted murder charges for allegedly trying to kill two DEA Task Force officers during an undercover drug sting in Joliet.

ADAN GODINEZ, 31, of Morris, tried to kill the officers during an undercover operation in a parking lot of the Louis Joliet Mall on Aug. 30, 2016, according to the indictment.  In addition to the attempted murder charge, the indictment charges him with one count of conspiracy to possess with the intent to distribute a controlled substance, one count of possession with the intent to distribute a controlled substance, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of brandishing and discharging a firearm during a crime of violence.

A co-defendant, FERNANDO GODINEZ, 44, of Cicero, was also at the scene of the undercover operation.  He is charged in the indictment with one count of conspiracy to possess with the intent to distribute a controlled substance, one count of possession with the intent to distribute a controlled substance, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of being a convicted felon in possession of a firearm.

Arraignments are scheduled for Oct. 27, 2016, at 11:30 a.m., before U.S. Magistrate Judge Susan E. Cox.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Dennis A. Wichern, Special Agent in Charge of the Chicago Field Division of the Drug Enforcement Administration.  The Joliet Police Department provided valuable assistance.

The sting operation was arranged after Adan Godinez agreed to sell cocaine to an individual who, unbeknownst to Godinez, was an undercover Task Force officer for the DEA, according to a criminal complaint previously filed in the case.  The defendants drove together to meet the undercover, at which point Adan Godinez got out of their car and entered the undercover’s vehicle, the complaint states.  After Adan Godinez provided the cocaine to the undercover, other law enforcement personnel approached to arrest him, according to the complaint.  Adan Godinez saw law enforcement personnel approaching, got out of the officer’s vehicle, pulled out a firearm and shot at the officers, the complaint states.  An exchange of gunfire ensued. 

Adan Godinez was wounded but survived.  No officers were injured.  Both defendants were arrested in the mall parking lot, and they have remained in custody without bond.

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

If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.  The charges against Adan Godinez carry a mandatory minimum sentence of 35 years in prison, and a maximum sentence of life in prison.  The charges against Fernando Godinez are punishable by a mandatory minimum sentence of 10 years, and a maximum of life in prison.

The government is represented by Assistant U.S. Attorneys Brian S. Wallach and Richard M. Rothblatt.

CHICAGO — The U.S. Attorney’s Office will monitor the federal and local elections in Chicago and surrounding suburbs on Nov. 8, 2016, Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced today.

As part of the monitoring effort, the Office will operate a telephone hotline for candidates or the public to report complaints related to the voting process.  Assistant U.S. Attorneys and other Office personnel will monitor the hotline and be available to respond to complaints as needed.

The hotline number, staffed on Election Day only, is (312) 469-6157.

“A citizen who is entitled to vote should in no way be prevented from doing so,” said Mr. Fardon. “Our Office will act promptly and aggressively to protect the integrity of the election process.”

The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations wherever they occur.   The Department’s longstanding Election Day Program furthers these goals, and also seeks to ensure public confidence in the voting process.

In addition, the Federal Bureau of Investigation will have special agents available in each field office throughout the country to receive allegations of election fraud and other election abuses on Election Day.  The Chicago FBI Field Office can be reached by phone at (312) 421-6700.

Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input.  It also contains special protections for the rights of voters, and provides that they can vote free from acts that intimidate or harass them.  For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law.  Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.  Violations of federal voting rights statutes carry penalties ranging from one to ten years in prison and fines of up to $250,000.

Complaints about possible violations of the federal voting rights laws can also be made directly to the Voting Section of the Justice Department’s Civil Rights Division in Washington, D.C., by phone at (800) 253-3931 or (202) 307-2767, by email at voting.section@usdoj.gov, or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.

For information as to the location and hours of polling locations, Illinois residents are advised to contact the Illinois State Board of Elections by logging on to www.elections.il.gov or by calling (312) 814-6440.

CHICAGO — A former correctional officer for the Cook County Sheriff’s Office has been indicted on a federal civil rights charge for allegedly using unreasonable force against a detainee while on duty.

ROBERT DARTT, 46, of Jacksonville, Fla., is charged with one count of deprivation of rights under color of law, and one count of filing a false report.  Dartt is alleged to have used unreasonable force while on duty as a correctional officer for the Cook County Sheriff’s Office on Oct. 31, 2011.  The victim suffered bodily injury as a result of the unreasonable force, the indictment states.

The false report charge arises from false statements Dartt filed with the Sheriff’s Office and the Cook County Department of Corrections after the incident, according to the indictment.

The indictment was returned Thursday in federal court in Chicago.  An arraignment date has not yet been set.

The indictment was announced by Zachary T. Fardon, 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.

Deprivation of rights is punishable by up to ten years in prison, while filing a false report carries a maximum sentence of 20 years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

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

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

CHICAGO — A Chicago woman was arrested today for allegedly operating a multi-million dollar fraud scheme that duped investors into believing she could earn profits on the secondary market for concert and sporting event tickets.

TRACY MONTI fraudulently obtained more than $5 million from investors by misrepresenting that she would purchase tickets for sporting events and concerts from primary market sources at face value and then re-sell them for a profit on the secondary market, according to a nine-count indictment returned Thursday in federal court in Chicago.  In reality, Monti used the victims’ funds to purchase a house in Chicago and a vehicle, and to make Ponzi-type payments to other investors, according to the indictment.

Monti, 42, of Chicago, was arrested this morning.  She pleaded not guilty during an arraignment today before U.S. District Judge Manish S. Shah.  Monti was ordered released on a recognizance bond, and a status hearing was scheduled for Nov. 9, 2016.

The indictment charges Monti with seven counts of wire fraud and two counts of money laundering.  Each count of wire fraud is punishable by up to 20 years in prison, while each money laundering count carries a maximum sentence of ten years.

The indictment was announced by Zachary T. Fardon, 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 D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division.

According to the indictment, Monti misrepresented to investors that she had business relationships with multiple primary market sources, such as event promoters and venues, through which she purportedly purchased tickets at face value.  The indictment alleges that these relationships didn’t actually exist, and that Monti did not purchase tickets at face value.  

The indictment seeks forfeiture of a house in the Austin neighborhood of Chicago and approximately $5.02 million in cash.

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

The government is represented by Assistant U.S. Attorney Jessica Romero.

The following are remarks by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, as prepared for delivery at Northwestern University Pritzker School of Law's "Opioids: An Interdisciplinary Symposium," on October 20, 2016:

Thank you Professor Geraghty for that kind introduction, and thank you Northwestern for having me.  It’s great to be here.  I’m grateful that you’re shining your light on this terrible epidemic.

Opiate consumption is a full-on crisis in this country.  It is nothing shy of an historic national public health and safety epidemic.  Opioids are now killing more people in this country than gun violence.  Opioids are now killing more people in this country than car crashes.

Heroin is everywhere.  It’s in our cities, suburbs, schools and homes.  The good old days of black tar heroin being expensive and hard to obtain, and ugly to use because it’s intravenous – those days are long gone.  Now powder heroin is cheap; it can be snorted or smoked; and in some neighborhoods, it’s easier to find than a fresh head of lettuce.

Heroin is rampant in Chicago.  You can go buy some right now for $10 on the West Side just off the Eisenhower Expressway, now known to some as the “Heroin Highway.”  And it’s all too cheap and easy to find heroin now in our collar counties as well: DuPage County, Lake County, Kane County, Will County and beyond. 

In Chicago, about a person a day is dying right now from a heroin overdose.  And about one additional person dies every day from an opioid other than heroin.  In the collar counties, we’re now seeing about one person every three days, dying from heroin or opioid overdose. 

Heroin is an equal-opportunity killer.  It is killing men, women, Blacks, Whites, Hispanics, friends, neighbors, loved ones.  It doesn’t discriminate; young and old, rich and poor, urban and rural, inner city and suburb.

According to the CDC, between 2002 and 2013, the heroin death rate across the country nearly quadrupled – from 0.7 deaths per 10,000 people to 2.7 deaths per 10,000.  During that same time frame, heroin use doubled among women, it increased 114% among whites, and it increased 109% among all 18-25 year olds. 

The mean age of first use of heroin in this country is now 18 years old.  And heroin has one of the highest dependency liability profiles of any drug, licit or illicit.  Only nicotine ranks higher.  Of those who are offered heroin, about 20% will try it, and of those who do, 25% will become addicted. 

And for those who become dependent, the prognosis is not good; mortality rates for heroin addicts are extremely high.  Over 50% of heroin addicts will be dead before the age of 50, with the average age of death being 30.

If all of that is not scary enough, here’s the kicker – heroin isn’t necessarily the biggest threat this crisis presents.  Heroin now has an even more dangerous cousin on the streets: fentanyl.  We are seeing an explosion right now, from a law enforcement perspective, in presence of fentanyl and fentanyl analogues. 

Many folks still don’t know what fentanyl is. Fentanyl is made in a lab.  Traditionally, it has been a very powerful prescription pain medication used for end of life situations or for those in extreme pain.  But now, it’s being cooked up in Mexican super labs run by drug cartels, and it’s being manufactured in China and sold to those cartels, or otherwise smuggled into the U.S. for illicit use.

Drug dealers are using fentanyl to dilute and increase the volume of the heroin they are selling on our streets.  While heroin is cheap, fentanyl is even cheaper, and so dealers are juicing their profits by mixing fentanyl into their heroin street products.   

And that means more people are dying.  Fentanyl is 40 to 50 times stronger than heroin.  Fentanyl is 80 to 100 times stronger than morphine.  Fentanyl has the power to kill with the ingestion, inhalation or skin absorption of just two milligrams.  By point of reference, that sweetener packet your kids play with at the restaurant table – that contains 1,000 milligrams per packet.  Two milligrams of fentanyl can be lethal. 

Fentanyl-laced heroin is increasingly killing people in our area.  Cook County has seen at least 124 fentanyl-related deaths since January 2015.  Many drug users don’t even know that heroin they are using may be laced with fentanyl.  They don’t know until it’s too late.

And because of its potency, fentanyl poses an unwitting risk not only to those heroin users but also to first responders.  For cops or agents who are seizing dope or searching a crime scene and unwittingly touch or inhale powder fentanyl, their lives are also at stake.

And fentanyl has analogues.  We’ve recently seen one called carfentanil – an analogue literally used in zoos to tranquilize elephants.  An elephant tranquilizer.  Carfentanil is roughly 100 times stronger than common fentanyl.  I mentioned that two milligrams of fentanyl is enough to kill a person.  Well, that same two milligrams of carfentanil is enough to knock out a 2,000-pound African elephant. 

So it’s no surprise then that carfentanil-laced heroin is a killer.  Last month, it was responsible for at least 8 overdose deaths in the Cincinnati, Ohio, area.  And unfortunately I can tell you that carfentanil is not limited to Ohio and points east.  It is right here in Chicago.  Right now.

Another similar analogue that has popped up recently is called W-18, which like carfentanil is 10,000 times more powerful than morphine.  Earlier this month, the Will County Coroner confirmed that a man who died from an overdose in April of this year had W-18 in his system. 

Fentanyl and its analogues are finding their way into heroin powder.  By itself, that is frightening.  But here’s more: we are now seeing a swell of illicit counterfeit pills containing fentanyl.  Hundreds of thousands of counterfeit prescription pills – pills made to look like oxycodone or hydrocodone but containing fentanyl -- are now being trafficked in the U.S.  Some of these counterfeit pills are manufactured outside the U.S. and smuggled in, principally through Mexico and Canada. But we also now are finding clandestine pill operations domestically. 

Just two weeks ago, the Wall Street Journal ran a front page story about how two people in San Francisco were charged this summer with manufacturing fentanyl-laced pills.  The pills were made to look like oxycodone but actually contained fentanyl.  During a search of a San Francisco home, the DEA found fentanyl powder, mixing equipment, and a $1,000 pill press.

On the other coast, in January of this year, DEA, after making undercover purchases of about 6,000 counterfeit pills, arrested a counterfeiter in New York.  Again, the pills were made to look like 30 milligram oxycodone pills but contained fentanyl.  Just like the couple in San Francisco, this counterfeiter in New York was making those pills in his home. 

And there’s a reason we’re seeing more and more of that.  It’s called profit.  The pill presses are easy to acquire and are fairly cheap.  And you can purchase a kilo of fentanyl powder from China for a few thousand dollars.  That kilo, plus the press, can generate millions in quick profit. 

Let’s say you make a batch at 1.5 milligrams of fentanyl per pill.  Then one kilo can generate about 666,666 counterfeit pills.  According to DEA, counterfeit pills containing fentanyl are now retailing between $10 and $20 per pill.  That means between $6.5 and $13 million in sales from pills made for a few thousand bucks.  That is a serious problem.

And these counterfeit pills closely resemble the authentic medications. The presence of fentanyl is often only detected through laboratory analysis.  The people taking these pills may have no idea that the pill contains a potentially deadly substance.  They may not know until it’s too late.

That is a dire diagnosis.  And I’m sorry for the parade of horribles to begin this speech, but I think it’s important that we be honest about the nature and scope of the problem before discussing solutions. 

Let me talk now about some of the things we are doing federally to push back against this epidemic.  And I’ll start with criminal enforcement, but first let me make this clear up front: while our primary function at the U.S. Attorney’s Office is to investigate and prosecute crimes, criminal enforcement alone cannot solve, and will never solve this crisis.  Treatment and prevention are equally if not more important ingredients to any solution.  This crisis demands a coordinated response across all elements of government and society.  After I talk about criminal enforcement, I’ll offer some thoughts and ideas, from my Office’s perspective, about treatment and prevention. 

Enforcement

First, enforcement.  Under the leadership of the Drug Enforcement Administration, the FBI, and other federal, state and local law enforcement partners, we are working harder than ever right now to attack the illicit opioids supply chain. 

The vast majority of heroin that’s flooding our Chicago region is brought here by international drug cartels and specifically Mexican-based cartels like the Sinaloa Cartel, the Juarez Cartel, the New Generation Cartel, the Zetas and others.  While it is impossible to know exactly how much heroin the cartels are smuggling into the Chicago area, based on recent seizure and source information, I think it’s safe to say that thousands of kilograms are now being imported here every year.

Why is the heroin problem particularly acute in Chicago?  Because we are a transshipment hub for cartels; because our location and transportation networks - air, rail and road – make Chicago an ideal transshipment point.  So we have a profound supply problem, and of course that eases distribution to street gangs that plague so many of our communities. 

So we are committing more and more federal resources here to investigating and prosecuting suppliers - heroin traffickers from the cartel leaders to the street gangs.  Between 2005 and 2014, the number of heroin-related arrests by DEA surged more than 200 percent.  2014 was the first year ever that DEA arrested more defendants for heroin trafficking than cocaine.  And that trajectory has only escalated since then.  DEA Chicago has proclaimed combatting heroin and opioid crime its number 1 priority for our district.

At the U.S. Attorney’s Office, I’ve instructed all of our prosecutors who work narcotics cases that investigating heroin and opioid trafficking is now our number one narcotics enforcement priority.  As little as three years ago, the majority of new case initiations in our office involved cocaine trafficking.  Since the beginning of this year, over 75% of the major narcotics investigations we’ve logged in at the U.S. Attorney’s Office are heroin, fentanyl or other illicit opioid trafficking cases.

One recent example is Operation Over the Top.  In the spring of this year, DEA agents, working with Assistant U.S. Attorneys in my office, identified a heroin trafficking organization that was responsible for transporting, in the hollowed out axles of tractor-trucks, 20-30 kilograms of heroin every week into the Chicago area.  We made multiple seizures resulting in the recovery of almost 100 kilos of heroin.  Until we made those seizures and stopped this particular distribution line, this group had been smuggling all of this heroin into our city for at least two years.  And that’s just one organization and one investigation.  We have many more charged and in the investigative pipeline.

Last year, in an Operation titled G.I. Joe, DEA agents and the Chicago Police Department took down what may have been the largest open-air heroin market in Chicago history, at Grenshaw and Independence on the West Side.  CPD and DEA made over 70 undercover purchases of heroin from gang members operating the drug spot, and seized over two kilos of heroin.  Before we took it down, conservative estimates based on the volume of customer traffic indicate heroin sales were in excess of $2.6 million per year at that spot alone. 

So we’re going after the gangs and drug trafficking organizations that are moving heroin into our communities.  We’re also committing significant resources to going after the cartels bringing the dope here in the first instance. 

I hope most of you have heard something about the Sinaloa Cartel prosecutions we have brought recently in my Office.  The Sinaloa Cartel is perhaps the single biggest transnational criminal organization in the world, responsible for the distribution of hundreds of tons of illegal drugs, including heroin, to virtually every corner of the world.  Because Sinaloa has decided to use Chicago as one of its principal transshipment points in the United States, my office together with our law enforcement partners, have targeted the cartel with every resource and tool at our disposal. 

And we have been successful.  We have brought indictments against all levels of the cartel and its infrastructure – from the cartel’s command and control based in Mexico, to its Chicago-based distribution cells, and all the way down to the street gangs who push the cartel’s dope onto the streets of Chicago and the surrounding communities.  We’ve indicted over 70 individuals, including Sinaloa leader Chapo Guzman, his sons and a slew of the other highest-ranking Sinaloa members in Mexico and here in Chicago.   Of those, we have convicted all but 18, and among the rest some are awaiting trial and others are fugitives from justice, including some now in custody awaiting extradition from Mexico.  And we have seized over eleven tons of Sinaloa cocaine, 80 kilograms of heroin, and $30 million in cartel assets – the lifeblood of their organization.  Because Sinaloa is the number 1 importer of heroin into our district, we have, and will continue to, take the fight directly to them.

Our fentanyl enforcement activities here in Chicago are also a focus of my Office right now.  We are working closely and constantly with our partners to track and prosecute fentanyl distributors.  About a month ago, we joined the Cook County State’s Attorney’s Office, DEA, CPD and others, to announce new charges against more than 30 defendants for distributing fentanyl and heroin on the West Side of Chicago. 

In addition to cartels and gangs and fentanyl, we’re also focused federally on diversion – which is a different kind of supply-side problem.  Abuse of prescription medications like hydrocodone and oxycodone are a gateway to heroin use.  According to the CDC, 45% of people who use heroin are also addicted to prescription painkillers.  And nearly 80% of new heroin users previously used prescription medications.  Just last month, HHS released new stats showing that at least 3.8 million Americans age 12 years and older are misusing prescription medications.  That is, sadly, our future heroin and fentanyl overdose population.

To beat the heroin and fentanyl problem, we have to stem the tide of prescription medications diverted for unlawful use.  To that end, my office and DEA are ramping up our investigations of doctors, pharmacists, and pharmacy employees who illegally prescribe and dispense hydrocodone and oxycodone.  To give one recent example, at the end of last year, we brought federal charges against a doctor in Lockport, Illinois, who wrote an astounding 500-plus prescriptions to one person for both oxycodone and Adderall.  From these prescriptions, 37,000 oxy and Adderall pills were illegally diverted from their intended pharmaceutical use to those who suffer from opioid addiction.

Because research shows that abuse of prescription opioids is a gateway to heroin use, it is vital that law enforcement identify and prosecute those in the medical field who abuse their oath by illegally diverting opioids for their own financial gain.  That’s another important piece of our long-term strategy for success.

Treatment      

So those are some of the things we’re doing on the enforcement front.  Let me say a few words about treatment.  Enforcement is all about supply side.  Treatment flips the script; it’s about demand. 

Cartels wouldn’t be importing heroin into our district if there wasn’t a market.  The hard truth is that demand for heroin in our district appears to be at an all-time high. 

According to an August 2015 study, admissions for heroin treatment in Illinois are significantly higher than the nation as a whole.  Nationally, heroin-treatment admissions comprise about 16% of total state-funded treatment admissions, whereas in Illinois, heroin caused about 25% of all such treatment admissions.  Heroin is now the second most common reason for citizens in our state to enter state-funded treatment programs, only behind alcohol addiction.

And the growing heroin addiction problem is not just an adult problem.  It’s now affecting our kids, and that situation is rapidly getting worse.  In 2013, 3.8% of Illinois youth reported using heroin in the past year.  3.8% of all kids in this state said ‘yes, I’ve used heroin within the last year.’  That is a disturbing reality and trend.

So, with this seemingly endless flow of heroin into our area, what can we in law enforcement do about demand and addiction?  Here are a few quick thoughts and ideas. 

First, from a criminal justice perspective, we have to make sure we are separating users and addicts from traffickers and profiteers.  When we catch users in the act, or with heroin in their pocket, and we arrest and incarcerate that user without any attention to the underlying problem, we’ve not only ignored the problem, we’ve made it worse.  Those addicts, without help, will use again upon release (if not while in jail).  And meanwhile we are straining our jails and our budgets by locking up people who are sick and no risk to society.

This issue is principally a state and local justice systems issue.  And across the state, I have seen many courts and prosecutors' offices recognize this dilemma and respond to it.  In Cook, DuPage, Lake, Kane, McHenry Counties and others, there are now drug courts and diversion programs designed to separate drug users from other defendants and put those users on a pathway not of incarceration but of treatment and rehabilitation.  Those efforts are laudable, and critical.  And while a lot has been done on that front, we do need to make sure those kinds of efforts are being duplicated across our local justice systems, including in rural areas. 

One great example is the partnership between the Chicago High Intensity Drug Trafficking Area, or HIDTA, and the Cook County State’s Attorney’s Office, where they have established a program under which individuals caught distributing heroin or other drugs but who themselves are substance abusers or addicts and have minor, non-violent criminal histories, those individuals are immediately evaluated by addiction treatment professionals and given the option of entering treatment.  If the addict decides to avail himself of the treatment opportunity, then the arrest for distribution is dismissed.  This is the type of forward-thinking approach to addiction and treatment that can make a real difference.   

More broadly, inside and outside of our justice systems, we have to do a better job of providing addiction treatment for those who are in the throes of abuse.  Whether public, private or philanthropic, we need to stretch and find ways to fund treatment for those who don’t have insurance or otherwise can’t afford it.  While I realize that presents enormous challenges - and I also realize that I may be swimming outside my lane - the truth is that the alternative won’t work.  If we don’t improve treatment, we will pay more in the end – more in connection with medical emergency responses to increasing overdoses, more through enforcement, arrests, and incarceration, and more as measured by lives lost.    So, however we do it, we have to improve our game statewide on the treatment front. 

As a component of that, we need to make sure our educators and community leaders understand the nature of opioid addiction and are prepared to help those who are opioid dependent.  Rather than responding to someone’s heroin or opioid abuse as a crime, we need folks to respond to it as a threshold matter for what it is: an illness that requires medical treatment and a pathway to rehabilitation.

Lastly on the treatment front, I’d like to make a related but different point.  I want to make a strong plug for the continued proliferation, particularly to our first responders, including fireman and patrol officers, of naloxone, most commonly referred to by the brand name Narcan.  Narcan is an easy-to-use, lifesaving antidote for heroin and opioid overdoses.  Used in hospitals for decades, the medication has no abuse potential, is not that expensive, and is easy to administer.  Well over a hundred lives in the Chicagoland area have been saved already this year by use of Narcan, and that number will only increase as the heroin crisis continues. 

I have heard some concerns and criticism that naloxone emboldens addicts to push their limits.  If they believe they can be brought back from overdose, then the risk/reward analysis of that higher dosage arguably can change.  I get that.  But I also know that people are dying right now.  And with the increased presence of fentanyl, more of those overdoses than ever are unexpected.  So, for now, I don’t think we as a society have a next best responsible choice.  We need to embrace training and investment in naloxone as a way to save lives.   We have to keep spreading the word and making those investments. 

Prevention

So that’s enforcement and treatment.  Let me, as promised, say something briefly about prevention.  I start from this base point: as I said earlier, we have to be honest and recognize that prosecutions alone will not solve this problem.  Until we stem demand, the supply chain will continue to fight and find a way.  So we have to get every bit as aggressive about education and prevention as we are already about enforcement.

One of the great attributes of this conference today is that it has brought together professionals from so many different disciplines that touch on this crisis.  It is not every day that lawyers, doctors, economists, and law enforcement are all together under the same roof talking about the same problem.  And having you all here together gives me the opportunity to mention a phenomenon that I worry contributes significantly to the heroin and opioid problem in this country.  And that is the over-prescription of pain medications.

I have attended too many events where I hear the same story told, over and over.  How a teenager or young adult playing sports is injured and goes to a doctor for treatment, receives a multi-week course of prescription opioid pain medications, and even though he or she may not need all of those meds to manage the pain, they take them and become dependent, leading to a crippling downward spiral of abuse that eventually leads to heroin. 

And I’ve heard about parents who received a large prescription for pain medications after a surgery and took some, but nowhere near all, of those pills.  And the pills then sat forgotten in the medicine cabinet, until one day they were found by a teenager living in the house.  And so the downward spiral begins.

These stories, which are real and are happening every day across this country, give color to the sobering statistic that the United States, with roughly 5% of the world’s population, consumes more than 75% of the world’s prescription drugs.  There is something wrong there. 

When I say I love doctors, it’s literal.  I am the son of an orthopedic surgeon.  I know that the issue of prescribing pain medications is a difficult and complex balance.  And I also know that the lions’ share of doctors work hard every day, patient by patient, to get that balance right. 

But the system as a whole is not working; 75% consumption of the world’s opioids reflects a problem, an imbalance in our health care system in this country.  And so I ask our physicians and health care providers to work even harder to come up with ideas and solutions for the underlying issue of over-prescription.  It’s imperative that you stretch.  It’s imperative that we all stretch.

Every one of us has to do more and do better at teaching our citizens and kids that pain medications can begin dependency that can lead to downward spiral into heroin use and death.  We have to be open and honest about how common opioid addiction is in this country, about the stark realities of that downward spiral, about the ravages heroin reeks on the body, and the devastation it brings on an addict’s friends and family. 

Everyone has to own this.  We need to leverage every medium we can think of – from print to TV to internet and social media.  We need to talk and educate in our schools, our churches, our businesses, and our community organizations.  And maybe most importantly, we need to talk in our homes.  No parent can any longer afford to wait and hope the opportunity to try heroin never finds your kid.  It will.  So let’s talk to our kids about it now, so they will be ready when that day soon comes.

And maybe most fundamentally, it’s time to de-stigmatize heroin addiction.  For decades, heroin was linked in our public consciousness with dirty needles, dark alleys, and perforated forearms.  That’s no longer our reality.  Heroin and opioid abuse is all around us.  It’s in our poorest communities and our wealthiest enclaves.  It no longer knows socioeconomic bounds.  It’s happening under city bridges, and at suburban high school proms. 

Heroin is not a rich or poor issue, not a black or white issue, it’s not a man or woman issue.  It’s a human issue.  So let’s lift the shadows.  No more hushed silence and whispering in shame.  This not shameful.  It’s tragic.  We are all impacted, and we all are in this together.

Today’s event is an important step.  We at the U.S. Attorney’s Office look forward to continuing this discussion and working with each and all of you until we reach a solution.  Thanks for having me and for listening.

CHICAGO — A former building inspector for the City of Chicago admitted in federal court today that he solicited a $300 bribe from a property owner in exchange for allowing renovation work without a permit.

ROBERTO URIBE, 55, of Frankfort, demanded the bribe from an owner of a two-story building in Chicago, according to a written plea agreement.  Unbeknownst to Uribe, the building owner was cooperating with federal authorities and had surreptitiously recorded the bribery demand. 

In a recorded conversation on Nov. 9, 2015, Uribe boasted of his ability to shut down the renovation work unless the owner paid him $300.  “So now, what’s happening now is you’re gonna give me some appreciation, and you’re gonna hurry up and get this done,” Uribe told the building owner, according to the plea agreement.  “And that appreciation is gonna be $300.  Now how quickly can you get me my money to keep my mouth shut?”

A few days later, the property owner paid $300 in cash to Uribe during a meeting at the property, the plea agreement states.  The property owner was equipped with a recording device that recorded this meeting.

Uribe pleaded guilty to one count of attempted extortion under color of official right.  The conviction is punishable by up to 20 years in prison and a maximum fine of $250,000.  U.S. District Judge Jorge L. Alonso set sentencing for Feb. 2, 2017, at 11:00 a.m.

The guilty plea was announced by Zachary T. Fardon, 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.

The government is represented by Assistant U.S. Attorney Sarah Streicker.

ROCKFORD — Two Rockford men were arrested today on federal drug trafficking charges.

 

QUINCY L. ATMORE, 44, and MAURICE D. NEAL, 34, both of Rockford, are charged in an eight-count indictment returned by a federal grand jury in Rockford.  Both men were charged with conspiracy to distribute a kilogram or more of heroin, in addition to charges of distributing heroin in Rockford from October 2015 through September 2016.

 

Atmore appeared today for arraignment in federal court in Rockford before U.S. Magistrate Judge Iain D. Johnston.  He remains in custody pending a detention hearing scheduled for Oct. 24, 2016, at 3:30 p.m.

 

Neal will appear for arraignment on Oct. 20, 2016, at 9:30 a.m., before Judge Johnston.

 

The drug conspiracy charge carries a ten-year mandatory minimum sentence, a maximum potential penalty of up to life in federal prison, and a maximum fine of up to $10 million. Each count of distribution of heroin carries a maximum potential penalty of up to 20 years in prison, and a maximum fine of up to $1 million.

 

The public is reminded that an indictment contains only charges and is 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 a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

 

The arrests were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis Wichern, Special Agent in Charge of the Chicago Office of the Drug Enforcement Administration; and Leo P. Schmitz, Director of the Illinois State Police. The case was investigated by the Rockford Resident Agency of the Drug Enforcement Administration’s Chicago Field Office, and the Stateline Area Narcotics Team ("SLANT"), a task force led by the Illinois State Police. The Bureau of Alcohol, Tobacco, Firearms & Explosives, the Federal Bureau of Investigation, the Winnebago County Sheriff’s Department, and the Rockford Police Department assisted in the investigation.

 

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

 

Indictment

CHICAGO — A federal grand jury in Chicago has indicted a south suburban man on sex trafficking charges for allegedly bringing a minor to Wisconsin to engage in prostitution.

DERONARTE NORWOOD, 30, of Harvey, forced the minor to engage in a commercial sex act, according to the indictment.  In May 2015 he brought the minor to Wisconsin from Illinois for the purpose of engaging in prostitution, the indictment states.

Norwood was arrested last night in Waukegan.  He pleaded not guilty during an arraignment in Chicago this afternoon before U.S. Magistrate Judge Mary M. Rowland.  Judge Rowland ordered Norwood held in custody until a detention hearing on Oct. 24, 2016, at 2:00 p.m.

The two-count indictment charges Norwood with sex trafficking and knowingly transporting a minor to engage in prostitution.  Both counts are punishable by a maximum sentence of life in prison.

The indictment was announced by Zachary T. Fardon, 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.  Substantial assistance was provided by the Lake County Gang Task Force, a multi-jurisdictional task force with federal and local law enforcement members.

The government is represented by Assistant U.S. Attorneys Nicole M. Kim and Abigail Peluso.

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

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.

Indictment

CHICAGO — The owner of two education-services companies admitted in federal court today that he offered bribes and kickbacks to former Chicago Public Schools chief BARBARA BYRD-BENNETT in exchange for obtaining a $2.09 million contract to train principals.

GARY SOLOMON admitted in a written plea agreement that he offered bribes and kickbacks to then-CPS chief Byrd-Bennett in exchange for her efforts to steer the sole-source contract to Solomon’s companies, THE SUPES ACADEMY LLC and SYNESI ASSOCIATES LLC.  Byrd-Bennett had previously worked for the companies, and her fraudulent arrangement with Solomon called for her to return there as a consultant upon leaving CPS, according to the plea agreement.  Solomon maintained a line item within the companies’ internal financial statements to set aside the kickback money, which would be paid to Byrd-Bennett in the form of a one-time signing bonus on her first day back, the plea agreement states.  Solomon told Byrd-Bennett in an email, “If you only join for the day, you will be the highest paid person on the planet for that day. Regardless, it will be paid out on day one.”

In addition to arranging the kickbacks, Solomon also provided Byrd-Bennett with numerous other benefits, including meals and tickets to sporting events.

Solomon, 48, of Wilmette, pleaded guilty to one count of honest services wire fraud.  The conviction carries a maximum sentence of 20 years in prison.

The Wilmette-based SUPES and Evanston-based Synesi also pleaded guilty today as corporate defendants to one count of honest services wire fraud.  Each company faces a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.  The government anticipates that the advisory guideline fine will be in the range of $3.2 million to $6.4 million.

In addition to potential prison terms and fines, the individual and corporate defendants also will be ordered to join in a restitution payment to CPS.  The defendants and the government agree that the total amount of restitution is $254,000, minus any credit for funds repaid prior to sentencing.

A sentencing hearing for Solomon, SUPES and Synesi has been scheduled for March 24, 2017, before U.S. District Judge Edmond E. Chang.

The guilty pleas were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Nicholas J. Schuler, Inspector General for the Chicago Public Schools.

All five defendants charged in the case have now been convicted.  Byrd-Bennett, 67, of Solon, Ohio, pleaded guilty last year to one count of honest services wire fraud, which carries a maximum sentence of 20 years in prison.  THOMAS VRANAS, a co-owner of SUPES and Synesi, pleaded guilty earlier this year to one count of conspiracy to commit federal program bribery.  Vranas, 35, of Glenview, faces up to five years in prison.  A sentencing hearing for Byrd-Bennett and Vranas has not yet been scheduled.

The government is represented by Assistant United States Attorneys Megan Cunniff Church and Lindsay Jenkins.

ROCKFORD — A Loves Park man pleaded guilty today before U.S. District Judge Philip G. Reinhard to producing child pornography. 

ZACHARY RODRIGUEZ, 26, of Loves Park, admitted in his written plea agreement that on Nov. 6, 2014, he persuaded and enticed a minor female victim to engage in sexually explicit conduct for the purposes of having her use a cell phone to take photographs of the sexually explicit conduct, and then having her text the images to Rodriguez by cell phone from Iowa to Loves Park.  According to the plea agreement, the female victim was 14 years of age at the time the pictures were produced and transmitted. 

Rodriguez further admitted that between Aug. 9, 2014, and Jan. 20, 2015, he similarly persuaded four other minor female victims, who were between the ages of 14-17, to do the same.  The minor victims resided in Ohio, Arizona, Connecticut, and Wisconsin.  Each time, Rodriguez persuaded the victims to text the photographs to him in Illinois.

Rodriguez faces a statutory mandatory minimum sentence of 15 years in prison, a maximum sentence of 30 years, and a term of supervised release of at least five years up to life.  The offense carries a maximum fine of $250,000. 

Sentencing for Rodriguez is set for May 8, 2017, at 9:00 a.m. 

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.  The Loves Park Police Department assisted in the investigation.

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

Plea Agreement

CHICAGO — Eleven people fraudulently obtained multiple credit cards and quickly maxed out the credit limits, with no intention of ever paying back the balance, according to an indictment unsealed in federal court in Chicago.

The defendants applied for the credit cards online, using false employment and income information to secure approval and bolster the credit limits, according to the indictment.  Upon receipt of the cards, the defendants purchased goods and services, and quickly reached the maximum credit limits to obtain as much money as possible from the financial institutions who issued the cards, the indictment states.  Some of the defendants later filed for bankruptcy in order to discharge the debts they had charged to the credit cards.  The scam began in April 2010 and continued until at least October 2015, according to the indictment.

The indictment states that several of the defendants also created phony corporations and linked mobile payment accounts to them.  Fictitious purchases were then made through the bogus corporations, creating charges that were reimbursed by the credit card issuers, the indictment states.

Charged with one count of bank fraud are GABRIEL CWYNAR, 37, of Chicago; IZABELA KAPUSCIAK, also known as “Izabela Cwynar,” 39, of Chicago; JAROSLAW WYSOCKI, 48, of Schaumburg; BARTOSZ POZNIAK, 42, of Mount Prospect; JOLANTA WYSOCKA, 50, of Schaumburg; MONIKA SZCZUREK, 36, of Lombard; MARCIN CYCHOWSKI; 41, of Addison; DANIEL NOGA, also known as “Daniel Terlecki,” 41, or Des Plaines; FRANCISZEK BYSTRON, 37, of Park Ridge; ARTHUR RADOLINSKI, 32, of Lisle; and ELZBIETA BUCZEK, 37, of Bensenville.

The eleven-count indictment was returned Sept. 29, 2016, and ordered unsealed yesterday.  It seeks forfeiture of at least $1.3 million.

The defendants pleaded not guilty during arraignments yesterday before U.S. Magistrate Judge Young B. Kim.  A status hearing is scheduled for Dec. 1, 2016, before U.S. District Judge James B. Zagel.

The indictment was announced by Zachary T. Fardon, 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 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 bank fraud is punishable by up to 30 years in prison and a $1 million fine.  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 Timothy J. Chapman and Kavitha Babu.

Indictment

CHICAGO — An Oak Lawn real estate executive was charged today with trying to hire a hit man to murder an attorney who was involved in litigation against him.

LYLE ANASTOS, 35, of Oak Lawn, was arrested yesterday afternoon.  He is charged with using interstate commerce in the commission of murder for hire, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  Anastos was ordered to remain in federal custody after an initial appearance today before U.S. Magistrate Judge Jeffrey T. Gilbert.  Judge Gilbert scheduled a detention hearing for Oct. 7, 2016, at 2:00 p.m.

According to the complaint, Anastos sought the murder of an attorney who represented the husband of Anastos’ maternal grandmother in cases filed against Anastos.  In June the attorney helped secure legal judgments of more than $900,000 for the grandmother’s husband against Anastos and his real estate company, Skyline 1, Inc., as well as against the company’s secretary and a related entity, S12 LLC, where Anastos served as manager.  In a secretly recorded conversation last week, Anastos is heard talking to an acquaintance and agreeing to pay up to $10,000 to a hit man to murder the attorney, the complaint states.  Anastos is heard on the recording referring to the attorney as “the catalyst to get out of the picture,” according to the complaint.

The complaint and arrest were announced by Zachary T. Fardon, 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.  Substantial assistance was provided by the Cook County Sheriff’s Office. 

According to the complaint, the acquaintance last month informed the FBI that Anastos had requested assistance in locating an individual to murder the attorney.  At the direction of law enforcement, the acquaintance subsequently engaged in multiple recorded conversations with Anastos.

In a conversation yesterday, Anastos guaranteed to convey title to a $5,000 dump trailer to the hit man as collateral, with the understanding that Anastos would pay cash to the hit man after the murder and then get back the trailer, the complaint states.  Anastos is heard confirming the murder for hire, and he requested to see photographs after it was carried out, according to the complaint.  Law enforcement arrested Anastos after this conversation, the complaint states. 

No one was injured as part of the alleged scheme.

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

The charge in the complaint carries a maximum sentence of ten 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 Stephen Chahn Lee.

Complaint

CHICAGO — Federal authorities in Chicago have charged two suspected computer hackers for allegedly operating cyber-attack-for-hire websites that launched attacks on companies and individuals around the world.

ZACHARY BUCHTA, 19, of Fallston, Md., and BRADLEY JAN WILLEM VAN ROOY, 19, of Leiden, the Netherlands, are charged with conspiring to cause damage to protected computers.  The charges are the result of an international investigation into the computer hacking groups “Lizard Squad” and “PoodleCorp,” according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  Buchta and van Rooy allegedly conspired with others to launch destructive cyber attacks around the world, and trafficked payment accounts that had been stolen from unsuspecting victims in Illinois and elsewhere.

Buchta was arrested last month in Maryland.  He is scheduled to make an initial court appearance in Chicago today at 11:00 a.m. before U.S. Magistrate Judge Jeffrey T. Gilbert.  Authorities in the Netherlands arrested van Rooy last month and he remains in custody there.

The complaint and arrests were announced by Zachary T. Fardon, 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.  Substantial assistance was provided by the Office of International Affairs of the Justice Department’s Criminal Division; the Dutch Regional Criminal Investigation Service; the Dutch Prosecutor’s Office; and U.S. Attorney’s Offices in the District of Maryland, the District of New Jersey, and the Southern District of Ohio.

In addition to the charges, a federal court in Chicago ordered the seizure of four domain names associated with the alleged conspiracy.  The complaint identifies the seized websites as shenron.lizardsquad.org, lizardsquad.org, stresser.poodlecorp.org, and poodlecorp.org.

Lizard Squad initially drew the attention of U.S. authorities during an investigation into phonebomber.net, a website that enabled paying customers to select victims to receive repeated harassing phone calls from spoofed numbers, according to the complaint.  One of the victims, who resided in Illinois, last fall received a phone call every hour for thirty days.  When the victim answered the phone, an audio recording stated that the victim “better look over your [expletive] back because I don’t flying [expletive] if we have to burn your [expletive] house down, if we have to [expletive] track your [expletive] family down, we will [expletive] your [expletive] up [expletive].”

Soon after the launch of phonebomber.net, Buchta, van Rooy and other members of Lizard Squad began denial-of-service attacks and boasted about them on social media, the complaint states.  The attacks targeted various victims, including gaming, entertainment and media companies, and relied on a massive network of compromised computers and devices, according to the complaint. 

Buchta, who used the online screen names “@fbiarelosers,” “pein,” “xotehpoodle” and “lizard,” and van Rooy, who used the names “Uchiha,” “@UchihaLS,” “dragon” and “fox,” also conspired with other members of Lizard Squad to operate websites that provided cyber-attack-for-hire services, facilitating thousands of denial-of-service attacks, and to traffic stolen payment card account information for thousands of victims, according to the complaint.

The public is reminded that a complaint is 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 conspiracy charge carries a maximum sentence of ten years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

Complaint

ROCKFORD — An Elgin resident was sentenced today by U.S. District Judge Frederick J. Kapala on federal fraud charges.  

STEPHEN T. ANGERMAN, 48, of Elgin, was sentenced to 26 months in federal prison, to be followed by 3 years of supervised release.  A hearing to determine the amount of restitution has been set for Oct. 21, 2016, at 2:30 p.m. before Judge Kapala. 

Angerman pleaded guilty on June 24, 2016, to bank fraud, money laundering, and testifying falsely in a bankruptcy case. 

In his written plea agreement, Angerman admitted that from December 2009 through March 31, 2010, he schemed to fraudulently obtain a $510,000 loan from Alliant Credit Union and a $64,590 loan from Prairie Community Bank in order to purchase a home on Wrenwood Circle in Elgin.  Angerman admitted to making false statements on his loan application to Alliant about his employment, assets, and liabilities.  He further admitted to submitting fictitious bank account statements, pay stubs, a W-2 earnings form, and a fraudulent Certificate of Gift form to the credit union in support of his application.  Alliant issued the loan based upon Angerman’s false representations. 

Angerman also admitted that in December 2009 and January 2010, he applied for and obtained a $64,590 loan from Prairie Community Bank by pledging a 2008 Chevrolet Corvette as collateral without disclosing that the Corvette was subject to a prior lien of approximately $40,000 held by another bank.  Angerman further admitted in his plea agreement that he schemed to defraud PNC Bank and Consumers Credit Union in order to obtain a $69,200 loan from PNC Bank and a $69,000 loan from Consumers Credit Union by secretly double pledging his home on Wrenwood Circle in Elgin as security for both loans.  

With regard to the money laundering charge, Angerman admitted that on March 23, 2010, he transferred most of the proceeds - $64,500 - from his checking account at Alliant Credit Union to an account in the name of a relative at a different bank in an attempt to conceal his bank fraud against Prairie Community Bank.

On Jan. 3, 2011, Angerman filed for bankruptcy in Rockford.  Angerman admitted that on Feb. 7, 2011, he falsely testified under oath at a meeting of creditors by stating he did not own any real estate other than what he had listed in his bankruptcy schedules, and that he did not own a car, when in fact he owned the home on Wrenwood Circle in Elgin and a 2008 Chevrolet Corvette. 

The sentencing was announced by Zachary T. Fardon, 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 James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service - Criminal Investigation Division in Chicago.

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

CHICAGO — A federal grand jury in Chicago has indicted a futures trader for allegedly causing $13 million in losses in a fraud scheme that led to the collapse of his trading firm.

THOMAS LINDSTROM used deep out-of-the-money options on ten-year Treasury Note futures to make it fraudulently appear that his trading at Chicago-based Rock Capital Markets LLC was profitable, thereby obtaining greater financial compensation for himself, according to the indictment.  His fraud scheme caused a loss of at least $13 million and led to the collapse of Rock Capital, the indictment states.  Over a six-month period in 2014 and 2015, Lindstrom obtained compensation of $285,000, the indictment states. 

The eight-count indictment was returned yesterday in U.S. District Court in Chicago.  It charges Lindstrom, 48, of Winnetka, with four counts of commodities fraud and four counts of wire fraud.  U.S. District Judge Harry D. Leinenweber scheduled arraignment for Oct. 4, 2016, at 9:45 a.m.

The indictment was announced by Zachary T. Fardon, 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 Commodity Futures Trading Commission, which today filed a civil enforcement lawsuit against Lindstrom, assisted in the investigation.  The CFTC complaint seeks injunctive and other equitable relief, as well as civil monetary penalties under the Commodity Exchange Act.

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

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

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

The public is reminded that an indictment 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.  Each count of commodities fraud is punishable by up to 25 years in prison, while the wire fraud counts each carry a maximum sentence of 20 years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The case is being prosecuted by the Securities and Commodities Fraud Section of the U.S. Attorney’s Office in Chicago.  The government is represented by Assistant U.S. Attorney Sunil Harjani and Special Assistant U.S. Attorney Lindsey Evans.

Indictment

ROCKFORD — A Crystal Lake woman was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for mail fraud. 

PATTY CORDOBA, 44, of Crystal Lake, Ill., was sentenced to 55 months in federal prison, to be followed by 3 years of supervised release, and was ordered to pay restitution of $1,115,072.  Cordoba pleaded guilty to mail fraud on May 23, 2016.  In the written plea agreement, Cordoba admitted that from March 1, 2009, to May 18, 2012, she and her co-defendants participated in a scheme to defraud and obtain refunds from the United States Treasury Department. 

Cordoba owned and managed Patty’s Tax Service in McHenry, Ill.  Cordoba and her employees - co-defendants MARIO CORDOBA, LUISA CARBAJAL and ALICIA AREVALO - prepared and filed over 200 fraudulent personal federal income tax returns for other co-defendants OLGA LIDIA DIAZ-HERNANDEZ, VICTOR HERNANDEZ, VERONICA SANCHEZ-BARRADAS and CESAR BESICHE, and other individuals, by claiming false amounts of income and credits for tax years 2006 through 2011.  Those returns were mailed and filed with the IRS, falsely claiming over $1,000,000 in tax refunds.

Based on the false tax returns submitted to the IRS, the United States Treasury issued and mailed tax refund checks to the addresses listed on the false tax returns, or caused the refunds to be directly deposited into bank accounts in the names of the filers.  The IRS issued approximately $1,115,072 in refunds to which Patty Cordoba and her co-schemers were not entitled.

The seven co-defendants previously pleaded guilty to mail fraud and were sentenced:

Arevalo, 49, of Poplar Grove, Ill., pleaded guilty on May 16, 2016, and was sentenced on August 29, 2016, to 21 months in federal prison, and ordered to pay restitution of $1,115,072.

Besiche, also known as Cesar Beciche-Barranco, 50, of McHenry, Ill., pleaded guilty on Dec. 8, 2015, and was sentenced on March 15, 2016, to time served and was ordered released to the Department of Immigration and Customs Enforcement for processing of deportation proceedings against him.  Besiche was also ordered to pay restitution of $74,902.

Carbajal, 54, of Marengo, Ill., pleaded guilty on Feb. 26, 2016, and was sentenced on June 23, 2016, to 16 months in federal prison, to be followed by a term of supervised release of 2 years, and ordered to pay restitution of $1,115,072.

Mario Cordoba, 49, of Crystal Lake, Ill., pleaded guilty on May 26, 2016, and was sentenced on September 1, 2016, to 33 months in federal prison, to be followed by 3 years supervised release, and ordered to pay restitution of 1,115,072.

Diaz-Hernandez, also known as Olga Diaz, 46, of McHenry, Ill., pleaded guilty on March 21, 2016, and was sentenced on July 8, 2016, to 21 months in federal prison, and ordered to pay restitution of $166,296.

Sanchez-Barradas, 40, of McHenry, Ill., pleaded guilty on Feb. 24, 2016, and was sentenced on June 7, 2016, to 27 months in federal prison, and ordered to pay restitution of $252,398.

Hernandez, 43, of McHenry, Ill., pleaded guilty on Feb. 16, 2016, and was sentenced on May 31, 2016, to 27 months in federal prison, and ordered to pay restitution of $252,398.

Patty Cordoba's sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service - Criminal Investigation Division; E.C. Woodson, Inspector in Charge of the Chicago Division of the United States Postal Inspection Service; and James M. Gibbons, Acting Special Agent-In-Charge of the Chicago Field Office of Homeland Security Investigations.

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

The following are remarks by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, as prepared for delivery to the City Club of Chicago on September 26, 2016:

Good afternoon. Thank you for having me.  I’m honored to be here and grateful to all of you for coming.

No different than the first two times I was here, despite the mission-critical work my Office does in areas like public corruption, counter-terrorism, cybercrime, major frauds, and narcotics trafficking, I am going to focus my comments today on violent crime in Chicago.

But I am going to talk not just about violence and law enforcement today.  I am going to talk about trust.  I am going to talk about civil rights.  I’m going to talk about the aspiration of bringing together all of the good and wonderful people who are fully committed to fixing what pains us in Chicago.  About breaking barriers and finding pathways to change.    

Everyone in this room knows that we’re in the midst of a brutal year.  Homicides are up over 40%.  Shootings are up 50%.  There is civil unrest.  Our police are under a constant microscope.  Our streets are teeming in protest.  There is anger, there is fear, there is distrust.  And with the constant drumbeat of bad news, for some there is even a sense of depression, of hopelessness. 

And yet, for all of that, let me tell you what breaks my heart, because my heart does break every single day in this job, but it’s not on account of what is happening this year.  It’s deeper and wider than that.  My heart breaks for reasons that I talked about in this room in 2014 and 2015 -- reasons that were just as real in 1996 and 2006 as they are today in 2016. 

We have kids – babies, toddlers, adolescents, tweens and teens – shot as a matter of routine in this city.  Thirty kids under 13 years old hit with bullets so far this year alone.  These are just some of those kids. 

Since 2010, over 2,800 kids shot, and 369 kids killed in the city of Chicago.

And that isn’t happening here in River North.  It’s happening in a handful of neighborhoods -- otherwise great neighborhoods on the South and West Sides of Chicago.  Neighborhoods that are isolated, traumatized and terrorized by gun violence. 

This is our reality today.  This was our reality last year, and the year before that. This has been our reality now for decades. 

In my three years as United States Attorney, I’ve been asked more than a dozen times what I think of the term Chiraq.  I usually take a pass on that question.  The word itself is not important to me.  But, in truth, Chiraq -- whatever else it may evoke -- is now a verbal symbol of the hard reality that Chicago is a tale of two cities – one safe and bucolic, the other dangerous and volatile. 

Our challenge in Chicago isn’t measuring today’s violence statistics against yesterday’s.  We’ve been doing that for decades, and fundamentally nothing has changed.  The challenge we need to be talking about is the decades-old social justice concern of these neighborhoods set apart, and children put at risk. 

That is a “right-versus-wrong” challenge.  It is a “who do we want to be as a city, a community, a society” challenge.  It’s a big challenge, but it’s ours.  We need to be honest about it, own it, and start coming up with better ideas for long-term sustainable solutions.

I’m going to spend the next twenty minutes or so talking about two major moving parts, from my perspective, important to those solutions.  First, I’m going to talk about civil rights and policing.  Second, I’m going to talk about not-for-profit organizations operating in those most violence-afflicted neighborhoods. 

Civil Rights Investigations

Starting with Civil Rights.  Two years ago, in August 2014, 18-year-old Michael Brown was shot and killed by a police officer in Ferguson, Mo.  That incident ignited a powder keg of pent-up anger.  Issues of force, race and racism in policing were thrust onto the national stage in a way that had not happened since the Rodney King beating in the 1990s. 

Unlike the era of Rodney King, we now live in a time when video cameras are ubiquitous; each of you has one in your pocket.  And so we started seeing viral videos posted in a near constant stream:

• Eric Garner dying from a choke hold in Staten Island
• Tamir Rice, the 12-year-old shot and killed in Ohio
• Freddie Gray dying in the back of a police van in Baltimore
• Laquan McDonald shot 16 times, mostly on the ground
• And, more recently, Paul O’Neal shot in the back here in Chicago.

There are dozens and dozens more examples over these past two years.  Two new examples in the past two weeks — one in Tulsa and one in North Carolina.  One or more of these events a week, across the nation, it seems.  And because of technology, those events are no longer just local concerns; they are national concerns -- they belong to us all. 

Which brings me to today.  We are now in the midst of a national reform movement around policing and trust.  It’s a movement with no less at stake than public safety, effective self-governance, and belief in our systems of justice.

And nowhere is that more true, with more at stake, than right here in Chicago.  In December of last year, United States Attorney General Loretta Lynch announced a “pattern and practice” investigation of the Chicago Police Department.  I was by her side in Washington when that announcement was made.  And since that announcement, our Office here in Chicago has been working hand-in-hand with DOJ’s Civil Rights Division in Washington, D.C., to conduct the investigation of CPD.

Our “pattern and practice” investigation is not a criminal investigation.  I will say something in a moment about our federal criminal civil rights cases.  The “pattern and practice” investigation is a sweeping civil review to determine if there have been repeated Constitutional violations by Chicago police over the years, particularly in two key areas: (i) use of force, including deadly force; and (ii) accountability mechanisms, meaning essentially what happens when bad cops do bad things.

For the past nine months our DOJ team -- my office and Main Justice working together – has done a deep dive on those areas.  The team has analyzed tons of data, interviewed hundreds of people, held public forums, conducted ride-alongs with patrol officers, reviewed policies and procedures, scrutinized training, and conferred with top experts across the country.  This is the largest “pattern and practice” investigation in the history of the Department of Justice.  And this is the first time in Chicago’s history there has been this kind of review of the police department.  So this is hugely important stuff. 

We are not done yet with the review, but we are, I believe, moving at record pace.  I won’t make predictions because I don’t want to create expectations where there is no certainty.  But we are approaching this with a tremendous sense of urgency, and I believe we’re on an unprecedented pace to get this review done. 

Our urgency has to be balanced with efficacy.  We’ve got one shot at this thing, and so we have to get it right.  Assuming we find problems, our goal is not quick fixes; it is long-term, sustainable change. That is what we are about.  Sustainable change takes time, care, and enormous effort.  So that’s how we’re approaching this historic opportunity. 

That’s on the civil side.  Let me, as promised, say something about our federal criminal civil rights prosecutions.  Where appropriate, our U.S. Attorney’s Office here in Chicago prosecutes police officers criminally.  To do that, we have a limited number of options.  Federally, there are no general murder, manslaughter, or assault type crimes; those are state crimes, and only the State can bring those kinds of charges. 

Our principal tool for federal prosecution is known as the deprivation of rights law, which essentially gives us authority to bring federal charges where we can prove that an officer willfully violated someone’s civil rights.  To prosecute under that law, we have to be able to prove beyond a reasonable doubt both that the officer’s use of force was objectively unreasonable, and that the officer acted willfully -- knowing that the force used was excessive.  Proving that willful state of mind -- getting inside the officer’s head at the moment force was used and proving willfulness beyond a reasonable doubt -- is a high bar. 

Despite those challenges, our Office has dedicated resources to this area and has historically brought impactful criminal charges against officers using excessive force in Chicago and across the Northern District of Illinois.  In the past two weeks we charged two excessive force cases – one against a Joliet police officer, and one against a Chicago police officer.  And beyond excessive use of force cases, we also have held dozens of officers accountable for other forms of corruption, like stealing from drug dealers, selling drugs, selling weapons, theft, and other crimes.    

We sometimes investigate police officer cases that are charged by the State and not by us.  Let me say something about that interplay between State and Federal prosecutions when it comes to police officer misconduct.  In some cases, even if our Office finds sufficient evidence to prosecute an officer federally, we will defer to the State when it moves forward with charges.  There are a couple important reasons for that.

First, as I mentioned, the State has the ability to charge crimes – like murder or manslaughter – that carry heavier penalties than our federal statute.  In other words, excessive use of force by police officers is a context in which the State often carries a bigger criminal stick than the feds.  Whether we like it or not, that’s the reality.

Second, in Illinois, there is a State double jeopardy law that specifically can preclude the State from prosecuting if we, the feds, charge first.  In light of that, when the State decides to charge an officer, my Office often will wait rather than risk jamming up the State’s prosecution.  When we make that decision to wait, we monitor the State case to see how it is resolved, and once the State case is done, we make a decision whether or not to charge federally.  In making that decision, the key factor is whether we the think the State result, including any prison sentence, has rendered justice. 

So, a lot of layers there.  Our criminal justice world is sometimes complicated, and that’s okay.  The most important thing I want you to know is this: Our U.S. Attorney’s Office has and will continue to independently and vigorously pursue federal civil rights prosecutions of police officers, where appropriate. 

And let me tell you why.  When officers break the law, it hurts us all.  It hurts the immediate victims, it hurts the public -- who lose faith and confidence in law enforcement -- and it hurts all of the good officers who suffer from that loss of public faith and confidence.  Those good officers can no longer do their jobs effectively without the support and trust of the people they serve and protect.   

Let me put a finer point on it.  I am someone who believes that police officers are by and large the noblest of our public servants.  They’re the ones, women and men, who’ve taken a job at modest pay, where every day they wake up not knowing if they may get hurt or even killed.  And damn near all of them do that, and wear that risk, because they are good people.  They are people who risk their lives to serve and protect us.

To succeed, those good officers need credibility with the public they serve.  And when bad cops are able to do bad things and there’s no accountability, that hurts all of those good officers.  Among other things, in my opinion, that paradigm can create and foster the exact kind of “don’t snitch” culture we have seen for decades now in our neighborhoods – South Side and West Side -- that most desperately need the police to be able to solve crimes, to catch the murderers. 

It’s time to fix that.  It’s time to change that paradigm.  It’s time to win back the respect our police officers have earned.  By doing that, we help CPD, we help our afflicted neighborhoods, and we help make this city safer and stronger. 

As I said at the outset, for me, this is not about statistics.  It is about fairness – fairness to all our neighbors across Chicago.  For us to have any chance of succeeding in the long-term goal of correcting the injustice of those neighborhoods set apart, I believe what we are going through with CPD right now was inevitable, and is essential. 

At the moment we are in pain.  In life, you sometimes have to go through pain to get to a better place.

Spike in gun violence

Let me talk more directly about that pain.  A 40+% increase this year in homicides.  A nearly 50% increase in shootings.  In 2014 and 2015, we saw some of our lowest homicide rates in Chicago since the 1960s.  And now suddenly, in 2016, the pendulum whips away from us.  Why is that?

No one can say for sure, but I think it is worth noting that the current spike in violence followed 4 quick successive events late last year:

• The city released the Laquan McDonald video
• DOJ announced its pattern & practice investigation
• CPD’s Superintendent of 4.5 years was let go
• Coincidental to those first 3 things, on January 1 of this year, a contract went into effect between the City and the ACLU mandating that officers fill out lengthy contact cards for every street encounter.  That agreement was negotiated between the city, CPD and the ACLU last year.  It just happened to go into effect on January 1 of this year.

After those 4 events, all of which came within a six-week period leading up to January 1, 2016, I believe there was a hit on CPD morale, and a drag on officer willingness to conduct stops.  There has in fact been a major drop this year in the number of street stops officers are conducting. 

I also think that the fallout in public confidence – the apparent embattlement of police on all fronts -- created a sense of emboldenment among gang members, especially in Chicago’s most violence-afflicted neighborhoods.  Some gang members apparently felt they could get away with more, and so more bullets starting flying. 

Those perceptions are wrong, and I think they are changing and will change with time and because of the great efforts our Chicago police officers are making right now -- to push back against that violence and to ensure change that will restore credibility. 

What We’re Doing at the USAO

Let me say something about what federal law enforcement, including the U.S. Attorney’s Office, has been doing to help CPD and our State partners in this crisis. 

In addition to the civil rights work I already mentioned, we are busier than ever at 219 South Dearborn prosecuting gangs and violent offenders.  In late July, we announced racketeering indictments against 34 ranking leaders of the Latin King Street gang on the South and West Sides for widespread and recurring violence.  Separate from that, starting earlier this month, we are trying a federal racketeering case against members of a Gangster Disciples/Black Disciples hybrid gang faction, who are alleged to have committed multiple murders and other brutal acts of violence over years.  That federal trial is taking place as I speak.

Those two major cases are exemplary; we have many more federal gang and violent-offender cases charged and in the investigative pipeline.  We have not and will not take our foot off the criminal enforcement pedal.

In addition, this year our Office has increased its intake of gun cases across the board.  We continue to work with the State’s Attorney’s Office, who are a great partner to us, to determine which sovereign is in a better position to charge putative gun defendants.  This year, through that cooperative screening process, we’ve decided to take on more water federally, specifically in reaction to the current crisis and to make sure that during this challenging time we’re doing everything we can to aid our local and state partners.    

And to be clear, it’s not just the U.S. Attorney’s Office leaning in to this crisis.  It’s the entire federal law enforcement family here in Chicago.  The FBI, DEA, ATF, USMS and other federal agencies have ramped up their resources to help tamp down this spike in violence.  There are some very specific initiatives we’ve launched this year, along with our State and local partners, and I’m not going to reveal details because I do not want to compromise those ongoing initiatives.  But suffice it to say all oars from those agencies, including the FBI, are in the water right now.  We are committed, along with CPD and our State partners, to doing everything we can to address the current increase in gun violence as quickly and effectively as possible.

Prevention Efforts  

That’s all on the criminal enforcement side.  Complementary to those efforts, we’re also right now working closely and constantly with CPD and others on preventing violence before it happens.  My Office this year has led or participated in reentry forums, youth outreach forums, violence-reduction gang call-in meetings, and community trust roundtables, on a routine basis.  We’ve had dozens of such events already this year. 

Last time I was here I spoke about our Youth Outreach Forums, where we are working with at-risk kids, 13-17 years of age, to help them identify a path other than gang membership and violence.  I won’t rehash that now, but that program continues.  And while no one program is a panacea for our gun violence problem, I am proud that our U.S. Attorney’s Office here continues to invest resources and lead the way forward on many of those initiatives.

Prevention efforts are a critical part of our long-term success against gun violence.  I don’t want to prosecute gun criminals if we can stop the crimes from happening in the first instance.

Not-For-Profit Community Conversations

I’m going to pivot now and say a few words about another concern I think is important to this overall discussion -- specifically, some challenges facing not-for-profit organizations operating in our most violence-afflicted neighborhoods. 

When I was here last, about a year ago, I mentioned that my Office had launched a series of community trust roundtables focused on violence and policing issues.  We have continued to hold those roundtables, which I’ve hosted roughly quarterly over the past almost two years.  After one in Englewood earlier this year, I spoke with CPD Superintendent Eddie Johnson about doing a separate series of smaller roundtable discussions with a very specific and discrete purpose: to gather leaders of not-for-profits operating in the neighborhoods that are suffering this year’s worst gun violence, and find out from those not-for-profit leaders their views and concerns about trying to make those neighborhoods safer.

Over the past three months, my Office and CPD have hosted 4 of those not-for-profit roundtable discussions.  We held one in Englewood, one in Garfield Park, one in Austin, and one in Back of the Yards.  Each meeting has included about 20 to 30 leaders from different not-for-profit organizations providing a wide spectrum of services in their respective neighborhoods. Things like:

• healthcare for the indigent
• housing and food for the homeless
• mental health services
• substance abuse aid
• domestic violence assistance
• workforce development
• educational programs
• youth programs
• tutoring for kids

The roundtables have been non-public, so as to foster candor and honesty.  This is the first time I’ve mentioned these meetings publicly.

And to be clear, the meetings are not part of the DOJ “pattern and practice” investigation or any larger DOJ initiative.  This is the U.S. Attorney’s Office and me, as the U.S. Attorney, trying to better understand some of the other pieces of the puzzle in Chicago -- beyond law enforcement’s role -- when it comes to combatting gun violence, so that we can do everything in our power to complement those other critical efforts. 

So, here are two key takeaways from the roundtable discussions:

First, there is an amazing number of super smart, committed, passionate, hard-working, altruistic people providing not-for-profit services in these neighborhoods.  And I don’t say that lightly, or to pander, or for hyperbole.  I say it because it’s true, and I didn’t really know it until I went and saw it for myself.  There is no shortage of good and smart people trying to help in these neighborhoods.

And so what?  Why does it matter that there is this critical mass of capable leaders working to improve those neighborhoods?

Because of my second key point -- they don’t have what they need to succeed.  At each and every one of these meetings – each with different participants operating in different neighborhoods – there was a single, resounding, common complaint: the absence of a Marshall plan or unified vision for working together and cooperating to improve the neighborhoods.  In fact, repeatedly we heard how these leaders and their organizations are often working apart from each other and often even in competition. 

Why is that?  What I heard first and foremost is that the funding mechanisms -- whether state, federal or philanthropic -- are mostly annualized, are hyper competitive, and are data driven.  And so many of these organizations compete -- all year, every year -- to protect their numbers and bring in funding dollars just so they can survive.  That paradigm leaves little room or incentive for them to stop the music and work together to come up with a comprehensive plan for attacking gun violence.

They want to do that.  All of them want to do that.  Many feel like they can’t. 

That paradigm has to change as well.  Those great people need to be able to work together, to complement each other, to share a vision and plan for success in helping their respective neighborhoods.  And so I ask all of you, whether you are in business, or government, or part of the great philanthropic community in Chicago, to give that issue some thought.  Let’s have a conversation and find a way to change that paradigm such that all these talented people -- already operating full time in these neighborhoods -- can have a greater impact. 

Schools and Jobs

Of course beyond not-for-profits and law enforcement, there are other major moving parts that we have to address to resolve our gun violence dilemma.  And like not-for-profits those major moving parts are outside my Office’s authority. 

Equal education is one.  We have to find ways to ensure that the schools operating in our violence-afflicted neighborhoods are providing the same quality and continuity of services as others across the city. 

Jobs is another.  We need more businesses to stake ground in these neighborhoods and create work opportunities, particularly for young adults coming up and for Illinois citizens returning from incarceration, a large percentage of whom return to these violence-afflicted neighborhoods.

Those are all significant challenges.  But there are a lot of good people – in city government, in state government, in the private sector – who working hard and earnestly on those challenges.  And we have success stories -- discreet but real stories -- where schools have improved, and new businesses have staked ground in these neighborhoods.  We need to study and build upon those successes, and come up with a template for every neighborhood to succeed. 

Conclusion

Chicago’s gun violence problem is multi-faceted.  It is not rooted in any one thing.  It has roots in poverty, joblessness, and educational inequality, which over decades has fostered cultural issues, parenting problems, fear, cynicism, and a tragic strain of low expectations, complacency, hopelessness.

Our institutions must do better.  Law enforcement.  Government. Schools.  Businesses.  Not-for-Profits.  We all have to do better.

I’d submit to you that across those institutions, we too are too often operating in silos.  For all of the good will and work of folks in the public, private and philanthropic sectors, we don’t communicate as much and effectively as we need to.  We are each trying hard to do our jobs, to do our parts.  But that is not good enough in the face of this kind of challenge.  We have to be better at knowing each other, at communicating, at coming together around a common, comprehensive plan where we are coordinated and complementing each other.  That is the only way to win this particular fight. 

In some small measure, through our roundtables and outreach initiatives, my Office is trying to chip away at that challenge.  And I commit to you we will not stop.  The fantastic women and men of this U.S. Attorney’s Office will keep pushing.  We’ll keep prosecuting violent offenders.  We’ll keep looking for new ways to stop crime before it occurs.  And we’ll keep listening, learning, and striving to find long-term solutions to this complex problem.  We never lose hope.  Giving up is not part of our DNA. 

Institutions matter. But at the end of the day, to save innocent kids and restore neglected parts of this city, the solution lies not in institutions; it lies in people.  I’m from Tennessee.  Chicago is my adoptive home.  And every year I have lived here I have fallen further in love with this place and its people.  I am in awe of the fundamental goodness I witness from people each and every day across this city -- the profound strength and love citizens here hold for the city and each other.  That strength and love is the fuel that will drive our change.

The U.S. Attorney’s Office is honored to be a part of it.  We’re going to keep working hard every single day. 

Thank you for being here and for listening.

CHICAGO — A high-ranking member of the Sinaloa Cartel was sentenced today to eight years in federal prison for his role in importing cocaine from Mexico and laundering millions of dollars in drug proceeds through textile, gold and other transactions.

EDGAR MANUEL VALENCIA-ORTEGA, 29, of Mexico, pleaded guilty earlier this year to one count of conspiracy to commit money laundering.  He admitted in a plea agreement that he helped broker multi-kilogram cocaine transactions and laundered narcotics proceeds to Mexico.

U.S. District Chief Judge Ruben Castillo imposed the 96-month sentence in federal court in Chicago.

“This case is about drug trafficking at the highest levels,” Assistant U.S. Attorney Michael Ferrara argued in the government’s sentencing memorandum.  “The damage that those drugs, and the violence resulting from the drug trade, have caused to communities in Chicago and elsewhere is immeasurable.”

The U.S. Attorney’s Office in Chicago has worked closely with federal and local law enforcement agencies to target senior leadership of the Mexican-based Sinaloa Cartel.  Valencia-Ortega is one of more than 20 alleged members of the cartel to be indicted in federal court in Chicago.  The indictments include charges against the cartel’s alleged leader, JOAQUIN “CHAPO” GUZMAN, who is in custody in Mexico.  The Chicago-based investigation has resulted in seizures of approximately $30.8 million, approximately eleven tons of cocaine, 265 kilograms of methamphetamine and 78 kilograms of heroin.

Valencia-Ortega frequently contacted associates of the Sinaloa Cartel regarding narcotics proceeds that needed to be laundered to Mexico from Chicago and Los Angeles.  The drug money was made clean through commodities-based laundering involving textiles, electronics and gold, with Valencia-Ortega receiving a commission on each transaction, according to his plea agreement.  In connection with one such transaction, federal authorities in May 2013 seized approximately $149,050 from a courier in Chicago.

Valencia-Ortega acknowledged in the plea agreement that he was directly involved in the laundering of drug proceeds totaling between $1.5 million and $3.5 million.

Valencia-Ortega also admitted brokering multi-kilogram cocaine transactions that resulted in deliveries from Mexico to customers in the Los Angeles area.  Federal authorities intercepted one such transaction in June 2013, seizing approximately 41 kilograms of cocaine and $325,000 from a courier.  Another federal confiscation in September 2013 resulted in the seizure of approximately 93 kilograms of cocaine from two stash-house operators who were responsible for maintaining and delivering the drugs within the United States.

The sentence was announced by Zachary T. Fardon, 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; James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Chicago Police Superintendent Eddie Johnson.

The government is represented by Mr. Ferrara and Assistant U.S. Attorneys Erika Csicsila, Georgia Alexakis, Kathryn Malizia, and Sean Franzblau.

ROCKFORD — A Rockford man was sentenced in federal court by U.S. District Court Judge Philip G. Reinhard for his role in a conspiracy to receive, possess, conceal, store, sell, and dispose of stolen firearms and ammunition, and other firearms offenses.

TEOVANNI CUNNINGHAM, 31, was sentenced Tuesday to a total of 188 months in federal prison, followed by three years of supervised release. Cunningham also was ordered to pay restitution to victims of the conspiracy.

Cunningham pleaded guilty on May 31, 2016, to conspiring to receive, possess, conceal, store, sell, and dispose of stolen firearms and ammunition; receiving, possessing, concealing, and storing stolen firearms and ammunition; and illegally possessing firearms and ammunition as a felon.  In a written plea agreement, Cunningham admitted that he conspired with codefendants, MICHAEL SCHAFFER, 34, and MICHAEL TAPIA, 25, of Belvidere, Ill., to receive, possess, conceal, store, sell, and dispose of stolen firearms and ammunition. Cunningham admitted that, on Dec. 31, 2012, he and Tapia broke into a residence in Rockton, Ill., and stole over 21 firearms and hundreds of rounds of ammunition from the residence. The plea agreement states that Cunningham learned about the firearm collection from Schaffer, who showed Cunningham where the residence was located and informed Cunningham when the residents would be away from home. Cunningham admitted that he and Tapia later sold or disposed of stolen firearms and ammunition to individuals in northern Illinois. Cunningham also admitted that he transferred four of the stolen firearms to codefendant DARRELL REED, 28, of Byron, Ill., and he gave firearms to Schaffer for Schaffer’s part in the conspiracy.

Schaffer pleaded guilty on June 3, 2016, to conspiring to receive, possess, conceal, store, sell, and dispose of stolen firearms and ammunition, and Reed pleaded guilty on June 15, 2016, to receiving, possessing, concealing, storing, selling, and disposing of stolen firearms. Tapia was found guilty by a federal jury on August 25, 2016, of conspiracy to receive, possess, conceal, store, sell, and dispose of stolen firearms and ammunition, and other firearms offenses. Sentencing is scheduled for Reed on Oct. 14, 2016, at 9:30 a.m., and for Tapia on Dec. 14, 2016, at 9:00 a.m.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Jeffery A. Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives.  The Federal Bureau of Investigation, Winnebago County Sheriff’s Department, Rockton Police Department and Rockford Police Department assisted in the investigation.

The government is represented by Assistant U.S. Attorneys Talia Bucci and Michael D. Love.

CHICAGO — The owner of a transportation company that bused Chicago public school students spent corporate money to purchase and renovate a $500,000 home in the city’s Oakland neighborhood and illegally deducted the funds in U.S. tax filings, according to a federal indictment unsealed today.

JEWEL LOCKHART, the owner and president of Chicago-based Jewels Bus Co., is charged with one count of impeding the Internal Revenue Service, and six counts of willfully filing false tax returns.  Lockhart, 71, of Chicago, will be arraigned in U.S. District Court on a future date to be determined by the Court.

From 2008 to 2013 Jewels Bus Co. contracted with Chicago Public Schools to provide daily bus service for its students.  The company also provided service to various other clients, including individual CPS schools, for special events.  The special event fees collected by the company were deposited into a separate bank account than the fees collected from CPS.

The indictment alleges that from 2009 to 2011 Lockhart concealed income from Jewels Bus Co.’s tax return preparer by failing to record the special events income in company books.  Lockhart transferred money from the bus business to a company controlled by a relative, who used it to purchase a $500,000 home in the 800 block of East Oakwood Boulevard in Chicago’s Oakland neighborhood, according to the indictment.  Lockhart and the relative, who isn’t named in the indictment, spent more than $600,000 in Jewels Bus Co.’s money to renovate the house, the indictment states.  Lockhart later became a joint tenant in the home and used it as her personal residence, according to the indictment.  Lockhart concealed the scheme by telling Jewels Bus Co.’s tax return preparer that the transferred funds and the renovation costs were tax-deductible corporate expenses, even though she knew the money was spent for her personal gain, the indictment states.

The indictment further alleges that Lockhart lied to an IRS officer during an interview in 2012 about Jewels Bus Co.’s alleged failure to remit all of the employment taxes it owed.  Lockhart falsely stated that CPS was the company’s only client, without mentioning its numerous other customers.

For the calendar years 2009 through 2011, Lockhart reported to the IRS that Jewels Bus Co.’s corporate income was more than $30.8 million, the indictment states.  In fact, Lockhart knew that the corporation’s total income for those years substantially exceeded that amount, according to the indictment.  For the same three-year period, Lockhart reported individual earnings of more than $1.1 million.  The indictment alleges that her actual personal income during that time substantially exceeded that amount.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Nicholas J. Schuler, Inspector General for the Chicago Public Schools; and Thomas D. Utz Jr., Special Agent-in-Charge of the U.S. Department of Education Office of Inspector General.

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

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

The government is represented by Assistant U.S. Attorney Steven Block.

Indictment

ROCKFORD - A suspended DeKalb, Ill. doctor pleaded guilty today in federal court before U.S. District Judge Frederick J. Kapala to illegally dispensing controlled substances and federal income tax fraud, and his wife pleaded guilty to income tax fraud. 

According to the plea agreements, RICHARD H. NG, 64, owned and operated the Sauk Medical Clinic’s DeKalb and Sterling, Illinois locations.  LEE LEE FOONG, 57, also known as “Audrey,” was married to Ng and was the office manager for the Sauk Medical Clinic.  Every patient at Sauk Medical Clinic received a prescription for a scheduled controlled substance.  Ng accepted only cash, credit cards, or checks for Sauk Medical Clinic patient visits and required 100% payment for the visit prior to the patient receiving a prescription.  Ng admitted in his plea agreement that he dispensed controlled substances, such as Hydrocodone, Oxycodone, and Morphine Sulphate, outside the course of professional practice and without a legitimate medical purpose.  Ng also admitted that he was aware of obvious “red flags” that his patients were abusing or misusing the controlled substances. 

Ng admitted that between December 10, 2010 and February 7, 2011, he dispensed outside the course of professional practice and without a legitimate medical purpose three prescriptions for Hydrocodone to an undercover federal agent.  Ng also dispensed outside the course of professional practice and without a legitimate medical purpose six prescriptions for controlled substances to two additional undercover federal agents.  Ng did so after performing a minimal examination and learning from both undercover agents that they were sharing their pills with others.       

According to the plea agreements, Ng and Foong filed a false federal individual tax return for 2011, which failed to report a total of $284,890 in cash received from Sauk Medical Clinic and rental receipts.  Ng and Foong admitted that the unreported income would have resulted in additional federal income tax due of $92,646.10.

Ng faces a maximum sentence of 13 years’ imprisonment, a term of supervised release up to life following imprisonment, and a fine of up to $1.1 million.  Sentencing for Ng is set for December 19, 2016, at 9:30 a.m. before U.S. District Judge Frederick J. Kapala.

Foong faces a maximum sentence of 3 years’ imprisonment, a term of supervised release up to one year, and a fine of up to $100,000.  Sentencing for Foong is set for December 20, 2016, at 2:30 p.m. before U.S. District Judge Frederick J. Kapala. 

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; and James D. Robnett, Special Agent-in-Charge of the Chicago Field Office of the Internal Revenue Service - Criminal Investigation Division.  The Sterling, Ill. Police Department assisted in the investigation.

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

CHICAGO — A federal judge in Chicago today imposed prison sentences of 30 years and 21 years for Aurora cousins who conspired to provide material support to a foreign terrorist organization.

U.S. District Judge John Z. Lee sentenced HASAN R. EDMONDS to 30 years, and JONAS M. EDMONDS to 21 years.  The defendants are United States citizens and cousins from southwest suburban Aurora.

The sentencings were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John P. Carlin, Assistant Attorney General for National Security; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The government was represented by Assistant U.S. Attorneys Barry Jonas and John Kness of the Northern District of Illinois, and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.

The cases were investigated by the Chicago Joint Terrorism Task Force, which is comprised of Special Agents of the FBI, officers of the Chicago Police Department, and representatives from an additional 20 federal, state and local law enforcement agencies.  Significant assistance was provided by U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement Homeland Security Investigations, the Illinois State Police, the Aurora Police Department and the Illinois National Guard.

The pair pleaded guilty in December 2015 to conspiring to provide material support to the Islamic State of Iraq and the Levant, a foreign terrorist organization commonly referred to as ISIL, ISIS, or the Islamic State.  Hasan Edmonds, 24, also pleaded guilty to one count of attempting to provide material support to a foreign terrorist organization, while Jonas Edmonds, 31, pleaded guilty to an additional count of making a materially false statement to a law enforcement officer regarding an offense of international terrorism.

The cousins admitted in their plea agreements that they devised a plan for Jonas Edmonds to carry out an armed attack at the U.S. Army National Guard base in Joliet.  At the time the attack was planned, Hasan Edmonds was a member of the Army National Guard and had been training at the Joliet installation.  The plot called for Hasan Edmonds to provide military uniforms for Jonas Edmonds to wear during the attack, and to give Jonas Edmonds a list of officers to kill.

Members of the Task Force arrested the cousins in March 2015 before an attack could be carried out.

“Had law enforcement not interceded, defendant’s attack could potentially have rivaled other ISIL-inspired attacks in Paris and California,” Mr. Jonas argued in the government’s sentencing memorandum in Jonas Edmonds’ case.  “The impact of the attack – on National Guard members, their families, and this nation’s psyche – would have been devastating.”

In addition to the proposed attack on the National Guard base, the conspiracy also called for Hasan Edmonds to travel to the Middle East for the purpose of waging violence on behalf of ISIL.  Jonas Edmonds expressed his support and excitement for Hasan Edmonds’ travel, believing that anyone who supported a mujahid (a fighter) was a mujahid himself, according to Jonas Edmonds’ plea agreement.