Eastern District of Louisiana

United States Attorney Kenneth Allen Polite, Jr. announced that STACEY JACKSON, age 47, a resident of New Orleans, Louisiana, pleaded guilty today before U.S. District Judge Mary Ann Vial Lemmon to conspiracy to steal federal funds and demand kickbacks from a program receiving federal funds.

According to court documents, JACKSON, the former Executive Director of New Orleans Affordable Homeownership (“NOAH”), a city agency and non-profit corporation, conspired with Earl Myers, Trellis Smith, and others to misuse and personally benefit from federal funds that NOAH had received, in violation of the law.  The United States Department of Housing and Urban Development (“HUD”), both before and after Hurricane Katrina, had provided grant money to the City of New Orleans to address blight within the city and to remediate homes damaged by the storm. 

JACKSON, as the Executive Director of NOAH, was responsible for the day-to-day management of the agency and determined how much each contractor would be paid.  JACKSON arranged to overpay certain contractors, such as Myers and Smith, instructing them to kickback portions of the overpayments to JACKSON’S benefit.  

Specifically, court documents state that on numerous occasions, JACKSON instructed Myers and Smith to pay her kickbacks out of the NOAH money she paid them for work that could not be substantiated by invoices or work actually performed.  For example, in or near October 2005, JACKSON, wrote a check from NOAH to Parish Dubuclet, a company operated by her friend, Smith, for approximately $15,260, which was deposited into a bank account belonging to Smith and Parish Dubuclet.  On or about October 8, 2005, Parish Dubuclet wrote a check in the amount of $10,460 to JACKSON’S father, which was deposited into a bank account that JACKSON, controlled jointly with her father.  Several days later, JACKSON used this money to write a check to a tree removal service to pay for the removal of a tree from her mother’s yard.

Court documents state that from in or near December of 2006 through in or near July of 2007, JACKSON contracted with Myers to renovate properties that she owned, which were located on 6th Street and Danneel Street in New Orleans, Louisiana. JACKSON paid Myers tens of thousands of dollars toward the renovation project and used public funds belonging to the United States and distributed to NOAH to pay Myers a portion of the money she owed him for these renovations.

Documents in the court records also outline that on or about November 1, 2007, JACKSON wrote two checks to companies owned and operated by Myers. One check was for $47,899.50 to Myers & Sons.  JACKSON instructed Myers to give portions of this money to different entities, such as a school that JACKSON was affiliated with.  The second check for $32,842.50 was payable to Excel Development, also owned and operated by Myers.  JACKSON directed Myers to kickback a portion of this money to her by having him write two checks, one for $9,400 and one for $7,000 payable to Z.F., a person who JACKSON knew personally and to whose checking account she had access.  Myers complied with these instructions because he knew it would ensure that he would continue getting NOAH remediation work assignments from JACKSON.

Also according to court documents, on or around August 13, 14, and 15, 2008, after JACKSON became aware that Myers had received a subpoena from a federal grand jury ordering him to turn over documents supporting the work he had done for NOAH, JACKSON provided false and fraudulent documents to Myers in an effort to mislead the federal grand jury into finding that no fraud occurred at the defendant’s direction or while she was the Executive Director of NOAH.

JACKSON is scheduled to be sentenced on October 16, 2014, and faces a maximum term of imprisonment of five years, a fine of up to $250,000, and three years of supervised release.

“Today’s guilty plea stands as the most recent example of our Office’s continued vigilance in prosecuting public corruption,” stated U.S. Attorney Polite.  “By diverting federal funds from those most in need in our community, Ms. Jackson’s criminal conduct further eroded public confidence in our government.  On behalf of the residents of Southeast Louisiana, we will continue to demand lawful and ethical conduct from our public officials.”

“In the wake of the recent conviction of former mayor Ray Nagin and now the guilty plea of Ms. Jackson, the FBI and its law enforcement partners will continue their tireless pursuit of all those who unlawfully financially capitalize upon the Katrina tragedy event as its 10-year anniversary nears,” state Michael Anderson, Special Agent in Charge, Federal Bureau of Investigation, New Orleans Field Office.

Special Agent in Charge Gabriel L. Grchan, IRS – Criminal Investigation, stated, “Public corruption degrades the integrity of government leadership and erodes the trust instilled in public officials by the very individuals they are appointed or elected to serve.  It is a great accomplishment when an individual who has violated that trust is brought to justice.  The plea ensures that Stacey Jackson will be held accountable for her misdeeds and the detriment she caused the great city of New Orleans and its citizens.”

“This guilty plea was the result of outstanding investigative work conducted by HUD-OIG, and our law enforcement partners,” stated Wyatt J. Achord, Assistant Special Agent in Charge, U.S. Department of Housing and Urban Development-Office of Inspector General.  “This collaborative effort sends a clear message that if someone takes advantage of a government subsidized program they will be held accountable.”

The case was investigated by the Federal Bureau of Investigation, the Department of Housing and Urban Development - Office of Inspector General, the Internal Revenue Service Criminal Investigation, City of New Orleans - Office of Inspector General, and the United States Postal Inspection Service.  The U.S. Attorney’s Office would also like to acknowledge the assistance of the Metropolitan Crime Commission. 

The case was prosecuted by Assistant U.S. Attorney and Senior Litigation Counsel Fred P. Harper, Jr. and Assistant U.S. Attorney Sharan Lieberman.

(Download Factual Basis )

U.S. Attorney Kenneth Allen Polite, Jr. announced that today, MARINE MANAGERS LTD., a Liberian corporation headquartered in Piraeus, Greece, pled guilty to a two-count bill of information charging the company with knowingly failing to maintain an oil record book while in port and within the internal waters of the United States, and submitting a  false document to the U.S. Coast Guard.

 In addition, MATTHAIOS FAFALIOS, 64, a resident of Greece and Chief Engineer of the Motor Vessel (“M/V”) Trident Navigator, was indicted yesterday on three related charges, specifically failing to maintain an accurate oil record book, obstruction of justice, and witness tampering.

According to court documents, MARINE MANAGERS LTD., was the operator of the M/V Trident Navigator which transported bulk cargo between various ports and places in the world, including the Port of New Orleans and other locations in the Eastern District of Louisiana.  On or about December 28, 2013, while the M/V Trident Navigator was sailing, FAFALIOS instructed the Second Engineer to construct a bypass system (often referred to as a “magic pipe”) that could be connected between the vessel’s bilge pump and overboard discharge valve.  The purpose of the bypass was to discharge the contents of the ship’s bilge tank directly into the sea, circumventing the ship’s Oil Water Separator and Oil Content Monitor.  On or about December 31, 2013, FAFALIOS ordered the Second Engineer to hook up the “magic pipe” and to discharge several metric tons of oily bilge waste from the bilge tank directly into the sea.  The “magic pipe” was removed after the discharge was completed and the discharge was not recorded in the vessel’s Oil Record Book as required.  FAFALIOS additionally confiscated a crew member’s cell phone which contained a photograph of the installed “magic pipe,” and caused that photo to be deleted. 

On or about January 18, 2014, U.S. Coast Guard personnel boarded the M/V Trident Navigator while it was anchored in the Mississippi River near New Orleans.  A tip from a crewmember led them to the discovery of the “magic pipe.”   FAFALIOS was uncooperative and further obstructed the Coast Guard investigation by instructing crewmembers to deny knowledge of the “magic pipe.”

Although the actions of the crewmembers on the vessel were contrary to defendant MARINE MANAGERS LTD.’s written policies and procedures, the company accepts that it is vicariously liable for its employees’ actions.

MARINE MANAGERS LTD. faces a maximum fine of $500,000 for each count.  Sentencing has been scheduled for October 2, 2014, before U.S. District Judge Carl J. Barbier.

For each of his three counts, FAFALIOS faces a maximum fine of $250,000 and three years of supervised release.  In addition, he faces a maximum term of imprisonment of six years, five years, and twenty years for the records, obstruction, and witness tampering charges, respectively.  

“The Coast Guard is committed to uncovering and investigating regulatory and criminal violations that threaten the health of our marine environment.  The successful prosecution of this case is due to the outstanding cooperation between Coast Guard Sector New Orleans, the Coast Guard Investigative Service, and the Department of Justice," said Rear Admiral Kevin S. Cook, Eighth Coast Guard District Commander.

The case against MARINE MANAGERS LTD was investigated by Special Agents of the United States Coast Guard Criminal Investigative Service.  Prosecution is being handled by Assistant United States Attorney Gregory M. Kennedy and DOJ Environmental Crimes Section Attorney Kenneth Nelson.   The case against MATTHAIOS FAFALIOS was also investigated by Special Agents of the Coast Guard Criminal Investigative Service.  Prosecution is being handled by DOJ Environmental Crimes Section Attorney Kenneth Nelson and Assistant United States Attorney Emily K. Greenfield.

(Download Factual Basis - Marine Managers Ltd. )

(Download Indictment - Matthaios Fafalios )

U.S. Attorney Kenneth Allen Polite, Jr. announced that a federal jury has convicted a Gretna man guilty of crimes involving the sexual exploitation of children.

KEITH JOSEPH MCGEE, age 30, of Gretna, Louisiana, was found guilty of all three counts with which he was charged, specifically: attempting to coerce a minor to produce images of sexually explicit conduct; receiving sexually explicit images of a 14-year-old boy; and receiving sexually explicit images from a 15-year old boy.

According to evidence introduced in trial, MCGEE, formerly a foreign language teacher at several Catholic high schools, posted numerous personal advertisements on an online classified advertisement website seeking sexual interactions with “young teens” and “Catholic high school boys.”  Additionally, between January 29, 2013, and February 11, 2013, MCGEE used e-mail, text messages, and several social media applications to correspond with two actual minors and an undercover FBI agent posing as a minor.  During those correspondences, MCGEE confirmed that each person was a minor and then subsequently encouraged and enticed them to provide him with sexually explicit pictures.  In addition to seeking sexually explicit pictures, MCGEE attempted to arrange sexual liaisons with the boys, including driving to the home of the 15-year-old boy at around 2:00 a.m.  Additional trial evidence indicated that MCGEE had engaged in sexually explicit conversations and exchanged sexually explicit pictures with approximately six other minors who have not been identified.

MCGEE faces a mandatory minimum term of imprisonment of 15 years and a maximum penalty of 70 years, followed by up to a life term of supervised release, and a $250,000 fine.  He can also be required to register as a sex offender.  Sentencing has been scheduled for September 23, 2014, at 9:00 a.m., before U.S. District Judge Jay C. Zainey.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”

This case was investigated by agents from the Federal Bureau of Investigation.  The prosecution of this case is being handled by Assistant United States Attorneys Jordan Ginsberg and Patrice Harris Sullivan.

A former school teacher was indicted by a federal grand jury today for crimes involving the sexual exploitation of children, announced United States Attorney Kenneth Allen Polite, Jr.

According to court records, on February 5, 2014, Special Agents with the U.S. Department of Homeland Security-Homeland Security Investigations assisted the Louisiana Department of Justice and the Jefferson Parish Sheriff’s Office with the execution of a search warrant in a child exploitation investigation at the residence of DON FRANCIS, JR., 43, a resident of Metairie, Louisiana.   FRANCIS has been in state custody since his February 5, 2014 arrest.  As a result of today’s federal indictment, FRANCIS will be transferred to federal custody. 

If convicted, FRANCIS faces a mandatory minimum penalty of five years and a maximum penalty of twenty years, followed by up to a lifetime term of supervised release, and a $250,000 fine.

U. S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.  For more information about internet safety education, please visit www.projectsafechildhood.gov and click on the tab "resources."

This case was investigated by special agents from the U. S. Department of Homeland Security-HSI, the Louisiana Department of Justice, and the Jefferson Parish Sheriff’s Office.  The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba.

(Download Indictment )

A St. Charles Parish tax preparer pled guilty this morning to conspiracy to defraud the United States and, specifically, the Internal Revenue Service, announced U.S. Attorney Kenneth Allen Polite, Jr.  Her daughter, LASHANDA RUTH VINNETT, age 29, also of Destrehan, Louisiana, pled guilty on Friday, June 13, 2014, to the same charge.

According to court documents, CATHY ROSS VINNETT, 46, of Destrehan, Louisiana, opened the D&C Tax Service in 2006.  In 2008, CATHY VINNETT and LASHANDA VINNETT (“the VINNETTS”) created River Parish Tax Professionals (“River Parish”).  River Parish was established by the VINNETTS for the purpose of filing fraudulent tax returns.  The VINNETTS, through River Parish, filed approximately 310 tax returns which falsely claimed the First-Time Homebuyer Credit, the Earned Income Tax Credit, as well as the listing of false dependents resulting in approximately $1.845 million in fraudulent tax refunds.  

CATHY VINNETT and LASHANDA VINNETT utilized recruiters to locate potential clients.  These recruiters advised potential clients that the federal Government was giving out stimulus money and instructed the individuals to visit River Parish in order to obtain their money.  The VINNETTS would interview clients at their office in LaPlace, Louisiana to obtain their personal information including their name, address and Social Security Number.  The  VINNETTS used that personal information to file false tax returns.  The clients had no knowledge that the VINNETTS were filing false returns in their names.

The VINNETTS specifically attempted to conceal and shield CATHY’s identity with the IRS, knowing that the IRS had previously suspended CATHY’S Electronic Filing Identification Number as a result of another fraudulent tax scheme involving D&C Tax Service.  Additionally, in May 2009, CATHY VINNETT knowingly made material false statements to IRS federal agents when she claimed she had no knowledge about false tax returns being prepared at River Parish, she did not own a tax business, and that her brother was the owner of River Parish.

United States District Court Judge Ivan L.R. Lemelle will sentence CATHY VINNETT on October 1, 2014 and LASHANDA VINNETT on September 17, 2014.  The VINNETTS face a maximum penalty of ten years imprisonment, followed by up to three years of supervised release, restitution, and a $250,000 fine.

Gabriel Grchan, Special Agent in Charge - IRS Criminal Investigation, stated that: “The guilty pleas entered by Cathy and Lashanda Vinnett represent a great victory for all U.S. taxpayers.  A tax stimulus, such as the First Time Homebuyer’s Credit, is meant to strengthen the country’s economy.  When these types of programs are exploited by fraud, it cannot be tolerated. IRS - CI will continue working to bring to justice those individuals who scheme and conspire to benefit themselves at the expense of other citizens and the government."

This case is being investigated by special agents from the Internal Revenue Service-Criminal Investigation Division.  The prosecution of this case is being handled by Fraud Unit Chief and Assistant U. S. Attorney Brian M. Klebba and Assistant U.S. Attorney Matthew Payne.

(Factual Basis - Cathy Vinnett )

(Factual Basis - Lashanda Vinnett )

U.S. Attorney Kenneth A. Polite announced that TYRELL C. SUTHERLAND, age 28, of New Orleans, pled guilty to one count of Conspiracy to Provide Contraband into a Prison Facility, in violation of Title 18, United States Code, Section 371.

According to court documents, in or about 2008, the Orleans Parish Prison ("OPP") contracted with the United States Marshals Service to provide for the custody, care, and safekeeping of federal prisoners in the Eastern District of Louisiana.  During that year, SUTHERLAND, then employed as an Orleans Parish Sheriff's Deputy, smuggled contraband items (including marijuana and cell phones) into the facility. 

The Orleans Parish Sheriff’s Office suspended SUTHERLAND on September 25, 2008, and terminated his employment on October 22, 2008.

SUTHERLAND faces a maximum penalty of five (5) years' imprisonment, a $250,000 fine, three (3) years' supervised release, and an $100.00 special assessment.
Sentencing is set for September 17, 2014, before United States District Judge Stanwood R. Duval, Jr.

U.S. Attorney Polite stated, "Sutherland's criminal conduct jeopardized the safety of his fellow Sheriff's Deputies and the inmates he was entrusted to protect.  We will not tolerate this type of misconduct that undermines public trust in our law enforcement community."

U.S. Attorney Polite also thanked the Federal Bureau of Investigation and the Orleans Parish Sheriff’s Office for their cooperation and assistance in investigating this matter.  The case is being prosecuted by Assistant United States Attorney Duane A. Evans.

(Factual Basis )

ANDREW J. KORPAL, age 29, a resident of Granger, Indiana, was sentenced today for receipt of child pornography, announced United States Attorney Kenneth Allen Polite, Jr.

According to court documents, in November 2013, KORPAL was arrested by special agents with the United States Department of Homeland Security, Homeland Security Investigations (“HSI”) after they determined that KORPAL was responsible for receiving and posting videos depicting the sexual exploitation of children on the Internet. 

U.S. District Judge Carl Barbier sentenced KORPAL to a term of imprisonment of ninety-seven (97) months, twelve (12) years of supervised release, and KORPAL will have to register as a sex offender.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

This case was investigated by Homeland Security Investigations and the U.S. Postal Inspection Service.  The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba.

U.S. Attorney Kenneth Polite announced that yesterday, two men pled guilty before U.S. District Judge Sarah S. Vance to charges involving the sexual victimization of children.

AUNG GAW, a/k/a Michael Gaw, age 26, of Fremont, California, pled guilty to one count of conspiracy to produce child pornography.  According to court documents, beginning in December 2012, and continuing until May 2013, GAW conspired with Jonathan Johnson to produce sexually explicit videos of young boys.  On November 5, 2013, federal agents executed a federal search warrant at GAW’s Fremont, California residence.  GAW has been in custody since his arrest that day.

GAW faces a sentence of 15 to 30 years’ imprisonment, 5 years to life of supervised release, and a maximum fine of $250,000.  In addition, he will have to register as a sex offender.  Sentencing is scheduled for September 3, 2014.

Additionally, KIRK P. WEBER, age 54, of Reserve, Louisiana, pled guilty to one count of Distribution of Child Pornography.  According to court documents, from May 14, 2013, to October 24, 2013, WEBER knowingly distributed images depicting the sexual victimization of minors through the use of a popular social media site.  WEBER has been in federal custody since his February 7, 2014 arrest.

WEBER faces a sentence of 5 to 20 years’ imprisonment, 5 years to life of supervised release, and a maximum fine of $250,000.  In addition, he will have to register as a sex offender.  Sentencing is scheduled for September 3, 2014.

U.S. Attorney Polite stated, “These convictions, which carry significant mandatory minimum sentences, continue to demonstrate our Office’s commitment to protecting our young children from sexual exploitation.”

These cases were brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

The GAW matter is being investigated by the U.S. Department of Homeland Security-Homeland Security Investigations and the U.S. Postal Inspection Service.  The WEBER matter is being investigated by the U.S. Department of Homeland Security-Homeland Security Investigations.  The prosecution of both cases is being handled by Fraud Section Chief and Project Safe Childhood Coordinator, Assistant U. S. Attorney Brian M. Klebba.

(Download Gaw Factual Basis )

(Download Weber Factual Basis )

KENDALL O. MARQUAR, age 36, a resident of Waveland, Mississippi, pled guilty today before U.S. Magistrate Judge Sally Shushan to the one-count Bill of Information charging him with willfully failing to file taxes, announced U.S. Attorney Kenneth Allen Polite, Jr.

According to court documents, from in or around 2000 through in or around 2012, MARQUAR, was a Mississippi businessman and owner of K&D Earthworks, a maintenance and construction vendor at the Orleans Parish Sheriff’s Office (“OPSO”).  During the years 2007, 2008, and 2009, MARQUAR and K&D Earthworks earned approximately $580,379 in taxable income, mainly from work performed at the OPSO.  As set forth in the factual basis, MARQUAR failed to file taxes during the years 2007 through 2009.  As a result, MARQUAR owes the Internal Revenue Service approximately $156,941 in funds based on the unpaid taxes.  As part of his plea agreement, MARQUAR has agreed to repay this amount to the Internal Revenue Service.

MARQUAR faces a maximum term of imprisonment of one year, a fine of $100,000, and up to one year supervised release following any term of imprisonment.  His sentencing is scheduled for September 9, 2014.

The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigative Division.   The case is being prosecuted by Assistant U. S. Attorney Matt Chester.

(Download Factual Basis )

U.S. Attorney Kenneth Allen Polite, Jr. announced that on May 13, 2014, the United States Attorney’s Office, the Federal Bureau of Investigation, and the New Orleans Police Department held a joint seminar on the subject of “Investigating and Prosecuting Police Misconduct and Corruption.”  The event, held at U.S. Attorney Polite’s office, included attorneys from the U.S. Attorney’s Office Public Integrity Unit, Special Agents from the FBI Civil Rights and Public Corruption Squads, and the entire staff of the New Orleans Police Department’s Public Integrity Unit.

The purpose of the seminar was to foster cooperation and encourage the prosecutors and investigators to work joint investigations.  The trainers were members of the “Tarnished Badge” Law Enforcement Task Force from Memphis, Tennessee. This Task Force is comprised of members from the United States Attorney’s Office, the FBI, the Memphis Police Department, and the Shelby County Sheriff’s Department. This is a full-time task force that exclusively work police corruption and civil rights violations.  In the past seven years the Tarnished Badge Task Force has convicted in excess of 65 law enforcement officers in federal court.

            Speakers included:

• U.S. Attorney Polite;

• Federal Bureau of Investigation Special Agent in Charge Michael Anderson;

• New Orleans Police Superintendent Ronal Serpas;

• Memphis Police Lt. Matthew Whittington and FBI Special Agent Anthony Householder, who provided specific training on investigative techniques, working with informants, and interview techniques.  They also presented several case studies on specific investigations conducted by the Task Force; and

• Assistant United States Attorney Steve Parker, the former Chief of the Civil Rights and Law Enforcement Corruption Unit in the U. S. Attorney’s Office in Memphis. Mr. Parker is now on special assignment to the U.S. Attorney’s Office in New Orleans working on the NOPD Consent Decree.  Mr. Parker presentation focused on the federal statutes used to prosecute police misconduct and the use of the Federal Grand Jury in these investigations.

U.S. Attorney Polite stated, “This seminar is the first of its kind in our District.  We can and must do better in addressing police misconduct, and this seminar represents our renewed commitment to increasing collaboration and coordination amongst those involved in investigating and prosecuting these cases.  Our shared expertise, intelligence, and investigative methodologies will help deter police misconduct more effectively and strengthen public confidence in the great work done by our law enforcement officers.”

U.S. Attorney Polite particularly acknowledged FBI Special Agent in Charge Anderson for participating in and providing financial support for the event.

THOMAS HILLIARD, 24, CHRISTIAN JOHNSON, 25, WILLIE HILLIARD, 23, and JAMES BROWN, 24, residents of New Orleans, were sentenced by U.S. District Judge Lance M. Africk, after pleading guilty to crack cocaine and gun charges, announced U. S. Attorney Kenneth Allen Polite, Jr.  THOMAS HILLIARD was sentenced to 121 months imprisonment followed by five years of supervised release. JOHNSON was sentenced to 228 months imprisonment followed by five years of supervised release.  WILLIE HILLIARD and BROWN were sentenced to 12 months and 42 months imprisonment, respectively, followed by three years of supervised release.

THOMAS HILLIARD and JOHNSON pled guilty to conspiracy to possess with intent to distribute two hundred eighty grams or more of crack cocaine. JOHNSON also pled guilty to possession of a firearm in furtherance of a drug trafficking crime and felon in possession of a firearm.  WILLIE HILLIARD pled guilty to possession with intent to distribute a quantity of crack.  BROWN pled guilty to conspiracy to distribute and possess with the intent to distribute a quantity of crack cocaine. 

The investigation of THOMAS HILLIARD, JOHNSON, WILLIE HILLIARD and BROWN was led by the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) and the New Orleans Police Department (“NOPD”) as part of the Multi-Agency Gang Unit.  These defendants, along with other individuals who have also pled guilty to drug charges, were identified as a gang known as “MMG” that distributed cocaine and possessed firearms to further their drug trafficking activities in the Seventh Ward area of New Orleans.   

The Multi-Agency Gang Unit is an NOPD led division which includes federal agents from A.T.F., the Drug Enforcement Administration, the Federal Bureau of Investigation, and the U.S. Marshals Service, as well as participants from the Orleans Parish Sheriff’s Office, the Louisiana State Police, State Probation and Parole, and the New Orleans District Attorney’s Office.

“These lengthy prison sentences are the result of the MAG Unit’s continued commitment to fighting violent crime, stated U.S. Attorney Polite.  “Our local, state, and federal law enforcement partners will not rest until our streets are safe for all residents of Southeast Louisiana.”

“The Multi-Agency Gang Unit continues to prove its effectiveness in getting violent criminals off the streets and out of our neighborhoods,” said Mayor Mitch Landrieu. “Since the fall of 2012, the MAG Unit has led to the indictments of 83 individuals associated with 8 groups. Through NOLA FOR LIFE, we will continue to focus on keeping our residents safe, reclaiming our neighborhoods, and offering opportunities to those who want to make better choices.”  

The investigation was conducted by Special Agents of the Bureau of Alcohol, Tobacco and Firearms and the New Orleans Police Department.  The case was prosecuted by Assistant United States Attorney Andre Jones.

ROLAND “TROY” CHAMBERS, age 45, and GREGORY JACKSON, age 40, both of Houma, Louisiana, were sentenced yesterday by U.S. District Judge Jay C. Zainey to 71 months and 60 months incarceration, respectively, announced U.S. Attorney Kenneth Polite.  Both defendants were sentenced to four years of supervised release to be served after their incarceration. 

CHAMBERS previously pleaded guilty to one count of conspiracy to distribute 100 grams or more of heroin, one count of possession with intent to distribute 100 grams or more of heroin, and three counts of distribution of heroin.  JACKSON previously pleaded guilty to one count of conspiracy to distribute 100 grams or more of heroin and five counts of distribution of heroin.

According to court documents, CHAMBERS and JACKSON worked together to sell heroin in the Houma, Louisiana area.  From July 1, 2012 through May 31, 2013, CHAMBERS and JACKSON made several sales of heroin to confidential sources of the Drug Enforcement Administration (“DEA”).  During the course of the conspiracy, JACKSON would instruct others on how to “bag up” heroin for resale to other drug users.  CHAMBERS served as a supplier, making several trips to New Orleans to obtain more heroin.  DEA agents and Terrebonne Parish Sheriff’s Office deputies arrested CHAMBERS in possession of over 100 grams of heroin immediately after he returned from New Orleans.

The case was investigated by the DEA New Orleans Division Office and the Terrebonne Parish Sheriff’s Office.  The case was prosecuted by Assistant United States Attorney Matthew Payne

U.S. Attorney Kenneth Allen Polite, Jr. announces the recent unsealing of an indictment charging three individuals with conspiring to violate federal drug distribution laws.  On April 10, 2014, a federal grand jury returned the indictment charging RYAN ERNST NYBERG, age 33, CHRISTOPHER BYRON FRITCHIE, a/k/a “Byron,” age 42, and NASER YOUSEF GHEITH, a/k/a “Nick,” age 35, with one count of conspiring to distribute and to possess with intent to distribute five hundred grams or more of methamphetamine in the Eastern District of Louisiana and elsewhere.

According to the indictment, NYBERG, FRITCHIE, and GHEITH conspired from 2011 through 2014 to violate federal drug distribution laws.  NYBERG is a United States citizen currently residing in Germany.  FRITCHIE and GHEITH are also United States citizens and reside in the San Francisco area.  If convicted, the charged individuals each face a maximum penalty of life imprisonment, a $10,000,000 fine, and at least five years of supervised release. 

U. S. Attorney Polite reiterated that the indictment is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.  

On March 20, 2014, German Customs Investigation Bureau (the Zollkriminalamt or ZKA) authorities arrested NYBERG in Duisburg, Germany.  The United States intends to formally request his extradition from Germany.  On April 29, 2014, DEA Agents arrested FRITCHIE in San Francisco, California.   GHEITH remains at large.

The DEA New Orleans Division Office investigated this case with assistance from the DEA Frankfurt, Germany Country Office and the DEA San Francisco Division Office.  The prosecution is being handled by Assistant United States Attorney Matthew Payne.

(Download Indictment )

GLEN MCINERNEY, age 42, a resident of Meraux, Louisiana, was sentenced today by U.S. District Judge Jane Triche Milazzo to 41 months in prison, followed by 3 years of supervised release, announced U.S. Attorney Kenneth Polite.  MCINERNEY previously plead guilty to a four-count Superseding Bill of Information charging him with two counts of bank fraud, one count of money laundering, and one count of wire fraud. MCINERNEY was also ordered to make restitution to the three victims of his crimes in the amount of $845,083.18.

According to court documents, MCINERNEY owned and operated GM Motors and Used Cars (“GM Motors”).  MCINERNEY maintained a bank account for GM Motors at Regions Bank.  Between May 2, 2009, and June 20, 2009, MCINERNEY wrote checks to straw payees to cash the checks and return the cash to him so that he could deposit portions of the proceeds back into the Regions account.  MCINERNEY timed the cash deposits to occur prior to account debits, which lead to the straw payees cashing checks that he knew would ultimately bounce.  In total, MCINERNEY wrote 288 such checks, resulting in a loss to Regions Bank of approximately $17,000.  

Separately, between December 29, 2008, and January 7, 2009, MCINERNEY also defrauded Gulf Coast Bank & Trust by negotiating six checks purportedly drawn on funds from a bank account at Twin City Federal National Bank in Minneapolis, Minnesota.  MCINERNEY knew that the Twin City Federal National Bank account had been closed since July 30, 2007, that the account belonged to someone other than MCINERNEY, and which MCINERNEY did not have authority or control.  These actions caused a loss to Gulf Coast Bank & Trust of approximately $28,083.18.

Finally, between January 3, 2007, and December 15, 2008, MCINERNEY defrauded an individual who had provided him with collateral for a short-term business loan by falsely representing that he had purchased used trailers from the Federal Emergency Management Agency (“FEMA”) that he intended to resell, when, in fact, he did not purchase such trailers in the first place.  MCINERNEY’S fraudulent misrepresentations caused the individual who loaned him the money to suffer losses of approximately $800,000.   

"Glen McInerney was sentenced today after pleading guilty to using "straw" payees to cash checks, committing bank fraud and laundering money to hide his part in illegal financial transactions," stated Gabriel L. Grchan, Special Agent in Charge, IRS Criminal Investigation, New Orleans Field Office.  "Money laundering is not a victimless crime.  Not only are innocent people ‘duped’ by such schemes, but the underground, untaxed economy harms the entire nation's economic strength.  Special Agents of IRS Criminal Investigation are committed to lending their expertise as the world's premiere financial investigators to all crimes of greed."

The case was investigated by the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigations.  The case was prosecuted by Assistant United States Attorneys Daniel P. Friel and Jordan Ginsberg.

FRANK MIKE, JR., age 45, of New Orleans, was indicted today by a federal grand jury and charged with Interstate Transportation of a Stolen Motor Vehicle, announced U.S. Attorney Kenneth Allen Polite, Jr. 

According to the indictment, MIKE transported a stolen 2010 Dodge Caravan from the State of Louisiana to the State of Georgia.  A criminal complaint filed earlier this week stated that on February 19, 2014, family members reported to the St. John the Baptist Parish Sheriff’s Department that Kenneth and Lakeitha Joseph of Reserve, Louisiana were missing.  A relative also indicated that she loaned her 2010 Dodge Grand Caravan to the Josephs but that the van had not been returned.  On February 27, 2014, the missing 2010 Dodge Grand Caravan was recovered by the Fulton County Police Department in College Park, Georgia in an apartment complex.  Later, video surveillance showed that the van had been parked at the Travelodge Hotel located in College Park.  It also showed that MIKE drove the van into the hotel parking lot on February 21, 2014. 

On March 10, 2014, the New Orleans Police Department discovered the body of Lakeitha Joseph, bound with rope, in the Intercoastal Waterway in New Orleans East.  On March 22, 2014, the New Orleans Police Department discovered the body of Kenneth Joseph, also bound with rope, in the Intercoastal Waterway. The New Orleans Parish Coroner ruled the cause of death in both cases as drowning.  Later, forensic testing revealed that blood samples taken from the stolen van matched the DNA of both Josephs.

The defendant appeared on the complaint before U.S. Magistrate Judge Karen Wells Roby on April 22, 2014.   The following day, April 23, 2014, Judge Roby ordered the defendant detained without bond pending the resolution of this charge. 

MIKE faces a maximum penalty of ten years imprisonment and a fine of up to $250,000 for this charge.

United States Attorney Polite reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.

The case has been investigated jointly by the Federal Bureau of Investigation, Drug Enforcement Administration, the New Orleans Police Department, the St. John the Baptist Parish Sheriff’s Office, the Fulton County, Georgia Police Department, the Orleans Parish District Attorney’s Office and the St. John the Baptist Parish District Attorney’s Office and will be prosecuted by Special Assistant United States Attorney Michael Redmann, who is assigned to the U.S. Attorney’s Office from the Orleans Parish District Attorney’s Office, and Assistant United States Attorney Mark Miller.

(Download Indictment )

MARTHA HEBERT, age 64, a resident of Kenner, Louisiana, was sentenced today to two years’ probation and fined $10,000 by U.S. District Judge Eldon E. Fallon after having pleaded guilty in January to a one count felony bill of information charging her with misprision of a felony, announced the U.S. Attorney Kenneth Allen Polite, Jr.
In addition to probation and her fine, HEBERT voluntarily agreed in her plea with the government to not engage in produced water toxicity testing for a period of five years and closed Laboratory Technology in March of this year.

According to court documents, HEBERT was the co-owner of Laboratory Technology, (LT), located in Kenner, Louisiana.  LT was a company that performed water toxicity tests for companies that were required by the Environmental Protection Agency (EPA) to adhere to certain limits involving the discharge of produced water. These companies were involved in the production of oil and gas in the Gulf.  During the process of producing oil, a certain amount of contaminated water is produced.  Untreated produced water is toxic and the discharge of untreated produced water is prohibited. 

The Clean Water Act required companies to perform toxicity tests on produced water samples pursuant to a permit (Permit) issued by the EPA. The Permit imposed limitations on the amount of pollutants that could be discharged into waters of the United States. The Permit required monitoring of any discharges to determine whether they were in compliance with the pollutant discharge limitations set forth in the Permit. The Permit required that discharge samples (Samples) be sent to a lab such as LT for testing.  The laboratory test results of the discharge Samples were recorded on a report known as a Discharge Monitoring Report, commonly known as a ADMR.@  The DMRs were sent to EPA. Companies relied upon the accuracy of LT’s test results when they submitted their DMRs to EPA. 

HEBERT acted as the office manager for LT and was responsible for sending clients the results of the water toxicity tests. The purpose of the toxicity test, in simple terms, was to determine if a company’s treated produced water was within its Permit limits. Accurate reporting of the results of the toxicity tests is material to a company’s DMR.  EPA had specific protocols in place for performing the toxicity tests. If one of the required steps in the protocol was not followed, the results were not valid and could not be used on the DMR.

Beginning in approximately July 2008 through June 15, 2012, LT’s laboratory supervisor, LEONARD JOHNSON, did not follow the required protocol for testing the toxicity of the companies’ samples. In order for it to appear that the toxicity tests had been performed, JOHNSON instructed lab employees and HEBERT to enter fake weight numbers in the information provided to the LT’s clients.  This information was used by the clients to prepare the required DMRs.   

HEBERT knew that Johnson was signing all reports certifying the accuracy of the toxicity test results when in fact he had not followed the required protocol and that the information was false. HEBERT did not make this known to a judge, or other person in civil or military authority under the United States.

The case was investigated by the Environmental Protection Agency-CID and the Federal Bureau of Investigation.

CHAD MICHAEL HOTARD, age 28, a resident of Luling, Louisiana, was sentenced today by U.S. District Court Judge H. Ginger Berrigan, arising from his conviction for two counts of production and one count of distribution of child pornography, announced U. S. Attorney Kenneth Allen Polite, Jr.

According to court documents, HOTARD knowingly employed, used, persuaded, induced, enticed and coerced a minor to engage in sexually explicit conduct in order to produce child pornography on two separate occasions, December 13, 2012 and March 12, 2013.  In addition, HOTARD distributed digital images and computer images of a minor engaging in sexually explicit conduct on March 13, 2013.  HOTARD has been in federal custody since his arrest on April 15, 2013.

HOTARD was sentenced by Judge Berrigan to 15 years’ imprisonment, to be followed by a term of supervised release of 15 years.  In addition, he will be required to register as a sex offender pursuant to the Sex Offender Registration and Notification Act.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

The case was investigated by the U.S. Department of Homeland Security-Homeland Security Investigations and the St. Charles Parish Sheriff’s Office and prosecution of this case was handled by Fraud Unit Chief and Project Safe Childhood Coordinator, Assistant U. S. Attorney Brian M. Klebba.

The Justice Department announced today that the U.S. District Court for the Eastern District of Louisiana approved its settlement with the city of New Orleans regarding a housing discrimination lawsuit late yesterday.

Under the settlement, the city agrees to permit the conversion of the former Bethany Nursing Home, located at 2535 Esplanade Avenue, into 40 units of affordable housing.  Half of the units in the new Esplanade complex will be designated as permanent supportive housing and will be reserved for formerly homeless persons with disabilities.  In addition, the settlement commits New Orleans to developing additional supportive housing for 350 persons with disabilities over the next three years.

“We are very pleased to have worked constructively with New Orleans to reach an agreement that will not only enable the Esplanade to be built, but that will also provide additional permanent supportive housing for 350 persons with disabilities in New Orleans,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.

“Nondiscriminatory housing is a fundamental right of the citizens of New Orleans, and this settlement agreement continues the efforts to rebuild and improve a housing inventory ravaged by Hurricane Katrina,” said U.S. Attorney Kenneth Allen Polite Jr. for the Eastern District of Louisiana.  “I applaud the cooperative efforts of the city and the department to reach a resolution that is in the best interests of persons with disabilities, who are amongst the most vulnerable members of our community.”

In addition to the development of 350 additional permanent supportive housing units, the settlement requires that the city agree to provide all appropriate permits for the Esplanade, amend its Comprehensive Zoning Ordinance to allow permanent supportive housing, continue its work to prepare and implement a reasonable accommodation policy approved by the United States, conduct fair housing training for key city officials and be subject to reporting requirements.

The State Bond Commission, which was also named as a defendant, is not a party to the settlement.  On March 20, 2014, the Bond Commission voted not to approve a settlement.  As a result, the Justice Department has moved to reopen the litigation against the Bond Commission and the court has scheduled a status conference for June 26, 2014.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status.  Title II of the Americans with Disabilities Act prohibits governments from discriminating on the basis of disability in administering their zoning laws.  More information about the Civil Rights Division and the laws it enforces is available at the division website <http://www.justice.gov/crt>.

(Download Agreement )

TORREY LEDELL DAVIS, age 42, most recently from Metairie, Louisiana was charged today in a three-count Indictment for offenses related to his involvement in the sex trafficking of a minor from the Jackson, Mississippi-area into the New Orleans area for the purposes of that minor engaging in prostitution, announced United States Attorney Kenneth Allen Polite, Jr..

According to the Indictment, in November 2012 DAVIS was contacted by an individual living in the Jackson, Mississippi area.  That individual inquired whether DAVIS would be willing to train the victim, who had just turned 16-years-old, to work as a prostitute.  DAVIS agreed, and and on November 26, 2012, DAVIS drove to the Scottish Inn in Jackson, Mississippi, picked up the victim, and drove her back to DAVIS’S residence in Metairie.  Once at the residence, DAVIS gave the victim drugs to numb her senses, took sexually suggestive photographs of the victim, and saved the photographs to his laptop computer.  DAVIS also arranged for the victim to be paired with a female who had worked as a prostitute for DAVIS; that individual used DAVIS’S laptop computer and the pictures DAVIS had taken of the victim to create a prostitution advertisement on an online classified advertisement website.  At DAVIS’S instruction, the female drove the victim to the French Quarter of New Orleans to work as a prostitute.  While in the French Quarter that evening, law enforcement officials arrested the minor for prostitution after an undercover officer arranged for the victim to perform a sexual act on the officer in exchange for $500.

If convicted, DAVIS faces a mandatory minimum term of imprisonment of ten (15) years and a maximum of life, followed by up to a life term of supervised release, and a $250,000 fine.  DAVIS can also be required to register as sex offenders. 

United States Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.  For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”

The investigation was initiated by the New Orleans Police Department and is being investigated by the Federal Bureau of Investigation and the Louisiana State Police Special Victims Unit.  The prosecution of this case is being handled by Assistant United States Attorney Jordan Ginsberg.

CHARLES “CHUCK” MIZELL, JR., age 44, a resident of Bogalusa, Louisiana, JAMES CREEL, age 48, a resident of Bogalusa, Louisiana, WILLIAM DARRYL KING, age 47, a resident of Angie, Louisiana,  TENILLE NIELSON, age 34, a resident of Franklinton, Louisiana, JACQUELINE MYERS, age 27, a resident of Franklinton, Louisiana, JERRY ATHEY, age 56, a resident of Bogalusa, Louisiana, DAVID LOWE, age 48, a resident of Bogalusa, Louisiana,  TERRY CASTILOW, age 48, a resident of Bogalusa, Louisiana, and ROGER NADEAU, age 51, a resident of Linn, Missouri, were charged today by a grand jury sitting in the Eastern District of Louisiana with mail fraud and conspiracy to commit mail fraud for an alleged scheme to defraud the Louisiana Workforce Commission of unemployment benefits, announced United States Attorney Kenneth Allen Polite, Jr.

According to the indictment, CHARLES “Chuck” MIZELL, JR.,  the President of Chamico, Inc., a Bogalusa construction company, and TERRY CASTILOW, WILLIAM DARRYL KING, DAVID LOWE, JAMES CREEL, JERRY ATHEY, TENILLE NIELSON, JACQUELINE MYERS, and ROGER NADEAU who were Chamico employees, conspired to defraud the Louisiana Workforce Commission (“LWC”) of money and property by means of false and fraudulent pretenses, representations, and promises, and by mailing and causing to be mailed through the United States Postal Service fraudulent unemployment benefit claim forms for the purpose of obtaining unemployment benefits to which they were not entitled.  Specifically, at the time CASTILOW, KING, LOWE, CREEL, ATHEY, NIELSON, MYERS, and NADEAU applied for unemployment benefits and made weekly representations to LWC that they were unemployed and not getting paid, MIZELL, JR., employed them at Chamico.  MIZELL, JR. had Chamico checks cashed and used the cash to pay CASTILOW, KING, LOWE, CREEL, ATHEY, NIELSON, MYERS, and NADEAU the difference in their salaries after LWC paid them fraudulent unemployment benefits.  MIZELL, JR., confirmed the misrepresentations his employees made to the LWC on the Notice of Claim Filed and Notice of Base Period Employer forms mailed to Chamico by the LWC stating that CASTILOW, KING, LOWE, CREEL, ATHEY, NIELSON, MYERS, and NADEAU, were not employed by Chamico because of lack of work.  As a result, MIZELL, JR. did not have to pay the employees their full salaries thereby saving Chamico and himself money.   In addition to being charged with conspiracy, MIZELL, JR., CASTILOW, ATHEY, CREEL, LOWE, NIELSON, and NADEAU, are charged with substantive mail fraud counts based on the mailing of the employer notice forms that fraudulently confirmed to LWC that ATHEY, CREEL, LOWE, NIELSON, and NADEAU, were unemployed due to lack of work.

United States Attorney Polite reiterated that the charges in the indictment are allegations and the defendants are innocent until proven guilty.

The defendants face a maximum sentence of five (5) years in prison on the conspiracy count, and 20 years in prison on each of the mail fraud counts.  The defendants also face a $250,000 fine and three (3) years of supervised release as to each count. 

The case was investigated by the Department of Labor-Office of Inspector General and the Federal Bureau of Investigation with assistance from the Louisiana Workforce Commission.  The case is being prosecuted by Assistant United States Attorney Emily K. Greenfield.

United States Attorney Kenneth Allen Polite, Jr. announces that, in celebration of National Crime Victims’ Rights Week, an information fair will be held at Lakeside Shopping Mall on April 12, 2014 from 10:00 a.m. to 1:00 p.m.   Federal and local agencies participating in the fair are the United States Attorney’s Office for the Eastern District of Louisiana, the Federal Bureau of Investigation, the Drug Enforcement Agency, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Department of Homeland Security, the Jefferson Parish District Attorney’s Office and the Orleans Parish Sheriff’s Office.  

The United States Attorney’s Office will also have an information tent at the Young Leadership Council’s Wednesday at the Square on April 9, 2014. 

There is no charge to attend these events.   Members of the public are encouraged to stop by these events to learn more about crime victims’ rights.

National Crime Victims’ Rights Week runs from April 6-12, 2014 and celebrates the thirtieth anniversary of the passage of the Victim of Crime Act.  This year’s theme – 30 Years:  Restoring the Balance of Justice – celebrates the accomplishments made and presents the opportunity to reinforce the nation’s long-term commitment to aiding crime victims.  Only 30 years ago, crime victims had virtually no rights and no assistance.  The criminal justice system often seemed indifferent to their needs. Victims were commonly excluded from courtrooms and denied the chance to speak at sentencing. They had no access to victim compensation or services to help rebuild their lives. There were few avenues to deal with their emotional and physical wounds. Victims were on their own to recover their health, security, and dignity.  Today, the nation has made dramatic progress in securing rights, protections, and services for victims. Every state has enacted victims’ rights laws and all have victim compensation programs. More than 10,000 victim service agencies now help people throughout the country.  In 1984, Congress passed the bipartisan Victims of Crime Act (VOCA), which created a national fund to ease victims’ suffering. Financed not by taxpayers but by fines and penalties paid by offenders, the Crime Victims Fund supports victim services, such as rape crisis and domestic violence programs and victim compensation programs that pay many of victims’ out- of-pocket expenses from the crime, such as counseling, funeral expenses, and lost wages.

Victims’ rights advocates have scored remarkable victories over the last 30 years. But there is still a lot of work to be done. As we move forward, we are increasingly expanding our reach to previously underserved victim populations, including victims of color, American Indians and Alaska Natives, adults molested as children, victims of elder abuse, and LGBTQ victims.  Over three decades, VOCA pioneered support efforts for victims of once-hidden crimes, like domestic and sexual violence. Today, we are shining a spotlight on other abuses that have long been unreported and often not prosecuted—hate and bias crimes, bullying, and sex and labor trafficking, among others.

“Our commitment to reaching every victim of crime is stronger than ever,” said Joye E. Frost, Director, Office for Victims of Crime (OVC), U.S. Department of Justice.  “For 30 years, VOCA has represented hope, healing, and justice.  Our message to all victims of crime is this: You are not alone.”

 

PETER M. HOFFMAN, age 63, of Los Angeles, California; MICHAEL P. ARATA, age 47, of New Orleans, Louisiana; and SUSAN HOFFMAN, age 69, of New Orleans, Louisiana were charged yesterday in a twenty-two count Superseding Indictment by a Federal Grand Jury, announced United States Attorney Kenneth Allen Polite, Jr. 

According to the Superseding Indictment, the Louisiana Motion Picture Incentive Act (LMPIA) was enacted to provide incentives for and encourage the filming of motion pictures and television programs in Louisiana.  Under the LMPIA, companies making motion pictures were eligible to receive tax credits which were calculated as a percentage of the companies’ qualified expenditures in Louisiana.  Qualified expenditures upon which companies could receive tax credits included expenditures on infrastructure.  Infrastructure expenditures only included the purchase, construction and use of facilities that were directly related to and utilized for motion picture production in Louisiana.  In order to qualify for infrastructure tax credits, all funds had to be actually expended, and such expenditures had to be verified by an independent Louisiana Certified Public Accountant.  Businesses that applied to the State for infrastructure tax credits were entitled to receive an amount equal to 40% of their qualified and audited infrastructure expenditures.  Once this amount was certified by the State of Louisiana, the applicants could then sell the certification to local businesses and individuals.  Such sale of tax credits provided for a significant source of cash for film projects.

The Superseding Indictment adds co-defendant SUSAN HOFFMAN, a California film producer who relocated to the New Orleans area. SUSAN HOFFMAN and PETER HOFFMAN are married but have been legally separated since approximately 1998.  SUSAN HOFFMAN owned and operated several companies including Leeway Properties, New Moon Pictures, LLC, and Seven Arts Pictures Louisiana, LLC.  Through their respective companies, PETER HOFFMAN, MICHAEL ARATA, and SUSAN HOFFMAN were partners in different movie-industry business ventures.
The Superseding Indictment also expands the time frame of the offense conduct, to on or about February 3, 2010.  Further, it adds four counts against MICHAEL ARATA for making false statements to a FBI Special Agent.

U.S. Attorney Polite reiterated that the Superseding Indictment is merely a charge and that guilt of the defendants must be proven beyond a reasonable doubt.

The case is being investigated by Special Agents of the Federal Bureau of Investigation and the Louisiana Office of the Inspector General.  The case is being prosecuted by Assistant United States Attorneys G. Dall Kammer and Jordan Ginsberg.

(Download Indictment )

TERENCE TAYLOR a/k/a “Peezy” a/k/a “Sonny”, 35; ARTHUR MCKINNIS a/k/a “Notchy”, 23; NOEL JONES a/k/a “Skinny” a/k/a “Noe”, 26; TERRELL DYER a/k/a “T”, 29; PERCY DEPRON a/k/a “Doo”, 27; ERNEST DIAZ a/k/a “E.O.”, 24; MALCOLM BOLDEN a/k/a “Little Mac”, 19; TERRELL DAVIS a/k/a “Fest”, 22; MELVIN SMITH a/k/a “Mel”, 29; THEODORE GRIFFIN a/k/a “Old Timer” a/k/a “Nokie”, 59; NARCISSE TROTTER a/k/a “Nerk”, 43; and AARONISHA LEWIS a/k/a “Molly”, 24; all residents of New Orleans, were indicted by a federal grand jury on Thursday, March 27, 2014, for conspiring to distribute one kilogram or more of heroin in the New Orleans area from January 2011 to the present, announced U. S. Attorney Kenneth Allen Polite, Jr.  The indictment was unsealed today.

TAYLOR and BOLDEN are also charged with distribution of heroin on or about July 26, 2013, resulting in the death of Kevin Ryan.  Several of the defendants are charged with additional counts of distributing heroin and using telephones in furtherance of heroin trafficking.  According to the indictment, GRIFFIN faces an additional charge of maintaining a drug-involved premise for allowing a residence located at 4848 Deanne Street in New Orleans to be used for drug-related activities.

 “The arrests made today are part of DEA’s response to the addiction, crime, violence, and despair brought on by the growing threat of heroin,” stated DEA Special Agent in Charge Keith Brown.  “Heroin is a killer that does not discriminate.  It destroys lives, families, and hope in every segment of society; and the individuals who sell heroin are spreading potential death in every foil package sold on the streets of this country.  DEA, working shoulder to shoulder with law enforcement agencies across the New Orleans area, is fully committed to stopping the spread of this deadly drug and to bringing to justice those who profit from the misery created by heroin.”

 “The St. Tammany Parish Sheriff’s Office has a long-standing and proud partnership with our federal law enforcement partners.  The work we do together is helping remove life- threatening drugs from our communities and making sure that those who would supply these drugs to others face the consequences of their actions,” stated St. Tammany Sheriff Jack Strain.

U. S. Attorney Kenneth Allen Polite, Jr., reiterated the charges in the indictment are only allegations, and that the guilt of the defendants must be proven beyond a reasonable doubt.

This case has been investigated jointly by the Drug Enforcement Administration, Federal Bureau of Investigation with assistance from the St. Tammany Parish Sheriff’s Office, and is being prosecuted by Special Assistant United States Attorney Michael Redmann, assigned from the Orleans Parish District Attorney’s Office, and Assistant United States Attorney Mark Miller.

(Download Indictment )

Today, U.S. Attorney Kenneth Allen Polite, Jr. announced that JONATHAN JOHNSON, age 27, of Abita Springs, Louisiana, pled guilty to Operating a Child Exploitation Enterprise in violation of Title 18, United States Code, Section 2252A(g). 

According to court documents, from 2012 through 2013, JOHNSON administered two child pornography websites identified as Website A and Website B out of his Abita Springs home in order to distribute images and videos depicting the sexual victimization of children.  JOHNSON’s illegal websites had over 27,000 members located throughout the world.  As the administrator of these websites, JOHNSON regulated membership in the websites and created two categories of website users:  members and uploaders.  JOHNSON required members to register with a user name and password before they could download video files, comment on videos, or exchange private messages.  Uploaders had the same privileges as members, but were also permitted to upload sexually explicit material directly to JOHNSON’s websites.  JOHNSON’s websites also included tutorials that provided guidance to members and uploaders on ways to communicate with minor boys in order to coerce them into creating sexually explicit videos and JOHNSON’s websites also provided instructions so members and uploaders could avoid detection from law enforcement.  JOHNSON frequently utilized and encouraged other members and uploaders to access popular social networking sites in order to search for and locate unsuspecting minor boys for the purpose of having them create sexually explicit videos.  JOHNSON and other website members and uploaders created fake female Internet personas in order to initiate online communications with young boys. 

During the course of the investigation of JOHNSON, special agents with the U.S. Department of Homeland Security, Homeland Security Investigations and the U.S. Postal Inspection Service determined JOHNSON’s websites contained approximately 2,000 videos depicting the sexual exploitation of young boys.  Dubbed “Operation Roundtable,” the case against JOHNSON has resulted in ten (10) additional individuals being charged by the U.S. Attorney’s Office in New Orleans.  To date, five (5) of those defendants have entered pleas of guilty to crimes involving the sexual exploitation of children.

In addition, Operation Roundtable has resulted in over twenty-five (25) additional defendants being arrested and charged with various state and federal charges throughout the United States and approximately 250 child victims have been identified and/or rescued by law enforcement officials. 

“Today’s guilty plea represents a significant step in our continued efforts to dismantle a criminal enterprise that is responsible for the sexual victimization of our nation’s young people,” stated United States Attorney Polite.  “Once again, I commend HSI and the Postal Service for being dedicated partners in Operation Roundtable.  Together, we are committed to utilizing our collective resources to bring justice to both the victims and the perpetrators of these crimes.  Our important investigation is on-going.”

“With at least 27,000 members worldwide, this criminal oversaw the largest child pornography network ever discovered in this agency’s history,” said HSI New Orleans Special Agent in Charge Raymond R. Parmer Jr. “Never before have so many minor victims been identified in the course of a single child exploitation investigation. Protecting children is one of HSI’s highest priorities and we will continue to investigate and seek prosecution of these dangerous criminals who exploit innocent victims and destroy lives for their own selfish desires.”

“Postal Inspectors investigate a wide variety of crimes in our mission to protect the integrity of the U.S. Mail, but sexual exploitation of children is particularly heinous,” said U.S. Postal Inspection Service Inspector in Charge Robert Wemyss. “When these predators use a combination of mail and the Internet to exploit our children we will ensure no aspect of their crimes escape justice.”

JOHNSON will be sentenced on July 17, 2014 by U.S. District Judge Nannette Jolivette Brown.  JOHNSON has been in federal custody since his arrest on June 13, 2013. 

JOHNSON is facing a mandatory minimum term of incarceration of twenty (20) years to a maximum sentence of life imprisonment.  JOHNSON will also be required to register as a sex offender pursuant to the Sex Offender Registration and Notification Act. 

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

This case is being investigated by the U.S. Department of Homeland Security-Homeland Security Investigations and the U.S. Postal Inspection Service.  The prosecution of this case is being handled by Fraud Unit Chief and Project Safe Childhood Coordinator, Assistant U. S. Attorney Brian M. Klebba.

(Download Factual Basis )

RICHARD ZANCO, age 44, of Slidell, Louisiana, plead guilty as charged today before United States District Judge Susie Morgan to money laundering, announced United States Attorney Kenneth Allen Polite, Jr.  

According to court documents, in about May 2012, ZANCO learned that someone had opened a brokerage account in his name and used that account to acquire collateralized mortgage obligations (CMOs), a type of bond that bore value from interest generated upon its sale, by fraudulent means.  Even though he knew that the CMOs did not belong to him, ZANCO gained control of the accounts and arranged for the interest proceeds of the CMOs to be diverted to other financial accounts under his control.  Between about March 11, 2013, and September 19, 2013, ZANCO used the funds, totaling approximately $343,998.82, to engage in a variety of financial transactions for his personal use, including purchasing multiple automobiles and at least one boat. 

ZANCO faces a maximum penalty of ten (10) years, followed by up to three (3) years of supervised release, and a $250,000 fine.  Sentencing has been scheduled before Judge Morgan for July 2, 2014.

This case is being investigated by agents from the Federal Bureau of Investigation and the Internal Revenue Service.  The prosecution of this case is being handled by Assistant United States Attorneys Jordan Ginsberg and Dan Friel.

(Download Factual Basis )

CHRISTOPHER JAMIESON, age 31, a resident of Douglasville, Georgia, pled guilty today to receipt of child pornography, announced United States Attorney Kenneth Allen Polite, Jr.

According to court documents, in November 2013, JAMIESON was arrested by special agents with the United States Department of Homeland Security, Homeland Security Investigations (“HSI”) and the United States Postal Inspection Service after they determined that JAMIESON was responsible for receiving videos depicting the sexual exploitation of children on the Internet.  Today, JAMIESON entered a plea of guilty to knowingly receiving several videos depicting the sexual exploitation of children from Jonathan Johnson, the administrator of a multi-national child pornography website.

Sentencing is scheduled for June 25, 2014, before U.S. District Judge Martin L.C. Feldman.  Receipt of child pornography carries a mandatory minimum sentence of not less than five (5) years and a maximum penalty of twenty (20) years imprisonment, supervised release of not less than five years up to life, and JAMIESON will have to register as a sex offender.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

This case was investigated by Homeland Security Investigations and the U.S. Postal Inspection Service.  The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba.

(Download Factual Basis )

CHRISTOPHER M. SCHWAB, age 24, a resident of New Orleans, Louisiana, pled guilty today to four counts of producing child pornography involving four different minor victims, one count of distributing child pornography and one count of receiving child pornography, announced U. S. Attorney Kenneth Allen Polite, Jr.

According to court documents, in August 2013, SCHWAB was arrested by special agents with the United States Department of Homeland Security, Homeland Security Investigations (“HSI”) after they determined that SCHWAB was responsible for sending images depicting the sexual exploitation of children.  SCHWAB has been in custody since his arrest.

Production of child pornography carries a mandatory minimum sentence of fifteen years and a maximum sentence of thirty years.  Distribution and receipt of child pornography carry a mandatory minimum sentence of five years and a maximum sentence of twenty years. Upon his release from incarceration, SCHWAB will have to register has a sex offender.  Sentencing is scheduled for June 11, 2014 before United States District Judge Sarah Vance. 

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

This case was investigated by Homeland Security Investigations.  The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba.

(Download Factual Basis )

ANTHONY R. THOMAS, age 48, a resident of New Orleans, Louisiana, pled guilty today to a nine-count superseding bill of information charging him with multiple criminal counts for his involvement in a 2007 scheme to burn his rental property for fire insurance, a 2009 scheme to burn another rental property for his accomplice to collect fire insurance and his attempt at covering up his involvement in the 2009 fire, announced United States Attorney Kenneth Allen Polite, Jr.

Specifically, THOMAS pled guilty to:  one count of conspiracy to commit arson; two counts of arson; one count of conspiracy to commit mail and wire fraud; three counts of wire fraud; one count of using arson to commit conspiracy, mail, and wire fraud; and one count of making false statements.

According to court documents, THOMAS and others attempted in 2007 to defraud his homeowner’s fire insurance company and their rental fire insurance companies by engaging in sham leases and filing inflated claims for property allegedly burned in the fire.  THOMAS and others were involved in a similar scheme in 2009 where a renter filed inflated claims for property allegedly burned in the arson fire.  THOMAS, who was burned in the 2009 fire, concocted a false story to federal agents to explaining his burns.

U.S. District Court Judge Susie Morgan scheduled THOMAS’s sentencing for June 18, 2014.  He faces a minimum term of imprisonment of seventeen (17) years and a maximum term of imprisonment of fifty (50) years. 

This case was investigated jointly by Special Agents of the Department of Justice, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and arson investigators of the New Orleans Fire Department. This case is being prosecuted by Assistant U.S. Attorney Tony Sanders.

(Download Factual Basis )

STANLEY ZDON, III, age 28, a resident of Tuckerton, New Jersey, pled guilty today to conspiracy to produce child pornography, announced United States Attorney Kenneth Allen Polite, Jr.

According to court documents, in November 2013, ZDON was arrested by special agents with the United States Department of Homeland Security, Homeland Security Investigations (“HSI”) after they determined that ZDON was responsible for creating and posting videos depicting the sexual exploitation of children on the Internet.  ZDON has been in custody since his arrest.

Sentencing is scheduled for June 18, 2014, before U.S. District Judge Susie Morgan. Conspiracy to produce child pornography carries a mandatory minimum sentence of not less than fifteen (15) years and a maximum penalty of thirty (30) years imprisonment, supervised release of not less than five years up to life, and ZDON will have to register as a sex offender.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

This case was investigated by Homeland Security Investigations.  The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Unit Chief, Assistant U.S. Attorney Brian M. Klebba.

(Download Factual Basis )

U.S. Attorney Kenneth Allen Polite, Jr., announced the recent unsealing of a superseding indictment charging members of the Frenchmen/Derbigny gang, or “FnD,” with violating federal drug and firearm laws.  A federal grand jury returned the superseding indictment on February 27, 2014, charging TRAVIS SCOTT, a/k/a “Trap” or “Slim,” age 29; STANLEY SCOTT, a/k/a “Stizzle,” age 23; SHAWN SCOTT, a/k/a “Shizzle,” age 25; AKEIN SCOTT, a/k/a “Keemy,” age 20; JEREMIAH JACKSON, a/k/a “Rocky,” age 23; GRALEN BENSON, a/k/a “Dooley,” age 26; BRIAN BENSON, a/k/a “Dub” or “Dubba,” age 24; CRYSTAL SCOTT, a/k/a “Chris,” age 32; and RICHMOND SMITH, a/k/a “Ace,” age 25, with various violations of the Federal Controlled Substances Act and the Federal Gun Control Act.

According to the superseding indictment, the Frenchmen/Derbigny gang conspired from 2006 through 2013 to violate federal drug distribution laws.  The superseding indictment also alleges that some of the members, TRAVIS SCOTT, STANLEY SCOTT, SHAWN SCOTT, AKEIN SCOTT, JEREMIAH JACKSON, GRALEN BENSON, and RICHMOND SMITH, conspired to possess and use firearms in furtherance of the drug distribution operation.  The superseding indictment specifically alleges that AKEIN SCOTT and his brother, SHAWN SCOTT, discharged firearms into a Mother’s Day second-line parade on May 12, 2013, in furtherance of that drug conspiracy.  As part of this overall federal gang indictment and with the full cooperation of the Orleans Parish District Attorney’s Office, the United States Attorney’s Office will be adopting the firearms and drug charges that are currently pending in state court on the individual gang members in an effort to avoid a duplication of resources. 

If convicted for violating federal drug conspiracy laws, the charged individuals face a maximum penalty of life imprisonment, a $10,000,000 fine, and at least five years of supervised release.  Those individuals charged with conspiring to possess firearms in furtherance of the drug distribution conspiracy face a maximum twenty years in prison, a $250,000 fine, and up to three years of supervised release.

This superseding indictment represents a coordinated effort of federal and state law enforcement authorities within the Multi-Agency Gang (“MAG”) Unit.  Federal agents and New Orleans Police Department officers assigned to the MAG Unit arrested GRALEN BENSON and JEREMIAH JACKSON on March 7, 2014.  BRIAN BENSON was arrested by the MAG Unit on March 10, 2014.  TRAVIS SCOTT is presently in federal custody, while STANLEY SCOTT, SHAWN SCOTT, and AKEIN SCOTT are currently in state custody.  RICHMOND SMITH and CRYSTAL SCOTT are still at large.

U. S. Attorney Polite thanked all members of the MAG Unit for their contributions to this investigation and prosecution.

“Following one of the most despicable shootings in our city’s recent history, our federal, state and local law enforcement partners collaborated in an unprecedented fashion to identify the allegedly responsible individuals,” stated U.S. Attorney Polite.  “This superseding indictment reflects the results of the MAG Unit’s outstanding work.  Let this be a signal to the entire community:  those who terrorize our streets through drug trafficking and gun violence will be brought to justice.”

ATF Special Agent in Charge Phil Durham stated, “Since the day of this horrendous crime where 19 people were shot while attending a parade celebrating Mother’s Day, ATF Special Agents assigned to the MAG Unit have worked around the clock with investigators and prosecutors to see that those involved are held accountable for their actions.   ATF will continue to dedicate our resources to targeting and reducing violent crime in the City of New Orleans.”  

“This indictment is another clear signal that the rules have changed -- there are real consequences for violence in our city. Since the fall of 2012, the Multi-Agency Gang Unit has led to the indictments of 83 individuals associated with 8 groups,” said Mayor Landrieu. “Through NOLA FOR LIFE, we will continue to focus on keeping our citizens safe, reclaiming our neighborhoods, and offering opportunities to those who want to make better choices.”

NOPD Superintendent Ronal Serpas said, “The collaboration of all partners in the Multi-Agency Gang (MAG) Unit has proven to be undeniably effective in getting some of the city’s most violent criminals out of our neighborhoods.  In some cases, innocent people felt they were being held hostage by fear of illegal activities that were prevalent in their communities.  These indictments are proof that the game has changed.  As a team - we are focused and we are unrelenting.”     

U. S. Attorney Polite reiterated that the superseding indictment is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.  

ATF Special Agents assigned to the MAG Unit are the lead case agents.  The prosecution is being handled by Assistant United States Attorney Matthew Payne and Special Assistant United States Attorney Brian Ebarb, who is assigned from the Orleans Parish District Attorney’s Office.

(Download Superseding Indictment )

EVANS LEWIS, a/k/a “Easy”, 22, a resident of New Orleans, pleaded guilty yesterday to the murder of Gregory Keys and shooting of Kendrick Smothers during the course of a drug trafficking crime, announced U.S. Kenneth Allen Polite, Jr.  In December 2011, LEWIS and co-defendant Gregory Stewart, a/k/a “Rabbit”, a/k/a “D-Nice”, 22, were charged with participating in the homicide of Keys and the shooting of Smothers.  Stewart’s trial is scheduled for July 14, 2014. 

LEWIS’s guilty plea resulted from a multi-year investigation of a heroin trafficking organization that operated in an area known as the “G-Strip” in New Orleans.  The G-Strip is an area encompassing the 1300 block of Gallier Street in the Ninth Ward of New Orleans. Many of the members of the G-Strip were also affiliated with a gang known as the 39ers, an alliance of heroin traffickers in the Third and Ninth Wards of New Orleans.  To date, eleven individuals related to the G-Strip organization have pleaded guilty to drug trafficking-related offenses.

According to Court records, on or about May 24, 2011, LEWIS and Stewart knowingly carried and used two firearms, a 40-caliber semi-automatic handgun and a 7.62-caliber assault rifle, during and in relation to the commission of a drug trafficking crime, and in the course of this violation, caused the death of Keys through the use of a firearm.

LEWIS will be sentenced on July 17, 2014, at 10:00 a.m.  He faces a maximum penalty of life imprisonment, a $250,000 fine, and a period of supervised release of not more than 5 years.

The investigation is being conducted by Special Agents of the Federal Bureau of Investigation, the Bureau of Alcohol Tobacco and Firearms, the New Orleans Police Department, Jefferson Parish Sheriff=s Office and St. Tammany Parish Sheriff=s Office.  The case is being prosecuted by Assistant U.S. Attorneys Sharan Lieberman, Maurice Landrieu and Matthew Payne.

(Download Factual Basis )

EFRAIN URBINA GRIMALDO aged 33, a citizen of Mexico, was convicted today on conspiracy to possess and distribute 5 kilograms or more of cocaine before U.S. District Court Judge Sarah S. Vance.  GRIMALDO’s organization distributed hundreds of kilograms of cocaine throughout United States, to include Jackson, Mississippi, Pensacola, Florida, New York City, New York, and Houma, Louisiana.

According to court documents, in September 2009, Drug Enforcement Administration Agents seized cocaine hydrochloride in Houma, Louisiana and April of 2010, the Drug Enforcement Administration conducted a controlled purchase of cocaine hydrochloride from the defendant in Beaumont, Texas.

GRIMALDO was arrested in July 2012, based on a warrant from the Eastern District of Louisiana in Houston, Texas.  At the time of arrest, GRIMALDO was found in possession of false identification documents out of Louisiana, and had surgically altered his fingerprints, in what appeared to be an effort to conceal his identity from law enforcement. 

The defendant faces a maximum sentence of life imprisonment and a fine of up to $10 million.  Sentencing is scheduled for June 11, 2014.

The case was investigated by the Drug Enforcement Administration New Orleans Office, DEA Houston HIDTA Task Force, Terrebonne Parish Sheriff’s Office, Louisiana State Police Troop C,  Houma Police Department and Lafourche Parish Sheriff’s Office.

This case is being prosecuted by Assistant U.S. Attorneys John F. Murphy and Theodore Carter.

DANIEL NOLAN DEVOR, age 40, a resident of Brunswick, Georgia, pled guilty today before U.S. District Judge Nannette Jolivette Brown, to conspiracy to produce child pornography, announced U.S. Attorney Kenneth Allen Polite, Jr.

According to court documents, in November 2013, DEVOR was arrested by special agents with the United States Department of Homeland Security, Homeland Security Investigations (“HSI”) after they determined that DEVOR was responsible for creating and posting videos depicting the sexual exploitation of children on the Internet.  DEVOR has been in custody since his arrest.

Sentencing is scheduled for July 17, 2014.  Conspiracy to produce child pornography carries a mandatory minimum sentence of not less than fifteen (15) years and a maximum penalty of thirty (30) years imprisonment, supervised release of not less than five years up to life, and DEVOR will have to register as a sex offender.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

This case was investigated by Homeland Security Investigations.  The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Section Chief, Assistant U. S. Attorney Brian M. Klebba.

(Download Factual Basis )

WALTER CONLEY, a/k/a “Ike Neezy”, 25, a resident of New Orleans, was sentenced today by U.S. District Judge Stanwood R. Duval, Jr., to serve 480 months (40 years) in prison for violating federal RICO, firearms, murder, and carjacking charges, announced U.S. Attorney Kenneth Allen Polite, Jr.  CONLEY was a member of a gang from the Hollygrove area of the city that was involved in several shootings and murders in recent years.  All of the indicted members of this gang have pled guilty and have been sentenced.  
                                                             
CONLEY had previously pled guilty to RICO conspiracy, firearms conspiracy, the non-fatal shooting of Corey Morris, the murder of Paul May, carjacking, and the attempted murder of Morris Williams.

A thirty-four count second superseding indictment was returned on November 16, 2012, charging Walter Conley, a/k/a “Ike Neezy”; Tyronne Stevenson, a/k/a “Duke”; Theron Golston, a/k/a “Thema”;  Bernell Williams a/k/a “Bussy”, a/k/a “A-Boogie”; Norman Ratcliff, a/k/a “Turk”; Carey Jones, a/k/a “Bean”, and Mark Glenn with participating in a RICO conspiracy, drug conspiracy, firearms conspiracy, and several substantive acts of violence. 

Co-defendant Ryan Carroll, a/k/a “Ronnie Boo,” pled guilty to participating in the RICO conspiracy and to discharging a firearm during a drug trafficking crime and a crime of violence.  On October 16, 2013, he was sentenced to serve 210 months in federal prison.

Co-defendant Theron Golston pled guilty and was subsequently sentenced to life in prison on November 20, 2013 for his participation in the RICO conspiracy, the murder of Aaron Allen, and the drive-by murder of Ms. Eula Mae Ivey.

Co-defendants Tyronne Stevenson and Mark Glenn also pled guilty to various charges in the indictment, which included non-fatal shootings and were sentenced on December 11, 2013.  Stevenson and Glenn were sentenced to serve 360 months and 300 months, respectively.

Co-defendant Bernell Williams pled guilty to participating in the RICO conspiracy and to discharging a firearm during a drug trafficking crime and a crime of violence.  On January 22, 2014, Williams was sentencing to serve 240 months in federal prison.

Co-defendant Carey Jones pled guilty and was subsequently sentenced to life in prison on January 22, 2014.

Co-defendant Norman Ratcliff also pled guilty and was sentenced on February 11, 2014, to serve 396 months.

“The sentencing of Walter Conley concludes the first Gang Case that was investigated and prosecuted by the newly formed N.O.P.D. Multi-Agency Gang (MAG) Unit,” stated U.S. Attorney Polite. “This case shows the success that is possible when members from different agencies come together for the common goal of making our city a safer place to live.” 

U.S. Attorney Polite thanked the federal agents from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) who took the lead role in this specific investigation and who have been steadfast in their resolve to bring these violent offenders to justice.   He also thanked the other members of the MAG Unit who worked on this case and renewed the USAO’s commitment to assist the MAG Unit in targeting these types of violent offenders.

The Multi-Agency Gang Unit is an N.O.P.D. led division which includes federal agents from ATF, the Drug Enforcement Administration, the Federal Bureau of Investigation, and the U.S. Marshals Service, as well as participants from the Orleans Parish Sheriff’s Office, the Louisiana State Police, State Probation and Parole, the New Orleans District Attorney’s Office, and the United States Attorney’s Office.

The case was prosecuted by Assistant United States Maurice E. Landrieu, Jr.

GEORGE POTTER, 27, of Gulf Breeze, Florida, was sentenced today by U.S. District Judge Martin L.C. Feldman, to serve 188 months incarceration, for crimes involving the sexual exploitation of children, announced U. S. Attorney Kenneth Allen Polite, Jr.  In addition to the term of imprisonment, POTTER was sentenced to serve 10 years supervised release and must register as a sex offender under the Sex Offender Registration Notification Act.

According to court documents, following an investigation by the Louisiana State Police and the U. S. Department of Homeland Security, Homeland Security Investigations (HSI), POTTER was indicted by a federal grand jury on June 20, 2013 for Distribution of Child Pornography and was arrested by HSI federal agents.  POTTER pled guilty on November 13, 2013.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.  For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

This case was investigated by special agents from the U. S. Department of Homeland Security, Homeland Security Investigations and the Louisiana State Police.  The prosecution of this case is being handled by Fraud Section Chief and Project Safe Childhood Coordinator, Assistant U. S. Attorney Brian M. Klebba.

JOSEPH J. MOGAN, III, M.D., TIFFANY MILLER, and DONALD NIDES were indicted by a federal grand jury on Friday, February 21, 2014, for conspiring to dispense prescription drugs illegally through “pill mill” clinics operated as Omni Pain Management in Metairie, Louisiana, and Omni Pain Management Plus in Slidell, Louisiana, announced U. S. Attorney Kenneth Allen Polite, Jr.

According to the indictment, MOGAN and MILLER owned and operated the two clinics and conspired to sell prescriptions for narcotics and other controlled substances without a legitimate medical purpose and outside the bounds of professional medical practice to drug seekers and drug abusers.  The indictment further charges DONALD NIDES, a former Drug Enforcement Administration (“DEA”) Task Force Officer and former New Orleans Police Department (“NOPD”) Officer, with participating in the drug trafficking conspiracy by advising MOGAN and MILLER as to how to avoid DEA “red flags”; by leaking confidential information to MILLER regarding ongoing investigations; and by lying to federal agents.  NIDES is also charged with obstruction of justice and with conspiring to receive bribes, in the form of sex acts and money, in return for using his official position to assist MILLER and MOGAN in operating the Omni clinics as “pill mills.”

“Prescription drug abuse has reached epidemic proportions in our community,” stated U.S. Attorney Polite.  “We must halt this plague at its source, by bringing to justice any medical provider who violates our safety by illegally distributing these medications to the public.”

 “Prescription drug trafficking and abuse are an epidemic in this country that destroys countless lives, and threatens important trusts in our society, such as our reliance on medical practitioners and, in this case, our faith in our law enforcement community,” stated Keith Brown, Special Agent in Charge, Drug Enforcement Administration-New Orleans Field Division.  “DEA is fully committed to the pursuit and arrest of any individual who abandons their oaths as medical practitioners and law enforcement officers to the patients they treat and the public they promise to protect.  Prescription drug abuse is a fast growing, widespread problem in Louisiana and can only be countered by an effective collaboration among law enforcement, the medical community, and the public to identify and stop those responsible for the illegal distribution of prescription drugs in our communities.”

U. S. Attorney Polite reiterated that, at this time, the charges in the indictment are only allegations, and that the guilt of the defendants must be proven beyond a reasonable doubt.  

This case has been investigated by the Drug Enforcement Administration, case agents George Cazenavette III and Brian Bradshaw, and is being prosecuted by Assistant United States Attorney Harry “Bill” McSherry and Special Assistant United States Attorney Michael Redmann, who is assigned from the Orleans Parish District Attorney’s Office.

(Download Indictment )

U.S. Attorney Kenneth Allen Polite, Jr. announces the recent unsealing of a bill of information charging JONATHAN JOHNSON, age 27, of Abita Springs with Operating a Child Exploitation Enterprise in violation of Title 18, United States Code, Section 2252A(g). 

According to court documents, from 2012 through 2013, JOHNSON administered two child pornography websites identified as Website A and Website B out of his Abita Springs, Louisiana home in order to distribute images and videos depicting the sexual victimization of children.  JOHNSON’s illegal websites had over 27,000 members located throughout the world.  As the administrator of these websites, JOHNSON regulated membership in the websites and created two categories of website users:  members and uploaders.  JOHNSON required members to register with a user name and password before they could download video files, comment on videos, or exchange private messages.  Uploaders had the same privileges as members, but were also permitted to upload sexually explicit material directly to JOHNSON’s websites.  JOHNSON’s websites also included tutorials that provided guidance to members and uploaders on ways to communicate with minor boys in order to coerce them into creating sexually explicit videos and JOHNSON’s websites also provided instructions so members and uploaders could avoid detection from law enforcement.  JOHNSON frequently utilized and encouraged other members and uploaders to access popular social networking sites in order to search for and locate unsuspecting minor boys for the purpose of having them create sexually explicit videos.  JOHNSON and other website members and uploaders created fake female Internet personas in order to initiate online communications with young boys. 

During the course of the investigation of JOHNSON, special agents with the U.S. Department of Homeland Security, Homeland Security Investigations and the U.S. Postal Inspection Service determined JOHNSON’s websites contained approximately 2,000 videos depicting the sexual exploitation of young boys.  The case against JOHNSON has resulted in 10 different individuals being charged by the U.S. Attorney’s Office in New Orleans. They are:

• DANIEL NOLAN DEVOR, age 39, of Brunswick, Georgia;
• JOHN C. FOSTER, age 44, of Tipp City, Ohio;
• AUNG GAW, a/k/a Michael Gaw, age 25, of Fremont, California;
• SEAN JABBAR, age 32, of Minneapolis, Minnesota;
• CHRISTOPHER JAMIESON, age 30, of Douglasville, Georgia;
• ANDREW J. KORPAL, age 29, of Granger, Indiana;
• NICHOLAS SAINE, age 27, of Seattle, Washington;
• STANLEY ZDON, III, age 27, of Tuckerton, New Jersey;
• CHRISTOPHER SCHWAB, age 25, of New Orleans, Louisiana;
• VITTORIO FRANCESCO GONZALEZ-CASTILLO, age 26, of Tucson, Arizona.

These defendants are charged as follows:

U.S. v. Daniel Nolan Devor, Criminal Docket No. 13-255 “G,” Conspiracy to Produce Child Pornography, Distribution of Child Pornography, and Receipt of Materials Involving the Sexual Exploitation of Minors;

U.S. v. John C. Foster, Criminal Docket No. 13-251 “N,” Conspiracy to Produce Child Pornography, Distribution of Child Pornography, and Receipt of Materials Involving the Sexual Exploitation of Minors;

U.S. v. Aung Gaw, Criminal Docket No. 13-250 “R,” Receipt of Child Pornography;

U.S. v. Sean Jabbar, Criminal Docket No. 13-252 “C,” Receipt of Child Pornography;

U.S. v. Christopher Jamieson, Criminal Docket No. 13-252 “F,” Receipt of Child Pornography;

U.S. v. Andrew J. Korpal, Criminal Docket No. 13-254 “J,” Receipt of Child Pornography;

U.S. v. Nicholas Saine, Criminal Docket No. 13-256 “N,” Receipt of Child Pornography;

U.S. v. Stanley Zdon, III, Criminal Docket No. 13-257 “E,” Conspiracy to Produce Child Pornography;

U.S. v. Christopher Schwab, Criminal Docket No. 13-237 “R,” Production of Child Pornography, Distribution of Child Pornography, and Receipt of Child Pornography;

U.S. v. Vittorio Francesco Gonzalez-Castillo, Criminal Docket No. 14-014 “K,” Conspiracy to Produce Child Pornography.

In addition, this joint investigation has resulted in over twenty-five (25) additional defendants being arrested and charged with various state and federal charges throughout the United States and approximately 160 child victims have been identified and/or rescued by law enforcement officials. 

JOHNSON will have an initial appearance on February 24, 2014 to be formerly arraigned on these charges.  JOHNSON has been in federal custody since his arrest on June 13, 2013, and he is represented by the Federal Public Defender’s Office.

JOHNSON is facing a mandatory minimum term of incarceration of twenty (20) years to a maximum sentence of life imprisonment.  JOHNSON will also be required to register as a sex offender pursuant to the Sex Offender Registration and Notification Act. 

U.S. Attorney Kenneth Allen Polite, Jr. reiterated that the Superseding Bill of Information is merely an accusation and that the guilt of the defendant must be proven beyond a reasonable doubt.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

This case is being investigated by the U.S. Department of Homeland Security-Homeland Security Investigations and the U.S. Postal Inspection Service.  The prosecution of this case is being handled by Fraud Unit Chief and Project Safe Childhood Coordinator, Assistant U. S. Attorney Brian M. Klebba.

(Download Superseding Bill of Information )

RAFAEL DOBARD, age 39, and QUINCY JONES, age 33, both New Orleans Police Department (“NOPD”) narcotics detectives, pled guilty today before U.S. District Court Judge Nannette Jolivette Brown, to conspiracy to commit theft from programs receiving federal funds and conspiracy to commit wire fraud, announced U. S. Attorney Kenneth Allen Polite, Jr.  Judge Brown set sentencing of both defendants on June 19, 2014 at 10:00 am. 

According to court documents, DOBARD and JONES both admitted that they conspired to enrich themselves and others by obtaining NOPD confidential informant funds by fraud and by corruptly making payments to other officers in their unit.  They also admitted that they conspired to commit wire fraud by submitting NOPD timesheets that indicated they were working on duty for the NOPD when, in fact, they were working at non-NOPD detail jobs.

DOBARD and JONES have served as NOPD officers for eight and eleven years, respectively.  Both officers were most recently assigned as detectives to NOPD’s Fourth District Narcotics Unit and are currently suspended.

The maximum penalty for conspiracy to commit theft from programs receiving federal funds is five years imprisonment and a $250,000 fine.  The maximum penalty for conspiracy to commit wire fraud is twenty years imprisonment and a $250,000 fine.  Any term of imprisonment must be followed by a term of supervised release of up to three years.

The case was investigated jointly by the Federal Bureau of Investigation and the NOPD Public Integrity Bureau.  The case is being prosecuted by Assistant United States Attorney Mark A. Miller and Special Assistant United States Attorney Michael B. Redmann, who is detailed to the U.S. Attorney’s Office from the Orleans Parish District Attorney’s Office.

(Download Factual Basis )

RAINER WITTICH, age 64, of River Ridge, Louisiana, and the company he owns, THE BRINSON COMPANY, of Harahan, Louisiana, were charged today in a four-count indictment by a federal grand jury for their role in creating and selling fake Mercedes-Benz diagnostic equipment containing proprietary software without authorization, announced U.S. Attorney Kenneth Allen Polite, Jr.

According to the Indictment, WITTICH owned THE BRINSON COMPANY, which sold replacement parts and diagnostic equipment for Mercedes-Benz vehicles.  Beginning in about 2001, WITTICH and THE BRINSON COMPANY began developing, manufacturing, and selling fake versions of the Mercedes-Benz Star Diagnostic System (SDS), a hand-held computer containing proprietary, confidential software, with the assistance of a Durham, North Carolina-based company.  They did so by obtaining Mercedes-Benz software without authorization, applying “cracks and fixes” to make the software work on everyday laptop computers, and making hundreds of copies of the software product.  WITTICH and others then worked to override Mercedes-Benz security systems by purchasing false license keys from a United Kingdom-based individual that, combined with other modifications, would “unlock” the SDS software and make it operable on the counterfeit devices.  When Mercedes-Benz notified the United Kingdom-based individual that his conduct was in violation of the law, WITTICH and others discussed plans to have him “go underground and off the radar” and continue to provide assistance and support in the production of fake SDS.

Beginning in about 2005, WITTICH entered into a conspiracy with a California-based company to manufacture and sell the SDS.  On some occasions, when one of the fake SDS units sold by the North Carolina or California companies would break, WITTICH and BRINSON would repair them and return them to the customers. 

Genuine SDS diagnostic devices are used by mechanics to identify problems with and assure the safety of motor vehicles employing electronic control systems; the fraudulent or unauthorized sale of such units increases the risk of Mercedes-Benz automobiles being stolen or suffering from misdiagnosed or undiagnosed problems.  Genuine SDS sold for up to $22,000 each, while WITTICH’S fake SDS sold for between $5,000 and $11,000.  In total, WITTICH and BRINSON sold not fewer than 700 counterfeit SDS, and the California-based company sold at least 95 devices.

If convicted, WITTICH faces a maximum term of imprisonment of twenty (20) years, followed by up to three (3) years of supervised release, and a $250,000 fine.   THE BRINSON COMPANY faces up to a $500,000 fine.

United States Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.

This case is being investigated by agents from the Federal Bureau of Investigation.  The prosecution of this case is being handled by Assistant United States Attorney Jordan Ginsberg.

(Download Indictment )

RENATA R. FOREMAN, age 34, a resident of New Orleans, was sentenced yesterday by U.S. District Court Judge Susie Morgan, to 33 months imprisonment, followed by 3 years of supervised release and a $300 special assessment,  announced U.S. Attorney Kenneth Allen Polite, Jr.  FOREMAN pleaded guilty in October 2013 to a three-count bill of information charging her with theft of government funds, mail fraud and identity theft related to her scheme to defraud the U.S. Department of Education.  Judge Morgan also ordered FOREMAN to pay restitution in the amount of $191,617 to the U.S. Department of Education.

According to court records, from September 2008 through January 2012, FOREMAN fraudulently obtained financial aid funds in the amount of $191,617 from several Louisiana and online universities.  As part of her scheme to defraud, FOREMAN applied for admission and financial aid in her name and in the name of nine individuals without their knowledge or consent. By falsifying high school graduation information and supplying forged transcripts, FOREMAN induced universities to admit her and others based on false information. FOREMAN also misrepresented her income and other applicant’s income in order to maximize the federal financial aid she illegally received.

The case was investigated by the U.S. Department of Education-Office of Inspector General, and U.S. Postal Inspection Service.  The case was prosecuted by Assistant U.S. Attorney Julia K. Evans.

DAVID LEE KILLEN, age 42, a resident of Covington, Louisiana, was charged today in a thirty-count health care fraud and four-count aggravated identity theft indictment by a Federal Grand Jury for his submission of fraudulent claims to Medicare, Medicaid and private insurers, announced U.S. Attorney Kenneth Allen Polite, Jr.

According to the indictment, KILLEN submitted bills to insurers for chiropractic adjustments, X-rays, and expensive allergy tests and back braces that he never provided.  KILLEN is also charged with billing insurers for back braces at a rate of nearly $1,000 each, but actually providing a cheaper substitute to his patients that would not have been reimbursed at the same rate.

The indictment also charges aggravated identity theft for KILLEN’S alleged use of the medical doctor’s insurance provider numbers in conjunction with his health care fraud scheme.  If an insurer would not reimburse certain services when provided by a chiropractor or licensed physical therapist, KILLEN allegedly billed the service as though it was provided by a medical doctor.

KILLEN is also alleged to have offered incentives and breaks for patient co-payments to his patients if they would agree to have an expensive allergy blood test for which his cost was $600 but for which he was reimbursed nearly $4,500.  The indictment alleges that KILLEN even billed for a two-year-old to have the expensive test, although a cheaper pediatric version of the test was available.

If convicted, KILLEN faces a ten-year term of imprisonment for each of the health care fraud counts, along with two years of imprisonment for each of the aggravated identity theft counts.  KILLEN is also subject to a fine of $250,000 and three years of supervised release following any term of imprisonment.

The case was investigated by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services. The case is being prosecuted by Special Assistant United States Attorney Juliana A. Etland.

(Download Indictment )

NORMAN RATCLIFF, a/k/a “Turk”, 21, a resident of New Orleans, was sentenced today by U.S. District Judge Stanwood R. Duval, Jr. to serve 396 months  in prison for violating federal RICO, drug conspiracy, firearms conspiracy, and murder charges, announced U.S. Attorney Kenneth Allen Polite, Jr.  RATCLIFF was a member of a gang from the Hollygrove area of the city that was involved in several shootings and murders in recent years.  To date, all but one of the indicted members of this gang have pled guilty and have been sentenced.  The last remaining co-defendant, Walter Conley, is scheduled to be sentenced on February 26, 2014.

RATCLIFF had previously pled guilty to RICO conspiracy, drug conspiracy, and participating in the drive-by shooting that resulted in the murder of Ms. Eula Mae Ivey on June 14, 2010. 

A thirty-four count second superseding indictment was returned on November 16, 2012, charging Walter Conley, a/k/a “Ike Neezy”; Tyronne Stevenson, a/k/a “Duke”; Theron Golston, a/k/a “Thema”; Bernell Williams a/k/a “Bussy”, a/k/a “A-Boogie”; Carey Jones, a/k/a “Bean”; and Mark Glenn with participating in a RICO conspiracy, drug conspiracy, firearms conspiracy, and several substantive acts of violence.  

Co-defendant Ryan Carroll pled guilty to participating in the RICO conspiracy and to discharging a firearm during a drug trafficking crime and a crime of violence.  On October 16, 2013, he was sentenced to serve 210 months in federal prison.

Co-defendant Theron Golston was sentenced to life in prison on November 20, 2013 for his participation in the RICO conspiracy, the murder of Aaron Allen, and the drive-by murder of Ms. Eula Mae Ivey.

Co-defendants Tyronne Stevenson and Mark Glenn also pled guilty to various charges in the indictment, which included non-fatal shootings and were sentence back on December 11, 2013.  Stevenson  and Glenn were sentenced to serve 360 and 300 months, respectively.

Co-defendant Carey Jones was sentenced to life in prison on January 22, 2014.

“Ratcliff and his co-defendants were responsible for terrorizing the streets of New Orleans,” stated United States Attorney Polite.  “Today’s lengthy sentence underscores that our community is fed up with violence in our neighborhoods.  Those who perpetrate such violence are on notice:  you will be held accountable for your actions.”

Mr. Polite thanked the federal agents from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (A.T.F.) who took the lead role in this investigation and who have been steadfast in their resolve to bring these violent offenders to justice.   He also thanked the other members of the MAG UNIT who worked on this case and renewed the USAO’s commitment to assist the MAG UNIT in targeting these types of violent offenders.

The Multi-Agency Gang Unit is an N.O.P.D. led division which includes federal agents from A.T.F., the Drug Enforcement Administration, the Federal Bureau of Investigation, and the U.S. Marshals Service, as well as participants from the Orleans Parish Sheriff’s Office, the Louisiana State Police, State Probation and Parole, and the New Orleans District Attorney’s Office.

The case is being prosecuted by Assistant United States Maurice E. Landrieu, Jr.

PETER GALVAN, 54, a resident of St. Tammany Parish, and the former St. Tammany Parish Coroner, was sentenced today to serve 24 months in federal custody followed by one year of supervised release, fined $5,000, and ordered to pay restitution of at least $193,388.  GALVAN pled guilty to conspiring to steal government funds from the St. Tammany Parish Coroner’s Office on October 23, 2013, announced U. S. Attorney Kenneth Allen Polite, Jr.

According to the Factual Basis, the Bill of Information to which GALVAN pled guilty, and other court documents filed in federal court:

GALVAN earned annual or sick leave to which he was not entitled.  However, with the assistance of another coroner’s office employee, GALVAN received yearly payments for unused annual and sick leave, totaling $111,376 over a five year period.

GALVAN, as a physician, individually contracted with the City of Slidell, Louisiana to provide medical services for inmates of the Slidell City Jail.  The contract was not with the St. Tammany Parish Coroner’s Office, but with GALVAN personally.  However, GALVAN conspired with another individual employed with the St. Tammany Parish Coroner’s Office to service this contract while the other individual was supposed to be working for and was being paid by the St. Tammany Parish Coroner’s Office.  The Coroner’s Office employee was paid at least $50,000 in public funds to fulfill GALVAN’s personal contract.

Additionally, GALVAN conspired with an employee of the coroner’s office to purchase a $9,170 generator for GALVAN’s personal vessel, a life raft and life jackets for his personal vessel valued at $4,841, and a Global Positioning Satellite Receiver for his personal use valued at $2,395, all with St. Tammany Parish Coroner’s Office funds.

Finally, GALVAN used his St. Tammany Parish Coroner’s Office credit card to make purchases of meals and other personal items with his public credit card totaling $15,606 which were unrelated to the office’s business.

The investigation of the St. Tammany Coroner’s Office is continuing.

“Members of this community, and indeed residents of this entire state, are tired of corruption and the negative effect it has on our reputation, economic development, and quality of life,” stated United States Attorney Polite. “Our residents expect that elected officials will provide honest services to the public, not use their offices or titles to enrich themselves.  We expect, and will no longer tolerate, anything less.”

Special Agent in Charge of the Federal Bureau of Investigation, New Orleans Field Office, Michael Anderson stated: “This conviction clearly highlights the significant importance of the continuous engagement of the local citizenry to support law enforcement’s priority mission to address fraud, corruption and betrayals of public trust.” 

“Today's sentencing of Dr. Peter Galvan again emphasizes the Internal Revenue Service, the U.S. Attorney’s Office and federal law enforcement partners will continue their aggressive pursuit of those who defraud the public and divert public money for personal use." said Gabriel L. Grchan, IRS Criminal Investigation Special Agent in Charge, New Orleans Field Office. "Honest taxpayers have been reassured today that no one is above the law."

Mr. Polite praised the investigative work of the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division, and the State of Louisiana Legislative Auditor.

The case is being handled by the Office’s Fraud Unit, Assistant United States Attorneys Carter K. D. Guice, Jr. and Chandra Menon. 

C. RAY NAGIN, 57, a resident of Frisco, Texas, and formerly the Mayor of New Orleans, was convicted in federal court today on 20 of 21 charges,  announced U.S. Attorney Kenneth Allen Polite, Jr., FBI Special Agent-in-Charge Michael Anderson, and IRS Criminal Investigation Special Agent-in-Charge Gabriel Grchan.  NAGIN was found not guilty on Count 7, a bribery charge.

According to evidence adduced at trial, between December 2004 and the present, NAGIN and several others participated in a conspiracy to commit bribery and honest services wire fraud.  Evidence produced at trial showed that NAGIN, in his role as chief executive, devised a scheme to defraud the City of New Orleans and its citizens of his honest services through bribery and a kickback scheme, whereby NAGIN used his public office and official capacity to provide favorable treatment, including awarding contracts, that benefitted business and financial interest of individuals providing him with bribes and kickbacks in the form of checks, cash, granite inventory, wire transfers, personal services, and free travel.

According to court documents, in January 2005, NAGIN created Stone Age LLC, a granite company based in New Orleans.  Evidence produced at trial showed, among other things, that NAGIN accepted approximately $62,250 in bribes from Rodney Williams and his company, Three Fold Consultants, LLC. Evidence also showed that NAGIN accepted bribes from Frank Fradella, including $50,000, granite inventory, and nine payoffs in the form of wire transfers from Fradella totaling $112,500.  In some cases, money was deposited into NAGIN=s Stone Age corporate account, or free granite inventory was provided to Stone Age.

In addition, trial evidence proved that NAGIN participated in a money laundering conspiracy and filed false tax returns for the years 2005 to 2008.

"Our public servants pledge to provide honest services to the people of Southeast Louisiana.  We are committed to bringing any politician who violates that obligation to justice," stated United States Attorney Kenneth Allen Polite, Jr.

"The tireless efforts of the investigative and prosecution team, exceeding 5 years, yielded the just and fair result in holding former Mayor Nagin fully accountable for serving his own personal interests well above those of the city at a time when it needed leadership, integrity and honest dealings the most," stated Michael Anderson, Special Agent in Charged for the FBI New Orleans Field Office.

“The investigation and subsequent prosecution of former Mayor, C. Ray Nagin, and his co-conspirators represents the closing of a dark chapter in the history of this great city.  While most people were working to rebuild after Hurricane Katrina these individuals were conspiring to benefit themselves at the expense of the citizens that elected them” stated Gabriel L. Grchan, Special Agent in Charge of IRS Criminal Investigation.  “Special Agents of IRS Criminal Investigation are elite financial investigators and will continue to lend our expertise to this and other task forces to ensure that those elected to public service do just that—serve the public, not contrive backroom deals to get themselves, and their family, private jet trips around the world or secure their family-owned businesses coveted contracts.  It also sends a reminder to everyone that all income, legal and illegal, must be reported to the Internal Revenue Service.  Know that we, with our federal law enforcement partners, will continue to ensure that all Americans, including public officials, are held to the same standard.  No one is above the law.”

“The New Orleans Office of Inspector General congratulates our federal partners in the successful prosecution of the former mayor.  OIG involvement in the case dates to 2009 when an evaluation led to a joint investigation of Greg Meffert.  The OIG will continue to protect the City from those who would defraud it,” stated Ed Quatrevaux, Inspector General, City of New Orleans.

"The road to former Mayor Ray Nagin's conviction began with one phone call from a courageous citizen,” stated Rafael C. Goyeneche III, President of the Metropolitan Crime Commission. “That citizen told the MCC about shipments of granite from Florida by the truckload to the Nagin family business in New Orleans. It was only one piece of a corrupt puzzle but when placed in the hands of the FBI and the U.S. Attorney's office the pieces grew one by one into a sprawling picture of corruption and betrayal." 

NAGIN faces the following terms of imprisonment:

• Count 1 (Conspiracy to commit bribery and honest services wire fraud), statutory penalties of up to five years in prison, a $250,000 fine and three years of supervised release;

• Counts 2-6 (Accepting a bribe), statutory penalties of up to 10 years in prison, a $250,000 fine and three years of supervised release on each count;

• Counts 8-16 (Accepting payoffs that caused interstate wire communications to occur between Louisiana and other states), statutory penalties of up to 20 years in prison, a $250,000 fine and three years of supervised release on each count;

• Count 17 (Conspiracy to commit money laundering) statutory penalties of up to 10 years in prison, a $250,000 fine and three years of supervised release; and

• Counts 18-21 (Filing false tax returns for years 2005 through 2008), statutory penalties of up to three years in prison, a $100,000 fine and three years of supervised release on each count.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division and the New Orleans Office of Inspector General.  U. S. Attorney Polite would also like to acknowledge the assistance provided by the New Orleans Inspector General=s Office and the Metropolitan Crime Commission. The case is being prosecuted by Assistant U. S. Attorneys Matthew M. Coman, Richard R. Pickens, II and Matthew S. Chester.

PETER M. HOFFMAN, age 63, of Los Angeles, California and MICHAEL P. ARATA, age 47, of New Orleans, Louisiana, were charged in a six count Indictment by a Federal Grand Jury with conspiracy and wire fraud, announced United States Attorney Kenneth Allen Polite, Jr.

According to the Indictment, the Louisiana Motion Picture Incentive Act (LMPIA) was enacted to provide incentives for and encourage the filming of motion pictures and television programs in Louisiana.  Under the LMPIA, companies making motion pictures were eligible to receive tax credits which were calculated as a percentage of the companies’ qualified expenditures in Louisiana.  Qualified expenditures upon which companies could receive tax credits included expenditures on infrastructure.  Infrastructure expenditures only included the purchase, construction and use of facilities that were directly related to and utilized for motion picture production in Louisiana.  In order to qualify for infrastructure tax credits, all funds had to be actually expended, and such expenditures had to be verified by an independent Louisiana Certified Public Accountant.  Businesses that applied to the State for infrastructure tax credits were entitled to receive an amount equal to 40% of their qualified and audited infrastructure expenditures.  Once this amount was certified by the State of Louisiana, the applicants could then sell the certification to local businesses and individuals.  Such sale of tax credits provided for a significant source of cash for film projects.

The defendant, PETER M. HOFFMAN, was the Chief Executive Officer of Seven Arts Entertainment, Inc., a company that was primarily involved in the motion picture and entertainment industry in California.  As Chief Executive Officer of Seven Arts Entertainment, Inc., his duties included the selection and production of major motion pictures, strategic planning, business development, operations, financial administration and accounting.  HOFFMAN was also an attorney and participated as a lawyer and executive in numerous financial and tax-preferred financings over a period of more than twenty-five years.  HOFFMAN also owned, operated and controlled numerous companies related to and affiliated with Seven Arts Entertainment, Inc.

The co-defendant, MICHAEL P. ARATA, was a Louisiana attorney and businessman who also owned and operated companies involved in the movie and entertainment industry.  Through their respective companies, HOFFMAN and ARATA were partners in different movie-industry business ventures.

Through their respective companies, HOFFMAN and ARATA purchased property located at 807 Esplanade, New Orleans, Louisiana.  807 Esplanade was an old mansion, located in the Faubourg Marigny neighborhood on the edge of the French Quarter, which had fallen into a severe state of disrepair over many years.  The proposed reason for purchasing the property was to renovate the mansion and turn it into a film post-production facility.

After purchasing the property, HOFFMAN and ARATA submitted an application and supporting documents to the State of Louisiana in order to receive film infrastructure tax credits for money the defendants fraudulently claimed had been spent on 807 Esplanade.  On or about June 19, 2009, the State of Louisiana issued approximately $1,132,480.80 in tax credits to the 807 Esplanade partnership. 

The Indictment charges that HOFFMAN and ARATA fraudulently submitted materially false and misleading documents and information regarding 807 Esplanade expenditures to the auditors and to the State of Louisiana in order to receive infrastructure tax credits. 

“The United States Attorney’s Office, the FBI and the Louisiana Office of the Inspector General stand committed to protecting the economic interests of the United States and the State of Louisiana,” stated U.S. Attorney Polite.  “The State of Louisiana has provided significant incentives to the film and entertainment industry in order to develop business and employment in Louisiana.  Such an important effort will not be criminally exploited.”  

“Those who brazenly steal from the taxpayers and abuse tax credit programs should know that we will relentlessly pursue and hold them criminally accountable wherever possible,” stated Louisiana Inspector General Stephen Street.  “We remain committed to working with the FBI and United States Attorney to root out this sort of corruption wherever it may exist.”

HOFFMAN and ARATA face a maximum term of imprisonment of five (5) years with respect to Count 1, and twenty (20) years with respect to each of Counts 2 through 6.  The defendants also face a maximum fine of $250,000 with respect to each count, and supervised release of three (3) years.

U.S. Attorney Polite reiterated that the Indictment is merely a charge and that guilt of the defendants must be proven beyond a reasonable doubt.

The case is being investigated by Special Agents of the Federal Bureau of Investigation and the Louisiana Office of the Inspector General.  The case is being prosecuted by Assistant United States Attorneys G. Dall Kammer and Jordan Ginsberg.

(Download Indictment )

JOHNNY SMITH, age 43, a resident of Raceland, Louisiana, pleaded guilty as charged yesterday before U.S. District Judge Sarah S. Vance to the sexual exploitation of children and possessing images depicting the sexual victimization of children under the age of twelve-years-old, announced U.S. Attorney Kenneth Allen Polite, Jr.

According to the court documents, after a lengthy investigation FBI special agents executed a search warrant on SMITH’S home on July 23, 2013, during which they seized several items of electronic evidence.  During a review of the evidence, agents found videos SMITH recorded in which he engaged in sexually explicit conduct with a three-year-old girl.  SMITH recorded the videos between about May 12, 2013, and June 23, 2013.  Agents also found approximately seven videos of seventeen images depicting children under the age of twelve engaged in sexually explicit conduct that SMITH had downloaded and saved to his computer. 

SMITH faces a mandatory minimum term of imprisonment of fifteen (15) years and a maximum of thirty (30) years as to Count 1, and a maximum of twenty (20) years as to Count 2 followed by up to a life term of supervised release, and a $250,000 fine.  He can also be required to register as a sex offender.  Sentencing has been scheduled for May 14, 2004. 

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.  For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”

This case is being investigated by agents from the Federal Bureau of Investigation.  The prosecution of this case is being handled by Assistant United States Attorney Jordan Ginsberg.

(Download Factual Basis )

United States Attorney Kenneth Allen Polite, Jr. announced that today, Richard W. Westling is rejoining the U.S. Attorney’s Office to serve as the First Assistant U.S. Attorney.  Effectively immediately, the senior staff of the Office is as follows:

Richard W. Westling serves as the First Assistant United States Attorney.  Between 2008 and 2014, Mr. Westling was a partner in Waller, Lansden, Dortch & Davis, LLP, in Nashville, TN, and a shareholder in Ober|Kaler, in Washington, D.C.  At both firms, he represented clients in health care fraud cases and a variety of other government enforcement matters.  Previously, Mr. Westling served as general counsel of a Louisiana-based physician-hospital organization which administered a Medicare Advantage HMO Plan with more than 35,000 members.  From 1997-2006, he practiced with the Law Offices of Richard W. Westling, LLC in New Orleans, where he defended complex federal criminal matters involving allegations of public corruption, health care fraud, mail and wire fraud, tax and environmental crimes and narcotics violations.  He served as an Assistant United States Attorney for the Eastern District of Louisiana from 1992 until 1997, prosecuting a variety of white collar crimes and serving as the Asset Forfeiture Chief for three years.  From 1990 to 1992, Mr. Westling was trial attorney and special assistant to the Assistant Attorney General of the Tax Division of the U.S. Department of Justice in Washington D.C.  He graduated with honors from the University of the South in Sewanee, TN and cum laude from Tulane University Law School in New Orleans, where he was a member of the Board of Editors of the Tulane Law Review.

Eileen Gleason serves as Executive Assistant United States Attorney.  Prior to her current position, Ms. Gleason served as Senior Litigation Counsel.  She first joined the United States Attorney’s Office in January 1988 as an Assistant United States Attorney assigned to the Civil Division. After transferring to the Criminal Division, she specialized in prosecuting white collar crimes, political corruption and environmental crimes and served as Chief of the Financial Crimes Unit.  Previously, Ms. Gleason served with the Department of Justice in Washington, DC. as a trial attorney with the Public Integrity Section of the Criminal Division from 2005 until 2008, and as a senior trial attorney, assistant chief, principal assistant chief and acting chief of the Environmental Crimes Section of the Environment and Natural Resources Division from 1999 until 2005.  Ms. Gleason also has served as Assistant Director of the Office of Legal Education, Executive Office for United States Attorneys, in Washington, DC.  She served as a United States Magistrate for the Eastern District of Louisiana from 1981 until 1983.  Ms. Gleason practiced law with two New Orleans firms, Phelps Dunbar, LLP and Gelpi, Sullivan, Carroll & Laborde, and served judicial clerkships with the Honorable Edward J. Boyle, Sr. and Morey L. Sear, United States District Judges for the Eastern District of Louisiana.  She is a graduate of Tulane University and Loyola University College of Law, where she was a member of the Editorial Board of the Loyola Law Review.

Duane A. Evans serves as the Chief of the Criminal Division.  He joined the United States Attorney’s Office in August 2000 as an Assistant United States Attorney assigned to the Criminal Division.  During his tenure in the Firearms/Violent Crimes Unit, he specialized in prosecuting matters related to firearms, narcotics, and violent crime.  In 2006, he became the Supervisor for the Violent Crimes/Project Safe Neighborhoods Unit.  In 2010, he became Chief of the Strike Force and Anti-Gang Unit.  Beginning in June 2012, he served as Senior Litigation Counsel until his promotion to the position of Criminal Chief.  After graduating from Tulane University School of Engineering and Loyola University College of Law, Mr. Evans served a judicial clerkship for Virgin Islands Superior Court Judge Ishmael A. Meyers from 1995-1997.  He later worked as an Assistant District Attorney for the Orleans Parish District Attorney’s Office.  He is a native of St. Thomas, United States Virgin Islands.

Peter M. Mansfield serves as Chief of the Civil Division. Prior to his current position, Mr. Mansfield served as Deputy Chief of the Civil Division since 2008. Since 2007, Mr. Mansfield also has supervised the office’s Financial Litigation Unit which is responsible for the enforcement and collection of criminal fines, restitution, and civil judgments in the district. As a supervisory AUSA, Mr. Mansfield has been the lead editor and reviewer of the office’s civil appeals in the Fifth Circuit Court of Appeals since 2011.  Mr. Mansfield joined the United States Attorney’s Office in 2005 and has handled both defensive and affirmative civil cases in district and appellate courts as lead counsel. After graduating from Franciscan University and Ave Maria School of Law, both magna cum laude, Mr. Mansfield began his legal career as a litigation associate at Adams and Reese, L.L.P. in its New Orleans office. Mr. Mansfield is a native of Metairie, Louisiana.

____________________

In addition, U.S. Attorney Polite announced that he has reorganized the Office’s Criminal Division into the following units:

The Organized Crime Strike Force/Violent Crime Unit investigates and prosecutes violent crime and firearms offenses, with a particular focus on conduct by organized street gangs and criminal enterprises.  Along with representatives from local, state, and federal law enforcement agencies, members of the Unit actively participate in the Multi-Agency Gang Unit, an initiative led by the New Orleans Police Department to combat gang-related shootings and murders in the New Orleans area.

The Public Integrity Unit investigates and prosecutes corruption by public officials and law enforcement officers.  The Unit also handles criminal civil rights matters, such as hate crimes, police brutality and human trafficking.

The Narcotics Unit investigates and prosecutes cases involving the distribution of illegal narcotics.  The Unit primarily seeks to disrupt large-scale drug-trafficking organizations that qualify for prosecution by the Organized Crime and Drug Enforcement Task Force (OCDETF).

The Fraud Unit investigates and prosecutes fraud offenses of all types, including financial institution crime, health care fraud, bank fraud, computer fraud, institutional insurance fraud, large scale mail and wire fraud, and criminal tax violations.  The Unit also handles child pornography cases under the Project Safe Childhood initiative.

The National Security Unit investigates and prosecutes cases involving international and domestic terrorism, threats involving weapons of mass destruction, terrorism financing, immigration violations, environmental crimes, and other offenses that impact national and border security.

The Appeals Unit defends convictions and judgments obtained by the Office in the United States Court of Appeals for the Fifth Circuit, the federal appellate court overseeing cases in Mississippi, Louisiana, and Texas.  Additionally, the Unit, in consultation with the Department of Justice, decides when to seek appellate review of trial level rulings adverse to the United States.

U.S. Attorney Polite stated, "Through these unit changes, I have reallocated our personnel into units that more accurately reflect our District’s prosecutorial priorities. In particular, I am increasing the number of prosecutors addressing violent crime and narcotics offenses, while at the same establishing the Office’s first stand-alone unit to address political corruption and civil rights violations.  These changes, together with the appointment of new senior management, represent significant steps toward the goal of increasing the productivity and efficiency of our Office."

MYRON SAUNDERS, 35, and LAMAR NERO, 24, both residents of New Orleans, were sentenced today by U. S. District Judge Nannette Jolivette Brown for bank robbery and attempted bank robbery, announced U.S. Attorney Kenneth Allen Polite, Jr.  SAUNDERS and NERO were sentenced to imprisonment for 228 months and 180 months, respectively.  Each will be placed on 5 years supervised release following incarceration and incur a $500 special assessment.  

In July 2013, following a six-day trial, a federal jury found SAUNDERS and NERO guilty of the June 24, 2011, robbery and December 24, 2011, attempted robbery of a Chase Bank in New Orleans, Louisiana, as well as the November 5, 2011, robbery of a Fidelity Homestead Bank in Metairie, Louisiana.  SAUNDERS and NERO were also found guilty of using a firearm during the robbery of the Chase Bank. 

The case was investigated by special agents of the Federal Bureau of Investigation and officers and detectives of the New Orleans Police Department and Jefferson Parish Sheriff’s Office.

The prosecution was handled by Assistant U.S. Attorneys Nolan D. Paige, Harry W. McSherry and Special Assistant U.S. Attorney Brian C. Ebarb.

STANLEY ZDON, III, age 28, a resident of Tuckerton, New Jersey, was charged today in a Superseding Bill of Information with conspiracy to produce child pornography, announced U. S. Attorney Kenneth Allen Polite, Jr.

According to court documents, inn November 2013, ZDON was arrested by special agents with the United States Department of Homeland Security, Homeland Security Investigations (“HSI”) after they determined that ZDON was responsible for receiving, distributing, and producing videos and images depicting the sexual exploitation of children via the Internet.  ZDON has been in custody since his arrest.

Conspiracy to produce child pornography carries a mandatory minimum sentence of 15 years and a maximum sentence of 30 years.  If convicted, ZDON will have to register has a sex offender.

U.S. Attorney Kenneth Allen Polite, Jr. reiterated that the Superseding Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

This case was investigated by Homeland Security Investigations and the United States Postal Inspection Service.  The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Section Chief, Assistant U. S. Attorney Brian M. Klebba.

(Download Indictment )

JABARI RAGAS, age 40, a resident of New Orleans, Louisiana, pled guilty to money laundering and filing a false tax return in federal court today before United States District Court Judge Lance M. Africk, announced United States Attorney Kenneth Allen Polite, Jr.

According to court documents, RAGAS was employed by Ameriprise Financial Services, Inc. (“Ameriprise”) as a registered broker and investment adviser from 2005 - 2009. RAGAS admitted in court to embezzling nearly $1,400,000 from clients, and failing to pay nearly $260,000 in tax due and owing to the Internal Revenue Service. RAGAS has agreed to pay full restitution.

In early 2006, a client of RAGAS indicated to him that he wished to open a Simplified Employee Pension (“SEP”) account to allow him to contribute towards retirement. The client made contributions from 2006 – 2009.  Without authorization, RAGAS began moving money from the Ameriprise SEP account, into an account controlled by RAGAS.  The client later checked the account balance and inquired as to why the account balance was lower than it should have been and was told by RAGAS that the funds had been transferred to a different financial institution located in Texas.  RAGAS was asked by the client to supply him with written account statements showing the balance, account number, and institution name.  RAGAS then supplied the client with a fraudulent account statement for an account that did not exist, along with a fraudulent balance. After using the interstate wire to embezzle funds from the client’s Ameriprise account, RAGAS committed money laundering by further transferring $20,000 into a different account that he controlled.  

Additionally, on October 12, 2008, RAGAS signed and filed a 2007 U.S. Individual Income Tax Return (Form 1040) with the Internal Revenue Service.  The tax return allegedly did not report approximately $288,000 in income.

RAGAS faces a maximum term of imprisonment of 10 years, on the money laundering count, and a maximum term of imprisonment of 3 years, on the tax count.  RAGAS also faces a fine of $250,000 or the greater of twice the gross gain to the defendant or twice the gross loss to any person as to the money laundering count.  As to the tax count, RAGAS faces a fine of $100,000 together with the costs of prosecution.  RAGAS faces a 3 year term of supervised release as to the money laundering count and a 1 year term of supervised release on the tax count, following any term of imprisonment. 

The case was investigated by the Special Agents of the Internal Revenue Service and the United States Secret Service, and the prosecution is being handled by Assistant United States Attorney Jon Maestri.

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