District of Maryland

The former president of Transportation Logistics Inc. (TLI), a Maryland-based transportation company that provides services for the transportation of nuclear materials to customers in the United States and abroad, was found guilty today for his role in a scheme to bribe an official at a subsidiary of Russia’s State Atomic Energy Corporation and on related fraud and conspiracy charges.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Robert K. Hur of the District of Maryland and Assistant Director in Charge Timothy R. Slater of the FBI’s Washington Field Office and Inspector General Teri L. Donaldson of the U.S. Department of Energy’s Office of Inspector General (DOE-OIG) made the announcement.

After a three-week trial, Mark Lambert, 56, of Mount Airy, Maryland, was found guilty of four counts of violating the Foreign Corrupt Practices Act (FCPA), two counts of wire fraud, and one count of conspiracy to violate the FCPA and commit wire fraud.  Sentencing has been scheduled for March 9, 2020, before U.S. District Judge Theodore D. Chuang of the District of Maryland, who presided over the trial.

According to the evidence presented at trial, Lambert participated in a scheme to bribe Vadim Mikerin, a Russian official at JSC Techsnabexport (TENEX), a subsidiary of Russia’s State Atomic Energy Corporation and the sole supplier and exporter of Russian Federation uranium and uranium enrichment services to nuclear power companies worldwide, in order to secure contracts with TENEX.  The trial evidence demonstrated that, over the course of years, Lambert conspired with others at TLI to make the corrupt and fraudulent bribery and kickback payments to Mikerin through offshore bank accounts associated with shell companies, at Mikerin’s direction.  In order to conceal the bribe payments, Lambert and his co-conspirators caused fake invoices to be prepared, purportedly from TENEX to TLI, that described services that were never provided, and then Lambert and others caused TLI to wire the corrupt payments for those purported services to shell companies in Latvia, Cyprus and Switzerland. 

The trial evidence further showed that Lambert and other members of the conspiracy used code words like “lucky figures,” “LF,” “lucky numbers” and “cake” to describe the payments in emails to the Russian official at an alias, personal email account under the name “Marvin Jodel.”  The evidence at trial also demonstrated that Lambert and his co-conspirators caused TLI to overbill TENEX by building the cost of the bribe payments into their invoices, and TENEX thus overpaid for TLI’s services in order to fund the bribes paid to Mikerin.

This case is being investigated by the FBI’s Washington Field Office and DOE-OIG.  Assistant Chief Vanessa A. Sisti and Trial Attorney Derek J. Ettinger of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David I. Salem of the District of Maryland are prosecuting the case.

The Department appreciates the significant cooperation provided by its law enforcement colleagues in Switzerland’s Office of the Attorney General as well as authorities in Latvia and Cyprus.

The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.

Greenbelt, Maryland – A federal jury today convicted Mark Lambert, 56, of Mount Airy, Maryland, of four counts of violating the Foreign Corrupt Practices Act (FCPA), two counts of wire fraud, and one count of conspiracy to violate the FCPA and commit wire fraud, for his role in a scheme to bribe an official at a subsidiary of Russia’s State Atomic Energy.  Lambert is the former president of Transport Logistics International, Inc. (TLI), a Maryland-based transportation company that provides services for the transportation of nuclear materials to customers in the United States and abroad, including to the Russian Federation.

The guilty verdict was announced by United States Attorney for the District of Maryland Robert K. Hur; Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; Inspector General Teri L. Donaldson of the U.S. Department of Energy’s Office of Inspector General (DOE-OIG); and Assistant Director in Charge Timothy R. Slater of the FBI’s Washington, D.C. Field Office.

According to the evidence presented at his three-week trial, Lambert engaged in a scheme to bribe Vadim Mikerin, a Russian official at JSC Techsnabexport (TENEX), a subsidiary of Russia’s State Atomic Energy Corporation and the sole supplier and exporter of Russian Federation uranium and uranium enrichment services to nuclear power companies worldwide, in order to secure contracts with TENEX. 

The trial evidence demonstrated that, over the course of years, Lambert conspired with others at TLI to make the corrupt and fraudulent bribery and kickback payments to Mikerin through offshore bank accounts associated with shell companies, at Mikerin’s direction.  In order to conceal the bribe payments, Lambert and his co-conspirators caused fake invoices to be prepared, purportedly from TENEX to TLI, that described services that were never provided, and then Lambert and others caused TLI to wire the corrupt payments for those purported services to shell companies in Latvia, Cyprus and Switzerland. 

Lambert faces a maximum of five years in federal prison for the conspiracy to violate the FCPA and commit wire fraud.  He also faces a maximum of 20 years in federal prison for each of two counts of wire fraud; a maximum of five years in federal prison for each of four counts of violating the FCPA.  The jury acquitted Lambert of three counts of violating the FCPA and of money laundering.  Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.  U.S. District Judge Theodore D. Chuang has scheduled sentencing for Lambert on March 9, 2020 at 2 p.m.

Vadim Mikerin, 60, a Russian official formerly residing in Chevy Chase, Maryland, previously pleaded guilty to conspiracy to commit money laundering involving violations of the FCPA and was sentenced to four years in federal prison.

United States Attorney Robert K. Hur and Assistant Attorney General Brian Benczkowski commended the DOE-OIG and the FBI for their work in the investigation, and thanked the Criminal Division’s Office of International Affairs and law enforcement in Switzerland, Latvia and Cyprus for providing valuable assistance with the investigation and prosecution of the case.  Mr. Hur and Mr. Benczkowski thanked Assistant U.S. Attorney David I. Salem and Assistant Chief Vanessa A. Sisti and Trial Attorney Derek J. Ettinger of the Criminal Division’s Fraud Section, who are prosecuting the case.

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Baltimore, Maryland – Catherine Elizabeth Pugh, age 69, of Baltimore, Maryland, pleaded guilty today to the federal charges of conspiracy to commit wire fraud, conspiracy to defraud the United States, and two counts of tax evasion.  U.S. District Judge Deborah K. Chasanow has scheduled sentencing for February 27, 2020, at 10:00 a.m.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.

“Catherine Pugh betrayed the public trust for her personal gain,” said United States Attorney Robert K. Hur. “Baltimore City faces many pressing issues, and we need dedication and integrity from our leaders—not corruption—in order to solve them.  Law enforcement will continue to be vigilant for evidence of fraud and corruption, to ensure that our citizens receive the honesty and professionalism they deserve from government officials.” 

“The people of Maryland expect elected officials to make decisions based on the public's best interests, not to abuse their office for personal gain,” said Special Agent in Charge Jennifer Boone of the FBI's Baltimore Division.  “Catherine Pugh betrayed the public's trust.  The FBI will continue to diligently work to detect fraud and corruption and hold those who violate this trust accountable.” 

“For over 100 years, IRS Criminal Investigation has been committed to enforcing our nation’s tax laws.  This case should serve as an example to the public that everyone will be held to the same standard when it comes to paying their fair share of taxes.” Said Kelly Jackson, IRS Special Agent in Charge, Washington D.C. Field Office. “IRS Criminal Investigation will continue to work diligently with our law enforcement partners to identify and bring to justice those who endeavor to evade taxes, especially those elected to serve the public.”

According to her plea agreement, from approximately 2007 through 2016 Pugh served in the Maryland State Senate, where she served on various legislative committees, including the Senate Health Committee.  In 2011, Pugh ran an unsuccessful campaign to be mayor of Baltimore.  In September 2015, Pugh again ran for mayor of Baltimore, and won, becoming Mayor on December 6, 2016.  Pugh owned Healthy Holly, LLC, a company formed in Maryland on January 14, 2011, and used to publish and sell children’s books she had written.  Pugh also owned Catherine E. Pugh and Company, Inc., a marketing and public relations consulting company organized in Maryland in 1997.  The principal address for both companies was Pugh’s residence in Baltimore.  Pugh was also the sole signatory on the Healthy Holly and Pugh Company bank accounts.  Pugh did not maintain a personal bank account, using her business bank accounts for personal and business finances.  

Between June 2011 and August 2017, four Healthy Holly books were published, with each book listing “Catherine Pugh” as author.  The vast majority of books published by Healthy Holly were marketed and sold directly to non-profit organizations and foundations, many of whom did business or attempted to do business with the Maryland and Baltimore City governments.

From approximately 2011 until December 2016, Gary Brown, Jr. worked as a legislative aide to Pugh.  Brown actively campaigned for Pugh’s reelection to the State Senate in 2014 and served as her campaign aide during her 2016 mayoral election campaign.  Following Pugh’s election and inauguration as mayor of Baltimore City in December 2016, Brown was hired as the Deputy Director of Special Events in the mayor’s office.  In December 2016, Brown was nominated by the Maryland Democratic Central Committee to fill the vacancy in the Maryland House of Delegates created by Pugh’s mayoral victory.  However, the Governor withdrew Brown’s nomination after he was indicted for election law violations in January 2017.

Brown was the sole owner and operator of Stricker Abstracting, LLC, and GB Abstracting, LLC, both Maryland companies that purported to be title-abstracting businesses, and GBJ Consulting, LLC, a Maryland consulting business.  Brown ran all three companies from his residences in Baltimore.  Brown also freelanced as a tax return preparer.  Between March 2011 until March 2019, Brown helped Pugh promote and sell the Healthy Holly books.  Brown oversaw the transportation and storage of the books, drafted invoices, and corresponded with purchasers.  Much of Brown’s work on Healthy Holly occurred during work hours while serving as Pugh’s legislative aide and mayoral staff member.  Brown was not an employee of Healthy Holly and received no salary or compensation until approximately mid-2016 when he started to get sales commissions.  None of his companies received compensation for services purportedly provided to Healthy Holly.

Wire Fraud

Pugh admitted that from November 2011 until March 2019, she conspired with Gary Brown to defraud purchasers of Healthy Holly books in order to enrich themselves, promote Pugh’s political career, and fund her campaign for mayor.  Pugh and Brown admitted that they employed several methods to defraud, including: not delivering books after accepting payments for the books; accepting payments for books to be delivered to a third party on behalf of a purchaser, then converting some or all of the purchased books to their own use without the purchaser’s or third party’s knowledge; and by double-selling books without either purchaser’s knowledge or consent.  Pugh stored quantities of fraudulently obtained Healthy Holly books at various locations, including Pugh’s residence, her state legislative offices, her mayoral office, the War Memorial building in Baltimore City, and a public storage locker used by Pugh’s mayoral campaign. 

Specifically, Pugh admitted that she sold approximately 20,000 each of Healthy Holly books one, two, and three to the University of Maryland Medical System (UMMS) for $100,000 each.  UMMS agreed to the purchase on the condition that it be on behalf of, and for distribution to, school children in the Baltimore City Public School system (BCPS), in part, to further the mission of UMMS’s community outreach program.  As part of the agreement Pugh was to deliver the donated books to BCPS.

As detailed in her plea agreement, Pugh did not deliver the full 20,000 Healthy Holly books one, two, and three that UMMS purchased to BCPS, instead keeping some of the books for herself.  In addition, Pugh sold to unwitting purchasers copies of Healthy Holly books one, two, and three that had already been sold to UMMS and donated to BCPS.  Pugh used Associated Black Charities, a Baltimore-based public charity, to facilitate the resale and distribution of the books to new purchasers.  Neither the charity nor the new purchasers knew that Pugh was double-selling the books.  Pugh also accepted payment for books that were never delivered to the purchaser.

Conspiracy to Defraud the United States/Tax Evasion

Pugh further admitted that she used the proceeds of the sale of fraudulently obtained Healthy Holly books for her own purposes, including: to fund straw donations to Pugh’s mayoral election campaign; and to fund the purchase and renovation of a house in Baltimore City.

Specifically, Pugh issued Healthy Holly checks payable to Brown, for the purpose of funding straw donations to the Committee to Elect Catherine Pugh.  Brown cashed the checks and used the untraceable cash to fund money orders, debit cards, and personal checks in the names of straw donors totaling approximately $35,800.  The straw donations purchased with the cash were then deposited into the bank account of the Committee to Elect Catherine Pugh.  Pugh wrote additional Healthy Holly checks to Brown totaling $26,300, which he cashed and gave the cash to Pugh.  In total, Brown and Pugh cashed out approximately $62,100 of Healthy Holly checks during 2016, all of which went to straw donors or Pugh.  To conceal the scheme, Brown and Pugh created the pretense of a legitimate business relationship between Brown and Healthy Holly.  In furtherance of the pretense, Pugh and Brown signed an independent contractor agreement between Healthy Holly and GBJ Consulting, and Brown created a business ledger that misrepresented the Healthy Holly checks as payments for promotion services rendered by Brown’s company on behalf of Healthy Holly.  At Pugh’s urging, Brown also created bogus GB Consulting invoices and backdated them.

On January 11, 2017, Brown was charged with, and ultimately convicted of, violating Maryland’s election laws for funneling $18,000 of the straw donations to Pugh’s campaign. The Committee to Elect Catherine Pugh issued five checks in the names of three of the straw donors, with a notation in the memo line on each check stating “returned contribution.” In fact, Pugh acknowledges that none of the straw donors received any of the returned money, and instead, at Pugh’s direction, Brown used the money to pay for his legal defense in the state election-law prosecution, a case that had legal implications for Pugh. 

Pugh also admitted that she conspired to evade taxes on the income received from the sales of Healthy Holly books.  To accomplish this, Pugh concealed from the IRS the fact that she created false business expenses to offset the income she received from the sale of books by issuing Healthy Holly checks to Brown for services and/or products purportedly supplied by his company.  Pugh filed false income tax returns for 2015 and 2016, in which she underreported her income.  For example, for tax year 2016 Pugh claimed her taxable income was $31,020 and the tax due was $4,168, when in fact, Pugh’s taxable income was $322,365, with an income tax due of approximately $102,444.

Pugh faces a maximum sentence of 20 years in federal prison for the wire fraud conspiracy; five years in federal prison for conspiracy to defraud the United States; and five years in federal prison for each of the two counts of tax evasion.  Actual sentences for federal crimes are typically less than the maximum penalties.  A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.  Pugh remains released on conditions under the supervision of U.S. Pretrial Services.

Former Baltimore City employees Gary Brown, Jr., age 38, of Baltimore, previously pleaded guilty to conspiracy to commit wire fraud, to two counts of conspiracy to defraud the United States, and to filing a false tax return.  No sentencing date has been set.

United States Attorney Robert K. Hur commended the FBI and the IRS Criminal Investigation for their work in the investigation and thanked the U.S. Department of Labor - Office of Inspector General, Office of Investigations - Labor Racketeering and Fraud, the Maryland State Prosecutor’s Office, and the Baltimore City Office of Inspector General for their assistance.  Mr. Hur thanked Assistant U.S. Attorneys Martin J. Clarke and Leo J. Wise, who are prosecuting the case.

# # #

Greenbelt, Maryland - Justin Paul Keener, age 31, of Patuxent River, Maryland, has pleaded guilty to a superseding information charging him with two counts of abusive sexual contact with a child.  The guilty plea was entered on November 19, 2019.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge John Salazar of the Naval Criminal Investigative Service, Washington Field Office; and Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office.

According to his guilty plea, in November 2017, while residing at Naval Air Station Patuxent River, Keener sexually abused a victim who was under the age of 12.  In and before November 2017, Keener sexually abused another victim, also under the age of 12, on multiple occasions.

As a result of his conviction, Keener will be required to register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA). 

Keener and the government have agreed that, if the Court accepts the plea agreement, Keener will be sentenced to between 19 and 25 years in federal prison.  U.S. District Judge George J. Hazel has scheduled sentencing for January 17, 2020 at 2:00 p.m. 

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 Attorney’s 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.justice.gov/psc.  For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.       

United States Attorney Robert K. Hur commended the NCIS and the FBI for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorney Joseph R. Baldwin, who is prosecuting the federal case.

# # #

Baltimore, Maryland – A federal grand jury has indicted Catherine Elizabeth Pugh, age 69, of Baltimore, Maryland, on the federal charges of conspiracy to commit wire fraud, seven counts of wire fraud, conspiracy to defraud the United States, and two counts of tax evasion.  The indictment was returned on November 14, 2019, and was unsealed today. Catherine Pugh is scheduled for an initial appearance and arraignment in U.S. District Court in Baltimore before U.S. District Judge Deborah K. Chasanow on November 21, 2019 at 1:00 p.m.  Pugh is expected to self-surrender to the U.S. Marshals prior to the hearing on November 21st. 

The guilty pleas of former Baltimore City employees Gary Brown, Jr., age 38, of Baltimore, and Roslyn Wedington, age 50, of Rosedale, Maryland, were also unsealed today.  On November 13, 2019, Brown pleaded guilty to conspiracy to commit wire fraud, to two counts of conspiracy to defraud the United States, and to filing a false tax return.  That same day, Wedington pleaded guilty to conspiracy to defraud the United States and to five counts of filing a false tax return.

The indictment and guilty pleas were announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.

“Our elected officials must place the interests of the citizens above their own,” said United States Attorney Robert K. Hur. “Corrupt public employees rip off the taxpayers and undermine everyone’s faith in government.  The U.S. Attorney’s Office and our law enforcement partners will zealously pursue those who abuse the taxpayers’ trust and bring them to justice.” 

“The people of Maryland expect elected officials to make decisions based on the public's best interests, not to abuse their office for personal gain,” said Special Agent in Charge Jennifer Boone of the FBI's Baltimore Division.  “The indictment alleges that Catherine Pugh betrayed the public's trust. The FBI will continue to diligently work to detect fraud and corruption and hold those who violate this trust accountable.” 

“Public officials should be a role model for the citizens they serve - adhering to the highest of standards,” said IRS-CI SAC Kelly Jackson. “These individuals chose to evade payment of their fair share of taxes instead, actions for which they must be held accountable in order to preserve public trust and confidence.”

According to Pugh’s 11-count indictment, from approximately 2007 through 2016 Pugh served in the Maryland State Senate, where she served on various legislative committees, including the Senate Health Committee.  In 2011, Pugh ran an unsuccessful campaign to be mayor of Baltimore.  In September 2015, Pugh again ran for mayor of Baltimore, and won, becoming Mayor on December 6, 2016.  Pugh owned Healthy Holly, LLC, a company formed in Maryland on January 14, 2011, and used to publish and sell children’s books she had written.  Pugh also owned Catherine E. Pugh and Company, Inc., a marketing and public relations consulting company organized in Maryland in 1997.  The principal address for both companies was Pugh’s residence in Baltimore.  Pugh was also the sole signatory on the Healthy Holly and Pugh Company bank accounts.  Pugh did not maintain a personal bank account, using her business bank accounts for personal and business finances.  

As stated in the indictment, between June 2011 and August 2017, four Healthy Holly books were published, with each book listing “Catherine Pugh” as author.  The vast majority of books published by Healthy Holly were marketed and sold directly to non-profit organizations and foundations, many of whom did business or attempted to do business with the Maryland and Baltimore City governments.

Wire Fraud Allegations

The indictment alleges that from November 2011 until March 2019, Pugh conspired with Gary Brown to defraud purchasers of Healthy Holly books in order to enrich themselves, promote Pugh’s political career, and fund her campaign for mayor.  The indictment alleges that the conspirators employed several methods to defraud, including: not delivering books after accepting payments for the books; accepting payments for books to be delivered to a third party on behalf of a purchaser, then converting some or all of the purchased books to their own use without the purchaser’s or third party’s knowledge; and by double-selling books without either purchaser’s knowledge or consent.  Pugh allegedly stored quantities of fraudulently obtained Healthy Holly books at various locations, including Pugh’s residence, her state legislative offices, her mayoral office, and a public storage locker used by Pugh’s mayoral campaign.  The indictment alleges that Pugh used the proceeds of the sale of fraudulently obtained Healthy Holly books for her own purposes, including: to fund straw donations to Pugh’s mayoral election campaign; and to fund the purchase and renovation of a house in Baltimore City.

Conspiracy to Defraud the United States/Tax Evasion

Further, the indictment alleges that Pugh issued Healthy Holly checks payable to Brown, for the purpose of funding straw donations to the Committee to Elect Catherine Pugh.  The indictment alleges that Brown cashed the checks and used the untraceable cash to fund money orders, debit cards, and personal checks in the names of straw donors totaling approximately $35,800.  The straw donations purchased with the cash were allegedly then deposited into the bank account of the Committee to Elect Catherine Pugh.  The indictment alleges that Pugh wrote additional Healthy Holly checks to Brown totaling $26,300, which he cashed and gave the cash to Pugh.  On January 11, 2017, Brown was charged with, and ultimately convicted of, violating Maryland’s election laws for funneling $18,000 of the straw donations to Pugh’s campaign. The Committee to Elect Catherine Pugh issued five checks in the names of three of the straw donors, with a notation in the memo line on each check stating “returned contribution.” The indictment alleges that none of the straw donors received any of the returned money, and instead, at Pugh’s direction, Brown used the money to pay for his legal defense.  

In addition, the indictment alleges that Pugh conspired to evade taxes on the income received from the sales of Healthy Holly books.  The indictment alleges that to accomplish this, Pugh concealed from the IRS the fact that she created false business expenses to offset the income she received from the sale of books by issuing Healthy Holly checks to Brown for services and/or products purportedly supplied by his company.  Pugh allegedly filed false income tax returns for 2016 and 2015, in which she underreported her income.  For example, the indictment alleges that for tax year 2016 Pugh claimed her taxable income was $31,020 and the tax due was $4,168, when in fact, Pugh’s taxable income was $322,365, with an income tax due of approximately $102,444.

If convicted, Pugh faces a maximum sentence of 20 years in federal prison for the wire fraud conspiracy and for each of the seven counts of wire fraud; five years in federal prison for conspiracy to defraud the United States; and five years in federal prison for each of the two counts of tax evasion.  Actual sentences for federal crimes are typically less than the maximum penalties.  A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. 

An indictment is not a finding of guilt.  An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

Brown Wire Fraud Conspiracy

According to Gary Brown’s plea agreement, from November 2011 until March 2019, he conspired with Catherine Pugh to fraudulently sell and distribute tens of thousands of Healthy Holly books.  Brown admitted that over that period they executed the scheme in three ways: by selling the books, keeping the money and not delivering the books; provided books to purchasers, but later converted them to their own use at campaign events and government functions; and resold books that had previously been purchased and donated to the Baltimore City Public Schools. 

Brown Conspiracy with Pugh to Defraud the United States

Further, as detailed in his plea agreement, Brown cashed checks Pugh wrote to him from the Healthy Holly account, then used the cash to fund money orders, debit cards, and personal checks in the names of straw donors, which were then submitted to the Committee to Elect Catherine Pugh.  Brown also admitted that he cashed some of the Healthy Holly checks and gave the cash to Pugh.  To conceal the straw-donation scheme and avoid paying taxes that might result from the scheme, Pugh and Brown provided false information to the IRS regarding the purpose of the Healthy Holly checks.   

Brown and Wedington Conspiracy to Defraud the United States/Filing False Tax Returns

Brown and Wedington both admitted that they conspired to avoid tax withholdings from Wedington’s payroll checks while Wedington was the Executive Director of the Maryland Center for Adult Training (MCAT) and Brown was the Chairman of the Board of Directors.  Specifically, in 2013, Wedington’s salary was garnished due to outstanding student loan debt and medical bills.  In order to avoid further garnishments, Wedington asked Brown to take her “off payroll,” which meant that MCAT would no longer submit her name to the payroll service provider for the purpose of calculating taxes to be withheld from her salary.  Brown agreed to the arrangement and had MCAT make electronic deposits into his personal bank account in an amount that exceeded the annual salary owed to Wedington, creating the pretense that he was doing work for MCAT as an independent contractor.  Brown then wrote checks to Wedington and/or gave her cash equal to or greater than her salary, which was more than $80,000 per year.  No taxes were withheld from the funds Brown paid to Wedington, nor did her salary go through Wedington’s bank account, where it could be garnished.  In addition, Brown prepared fraudulent tax returns for Wedington for tax years 2013 through 2017, which did not report Wedington’s MCAT income and made a variety of false entries, resulting in refunds to which Wedington was not entitled and avoiding over $121,000 in total taxes due and owing.  Brown also filed a false individual income tax return for tax year 2016 for himself, which falsely listed the $64,325 of Healthy Holly payments as business income.  In addition, from 2016 through 2018, Brown worked part-time as a freelance tax preparer and charged a fee to prepare dozens of tax returns that he filed on behalf of his family, friends, and associates.  Brown included false information in all of those tax returns in order to obtain larger refunds for his customers.  The fraudulently obtained refunds totaled more than $100,000.

Brown faces a maximum of 20 years in federal prison for the wire fraud conspiracy.  Brown and Wedington each face a maximum sentence of five years in federal prison for each count of conspiracy to defraud the United States, and three years in prison for each count of filing a false tax return.  Judge Chasanow has not yet scheduled sentencing for Brown or Wedington.

United States Attorney Robert K. Hur commended the FBI and the IRS Criminal Investigation for their work in the investigation and thanked the U.S. Department of Labor - Office of Inspector General, Office of Investigations - Labor Racketeering and Fraud, the Maryland State Prosecutor’s Office, and the Baltimore City Office of Inspector General for their assistance.  Mr. Hur thanked Assistant U.S. Attorneys Martin J. Clarke and Leo J. Wise, who are prosecuting the case.

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Baltimore, Maryland – Chief U.S. District Judge James K. Bredar sentenced Jawanza Kevin Carter, age 22, of Laurel, Maryland, to 272 months in federal prison, followed by five years of supervised release, for robbery involving controlled substances, and for carrying and brandishing of a firearm during and in relation to a crime of violence, in connection with the armed robbery or attempted armed robbery of five pharmacies and the theft of tens of thousands of dollars’ worth of opioids.  The sentence was imposed late on November 15, 2019.

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; Chief Henry P. Stawinski III of the Prince George’s County Police Department; Chief Edward Jackson of the Annapolis Police Department; Anne Arundel County Police Chief Tim Altomare; Chief Marcus Jones of the Montgomery County Police Department; Chief Lisa D. Myers of the Howard County Police Department; and Anne Arundel County State’s Attorney Anne Colt Leitess.

“Criminals who are not deterred from carrying guns by the threat of prison time can be deterred by the reality of years spent in a federal prison far from home,” said U.S. Attorney Robert K. Hur.  “Police and prosecutors are working to remove armed criminals from our communities.  Jawanza Carter, who is 22 years old, used a gun to rob pharmacies.  Carter will now serve the next 22 years in federal prison, where there is no parole—ever.  Please, put down the guns.  You may save a life, including your own.”

According to Carter’s plea agreement, between May 5 and November 29, 2017, Carter and his co-conspirator Arthur Prince participated in five armed robberies of pharmacies.  In each robbery, Carter pointed a gun at the clerk, and Carter and Prince demanded opioid narcotics such as Oxycodone, OxyContin, Percocet, and Codeine.  In most of the robberies, Carter and Prince also stole money from the cash register and/or robbed the clerk.

Specifically, Carter admitted that he robbed: the Howard Pharmacy in Columbia, Maryland on May 5, 2017; the Lorven Pharmacy in Laurel on June 19, 2017; the Pasadena Pharmacy in Pasadena, Maryland on August 25, 2017; and the Annapolis Professional Pharmacy in Annapolis, Maryland on November 29, 2017.  Carter and Prince also attempted to rob the Pace Wellness Pharmacy in Pasadena on August 25, 2017, but were not able to steal narcotics when the clerk didn’t know where the drugs were located.  Instead, Carter and Prince stole $180 from the cash register and robbed the clerk of her purse, which contained $50 in cash and credit cards, among other things.

In each robbery, cell-site records showed that Carter’s phone was in the immediate area of the pharmacy at the time of the robbery, and his DNA was found on a reusable shopping bag left by the robbers at the Howard Pharmacy and on a mask Carter wore during the Annapolis Professional Pharmacy robbery that law enforcement later recovered.  In addition, law enforcement recovered Carter’s fingerprints on one of the getaway vehicles used by the robbers, and text messages between Carter and Prince concerning one of the robberies.  Photos from Carter’s Snapchat account also appear to reflect large purchases in the days and weeks after some of the robberies, including luxury items from Gucci, a gold watch, and designer tennis shoes. 

Prince was arrested after the robbery on November 29, 2017, in Odenton, Maryland, not far from where law enforcement located the stolen narcotics.  Carter was arrested at the home of his girlfriend in Laurel.  Searches executed at locations associated with Carter recovered three boxes of .40-caliber ammunition, a gun cleaning kit and related items, and an empty handgun carrying case with a clip in it.

After his arrest and while he was detained, Carter attempted to obstruct justice.  In recorded jail calls, Carter instructed his girlfriend to get rid of a bag used in connection with one of the robberies, which she did.  On December 4, 2017, Carter coached his girlfriend on what to say to law enforcement about two vehicles used in the robberies that were titled and registered to her.  Carter told his girlfriend to tell law enforcement that one of the cars is a “family and friends car,” and that she drove the other vehicle.

Co-conspirator Arthur Raymond Prince, age 20, of Laurel Maryland, was previously sentenced to more than 15 years in federal prison for aiding and abetting robbery involving controlled substances, and aiding and abetting the brandishing of a firearm during and in relation to a crime of violence, in connection with the armed robberies of five pharmacies.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

United States Attorney Robert K. Hur commended the FBI, the Prince George’s County Police Department, the Annapolis Police Department, the Anne Arundel County Police Department, the Montgomery County Police Department, the Howard County Police Department, and the Anne Arundel County State’s Attorney’s Office for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Paul A. Riley and Brandon K. Moore, who prosecuted the case.

# # #

Baltimore, Maryland – Eagle Alliance, a Northrop Grumman partnership, has paid the United States $110,000 to resolve False Claims Act allegations that it improperly billed the government for computer hardware.

The settlement was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Robert E. Craig, Jr. of the Defense Criminal Investigative Service - Mid-Atlantic Field Office (DCIS); and Inspector General Robert P. Storch of the National Security Agency (NSA).

“We rely on government contractors to bill the government fairly,” said U.S. Attorney Robert K. Hur.  “When the government is overbilled or billed improperly under its contracts, taxpayers suffer.  We will pursue government contractors to recover the fraudulently obtained funds.”

According to the settlement agreement, Eagle Alliance contracted with a government agency to provide new computer hardware.  However, during several periods of time between 2012 and 2013, Eagle Alliance billed the government twice for the same equipment.  Moreover, the government contends that Eagle Alliance also improperly billed certain used computer equipment to the government as if it were new.

The claims resolved by this settlement are allegations.  The settlement is not an admission of liability by Eagle Alliance or Northrop Grumman, nor a concession by the United States that its claims are not well founded.

Jeffrey Brenner, a former Eagle Alliance employee, originally filed this lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act.  These provisions permit private individuals with knowledge of fraud to sue on behalf of the government for false claims and to share in any recovery, even where the government intervenes to take over the action, as it did here. Brenner will receive $18,700 of the settlement.

The settlement reminds contractors of their obligations to carefully account for their billings under government contracts, as improper billings and overages will subject them to liability under the False Claims Act.

United States Attorney Robert K. Hur commended the DCIS and the NSA Office of the Inspector General for their work in the investigation.  Mr. Hur also thanked Assistant United States Attorney Molissa H. Farber, who handled the case.

# # #

 

Baltimore, Maryland – A new illegal firearms initiative announced today, Project Guardian-DMV, is designed to reduce violent crime and further enforce federal firearms laws across the District of Columbia, Maryland, and Virginia (DMV).  The new initiative builds on the Justice Department’s national effort, Project Guardian, announced by Attorney General William P. Barr on Wednesday.

The initiative was announced by United States Attorney for the District of Maryland Robert K. Hur; United States Attorney for the Eastern District of Virginia G. Zachary Terwilliger; United States Attorney for the District of Columbia Jessie K. Liu; United States Attorney for the Western District of Virginia Thomas Cullen; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; Special Agent in Charge Ashan M. Benedict of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Washington Field Division;  Chief Peter Newsham of the Metropolitan Police Department; and Colonel Gary T. Settle, Superintendent of the Virginia State Police.

“Gun crime remains a pervasive problem in too many communities across America,” said Attorney General Barr. “The Department of Justice is redoubling its commitment to tackling this issue through the launch of Project Guardian. Building on the success of past programs like Triggerlock, Project Guardian will strengthen our efforts to reduce gun violence by allowing the federal government and our state and local partners to better target offenders who use guns in crimes and those who try to buy guns illegally.”

Project Guardian-DMV will localize the effort to the DMV region, and expands upon the current partnership between the U.S. Attorney’s Offices in the District of Columbia and the Eastern District of Virginia, the ATF, and Metro Police Department, and now also includes the U.S. Attorney’s Offices in Maryland and the Western District of Virginia, and the Virginia State Police.

“We are committed to working with our federal, state, and local law enforcement partners to get guns off of our streets, in order to reduce violent crime in our neighborhoods,” said Robert K. Hur, U.S. Attorney for the District of Maryland. “If you use a gun, you could face federal time, where there is no parole—ever.  Please, put down the guns and save a life—maybe even your own.”

Reducing gun violence and enforcing federal firearms laws have always been among the Department’s highest priorities. In order to develop a new and robust effort to promote and ensure public safety, the Department reviewed and adapted some of the successes of past strategies to curb gun violence. Project Guardian draws on the Department’s earlier achievements, such as the “Triggerlock” program, and it serves as a complementary effort to the success of Project Safe Neighborhoods (PSN). In addition, the initiative emphasizes the importance of using all modern technologies available to law enforcement to promote gun crime intelligence.

“Working together with our federal and local partners is key to reducing gun violence and violent crime in the region,” said Jessie K. Liu, U.S. Attorney for the District of Columbia. “Project Guardian will allow us to identify specific incidents and trends, thereby enabling us to move quickly in investigating and prosecuting violent crime in the most appropriate venue. The correlation between the availability and use of illegal guns and violent crime is undeniable, and we will continue to work closely with our partners in the law enforcement community in the promotion of public safety and the pursuit of justice. “

“The public is on notice that we are deadly serious about illegal firearms offenses,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “Now with leadership of Attorney General Barr, all the tentacles of the Department of Justice, including the ATF and its Crime Gun Intelligence capabilities, and the amazing men and women in blue on the beat, we are doubling down on illegal firearms with Project Guardian.”

“Through this partnership, we hope to stanch the flow of illegal guns from the Commonwealth of Virginia to Washington, Baltimore, and other cities in the Northeast, where, too often, they are used to commit violent crimes,” said Thomas T. Cullen, U.S Attorney for the Western District of Virginia.  “We will work closely with our U.S. attorney partners, the ATF, the MPD, and the Virginia State Police to identify individuals and groups in Western Virginia engaged in this deadly enterprise and put them in federal prison.”

“Criminals do not concern themselves with state line or jurisdictions, so we have ensured that our efforts to stop the illegal flow of guns into Maryland involves working closely with our neighboring ATF Field Division in Washington, as well as neighboring U.S. Attorney’s Offices in Virginia and D.C.,” said Rob Cekada, Special Agent in Charge of ATF Baltimore Field Division. “Our focus is on identifying, investigating, and incarcerating anyone who uses firearms to commit violent crime, and those who traffic or straw purchase firearms are supplying these offenders. Project Guardian serves to further strengthen our multi-state and District partnerships with law enforcements and prosecutors so we can brings these criminals to justice.”

“Straw purchasers and firearms traffickers do more than commit paperwork violations or illegally sell a firearm – they knowingly put firearms in the hands of people who should not have them, including violent offenders. These traffickers have no regard for the safety of D.C., Maryland, and Virginia communities,” said Ashan M. Benedict, Special Agent in Charge of ATF’s Washington Field Division. “As part of Project Guardian, ATF will continue to work alongside our local, state, and federal law enforcement partners and U.S. Attorney’s Officers to ensure anyone committing these crimes is held accountable. We are putting all gun traffickers on notice that we will find you; you will be held accountable; and you will be punished under the law.”

Project Guardian’s national and DMV implementation is based on five principles:

1. Coordinated Prosecution. Federal prosecutors and law enforcement will coordinate with state, local, and tribal law enforcement and prosecutors to consider potential federal prosecution for new cases involving a defendant who: a) was arrested in possession of a firearm; b) is believed to have used a firearm in committing a crime of violence or drug trafficking crime prosecutable in federal court; or c) is suspected of actively committing violent crime(s) in the community on behalf of a criminal organization.
    
2. Enforcing the Background Check System. United States Attorneys, in consultation with the Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in their district, will create new, or review existing, guidelines for intake and prosecution of federal cases involving false statements (including lie-and-try, lie-and-buy, and straw purchasers) made during the acquisition or attempted acquisition of firearms from Federal Firearms Licensees.
   Particular emphasis is placed on individuals convicted of violent felonies or misdemeanor crimes of domestic violence, individuals subject to protective orders, and individuals who are fugitives where the underlying offense is a felony or misdemeanor crime of domestic violence; individuals suspected of involvement in criminal organizations or of providing firearms to criminal organizations; and individuals involved in repeat denials.
    
3. Improved Information Sharing. On a regular basis, and as often as practicable given current technical limitations, ATF will provide to state law enforcement fusion centers a report listing individuals for whom the National Instant Criminal Background Check System (NICS) has issued denials, including the basis for the denial, so that state and local law enforcement can take appropriate steps under their laws.
    
4. Coordinated Response to Mental Health Denials. Each United States Attorney will ensure that whenever there is federal case information regarding individuals who are prohibited from possessing a firearm under the mental health prohibition, such information continues to be entered timely and accurately into the United States Attorneys’ Offices’ case-management system for prompt submission to NICS. ATF should engage in additional outreach to state and local law enforcement on how to use this denial information to better assure public safety. 
   Additionally, United States Attorneys will consult with relevant district stakeholders to assess feasibility of adopting disruption of early engagement programs to address mental-health-prohibited individuals who attempt to acquire a firearm. United States Attorneys should consider, when appropriate, recommending court-ordered mental health treatment for any sentences issued to individuals prohibited based on mental health.
    
5. Crime Gun Intelligence Coordination. Federal, state, local, and tribal prosecutors and law enforcement will work together to ensure effective use of the ATF’s Crime Gun Intelligence Centers (CGICs), and all related resources, to maximize the use of modern intelligence tools and technology. These tools can greatly enhance the speed and effectiveness in identifying trigger-pullers and finding their guns, but the success depends in large part on state, local, and tribal law enforcement partners sharing ballistic evidence and firearm recovery data with the ATF.
   
   Our sincere thanks to the National Law Enforcement Officers Memorial Fund for their tremendous support of this announcement.
   
   
    

 

Baltimore, Maryland – U.S. District Judge Ellen L. Hollander today sentenced John O’Day, age 48, of Chester and Stevensville, Maryland, and Sarasota, Florida, to 104 months in federal prison, followed by five years of supervised release, for federal charges of bank fraud and aggravated identity theft, in connection with a scheme to defraud at least 20 individuals and five financial institutions of more than $1 million by submitting fraudulent auto loan applications.  Judge Hollander also ordered O’Day to pay restitution of $1,072,091, with interest.

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rodney A. Davis of the Treasury Inspector General for Tax Administration; Chief Marcus Jones of the Montgomery County Police Department; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.

According to his plea agreement, between April 2016 and January 2018, O’Day and his co-conspirators, Denise White and Nigel Broomes, submitted at least 30 fraudulent applications for auto loans to victim financial institutions falsely listing O’Day as the seller of various motor vehicles, which were listed as collateral, but in which neither O’Day or the listed purchaser had any ownership interest.  At least 27 of the fraudulent applications were successful and resulted in the disbursement of loan checks totaling approximately $1,167,192.  O’Day deposited those funds into his personal bank accounts in Maryland.  O’Day provided a portion of the fraud proceeds to his co-conspirators.  The funds were not used to purchase vehicles.  O’Day attempted to obtain additional loan checks totaling at least $246,000 through several unsuccessful auto loan applications.

Most of the applicants listed in the auto loan applications were recruited by O’Day under false promises and pretenses.  Specifically, O’Day falsely promised that he would pay off the auto loans within up to 90 days and that the borrowers would not be responsible for loan payments. O’Day made payments in smaller amounts to most of the borrowers to assist them temporarily in making periodic payments on the loans and to compensate them for their involvement in the scheme.  However, O’Day eventually stopped assisting borrowers with their payments and failed to pay off the loans as he promised.  Most of the borrowers remained liable for the loans and suffered financial hardship as a result.  At least some of the fraudulent auto loans were eventually converted to unsecured personal loans with higher interest rates as a result of the applicants’ failure to produce proof that they had purchased the vehicles.  Several of the applicants had no knowledge that O’Day and his co-conspirators had submitted applications in their names and never authorized them to do so. 

O’Day, White, and Broomes used the personal identification information of at least five individuals, without their knowledge or approval, to submit fraudulent loan applications.  At least two of the applications were approved and resulted in the disbursement of loan checks totaling $98,000.

O’Day admitted that he also laundered the proceeds of the fraudulent auto loan scheme through the purchase of a home.  O’Day worked as a loan officer with a mortgage brokerage company located in Maryland between January 2014 and August 2017.  Between January and March 2017, O’Day requested that his employer issue him a company check for his closing costs in return for him transferring funds to the company.  O’Day deposited $90,000 in fraud proceeds into a bank account he controlled, then wired $33,750 from that account to his employer’s account.  The following day, the employer wired $33,750 to another of O’Day’s accounts and O’Day purchased a cashier’s check in the amount of $30,000 drawn on that account, which he used to pay the closing costs associated with the purchase of his home.

According to their plea agreements, White and Broomes personally submitted some of the fraudulent auto loan applications.  White also contacted the financial institutions under false pretenses in order to get the applications approved.  White used multiple e-mail accounts in which she received correspondence from the various financial institutions to which she submitted fraudulent loan applications.  Upon O’Day’s request, White also contacted borrowers whom O’Day had recruited in order to assuage their concerns about their involvement with the auto loans, requests made by the financial institutions for proof of ownership of the vehicles, and O’Day’s failure to pay off the loans taken out in their names, falsely identifying herself as “Lisa.”  White and Broomes also fabricated documents in support of the fraudulent loan applications and O’Day’s efforts to negotiate the loan checks.

Denise White, age 32, of East Point, Georgia, and Nigel Broomes, age 39, of Atlanta, Georgia previously pleaded guilty to their roles in the scheme.  White and Broomes each face a maximum of 30 years in federal prison for bank fraud, and White also faces a mandatory minimum sentence of two years in federal prison, consecutive to any other sentence imposed, for aggravated identity theft.  Judge Hollander has scheduled sentencing for White and Broomes on November 15, 2019, at 10:00 a.m. and 11:00 a.m., respectively.

United States Attorney Robert K. Hur commended TIGTA, the Montgomery County Police Department, and the Maryland State Police for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorney Matthew J. Maddox, who is prosecuting the case.

# # #

 

Greenbelt, Maryland – Anitra Edmond, age 43, of New Carrollton, Maryland, the treasurer for the “Friends of Tawanna P. Gaines” campaign committee, pleaded guilty today to a federal wire fraud charge, admitting that she converted more than $35,000 in campaign funds to her personal use.  

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office.

“Individuals who donate to a political campaign trust that their money will be used to support their candidate.  Edmond abused that trust to enrich herself,” said United States Attorney Robert K. Hur.  “Such a betrayal undermines everyone’s faith in government.  We will continue to work with our law enforcement partners to find those who break the law, and bring them to justice.”   

According to her plea agreement, from 2005 to the present, Edmond was the treasurer of the “Friends of Tawanna P. Gaines” (FTPG) candidate committee, which was the finance entity for the campaign of former Maryland State Delegate Tawanna P. Gaines.  FTPG was a regulated state election campaign committee with a designated bank account, for which Edmond was the sole signatory and had possession of a debit/ATM card for the account.

Edmond admitted that from at least November 2012 through June 2018, she defrauded the campaign and its contributors of more than $35,000, converting the campaign funds for her personal use.  Specifically, Edmond deposited checks from some campaign contributors directly into her personal bank account, instead of the FTPG account.  Edmond also received and deposited campaign contributions into the FTPG account, then converted them to her own use without causing the contributions to be identified on campaign finance reports made to the Maryland State Board of Elections. 

As detailed in her plea agreement, Edmond used the campaign funds from the FTPG account to pay her personal expenses, such as fast food, hair styling, personal phone bills, and rent for a separate business.  In addition, during the course of the scheme, and in violation of Maryland campaign finance law, Edmond withdrew from the FTPG account a total of approximately $7,080 in cash from ATM machines, including an $800 withdrawal on June 25, 2018.  The total loss as a result of Edmond’s involvement was at least $35,188.63.  As part of her plea agreement, Edmond is required to forfeit and pay restitution in that amount.

Edmond faces a maximum sentence of 20 years in federal prison for wire fraud.  U.S. District Judge Theodore D. Chuang has scheduled sentencing for February 24, 2020. She is released on her own recognizance under the supervision of U.S. Pretrial Services.

Former Maryland State Delegate Tawanna P. Gaines, age 67, of Berwyn Heights, Maryland, previously pleaded guilty to a federal wire fraud charge, admitting that she converted more than $22,000 in campaign funds to her personal use. U.S. District Judge Theodore D. Chuang has scheduled sentencing for Gaines on January 3, 2020, at 10:00 a.m.

United States Attorney Robert K. Hur commended the FBI for its work in this investigation.  Mr. Hur thanked Assistant U.S. Attorney Thomas P. Windom, who is prosecuting these cases.

# # #

 

A Navy employee, who resided in Silver Spring, Maryland, before moving to Japan, was sentenced today to 40 years in prison for the production, transportation and possession of child pornography.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Robert K. Hur of the District of Maryland and Special Agent in Charge Jennifer C. Boone of the FBI’s Baltimore Field Office made the announcement.

Spencer E. Steckman, 36, was sentenced by U.S. District Court Judge Paul W. Grimm of the U.S. District Court for the District of Maryland.  Steckman pleaded guilty on June 11, 2019, to one count of production of child pornography, one count of transportation of child pornography and one count of possession of child pornography.  In addition to his prison sentence, Steckman received a lifetime of supervised release and was ordered to pay $120,000 in restitution to the victims.

According to court documents, Steckman enticed at least 10 preteen and teenage boys to engage in sexually explicit conduct, record it and send it to him.  He employed a variety of tactics, including misrepresenting his identity, offering money and videogame redemption codes and encouraging the children to compete with others to produce and send the “best” photos.  After years of this conduct, he moved to Japan in mid-November 2017, where he worked with Commander Navy Region Japan and transported and possessed child pornography.

The Naval Criminal Investigative Service (NCIS) in Japan detained Steckman on March 27, 2018.  The U.S. Marshals service transported him back to Maryland to appear before the U.S. District Court for the District of Maryland.  He has remained in custody since that time.

Further investigation revealed that Steckman had previously molested two prepubescent children on numerous occasions, that he had given one of the teenage boys cash and marijuana to engage in sexual activity with him, that he had shared his child pornography with like-minded offenders and that he stored most of his child pornography collection on an encrypted device.

The FBI’s Baltimore Field Office and the Maricopa County, Arizona, Sheriff’s Office investigated the case, with substantial assistance from NCIS.  Trial Attorney Jessica Urban of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Joseph Baldwin of the District of Maryland are prosecuting the case. 

This investigation was a 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 U.S. Attorneys’ Offices and 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.justice.gov/psc.

Greenbelt, Maryland – U.S. District Court Judge Paul W. Grimm sentenced Spencer E. Steckman, 36, a Navy employee formerly of Silver Spring, Maryland, today to 40 years in federal prison, followed by lifetime supervised release, for the production, transportation, and possession of child pornography.  Judge Grimm also ordered that Steckman pay restitution of $120,000 to the victims, and that Steckman must register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA). 

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; and Special Agent in Charge Jennifer C. Boone of the FBI’s Baltimore Field Office.

Steckman pleaded guilty on June 11, 2019, to one count of production of child pornography, one count of transportation of child pornography, and one count of possession of child pornography.   

According to his plea agreement and other court documents, Steckman enticed at least 10 preteen and teenage boys to engage in sexually explicit conduct, record it and send it to him.  He employed a variety of tactics, including misrepresenting his identity, offering money and video game redemption codes, and encouraging the children to compete with others to produce and send the “best” photos.  Steckman also admitted that he gave one of the victims cash and marijuana to engage in sexual activity with him.  After years of this conduct, Steckman moved to Japan in mid-November 2017, where he worked with Commander Navy Region Japan, and transported and possessed the child pornography.

Further investigation revealed that Steckman had shared his child pornography, including images sent to him by the victims, with like-minded offenders, and that he stored most of his child pornography collection on an encrypted device.

Steckman was detained by the Naval Criminal Investigative Service (NCIS) in Japan on March 27, 2018, and transported back to Maryland by the United States Marshals Service to appear before the U.S. District Court for the District of Maryland.  He has remained in custody since that time.

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 Attorney’s 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.justice.gov/psc.  For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.       

United States Attorney Robert K. Hur and Assistant Attorney General Brian A. Benczkowski commended the FBI’s Baltimore Field Division and the Maricopa County, Arizona, Sheriff’s Office who investigated the case, with substantial assistance from NCIS.  Mr. Hur and Mr. Benczkowski thanked Assistant U.S. Attorney Joseph Baldwin and Trial Attorney Jessica Urban of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), who prosecuted the case.

# # #

Baltimore, Maryland – U.S. District Judge Thomas E. Johnston today sentenced Ryan Russell Parks, a/k/a Dinero, age 26, of Baltimore, Maryland, to 240 months in federal prison, followed by five years of supervised release, for two counts of sex trafficking of a minor and one count of using the Internet to promote a business enterprise involving prostitution.  A federal jury convicted Parks late on July 18, 2019, after a four-day trial.  As a result of his conviction, upon his release from prison, Parks will be required to register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.

“Ryan Parks cruelly preyed on vulnerable girls in order to sell them for sex.  Children cannot consent to have sex for money and the sex trafficking of children will not be tolerated in Maryland.  Through the Maryland Human Trafficking Task Force, law enforcement is working with victim services providers and victim advocates to rescue human trafficking victims and prosecute traffickers,” said Maryland U.S. Attorney Robert K. Hur.

According to the evidence presented at his trial, Parks trafficked two vulnerable minor victims—a 16-year-old girl (Girl 1) and a 15-year-old girl (Girl 2)—for commercial sex.  According to trial testimony, Parks met Girl 1 online.  During their communications Parks learned that she was hungry and had no real place to live, and he offered Girl 1 a place to stay.  Parks sent a car to pick up Girl 1 and to bring her to a motel in Woodlawn, Maryland, and within a day, he caused advertisements to be posted on a website that marketed commercial sex workers.  These advertisements contained photographs and descriptions of Girl 1 and offered Girl 1 for commercial sex acts.  Parks stayed with Girl 1 at a motel in Baltimore, along with another woman he was advertising on the Internet for commercial sex.  He also had sex with Girl 1 in the motel room.  Parks would leave the room for short periods of time, when men would come to the room to have sex with Girl 1, and he would return to the room shortly after the men left the room.  Parks paid for additional advertisements on the website offering Girl 1 for commercial sex on August 1 and August 2, 2017.  One of Girl 1’s customers returned to the room the next day to rescue her, and he took her to live in a different city with his sister.

The evidence also proved that in November 2017, Parks met Girl 2 online, and he learned that she had run away from her foster home.  On November 16, 2017, Parks paid a driver through an application on his cell phone to pick up Girl 2 and bring her to his home.  Girl 2, who was 15 years old, told Parks that she was 17 years old, in foster care, and in an unhappy situation.  Parks provided Girl 2 with marijuana and had sex with her.  He talked to her about making money through prostitution, and he took her to the same motel in Baltimore where Parks had harbored Girl 1.  Girl 2 had run away from her foster home without a coat, a purse, or change of clothing. Parks purchased a bra, panties, and condoms for Girl 2.  Parks took photographs of Girl 2 and paid for an online advertisement offering Girl 2 for commercial sex using his cell phone.  Several of the photos that Parks uploaded to the website were rejected, because they contained nudity and were too explicit.  Less revealing photos of Girl 2, wearing the bra and panties purchased by Parks, were accepted and uploaded to the online advertisement. 

As he had with Girl 1, Parks then set the prices and time limits for the sex acts to be performed on Girl 2, and he instructed her on the process of checking a man for a wire when he came into the motel room.  Parks stayed in the motel room with Girl 2 when other men were not present, but he left the room and stood outside in a stairwell when men arrived to have sex with Girl 2.  Parks offered Girl 2 for commercial sex from November 16 through November 20, 2017.  During this time, over 300 individuals contacted the phone number placed by Parks on the advertisement, to inquire about commercial sex with Girl 2.  On November 21, 2017, Girl 2 contacted her foster care social worker, who dispatched police to the motel.  According to trial testimony, Parks reviewed Girl 2’s phone while she was in the shower and saw that she had contacted her social worker.  Parks became angry, told her to delete information from her phone and to remove the chip from her phone, and then he left the motel.  Girl 2 went to the lobby and turned herself in to police.

While law enforcement was investigating the trafficking of the two minor victims, they discovered evidence regarding the extent of Parks’ prostitution business.  Evidence at trial proved that from February 25, 2017, through the date that he was arrested on January 10, 2018, Parks paid over $1,000 for approximately 295 commercial sex advertisements placed on the Internet.  Parks advertised approximately 27 different women and girls for commercial sex.  Parks also paid over $6,000 for hotel rooms in Baltimore County and Baltimore City during the course of his prostitution enterprise.

Parks remains detained.

The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from 10 state and federal law enforcement agencies.  The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.  

MCETF partners with the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders.  Members include federal, state and local law enforcement, as well as victim service providers and local community members.  For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.

United States Attorney Robert K. Hur commended the FBI and Maryland State Police for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Christine Duey and Matthew Maddox, who prosecuted the case.

# # #

Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Tiffany Edmundson, age 31, of Greenbelt, Maryland, today to 78 months in prison, followed by three years of supervised release, for conspiring to commit two armed robberies.  Judge Grimm also ordered Edmundson to pay restitution of $1,740.

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Assistant Director in Charge Timothy R. Slater of the Federal Bureau of Investigation - Washington Field Office; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; Chief Peter Newsham of the Metropolitan Police Department; Chief Henry P. Stawinski III of the Prince George’s County Police Department; Chief Marcus Jones of the Montgomery County Police Department; and Chief Anthony Morgan of the Mount Rainier Police Department.

According to her plea agreement and other court documents, Edmundson committed two robberies on May 31, 2012.  Edmundson’s role in the robberies included conducting surveillance of the target businesses before the robberies, planning the robberies with her co-conspirators—including knowing that at least one co-conspirator would be armed with a gun, participating in the robberies, and dividing and receiving a portion of robbery proceeds. During the robberies, Edmundson and her co-conspirators partially hid their faces with cloths or a mask.

Specifically, Edmundson and two co-conspirators, Anthony Akrah Morris and Chavez Tyrone Smith, robbed a 7-Eleven store at 1:05 a.m. on May 31, 2012, located in the 12000 block of Laurel Bowie Road in Laurel, Maryland.  Smith stood at the entrance of the store to watch for other customers or law enforcement.  Smith was armed with a gun, which he brandished at people inside the store.  The robbers ordered customers to the floor.  Morris took approximately $340 from the store cash register. Edmundson and Morris also took $475 worth of cigarettes from the store. Edmundson also took money and items from customers, including an Apple iPhone from a female customer. The co-conspirators fled from the store in a vehicle driven by co-conspirator Cornelius Jennings.

Shortly thereafter, at 2:59 a.m., Edmundson, Morris, and Jennings entered a McDonald’s restaurant located in the 15000 block of Old Columbia Pike in Burtonsville.  Jennings brandished a firearm at persons inside the restaurant.  Edmundson and her co-conspirators forced employees to open the restaurant’s safe from which they stole $1,400 in cash.  They fled in a getaway vehicle driven by Smith.

Edmundson pleaded guilty on February 13, 2013, but her sentencing was delayed as a result of intervening litigation related to a Supreme Court decision which vacated her conviction on the gun charge to which she had pleaded guilty.

After several reported violations of her pre-sentence release conditions, on January 10, 2019, a detention hearing was held before Judge Grimm, in which Edmundson sought to avoid detention pending sentencing.  In anticipation of the hearing, Edmundson created a letter from her supervisor at her place of employment extolling her work performance.  She provided the letter to her counsel with the hope that it would be shared with the Court.  The letter was subsequently relied on by counsel and provided to the Court.  The letter, however, was discovered to be false and was created by Edmundson without her supervisor’s knowledge or consent.

Anthony Akrah Morris, age 30, of Burtonsville, Maryland, was convicted after trial and sentenced to 505 months in prison for conspiring to commit robbery, two counts of robbery and two counts of brandishing a firearm during a robbery.  Chavez Tyrone Smith, age 40, and Cornelius Jennings, age 32, both of Washington, D.C., pleaded guilty to their roles in the robberies and were sentenced to 16 years and 111 months in federal prison, respectively. 

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

United States Attorney Robert K. Hur commended the FBI, the Prince George’s County Police Department, the Metropolitan Police Department, the Montgomery County Police Department, and the Mount Rainier Police Department for their work in the investigation.  Mr. Hur praised the Prince George’s County State’s Attorney’s Office and the Montgomery County State’s Attorney’s Office for their assistance and coordination.  Mr. Hur thanked Assistant United States Attorney Thomas M. Sullivan, who prosecuted the case, and Assistant United States Attorney Jason Medinger for his work on the appeals.

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Greenbelt, Maryland – A federal grand jury has indicted Lachann Alexis Green, age 36, of Laurel, Maryland, on federal wire fraud charges in connection with a scheme to embezzle money from her employer.  The indictment was returned on November 4, 2019, and was unsealed at her initial appearance today.

The indictment was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office.

According to the indictment, from October 2017 through December 2018, Green defrauded her employer, a business that managed residential apartment buildings in several states, including Maryland.  Green was the general manager of Rhode Island Row, an apartment complex in Washington, D.C. that was managed by her employer.  Her employer opened and maintained a business bank account to pay expenses for Rhode Island Row.

The indictment alleges that on October 4, 2017, Green registered a fraudulent shell business, “Executive Property Staffing” (“EPS”) with the Maryland State Department of Assessments and Taxation (“SDAT”).  EPS was a business purportedly located in Beltsville, Maryland.  Although her employer required that employees report any financial interest they had in any firm that did business with the employer, as well as any conflict or potential conflict of interest, Green did not disclose her association with EPS to her employer.  Green allegedly created and submitted or caused to be created and submitted fraudulent invoices in the name of EPS to her employer for staffing, cleaning, and maintenance work at Rhode Island Row that had not been done by EPS.  After Green’s employer transferred money as payment for the fictitious invoices to a bank account Green had opened in EPS’s name, Green allegedly transferred the funds to bank accounts opened in her own name or used the funds for her own personal gain.

The EPS scheme was one of several that Green allegedly operated as general manager of Rhode Island Row.  Green also allegedly submitted fraudulent invoices to her employer for expenses that she falsely claimed she had incurred in the course of her duties.  In addition, she submitted fraudulent invoices in the name of another business owned and operated by a personal associate (“Individual 1”) in return for a kickback from Individual 1 of a portion of the proceeds.  Finally, the indictment alleges that Green submitted or caused to be submitted fraudulent resident application information to her employer on behalf of two relatives so that the relatives could live at Rhode Island Row under fake names and under favorable lease terms.

If convicted, Green faces a maximum sentence of 20 years in federal prison for each of five counts of wire fraud.  At today’s initial appearance in U.S. District Court in Greenbelt, U.S. Magistrate Judge Timothy J. Sullivan ordered that Green be detained pending a detention hearing scheduled for November 7, 2019, at 3:30 p.m.

An indictment is not a finding of guilt.  An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings. 

United States Attorney Robert K. Hur commended the FBI for its work in the investigation.  Mr. Hur thanked Assistant U.S. Attorney Burden H. Walker, who is prosecuting the case.

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Baltimore, Maryland – U.S. District Judge Catherine C. Blake today sentenced Dante Bailey, a/k/a “Gutta,” “Almighty,” and “Wolf,” age 40, of Windsor Mill, Maryland, to life in federal prison.  Bailey, the leader of Murdaland Mafia Piru (MMP), a subset of the Bloods gang, was convicted on April 30, 2019 after a six-week trial of murder in aid of racketeering, conspiracy to participate in a racketeering enterprise, conspiracy to distribute a kilogram or more of heroin and 280 grams or more of crack cocaine, possession of firearms by a previously convicted felon, and possession with intent to distribute heroin.  The jury found that Bailey participated in the gang’s affairs through a pattern of racketeering activities that included murder, extortion, witness tampering, witness retaliation, conspiracy to distribute drugs, and drug distribution.   

Yesterday, Judge Blake sentenced MMP member Jamal Lockley, a/k/a “T-Roy” and “Droid,” age 40, of Baltimore to 30 years in prison, followed by five years of supervised release.  Lockley was also convicted after trial of the racketeering and drug conspiracies.  The jury found that Lockley participated in MMP’s affairs through a pattern of racketeering activities that included distribution of drugs, conspiracy to distribute drugs, and witness tampering and retaliation.                 

The sentences were announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; Commissioner Michael Harrison of the Baltimore Police Department; Chief Melissa R. Hyatt of the Baltimore County Police Department; Baltimore City State’s Attorney Marilyn J. Mosby; and Baltimore County State’s Attorney Scott Shellenberger.

“Dante Bailey led the violent and destructive MMP gang that brought terror and death to Baltimore and Baltimore County neighborhoods with guns and drugs.  Now, Dante Bailey will spend the rest of his life in federal prison, where there are no suspended sentences and no parole—ever.  And Jamal Lockley will be over 65 years old before he is released from prison.  Due to their choices, most of the 25 defendants convicted in this case will spend between 14 and 30 years in federal prison,” said U.S. Attorney Robert K. Hur.  “We are committed to working with our law enforcement partners to get guns out of the hands of drug dealers and off of our streets, in order to reduce violent crime in our neighborhoods.  Over the course of this investigation, law enforcement seized 42 firearms and convicted 25 gang members.  I urge anyone who’s thinking of following these defendants’ example:  Please, put down the guns and save a life—maybe even your own.”

According to the evidence presented at the six-week trial, MMP, also known as the “Mob” or “Mobsters,” is a violent subset of the Bloods gang that operates in Maryland and elsewhere.  Founded by Dante Bailey, MMP was modeled after the Italian Mafia.  The MMP oath was called the “Omerta Code.”  The gang was organized hierarchically, with Dante Bailey as “the Don” at the top and various “Bosses,” “Underbosses,” “Capos,” “Lieutenants,” and “Mobsters” underneath.  MMP gang paperwork laid out certain rules of conduct by which members were governed, including that “retaliation is a must,” “[w]hen at war fight like you are ready to die,” and “[w]henever we are forced to strike, our only option is to kill.”  The most important rule was that “co-operation with authorities that lead[s] to incriminating others” was punishable by death.  MMP members enhanced their status in the gang by carrying out acts of violence; for instance, members could earn a “lightning bolt” tattoo for “killing for the Mob.”  Dante Bailey has multiple lightning bolt tattoos on his face.

MMP members operated street-level drug distribution shops in various locations in Northwest Baltimore City and neighboring Baltimore County, where they sold large volumes of heroin and crack cocaine, among other controlled substances.  The gang’s drug shop in the 5200 block of Windsor Mill Road was particularly lucrative due to its close proximity to Interstate 70, and it frequently attracted drug customers driving from Western Maryland and neighboring states. 

MMP members, including Bailey, used social media websites to assert the gang’s claim to particular drug territories, intimidate rival gangs and drug traffickers, enhance MMP’s status, and enhance members’ status within the gang.  Bailey posted rap videos under the stage name “Gutta Almighty,” in which he and other members of MMP flaunted actual firearms, and threatened to kill those who stood in the way of the gang. 

The evidence proved that Bailey ordered and committed numerous murders in order to retaliate against rivals, impose discipline within the gang, and eliminate potential witnesses against the gang.  He distributed large volumes of heroin and crack cocaine in the gang’s territories in Northwest Baltimore. After he was arrested, he continued to conduct the gang’s affairs from behind bars, ordering hits on rivals and witnesses, and plotting various ways to obstruct justice. 

For example, on October 15, 2012, Bailey directed another MMP member to murder Victim 1 because Victim 1 was believed to be cooperating with law enforcement.  That MMP member shot Victim 1 multiple times in the head and torso with a .45-caliber firearm outside the crowded Mirage Nightclub in downtown Baltimore.  A closed-circuit television camera captured the shooting, and showed Bailey arriving at the club with the shooter and other MMP members, one of whom was wearing a shirt that said “MOBB SQUAD.”  Bailey recounted the events surrounding the attempted murder of Victim 1 in a semi-autobiographical screenplay that investigators recovered from his residence in 2016.  The screenplay included a scene in which Bailey learned that Victim 1 was “a rat” and a scene in which Victim 1 “gets hit” at “Club Mirage.”

In November 2012, Bailey ordered another MMP member to murder Antoine Ellis because Ellis had allegedly shown disloyalty to the gang.  On Thanksgiving Day, that MMP member shot Ellis to death in a baseball field in the 5200 block of Windsor Mill Road.  A few hours before the murder, the shooter had posted a comment to his Facebook profile that said: “198 n risen”—a reference to that year’s murder tally in Baltimore City, which he was about to increase by one.

On February 12, 2015, Dante Bailey murdered James Edwards for showing disloyalty to the gang.  Bailey shot Edwards to death in the 300 block of Collins Avenue, using the same gun he had used to shoot at rivals in the 5200 block of Windsor Mill Road three nights earlier. 

On April 28, 2016, Bailey armed himself and went looking to retaliate against members of a rival drug organization they believed were responsible for killing an MMP member.  Jamal Lockley drove Bailey to the rival drug organization’s territory, where Bailey observed Anthony Hornes, whom he suspected—wrongly—had been involved in the MMP member’s murder.  Bailey shot Hornes in the head, killing him.  Lockley was the getaway driver.

In September 2017, while in pretrial custody, Dante Bailey caused a hit letter to be mailed to a co-conspirator that directed the murder of a witness against the gang, and included the witness’s address.  ATF Special Agents arrested the co-conspirator while in possession of the hit letter as well as a recently purchased firearm.

The evidence showed that Lockley worked in concert with other MMP members to distribute heroin and crack cocaine in MMP’s territory in the area around Windsor Mill Road and Forest Park Avenue, and to avoid detection by law enforcement. He distributed heroin that caused a young woman to overdose and nearly lose her life, and he continued to deal drugs after learning of the overdose. He was the getaway driver for a retaliatory gang murder committed by Dante Bailey.  He discussed retaliating against a rival of the gang with another MMP member and he conspired with Bailey to kill a witness against the gang by sending him to an MMP hitman.

Twenty-five defendants have been convicted in the case and twenty-four defendants, including Bailey and Lockley, have been sentenced, with most receiving between 14 and 30 years in federal prison.  The final defendant is awaiting trial.

This case was made possible by investigative leads generated from the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) National Integrated Ballistic Information Network (NIBIN). NIBIN is the only national network that allows for the capture and comparison of ballistic evidence to aid in solving and preventing violent crimes involving firearms. NIBIN is a proven investigative and intelligence tool that can link firearms from multiple crime scenes, allowing law enforcement to quickly disrupt shooting cycles. For more information on NIBIN, visit https://www.atf.gov/firearms/national-integrated-ballistic-information-network-nibin.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.

United States Attorney Robert K. Hur praised the ATF, the Baltimore City and Baltimore County Police Departments, and the Baltimore City and Baltimore County State’s Attorney’s Offices for their work in the investigation and prosecution.  Mr. Hur thanked Assistant United States Attorneys Christina Hoffman and Lauren E. Perry, who are prosecuting this Organized Crime Drug Enforcement Task Force case.

# # #

 

Baltimore, Maryland – United States Attorney for the District of Maryland Robert K. Hur announced that Saiontz & Kirk, P.A., a Baltimore-based law firm, has paid the United States $91,406.98 to resolve allegations that it failed to reimburse Medicare for conditional payments that had been made to medical providers on behalf of firm clients.

“Plaintiffs’ attorneys cannot refer a case to or enter into a joint representation agreement with co-counsel and simply wash their hands clean of their obligations to reimburse Medicare for its conditional payments,” said U.S. Attorney Robert K. Hur.  “We intend to hold attorneys accountable for failing to make good on their obligations to repay Medicare for its conditional payments, regardless of whether they were the ones primarily handling the litigation for the plaintiff.”

According to the settlement agreement, over a number of years, Medicare made conditional payments to healthcare providers to satisfy medical bills for firm clients.  Under the Medicare statute and regulations, Medicare is authorized to make conditional payments for medical items or services under certain circumstances, with the requirement that when an injured person receives a tort settlement or judgment, those receiving the proceeds of the settlement or judgment, including the injured person’s attorney, are required to repay Medicare for the conditional payments.

During that period, the firm referred clients to or entered into joint representation agreements with co-counsel on four of the six matters about which the U.S. Attorney’s office contacted the firm.  The government contends that the firm, either itself or together with co-counsel, negotiated for and received settlement proceeds for the firm’s clients, but neither the firm nor its clients repaid Medicare for conditional payments that Medicare made to medical providers. 

The claims resolved by this settlement are allegations.  The settlement is not an admission of liability by Saiontz & Kirk, P.A., nor a concession by the United States that its claims are not well founded. 

This settlement reminds attorneys of their obligation to reimburse Medicare for conditional payments after receiving settlement or judgment proceeds for their clients.  This is no less true for plaintiffs’ attorneys who refer cases to co-counsel or jointly represent plaintiffs. 

U.S. Attorney Robert K. Hur commended Eric Wolfish, Assistant Regional Counsel, United States Department of Health and Human Services, Office of the General Counsel, Region III, for his work in the investigation.  Mr. Hur also thanked Assistant United States Attorney Alan C. Lazerow, who handled the case.

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Greenbelt, Maryland – U.S. District Judge Paula Xinis today sentenced Crystal Mebane McGinty, age 59, of Silver Spring, Maryland, to two years in prison, followed by three years of supervised release, for mail fraud and for theft of government property in connection with a scheme to obtain over $517,000 of her deceased mother’s social security and City of New York teachers’ retirement benefits.  Judge Xinis also ordered McGinty to forfeit and pay restitution in the form of a money judgment of $517,000.

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Michael McGill of the Social Security Administration (SSA) - Office of Inspector General, Philadelphia Field Division.

“This prosecution demonstrates that we will not tolerate criminals who lie, cheat, and steal to obtain benefits to which they are not entitled.  Crystal McGinty will now serve two years in federal prison, where there is no parole—ever.  She not only defrauded the Social Security Administration, but all law-abiding citizens, and I am hopeful that this sentence will deter others who may be tempted to do the same,” said U.S. Attorney Robert K. Hur. 

According to her plea agreement, during the course of the fraud McGinty worked as a physician at practices in Maryland and Washington, D.C.  McGinty’s mother died on June 17, 2005, and McGinty was listed as the informant on the death certificate.

McGinty admitted that from June 2005 through June 2018, she engaged in a scheme to commit mail fraud and theft of government property by spending her deceased mother’s Social Security Administration (SSA) retirement payments and Teachers’ Retirement System of the City of New York (TRSCNY) pension payments.  McGinty did not disclose and concealed her mother’s death from TRSCNY and the SSA, in part, by posing as her deceased mother, in order to continue receiving her mother’s retirement payments.

As detailed in the plea agreement, McGinty deposited her mother’s TRSCNY checks, which were mailed to McGinty’s home, into a joint checking acount.  The checks bore McGinty’s signature and her mother’s signature.  McGinty’s mother’s SSA payments were also deposited into that bank account.  Further, TRSCNY records show that from 2012 to 2017, McGinty signed and submitted several proof-of-life forms to TRSCNY, including some in which she identified herself as her deceased mother’s physician, in order to continue to receive her mother’s retirement benefits.  TRSCNY records also show that after they stopped mailing her mother’s pension checks, McGinty called TRSCNY on May 31, 2016, posing as her deceased mother and provided her deceased mother’s identifying information, in an effort to get the pension benefits reinstated.

Further, McGinty admitted that she routinely withdrew her deceased mother’s TRSCNY and SSA retirement benefits from the bank through cash withdrawals or by transferring the funds to her personal accounts each month.  McGinty used the funds to pay for the mortgage and utility bills at her Silver Spring home, renewal of her medical license, department store purchases, tuition at a private high school in Washington, D.C., international and domestic travel, and a cruise vacation.

According to public records, the Maryland Board of Physicians suspended McGinty’s license on January 17, 2019, and McGinty permanently surrendered her license on April 23, 2019.

United States Attorney Robert K. Hur commended the SSA Office of Inspector General for its work in the investigation.  Mr. Hur thanked Special Assistant U.S. Attorney Michael F. Davio, who prosecuted the case.

# # #

 

Baltimore, Maryland – A federal jury convicted Juan Carlos Sandoval-Rodriguez, a/k/a “Picaro,” “El Pastor,” and “Gasper,” age 21, of Annapolis, Maryland, of murder in aid of racketeering, and conspiracy to commit murder in aid of racketeering, in connection with his participation in the activities of La Mara Salvatrucha, or MS-13.  The verdict was returned late on October 31, 2019.

The guilty verdict was announced by United States Attorney for the District of Maryland Robert K. Hur; Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division; Special Agent in Charge John Eisert of Homeland Security Investigations-Baltimore Field Office; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Baltimore Field Division; Police Chief Timothy J. Altomare of the Anne Arundel County Police Department; and Anne Arundel County State’s Attorney Anne Colt Leitess.

“The MS-13 gang uses violence, extortion, and intimidation to terrorize their communities, both here in the U.S. and abroad.  The gang’s chilling motto is ‘mata, viola, controla,’ or ‘kill, rape, and control.’  This MS-13 member showed his allegiance to the gang through murder.  Now he faces a mandatory sentence of life in federal prison.  His conviction for murder, and our ongoing work with our law enforcement partners to bring other gang members to justice, demonstrates our unflagging commitment to eliminate MS-13 and its campaign of wanton violence,” said United States Attorney Hur.  “We will continue to root out and prosecute violent gang members to obtain justice for their victims.”

“This individual’s crime is yet another example of the terror and violence that criminal gangs like MS-13 inflict upon our communities,” said HSI Baltimore Special Agent in Charge John Eisert. “HSI is committed to working with our law enforcement partners to investigate and dismantle these gangs to make our streets safer.”

MS-13 is a national and transnational gang composed primarily of immigrants or descendants from El Salvador.  Branches or “cliques” of MS-13, one of the largest street gangs in the United States, operate throughout Anne Arundel County, Prince George’s County, Montgomery County and Frederick County, Maryland.  In Maryland, MS-13 cliques often work cooperatively to engage in criminal activity and to assist one another in avoiding detection by law enforcement.   These cliques include the Hempstead Locos Salvatrucha (HLS or Hempstead), Fulton Locos Salvatruchs (FLS or Fulton), and Langley Park Salvatrucha (LPS), among others.  MS-13 members are required to commit acts of violence to maintain membership and discipline within the gang.  One of the principal rules of MS-13 is that its members must attack and kill rivals, known as “chavalas,” whenever possible.

According to the evidence presented at his 9-day trial, from at least 2015 through 2017, Sandoval-Rodriguez was a member and associate of the Fulton clique.  As a member of the MS-13 gang, Sandoval-Rodriguez participated in racketeering activities including drug trafficking, extortion, and murder.

The evidence at trial proved that Sandoval-Rodriguez and other MS-13 members and associates conspired to murder an individual whom they believed to be a rival gang member.  Specifically, on March 11, 2016, Sandoval-Rodriguez lured the victim to a park in Annapolis, with the intent to murder the victim.  Once the victim arrived at the park, members of the gang struck the victim on the head with a branch or stick.  Sandoval-Rodriguez and the other members and associates of MS-13 then stabbed the victim repeatedly, killing the victim. The members and associates of MS-13 then buried the victim in a shallow grave in the park.  Sandoval-Rodriguez and his co-conspirators murdered the victim in Annapolis, for the purpose of gaining entrance to, maintaining, and increasing their position in MS-13.

As a result of his conviction for murder in aid of racketeering, Sandoval-Rodriguez faces a mandatory life sentence.  Chief U.S. District Judge James K. Bredar has not yet scheduled sentencing. 

Co-defendants Marlon Cruz-Flores, a/k/a “Little S,” age 22; Fermin Gomez-Jimenez, age 20; and David Diaz-Alvarado, age 21; all of Annapolis, Maryland, previously pleaded guilty to their roles in the racketeering enterprise. The other defendants are awaiting sentencing.  All of the defendants are detained.

United States Attorney Robert K. Hur and AAG Benczkowski commended HSI, the ATF, the Anne Arundel County Police Department, and the Anne Arundel County State’s Attorney’s Office.  Mr. Hur and Mr. Benczkowski thanked Assistant U.S. Attorney Zachary Stendig, Trial Attorney Matthew Hoff of the Criminal Division’s Organized Crime and Gang Section, and Special Assistant U.S. Attorney Samantha Mildenberg, a cross-designated Anne Arundel County Assistant State’s Attorney, who are prosecuting this case.

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Baltimore, Maryland - U.S. District Judge Richard D. Bennett today sentenced Jake Tyler Patterson, age 21, of Adamstown, Maryland, to 150 months in federal prison, followed by lifetime supervised release, for coercion and enticement of a minor to engage in illegal sexual activity in order to produce child pornography.  Judge Bennett also ordered that, upon his release from prison, Patterson must continue to register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA). 

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; Frederick County Sheriff Charles A. “Chuck” Jenkins; and Frederick County State’s Attorney J. Charles Smith.

“Patterson, like many criminals, took advantage of the anonymity of the Internet to pose as a minor female and solicit young boys to send him sexually explicit images and video,” said U.S. Attorney Robert K. Hur.  “Now he will serve over 12 years in federal prison, where there is no parole—ever.  One alert parent checked their child’s smartphone, found sexually explicit photos, and called the police.  That call may have prevented more children from being abused by this predator.”

According to his guilty plea, beginning in approximately fall of 2017, Patterson set up an online social media profile pretending to be a 15- or 16- year-old girl who resided outside of Maryland.  Using that profile, Patterson sought out minor males and established online relationships with them. Patterson initiated sexually explicit conversations with the victims and convinced them to produce and send sexually explicit images and videos of the victims.  As part of his inducement, Patterson sent sexually explicit files displaying female genitals.  Patterson also paid some of the victims with gift cards, including Amazon, iTunes, Xbox, and PlayStation.

As detailed in his plea agreement, from July to December 2018 Patterson’s victims ranged in age from 12 to 15 years old and resided in Colorado, Michigan, Texas, and Maryland.  All of the victims sent at least one sexually explicit image or video to Patterson, and several victims sent more than that.  Patterson offered, and sent, the victims gift cards to induce them to send more sexually explicit images and videos.  For example, a review of Patterson’s Amazon account showed that Patterson had purchased 55 gift cards in the previous 10 months, totaling approximately $2,600.

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 Attorney’s 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.justice.gov/psc.  For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.       

United States Attorney Robert K. Hur commended the FBI, the Frederick County Sheriff’s Office, and the Frederick County State’s Attorney’s Office for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorney Paul E. Budlow and Special Assistant U.S. Attorney Joyce King, a cross-designated Frederick County Assistant State’s Attorney, who prosecuted the federal case.

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Greenbelt, Maryland – U.S. District Judge George J. Hazel today sentenced Josue Balbino Ruiz-Reyes, age 25, of Adelphi, Maryland, to 15 years in federal prison, followed by five years of supervised release, for conspiracy to distribute and to possess with intent to distribute methamphetamines and for using, carrying, brandishing, and discharging a firearm in connection with a drug trafficking offense. 

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Acting Chief Marcus Jones of the Montgomery County Police Department.

United States Attorney Robert K. Hur stated, “All too often, guns and drugs go hand in hand—and both are killers. As today’s sentence demonstrates, we are committed to getting both off of our streets and to reducing violent crime in our neighborhoods.  Josue Ruiz-Reyes will now serve 15 years in federal prison, where there is no parole—ever.  Please, put down the guns and save a life—maybe even your own.”

According to his guilty plea, from about 2016 through November 21, 2018, Ruiz-Reyes conspired with others, including Individual 1, to distribute methamphetamine.  During that time, Ruiz-Reyes distributed crystal methamphetamine to individuals in and around Maryland in exchange for cash, services, or items of value, such as hotel stays.  In October or November 2018, Ruiz-Reyes paid Individual 1 approximately $500 in cash for a future delivery of methamphetamine.  Despite repeated requests from Ruiz-Reyes, Individual 1 failed to deliver the methamphetamine or repay the money.

As detailed in his plea agreement, late on November 15 or early November 16, 2018, Ruiz-Reyes drove a silver-colored vehicle to a house on Twig Road in Silver Spring, Maryland, where he knew Individual 1 often stayed with Individual 2.  Ruiz-Reyes repeatedly fired a 9mm semi-automatic pistol at the Twig Road House in retaliation for Individual 1’s failure to pay the drug debt, and to induce Individuals 1 and 2 to repay the drug debt.  In the evening of November 16, 2018, Ruiz-Reyes returned to the house in his silver vehicle and again discharged his weapon at the house over the drug debt owed to him by Individual 1.  Ruiz-Reyes also sent threatening messages over social media to Individual 2 regarding the drug debt.

On November 21, 2018, Ruiz-Reyes was arrested in Hanover, Maryland, as he returned to his car in the parking lot of a casino/hotel.  Officers executed a search warrant on the vehicle and recovered: the 9mm semi-automatic pistol used in the shooting, as well as spent shell casings from the exterior windshield and floorboard of the car; 20 small bags of crystal methamphetamine, weighing a total of 19.02 grams; a digital scale; empty clear plastic bags; two glass pipes; a knife; and a ski mask.

This case was made possible by investigative leads generated from the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ (ATF) National Integrated Ballistic Information Network (NIBIN).  NIBIN is the only national network that allows for the capture and comparison of ballistic evidence to aid in solving and preventing violent crimes involving firearms.  NIBIN is a proven investigative and intelligence tool that can link firearms from multiple crime scenes, allowing law enforcement to quickly disrupt shooting cycles.  For more information on NIBIN, visit https://www.atf.gov/firearms/national-integrated-ballistic-information-network-nibin.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

United States Attorney Robert K. Hur commended the ATF and Montgomery County Police Department for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Catherine K. Dick and Leah B. Grossi, who prosecuted the case.

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Greenbelt, Maryland – Sean Dean, age 26, of Baltimore, pleaded guilty to conspiracy to engage in sex trafficking of a minor.  Dean admitted that he conspired to traffic four minor girls to engage in commercial sex acts for his financial benefit.  Dean entered his guilty plea on October 29, 2019.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Chief Russell E. Hamill III of the City of Laurel Police Department; and Special Agent in Charge John Eisert of Homeland Security Investigations (HSI).

“Sean Dean cruelly preyed on vulnerable girls in order to profit by selling them for sex,” said U.S. Attorney Robert K. Hur.  “Children cannot consent to have sex for money and the sex trafficking of children will not be tolerated in Maryland.  Through the Maryland Human Trafficking Task Force, law enforcement is working with non-profit organizations to help human trafficking victims and prosecute the traffickers.”

According to Dean’s plea agreement, from December 2017 until January 2018, Dean recruited, harbored, transported, and/or maintained five females, including four minors ranging from 15 to 17 years old, to engage in commercial sex acts.  Dean utilized social media and cellular telephones to recruit, monitor, direct, and communicate with the four girls and the woman.

In furtherance of the sex trafficking enterprise, Dean and/or a co-conspirator rented hotel rooms in Timonium and Laurel, Maryland to be used by the victims to engage in commercial sex acts.  Dean and his co-conspirator transported the victims to the various hotels where they would stay for multiple days. While in the hotel rooms, at Dean’s direction the victims used a website to advertise themselves for commercial sex acts.  The advertisements contained pictures of the victims in provocative poses and provided contact information for clients to use to secure a “date” with the victims.  The victims were required to share a portion of the proceeds from any commercial sex acts with Dean and his co-conspirator. 

As detailed in his plea agreement, during the first week of January 2018, Dean and his co-conspirator transported three of the minor girls and the woman to a hotel in Timonium.  The victims were at the hotel for approximately one week and met with multiple customers per day to engage in commercial sex acts.  During that time, Dean texted one of the minors to bring lingerie to wear in photos and texted one or more of the victims to confirm that they had posted advertisements on the commercial sex website.  The victims shared a portion of the proceeds earned from their commercial sex acts with Dean and the co-conspirator.  The following week, Dean rented rooms at a hotel in Laurel, where the victims stayed for one or two days, again engaging in commercial sex acts with multiple clients.  Dean also recruited the fourth minor girl to come to the hotel to engage in sex acts.

On January 11, 2018, Dean and his co-conspirator transported all five victims to another hotel in Laurel, where Dean had rented rooms for the victims to use for commercial sex acts.  In response to a complaint, law enforcement responded to two different rooms rented by Dean.  Law enforcement located three minor girls and the woman in the two rooms.  The fourth minor girl had already left the hotel.  Dean and the co-conspirator fled to avoid detection by law enforcement.  After leaving the area, Dean exchanged messages with the woman indicating that he had left to avoid law enforcement because he knew one of the victims was under age.  Dean also directed the woman to delete their messages.

As part of his plea agreement, Dean will be required to register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).

Dean and the government have agreed that if the Court accepts the plea agreement Dean will be sentenced to 10 years in federal prison.  U.S. District Judge George J. Hazel has scheduled sentencing for February 28, 2020 at 2:00 p.m. 

This case was investigated by law enforcement agencies that are members of the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders.  Members include federal, state and local law enforcement, as well as victim service providers and local community members.  For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.

Report suspected instances of human trafficking to HSI's tip line at 866-DHS-2ICE (1-866-347-2423) or by completing its online tip form.  Both are staffed around the clock by investigators.

United States Attorney Robert K. Hur commended the Laurel Police Department and HSI Baltimore for their work in the investigation and thanked the Baltimore County Police Department and the Federal Bureau of Investigation for their assistance.  Mr. Hur thanked Assistant U.S. Attorneys Joseph R. Baldwin and Elizabeth Wright, who are prosecuting the case.

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Baltimore, Maryland – U.S. District Judge Richard D. Bennett today sentenced Jay B. Ledford, age 55, of Westlake, Texas and Las Vegas, Nevada to 14 years in federal prison, followed by three years of supervised release, for conspiracy to commit wire fraud, aggravated identity theft, and a money-laundering transaction, arising from a $396 million investment fraud scheme that operated from 2013 through September 2018, with an additional $260 million in attempted investments at the time of Ledford’s arrest.  Judge Bennett also ordered Ledford to pay restitution in the full amount of the victims’ losses, which is at least $189,166,116.  Judge Bennett will also enter an order of forfeiture, with the exact amount of forfeiture still to be determined.  On October 10, 2019, Judge Bennett sentenced co-defendant Kevin B. Merrill, age 54, of Towson, Maryland, to 22 years in federal prison.

The U.S. Securities and Exchange Commission (SEC) has a pending parallel civil action in this matter.

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Robert W. Manchak of the Federal Housing Finance Agency, Office of Inspector General. 

“Jay Ledford created phony documents and operated a debt collection center to provide credibility to Kevin Merrill’s false claims to investors, duping them into paying millions of dollars into this Ponzi scheme,” said U.S. Attorney Robert K. Hur.  “The effects of this kind of fraud can be devastating and a number of victims have lost their life savings.  This sentence sends a strong message that law enforcement will root out, prosecute, and send to prison criminal fraudsters like Jay Ledford and his co-conspirators.”

According to his plea agreement, Ledford was a certified public accountant in Texas, starting his own practice in Amarillo in 1996 and later expanding to Dallas.  In 1999, Ledford met Kevin Merrill in Dallas, when Merrill was a salesman for a Baltimore company that sold supplies for X-ray machines for hospitals and doctors’ practices.  Ledford and Merrill became friends, attending sporting events and visiting casinos together.  Ledford prepared Merrill’s taxes for several years.

“Consumer debt portfolios” are defaulted consumer debts to banks/credit card issuers, student loan lenders, and car/truck financers which are sold in batches called “portfolios” to third parties that attempt to collect on the debts.  Ledford and Merrill both had businesses that collected on consumer debt or purchased consumer debt.   Beginning in January 2013, Ledford and Merrill joined forces to perpetrate a Ponzi scheme to defraud investors.  Specifically, Ledford and Kevin Merrill invited investors to join them in purchasing consumer debt portfolios.  Ledford provided fictitious sales agreements and other documents, including false tax returns, to Merrill, knowing that Merrill was using them to induce individuals to invest with his companies, Delmarva Capital and Global Credit Recovery.  For 2013, Merrill took in approximately $4.3 million from investors, while Ledford raised just over $186,000 from investors.  Thereafter, Merrill’s superior sales ability caused Ledford to assume a background role, while Merrill was the “front man,” promoting the fraudulent investments to potential investors.

The conspirators falsely represented to investors that they would use the investors’ money to buy consumer debt portfolios and make money for them by (1) collecting the payments that people made on their debts or (2) selling the portfolios for a profit to other third-party debt buyers, in a practice called “flipping.”  According to court documents, the victim investors included small business owners, restauranteurs, construction contractors, retirees, doctors, lawyers, accountants, bankers, talent agents, professional athletes, and financial advisors, located in Maryland, Washington, D.C., Virginia, Colorado, Texas, Illinois, New York, and elsewhere.

Ledford admitted that to induce investors to participate, he and his co-conspirators falsely represented who they were buying the debt portfolios from and how much they were paying for the portfolios, whether they were investing their own funds, and their track record of success. According to the plea agreement, sometimes there was no underlying debt portfolio purchased with the investors’ money.  To conceal the truth, Ledford, created imposter companies with names similar to actual consumer debt sellers or brokers and opened bank accounts in the names of those imposter companies.  In addition, to lend credibility to the transactions, Ledford created false portfolio overviews, sales agreements which used the names and forged signatures of actual employees of the sellers, created false collections reports, and falsified bank statements and merchant account reports.  In late 2014, Ledford transferred employee and co-defendant Cameron Jezierski to manage debt collections for the Riverwalk and DeVille companies.  DeVille had a collections center in Euless, Texas, and the conspirators began to invite prospective investors to tour Riverwalk’s office and the collections center, which added substance to their claims regarding the success of their portfolio purchasing strategy and collections efforts.  In December 2017, Ledford recruited Jezierski to the criminal conspiracy because his analytical skills enabled him to contribute significantly to creating false documentation to induce investors to invest, and to conceal the mark-up Ledford and Merrill added to the purchase price charged to investors for debt portfolios.

Further, Ledford admitted that he and Merrill falsely represented that the monies the conspirators paid to investors were “proceeds” from collections and/or flipping debt portfolios, when in fact, the proceeds were paid from funds provided by other investors.  The conspirators provided monthly or quarterly reports to investors regarding the “purported progress of the portfolio and its recovery,” which Ledford and Merrill created.  From 2013 to 2018, the scheme to defraud took in over $396 million; the co-conspirators spent only 14% on purchasing consumer debt portfolios. At the time of their arrests, the co-conspirators were attempting to obtain an additional $260 million from investors.  Ledford assisted Merrill to divert investors’ funds to purchase a home in Naples, Florida, and also helped Merrill falsify records to the bank lender.  Ledford himself diverted fraud proceeds to purchase and renovate a home in Las Vegas, Nevada, to refinance a home in Texas, to gamble at casinos, to purchase luxury automobiles and jewelry, and otherwise to support a lavish lifestyle.

At today’s hearing, the government presented evidence that over the course of the scheme, Ledford used more than $42 million in investors’ funds to gamble at casinos throughout the United States.  Generally, Ledford would deposit a cashier’s check with the casino, which provided Ledford with chips up to the value of the check.  At the end of the gambling trip, if Ledford won, the casino would pay any winnings to Ledford by cash or check, and return the “front money” cashier’s check to Ledford.  If Ledford lost at the casinos, the casino deposited the “front money” cashier’s check to cover his losses, and paid Ledford the difference by cash, check, or chips. Ledford returned over $18 million in casino wires or checks to the Ponzi scheme. Currency Transaction Reports filed by the casinos show that Ledford took $14.9 million in cash out of casinos and paid over $9 million in cash into the casinos. Over the six years of the fraud, according to casino records, Ledford had net losses of more than $16 million.

For example, on December 28, 2017, a group of investors paid over $14 million into a Merrill account to invest in credit portfolios.  Of those funds, Ledford spent over $3.5 million on actual credit portfolios purchases, but he also paid Merrill, gave a bonus to Jezierski, and bought a $2.5 million cashier’s check which he gambled against at the Las Vegas Sands, home of The Venetian and The Palazzo casinos.  Ledford lost over $1.5 million of the investors’ monies on that gambling trip.

Cameron R. Jezierski, age 28, of Fort Worth, Texas, previously pleaded guilty to his role in the scheme and is scheduled to be sentenced on November 14, 2019, at 3:00 p.m.  Kevin Merrill’s wife, Amanda Merrill, age 30 of Towson, Maryland, pleaded guilty on October 9, 2019, to conspiracy to remove and conceal assets in violation of court orders, and is scheduled to be sentenced on January 22, 2020, at 3:00 p.m.  Merrill and Ledford have been detained since their arrest on September 18, 2018, and Amanda Merrill and Cameron Jezierski are released under the supervision of U.S. Pretrial Services.

United States Attorney Robert K. Hur commended the FBI in Baltimore, Dallas, Las Vegas and Tampa; the Federal Housing Finance Agency, Office of the Inspector General; and the SEC for their work in this investigation.  Mr. Hur thanked Assistant U.S. Attorneys Joyce K. McDonald and Martin J. Clarke, who are prosecuting the criminal case.

# # #

Baltimore, Maryland – A federal jury convicted Demetrios Stavrakis, a/k/a Jimmy, age 53, of Lutherville-Timonium, Maryland, for an arson conspiracy to damage his business by setting it on fire in order to obtain insurance proceeds.  The verdict was returned late on October 28, 2019.

The guilty verdict was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; Maryland State Fire Marshal Brian Geraci; and Commissioner Michael Harrison of the Baltimore Police Department.

U.S. Attorney Robert K. Hur stated, “The evidence proved that ‘Jimmy’ Stavrakis conspired to burn down his business in order to defraud his insurance company of millions of dollars in insurance proceeds.  Criminals who commit fraud destroying property by fire, jeopardizing their community and first responders, then spend the stolen money on luxury cars, watches, and jewelry, must be held accountable

According to evidence presented at his 7-week trial, beginning in July 2015, Stavrakis made a plan to set fire to commercial property he owned at 234 S. Haven Street in Baltimore, in order to collect insurance proceeds on the property.  The building housed Adcor Industries, Inc., a manufacturing shop owned by Stavrakis since 1991, as well as Adcor Beverage, LLC and other LLC’s owned and created by Stavrakis.  

Testimony at trial revealed that by 2010, Adcor’s business experienced a down turn due to the loss of a contract with Colt Industries.  From 2011 to 2015, Stavrakis’s businesses defaulted on various loans, struggled to pay suppliers resulting in legal action, and sold off profitable divisions of the business to satisfy defaulted loans.  In 2014, Adcor incurred an operating loss of $2,053,427 and its liabilities exceeded its assets by almost $900,000.  Financial records showed that during 2014, Stavrakis liquidated personal assets and injected the proceeds into Adcor to utilize as working capital.  A public accounting firm hired by Adcor to review its financial condition reported to Stavrakis that the balance of cash and cash equivalents as of December 31, 2014 was inadequate to fund operations through December 31, 2015.  More losses followed, and Adcor was again in default on a line of credit and their monthly operating losses put them on a pace to lose approximately $2.9 million for the year.

The evidence proved that on July 28, 2015, just before 6 p.m., Stavrakis used adhesive tape to defeat one of the security features on the front door of the building so that the person or persons setting the fire could enter the building.

According to the trial evidence, at 12:25 a.m. on July 29, 2015, someone disarmed the alarm inside the building by entering the four-digit code.  At 12:33 a.m., an alarm in another part of the building was disarmed.  At approximately 1:30 a.m., the fire was reported to law enforcement by a passer-by who saw smoke emanating from the building.  The Baltimore Fire Department responded to extinguish the blaze.  The fire destroyed an office on the shop floor of the building and damaged a portion of the ceiling directly above the office area.  Later on July 29, 2015, Stavrakis contacted a public adjuster firm that his company had previously retained to notify them of the fire and to request their assistance in filing claims with the insurance company. 

Trial evidence proved that from July 29, 2015 through August 5, 2016, the adjusters, acting on behalf of Stavrakis and his companies, submitted insurance claims totaling more than $21 million.  The insurance company paid a total of approximately $15,081,435.  Of that amount, approximately $7.5 million was used to purchase new machinery, purchase parts inventory, restore the building, and for other business expenses.  In addition, insurance proceeds were transferred or used for other expenses, including $600,000 which was transferred to an account in the name of Stavrakis’s wife, after which additional monthly payments of approximately $6,000 followed; approximately $98,499.20 used to purchase a 2016 Mercedes-Benz GL 550, titled and registered to Stavrakis; approximately $52,890.55 used to purchase a BMW titled and registered in the name of Stavrakis’s wife; approximately $25,500 used to purchase a 2016 Harley-Davidson Street Glide motorcycle; and approximately $35,087 in watches and jewelry.

Stavrakis faces a mandatory minimum sentence of five years and a maximum of 20 years in prison for the malicious destruction of property by fire; a mandatory 10 years in prison, consecutive to any other sentence imposed, for use of fire to commit a federal felony; and a maximum sentence of 20 years in prison for each of two counts of wire fraud.  U.S. District Judge Ellen L. Hollander has scheduled sentencing for January 24, 2020.

United States Attorney Robert K. Hur commended the ATF, the Office of the Maryland State Fire Marshal, and the Baltimore Police Department for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Judson T. Mihok and Paul E. Budlow, who are prosecuting the case.

 # # #

 

 Baltimore, Maryland – A federal grand jury has returned an indictment charging De’Angelo Johnson, a/k/a Cowboy, a/k/a D, age 31, of Maryland, with sex trafficking and distribution of heroin and cocaine.  The indictment was returned on October 22, 2019.

The federal indictment was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge John Eisert of Homeland Security Investigations (HSI) Baltimore; Chief Melissa R. Hyatt of the Baltimore County Police Department; and Chief Lisa D. Myers of the Howard County Police Department; and Howard County State’s Attorney Rich H. Gibson, Jr.

“Sex traffickers prey on vulnerable women in order to profit by selling them for sex.  These particularly cruel crimes often involve the use of violence and threats and the exploitation of victims’ drug addictions,” said U.S. Attorney Robert K. Hur.  “Through the Maryland Human Trafficking Task Force, local, state and federal law enforcement partners are working with non-profit organizations to help human trafficking victims and prosecute the traffickers.  Together, we are determined to rescue victims and bring sex traffickers to justice.”

According to the six-count indictment, from August 2018 through May 21, 2019, Johnson was a pimp, engaging in the business of recruiting, enticing, harboring, transporting, providing, obtaining, advertising, and maintaining women to engage in commercial sex acts for his own financial benefit.  The indictment refers to five victims, all over the age of 18 and residents of Maryland, whom Johnson allegedly caused to engage in commercial sex acts for his own financial benefit, by means of force, fraud, and coercion.

The indictment alleges that Johnson routinely took half or all of the money the victims working for him had earned through sex acts and kept it for himself.  Further, the indictment alleges that all of the sex trafficking victims suffered from serious substance abuse disorders, including addictions to heroin and crack cocaine.  According to the indictment, Johnson sold narcotics, including heroin and crack cocaine, to the victims, who were required to pay him with whatever money they were permitted to retain from the sex acts they had performed.  Johnson also was allegedly responsible for posting advertisements of the victims on websites that marketed commercial sex workers, often not allowing the victims to see or have access to the advertisements, even when they asked.  Johnson allegedly communicated with potential sex customers regarding price, location, and all other logistics, often purporting to be the victim during these communications.

If convicted, Johnson faces a mandatory minimum sentence of 15 years in federal prison and a maximum sentence of life in federal prison for each of five counts of sex trafficking.  Johnson faces a maximum sentence of 20 years in federal prison for distribution of controlled substances.  An initial appearance has not yet been scheduled in U.S. District Court in Baltimore.  Johnson remains detained on unrelated state charges.

An indictment is not a finding of guilt.  An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.   

This case was investigated by law enforcement agencies who are members of the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders.  Members of the Task Force include federal, state, and local law enforcement, as well as victim service providers and local community members.  For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.  Suspected instances of human trafficking can be reported to HSI’s tip line at 866-DHS-2ICE (1-866-347-2423) or by completing its online tip form. Both are staffed around the clock by investigators.

United States Attorney Robert K. Hur commended HSI, the Baltimore County Police Department, the Howard County Police Department, and the Howard County State’s Attorney’s Office for their work in the investigation and prosecution.  Mr. Hur thanked Assistant U.S. Attorney Mary Setzer, who is prosecuting the federal case.

# # #

Baltimore, Maryland – Bilal Mohammad Siddiqui, age 22, of Catonsville, Maryland, pleaded guilty on October 18, 2019 to federal charges of sexual exploitation of children and cyberstalking.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Chief Melissa R. Hyatt of the Baltimore County Police Department.

According to his guilty plea, between April 2017 and August 2018, Siddiqui used the Internet-based communication services LiveMe, Snapchat, Kik, and FaceTime to coerce at least six minor females, ages 8 to 14, into creating and sending him sexually explicit images and videos of themselves.  Siddiqui also attempted to sexually extort one of those victims, a sixth-grader.  When she refused to produce additional sexually explicit videos of herself, he sent images and videos that she had previously shared with him to her sixth-grade classmates and friends.

Prior to September 2017, Siddiqui created an account on LiveMe, a mobile application that allowed users to stream live video over the internet and simultaneously chat with viewers.  Siddiqui’s account included an anonymous username and a photograph of a young boy as his profile picture, so that other users would not realize he was an adult male.  One of the users misled by Siddiqui was Jane Doe 1, an 8-year-old female.

On September 28, 2017, Jane Doe 1 was using LiveMe to broadcast a video of herself exercising in her pajamas.  Siddiqui was among several LiveMe users watching the broadcast.  When a number of those viewers asked Jane Doe 1 to show them her underwear, she refused, and eventually terminated the broadcast.  Not long after, however, Jane Doe 1 began streaming a new LiveMe broadcast, and a number of her earlier broadcast viewers—including Siddiqui—followed her to the new broadcast.  During the new broadcast, Jane Doe 1 told her viewers that she was 13 years old.  Again, they enticed her to undress and expose herself.  While she initially refused their requests, Jane Doe 1 eventually did what Siddiqui and other viewers asked, undressing and exposing her genitals to the camera.

Toward the end of Jane Doe 1’s broadcast, Siddiqui persuaded her to end her live stream and to contact him privately.  They communicated via FaceTime, and during these video chats, Jane Doe 1 again told Siddiqui that she was 13 years old.  He nonetheless instructed her to remove her shirt, pants, and underwear, then instructed Jane Doe 1 to use a marker to write “B-1-L-A-L”—his first name—on her skin next to her genitalia.  He also instructed her to send him pictures of herself and her genitalia via text message.  She complied with his instruction and sent Siddiqui at least one picture of herself.

After viewers of Jane Doe 1’s LiveMe broadcast reported the public conduct described above to the National Center for Missing and Exploited Children, law enforcement identified Siddiqui as the person who persuaded Jane Doe 1 to chat privately and obtained a search warrant for his residence.  On September 5, 2018, officers executed the search warrant and located the cellphone that Siddiqui used to communicate with Jane Doe 1.

Siddiqui was present during the search, waived his Miranda rights, and voluntarily agreed to be interviewed by law enforcement.  He admitted that the phone was his, that it was passcode-protected, that he had used LiveMe on the phone, and that he created the fake LiveMe profile using a photograph of a former classmate to disguise his identity.  He admitted that he used his fake LiveMe account to communicate with Jane Doe 1, and later admitted—after initially denying—that he communicated privately with Jane Doe 1 through FaceTime, including instructing her to write his name next to her genitalia, and that he instructed her to send him nude images of herself via text message, believing Jane Doe 1 was 13 years old.

While Siddiqui was being interviewed, law enforcement conducted an on-scene forensic review of the phone and discovered evidence that he had also sexually exploited Jane Doe 2, a 9-year-old female.  When officers asked Siddiqui about Jane Doe 2, he admitted that he created videos of her and estimated that there were ten videos of Jane Doe 2 engaging in sexually explicit conduct saved on his phone.  Siddiqui explained that he began communicating with Jane Doe 2 in August 2018 using Snapchat, and continued as recently as September 3, 2018—two days before the search warrant execution.  He explained that he captured the videos depicting this conduct by using his phone’s screen recording function, and that he believed Jane Doe 2 was 11 or 12 years old.

Finally, law enforcement asked Siddiqui whether he had engaged in similar conduct with any other children using mobile applications.  He responded that he caused more than 10 but fewer than 50 minor females to do sexual things on video and that he derived sexual gratification from it.

Following Siddiqui’s interview, law enforcement sought and obtained records associated with online accounts controlled and used by Siddiqui.  Those records showed that Siddiqui had coerced Jane Doe 4, an 11-year-old sixth-grader, into producing and sending him a nude image and nude videos of herself.  Siddiqui began communicating with Jane Doe 4 on September 15, 2017, and told her that he was 15 years old and lived in her town.  Within days, he had convinced Jane Doe 4 that they were in a relationship, and she revealed the name of the middle school that she was attending.

On October 4, 2017, however, Siddiqui began demanding that Jane Doe 4 send him sexually explicit images of her genitals, and threatened to send one of the videos of Jane Doe 4 to her classmates, friends, and family if she did not produce and send further videos of herself engaging in sexually explicit conduct.  Siddiqui specifically told Jane Doe 4, “Don’t play games with me .... I’ll expose u [right now] and ruin your life.”  Jane Doe 4 begged him not to follow through on his threats and sent him additional explicit videos.  After she sent the videos, Siddiqui told Jane Doe 4 that it was “too late” because he had already sent them to her friends.

On October 7, 2017, Jane Doe 4 tried to end her relationship with Siddiqui through a conversation on Snapchat.  Siddiqui reacted to Jane Doe 4’s attempt by demanding that she immediately produce videos of herself engaging in sexually explicit conduct.  After she refused, Siddiqui sent one image and two videos—all of which depicted Jane Doe 4 nude—to two unidentified Snapchat users.  On October 12, 2017, a classmate of Jane Doe 4 alerted her middle school guidance counselor that images of Jane Doe 4 were being circulated.  School administrators conducted a brief investigation to ensure the images had been deleted but did not contact law enforcement.

Electronic evidence further revealed that, between April 2017 and September 2018, Siddiqui used Snapchat and Kik to entice three additional minors, an 11-year-old, a 12-year-old, and a 14-year-old, to produce and send him sexually explicit images and videos.  In each instance, he lied about his real age to persuade these minors to send him such materials.

Siddiqui and the government have agreed that, if the Court accepts the plea agreement, he will be sentenced to between 15 and 30 years in federal prison.  U.S. District Judge Catherine C. Blake has scheduled sentencing for January 24, 2020 at 9:30 a.m.

United States Attorney Robert K. Hur commended the FBI and the Baltimore County Police Department for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Jeffrey J. Izant and Paul E. Budlow, who are prosecuting the case.

# # #

 

Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced Christopher Lovelace, a/k/a Fat Chris, age 41, of Baltimore, Maryland, to six years in federal prison, followed by three years of supervised release, for possession of a firearm by a convicted felon.  As part of his guilty plea, Lovelace admitted to possessing fentanyl, as well as the gun.

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Commissioner Michael Harrison of the Baltimore Police Department.

United States Attorney Robert K. Hur stated, “All too often, guns and drugs go hand in hand—and both are killers.  Along with our local, state, and federal partners, we are committed to getting both off of our streets and to reducing violent crime in our neighborhoods.  Christopher Lovelace brought both a gun and fentanyl to our streets, and now faces the reality of six years spent in a federal prison with no suspended sentences and no parole––ever.”

According to Lovelace’s plea agreement, on August 25, 2018, a Baltimore Police Officer was observing the 600 block of East 38th Street in northern Baltimore.  The officer saw a woman walk up to the intersection of East 38th Street and Old York Road, and hand money to Lovelace.  Lovelace then walked away from the woman, towards a dark-colored GMC Yukon, and retrieved something from the front of the car.  He walked back towards the woman, and handed something to her.  The officer recognized this exchange as a drug transaction, and called in other officers to arrest Lovelace, the woman, and to secure any relevant evidence.

After Lovelace was placed under arrest, officers found U.S. currency, gelcaps containing a white powdery substance, and the keys to the GMC Yukon on his person.  During the search of the GMC Yukon, they found a loaded pistol and a clear plastic bag that contained gelcaps containing a white powdery substance, matching the ones found on Lovelace’s person.

Laboratory tests revealed that the gelcaps found on Lovelace during the search contained fentanyl.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

United States Attorney Robert K. Hur commended the ATF and the Baltimore Police Department for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Daniel Loveland and Sandra Wilkinson, who are prosecuting the case.

# # #

Baltimore, Maryland – Devron Lasha Young, Jr., age 22, of Baltimore, Maryland, pleaded guilty today to a federal charge of possession with intent to distribute approximately 75 grams of fentanyl and acetyl fentanyl—enough to kill 37,500 people.  Young was charged in federal court as part of a federal-state initiative announced in December 2018 to combat the fentanyl crisis in Maryland.

Under this new initiative, titled the “Synthetic Opioid Surge,” or “SOS” for short, every arrest involving distribution of fentanyl made by law enforcement in Baltimore is reviewed jointly by the State’s Attorney’s Office for Baltimore City, the Drug Enforcement Administration, and the U.S. Attorney’s Office to determine whether the case will be handled in the state or federal system.  The U.S. Attorney’s Office will prosecute more cases involving fentanyl as a result of this new program.  The use of federal resources and statutes, which carry significant terms of imprisonment, is necessary to prosecute those individuals who pose the greatest threat to public safety in distributing lethal doses of fentanyl.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Assistant Special Agent in Charge Don A. Hibbert of the Drug Enforcement Administration, Baltimore District Office; and Commissioner Michael Harrison of the Baltimore Police Department.

“Local, state, and federal law enforcement partners in Baltimore City are teaming up to arrest and prosecute those who peddle the deadly poison of fentanyl on our streets and in our neighborhoods,” said U.S. Attorney Robert K. Hur.  “As a result of our combined efforts, Devron Young now faces federal prison time, where there are no suspended sentences and no parole, ever.  We must do everything we can to reduce overdose deaths from this drug and from all opioids.”

According to his guilty plea, on February 22, 2019, Young hailed an illegal taxi at the intersection of North Avenue and Pennsylvania Avenue in northwest Baltimore, the location of an open­air drug market.  Young offered the driver $10 to drive him a few blocks away, wait while he went into a building, and drive him back to the corner of North and Pennsylvania.  Shortly after Young entered the vehicle, a Baltimore police officer stopped the car for a traffic violation.  The officer asked the driver and Young where they were going.  Young answered that the driver was a friend from school and that she was giving him a ride home.  Neither statement was true.

When the officer asked the driver for her license and registration, she stated that they were in her wallet, which was located in a bag behind the driver’s seat.  With the officer’s permission, she retrieved the bag.  The officer saw that, aside from the driver’s wallet and some personal items, the bag contained only children’s diapers.  The driver then returned the bag to the rear driver-side floor.

The driver produced a learner’s permit, but Young was unable to provide any form of identification.  Young provided his personal information to the officer, who then advised Young and the driver that he was going to tow the vehicle because it was unregistered and uninsured.  The officer returned to his vehicle to run law enforcement database inquiries on the driver and Young.

While the officer was in his patrol car, he observed Young reaching toward the rear passenger floor.  The officer walked back to the vehicle and asked the driver to step out.  He asked if there was anything illegal in the vehicle, and the driver told him there was not, then consented without hesitation to a search of the vehicle.

While the driver stayed outside the vehicle, the officer radioed for backup, and returned to the car to speak with Young. The officer asked Young if he had anything illegal on his person, which Young denied.  Young then agreed to the officer’s request to perform a protective pat-down outside the vehicle.  However, when the officer opened the door, Young tried to run away.  Before Young could escape, the officer grabbed Young and placed Young under arrest.

Once Young was in custody, the officer searched the vehicle.  He discovered that the bag had been moved to the middle of the vehicle’s back row.  The officer seized the bag and noticed that, on top of the diapers, there was now a brown plastic bag that had not been there before.  The brown plastic bag contained 30 separate packs holding a total of 752 capsules.  The BPD Laboratory Section subsequently analyzed the capsules and determined that each contained both fentanyl and acetyl fentanyl.

Young and the government have agreed that, if the Court accepts the plea agreement, Young will be sentenced to five years in federal prison.  U.S. District Judge Catherine C. Blake has scheduled sentencing for January 17, 2020 at 11:00 a.m.

United States Attorney Robert K. Hur commended the DEA and the Baltimore Police Department for their work in the investigation and thanked Baltimore State’s Attorney Marilyn Mosby and her office for their assistance.  Mr. Hur thanked Assistant U.S. Attorney Jeffrey J. Izant, who is prosecuting the case.

# # #

Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Kenneth Grossman, age 29, of Baltimore Maryland, to 168 months in federal prison, followed by five years of supervised release, for conspiracy to distribute fentanyl, heroin, and cocaine.

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Commissioner Michael Harrison of the Baltimore Police Department.

“Kenneth Grossman was a leader of a drug organization that brought the deadly combination of guns and drugs to the streets of Baltimore,” said U.S. Attorney Robert K. Hur.  “Grossman will now serve 14 years in a federal prison far from home, where there is no parole—ever.  Please put down the gun.  You’ll save a life, maybe even your own.”

According to his plea agreement, from January 2017 until July 2018, Kenneth Grossman conspired to distribute fentanyl, heroin, and cocaine as a leader and member of the Young Finesse Kings (YFK), a drug shop that operated primarily in the German Park area of Baltimore City.  During the course of the investigation, investigators from the FBI and the Baltimore Police Department obtained authority to intercept wire and electronic communications of members of the YFK drug shop and conducted physical surveillance of the YFK drug shop documenting many instances of Kenneth Grossman directing and coordinating drug shop operations. 

On April 11, 2018, investigators intercepted phone calls which led them to believe that Grossman and several co-defendants were going to commit a retaliatory act of violence, after someone shot at co-defendant Knowledge Sharpe’s car.  Sharpe contacted Grossman and other co-conspirators to get them to assist with the retaliation.  Investigators immediately responded to the area where the conspirators had discussed meeting: Mount Royal Terrace and North Avenue, in the Central District of Baltimore City.  While in the vicinity, investigators observed a gold Nissan van occupied by up to six individuals parked near Druid Park Lake, but the van left the area before investigators were able to stop it.  A short time later investigators learned that a gun was discharged in the area of 1700 North Carey Street. Investigators checked the location information of Sharpe’s cellular telephone and compared it to time that the discharging occurred.  At the time of the discharging, Sharpe’s cellular telephone was at a location in the same block of Carey Street.

Shortly afterwards, investigators located the gold van in the parking lot of the Security Mall in Baltimore.  Kenneth Grossman and co-defendants, Knowledge Sharpe, Dana Dunnock, Anthony Whitaker, Quran Smoot, and another individual were subsequently seen exiting the mall and entering the van.  Investigators surrounded the vehicle and stopped the van before it could exit the parking spot. Immediately upon opening the front passenger door, investigators observed a firearm on the front passenger floorboard.  All occupants were detained and a search of the van showed six firearms within easy reach of all occupants.  Specifically, a CM11 assault pistol with a loaded magazine was located on the front passenger-side floorboard (where Sharpe was sitting), a .32-caliber revolver loaded with 6 rounds and a .380-caliber revolver with a loaded magazine were in the rear third row cup holder and on the rear third row seat, respectively (where Grossman and the other individual were sitting), a 9mm pistol with a loaded magazine in the front center console near the driver (where Smoot was sitting), from Whitaker’s waistband area an officer recovered a .40-caliber handgun loaded with 5 rounds, and from Dunnock’s front waistband area an officer recovered a .45-caliber handgun loaded with 10 rounds and attached to a second magazine containing 9 more rounds.  There was also a bag containing loose ammunition and a black ski mask located in the van.  Black ski masks were also recovered from Grossman, Sharpe, and Whitaker.  Kenneth Grossman and his co-conspirators possessed firearms in furtherance of their drug trafficking activities.  Grossman had previous felony convictions and was therefore prohibited from possessing firearms or ammunition.

All nine defendants have pleaded guilty to their roles in the drug conspiracy or for possessing a firearm in the van with Grossman, including; Dana Dunnock, age 21; Knowledge Sharpe, age 19; Quran Smoot, age 21; and Anthony Whitaker, age 24, all of Baltimore.  Six defendants, in addition to Kenneth Grossman, have been sentenced including Sharpe who was sentenced to 12½ years in federal prison; Whitaker who was sentenced to 13 years in federal prison; and Dunnock who was sentenced to 135 months in federal prison. 

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

United States Attorney Robert K. Hur commended the FBI and the Baltimore Police Department for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Christine Goo and Brandon K. Moore, who are prosecuting the case.

# # #

 

Greenbelt, Maryland – Former Maryland State Delegate Tawanna P. Gaines, age 67, of Berwyn Heights, Maryland, pleaded guilty today to a federal wire fraud charge, admitting that she converted more than $22,000 in campaign funds to her personal use.  

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office.

“Our elected officials are entrusted to make decisions in the best interests of the people they represent, not to use their positions of authority to line their own pockets,” said United States Attorney Robert K. Hur.  “We will pursue and prosecute those who betray the public trust and break the law, and bring them to justice.”   

“Those who serve in public office positions must uphold the public’s trust. Sadly, Tawanna Gaines abused her position for personal gain,” said Special Agent in Charge Jennifer Boone of the FBI's Baltimore Division. “Today’s plea announcement sends a signal that the FBI will investigate any public official who attempts to abuse their position of trust to enrich themselves.”

According to her plea agreement, Gaines was a Maryland State Delegate from December 2001 through the present, representing District 22, which covered portions of Prince George’s County.  Over her years in the House of Delegates, Gaines held many committee assignments, including vice-chair of the Appropriations Committee and Assistant Majority Leader.  The “Friends of Tawanna P. Gaines” (FTPG) candidate committee was the name of the finance entity for the Gaines campaign for Maryland State Delegate from June 2002 to the present.  FTPG was a regulated state election campaign committee with a designated bank account.  Separately, Gaines held exclusive control over a PayPal account used to accept electronic donations to FTPG which was not disclosed in State campaign finance filings.

Gaines admitted that from at least January 2015 through April 2018, she defrauded the campaign and its contributors of more than $22,000.  Specifically, Gaines solicited campaign contributions, falsely representing to contributors that the funds would be used to facilitate her reelection and maintain her leadership positions within the Maryland General Assembly.  Gaines accepted donations from campaign contributors into the FTPG PayPal account, then without authorization and in violation of Maryland campaign finance laws, utilized campaign funds from the FTPG account for her personal use.  Gaines admitted that she received campaign contributions and converted them to her own use without causing the contributions to be identified on reports made to the Maryland State Board of Elections.

As detailed in her plea agreement, Gaines used the campaign funds from the FTPG PayPal account to pay for personal expenses, such as fast food, hair styling, dental work, a cover for the pool at her personal residence, an Amazon Fire TV stick, Amazon Prime membership, and payments to Amazon.com.  In addition, during the course of the conspiracy Gaines withdrew a total of approximately $1,952.75 in cash from ATM machines and electronically transferred at least $2,061.55 from the FTPG PayPal account directly to her personal checking account.  The total loss as a result of Gaines’ fraud was at least $22,565.03.  As part of her plea agreement, Gaines is required to forfeit and pay restitution in that amount.

Gaines faces a maximum sentence of 20 years in federal prison for wire fraud.  U.S. District Judge Theodore D. Chuang has scheduled sentencing for January 3, 2020, at 10:00 a.m. She is released on her own recognizance under the supervision of U.S. Pretrial Services.

United States Attorney Robert K. Hur commended the FBI for its work in the investigation.  Mr. Hur thanked Assistant U.S. Attorney Thomas P. Windom, who is prosecuting the case.

# # #

Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow today sentenced Curlee Smittee, Jr., age 47, of Baltimore, to 46 months in federal prison, followed by five years of supervised release, for conspiracy to commit wire fraud and bank fraud, and for bank fraud, resulting in losses of more than $373,000.  Judge Chasanow also entered an order requiring Smittie to pay restitution of $342,776.89.

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office.

According to Smittee’s plea agreement, from March 2013 through July 29, 2015, while Smittee was on supervised release from a previous federal fraud conviction, he and his long-time romantic partner, Douglina Rosa Battle, conspired to defraud at 15 banks and credit card companies.

As detailed in his plea agreement, Smittee and Battle submitted fraudulent credit card and loan applications using false employment and earnings information, and false personal information, including name, address and social security numbers. Once the cards and loans were obtained, Smittie and Battle used them primarily for personal spending, but also applied some of the funds to avoid or postpone default on other fraudulent loans or credit cards.  For example, Smittee submitted fraudulent applications to obtain car loans, but after obtaining the loan did not purchase the vehicle, instead depositing the check into a bank account controlled by Smittee and/or Battle.

In all, Smittee and Battle obtained a total of 53 credit cards and personal loans from 15 banks and financial services companies, resulting in losses of more than $373,000.  Eleven of the credit cards were obtained by Smittee while he was on federal pretrial release after pleading guilty to a federal fraud charge, in violation of the requirement that he “not open any new lines of credit without prior approval of Pretrial Services.”  

Douglina Rose Battle, age 43, of Baltimore, also pleaded guilty to the fraud scheme and was sentenced to four months in federal prison, followed by four months of home detention as part of three years of supervised release.  Battle was also ordered to pay restitution of $188,746.81.                

United States Attorney Robert K. Hur praised the FBI for its work in the investigation.  Mr. Hur thanked Assistant U.S. Attorney Jefferson M. Gray, who prosecuted the case.

# # #

 

Baltimore, Maryland – U.S. District Judge Catherine C. Blake today sentenced Shakeen Davis, a/k/a “Creams,” age 25, of Baltimore, Maryland to 30 years in federal prison, followed by five years of supervised release, for racketeering and drug conspiracies related to his participation in the gang activities of the Murdaland Mafia Piru (MMP), a subset of the Bloods gang.  Davis was also convicted of possession with intent to distribute crack cocaine; two counts of possession of a firearm by a felon; and possession of a firearm in furtherance of a drug trafficking crime.  The evidence established that Davis attempted to murder two individuals on May 30, 2015, firing multiple rounds at his intended victims with an assault rifle in the middle of a busy intersection in broad daylight.  The jury returned its guilty verdict on April 30, 2019.

“Armed drug traffickers are on notice that federal, state and local law enforcement are working together to target leaders and key members of violent gangs,” said U.S. Attorney Robert K. Hur. “We will not tolerate those who peddle death through drugs and gun violence in our neighborhoods.  Shakeen Davis will now spend 30 years in federal prison.  This sentence sends a strong message that gun crime can lead to federal time, where there is no parole—ever.  Please put down the gun.  You’ll save a life, maybe even your own.”

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; Commissioner Michael Harrison of the Baltimore Police Department; Chief Melissa R. Hyatt of the Baltimore County Police Department; Baltimore City State’s Attorney Marilyn J. Mosby; and Baltimore County State’s Attorney Scott Shellenberger.

According to court documents and the evidence presented at the six-week trial, MMP, also known as the “Mob” or “Mobsters,” is a violent subset of the Bloods gang that operates in Maryland and elsewhere.  MMP was modeled after the Italian Mafia and was organized hierarchically, with “the Don” at the top and various “Bosses,” “Underbosses,” “Capos,” “Lieutenants,” and “Mobsters” underneath.  For many years, MMP has controlled the drug trade in large swaths of Northwest Baltimore City and neighboring Baltimore County, including Forest Park, Windsor Mill, Gwynn Oak, Howard Park, Woodlawn, and Walbrook Junction.  The gang’s drug shop in the 5200 block of Windsor Mill Road was particularly lucrative due to its close proximity to Interstate 70, and it frequently attracted drug customers driving from Western Maryland and neighboring states.  MMP’s members enriched themselves through drug trafficking and other criminal activities, and using violence and threats of violence to intimidate or retaliate against witnesses, protect the gang’s territories, enforce debts, and eliminate rivals.

According to trial testimony, one of the founding principles of the gang was a rule against cooperation with law enforcement.  Violations of this rule were punishable by death.  MMP members enhanced their status within the gang by carrying out acts of violence against rivals.  For instance, members could earn a lightning bolt tattoo for “killing for the Mob.”  MMP members, including Davis, used social media websites to assert the gang’s claim to particular drug territories, intimidate rival gangs and drug traffickers, enhance MMP’s status, and enhance members’ status within the gang.  Davis posted photographs and comments to social media websites in which he boasted about his membership in MMP and flaunted firearms.  For example, on March 9, 2016, Davis posted a comment that said, “Go Against the MOBB GET MURDERED.”  The evidence proved that members and associates of MMP participated in the gang’s affairs through a pattern of racketeering activities, including murder, extortion, witness tampering and retaliation, and drug distribution.  According to witness testimony, Davis sold both cocaine and heroin and had guns, including an AR-15. 

According to trial evidence, on May 30, 2015, Davis attempted to murder two victims in furtherance of MMP.  Davis fired at least nine rounds at the two individuals with an assault rifle in broad daylight as the victims sat in their car at a busy intersection.  One individual suffered graze wounds to his back, and both victims suffered cuts from broken glass.  A witness testified that the shooting was in retaliation for the victims pulling a gun on another MMP member earlier that day.

On April 26, 2016, Davis was arrested by members of the Baltimore County Police Department.  The officers recovered a loaded, stolen, police-issue handgun, a loaded AR-15 rifle (with a shoulder strap), and several cell phones from the trunk of Davis’s vehicle.  They also recovered a balaclava mask, a small, digital scale, and a bottle of the cutting agent Inositol.  Davis is prohibited from possessing firearms or ammunition as a result of a previous felony firearm conviction.

One of the cell phones seized from Davis on April 26, 2016 contained hundreds of text messages in which Davis arranged drug transactions with customers. These included text messages in which customers asked for specific quantities of “boy” and “girl”—street terms for heroin and cocaine, respectively, as well as texts in which Davis advertised the potency of the drugs he had for sale—e.g., “Got fire,” or “I got a bomb.”  Importantly, on April 9, 2016, a drug customer who had recently purchased drugs from Davis sent him a text message indicating that he had overdosed and wound up in the hospital.  The customer said: “Made it through detox, ended up in the hospital but I’m better now, I’ll send people your way if they are looking.”  The cell phone also contained text messages in which Davis indicated that he was “beefing with” certain individuals and was “hunting” for them in order to kill them.

On August 5, 2016, Davis received a message from a co-defendant using coded language to ask Davis to get three guns.  On the morning of August 10, 2016, that co-defendant and others abducted, bound, robbed, and murdered Ricardo Johnson, a/k/a “Uncle Rick,” then attempted to set his body on fire.  Johnson was found hog-tied, blindfolded, and with over 20 bullet wounds, in the back of a stolen van in at 6:25 a.m. on August 10.  The government presented evidence at trial that Davis was involved in Johnson’s murder, including witness testimony that was present when the co-defendant discussed kidnapping and robbing “Uncle Rick,” whom they believed had a lot of drugs.  Davis also spoke with the co-defendant by phone at 3:07 a.m. on August 10—roughly half an hour after Johnson had been abducted, and had 12 phone calls with the co-defendant on the day before the murder.

On April 29, 2019, the final day of trial before the case went to the jury for deliberation, Davis was caught trying to smuggle razor blades into the federal courtroom.  A Deputy U.S. Marshal conducted a routine search of Davis’s person before he was brought into the courtroom and recovered two razor blades, approximately 3/4-inch in length, located inside each of Davis’s shoes.  

Twenty-five defendants have been convicted in the case, including Davis, MMP leader Dante Bailey, Randy Banks, Jamal Lockley, and Corloyd Anderson, who were convicted on April 30, 2019 after a six-week trial.  Twenty defendants, including Davis, have been sentenced, with most receiving between 10 and 30 years in federal prison.  Judge Blake has scheduled sentencing for Dante Bailey, a/k/a “Gutta,” “Almighty,” and “Wolf,” age 40, of Windsor Mill, Maryland on November 8, 2019; for Jamal Lockley, a/k/a “T-Roy” and “Droid,” age 40, of Baltimore, on November 4, 2019; and for Corloyd Anderson, a/k/a “Bo,” age 36, of Owings Mills, Maryland on November 26, 2019.  They all face a maximum of life in prison.  The final defendant is awaiting trial.

This case was made possible by investigative leads generated from the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) National Integrated Ballistic Information Network (NIBIN). NIBIN is the only national network that allows for the capture and comparison of ballistic evidence to aid in solving and preventing violent crimes involving firearms. NIBIN is a proven investigative and intelligence tool that can link firearms from multiple crime scenes, allowing law enforcement to quickly disrupt shooting cycles. For more information on NIBIN, visit https://www.atf.gov/firearms/national-integrated-ballistic-information-network-nibin.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.

United States Attorney Robert K. Hur praised the ATF, the Baltimore City and Baltimore County Police Departments, and the Baltimore City and Baltimore County State’s Attorney’s Offices for their work in the investigation and prosecution.  Mr. Hur thanked Assistant United States Attorneys Christina A. Hoffman and Lauren E. Perry, who are prosecuting this Organized Crime Drug Enforcement Task Force case.

# # #

 

Greenbelt, Maryland – Correctional Officer Janel Griffin, age 41, of Baltimore, pleaded guilty today to a federal racketeering charge for participating in a scheme to smuggle contraband into the Maryland Correctional Institute Jessup (MCIJ), including narcotics, unauthorized flash drives, tobacco, and cell phones into the prison.  Inmate Corey Alston, a/k/a “C,” age 29, pleaded guilty on September 18, 2019, to the same charge.

The guilty pleas were announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone, of the Federal Bureau of Investigation, Baltimore Field Office; and Secretary Robert L. Green, of the Maryland Department of Public Safety and Correctional Services.

“This case demonstrates that we will not tolerate employees in positions of trust violating their oaths.  Federal, state, and local officials will continue to work together to root out corrupt employees and others who undermine the administration of justice at our prisons,” said U.S. Attorney Robert K. Hur.

According to court documents, MCIJ was a medium-security prison in Anne Arundel County, Maryland, that housed approximately 1,100 male inmates, with 262 custody staff or Correctional Officers (COs) and 52 non-custody staff, including case management, medical, and administrative staff.

According to her plea agreement, Griffin smuggled contraband into MCIJ for at least inmate Corey Alston, including narcotics and tobacco.  At Alston’s direction, Griffin met with co-conspirator facilitators, including Tyirisha Johnson, to receive contraband as well as bribe payments.  Recorded jail calls between Alston and others confirm that between April 16 and August 14, 2017, Griffin met with Johnson or another facilitator on at least six occasions to obtain contraband and at least $2,800 in bribe payments.  Griffin smuggled the contraband, including Suboxone and Percocet, into MCIJ.

Inmate Corey Alston admitted that he was a leader in the racketeering conspiracy.  As detailed in the plea agreement, Alston conspired with four outside facilitators, including Johnson, who obtained and packaged contraband, met with the correction officers and employees to provide contraband and bribe payments, and managed the proceeds of illegal contraband sales for Alston.  According to his plea agreement Griffin and another MCIJ employee brought the contraband into the prison for Alston, in exchange for bribe payments, and Alston conspired with another inmate to sell the contraband to other inmates. 

Alston was overheard by law enforcement on a series of recorded calls arranging for contraband to be smuggled into MCIJ and arranging payment for the contraband and for bribes.

Griffin and Alston each face a maximum sentence of 20 years in prison.  U.S. District Judge Paula Xinis has scheduled sentencing for Griffin on February 6, 2020, at 1:00 p.m.  Tyirisha Johnson, age 23, of Baltimore, pleaded guilty to her role in the conspiracy on July 23, 2019.  Johnson and Alston are also expected to be sentenced in February 2020.

This case arose from the efforts of the Maryland Prison Task Force, coordinated by the U.S. Attorney’s Office and comprised of local, state, and federal stakeholders that meet regularly to share information and generate recommendations to reform prison procedures and attack the gang problem that has plagued Maryland in recent years.  The work of the Task Force previously resulted in the federal convictions of more than 80 defendants, including 16 correctional officers, at the Eastern Correctional Institution, and 40 defendants, including 24 correctional officers, at the Baltimore City Detention Center.

United States Attorney Robert K. Hur commended the FBI and the Department of Public Safety and Correctional Services for their work in the investigation. The U.S. Attorney expressed appreciation to the Department of Public Safety and Correctional Services, whose staff initiated the MCIJ investigation and have been full partners in this investigation.  Mr. Hur thanked Assistant U.S. Attorneys Lauren E. Perry and Sean R. Delaney, who are prosecuting this case.

# # #

 

Baltimore, Maryland – Malik Moseley, age 28, of Baltimore, Maryland, pleaded guilty today to a federal charge for being a felon in possession of a firearm.  

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Assistant Special Agent in Charge Don A. Hibbert of the Drug Enforcement Administration, Baltimore District Office; Commissioner Michael Harrison of the Baltimore Police Department; and Anne Arundel County Police Chief Tim Altomare.

“This case is part of the initiative undertaken by state and federal law enforcement to reduce fentanyl overdoses in Baltimore.  Under this program, prosecutors in Baltimore City, the U.S. Attorney’s Office, and DEA agents are reviewing every arrest involving distribution of fentanyl in Baltimore, with the support of the Baltimore City Police Department’s Laboratory Section,” said U.S. Attorney Robert K. Hur.  “I am grateful to Baltimore City State’s Attorney Marilyn Mosby for providing a cross-designated Assistant State’s Attorney to facilitate and coordinate this review.”

According to his guilty plea, in September and October 2018, members of the Baltimore Police Department conducted two controlled purchases of drugs from Moseley at a residence in the 400 block of Freeman Street in South Baltimore.  Law enforcement officers also conducted covert surveillance outside the residence and observed Moseley and another individual engage in suspected hand-to-hand drug transactions in front of the home. 

Based on this information, BPD officers obtained a search warrant for the residence, which they executed on October 17, 2018.  At the time, Moseley had an open arrest warrant from Anne Arundel County, Maryland.  While approaching the residence, the officers observed Moseley standing outside, and they immediately apprehended and arrested him.  In a search of Moseley’s person incident to his arrest, the officers recovered a 9mm semi-automatic pistol, loaded with eight rounds of ammunition; a plastic bag containing nine suboxone strips, and $790 in cash.  Moseley had a previous felony conviction and was therefore prohibited from possessing a firearm or ammunition. 

During the search of the residence, the officers recovered bags containing a total of approximately 47 grams of fentanyl; a bag containing approximately 5 grams of a heroin-fentanyl mixture; drug paraphernalia, including three digital scales with drug residue; razor blades with residue; a glass plate with residue; a pill press with residue; and various drug packaging material.  In addition, law enforcement recovered a gun holster; two remote-control surveillance drones; a home surveillance system with two high-definition cameras; $101 in cash, and $30 in counterfeit currency. 

Moseley faces a maximum of 10 years in federal prison.  U.S. District Judge Catherine C. Blake has scheduled sentencing for January 23, 2020 at 10:30 a.m.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

United States Attorney Robert K. Hur commended the DEA, the Baltimore Police Department, and the Anne Arundel County Police Department for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorney Christina A. Hoffman, who is prosecuting the case.

# # #

 

Defrauded Investors Across the Country

 Baltimore, Maryland – U.S. District Judge Richard D. Bennett today sentenced Kevin B. Merrill, age 54, of Towson, Maryland, to 22 years in federal prison, followed by three years of supervised release, for conspiracy and wire fraud arising from a $396 million investment fraud scheme that operated from 2013 through September 2018, with an additional $260 million in attempted investments at the time of Merrill’s arrest.  Judge Bennett also ordered Merrill to pay restitution in the full amount of the victims’ losses, which will be determined later, but which is at least $189,166,116.  Judge Bennett will also enter an order of forfeiture, with the exact amount of forfeiture still to be determined.

The U.S. Securities and Exchange Commission (SEC) has a pending parallel civil action in this matter.         

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Robert W. Manchak of the Federal Housing Finance Agency, Office of Inspector General. 

“Kevin Merrill lured investors through an elaborate web of lies, duping them into paying millions of dollars into this Ponzi scheme,” said U.S. Attorney Robert K. Hur.  “As a result of this scheme, a number of victims were devastated, losing their life savings.  This sentence sends a strong message that federal prosecutors, federal agents, and our SEC partners will continue to work together to investigate and prosecute those who perpetrate these kind of fraud schemes for their personal gain—leaving a wave of victims in their wake.”

“Considering there were hundreds of victims and millions of dollars lost, it is fitting that Kevin Merrill will be spending a significant amount of time in federal prison,” said Special Agent in Charge Jennifer Boone of the FBI's Baltimore Division. “The FBI, and our partners, are firmly committed to holding accountable fraudsters who victimize the public by selling a false bill of goods.”

According to his plea agreement, beginning in January 2013, Merrill and his co-conspirators, Jay B. Ledford and Cameron R. Jezierski, perpetrated a Ponzi scheme to defraud investors of more than $396 million.  Specifically, Merrill and Ledford invited investors to join them in purchasing consumer debt portfolios. Merrill knowingly used fictitious sales agreements and other documents, including tax returns, provided by Ledford, to induce individuals to invest with his companies, Delmarva Capital and Global Credit Recovery.  For 2013, Merrill deposited approximately $4.3 million from investors, while Ledford raised just over $186,000 from investors.  Thereafter, Merrill’s superior sales ability caused Ledford to assume a background role supplying Merrill with fictitious documents, while Merrill was the “front man,” promoting the fraudulent investments to potential investors.

Specifically, the conspirators falsely represented to investors that they would use the investors’ money to buy consumer debt portfolios and make money for them by (1) collecting the payments that people made on their debts or (2) selling the portfolios for a profit to other third-party debt buyers, in a practice called “flipping.”  According to court documents, the victim investors included small business owners, restauranteurs, construction contractors, retirees, doctors, lawyers, accountants, bankers, talent agents, professional athletes, and financial advisors, located in Maryland, Washington, D.C., Northern Virginia, Boulder, Texas, Chicago, New York, and elsewhere.

To induce investors to participate, Merrill and his co-conspirators falsely represented who they were buying the debt portfolios from and how much they were paying for the portfolios, whether they were investing their own funds, and their track record of success. According to their plea agreements, sometimes there was no underlying debt portfolio purchased with the investors’ money.  To conceal the truth, Merrill, Ledford, and Jezierski created imposter companies with names similar to actual consumer debt sellers or brokers and opened bank accounts in the names of those imposter companies.  In addition, to lend credibility to the transactions, Ledford created false portfolio overviews, created false sales agreements which used the names and forged signatures of actual employees of the sellers, created false collections reports, and falsified bank statements and merchant account reports.  In late 2014, Ledford transferred Cameron Jezierski to manage debt collections for Riverwalk/DeVille.  DeVille had a collections center in Euless, Texas, and the conspirators began to invite prospective investors to tour Riverwalk’s office and the collections center, which added substance to their claims regarding the success of their portfolio purchasing strategy and collections efforts.  In December 2017, Ledford recruited Jezierski to the criminal conspiracy because his analytical skills enabled him to contribute significantly to creating false documentation to induce investors to invest, and to conceal the mark-up Merrill and Ledford added to the purchase price charged to investors for debt portfolios.

Further, Merrill and Ledford falsely represented that the monies the conspirators paid to investors were “proceeds” from collections and/or flipping debt portfolios, when in fact, the proceeds were paid from funds provided by other investors.  Merrill and Ledford provided monthly or quarterly reports to investors regarding the “purported progress of the portfolio and its recovery,” which Merrill and Ledford created.  From 2013 to 2018, the scheme to defraud took in over $396 million, and at the time of their arrests, the co-conspirators were attempting to obtain an additional $260 million from investors.  Ledford assisted Merrill to divert investors’ funds to purchase a home in Naples, Florida, and also helped Merrill falsify records to the bank lender.  Ledford diverted fraud proceeds to purchase and renovate a home in Las Vegas, Nevada;  refinance a home in Texas; gamble at casinos; purchase luxury automobiles and jewelry; and to support a lavish lifestyle.

Finally, Merrill admitted that while the scheme was ongoing, he met with the FBI, lied to the investigating agents, and provided false documents to the FBI.  As detailed in his plea agreement, after his arrest, Merrill attempted to obstruct justice by causing his wife to remove assets from their Naples, Florida home on October 13, 2018, and by preparing a handwritten note instructing his wife to conceal assets from the court-appointed receiver, which he intended to hold up to the glass in the detention center on December 5, 2018, when his wife visited.  These actions violated the restraining order with which Merrill was served in the criminal case, and the preliminary injunction ordered by the Court in the SEC’s civil action.

The Court has appointed a receiver to marshal the assets for the benefit of the victims.

U.S. District Judge Richard D. Bennett has scheduled sentencing for Jay B. Ledford, age 55, of Westlake, Texas and Las Vegas, Nevada, on October 29, 2019, at 10 a.m. and for Cameron Jezierski, age 28, of Fort Worth, Texas, on November 14, 2019, at 3:00 p.m.  Kevin Merrill’s wife, Amanda Merrill, age 30 of Towson, Maryland, pleaded guilty on October 9, 2019, to conspiracy to remove and conceal assets in violation of court orders, and is scheduled to be sentenced on January 22, 2020, at 3:00 p.m.  Merrill and Ledford have been detained since their arrest on September 18, 2018, and Amanda Merrill and Cameron Jezierski are released under the supervision of U.S. Pretrial Services.

United States Attorney Robert K. Hur commended the FBI in Baltimore, Dallas, Las Vegas and Tampa; the Federal Housing Finance Agency, Office of the Inspector General; and the SEC for their work in this investigation.  Mr. Hur thanked Assistant U.S. Attorneys Joyce K. McDonald and Martin J. Clarke, who are prosecuting the criminal case.

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Greenbelt, Maryland – A federal grand jury today returned an indictment charging Charles Victor Kopfstein-Penk, age 74, of Bethesda, Maryland, with possession of child pornography.  Kopfstein-Penk, a music teacher who gave lessons out of his home, was arrested earlier this year on related state charges. 

The federal indictment was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge John Eisert of Homeland Security Investigations (HSI) Baltimore; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Montgomery County State’s Attorney John McCarthy.

According to the indictment, Kopfstein-Penk possessed images depicting the sexual abuse of children, including images of child pornography involving a prepubescent minor.  The indictment also seeks the forfeiture of any property traceable to profits from the offense or used to commit the offense, including a desk top computer and five external hard drives.

Anyone who may have information about possible victims or details related to the investigation of Charles Victor Kopfstein-Penk is asked to contact the Maryland Center for Missing and Exploited Children at 1-800-637-5437.

If convicted, Kopfstein-Penk faces a maximum sentence of 20 years in federal prison for possession of child pornography.  Kopfstein-Penk had an initial appearance in U.S. District Court in Greenbelt, and was released under the supervision of U.S. Pretrial Services.

An indictment is not a finding of guilt.  An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings. 

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 Attorney’s 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.justice.gov/psc.  For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.       

United States Attorney Robert K. Hur commended HSI, the Maryland State Police Internet Crimes Against Children Task Force, and the Montgomery County State’s Attorney’s Office for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Rajeev Raghavan and Kristi N. O’Malley, who are prosecuting the federal case.

# # #

 

Baltimore, Maryland – A federal jury convicted Maximo Gondres-Medrano, age 35, of Baltimore, Maryland, after a three-day trial for the federal charge of possession with intent to distribute more than 400 grams of fentanyl and heroin.  The jury returned its verdict late on October 9, 2019.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge John Eisert of Homeland Security Investigations (HSI) Baltimore; and Commissioner Michael Harrison of the Baltimore Police Department.

“State and federal law enforcement and prosecutors in Baltimore City are working together to arrest and prosecute those who peddle deadly fentanyl on our streets and in our neighborhoods,” said U.S. Attorney Robert K. Hur.  “I am grateful to Baltimore City State’s Attorney Marilyn Mosby, who shares my resolve and has cross-designated an Assistant State’s Attorney from her office, so that we are effectively using our resources to coordinate our efforts.  We are committed to reducing overdose deaths from fentanyl and from all opioids.”

According to evidence presented at his three-day trial, on September 8, 2017, federal law enforcement prepared an operation to arrest and search Gondres-Medrano based on information that he would be transporting a large quantity of narcotics.  The agents observed Gondres-Medrano leave his residence in the 800 block of Whitelock Avenue, in Northwest Baltimore, carrying a shoebox believed to contain narcotics, and then enter the passenger seat of a vehicle.  The vehicle was stopped and law enforcement recovered the box, which contained a wrapped package of almost 793 grams of a mixture of heroin and fentanyl—a quantity sufficient to kill hundreds of thousands of people.  During the investigation, federal law enforcement learned that on August 24, 2017, Gondres-Medrano received a shipment of suspected narcotics in a commercial mail shipping envelope from Mexico.  Gondres-Medrano used his phone to record a series of instructional videos of himself opening the envelope while he demonstrated how the narcotics were successfully concealed within the envelope so that it would not be detected.  In the videos, Gondres-Medrano filmed himself opening the envelope, peeling back a black film that masked the drugs that came from Mexico, and showing the suspected heroin/fentanyl to viewers. 

In a recorded interview with law enforcement after his arrest, Gondres-Medrano admitted that the August 24, 2017 shipping envelope contained heroin, and provided information about his drug trafficking activity.  Gondres-Medrano admitted that he had multiple sources of supply of heroin and ordered kilogram-sized quantities from them.  Gondres-Medrano testified at trial and denied that he carried the shoebox of narcotics to the car on September 8, 2017, and asserted that he never looked inside the nearly 793 gram package to see that it contained narcotics.  However, on cross examination, he admitted that he had taken delivery of the narcotics, which he knew to contain heroin, from one of his sources of supply in order to deliver it to another individual.

Gondres-Medrano faces a mandatory minimum sentence of 10 years in federal prison and a maximum sentence of life in federal prison.  U.S. District Judge George L. Russell, III has not yet scheduled Gondres-Medrano’s sentencing.

United States Attorney Robert K. Hur commended the FBI, HSI, and the Baltimore Police Department for their work in the investigation.  Mr. Hur thanked Special Assistant U.S. Attorney Jeffrey M. Hann, an Assistant State’s Attorney from the Office of the State’s Attorney for Baltimore City who is cross-designated to handle fentanyl and other drug cases in federal court, and Assistant U.S. Attorney Derek E. Hines, who are prosecuting the case.

# # #

 

Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Knowledge Sharpe, age 19, of Baltimore Maryland, to 12 ½ years in federal prison, followed by five years of supervised release, for conspiracy to distribute fentanyl, heroin, and cocaine, and for assaulting a federal officer.

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; U.S. Marshal Johnny Hughes; Commissioner Michael Harrison of the Baltimore Police Department; and Anne Arundel County Police Chief Tim Altomare.

“Knowledge Sharpe brought the deadly combination of guns and drugs to the streets of Baltimore,” said U.S. Attorney Robert K. Hur.  “Not only did he endanger members of his own community, but he also attacked a federal law enforcement officer.  This sentence demonstrates that we will hold accountable criminals who attempt to terrorize law-abiding citizens and those who are sworn to protect them.  Sharpe will serve over 12 years in a federal prison far from home, where there is no parole—ever.  Please put down the gun.  You’ll save a life, maybe even your own.”

According to his plea agreement, from January 2017 until July 2018, Sharpe conspired to distribute fentanyl, heroin, and cocaine as a member of the Young Finesse Kings (YFK), a drug shop that operated primarily in the German Park area of Baltimore City.  During the course of the investigation, investigators from the FBI and the Baltimore Police Department obtained authority to intercept wire and electronic communications of members of the YFK drug shop and conducted physical surveillance of the YFK drug shop observing many instances of drug trafficking. 

On April 11, 2018, investigators intercepted phone calls which led them to believe that Sharpe and several co-defendants were going to commit a retaliatory act of violence, after someone had shot at Sharpe’s car.  Sharpe contacted his co-conspirators to get them to assist with the retaliation.  Investigators immediately responded to the area where the conspirators had discussed meeting: Mount Royal Terrace and North Avenue, in Baltimore City.  While in the vicinity, investigators observed a gold Nissan van occupied by up to six individuals parked near Druid Park Lake.  That Nissan van was registered to an address used by one of Sharpe’s co-defendants.  The van left the area before investigators were able to stop it.  A short time later investigators learned that a gun was discharged in the area of 1700 North Carey Street. Investigators checked the location information of Sharpe’s cellular telephone and compared it to time that the discharging occurred.  At the time of the discharging, Sharpe’s cellular telephone was at a location in the same block of Carey Street.

Shortly afterwards, investigators located the gold van in the parking lot of the Security Mall in Baltimore.  A short time later, Sharpe and co-defendants Kenneth Grossman, Dana Dunnock, Anthony Whitaker, Quran Smoot, and another individual were seen exiting the mall and entering the van. Investigators surrounded the vehicle and stopped the van before it could exit the parking spot. Immediately upon opening the front passenger door, a firearm was observed on the front passenger floorboard. All occupants were detained and a search of the van showed six firearms within easy reach of all occupants. Specifically, a CM11 assault pistol with a loaded magazine was located on the front passenger-side floorboard (where Sharpe was sitting), a .32-caliber revolver loaded with 6 rounds and a .380-caliber revolver with a loaded magazine were in the rear third row cup holder and on the rear third row seat, respectively (where Grossman and the other individual were sitting), a 9mm pistol with a loaded magazine in the front center console near the driver (where Smoot was sitting), from Whitaker’s waistband area an officer recovered a .40-caliber handgun loaded with 5 rounds, and from Dunnock’s front waistband area an officer recovered a .45-caliber handgun loaded with 10 rounds and attached to a second magazine containing 9 more rounds.  There was also a bag containing loose ammunition and a black ski mask located in the van.  Black ski masks were also recovered from Sharpe, Whitaker, and Grossman.  Sharpe admitted that he possessed a firearm in furtherance of his drug trafficking activities.  At sentencing, prosecutors proved that Sharpe also made a credible threat of violence.   

Sharpe also attacked an employee of the Department of Public Safety and Correctional Services (DPSCS) while he was a pretrial detainee at the Chesapeake Detention Facility, which is run by the U.S. Marshals and maintained by the DPSCS.  The victim had denied Sharpe’s request for a second meal.  When the victim returned to Sharpe’s housing area later, Sharpe sneaked up behind the victim, struck the victim with a closed fist to his face, and continued to strike the victim after he had fallen to the ground.  Other federal detainees also struck the victim, as well as another person who had come to the victim’s aid.  After the fight, which was broken up by deploying pepper spray, the two victims of the attack were treated for their injuries.

All nine defendants have pleaded guilty to their roles in the drug conspiracy or for possessing a firearm in the van with Sharpe, including Kenneth Grossman, age 29; Dana Dunnock, age 21; Quran Smoot, age 21; and Anthony Whitaker, age 24, all of Baltimore.  Six defendants have been sentenced including Sharpe, Dunnock who was sentenced to 135 months in federal prison, and Whitaker who was sentenced to 13 years in federal prison. 

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

United States Attorney Robert K. Hur commended the FBI, the U.S. Marshal Service, the Baltimore Police Department, and the Anne Arundel County Police Department for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Christine Goo and Brandon K. Moore, who are prosecuting the case.

# # #

 

Baltimore, Maryland – Amanda Mahlstedt Merrill, age 30, of Towson, Maryland, pleaded guilty today to the federal charge of conspiracy to remove property to prevent seizure, obstruct justice, and disobey court orders. 

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Robert W. Manchak of the Federal Housing Finance Agency, Office of Inspector General. 

“This prosecution demonstrates our commitment to the integrity of the judicial process.  When the district court enters an order in a case, we expect the affected persons to abide by the order, not conspire to remove and hide assets,” said U.S. Attorney Robert K. Hur.  “We will prosecute those, like Amanda Merrill, who hide assets which are subject to seizure, who obstruct justice, and who attempt to keep ill-gotten gains for their own benefit rather than restoring them to the victims of fraud.”

According to her plea agreement, on September 11, 2018, Amanda Merrill’s husband, Kevin Merrill, was indicted on federal charges of conspiracy to commit wire fraud, identity theft, money laundering conspiracy, and money laundering, in connection with a $394 million Ponzi scheme.  The indictment included a forfeiture allegation for $39 million, six real estate properties, 25 cars, a boat, an interest in an aircraft, an insurance policy, and jewelry.  The properties to be forfeited included the Merrills’ residence in Towson and a home on Spyglass Lane in Naples, Florida.  On September 13, 2018, the Securities and Exchange Commission (SEC) brought a civil enforcement action against Kevin Merrill, other persons and entities, and Kevin Merrill’s companies.  The Court issued a temporary restraining order freezing assets and granting other emergency relief and appointed a temporary receiver.  Anyone receiving notice of the receivership order who possessed property, business books, records, accounts, or assets of the receivership parties was directed to provide those items to the receiver.

On September 18, 2018, Kevin Merrill was arrested at his residence in Towson and agents seized jewelry, his watch collection, cars, and over $520,000 in cash, mostly from a safe.  Kevin Merrill was subsequently ordered to be detained pending trial as a risk of flight and a risk of obstruction of justice.  FBI Special Agents provided Amanda Merrill with a receipt of items taken and asked her to disclose any information to assist agents in locating items not collected at the residence.  Amanda Merrill was counseled by the FBI agents to be completely truthful in her answers and was warned against attempting to hide or move assets.  Amanda Merrill’s counsel was also provided with a copy of the restraining order and the receivership order.

Nevertheless, beginning on October 3, 2018, Amanda Merrill redeemed the points on an American Express business credit card belonging to Kevin Merrill, even though she was not an authorized user.  Amanda Merrill received 127 gift cards worth $26,075 for retail businesses such as Target, Home Depot, Nordstrom, Sephora, and Starbucks. 

On October 13, 2018, Amanda Merrill and another individual traveled by plane to Naples, Florida, to the Spyglass Lane property, which the Merrills had purchased earlier that year for $10 million.  The Merrills were captured on several recorded jail calls that day discussing Amanda Merrill’s trip to the Florida property, which they referred to in coded language as “the restaurant.”  On the recorded jail calls, Kevin and Amanda Merrill discussed how to open the safe at the property.  Amanda Merrill removed cash and other items from the home, which she placed into her purse, two large suitcases, and a carry-on bag.  She told the other individual who accompanied her on the trip that she intended to tell her attorney that she had found the safe unlocked and empty.  Video footage from BWI Airport security for October 13, 2018 shows Amanda Merrill returning from Florida rolling a carry-on bag and holding a large purse.  Video footage revealed that Amanda Merrill also retrieved two large suitcases from the baggage carousel.  American Express statements for Kevin Merrill’s business card (for which Amanda Merrill was not an authorized user) also show the purchase of plane tickets for Amanda Merrill and her companion, and payment for a rental car.  Amanda Merrill’s American Express statement shows two airline charges of $75 each for two pieces of luggage, each of which was over the 50-pound limit, for the trip from Ft. Myers, Florida to BWI.

On October 30, 2018, counsel for Amanda Merrill e-mailed a letter directed to “Government, SEC, and Receiver,” which stated, among other things, that Amanda Merrill and her companion had gone to the house in Naples, Florida and “the unlocked safe at the house was empty,” and that they had removed six boxes of children’s clothing and personal items.  The statement was false because Amanda Merrill misrepresented what had happened in Florida to her counsel and omitted the cash, the over-weight-limit suitcases, and the carry-on luggage in talking with her attorney.   

In early November 2018, FBI Special Agents executed search warrants at the Merrill homes in Towson and Naples.  In the Towson home, agents discovered approximately $15,378 in cash, $8,878 in a purse in Amanda Merrill’s bedroom, with the remainder in a closet drawer.  Agents also located the two large suitcases, which were still tagged from the trip, but were empty, as well as the six boxes of children’s clothing and personal items in the Towson home.  In the Florida home, agents used the transcription of the recorded jail call to gain access to the safe, which was empty.

According to the plea agreement, at sentencing the government will recommend that Amanda Merrill serve 12 months on electronic home monitoring with work release and restitution.  U.S. District Judge Richard D. Bennett has scheduled sentencing for January 22, 2020 at 3:00 p.m.

Kevin Merrill, age 54, of Towson, previously pleaded guilty to conspiracy and wire fraud arising from his role in a $394 million investment fraud scheme that operated from 2013 through September 2018.  Merrill faces a maximum of 40 years in prison for the wire fraud conspiracy and for wire fraud, as well as a possible fine of $500,000, or twice the gross gain, at his sentencing hearing scheduled to begin on October 10, 2019.

United States Attorney Robert K. Hur commended the FBI in Baltimore and Tampa; the Federal Housing Finance Agency, Office of the Inspector General; and the SEC for their work in this investigation.  Mr. Hur thanked Assistant U.S. Attorneys Joyce K. McDonald and Martin J. Clarke, who are prosecuting the criminal case.

# # #

 

Baltimore, Maryland – On October 8, 2019, U.S. District Judge Deborah K. Chasanow  sentenced Stephen Bayne Fields, Jr., age 47, of Towson, Maryland, to 12 years in federal prison, followed by lifetime supervised release, for distribution of child pornography.  Fields admitted using multiple social media accounts to send and receive video and still images of children engaging, and being used to engage in, sexually explicit conduct via the Internet.  Judge Chasanow also ordered that, upon his release from prison, Fields must register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge John Eisert of Homeland Security Investigations (HSI); Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; Chief Melissa R. Hyatt of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.

According to Fields’ plea agreement, between July and September 2018, Fields used four social media accounts under alias names that were variations of a name beginning with the letter “T” and each included images of an adult female by that name as profile photos.  “T” was 20 years old at the time and was known personally to Fields, who obtained the profile photos for his alias accounts from a genuine social media account used by “T” in her own name.

Fields admitted that during this time, using the four social media accounts created using “T’s” name and photos, he sent and received child pornography on numerous occasions.  For example, as detailed in the plea agreement, while posing as “T” in July 2018, Fields sent messages to other social media users stating that he (or she) lived in Maryland and requesting “young girl pictures.”  Between July 24 and September 2018, Fields received at least five videos depicting prepubescent minors engaged in sexually explicit conduct from other social media users.  Fields also sent at least three videos and one still image depicting minors engaged in sexually explicit conduct to other users.

On August 30 and 31, 2018, Fields corresponded through the social media accounts with another user discussing that person’s sexual abuse of a seven-year-old minor female.  Fields received two videos from the user depicting an adult male engaging in sexually explicit conduct with a prepubescent female.  Fields also sent the other user a sexually explicit video.  During their conversations, Fields asked the user to send him photos or videos of the user sexually abusing the girl. 

Law enforcement became aware of Fields’ alias accounts through a series of Cybertipline reports made to the National Center for Missing and Exploited Children.  Internet Protocol addresses used in August 2018 to access three of these accounts were subscribed by Fields at his residence in Towson.  Law enforcement executed a search warrant at the residence and seized a laptop computer and other electronic devices.

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 Attorney’s 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.justice.gov/psc.  For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.       

United States Attorney Robert K. Hur commended the FBI, HSI-Baltimore, the Baltimore County Police Department, and the Baltimore County State’s Attorney’s Office for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorney Matthew J. Maddox, who prosecuted the federal case.

# # #

 

Greenbelt, Maryland – A federal criminal information was filed today charging Maryland State Delegate Tawanna P. Gaines, age 67, of Berwyn Heights, Maryland, with a federal wire fraud charge.  An initial appearance and arraignment is expected to be scheduled later this week in U.S. District Court in Greenbelt.

The indictment was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office.

According to the criminal information, Gaines was a Maryland State Delegate from December 2001 through the present, representing District 22, which covered portions of Prince George’s County.  Over her years in the House of Delegates, Gaines held many committee assignments, including vice-chair of the Appropriations Committee and Assistant Majority Leader.  The “Friends of Tawanna P. Gaines” (FTPG) candidate committee was the name of the finance entity for the Gaines campaign for Maryland State Delegate from June 2002 to the present.  FTPG was a regulated state election campaign committee with a designated bank account.  Separately, Gaines held exclusive control over a PayPal account used to accept electronic donations to FTPG which was not disclosed in State campaign finance filings.

The criminal information alleges that from at least January 2015 through April 2018, Gaines defrauded the campaign and its contributors of more than $22,000.  Specifically, the information alleges that Gaines solicited campaign contributions representing that the funds would be used to facilitate her reelection and maintain her leadership positions within the Maryland General Assembly.  Gaines allegedly accepted donations from campaign contributors into the FTPG PayPal account, then without authorization and in violation of Maryland campaign finance laws, utilized campaign funds from the FTPG account for her personal use.  According to the criminal information, Gaines received campaign contributions and converted them to her own use without causing the contributions to be identified on reports made to the Maryland State Board of Elections.

If convicted, Gaines faces a maximum sentence of 20 years in federal prison for wire fraud. 

A criminal information is not a finding of guilt.  An individual charged by criminal information is presumed innocent unless and until proven guilty at some later criminal proceedings. 

United States Attorney Robert K. Hur commended the FBI for its work in the investigation.  Mr. Hur thanked Assistant U.S. Attorney Thomas P. Windom, who is prosecuting the case.

# # #

 

Baltimore, Maryland - U.S. District Judge Ellen L. Hollander today sentenced Alexander Massari, age 53, of Owings Mills, Maryland, to 230 months in federal prison, followed by lifetime supervised release, for distribution of child pornography.  Judge Hollander also ordered that, upon his release from prison, Massari must continue to register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA). 

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office.

“Crimes involving child pornography perpetuate the cruel and heartless business of the sexual abuse of children for personal gain,” said U.S. Attorney Robert K. Hur. “This sentence sends a clear message that we will bring to justice those who would victimize innocent children.”

According to his guilty plea, on March 15, 2018, federal investigators executed a federal search warrant for two e-mail accounts associated with Massari after the National Center for Missing and Exploited Children (NCMEC) received a Cybertipline Report that one of those accounts had sent or possessed child pornography.  The video file associated with the tip contained images documenting the sexual abuse of a prepubescent minor female. 

Records obtained as a result of the warrant revealed that in February 2018, Massari exchanged e-mails with individuals requesting child pornography, requested money for the child pornography images, and transmitted videos and images containing child pornography.  Investigators also observed e-mails on February 13 and 28, 2018, during which Massari corresponded with another person about exchanging child pornography.  During one exchange, Massari wrote “here you go” and the person responded “you got any more.”  Massari responded that he did, but that Massari was interested in receiving child pornography in exchange.

On April 11, 2018, a company that provides website hosting services sent a Cybertipline Report to NCMEC for a child pornography violation that occurred on April 10, 2018.  The user being reported was a member of Massari’s family, but Massari admitted that he was using the family member’s name and that Massari was the actual user.  Although the website had been taken down by the time investigators identified it, the files provided by the web hosting service allowed law enforcement to recreate what the website looked like when it was taken down.  FBI investigators viewed the files and at the top of the home page were the words “illegal.cp” and “join now!”  The website provided information concerning the prices for different levels of membership that individuals could pay to obtain child pornography files.  The home page of the website contained several images of child pornography.

On June 7, 2018, FBI investigators executed a federal search warrant at Massari’s residence and recovered numerous electronic storage devices, including a laptop computer and a computer hard drive.  Those devices were examined pursuant to a federal search warrant and investigators recovered more than 600 images of child pornography from Massari’s electronic devices, including images of prepubescent minors engaged in sexually explicit conduct and sadistic conduct.

Massari also has a previous 2006 federal conviction for possession of child pornography.

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 Attorney’s 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.justice.gov/psc.  For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.       

United States Attorney Robert K. Hur commended the FBI for its work in the investigation.  Mr. Hur thanked Assistant U.S. Attorney Michael C. Hanlon, who prosecuted the federal case.

# # #

Greenbelt, Maryland – Rakesh Kaushal, age 66, of Rockville, Maryland, pleaded guilty today to the federal charge of conspiracy to commit wire fraud, in connection with a scheme to defraud his employer of more than $1.7 million. 

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office.

According to his plea agreement, between August 2015 and approximately January 2017, Kaushal was employed by a company headquartered in Beltsville, Maryland (Victim Company 1), which provided construction and design services, primarily to federal government agencies.  Ivan Victor Thrane was the owner and president of three construction companies operating in Dickerson and Beltsville, Maryland (“the Thrane companies”).  Kaushal recommended the Thrane companies to be subcontractors on Victim Company 1 projects for which Kaushal was the Project Manager or Project Executive. 

Kaushal admitted that between August 2015 and January 2017, he conspired with Thrane to defraud Victim Company 1 by submitting fraudulent payment requests for work purportedly performed by the Thrane companies, which Kaushal reviewed and approved.  In fact, the Thrane companies had not performed all of the work indicated on the payment requests and, in some cases, had not performed any work on projects for which payment was requested. 

Specifically, Kaushal and Thrane, among other things, caused the Thrane companies to submit payment requests to Victim Company 1.  Kaushal prepared the payment requests, which he e-mailed to Thrane.  Thrane, or another individual at Thrane’s request, signed the payment requests on behalf of the Thrane companies.  Thrane then e-mailed the signed payment requests to Kaushal, who, as Victim Company 1’s project manager and project executive, approved the payment requests, causing Victim Company 1 to pay the Thrane companies.  Once payment was received from Victim Company 1, Thrane funneled a portion of those payments to Kaushal, typically by writing checks from his personal bank account or from the Thrane companies, which Kaushal then deposited into his personal bank account.

After Victim Company 1 discovered the overbilling in December 2016, Kaushal and Thrane attempted to conceal the scheme to defraud.  For example, on December 28, 2016, Kaushal, using his work e-mail address, sent an e-mail to Thrane that read in part, “Good Morning Mr. Thrane: I have been informed by our accounting department that mistakenly we have overpaid your company for the MPO Skywalk Project.  Can you please verify with your accounting and respond by COB today.”  Other employees from Victim Company 1 were copied on this e-mail.  In fact, Kaushal and Thrane had communicated prior to this e-mail regarding the discovery of overpayments by Victim Company 1.  Kaushal and Thrane also agreed on a response, which Thrane then e-mailed to Kaushal, copying other employees from Victim Company 1.  Thrane’s response read in part, “…please allow me to review our records with my accountant.  My accountant is off this week. . . . Please rest assured that if there have been any overpayment to us by [Victim Company 1], we will return the overpayment immediately.”  In fact, the Thrane companies did not have an accountant.

Shortly after the fraud was discovered by Victim Company 1, between January 17 and January 23, 2017, Kaushal wired a total of $650,000, including proceeds of the fraud, from one of his personal bank accounts to an account in India, with Kaushal listed as the beneficiary.

Victim Company 1 eventually initiated civil litigation against Kaushal and Thrane, and obtained a default judgment against Kaushal of $1,740,330.  Kaushal then filed for Chapter 7 bankruptcy.  During a meeting of creditors in the bankruptcy proceeding, Kaushal testified that he had used some of the proceeds of the fraud to purchase a condominium in India for a family member and that he had lost more than $100,000 gambling at various casinos.  Kaushal was unable to account for more than $1 million of the kickback payments he received from Thrane.  On May 15, 2019, the Bankruptcy Court entered a default judgment against Kaushal, denying him a discharge.

From approximately September 2015 to December 2016, Victim Company 1 paid the Thrane companies approximately $3,294,675.34 as a result of the scheme to defraud.  Upon receipt of these payments from Victim Company 1, Thrane issued 34 kickback payments, totaling approximately $1,740,330 in checks written to Kaushal.  On January 3, 2017, after discovering the fraud scheme, Victim Company 1 reversed or voided payments totaling approximately $741,525 to the Thrane companies.  Kaushal then provided Thrane with three checks, all dated January 4, 2017, from Kaushal and made payable to one of the Thrane companies, totaling $370,700.06.  Kaushal admits that the loss attributable to him as a result of the scheme is between $1.5 million and $3.5 million.

Ivan Victor Thrane, age 65, of Dickerson, Maryland, pleaded guilty to his role in the scheme on August 22, 2019, and is scheduled to be sentenced on January 7, 2020.

As part of their plea agreements, Kaushal and Thrane are required to forfeit and pay restitution in the full amount of the victim’s losses still outstanding, which is at least $988,805.

Kaushal faces a maximum sentence of 20 years in prison for the wire fraud conspiracy.   U.S. District Judge Paul W. Grimm has scheduled sentencing for January 14, 2020.  Kaushal remains detained. 

United States Attorney Robert K. Hur commended the FBI for its work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Jessica Collins and Gregory Bernstein, who are prosecuting the case.

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Greenbelt, Maryland – James Robert Dorsey III, age 29, of Oxon Hill, Maryland, has pleaded guilty to federal charges for possession with intent to distribute marijuana and for possessing a firearm in furtherance of a drug trafficking crime.  The guilty plea was entered on October 2, 2019.  

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Chief Henry P. Stawinski III of the Prince George’s County Police Department.

“Armed drug dealers bring both addiction and violence to our streets,” said United States Attorney Robert K. Hur.  “Working together with our local, state, and federal law enforcement partners, we are determined to make our communities safer by eliminating illegal drug trafficking and gun violence.”

According to his guilty plea, on May 7, 2019, Prince George’s County Police officers received a call for service in the Seat Pleasant area for individuals suspected of smoking and distributing marijuana.  When officers arrived, they observed Dorsey begin to walk away from the area holding the waistband area of his pants, and enter a silver sedan parked nearby.  As Dorsey attempted to drive away he struck a vehicle parked in front of him before responding to officers’ directions to stop, and was subsequently removed from his vehicle.

Dorsey was searched and law enforcement recovered a loaded 9x19 millimeter semi-automatic pistol; approximately 15 grams of marijuana; and $552 in cash.  During a search of the vehicle, law enforcement located a partially unzipped black shoulder bag on the back seat.  Inside the backpack were approximately 11 bags containing a total of 130 grams of marijuana; a digital scale with marijuana residue; and approximately 150 plastic sandwich bags.  Dorsey admitted that he possessed the marijuana with the intent to distribute it.

On June 20, 2019, a search warrant was executed at Dorsey’s residence and law enforcement recovered a Glock switch, which is an aftermarket part that, once installed, converts a semi-automatic pistol into a fully automatic pistol.  The Glock switch itself is defined as a machinegun under the law. 

On July 25, 2019, Dorsey was arrested at a hotel in Largo, Maryland.  While conducting surveillance at the hotel, law enforcement observed Dorsey and another male get into a white Mercedes Benz S560 sedan.  When law enforcement approached Dorsey, he refused to comply with law enforcement’s instructions and was removed from the front driver’s side of the vehicle, placed into handcuffs, and then searched.  As a result of the search, law enforcement recovered the keys for the Mercedes and $3,195 in U.S. currency.  Inside the Mercedes, law enforcement recovered: a loaded 9mm handgun; a compact-sized pistol with no serial number, loaded with a magazine containing eight cartridges and one in the chamber; a 15-round magazine with an extension; a white trash bag containing bags of prepackaged marijuana for distribution, totaling approximately 450 grams; and a digital scale.

Dorsey had a previous felony conviction and therefore was prohibited from possessing a firearm or ammunition.  Dorsey admitted that he possessed the firearm in furtherance of his drug trafficking.

Dorsey and the government have agreed that, if the Court accepts the plea agreement, Dorsey will be sentenced to between 78 and 114 months in federal prison.  U.S. District Judge George J. Hazel has scheduled sentencing for January 3, 2020 at 11 am.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

United States Attorney Robert K. Hur commended the ATF and the Prince George’s County Police Department for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorney Jennifer R. Sykes, who is prosecuting the case.

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Greenbelt, Maryland –Christopher Paul Hasson, age 50, of Silver Spring, Maryland, pleaded guilty today in U.S. District Court in Maryland to four federal charges, including unlawful possession of unregistered silencers, unlawful possession of firearm silencers unidentified by serial number, possession of firearms by an addict to and unlawful user of a controlled substance, and possession of a controlled substance.  Hasson was arrested on related charges on February 15, 2019, and has been detained since his arrest.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Art Walker of the U.S. Coast Guard Investigative Service; and Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division.

“I am grateful for the hard work of the agents and prosecutors to obtain this guilty plea.  I look forward to the opportunity for the government to present additional evidence to the Court at sentencing,” said United States Attorney Robert K. Hur.

According to his plea agreement, Hasson was a Lieutenant in the United States Coast Guard.  Prior to June 2016, Hasson owned a residence and lived in Currituck, North Carolina.  In approximately June 2016, Hasson moved to a residence in Silver Spring, Maryland, and worked at Coast Guard Headquarters in Washington, D.C. 

Hasson admitted that from at least March 2016 through early February 2019, he used various e-mail accounts, including an overseas encrypted e-mail account, to order Tramadol, which is an opioid, from various illegal Internet-based distributors.  Hasson usually paid for the Tramadol by using MoneyGram or Western Union to send money to individuals in Mexico, at the direction of the Mexico-based distributor.  The distributor then had the Tramadol shipped to Hasson, typically in 100mg pills,  at addresses Hasson provided, including his North Carolina and Maryland residences.  Hasson admitted that he then concealed the Tramadol in other packaging at his residence and work.  Hasson ordered at least 4,650 Tramadol pills and personally took the pills, usually daily, including while he was at work.  Hasson knew that he did not have a lawful prescription for Tramadol and that his possession of the drug was illegal.  During the time of his use of Tramadol, Hasson also conducted Internet searches and visited websites that discussed addiction and Tramadol withdrawal.

As detailed in his plea agreement, at the time of Hasson’s arrest on February 15, 2019, agents recovered 196 Tramadol pills from Hasson’s backpack.  Search warrants executed the same day recovered 106 Tramadol pills from Hasson’s desk at Coast Guard Headquarters and 122 Tramadol pills from Hasson’s residence.  From Hasson’s residence, law enforcement also recovered the following firearms:  seven rifles; two shotguns; four pistols; two revolvers; an assembled firearm silencer; and a disassembled firearm silencer.  In close proximity to the guns, agents found multiple magazines that could accept more than 15 rounds of ammunition, as well as hundreds of rounds of ammunition.

According to the plea agreement, Hasson ordered the components of the firearm silencers from a company in California and used a drill to complete and assemble one firearm silencer.  Hasson knew the firearm silencers were not registered in the National Firearms Registration and Transfer Record, and that they did not have serial numbers, as required by law.

Hasson faces a maximum sentence of 10 years in prison for each of the three charges related to firearms and the firearm silencers, and a maximum of one year in prison for possession of tramadol.  U.S. District Judge George J. Hazel has scheduled sentencing for January 31, 2020, at 9:30 a.m.

United States Attorney Robert K. Hur commended the FBI, the U.S. Coast Guard Investigative Service, and the ATF for their work in the investigation.  Mr. Hur thanked his office’s national security prosecutors, who are handling the case.

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Baltimore, Maryland – A federal jury convicted Paul Alexander, a/k/a David Paul Hayes and Shorty, age 47, of Hanover, Maryland, on five federal charges including conspiracy to distribute fentanyl, two counts of possession with intent to distribute a controlled substances—specifically fentanyl, possession of a firearm in relation to a drug trafficking crime, and possession of a firearm by a prohibited person.  The jury returned its verdict in the evening on Monday, October 1, 2019.

The guilty verdict was announced by United States Attorney for the District of Maryland Robert K. Hur; Assistant Special Agent in Charge Don A. Hibbert of the Drug Enforcement Administration, Baltimore District Office; and Commissioner Michael Harrison of the Baltimore Police Department.

“More people die of opioid overdoses than murder in Maryland, while drug dealers spend their profits on luxury cars and jewelry,” said U.S. Attorney Robert K. Hur.  “Fentanyl dealers, like Paul Alexander, sell death and despair, and dealing in fentanyl increases their odds of federal prosecution. We’re also targeting drug dealers who use guns and increase the risk of gun violence in Maryland.  Working together with our local, state, and federal partners, we are determined to reduce the number of opioid overdose deaths in Maryland.”

According to the evidence presented at his five-day trial, from April 2018 through January 2019, Paul Alexander distributed large amounts of fentanyl in and around the Baltimore area.  An 11-month investigation by DEA into Alexander’s drug trafficking activities resulted in the seizure of more than 10 kilograms of fentanyl—enough fentanyl to kill 5 million people—and over $4 million in cash from Alexander’s car and apartments on January 2, 2019.

The evidence showed that Alexander distributed fentanyl on several occasions to a Baltimore County drug trafficker in 2018.  In addition, he was observed conducting narcotics-related transactions with another drug dealer, and surveillance video at his apartment complex revealed that Alexander used several vehicles to store and deliver drugs.  The evidence proved that Alexander utilized vehicles and residences in the names of relatives and associates in furtherance of his drug trafficking operation.

Witnesses testified that the DEA and Anne Arundel County police executed search warrants on January 2, 2019, at two apartments associated with Alexander.  Law enforcement testified that they recovered a loaded pistol with an extended magazine that contained 24 rounds of ammunition, multiple bags filled with over $4 million in cash, jewelry, and narcotics distribution paraphernalia. 

The government also seeks the forfeiture of more than $4 million in cash seized during the investigation, three luxury vehicles, seven Rolex watches, two Cartier bracelets with diamonds, a diamond tennis bracelet, and two designer bags.

Alexander faces a maximum sentence of life in federal prison for the conspiracy; a maximum of life in prison for each of two counts of possession with intent to distribute fentanyl; life in prison for possession of a firearm in relation to drug trafficking; and ten years in prison for illegal possession of a firearm by a previously convicted felon.   U.S. District Judge Richard D. Bennett has scheduled sentencing for January 3, 2020 at 9:30 a.m.

United States Attorney Robert K. Hur commended the DEA and Baltimore Police Department for their work in the investigation and thanked the Anne Arundel County Police Department, the Federal Bureau of Investigation, and Homeland Security Investigations for their assistance.  Mr. Hur thanked Assistant U.S. Attorney Matthew DellaBetta and First Assistant U.S. Attorney Jonathan F. Lenzner, who tried this Organized Crime Druge Enforcement Task Force case, and Assistant U.S. Attorney Anatoly Smolkin, who handled pre-trial litigation.

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Baltimore, Maryland – Mark David Franklin, age 44, of Ellicott City, Maryland, pleaded guilty today to the federal charge of attempted possession of child pornography. 

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office.

According to his guilty plea, between September 7 and October 10, 2018, Franklin used online applications to attempt to induce an individual he believed to be a 13-year-old girl to engage in sexually explicit activity and send Franklin photos of the sexual conduct. In fact, Franklin was communicating with an undercover FBI Special Agent.

As detailed in his plea agreement, Franklin engaged in sexually explicit conversations with the minor female, sent her sexually explicit photographs of himself, and requested that she send him sexually explicit photographs of herself.  During their conversations, Franklin also discussed meeting in person to engage in sex acts and described the photographs he wished to take during their sexual encounter.

On October 10, 2018, Franklin traveled from Ellicott City to Frederick, Maryland, to meet and engage in sex acts with the 13-year-old girl.  When Franklin arrived at the agreed-upon location, he was arrested.  At the time of his arrest Franklin was in possession of a teddy bear requested by the 13-year-old girl, condoms, two blankets, and a towel.

Franklin faces a maximum sentence of 10 years in prison.  U.S. District Judge Catherine C. Blake has scheduled sentencing for December 17, 2019 at 10:15 a.m.

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 Attorney’s 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.justice.gov/psc.  For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.       

United States Attorney Robert K. Hur commended the FBI’s Child Exploitation Task Force for their work in the investigation and thanked the Frederick City Police Department for its assistance.  Mr. Hur thanked Assistant U.S. Attorneys Daniel A. Loveland, Jr. and Paul E. Budlow, who are prosecuting the federal case.

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Greenbelt, Maryland – Santos Nicolas Obando-Flores, age 46, of Brentwood, Maryland, pleaded guilty today to possession of child pornography.  In 2015, Obando-Flores was convicted of a sex offense after engaging in sexual contact with a nine-year-old minor and was sentenced to 20 years in prison with all but six years suspended.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge John Eisert of Homeland Security Investigations (HSI); and Colonel William M. Pallozzi, Superintendent of the Maryland State Police (MSP).

According to his guilty plea, on September 13, 2018, Obando-Flores was being administered a routine polygraph examination by a Maryland State Police polygraph examiner.  The routine polygraph was required because Obando-Flores was a registered sex offender.  During the post-polygraph interview, Obando-Flores admitted to the polygraph examiner that he had viewed child pornography on his cellphone and that the pornography was still on the cellphone. Obando-Flores also admitted to having as many as one hundred videos containing child pornography on his phone.          

The polygraph examiner stopped the interview and read Obando-Flores his Miranda Rights, which Obando-Flores acknowledged that he understood.  Obando-Flores agreed to speak with law enforcement without an attorney present and again admitted to the MSP polygraph examiner that there was child pornography on his cellphone.  He explained to the polygraph examiner that he got it from a Facebook page and that he received multiple videos of child pornography through a “group chat” from an application on his phone. Obando-Flores was able to describe some videos depicting prepubescent minors engaged in sex acts or provocatively posed.  Obando-Flores admitted that he started getting the videos approximately six to eight months ago.

The polygraph examiner confiscated Obando-Flores’s cellphone, which Obando-Flores had brought with him to the scheduled meeting and Obando-Flores consented to the search of his phone.  An MSP trooper previewed the phone and found numerous files of suspected child pornography. Obando-Flores was arrested and a federal search warrant was obtained from the phone.  Forensic analysts identified approximately 359 videos and 200 images documenting the sexual abuse of minors. 

As part of his plea agreement, Obando-Flores will be required to continue to register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA). 

“Combatting the exploitation of children is a team effort and thanks to our collaboration with our local law enforcement partners, we have one less offender on the streets,” said HSI Baltimore Special Agent in Charge John Eisert. “HSI is committed to continuing to work with our local law enforcement partners to pursue our goals of identifying and rescuing the victims of exploitation.”

Obando-Flores faces a minimum mandatory sentence of 10 years and a maximum of 20 years in federal prison followed by up to lifetime supervised release.   U.S. District Judge Peter J. Messitte has scheduled sentencing for February 18, 2020 at 9:30 a.m.

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 Attorney’s 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.justice.gov/psc.  For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.       

United States Attorney Robert K. Hur commended HSI-Baltimore and the Maryland State Police for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorney Jennifer R. Sykes, who is prosecuting the federal case.

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Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow today sentenced Michael Nana Baako, age 50, a native of Ghana residing in Fulton, Maryland, to 15 months in federal prison, followed by three years of supervised release, for the federal charge of passport fraud.  Baako was a physician who practiced in hospitals in Maryland and maintained his own clinic, Biazo Healthcare.

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Edwin Guard of the U.S. Department of State’s Diplomatic Security Service (DSS) Washington Field Office.

According to Baako’s plea agreement, since at least 2001, Baako and R.A.A. have lived together in Howard County, Maryland and are the parents of two minor children.  Baako and R.A.A. married in Ghana in 1995. Months later, Baako entered the United States legally after obtaining a visitor’s visa.  In 1996, Baako applied for certification of his Ghanian medical education in the United States.  In 1998, Baako married a U.S. citizen in Virginia, who filed a petition for Baako to become a naturalized United States citizen three weeks later.  The petition was denied in 2000 after immigration officials concluded that Baako’s marriage was a “sham” marriage entered into for the sole purpose of obtaining immigration benefits.  In 2001, Baako was licensed to practice in Maryland as a physician.

On November 29, 2005, Baako registered to vote in Maryland, swearing that he was a United States citizen, and subsequently voted in 10 federal elections between November 7, 2006 and November 6, 2018.  

On December 15, 2006, Baako obtained a new Ghanaian passport in Accra, Ghana, as a Ghanaian national.  On April 17, 2007, and September 16, 2009, respectively, Baako and R.A.A. submitted passport applications on behalf of their minor children, in which Baako falsely claimed that he was a citizen of the United States, born in Hillsborough, North Carolina.  On April 22, 2008, Baako submitted an application for a United States passport for himself in which he falsely claimed that he was born in North Carolina, as were both of his parents.  As part of his passport application, Baako provided an affidavit purporting to be from a family friend, falsely stating that this person was one of the first people to see Baako after his birth and was present at a subsequent naming and baptism ceremony for Baako at a Hillsborough, North Carolina church.  Baako was issued a U.S. passport on April 29, 2008, which he used for international travel on several occasions. That passport included the false information that Baako was a citizen of the United States born in North Carolina.  On July 31, 2012, Baako and R.A.A. submitted a passport renewal application on behalf of their first child, in which Baako falsely stated that he was a citizen of the United States.  On February 20, 2018, Baako filed a passport renewal application for his own passport, again falsely stating that he was a U.S. citizen born in North Carolina.  Baako was interviewed by Department of State officials on April 22, 2010, and on June 12, 2018.  In both interviews Baako falsely stated that he was born in Hillsborough, North Carolina.

On May 8, 2019, law enforcement officers executed a search warrant at Baako’s home and located his Ghanaian passport and plans for the three-bedroom home Baako purchased in Accra, Ghana in August 2012. Investigators also obtained a number of documents related to Baako’s ongoing efforts to fraudulently obtain documentation establishing that he was a U.S. citizen born in North Carolina, including: a false affidavit purporting to be sworn by the Baako’s mother, claiming that he was born in North Carolina; a page from the family Bible falsely stating it had been presented to Baako at his birth in North Carolina; a falsified baptism certificate purporting to be from a North Carolina church, certifying that Baako was born in North Carolina; and several draft petitions to the Circuit Court for Howard County seeking to fraudulently establish the fact of his birth in North Carolina.

Baako has been detained since his arrest on May 8, 2019.  As stated at today’s hearing, the Department of Homeland Security has initiated removal proceedings against Baako.

United States Attorney Robert K. Hur commended DSS for its work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Zachary A. Myers and Daniel A. Loveland, who prosecuted the case.

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Baltimore, Maryland – William Francis Hickey III, age 43, of Elkton, Maryland, pleaded guilty to federal charges of conspiracy to commit wire fraud and wire fraud in connection with a scheme to defraud trucking companies and logistical brokers of more than $1 million.  The guilty plea was entered on September 26, 2019.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Postal Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service - Washington Division; and Special Agent in Charge Jamie Mazzone of the U.S. Department of Transportation Office of Inspector General.

According to his plea agreement, Hickey was the managing member of Hickey Consulting LLC and president of Latino Consulting LLC, both headquartered in Baltimore.  Hickey maintained bank accounts in the names of both companies, which he used to deposit checks fraudulently obtained by his co-conspirators.

Specifically, from May 2016 through January 31, 2019, Hickey conspired with others, including a co-conspirator in Pakistan, to devise and execute a scheme to defraud trucking companies and logistical brokers hired by shippers to arrange for trucking companies to transport their loads.  As detailed in the plea agreement, logistical brokers are hired by shippers of goods to arrange for transportation of the goods by trucking companies.  Brokers pay trucking companies for transporting loads through “truck industry checks,” by providing a numerical code, referred to in the trucking industry as an “express code,” which the trucking company uses to populate a blank check from its book of truck industry checks.  The broker typically makes two payments to the trucking company—a fuel advance, which is made after the company has picked up its load, and the final payment after the load has been delivered.  Truck industry checks can be deposited into a bank account or cashed at a truck stop or check-cashing establishment.

Hickey admitted that he and his co-conspirators obtained truck industry checks from brokers by posing as legitimate trucking companies; entering into agreements with brokers to transport loads; re-brokering, or “double brokering,” the same load to an actual trucking company; and then seeking payment from the brokers for transportation services that the members of the conspiracy did not provide.  After the legitimate trucking company picked up the load, the conspirators requested an express code from the broker for the fuel advance payment, then used the express code to populate and subsequently cash or deposit a truck industry check.  In some cases, the conspirators also requested a second express code from the original broker after the load was delivered, to deposit a second truck industry check.  The conspirators did not pay the trucking company that actually transported the goods.

Hickey deposited over 1,000 truck industry checks worth $1,171,314.11 into his business bank accounts, knowing that they were obtained as part of the fraud scheme.

Hickey faces a maximum sentence of 20 years in federal prison for the conspiracy and for the wire fraud.   U.S. District Judge George L. Russell, III has scheduled sentencing for December 20, 2019 at 9:30 a.m.

United States Attorney Robert K. Hur commended the U.S. Postal Inspection Service and the U.S. Department of Transportation Office of Inspector General for their work in the investigation.  Mr. Hur thanked Assistant U.S. Attorneys Peter J. Martinez and Kathleen O. Gavin, who are prosecuting the case.

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