District of Maryland

Baltimore, Maryland – U.S. District Judge Marvin J. Garbis sentenced Quentin Turgot Glenn, age 50, of Hanover, Maryland, who owned and operated Glenn Services, LLC, a trash hauling business, today to three years in prison followed by three years of supervised release for conspiracy and bribery in connection with a scheme in which commercial haulers paid Department of Public Works (DPW) employees cash in return for allowing the haulers to deposit trash at the Quarantine Road Landfill (Landfill) without paying the required disposal fees. Judge Garbis also ordered Glenn to pay restitution of $306,000.

Judge Garbis also sentenced Jessie Lee Wilson, Jr., age 41, of Baltimore, who was employed by Glenn Services as a truck driver, today to three years of probation, with the first year to be spent in community confinement, for the conspiracy and bribery.

The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Robert H. Pearre, Jr., Inspector General, City of Baltimore Office of Inspector General; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.

The DPW’s Bureau of Solid Waste is responsible for managing Baltimore City’s waste management services, including overseeing citizen drop-off centers, such as the Northwest Transfer Station (NWTS) and the Landfill.  Baltimore City’s waste management system generates revenue for the City by collecting and selling recyclable scrap metal dumped at the City’s trash collection facilities.  The City contracts with private salvage companies to purchase and remove scrap metal from its trash collection facilities. The salvage companies regularly pick up the scrap metal and, based on predetermined prices per ton, the salvage companies pay the City for the value of the scrap metal.            

Individuals or companies commercially hauling trash that have registered their vehicles with the City and obtained Landfill permits, as well as Baltimore City residents with larger loads, must deposit their trash in an open area located within the Landfill.  Commercial haulers of trash that meet certain vehicle weight limitations must, in addition to purchasing a Landfill permit, pay a waste disposal fee of $67.50 per ton of trash deposited at the Landfill. DPW employees assigned as scale house operators weigh each truck as it enters the Landfill, which is recorded on a computerized point-of-sale system.  The scale house operators reweigh each truck as it leaves the Landfill. 

According to facts agreed upon by Wilson and Glenn, at times when Wilson drove a truckload of trash to the Landfill, neither he nor Glenn Services was charged a disposal fee.  In return, Glenn Services paid scale house employees a bribe of $100 per truckload of trash.  After a certain number of unpaid trips, Glenn would arrange for himself or one of his drivers, including Wilson, to meet a scale house operator to pay the balance of the cash bribes.

In a recorded phone conversation on January 23, 2015, Wilson explained to a scale house employee why Glenn Services had not yet paid bribes on dozens of trips to the Landfill.  Wilson said he had tried to text the employee using coded language to arrange a meeting, and that he carried the bribery money around in his pocket for so long that he eventually tried to give it back to Glenn, but Glenn insisted that Wilson keep the money until the employee was ready to receive it.

In another recorded phone conversation with the employee on January 29, Wilson said he needed the “numbers for the dinner,” and the employee replied that Glenn Services still owed for 34 trips, or $3,400.  In a subsequent call, Wilson confirmed that in addition to paying this amount, Glenn would also pay for the few times Glenn Services was actually charged for dumping (at the FBI’s direction).

On February 1, 2015, Wilson met the employee at a parking lot on Edmondson Avenue in Baltimore City and gave the employee $2,500 in cash.  He said that Glenn would give her the rest later in the week, and complained about the times Glenn Services was actually charged a disposal fee, which was a “[c]ouple of them…was like 16, 1700 dollars.”

On April 21, 2015, in a series of phone calls and text messages, the employee told Wilson that Glenn owed for 39 trips since February 1, 2015, plus for five other trips, for a total of $4,400.  Wilson arranged a meeting between the employee and Glenn. 

On April 23 and 24, Glenn met with the employee, providing a total of $4,000 in cash for 40 trips to the Landfill.  Also during the meetings, they agreed to deal directly with each other without going through Wilson or Tamara Washington, another DPW employee, and to try to meet more regularly every time Glenn’s drivers made 10 trips to the Landfill.

From July 1, 2014 to May 1, 2015, Wilson fraudulently gave and agreed to participate in giving DPW employees cash payments in lieu of paying waste disposal fees that totaled more than $5,000.

Former Baltimore City Department of Public Works (DPW) employees Tamara Oliver Washington, age 55, William Charles Nemec, Sr., age 56; and Michael Theodore Bennett, age 47, all of Baltimore, and Jarrod Terrell Hazelton, age 33, of Parkville, Maryland, a former employee at the Quarantine Road Landfill, previously pleaded guilty to their roles in the schemes.  Nemec was sentenced to 78 months in prison and ordered to pay restitution of $6 million. Bennett was sentenced to 46 months in prison and ordered to pay restitution of $400,000.  Washington and Hazelton await sentencing.

Five other commercial trash haulers have also pleaded guilty, and a sixth trash hauler was convicted of conspiracy and two counts of bribery after a five day trial in November 2015. Judge Garbis sentenced two commercial haulers for their participation in the bribery scheme: Adam Williams, Jr., age 52, of Randallstown, to one year in prison followed by two years of community confinement with work release; and Larry Lowry, age 61, of Orchard Beach, Maryland, to 30 months in prison.  Judge Garbis also entered an order that Williams pay restitution of $900,000, and Lowry pay restitution of $180,000.

United States Attorney Rod J. Rosenstein praised the FBI, IRS-CI, Baltimore Office of Inspector General, and Maryland State Police for their work in the investigation.  Mr. Rosenstein thanked Assistant United States Attorneys Martin J. Clarke and Leo J. Wise, who prosecuted the case.

Greenbelt, Maryland – Abdelrahim Ayyad, a/k/a Sahid, age 50, of White Plains, Maryland, pleaded guilty today to: an armed robbery conspiracy; two armed commercial robberies; and to using and brandishing a firearm in relation to a crime of violence. Ayyad was originally scheduled to go to trial today on those charges, but instead pleaded guilty to the superseding indictment.  

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; and St. Mary’s County Sheriff Tim Cameron.

According to court documents, in June 2014, Ayyad conspired with Furman Troy, Darrell Lee and Michael Burgess, to rob commercial businesses in St. Mary’s County, Maryland.  For example, on June 18, 2014, Ayyad admitted that he drove to Washington, D.C. and picked up Troy, Lee and Burgess and drove them to a jewelry store in Charlotte Hall, Maryland in order to commit a robbery.  Ayyad handed Troy a bag containing a gun.  Troy and Lee entered the store and Lee brandished a firearm at the owner of the store.  Troy subsequently bound the victim with duct tape.  The robbers then demanded the key to the jewelry counter from an employee of the store and stole jewelry worth more than $8,800, cash, a laptop computer and other items.  On June 22, 2014, Ayyad and Burgess drove to a pharmacy in Mechanicsville, Maryland, with Troy and Lee following in another vehicle.  Ayyad and Burgess waited in their vehicle while Troy and Lee robbed the pharmacy.  During the robbery Lee again brandished a gun and Troy bound the pharmacy employee with duct tape.  According to their plea agreements, Troy and Lee stole cash and prescription bottles containing oxycodone, methadone, hydrocodone and endocet, valued at $8,897.

U.S. District Judge George J. Hazel has scheduled sentencing for Ayyad on September 12, 2016, at 2:00 p.m.

Furman Troy, age 45, and Darrell Lee, age 48, both of Charlotte Hall, Maryland, and Michael Burgess, age 54, of Alexandria, Virginia, previously pleaded guilty to their roles in the robberies.  Furman was sentenced to 12 years in prison. Lee and Burgess are awaiting sentencing

United States Attorney Rod J. Rosenstein commended the FBI and St. Mary’s County Sheriff’s Office for their work in the investigation and recognized the St. Mary’s County State’s Attorney’s Office for its assistance in the case.  Mr. Rosenstein thanked Assistant United States Attorneys Leah J. Bressack and Thomas P. Windom, who are prosecuting the case.

Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Malcolm Xavier Green, age 24, of Temple Hills, Maryland, today to 154 months in prison followed by three years of supervised release for bank robbery conspiracy, bank robbery, armed bank robbery and brandishing a firearm in relation to a bank robbery. Judge Bennett also ordered Green to pay restitution of $10,593.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Chief James W. Johnson of the Baltimore County Police Department; Chief Hank Stawinski of the Prince George’s County Police Department; Kent County Sheriff John F. Price IV; Loudoun County Sheriff Michael L. Chapman; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.

According to his plea agreement, Green and co-defendant Andrew Walker robbed three banks in Maryland and one bank in Virginia.  On July 1, 2015, Green and Walker entered the BB&T Bank on Allentown Road in Camp Springs, Maryland.  Walker passed a note to a teller demanding money in large and small bills.  When the bank teller stated that she did not have large bills, Walker patted his waistband with his hand.  The teller believed that this motion was meant to indicate that Walker had a weapon.  The teller provided money and the defendants left.

On July 13, the defendants presented a demand note to a teller at the Essex Bank on Ingleside Road in Baltimore.  The teller provided cash and the defendants left with approximately $100.  A dye pack ignited in Green’s pants, burning his legs and ruining the money. 

On July 17, the defendants walked into the BB&T Bank on Cypress Avenue in Millington, Maryland.  Green passed the teller a note demanding money, and threatening to come back shooting if his demands were not met.  When the teller hesitated, Walker pulled out a gun from his waistband, brandishing it several times.  The teller provided cash and the defendants left.

On July 24, 2015, the defendants entered the BB&T Bank in Lovettsville, Virginia.  Green brandished a gun and gave the teller a note demanding money and no dye packs.  The teller provided money and the defendants left.

The total amount that the defendants stole from the banks was in excess of $10,590.

Investigators identified the defendants through fingerprint analysis on a robbery note, law enforcement databases and surveillance footage of the robberies.  Green and Walker were arrested on August 3, 2015.

Andre Antoine Walker, age 23, of Temple Hills, previously pleaded guilty to his participation in the conspiracy and is scheduled to be sentenced on July 21, 2016 at 3:00 p.m.

United States Attorney Rod J. Rosenstein commended the FBI, Baltimore County Police Department, Prince George’s County Police Department, Kent County Sheriff’s Office, Loudoun County Sheriff’s Office and the Maryland State Police for their work in the investigation.  Mr. Rosenstein thanked the Loudoun County Commonwealth’s Attorney’s Office for their assistance, and Assistant United States Attorney Aaron S. J. Zelinsky, who prosecuted the case.

Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Anthony Terrell Cannon, age 26, of Washington, D.C., today to 75 years in prison, followed by five years of supervised release, for conspiracy, robbery, carjacking, and two counts of discharging a gun during a crime of violence, and interstate transportation of a stolen vehicle, in connection with an armored car robbery and a carjacking in which a victim was shot in the arm and head. Cannon was convicted on September 12, 2014.

Judge Chasanow ordered that 50 years of today’s sentence is to be served consecutive to the 60 year sentence Cannon previously received in the U.S. District Court for the Eastern District of Virginia for other crimes.  Cannon has also been sentenced to life in prison in the Prince George’s County Circuit Court. 

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; the members of the FBI Cross Border Task Force - Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Assistant Director in Charge Paul M. Abbate of the Federal Bureau of Investigation - Washington Field Office; Chief Hank Stawinski of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; Chief Cathy L. Lanier of the Metropolitan Police Department; Chief Alan Goldberg of the Takoma Park Police Department; Montgomery County State’s Attorney John McCarthy; and Prince George’s County State’s Attorney Angela D. Alsobrooks.   

According to the evidence presented at Cannon’s two week trial, on October 26, 2012, Cannon, Tonnie Floyd, and Marcellus Ramone Freeman, a/k/a Derrick Relando Pitts, driving a stolen Jeep, followed a Garda Cash Logistics armored transport vehicle to the Cricket store located in the 1300 block of University Boulevard East, Takoma Park, Maryland. A Garda employee exited the armored truck, went into the store and picked up a bag containing $3,911.  As the employee returned to the armored truck, he was confronted by two co-conspirators with guns. The Garda employee dropped the money bag and at least one co-conspirator fired a gun at the employee. The employee shot back. One of the co-conspirators picked up the money bag.  The co-conspirators ran back to the stolen Jeep. As the co-conspirators drove away, the employee continued to fire his handgun at the Jeep, striking a tire and the back window. Floyd was wounded in the shoulder during the gunfire.

The co-conspirators left the Jeep in a neighborhood nearby because it had a flat tire as a result of the shooting.  They saw a man entering a vehicle, and shot the man in the arm and head, causing permanent and life-threatening bodily injury, then stole his vehicle.  They drove the vehicle into the District of Columbia, where they set it on fire.

Police evidence personnel recovered blood containing DNA of Floyd from the back seat of the Jeep.  Floyd went to a hospital in the District of Columbia for medical treatment of his gunshot wound on October 26, 2012 at approximately 8:20 p.m. The Garda money bag was found in the Jeep and the bag had Freeman’s finger and palm prints upon it.  A drink bottle was recovered from the front console area of the Jeep Cherokee that had DNA of Cannon on the top area that would have come into contact with his mouth when drinking.

The evidence also included a recorded call between Cannon and an inmate at Prince George’s County Detention Center in which Cannon acknowledged his participation in the crimes and expressed disappointment in leaving an evidence trail in the stolen Jeep.

Co-conspirator Tonnie Floyd, age 23, of Washington, D.C., previously pleaded guilty to robbery, and discharging a gun during the robbery and carjacking and was sentenced to 222 months in prison.  Marcellus Ramone Freeman, a/k/a Derrick Relando Pitts, age 24, also of Washington, D.C., pleaded guilty to the same offenses. Freeman and the government have agreed that if the Court accepts his plea, Freeman will be sentenced to between 241 months and 30 years in prison at his sentencing on June 6, 2016.

United States Attorney Rod J. Rosenstein praised the FBI Baltimore and Washington Field Offices, the Prince George’s County and Montgomery County Police Departments, the Metropolitan Police Department, the Takoma Park Police Department and the Prince George’s County and Montgomery County State’s Attorney’s Offices for their work in the investigation and prosecution.  Mr. Rosenstein thanked Assistant United States Attorneys William D. Moomau and Bryan E. Foreman, who prosecuted the case.

Baltimore, Maryland – Medical device manufacturer Paradigm Spine has agreed to pay the United States $585,000 to resolve allegations under the False Claims Act that the company caused health care providers to submit false claims to Medicare and other federal health care programs for spine surgeries by marketing the company’s coflex-F® device for surgical uses that were not approved by the U.S. Food and Drug Administration (FDA).  The settlement further resolves allegations that Paradigm caused false claims by giving false recommendations on how to code health claims for procedures involving the company’s coflex® device.

The settlement was announced today by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; and Special Agent in Charge Drew Grimm, Office of Personnel Management, Office of Inspector General.

“A medical device manufacturer has a duty to be truthful about the approved uses of medical devices and the appropriate billing codes to use when seeking payment from the government,” said U.S. Attorney Rod J. Rosenstein.

According to the settlement agreement, from 2011 to 2013, Paradigm Spine allegedly marketed coflex-F for surgical uses that were not approved by the FDA.  Further, from 2012 to 2015, Paradigm Spine allegedly provided health care providers with improper guidance on how to claim reimbursement for coflex.  As a result of this conduct, the United States claimed that Paradigm Spine caused physicians and hospitals to submit false claims to federal health care programs for certain spine surgeries that were not eligible for reimbursement.  Paradigm denies the allegations.

The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act by Chris Coyle, a former Paradigm Spine sales representative (United States ex rel. Charles Coyle v. Paradigm Spine, LLC, et al., Case No. DKC-14-CV-2086 (D. Md.)).  The False Claims Act permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery.  As part of today’s resolution, Mr. Coyle will receive approximately $105,300. The claims resolved by this settlement are allegations only, and there has been no determination of liability.  

The settlement was the result of an investigation the U.S. Attorney’s Office for the District of Maryland, U.S. Department of Justice, the Department of Health and Human Services’ OIG, the Department of Defense’s OIG and the Office of Personnel Management’s OIG, with assistance from the FDA’s Office of Chief Counsel and Office of Criminal Investigations.  The case was handled by Assistant U.S. Attorneys Thomas Barnard and Rebecca Koch, and Trial Attorney Lisa Samuels from the Department of Justice.

Greenbelt, Maryland –Vinnie Lysander Taylor, a/k/a “T,” age 44, of Wilmington, North Carolina, Pennsylvania and Georgia, pleaded guilty on May 26, 2016, to charges of receiving and selling industrial grade silicone, but representing to customers that it was medical grade silicone.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Prince George’s County State’s Attorney Angela D. Alsobrooks; Special Agent in Charge Mark S. McCormack of the U.S. Food & Drug Administration, Office of Criminal Investigations’ Metro Washington Field Office; and Chief Hank Stawinski of the Prince George’s County Police Department.

“Injecting industrial-grade silicone into individuals’ bodies can result in serious bodily injury or death,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations’ Metro Washington Field Office. “FDA’s OCI will continue to work with our law enforcement partners to bring to justice those who offer this dangerous product to the public.”

Taylor admitted that from at least 2008 through December 16, 2014, he administered silicone injections into the buttocks of customers who wanted larger or fuller buttocks. Taylor, who was not a licensed medical practitioner, falsely represented to customers and victims to whom he administered liquid silicone injections that the procedure was safe and that he used medical grade silicone, when in fact the silicone was not medical grade silicone. Taylor administered the injections in hotel rooms in Prince George’s County, Maryland, St. Louis, Missouri, Arlington, Virginia, and elsewhere. Taylor charged between $800 and $1000 for the initial injections and between $350 and $800 for subsequent injections. When used in this fashion, liquid silicone is a medical device subject to regulation by the FDA.

In Maryland, between at least 2012 and December 2014, Taylor administered silicone injections to more than 10 individuals, representing to each victim that he used medical grade silicone and that it was safe.  In fact, Taylor did not use medical grade silicone, but used polydimethylsiloxane, a common silicone product used in commercial applications such as foods, lubricating oils, sealants and shampoos.

On March 20, 2014, Taylor injected silicone into the buttocks of a victim.  After the victim left the hotel she began having breathing difficulties.  On March 22, 2014, the victim checked herself into the hospital and two days later, she died.  An autopsy determined that the cause of death was acute and chronic respiratory failure due to a foreign substance causing a pulmonary embolization.  The medical examiner ruled the manner of death to be a homicide.  A clear viscous fluid removed from the victim’s buttocks during the autopsy was determined to be polydimethylsiloxane.

According his plea agreement, from approximately 2008 through December 2, 2014, Taylor purchased 152 gallons of food grade liquid silicone. Taylor stored the liquid silicone in plastic bottles that were not labeled nor approved by the FDA for that purpose.  Therefore, the liquid silicone was adulterated and misbranded.  The 152 gallons of silicone equates to 3,196 sessions.  At $500 per treatment, Taylor’s mid-range fee, proceeds from the illegal injections total at least $1,598,000.

As part of his plea agreement, Taylor has agreed to plead guilty to a criminal information that will be filed in Prince George’s County Circuit Court, admitting that Taylor’s conduct resulted in the death of the victim in March 2014.  In exchange, the Prince George’s County State’s Attorney’s Office dismissed first degree murder charges which were pending against Taylor.

Taylor, the U.S. Attorney’s Office, and Prince George’s County State’s Attorney’s Office have agreed that if the Court accepts the plea agreement Taylor will be sentenced to between 12 and 15 years in prison.  U.S. District Judge George J. Hazel has scheduled sentencing for August 19, 2016 at 9:30 a.m.  Taylor remains detained.

United States Attorney Rod J. Rosenstein praised the FDA Office of Criminal Investigations’ Metro Washington Field Office, the Prince George’s County Police Department, and the Prince George’s County State’s Attorney’s Office for their work in the investigation and prosecution.  Mr. Rosenstein thanked Assistant United States Attorney Deborah A. Johnston and William D. Moomau, who are prosecuting the case.

Baltimore, Maryland – Shivani Patel, age 30, of Reisterstown, Maryland, pleaded guilty today to bank fraud conspiracy and aggravated identity theft arising from a scheme to use stolen credit information of more than 200 victims to defraud financial institutions.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office.

According to her plea agreement and court documents, from at least June to December 18, 2013, Patel conspired with Tariq Hicks, her then boyfriend Eddie Carey and others to defraud financial institutions by accessing stolen credit card and debit card accounts belonging to real people and using counterfeit cards encoded with the stolen account information to make unauthorized purchases. 

Hicks purchased the stolen account information over the internet.  Patel and Hicks used a computer and an electronic device called a “reader-writer” to encode the stolen credit and debit card information onto existing credit cards, gift cards, or other similar cards.  These cards were sold or distributed to co-conspirators, such as Carey and Ishia Cason, who used them and provided the bulk of the proceeds to Hicks.  Patel often delivered cards to the individuals who were conducting transactions, called “strikers.”  Patel also recruited workers.

Hicks also purchased or obtained over the internet “credit profiles” containing the identity information of victims.  He then obtained full credit reports for these victims.  Hicks gave this information to Patel and others, who went into stores where the victims had existing credit accounts, with the victim’s personal identity information so that they could “authenticate” themselves as the victim.  Patel, Carey, Cason and others would then make purchases on the existing accounts (called “account takeover”).

In addition, Hicks used the credit reports to identify stores at which a victim did not have an account, and sent Patel, Carey, Cason and others into those stores with the same personal identity information.  Patel and the co-conspirators would apply for new credit accounts in the victim’s identity, and then use that “instant credit” to make purchases before the victim learned of the account.

For all of these schemes, Hicks obtained fraudulent drivers’ licenses which bore the information of the victim, but the photograph of a co-conspirator.  Patel had many such identifications which bore her photo but the identity information of victims.  Often Hicks or Patel would provide a cheat sheet with the necessary personal identity and account information so that a co-conspirator would have ready and covert access to the information as needed. The co-conspirators could then use the counterfeit license to establish their identity as the victim. 

Patel and others instructed those using the cards and information to travel to other states to engage in the fraud.  Patel and Carey traveled to conduct account takeovers, instant credit fraud and other fraudulent transactions.  Co-conspirators frequently traveled north to Pennsylvania and south as far as Georgia to engage in fraud, as well as the states that lie between Baltimore and Atlanta, including North and South Carolina, West Virginia, and Virginia.

On December 18, 2013, a search warrant was executed at Patel’s residence, where she lived with Hicks and Carey.  A complete set up for the fraud scheme was on the dining table, including a computer with the credit profiles and credit reports, a reader/writer device, credit cards in various states of manufacture, money gram receipts for payments for the stolen credit card numbers and profiles, lists of personal identity information and “cheat sheets.”  Also recovered were dozens of credit cards bearing victims’ names and accounts, as well as dozens of fraudulent identification to match the credit cards, all bearing the information of the victims but the photographs of co-conspirators.

In a basement space shared by Patel and Carey were more lists of victim information and a receipt for a storage locker rented to “Aishwarya Gupta,” a fictitious identity that Patel created as an alter ego and used to obtain a $42,073.22 loan for the purchase of a 2010 BMW 528XI.  There was also a small notebook in Patel’s handwriting which numerous personal identity information; notations as to money grams which had to be sent to various individuals in Kiev and the amounts owed; notations as to what merchandise was ordered and delivered to customers of the scheme at what price; notations as to how much was owed to workers in the scheme, and a reminder to pay the storage locker fee.

A search warrant was executed on the storage unit and a duplicate “mill” was located, including an embosser to manufacture embossed credit cards, and boxes containing hundreds of blank plastic cards ready for counterfeiting, including white, gold, silver and black cards.  There were also over 150 cards in various states of manufacture.

Over 450 compromised accounts were compiled from the evidence seized from the residence and storage locker, although most had not yet been used in the scheme.  There were over 200 victims, including businesses and financial institutions which sustained an actual loss and victims who had their identities compromised in the conspiracy. Based on the individual victims and credit accounts which were recovered from the search warrant, actual losses associated with the scheme are $61,030.78.  As part of her plea agreement, Patel will be required to pay restitution in the full amount of the victims’ losses.

Patel faces a maximum sentence of 30 years in for the bank fraud conspiracy, and a mandatory two years in prison, consecutive to any other sentence imposed, for aggravated identity theft.  U.S. District Judge James K. Bredar scheduled sentencing for September 30, 2016 at 3:00 p.m.

Tariq Hicks, age 48, of Owings Mills, Maryland, pleaded guilty on May 2, 2016; and Eddie Carey, age 32; and Ishia Biff Cason, age 36, both of Baltimore, pleaded guilty on May 5, 2016, to bank fraud conspiracy and aggravated identity theft.  Judge Bredar scheduled sentencing for Hicks on June 10, 2016 at 9:30 a.m.; for Carey on August 18, 2016 and for Cason on August 5, 2016, both at 2:00 p.m.

The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended HSI Baltimore and the U.S. Secret Service for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Tamera L. Fine, who is prosecuting the case.

Baltimore, Maryland – A federal grand jury has charged seven individuals for a bank fraud conspiracy in which the defendants allegedly impersonated individual victims to remove funds from the victims’ investment accounts.  Two of the defendants are also alleged to have participated in a conspiracy to transport stolen vehicles to Africa. The superseding indictment, which adds six defendants and additional charges, was returned on May 19, 2016, and unsealed today upon the arrest of six defendants.  Law enforcement is still seeking the seventh defendant.

The following defendants have been arrested:

            Mohammed Kwaning, a/k/a Kofi, age 35, of Laurel, Maryland;             Issah Mohammed, a/k/a Yissa and Ali, age 28, of Laurel;             Sandra Badu, age 30, of Jessup, Maryland;             Francis Osei Fosu, a/k/a Pino, age 27, of Dallas, Texas;             Mark Dennis, age 28, of Beltsville, Maryland; and
            Abayomi Davies, age 29, of Silver Spring, Maryland.

The superseding indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); U.S. Customs and Border Protection Baltimore Port Director Diana Bowman; Chief James W. Johnson of the Baltimore County Police Department; and Chief Hank Stawinski of the Prince George’s County Police Department.

According to the 14 count superseding indictment, the defendants stole money from the accounts of individual victims by: obtaining the email addresses of victims, then purporting to be the victims, sending emails to investment account managers requesting that funds be wired into a business account controlled by Kwaning and Mohammed; and by obtaining victims’ account information at various investment account firms and taking over the online accounts of the victims. According to the superseding indictment, Mohammed and Kwaning also created fraudulent checks and cashier’s checks drawn on the victims’ accounts, which Davies, Dennis, Badu and others deposited into accounts they controlled.  The defendants then withdrew or transferred the funds from the business account they maintained to receive the victims’ funds to other accounts controlled by the conspirators before the bank discovered the fraud. 

Further, the superseding indictment alleges that from at least January 31, 2013, through May 12, 2014, Kwaning and Mohammed were part of a conspiracy to have vehicles stolen in New York, New Jersey and Washington, D.C., then transported to Africa for sale. Specifically, the indictment alleges that after causing the vehicles to be stolen, the conspirators would transfer possession of the vehicles to Kwaning, Mohammed and others.  The conspirators used business bank accounts opened by Kwaning and Mohammed for paperwork associated with the stolen vehicles, such as the title, registration, shipping, bill of sale and insurance.  They caused the stolen vehicles to be loaded into a shipping container and delivered to the Ports of Baltimore and Newark, New Jersey, where they were shipped to destinations including Lagos, Nigeria and Accra, Ghana.

According to the indictment, the proceeds from the bank and wire fraud conspiracy were pooled with the funds used and generated from the purchase and sale of the stolen vehicles.

If convicted, the defendants face a maximum sentence of 30 years in prison for the bank and wire fraud conspiracy, and for each count of bank and wire fraud in which they are charged.  Kwaning and Mohammed also face a maximum of five in prison for conspiracy to transport stolen motor vehicles, and a maximum of 10 years in prison for each of four counts of receipt and possession of stolen motor vehicles.  Finally, Kwaning also faces a mandatory minimum of two years in prison consecutive to any other sentence imposed for aggravated identity theft.  The defendants had an initial appearance today before U.S. Magistrate Judge J. Mark Coulson in U.S. District Court in Baltimore. Kwaning, Mohammed and Davies are detained and Badu and Dennis were released under the supervision of U.S. Pretrial Services. Kwaning and Davies have detention hearings scheduled for May 27 and May 31, 2016, respectively.  Fosu had his initial appearance in Texas and was detained pending a detention hearing.

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. 

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended HSI Baltimore, U.S. Customs and Border Protection and the Baltimore County and Prince George’s County Police Departments for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Judson T. Mihok and Zachary A. Myers, who are prosecuting the case.

Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Perry Haywood, Jr., age 29, formerly of Washington, D.C., today to 54 months in prison, followed by three years of supervised release, for credit card fraud and aggravated identity theft.  Judge Titus also ordered Haywood to pay restitution of $1,700 and to forfeit the computers and skimming devices used in the scheme.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge James Murray of the United States Secret Service - Washington Field Office; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Chief J. Thomas Manger of the Montgomery County Police Department  

According to his plea agreement, on March 18, 2012, Haywood approached a government informant working at a Prince George’s County, Maryland, hotel and asked the informant if she was willing to skim credit cards used for payment at the hotel in exchange for $1,000 per week.  After notifying federal law enforcement of Haywood’s solicitation, the informant arranged to meet with Haywood.  During that meeting, Haywood explained the skimming operation to the informant and showed her how to use the skimming device.  Haywood told the informant that he wanted her to skim 20-25 cards per week, and he would take steps to make it difficult for law enforcement to determine where the cards had been compromised.  Haywood advised that he was giving the skimming device he had with him to another co-conspirator and arranged to meet the informant later to provide her with a skimming device.         

On March 23, 2012, Haywood met the informant at a coffee shop and gave her a skimming device.  He also provided the informant with a pre-paid cell phone to use to contact him.   Haywood paid for that phone with a credit card encoded with the name and credit account of Victim #1.  The informant, with government permission, used the skimming device to record the credit card information of five hotel customers, then arranged to return the skimming device to Haywood.        

On April 2, 2012, Haywood was arrested while attempting to retrieve the skimmer from the informant.  At the time of his arrest, Haywood was carrying another skimming device that contained the credit information of 19 additional victims.  In addition, Haywood was carrying 11 credit cards encoded with information belonging to 11 separate victims, but which did not match the information that was embossed on the plastic cards themselves. Finally, in Haywood’s rental car, agents located six additional plastic cards, five of which were encoded with information belonging to victims that did not match the information embossed on the cards themselves.          

After Haywood’s arrest, agents searched his residence in Washington, D.C., and seized two computers, two additional skimming devices, a device capable of encoding magnetic strips on credit cards, and 31 plastic cards with magnetic strips.  Of the 31 cards, eight had been encoded with information, including the information of three additional victims.  Subsequent forensic examination determined that one of the computers was loaded with software and drivers to operate a magnetic strip reader/writer and information consistent with credit card track data.  Additionally, the computer had been used to access websites selling magnetic strip readers, blank magnetic card stocks, encoders, and embossers.  The total actual and attempted loss as a result of Haywood’s fraudulent scheme was between $10,000 and $30,000.            

On June 28, 2012, Haywood was released under conditions of pre-trial release, and was allowed to reside with his mother in Atlanta, Georgia.  In late September 2012, Haywood failed to report to his supervising pre-trial services officer, and the Court ordered a bond review hearing on October 3, 2012.  When Haywood failed to appear for that hearing, the Court issued a warrant for his arrest.  On June 17, 2014, Haywood was arrested after he was located by federal authorities in Jacksonville, Florida.  

United States Attorney Rod J. Rosenstein praised the U.S. Secret Service – Washington Field Office, HSI Baltimore and Ocean City, and Montgomery County Police Department for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Ray D. McKenzie, who prosecuted the case.

Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Robert Anthony Fitzgerald Lathan, age 48, of Accokeek, Maryland, today to 42 months in prison, followed by five years of supervised release, for a bank fraud conspiracy in which the conspirators obtained fraudulent vehicle loans.  Judge Chasanow also ordered Lathan to forfeit and pay a money judgment of $169,385.83. 

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Chief Hank Stawinski of the Prince George’s County Police Department.

According to his plea agreement and other court documents, from January 2009 to April 29, 2015, Lathan and others applied for vehicle loans with financial institutions and lenders using false information as to employment history at shell entities created by the conspirators, addresses, dates of birth and social security numbers.  Lathan and others created and submitted fake documents, such as lien releases, utility bills, paystubs, letters of recommendation and a police report. The defendants often applied for vehicle loans on the same vehicle with different lenders.  They sold the vehicles, obtained money from the sales and then did not provide the vehicles to the buyers.  They deposited the loan funds into bank accounts and cashed loan checks at liquor stores.  Lathan and his co-conspirators failed to pay the vehicle loans, which often resulted in the vehicles being repossessed by the lenders.  Lathan knew that he had no intention of purchasing a vehicle and that the loan proceeds would be split between himself and his co-conspirators.

One of Lathan’s roles in the conspiracy was to create fake documents for other co-conspirators to use when making fraudulent loan applications.  For example, Lathan created a fake lien release for a vehicle, a deal worksheet with false information, and fake paystubs.  Lathan sent the fake documents to a co-conspirator, who either used the documents himself or provided them to other conspirators to use while applying for fraudulent loans.  In addition, Lathan permitted co-conspirators to use his name and other information on fraudulent loan applications.

The total intended loss resulting from Lathan’s conduct in the scheme was at least $304,560.83.

Four co-defendants have pleaded guilty to their roles in the conspiracy and are awaiting sentencing.

The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended HSI Baltimore and the Prince George’s County Police Department for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorneys Thomas P. Windom and Joseph R. Baldwin, who are prosecuting the case.

Greenbelt, Maryland – A federal grand jury indicted 11 defendants, including four family members, for conspiring to distribute and possess with intent to distribute drugs:

            Mario Finesse Wright, a/k/a Super and Finesse, age 27, of New Jersey;             Nikko Taylor Wright, age 25, of Germantown, Maryland;             Clayton Dion Hollywood Wright, a/k/a Hollywood, and Harrison Wright, age 22, of New Jersey;             Maximillan Kabir Bradford Wright, age 21, of New Jersey;             Shahryar Talebi-Nejad, a/k/a Skeet, age 27, of North Potomac, Maryland;             Matthew Joseph Hochman, a/k/a Greasy, age 28, of Gaithersburg, Maryland;             Daniel Rocco Famulare, age 28, of Gaithersburg, Maryland;             Brandon Alexander Ade, age 24, of Germantown, Maryland;             Arian Siasi, a/k/a The Prince of Persia, age 25, of Silver Spring, Maryland;             Ilya Bechutsky, age 29, of Boyds, Maryland; and
            Terrence Devon Taylor, a/k/a Scoop, and T, age 27, of Clinton, Maryland.

The indictment was returned yesterday and unsealed today upon the arrests of the defendants and the execution of search warrants at over 20 locations in Maryland and New Jersey by over 250 members of law enforcement.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Special Agent in Charge Carl J. Kotowski of the Drug Enforcement Administration – New Jersey Field Division; and Chief J. Thomas Manger of the Montgomery County Police Department.

According to the indictment and evidence presented to the court, from at least March 2014 to May 2016, the defendants conspired to distribute heroin and cocaine.  The government contends that the three New Jersey-based brothers, Mario, Clayton, and Max Wright, supplied their Maryland-based brother, Nikko Wright, with large quantities of heroin and cocaine over the course of several years, and that Nikko Wright in turn distributed those drugs to a network of dealers in the Maryland and Washington, D.C., metropolitan area.

The Wright brothers, Shahryar Talebi-Nejad, and Matthew Hochman, all face sentences of up to 40 years in prison, with a mandatory minimum of five years.  The other defendants all face sentences of up to 20 years in prison. Initial appearances are being held today in U.S. District Court in Greenbelt. 

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 Rod J. Rosenstein commended the DEA and the Montgomery County Police Department for their work in the investigation.  U.S. Attorney Rosenstein also recognized the Bureau of Alcohol, Tobacco and Firearms, the United States Marshal Service, Calvert County Police Department, Howard County Police Department and Prince George's County Police Department for their assistance. Mr. Rosenstein thanked Assistant U.S. Attorneys Michael T. Packard and Ray D. McKenzie, who are prosecuting this Organized Crime Drug Enforcement Task Force case.

Baltimore, Maryland – A federal grand jury indicted Republic National Distribution Company, LLC, and its employees, Eugene Gerzsenyi, age 52, of Glen Burnie, Maryland; Jason Lockerman, age 38, of Bel Air, Maryland; and Lisa Robbins, age 55, of Woodbine, Maryland, today on charges arising from a scheme to defraud the state and city of New York, and registered New York liquor wholesalers.  Specifically, the indictment alleges that the defendants transferred and moved liquor from Maryland, where the state excise tax rate for liquor was approximately $1.50 per gallon, to New York, where the state excise tax for liquor was approximately $7.44 per gallon, for retail sale.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Assistant Administrator for Field Operations Tom Crone, U.S. Treasury Department, Alcohol and Tobacco Tax and Trade Bureau (TTB); and Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.

According to the indictment Republic National Distribution Company, LLC, (RNDC), which has offices in Jessup, Maryland, is a wholesale distributor of liquor in Maryland and elsewhere in the United States.  Eugene Gerzsenyi was the Assistant Director of Operations for RNDC, Jason Lockerman was a salesman for RNDC and Lisa Robbins was an accounting manager.  According to the indictment, any wholesaler transferring or distributing liquor for retail sale in Maryland, or in New York, was required to register with the state, and to provide monthly reports of the quantities of liquor transferred or distributed for retail sale in the state.  RNDC was registered in Maryland and sold and delivered liquor to Cecil County retailers, including liquor stores, bars and restaurants.

The 23 count indictment alleges that from at least June 2009 through June 2012, a number of New York liquor retailers communicated with several retail liquor stores in Cecil County to order cases of wine and liquor.  People working at the Cecil County retailers then passed the orders to RNDC though salesmen, including Lockerman.  The indictment alleges that Lockerman and the other RNDC salesmen knew that the liquor was intended for retail sale in New York, and they transmitted those orders to RNDC to be filled.  According to the indictment, RNDC delivered the ordered liquor to the Cecil County retailers, where it was held for the New York retailers.  The New York retailers and their agents then picked up and transported the liquor to New York, where it was sold to customers without the New York excise taxes being paid. 

The indictment alleges that RNDC, Robbins, Gerzsenyi, and Lockerman facilitated the payment to RNDC for liquor that was moved from RNDC, through the Cecil County retailers to the New York retailers and their agents.  Specifically, RNDC submitted invoices to the Cecil County retailers that included the amounts owed to RNDC for the liquor that had been delivered to the New York retailers and their agents. The New York retailers paid the Cecil County retailers in cash, which the Cecil County retailers deposited into their business accounts.  The Cecil County retailers then paid RNDC by check.

The indictment alleges that RNDC, the New York retailers, and the Maryland retailers, did not register as liquor wholesalers or distributors in New York; did not provide monthly reports of the quantities of liquor shipped into New York for retail sale; and did not pay New York excise taxes.  In addition, RNDC allegedly filed false reports to the Maryland State Comptroller’s Office, indicating that all liquor sold to the Cecil County retailers was intended for resale in Maryland. 

The indictment seeks forfeiture of all proceeds traceable to the scheme, including a money judgment of at least $9 million.

If convicted, the company and the individual defendants face a $250,000 fine, and the individual defendants also face a maximum sentence of 20 years in prison, for wire fraud conspiracy and each of four counts of wire fraud.  If convicted of the money laundering counts, the indictment seeks forfeiture from RNDC of the funds involved in those offenses.  No initial appearance has been scheduled for the defendants. 

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 Rod J. Rosenstein commended HSI Baltimore, TTB, and IRS-Criminal Investigation for their work in the investigation and thanked the New York State Department of Taxation and Finance Criminal Investigations Division for its assistance.  Mr. Rosenstein thanked Assistant U.S. Attorneys Tamera L. Fine and Richard C. Kay, who are prosecuting the case.

Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Elmar Rakhamimov, a/k/a “Eric Rakhamimov,” age 43, of Owings Mills, Maryland, to 18 months in prison followed by three years of supervised release for conspiring to possess and distribute over $6.6 million in contraband cigarettes; and for trafficking and distributing oxycodone.  Judge Motz imposed the sentence on May 20, 2016, and entered an order requiring Rakhamimov to pay restitution of $400,000.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Chief James W. Johnson of the Baltimore County Police Department; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.

According to his guilty plea, Elmar Rakhamimov was the leader and organizer of the contraband cigarettes scheme.  Contraband cigarettes are cigarettes on which the applicable state taxes have not been paid. Elmar Rakhamimov coordinated with Ilgar Rakhamimov (no relation) and Artur Zakharyan to collect the money to purchase the contraband cigarettes, and to arrange for the storage and transportation of the contraband cigarettes to Brooklyn, New York. The Rakhamimovs and Zakharyan purchased contraband cigarettes on 18 occasions between December of 2011 and November of 2013 from an undercover FBI agent operating in the Baltimore County, Maryland area.

According to court documents and trial testimony, Artur Zakharyan recruited his son, Nikolay Zakharyan, to participate in the scheme. Nikolay Zakharyan assisted in the unloading, accounting, bagging, moving and loading of the master cases of contraband cigarettes.  Other members of the conspiracy included Zarakh Yelizarov, Salim Yusufov, Adam Azerman, Shamil Novakhov, and Ruslan Ykiew. 

The first transaction occurred on December 11, 2011, when Elmar Rakhamimov and Ilgar Rakhamimov purchased 20 master cases of contraband cigarettes in exchange for $18,000 in cash.  After the first transaction, the contraband cigarettes were delivered to and stored at Elmar Rakhamimov’s home.  Prior to each transaction, Elmar Rakhamimov, Ilgar Rakhamimov, and Artur Zakharyan discussed the transaction on the phone, and frequently met at Elmar Rakhamimov’s home to discuss the purchase and compile and count the money for the transaction. 

The cigarettes were sold in quantities of 10,000 cigarettes or more, and bore no evidence of the payment of applicable state sales taxes. At the time of the indictment, the cigarette tax in Maryland was $2.00 per package of cigarettes ($20 per carton of cigarettes) and the cigarette tax in New York was $4.35 per package of cigarettes ($43.50 per carton of cigarettes).  The total tax evaded over the course of the conspiracy was more than $2.5 million.  

Following many of the deliveries, the conspirators met at Elmar Rakhamimov’s residence to discuss moving the cigarettes to Brooklyn, New York where the cigarettes were sold at a profit to individuals in New York, who further distributed the contraband cigarettes.  The cigarettes were often transported from Maryland to New York by Adam Azerman, who delivered them to Shamil Novakhov, a relative of Ilgar Rakhamimov.  Ilgar Rakhamimov brought Novakhov into the conspiracy, and was the primary contact with Novakov throughout the conspiracy. Novakhov’s nephew, Ruslan Ykiew, also would travel from New York to Maryland to obtain contraband cigarettes and transport them to his uncle in New York.  Ykiew initially stored the cigarettes in a restaurant he owned.  At Novakhov’s request, in 2012 Ykiew rented a warehouse for the storage of the contraband cigarettes.  The conspirators paid $30 for each carton of contraband cigarettes, and sold them to buyers in New York for approximately $41 - $45 per carton.

Elmar Rakhamimov and his cousin, Zarakh Yelizarov, laundered the proceeds of the contraband cigarette sales through an international money laundering operation that wired funds from banks located in Latvia, Cyprus, Estonia, and New York, to a bank in Maryland, disguising the money as legitimate business payments for medical equipment or supplies. From December 27, 2012 through September 5, 2013, Yelizarov and Rakhamimov wired a total of $649,500 through 12 transactions.  

Elmar Rakhamimov also distributed Oxycodone, prescription drugs, counterfeit prescription drugs and other drugs as partial payment for contraband cigarettes and in exchange for cash.  He conducted 15 drug transactions for which he received $356,123.00 in cash.  Additionally, on October 28, 2013, Rakhamimov sold 340 pills of Oxycodone and 1,000 pills of counterfeit Cialis to an individual who paid him $38,980 in cash. This cash amount represented payment of $30,980 for such drugs and for drugs provided in an earlier drug transaction, and an $8,000 money laundering fee relating to contraband cigarette transactions.

Finally, the government presented evidence to the court that Elmar Rakhamimov was involved in the fencing of stolen jewelry from a violent robbery orchestrated by his nephew, Stanislav “Steven” Yelizarov. After kidnapping a store employee, whose movements they had been monitoring, Yelizarov and his co-conspirators brandished firearms and forced the victim to provide the alarm codes for the jewelry store. Yelizarov and a co-conspirator stole jewelry worth approximately $500,000 from the store.  The next day, Elmar Rakhamimov told a confidential informant (CI) that he had a million dollars of “hot” jewelry to sell, and set up a meeting for January 18 at Rakhamimov’s home.  The CI met Rakhamimov and Yelizarov, who were wearing gloves and had the stolen jewelry.  The CI bought a selection of the stolen jewelry for $29,000. 

Zarakh Yelizarov, age 53, of Pikesville, Maryland was sentenced to 18 months in prison and ordered to pay restitution of $2.5 million; Ilgar Rakhamimov, age 41, also of Pikesville, was sentenced to a year and a day in prison and ordered to pay a $10,000 fine; Shamil Novakhov, age 60, of Brooklyn, New York, was sentenced to a year and a day in prison and ordered to pay restitution of $400,000; and Adam Azerman, age 61, Pikesville, was sentenced to time served and ordered to pay restitution of $912,780. Nikolay Zakharyan, age 25, of Owings Mills, Maryland, was convicted by a federal jury after a five day trial and was sentenced to a year and a day in prison, and ordered to pay restitution of $9,659,880.

Artur Zakharyan, age 54, of Reisterstown, Maryland, to one year of home detention, as part of four years’ probation and ordered to pay restitution of $2,500,000 and to forfeit $50,000 believed to be proceeds of the offense, $11,947, and a five troy ounce gold bars and a gold coin seized during searches. 

Elmar Rakhamimov’s brother, Salim Yusufov, age 43, of Reisterstown, Maryland, was sentenced to 12 months home confinement as part of four years’ probation, for conspiracy to traffic over $6.6 million in contraband cigarettes, health care fraud, and receipt and delivery of misbranded drugs. Yusufov was also ordered to forfeit $200,000. Ruslan Ykiew, age 40, of Brooklyn, New York, was sentenced to two years’ probation.

Stanislav “Steven” Yelizarov, age 26, of Pikesville, Maryland, was sentenced on April 13, 2016 to 30 years in prison on charges arising from the robbery of a jewelry store, including a carjacking and kidnapping. 

United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, and Office of Inspector General of the Department of Health and Human Services – Office of Investigations for their work in the investigation and the Medicaid Fraud Control Unit of the Maryland Attorney General’s Office for its assistance in the investigation.  Mr. Rosenstein thanked Assistant United States Attorneys Paul E. Budlow and John W. Sippel, Jr., who prosecuted the case.

Greenbelt, Maryland – Three guardsmen from the District of Columbia Army National Guard were indicted on charges arising from a scheme to use Bitcoin to buy stolen credit and debit card numbers from foreign websites, re-encode cards issued in their names with those stolen numbers, and then fraudulently purchase items at Army and Air Force Exchange Service (AAFES) stores on military bases and elsewhere for use and resale (Shelton Stewart Indictment):

Derrick K. Shelton, II, age 28, of Washington, D.C.,

James C. Stewart, III, (J. Stewart) age 25, of District Heights, Maryland; and

Quentin T. Stewart, age 28, of Parkville, Maryland.

A fourth national guardsman, Vincent Anthony Grant, age 27, of Laurel, Maryland was also indicted in a separate case involving a similar fraud scheme (Grant Indictment).  The indictments were returned on May 9, 2016 and unsealed last Friday, May 20, 2016 following the arrests of the defendants.

The indictments were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office (DCIS); and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.

Shelton, J. Stewart and Grant were specialists, and Q. Stewart was a former sergeant, all in the District of Columbia Army National Guard.

“Bitcoin” is a digital currency that operates through an online, decentralized ledger system. Bitcoin is not issued by any government, bank, or company, but rather is generated and controlled through computer software operating through a decentralized network. Bitcoin can be exchanged for other currencies, products, or services.

The Shelton Stewart Indictment alleges that from July 2014 to May 2015, Shelton, J. Stewart and Q. Stewart, along with co-conspirator Jamal Moody and others, used Bitcoin to purchase stolen credit and debit card numbers of individuals and businesses from foreign internet websites.  They selected and purchased stolen credit and debit card numbers of individuals and businesses holding federal credit union accounts, and those with billing addresses in or near Maryland.  They bought magnetic strip card-encoding devices and software to re-encode credit, debit and other cards with the stolen credit and debit card numbers.

According to the Shelton Stewart Indictment, the defendants used the cards they fraudulently re-encoded to buy merchandise, including gift cards, electronic items, and luxury goods, from AAFES stores on U.S. military bases, and other locations in Maryland and elsewhere.  They used the merchandise themselves or resold the merchandise.

The Grant Indictment alleges that from July 2014 to April 2015, Grant, along with co-conspirator Moody and others, engaged in a scheme similar to the one described above.

Shelton, J. Stewart and Q. Stewart face a maximum sentence of 20 years in prison for conspiring to commit wire fraud, and wire fraud.  Grant faces a maximum sentence of seven and half in prison for conspiring to commit access device fraud.  All four defendants also face a mandatory minimum of two years in prison for aggravated identity theft, consecutive to any other sentence imposed.  The defendants had their initial appearances last week and were released under pretrial supervision, except for Quentin Stewart who is scheduled to have a detention hearing tomorrow, May 24, 2016, at noon before U.S. Magistrate Judge Charles B. Day in U.S. District Court in Greenbelt.

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. 

In a separate proceeding, Jamal Alexander Moody, age 28, of Oxon Hill, Maryland, and Waynesboro, Pennsylvania, who was also a specialist in the District of Columbia Army National Guard, pleaded guilty to conspiring to commit access device fraud and aggravated identity theft.  Moody admitted that from July 2014 to April 2015, he purchased a magnetic-strip card-encoding device which he used to re-encode credit and debit cards issued in his name with more than 100 stolen credit and debit card numbers of other individuals that he purchased through Bitcoin transactions.  Moody used the fraudulently re-encoded cards to purchase – often from AAFES stores - gift cards or electronic and luxury goods for resale.  Moody is awaiting sentencing. 

The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended the DCIS and FBI for their work in the investigation.  Mr. Rosenstein thanked Special Assistant U.S. Attorney Gustav William Eyler, of the U.S. Justice Department, Criminal Division - Fraud Section, and Assistant U.S. Attorney Thomas P. Windom, who are prosecuting the case.

Greenbelt, Maryland – U.S. District Judge Theodore Chuang sentenced Edward White, age 46, of Waldorf, Maryland, today to 13 years in prison, followed by five years of supervised release, for theft of firearms and use of fire during the commission of a felony, in connection with the robbery and arson of a federally licensed firearms dealer. 

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Frank Riehl of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; and Charles County Sheriff Troy Berry.

“ATF worked hand-in-hand with the Charles County Sheriff's Office as well as federal prosecutors to build a strong case against Mr. White in an effort to hold him responsible for the theft of firearms and arson of Fred's Sporting Goods,” said ATF Acting Special Agent in Charge Frank Riehl. “The hard work of ATF's DNA chemists and the Charles County Forensic Science Unit provided unquestionable scientific evidence as to White's participation in this crime.”

According to his plea agreement, in February 2014, White planned to burglarize Fred’s Sports and Furniture, a federally licensed firearms dealer in Waldorf, Maryland. In preparation for the burglary White took photographs outside and inside the store, including the fence, gate, the padlock used to secure the gate, guns, and display cases containing the guns.  White also accessed the roof of the store by climbing the HVAC system at the rear of the building, and took photos of the roof and the HVAC system.  White’s DNA was recovered from a beam next to the HVAC system.  White shared the photos with at least one co-conspirator.

On October 13, 2014, co-conspirators robbed Fred’s Sports and set it on fire.  Specifically, co-conspirators cut the chain and padlock previously photographed by White, using bolt cutters provided by White.  At least one co-conspirator climbed onto the roof of the building and cut a hole in the roof at the same location photographed by White.  A co-conspirator entered the store and gathered more than 70 handguns from display cases throughout the store.  After more than an hour, the co-conspirators poured an accelerant on the floor throughout the interior of the store, exited through the hole in the roof and ignited the accelerant.  The fire destroyed Fred’s Sports and rendered the building uninhabitable. 

Law enforcement officers recovered White’s cell phone near the rear of the store.  The phone contained the photos of Fred’s Sports taken by White.

On November 6, 2014, law enforcement executed a search warrant at White’s home and recovered a .380 handgun stolen from Fred’s Sports and five .40 caliber rounds of ammunition.  White’s DNA was found on the firearm.  White, who was not under arrest at the time, agreed to go with law enforcement officers to the Charles County Sheriff’s Office, where he requested to use the rest room.  While in the toilet stall, White placed a black cloth object in the trash can next to the toilet.  Law enforcement subsequently searched the trash can and discovered a black cloth belly band holster containing a .40 caliber semi-automatic handgun, loaded with a magazine and 10 rounds of ammunition.  This firearm was also stolen from Fred’s Sports on October 13, 2014.  The next day, law enforcement searched White’s car and recovered the bolt cutters used during the robbery.

In addition to the two stolen guns recovered from White, several of the firearms stolen from Fred’s Sports were recovered in Washington, D.C., including: two guns used in separate shootings - one in which the victim was found next to the gun; one gun used in a robbery; one gun used in a carjacking; one gun recovered from a brothel; and two guns used in separate domestic altercations. 

United States Attorney Rod J. Rosenstein commended the ATF and Charles County Sheriff’s Office for their work in the investigation.  Mr. Rosenstein thanked Assistant United States Attorney Daniel C. Gardner, who prosecuted the case.

A federal jury convicted three defendants today of multiple charges related to a racketeering enterprise known as La Mara Salvatrucha, or MS-13.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland, Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Baltimore Field Office, Chief Hank Stawinski of the Prince George’s County, Maryland, Police Department, Chief J. Thomas Manger of the Montgomery County, Maryland, Police Department and Prince George’s County State’s Attorney Angela D. Alsobrooks made the announcement.

Jorge Enrique Moreno-Aguilar, aka Flaco and Castigato, 22, of District Heights,   Maryland; Juan Alberto Ortiz-Orellana, aka Chele and Furia, 27, also of District Heights; and Minor Perez-Chach, aka Minor Chach-Perez, Little Bad and Bryant Sacarias, 25, of Hyattsville, Maryland, were convicted by a federal jury sitting in the U.S. District Court for the District of Maryland.  All three defendants were found guilty of conspiracy to participate in a racketeering enterprise and murder in aid of racketeering.   Additionally, Moreno-Aguilar and Ortiz-Orellana were convicted of conspiracy to commit murder in aid of racketeering, and Ortiz-Orellana and Chach-Perez were also convicted on various related firearms charges.

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 Prince George’s County, Montgomery County and Frederick County, Maryland.  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 evidence presented at trial, from at least 2009 through October 2014, MS-13 members planned and committed murders, attempted murders, assaults and robberies in Prince George’s, Montgomery and Frederick Counties.  Gang members also extorted brothel operators and owners of other illegal businesses and tampered with and retaliated against witnesses, among other crimes.  Trial evidence demonstrated that Moreno-Aguilar and Ortiz-Orellana were members and associates of the MS-13 Sailors Locotes Salvatrucha Westside Clique and Perez-Chach was a member of the MS-13 Langley Park Salvatrucha Clique.

Trial evidence demonstrated that on January 2013, Moreno-Aguilar and Ortiz-Orellana targeted an individual associated with the rival 18th Street gang, obtained photographs of the victim and conspired to murder him with other members of MS-13.  On March 12, 2013, Moreno-Aguilar and Ortiz-Orellana went to Capitol Heights, Maryland and shot the victim multiple times outside his home, killing him.

According to the trial evidence, in the early morning hours of Feb. 23, 2013, Perez-Chach met a man whom he believed to be a member of MS-13 who had testified against MS-13 members in federal trials.  In fact, the victim was not the witness from the previous MS-13 trials, according to trial evidence.  Perez-Chach followed the victim to his home in Hyattsville, where he stabbed the victim to death while another member of MS-13 attacked the victim with a machete, trial evidence demonstrated.  Evidence presented at trial showed that during his arrest on May 20, 2013, Perez-Chach was found to be in illegal possession of a firearm and ammunition.

In addition to these convictions, 8 of the other 13 defendants charged in this investigation have pleaded guilty to their roles in the racketeering conspiracy. 

HSI Baltimore, Prince George’s County Police Department, Montgomery County Police Department, Prince George’s County State’s Attorney’s Office and Montgomery County State’s Attorney’s Office investigated the case.  Trial Attorneys Kevin Rosenberg and Catherine K. Dick of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys William D. Moomau and Lindsay Eyler Kaplan are prosecuting the case.

Greenbelt, Maryland – A federal jury today convicted Jorge Enrique Moreno-Aguilar, aka “Flaco,” and “Castigato,” age 22; Juan Alberto Ortiz-Orellana, aka “Chele” and “Furia,” age 27, both of District Heights, Maryland; and Minor Perez-Chach, aka “Minor Chach-Perez,” “Little Bad” and “Bryant Sacarias,” age 25, of Hyattsville, Maryland, on charges related to a racketeering enterprise known as La Mara Salvatrucha, or MS-13.

The convictions were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Chief Hank Stawinski of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; Prince George’s County State’s Attorney Angela D. Alsobrooks; and Montgomery County State’s Attorney John McCarthy.

All three defendants were found guilty of conspiracy to participate in a racketeering enterprise and murder in aid of racketeering. Moreno-Aguilar and Ortiz-Orellana were each convicted of conspiracy to commit murder in aid of racketeering.  Ortiz-Orellana was also convicted of discharge of a firearm during a crime of violence, and murder resulting from the brandishing/discharge of a firearm during a crime of violence.  Perez-Chach was also convicted of unlawful possession of a firearm and ammunition by an alien, and unlawful possession of a firearm and ammunition by a felon.

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 Prince George’s County, Montgomery County, and Frederick County, Maryland. 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 evidence presented at the three-week trial, from at least 2009 through October 2014, MS-13 members planned and committed murders, attempted murders, assaults, and robberies in Prince George’s, Montgomery, and Frederick Counties. Gang members also extorted brothel operators and owners of other illegal businesses and tampered with and retaliated against witnesses, among other crimes. Moreno-Aguilar and Ortiz-Orellana were members and associates of the MS-13 Sailors Locotes Salvatrucha Westside (SLSW) Clique and Perez-Chach was a member of the MS-13 Langley Park Salvatrucha (LPS) Clique.

In January 2013, defendants Moreno-Aguilar and Ortiz-Orellana targeted an individual associated with the rival 18th Street gang, obtaining photographs of the victim from Facebook and conspiring to murder him with other members of MS-13. On March 12, 2013, Moreno-Aguilar and Ortiz-Orellana went to Capitol Heights, Maryland and Ortiz-Orellana shot the victim multiple times outside his home, killing him.

In the early morning hours of February 23, 2013, Perez-Chach met a man in a restaurant whom he believed to be a member of MS-13 who had previously testified against MS-13 members in federal trials in Greenbelt, Maryland. In fact, the victim was not the witness from the previous MS-13 trials, according to trial evidence. Perez-Chach followed the victim to his home in Hyattsville, Maryland where he stabbed the victim to death while another member of MS-13 attacked the victim with a machete. During his arrest on May 20, 2013, Perez-Chach was found in illegal possession of a firearm and ammunition.

All three defendants face a maximum sentence of life in prison for conspiring to participate in a racketeering enterprise, and a mandatory sentence of life in prison for murder in aid of racketeering. Moreno-Aguilar and Ortiz-Orellana face a maximum of 10 years imprisonment for conspiracy to commit murder in aid of racketeering.  Ortiz-Orellana also faces a mandatory sentence of life in prison for murder resulting from the use and discharge of a firearm during a crime of violence; and a minimum of ten years for discharging of a firearm during a crime of violence. Perez-Chach also faces a maximum sentence of 10 years in prison for being a felon in possession of firearm and ammunition, and 10 years for being an alien in possession of firearm or ammunition. Moreno-Aguilar was acquitted of brandishing/discharge of a firearm during a crime of violence, and murder resulting from the brandishing/discharge of a firearm during a crime of violence. 

U.S. District Judge Roger W. Titus has scheduled sentencing for all three defendants on October 12, 2016.

In addition to these convictions, 8 of the other 13 defendants charged in this investigation have pleaded guilty to their roles in the racketeering conspiracy. 

United States Attorney Rod J. Rosenstein commended HSI Baltimore, Prince George’s County and Montgomery County Police Departments, and Prince George’s and Montgomery Counties State’s Attorney’s Offices for their work in the investigation and proceedings.  Mr. Rosenstein thanked Assistant United States Attorneys William D. Moomau and Lindsay Eyler Kaplan as well as Trial Attorneys Kevin Rosenberg and Catherine K. Dick with the Justice Department’s Organized Crime and Gang Section.

Baltimore, Maryland – U.S. District Judge James K. Bredar today sentenced Lyneth Nyabiosi, age 50, to 48 months in prison, and her husband, Willie Evans III, a/k/a “James Davies” and “James Davis,” age 54, both of Bear, Delaware, to 41 months in prison, both followed by three years of supervised release.  The defendants had previously pleaded guilty to conspiring to commit mail fraud arising from a scheme to falsely bill Nyabiosi’s employer, Sheppard Pratt Health Systems, for approximately $2.7 million for work purportedly performed by a company that the defendants secretly controlled.  Judge Bredar also ordered the defendants to forfeit and pay restitution of $2,742,791, and to forfeit two residences located in Bear and Newark, Delaware and three vehicles. 

The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.        

Sheppard Pratt Health System is a private, non-profit health system in Maryland which offers mental health, substance use and special education services.  Sheppard Pratt’s main campus is located in Towson, Maryland.  From November 2005 to September 2014, Nyabiosi was the director of the Health Information Management Department (HIM Department) of Sheppard Pratt.  The department was responsible for maintaining patient medical records. As the director, Nyabsiosi was the highest ranking employee in the HIM Department.

According to their plea agreements, Nyabiosi and Evans controlled and operated an entity named Information Management Solutions Technology (IMST), which was designed to appear as an independent third party contractor, but was in fact created by the defendants to execute the fraud scheme.  On March 7, 2007, Nyabiosi, on behalf of Sheppard Pratt, entered into a contract with IMST to manage medical records for Sheppard Pratt.  Nyabiosi never informed Sheppard Pratt that she and her husband were affiliated with IMST, in violation of Sheppard Pratt’s conflict of interest policy. To further hide their affiliation with IMST, Evans signed the contract on behalf of IMST as “James Davies,” a purported regional account representative at IMST.  Thereafter, Evans continued to represent himself to Sheppard Pratt staff as “James Davis,” an account representative, even though no such person was ever affiliated with IMST.   

From 2007 to 2014, the defendants submitted over 180 false invoices requesting that Sheppard Pratt pay IMST for work which was never performed, or for excessively inflated amounts for the work that was actually performed.  For example, IMST picked up approximately 2,863 boxes of patient records from Sheppard Pratt for short-term storage, yet the invoices falsely represented that IMST had picked up over 500,000 boxes of patient records. Other invoices and documents provided to Sheppard Pratt falsely represented that IMST had picked up and was storing 20,270 boxes of records from the company Iron Mountain, when in fact, IMST never picked up a single box.  And on two separate occasions in 2009, the defendants sent invoices to Sheppard Pratt for purported work on a project to digitize older patient records.  The defendants paid a third party company $26,395 to complete the work, but they billed Sheppard Pratt $546,510.  

Nyabiosi personally approved all of the false invoices, causing Sheppard Pratt to mail checks to IMST totaling $2,742,791.  The defendants deposited the money in their bank account for their personal use.

In September 2014, the law firm representing Sheppard Pratt contacted “James Davis” using IMST contact information provided by the defendants.  On September 4, 2014 and September 14, 2014, counsel for Sheppard Pratt met with Evans, who falsely represented himself to be “James Davis” and never revealed himself to be Nyabiosi’s husband.  Evans falsely told the law firm that he, “James Davis,” alone owned IMST and was in charge of running the business.

United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation.  Mr. Rosenstein also commended Sheppard Pratt for its internal investigation and for bringing the matter to the attention of law enforcement.  Mr. Rosenstein thanked Assistant United States Attorney Rachel M. Yasser, who prosecuted the case.

Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Grigoriy (Greg) Zilberman, age 25, of Owings Mills, Maryland, today to three years in prison, followed by five years of supervised release, for conspiracy, kidnapping, and brandishing a firearm in relation to a crime of violence, in connection with the robbery of a jewelry store, including a home invasion robbery, carjacking and kidnapping. Judge Motz also entered an order requiring Zilberman to pay restitution of $500,000.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.         

According to his plea agreement, Zilberman was part of a conspiracy, led by Stanislav “Steven” Yelizarov, to rob an Owings Mills jewelry store.  In the course of the conspiracy, Zilberman participated in an armed home invasion robbery designed to obtain firearms for use in the later robbery of the jewelry store.

Specifically, on July 22, 2012, S. Yelizarov, his brother, MaratYelizarov, Zilberman and Aleksey Sosonko, robbed a home in Reisterstown, Maryland. Zilberman had been a guest in the home on a number of occasions and knew that the residents of the home owned firearms. After conducting surveillance of the home for several days prior to the robbery, at 2:30 a.m. on July 22, 2012, the conspirators, dressed all in black and wearing ski masks and latex gloves, entered the home through the garage door. S. Yelizarov was armed with a handgun when they entered the residence. The other three men grabbed long guns as they entered the home and carried them with them. A resident of the home was asleep when the four robbers entered his bedroom and woke him up, pointing guns at him and shining flashlights in his eyes. S. Yelizarov beat the resident when he tried to resist while M. Yelizarov tied up the resident with a belt and a cord. The robbers ransacked the home for about an hour, looking for firearms and other valuables. After the robbers left, the resident was able to free himself and call police.  The resident was taken to the hospital for treatment of his injuries. Among the items stolen from the house were 10 long guns (rifles and shotguns), a crossbow, a laptop computer, and jewelry. Numerous electronic devices including computers and televisions were destroyed during the robbery. The value of the items stolen was approximately $10,000.

S. Yelizarov also devised a plan to commit the jewelry store robbery and recruited Zilberman, Sosonko, M. Yelizarov, Igor Yasinov, Peter Magnis, Sorhib Omonov and others to participate in the robbery. Prior to the robbery, the conspirators gathered intelligence, including conducting surveillance and attaching a GPS device to the car of an employee of the jewelry store in order to learn the employee’s travel routine and habits.  Zilberman also exploited his friendship with the employee to obtain information about the operation of the jewelry store and the habits of the employee.

According to their plea agreements, on January 15, 2013, Zilberman enticed the employee to visit his home, in order to alert the other co-conspirators of the employee’s whereabouts.  While the employee was at Zilberman’s home, the other conspirators met at S. Yelizarov’s residence to prepare for the kidnapping and robbery, including preparing the firearms and donning masks and gloves. Early in the morning on January 16, 2013, M. Yelizarov and Omonov followed the employee from Zilberman’s home and notified the other conspirators of the employee’s location so they could follow the employee. S. Yelizarov, Sosonko, Yasinov, and Magnis used a law enforcement-type light bar and a loudspeaker to impersonate a police officer and pull over the employee. Brandishing firearms which were supplied by S. Yelizarov, the conspirators removed the employee from his car, bound and blindfolded the employee, put him into the trunk of his own car, and drove him to a predetermined location. Once at the location, Sosonko, Yasinov, Magnis, and S. Yelizarov continued to brandish firearms and threatened to kill the employee’s family if he did not comply with their demands or if he reported the incident to police. The employee complied and at approximately 3:52 a.m., Sosonko and S. Yelizarov drove the employee’s vehicle from the remote location to the jewelry store. Yasinov and Magnis stayed with the employee. M. Yelizarov and Omonov were stationed near the jewelry store to act as look-outs. S. Yelizarov and Sosonko entered the jewelry store and stole jewelry, stones, and watches, valued at about $500,000, then drove back to the remote location. The employee was then placed back into the trunk of his car and driven to another location, where he was left. The employee was able to kick his way out of the trunk through the back seat of his car.

On January 18, 2013, S. Yelizarov sold a portion of the stolen jewelry for approximately $29,000 to an FBI informant. On January 19, 2013, S. Yelizarov traveled to Brooklyn, New York to sell some of the jewelry and stones taken during the robbery, receiving over $100,000. On January 21, 2013, he returned to Maryland and divided the cash proceeds among the members of the conspiracy and others. S. Yelizarov determined how much each participant received based on his perception of the risk and the conduct of each participant.

On January 25, 2013, S. Yelizarov was arrested in Buffalo, New York, on charges of federal misuse of a passport. From January 25 through February 2, 2013, S. Yelizarov placed calls directing M. Yelizarov, Sosonko, and others, to remove from his residence and dispose of evidence related to the jewelry store robbery, including cash from the sale of the jewelry, firearms used during the conspiracy, the law enforcement light bar, the GPS device, a laptop computer, and other evidence of the crimes. 

Stanislav “Steven” Yelizarov, age 26, of Pikesville, Maryland, was sentenced to 30 years in prison, after he pleaded guilty to a robbery conspiracy, kidnapping, and brandishing a firearm in relation to a crime of violence. Marat Yelizarov, age 27, of Pikesville, and Aleksey Sosonko, age 35, of Owings Mills, were sentenced to 18 years and 14 years in prison, respectively. Peter Aleksandrov Magnis, age 28, of Hydes, Maryland, and Sorhib Omonov, age 27, of Baltimore, were sentenced to seven years in prison and four years in prison, respectively. Judge Motz also entered an order requiring all of the sentenced defendants to pay restitution of $500,000. Igor Yasinov, age 26, of Baltimore, also pleaded guilty and is awaiting sentencing.

United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, and Baltimore County State’s Attorney’s Office for their work in the investigation.  Mr. Rosenstein thanked Assistant United States Attorneys Paul E. Budlow and Aaron S. J. Zelinsky, who are prosecuting the case.

Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Aaron G. Seltzer, age 39, of Trappe, Maryland, today to five years in prison, followed by three years of supervised release, for wire fraud in connection with a scheme in which he converted funds intended for real estate investments to his personal use.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.

According to his plea agreement and court documents, Seltzer was a licensed Maryland attorney who handled real estate transactions and maintained an office in Crofton, Maryland.  From January 2008, through 2010, Seltzer offered victims fraudulent investment opportunities then diverted the money intended for the investments for his own benefit.  Seltzer obtained a total of $768,242 through seven fraudulent transactions.  As part of his plea agreement, Seltzer is required to pay restitution in that amount.

For example, Seltzer offered to sell an investor 45% of an Anne Arundel County real estate company, claiming that he owned 100% of the stock, assets and liabilities of the company, when in fact, he did not.  The investor sent a total of $92,000 to Seltzer, which Seltzer used for his own benefit.  During the summer of 2009, Seltzer contacted a lawyer in New York and represented that a client of Seltzer’s was seeking a business loan. Seltzer proposed that the loan be secured by a mortgage on three commercial properties located in Virginia, purportedly owned by Seltzer’s client.  The New York attorney assembled a group of investors to fund the loan.  Seltzer presented the attorney with a fraudulent promissory note, which Seltzer falsely claimed was signed by a representative of his client.  Seltzer further falsely represented that he had conducted the closing for the loan and presented the attorney with fabricated closing documents.  On behalf of the investors, the attorney wired Seltzer $497,527 to fund the loan, which Seltzer diverted to his own benefit.

Seltzer was investigated by the Maryland Attorney Grievance Commission for his conduct in the scheme and was subsequently disbarred.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

United States Attorney Rod J. Rosenstein praised HSI Baltimore, and the FBI and for their work in the investigation and recognized the Maryland Attorney Grievance Commission and Bar Counsel Glenn Grossman for their assistance.  Mr. Rosenstein thanked Assistant U.S. Attorney Leo J. Wise, who prosecuted the case.

Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Baltimore City Police officer Maurice Lamar Jeffers, age 47, of Savage, Maryland, today to a year and a day in prison, followed by three years of supervised release, for theft of government property and stealing property as a federal officer. Judge Motz also ordered Jeffers to forfeit $3,000.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Commissioner Kevin Davis of the Baltimore Police Department; and Maryland U.S. Marshal Johnny Hughes.    

“The agents carried out an undercover operation and obtained a video recording of the defendant stealing cash while he believed he was executing a search warrant,” said U.S. Attorney Rod J. Rosenstein. “I want to thank the officers of the Baltimore Police Department and other agencies that assisted in this investigation.”

Jeffers has been a sworn member of the Baltimore Police Department for the last 12 years, and was assigned as a Task Force Officer (TFO) to the U.S. Marshals’ Capital Area Regional Fugitive Task Force (CARFTF).  As a TFO, Jeffers received special deputation to execute arrest and search warrants supporting the federal task force. Jeffers was responsible for locating and arresting offenders who had active local and federal arrest warrants and assisting in locating individuals for other jurisdictions and agencies upon request.

According to court documents and information provided to the court at his plea hearing, acting on information provided by a confidential source, law enforcement conducted a covert operation in which Jeffers was recorded stealing approximately $3,000 in cash. The cash belonged to the FBI.    

Jeffers was told to secure a location with another investigator so that a local law enforcement agency could later execute a search warrant.  Jeffers entered the location and conducted a brief protective sweep with the other investigator. Jeffers then told the other investigator to go tell other CARFTF members that no one was located inside the location.  After the other investigator left the room, Jeffers conducted an illegal search and located the cash hidden by law enforcement, which he placed into his pants pockets.  Jeffers kept the money for his own personal gain.  On May 7, 2015, Jeffers was arrested and searched incident to the arrest.  Law enforcement located $220 (eleven $20 bills) on Jeffers that he stole on March 10, 2015.

United States Attorney Rod J. Rosenstein praised the Baltimore FBI Public Corruption Task Force, which includes Agents and law enforcement officers from the FBI, IRS, the Baltimore Police Department, the Prince George’s County Police Department and the U.S. Marshals’ Capital Area Regional Fugitive Task Force, for their work in the investigation.  Mr. Rosenstein thanked Assistant United States Attorney Rachel M. Yasser, who prosecuted the case.

Greenbelt, Maryland – A federal grand jury indicted Caleb Andrew Bailey, age 30, of Waldorf, Maryland late yesterday on various charges.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Frank Riehl of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Postal Inspector in Charge Maria L. Kelokates of the U.S. Postal Inspection Service - Washington Division; and Charles County Sheriff Troy Berry.

According to the four count indictment and court documents, on February 18, 2016, postal police and postal inspectors responded to a postal facility in Capital Heights, Maryland and recovered ammunition and explosives from a package that had ruptured open. ATF was notified by the postal inspectors and responded to evaluate the contents of the package. The contents of the package included 119 rounds of reloaded .50 caliber cartridges with M48A1 incendiary projectiles, and 200 rounds of 14.5mm M183A1 spotting projectiles which contain an explosive charge. The package was addressed to an individual in Wisconsin.

According to court documents, on February 25 and March 3, 2016, the U.S. Postal Service customer service received calls from a person who identified himself by a false name in the first call, and then identified himself as Caleb Bailey in the second call.  The caller provided the tracking number for the package recovered by ATF, and advised that the package had not yet been delivered.  Neither Bailey nor the individual to whom the package was addressed had a federal explosives license to transport the explosives contained in the package.

According to court documents, law enforcement arranged to meet with Bailey at a postal facility on May 5, 2016, for the stated purpose of having Bailey provide information regarding the missing package in person.  Bailey did not appear at the agreed meeting time and place.  That day, law enforcement executed federal search warrants at adjoining properties associated with Bailey, including his residence, and seized a machine gun.  The indictment alleges that Bailey illegally possessed a machine gun on May 5.

The indictment further alleges that from March 2015 to January 2016, Bailey attempted to use and did use a minor to engage in sexually explicit conduct to produce child pornography.  The indictment also alleges that Bailey possessed child pornography.

Bailey faces a maximum sentence of 10 years in prison for unlawful transport of explosives by a non-licensee and for illegal possession of a machine gun; a mandatory minimum of 15 years and a maximum of 30 years in prison for production and attempted production of child pornography; and a maximum sentence of 10 years in prison for possessing child pornography.  A criminal complaint was filed on May 6, 2016 charging Bailey with unlawful transport of explosives. Bailey is detained pending a detention hearing on May 24, 2016 at 10:00 a.m. in U.S. District Court in Greenbelt, at which time his initial appearance is also scheduled.

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 Rod J. Rosenstein commended ATF- Arson and Explosives Group for the Baltimore Field Division, HSI Baltimore, U.S. Postal Inspection Service - Washington Division and Charles County Sheriff’s Office for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorneys Jennifer R. Sykes and Thomas P. Windom, who are prosecuting the case.

Baltimore, Maryland – Michael Toliver, age 40, of Baltimore, pleaded guilty today to robbery.

The plea agreement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Chief James W. Johnson of the Baltimore County Police Department; Commissioner Kevin Davis of the Baltimore Police Department; and Chief Gary Gardner of the Howard County Police Department.

According to his plea agreement and court documents, from May 17 to June 4, 2014, Toliver and others robbed commercial businesses located in Baltimore, Baltimore County and Howard County at gunpoint. In several of the robberies co-defendant Marcus Gray stood at the door and acted as the lookout, while Toliver pointed a gun at employees and demanded money.  Toliver admitted to robbing the following stores in Maryland:

Exxon gas station, Forest Rd., Columbia, on May 17;

Burger King, Rolling Mills Road, Dundalk, on May 17;

Bob Evans, Wholesale Club Dr., Nottingham, on May 19;

Safeway Food Stores, Harford Rd., Baltimore, on May 23;

Dunkin Donuts, Reisterstown Rd., Baltimore on May 23;

Sprint, Baltimore National Pike, Baltimore, on May 24;

Royal Farms, Pulaski Highway, Baltimore, on May 31;

BP gas station, Park Heights Ave., Baltimore, on May 31;

Royal Farms, Southwick Dr., Baltimore, on May 31; and

Royal Farms, Edmondson Ave., Baltimore, on June 4.

During the Dunkin Donuts robbery, Toliver struck the manager in the head with a handgun, causing injury.  During the Sprint store and BP gas station robberies, Toliver fired his gun into the floor or ceiling, when the managers of each store did not open the store’s safe.

Law enforcement reviewed video recordings of the robberies and identified Toliver as one of the robbers.  On June 4, 2014, law enforcement arrested Toliver and executed a search warrant on his car.  They seized a handgun and ammunition, along with a BB gun, a SWAT vest and gloves. Gray was arrested the following day.  Law enforcement executed additional search warrants and seized from Toliver’s residence another handgun, ammunition, $3,780 in coins or cash, and clothing worn by Toliver during several robberies.  Subsequent investigation revealed that the gun seized from Toliver’s vehicle was the gun fired during the BP Gas station robbery.

Toliver and the government have agreed that if the Court accepts the plea agreement, Toliver will be sentenced to 15 years in prison.  U.S. District Judge Ellen L. Hollander has scheduled sentencing for August 25, 2016 at 11:00 a.m.

Marcus Gray, age 42, of Baltimore, previously pleaded guilty to his participation in several of the robberies and awaits sentencing.

United States Attorney Rod J. Rosenstein commended the FBI, Baltimore County Police Department, Baltimore City Police Department, Howard County Police Department and Baltimore County, City and Howard County State’s Attorney=s Offices for their work in the investigation.  Mr. Rosenstein thanked Assistant United States Attorney Debra L. Dwyer, who prosecuted the case.

Greenbelt, Maryland – U.S. District Judge Peter J. Messitte sentenced Christopher C. Camut, age 53, of Baltimore, Maryland, today to 80 months in prison followed by three years of supervised release for conspiring to commit wire fraud arising from a scheme to fraudulently obtain at least $1.6 million from three companies at which he was employed as the chief financial officer. Judge Messitte also ordered Camut to forfeit and pay restitution of $1,618,951. 

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.

At various times between January 2007 and August 2014, Camut was the chief financial officer for three companies. Company A is a non-profit organization that develops microbicides which can provide women in developing countries with protection against HIV infection.  Company B manufactures products for the medical industry, and Company C develops medical countermeasures against biological and chemical threats.

According to his plea agreement, from January 2008 to May 2014, Camut created false emails, engagement letters, agreements and invoices to make it appear as if financial institutions had provided services to the companies.  He caused the companies to issue checks payable to the financial institutions, which Camut then deposited into his personal bank accounts.  Over the period of six years, Camut stole at least $1,618,951 from the three companies.

Camut created agreements between coconspirator Kaitlyn Jones and Companies A, B and C, which falsely represented Jones’ profession.  Camut caused the three companies to transfer by wire and issue checks payable to Jones, although Jones performed no work for the companies.  Camut and Jones shared the proceeds received from the companies.

To facilitate the fraud, Camut repeatedly forged on documents the name and signature of a bank employee, to make it appear as if the bank had performed work for Companies A and C, when it had not.  Camut forged the victim’s name over 15 times.

Kaitlyn Jones, age 48, of Reisterstown, Maryland, pleaded guilty to her participation in the conspiracy and is scheduled to be sentenced on June 29, 2016 at 9:30 a.m.

United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation and thanked Assistant United States Attorneys Leah Jo Bressack and David I. Salem, who prosecuted the case.

Baltimore, Maryland - U.S. District Judge George L. Russell III sentenced Rayvon O. Archibald, a/k/a “P Money,” “Keyvon M. Malone,” “Keyvon Smith,” and “Scoobie,” age 26, of Boston, Massachusetts, today to 14 years in prison followed by five years of supervised release for sex trafficking of a child. Judge Russell also ordered that upon his release from prison, Archibald must register as a sex offender in the place 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 announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Chief James W. Johnson of the Baltimore County Police Department; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Baltimore County State’s Attorney Scott Shellenberger.

According to his guilty plea, for several years Archibald was involved in recruiting, harboring and transporting individuals to engage in commercial sex acts.  From April 2012 to March 2014, Archibald used the internet to buy and post advertisements for commercial sex in several states.

On March 5, 2014, Rayvon O. Archibald encountered a 13 year old girl in New York City.  He provided her with alcohol and drugs.  The next day, Archibald transported the girl by bus from New York to the Baltimore area, then by taxi to co-defendant Jonathan Went’s apartment in Gwynn Oak, Maryland. Archibald did not inform the girl before she left New York that she would be caused to engage in commercial sex. 

On March 6, Archibald and Went posted an ad on a commercial sex website soliciting customers for the girl, which listed the number for a phone used by Archibald and Went, and an email controlled by Archibald. They also instructed the girl on pricing for commercial sex acts and provided her with a document that included prices.

After the ad was posted, numerous customers responded to the ad and they were directed to come to Went’s apartment.  Archibald and Went caused the girl to meet clients in the living room. Multiple potential clients arrived at the apartment seeking sex for pay.  At least one customer engaged in a sex act with the girl.  The money paid by customers was given to Archibald and Went.

On the morning of March 7, 2014, the girl left Went’s apartment while Archibald and Went were asleep. According to court documents, the girl called 911 from Went’s phone. The police found the girl at a nearby intersection. The girl gave police the address of Went’s apartment and told police that there were two men and a woman inside the location. The girl reported that she was held against her will inside Went’s apartment building. The girl identified Archibald as her captor and stated that he had assaulted her.

According to court documents, police went to the apartment and arrested Went, Archibald and a woman. Both the girl and the woman who was arrested independently told police that one customer who came to the apartment demanded his money back because the girl was too young. The woman and the girl gave the money back to the customer, and when they told Archibald what happened, he slapped them both.

Archibald and Went remain detained.

Jonathan M. Went, a/k/a “Jon Maxx,” and “Max Out,” age 31, of Massachusetts and Gwynn Oak, Maryland, previously pleaded guilty to conspiring to commit sex trafficking of a child. He faces up to life in prison at his sentencing scheduled for July 5, 2016, at 9:30 a.m.

The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from10 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 Rod J. Rosenstein commended the FBI, Baltimore County Police Department, Maryland State Police and the Baltimore County State’s Attorney’s Office for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorneys Zachary A. Myers and Sandra Wilkinson, who prosecuted the case.

Baltimore, Maryland – U.S. District Judge Marvin J. Garbis sentenced today payroll company owners Kevin Carden, age 56, to six years in prison for wire fraud, and his wife Beverly Carden, age 54, both formerly of Bel Air, Maryland, to five years in prison for mail fraud, both followed by three years of supervised release, arising from a scheme to steal money from their clients, the IRS and the Maryland State Comptroller.  

The Cardens also each previously pleaded guilty to filing a false tax return. Judge Garbis announced that he will sentence the Cardens tomorrow for the tax offenses, which he indicated will run concurrent with the fraud sentences, adding no additional prison time. Judge Garbis also announced that after hearing additional evidence and argument tomorrow, he will determine the specific amount of losses arising from the fraud and tax schemes for which the Cardens are responsible for paying restitution.

The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.

“When customers realized that the money they entrusted to AccuPay was not being used as intended to pay their taxes, Kevin Carden misled them with false cover stories,” said U.S. Attorney Rod J. Rosenstein. “What really happened was that Kevin and Beverly Carden took money intended for the IRS and spent it themselves, causing millions of dollars in losses to their customers.”

“It is unacceptable to help yourself to other people’s money and violate their trust,” said Thomas Jankowski, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office.  “Today’s sentencings serve as reminders that this criminal behavior was inexcusable and IRS-CI is committed to bringing culpable individuals to justice.”

According to their plea agreements, until its closure in March 2013, Kevin and Beverly Carden owned and operated AccuPay, Inc., which provided payroll and payroll tax services to small and medium businesses.  Kevin Carden ran the company’s “tax department,” which was responsible for handling the employment tax portion of the business.  AccuPay received funds from its clients that it held in trust to pay over to the IRS and the Comptroller of Maryland for AccuPay’s clients’ employment taxes. Kevin Carden was responsible for transferring the client funds to make the required tax payments.  

During the course of the fraud scheme, which lasted from 2010 to March 2013, AccuPay withdrew from the clients’ funds the full amount of payroll taxes owed, but then paid the taxing authorities only a portion of the funds.  While AccuPay falsely represented to its clients that it paid all of the taxes owed, in fact, Beverly Carden diverted some of those funds to a joint personal bank account that she and her husband maintained which the couple then used to pay personal expenses. 

Because of the Cardens’ failure to fully pay existing tax obligations owed by their clients, both the federal and state taxing authorities imposed interest and penalties on AccuPay’s clients, thereby further increasing the magnitude of their tax obligations. Thus, the payments that the Cardens did make to the taxing authorities in part were being applied to pay interest charges and penalties imposed as a result of underpayments earlier in the scheme.

The Cardens used various methods to cover up their diversion of funds and to allay their clients’ concerns when the clients learned that the taxing authorities had apparently not been paid the full amounts they were supposed to receive. For example, in the instances in which AccuPay’s clients confronted employees at AccuPay about the underpayment of their taxes, Kevin Carden either told those clients that the underpayment would be addressed or (in some cases) avoided their inquiries. Kevin Carden further represented to those clients with whom he spoke that the underpayment was due to (1) a mistake by the taxing authority; (2) an error made by AccuPay employees; and/or (3) problems with the software AccuPay used to file tax returns. These representations were often untrue.

In addition, as a further means of covering up their diversion of funds and allaying their clients’ concerns, in late 2011 AccuPay sent a letter to their clients stating that they had hired a chief financial officer (CFO) to audit tax deposits and filings for all tax clients back to 2009 “for correctness, compliance, and completeness.” In fact, that individual was not AccuPay’s CFO, but rather was an independent tax preparer the Cardens had hired to prepare their own personal taxes and the corporate taxes of AccuPay, rather than those of the clients.

In 2012, a client of AccuPay confronted representatives of AccuPay with the fact that the company had failed to pay over $300,000 in taxes owed from 2008 to 2012.  In response, AccuPay paid the client’s tax deficiencies.

The Cardens also admitted that they filed a false individual tax return for 2011 in which they did not report the amount of payroll taxes that had been diverted from AccuPay’s clients to the Cardens’ personal account.  Beverly Cardin also admitted that she did not file a 2012 individual tax return.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

United States Attorney Rod J. Rosenstein commended the IRS - Criminal Investigation and FBI for their work in the investigation.  Mr. Rosenstein praised the Bel Air Police Department for their assistance in the investigation, and thanked Assistant U.S. Attorneys Evan T. Shea and Jefferson M. Gray, who prosecuted the case.

Greenbelt, Maryland - Two brothers were sentenced to prison today for filing 46 fraudulent tax returns seeking refunds of over $224 million. U.S. District Judge Paul W. Grimm sentenced Sean Aude Gallman, age 39, of Upper Marlboro, Maryland to 11 years in prison, and Eric Maurice Gallman, age 42, of Huntersville, North Carolina, to four years in prison, both followed by three years of supervised release.  The Gallmans previously pleaded guilty to conspiring to commit mail and wire fraud, mail fraud, and conspiring to commit money laundering.  Sean Gallman also pleaded guilty to money laundering and aggravated identity theft.

Judge Grimm also ordered Sean and Eric Gallman to pay restitution to the IRS of $16,512,492; and forfeit the amount of the refunds paid by the IRS, including $11,529,954 seized from numerous bank accounts; foreign currency and gold and silver coins seized from a residence in Upper Marlboro; nine residential properties located in Upper Marlboro and Laurel, Maryland, North Carolina and South Carolina; and two Mercedes-Benz vehicles and a Hyundai vehicle.           

The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Assistant Attorney General Caroline D. Ciraolo of the Tax Division of the Department of Justice; and Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.

“These two criminals filed bogus tax returns claiming ‘refunds’ that were not owed, and stole over $16 million from the IRS,” said U.S. Attorney Rod J. Rosenstein. “Federal agents and prosecutors have a duty to pursue perpetrators of such fraud schemes and try to recover money stolen from the United States Treasury.”

“The Gallman brothers engaged in a willful and deliberate scheme to steal from the U.S. Treasury and in turn, U.S. taxpayers,” said Acting Assistant Attorney General Ciraolo. “The Department will continue to aggressively investigate and prosecute individuals and entities engaged in this criminal conduct, and will seek substantial prison terms, fines and full restitution to hold defendants accountable and send a strong message to potential offenders.”

"Using the U.S. Treasury as a personal piggy bank to obtain millions of dollars in fraudulent refunds, the Gallman’s not only showed their blatant disregard of the law, but also for the American taxpayer," said Thomas Jankowski, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office.  “Today’s sentencing’s emphasize that such greed based criminal behavior comes with a cost.”

According to court documents and evidence presented at the sentencing hearing, Sean and Eric Gallman established trusts and business entities, and used mailboxes at numerous private commercial postal carrier stores in Maryland and North Carolina as the addresses for the trusts and business entities. The defendants, acting as trustees and agents, mailed fraudulent tax returns to the IRS in the names of the trusts and businesses requesting refunds.

For example, in January 2013, Sean Gallman mailed to the IRS a fraudulent 2012 tax return in the name of the Gallman Charitable Trust, requesting a refund of $8,218,930.  Also around this time, the defendants mailed to the IRS a fraudulent 2012 tax return in the name of LEA Group Holdings Trust, requesting a refund of $8,293,562. The defendants knew that the trusts were not entitled to the tax refunds.  After receiving refund checks in these amounts, on February 15 and March 11, 2013, the defendants deposited the two refunds in bank accounts they controlled. To hide their receipt of these refunds, the defendants used cashier’s checks and other financial instruments to transfer a portion of the money to third parties and other bank accounts.

Altogether, the Gallman brothers filed approximately 46 fraudulent tax returns seeking refunds totaling $224,676,998, for which the IRS paid two refunds totaling $16,512,492.

United States Attorney Rosenstein and Acting Assistant Attorney General Ciraolo praised IRS-Criminal Investigation for its work in the investigation and thanked Assistant United States Attorney Thomas P. Windom and Trial Attorney Erin Pulice of the Department of Justice Tax Division, who prosecuted the case.

Baltimore, Maryland – William Ray Wagner, age 33, a resident of Harford County, pleaded guilty today to use of interstate facilities to coerce a minor to engage in sex.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Harford County Sheriff Jeffrey R. Gahler; and Harford County State’s Attorney Joseph I. Cassilly.

According to his plea agreement, in the fall of 2014, Wagner was communicating on Facebook with an individual he believed was a 14 year old girl who lived with her parents.  The individual was actually an undercover Harford County detective.

In early October 2014, Wagner attempted to meet the individual to engage in sex, and used his computer to initiate graphic discussions about sex.  He ultimately arranged to meet the individual at a restaurant in Bel Air on October 13, and then walk to a nearby trail to engage in sex. On that date, Wagner arrived at the agreed upon meeting location with a blanket and two condoms.  He was arrested.

Wagner had previously been convicted of unlawful contact with a minor in 2009 and as a result, was required to register as a sex offender in Maryland.  In April 2014, Wagner was arrested in Harford County and charged with failure to register as a sex offender.

As part of his plea agreement, Wagner must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).

Wagner and the government have agreed that if the Court accepts the plea agreement Wagner will be sentenced to 10 years in prison followed by a lifetime of supervised release.  U.S. District Judge George L. Russell III has scheduled sentencing for September 9, 2016 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 Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.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 Rod J. Rosenstein commended the FBI, Harford County Sheriff‘s Office and Harford County State’s Attorney’s Office for their work in the investigation and prosecution.  Mr. Rosenstein thanked Assistant U.S. Attorney Paul E. Budlow, who is prosecuting the case.

Baltimore, Maryland – Calelah John Lattisaw, age 58, of New Carrollton, Maryland, pleaded guilty today to wire fraud arising from a scheme to steal $110,107 in social security benefits.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Michael McGill of the Social Security Administration - Office of Inspector General, Philadelphia Field Division; and John L. Phillips, Assistant Inspector General for Investigations, U.S. Department of the Treasury - Office of Inspector General.

According to his guilty plea, in February 1993, Lattisaw began receiving Supplemental Security Income through the Social Security Administration (SSA) for a disability.  In order to receive benefits, Lattisaw was required to report to SSA information regarding his income, resources and living arrangements. Lattisaw admitted that at the time of his application, he concealed from SSA that he was living with two other individuals, both of whom were also receiving SSA benefits.

In addition, Lattisaw took steps to hide additional income and assets from SSA. Specifically, in 1997, Lattisaw was living with his sister-in-law, S.L., who died on November 23, 1997.  At the time of her death S.L. was receiving Social Security Survivor Benefits, as well as a D.C. pension, administered by the U.S. Treasury.  Both benefits were paid by direct deposit to her bank account.  Prior to her death, Lattisaw was added as a co-signor to S.L.’s bank account under the name John. H. Lattisaw, using the social security number of another individual, B.K.  Neither SSA, nor the U.S. Treasury were advised of S.L’s death.  Although Lattisaw knew that he had no legal entitlement to S.L.’s beneifts, he withdrew virtually all of the SSA and pension benefits from S.L.’s account via ATM withdrawals and debit purchases.  Lattisaw did not advise SSA of this additional income and because he had used an alias and the SSN of another person on the bank account, any check run by SSA to locate additional income would have been unsuccessful.

In 2003, while Lattisaw was receiving S.L.’s benefits and his own SSI benefits, Lattisaw married an elderly woman, M.B.  Shortly after marrying M.B., Lattisaw attempted to sell her home, but her family blocked the sale and had the marriage annulled.  In 2006, Lattisaw moved M.B. out of her nursing facility and in to the home he shared with his girlfriend.  Lattisaw remarried M.B. and became power of attorney over one of her bank accounts and the co-signor on another bank account, again using his alias, John H. Lattisaw, and B.K.’s SSN.  M.B. died on June 11, 2006 at Lattisaw’s home.  Five days later, Lattisaw liquidated a certificate of deposit at one of M.B’s accounts and withdrew $161,000.  Lattisaw subsequently deposited those funds into a new account opened in the name of his alias, using B.K.’s SSN.  Lattisaw did not report the change in his living conditions, nor this additional income to SSA.

Had SSA been aware of Lattisaw’s income, resources, or living arrangements, he would not have qualified for SSI benefits.  Between 2000 and 2015, Lattisaw received $110,107 in SSI benefits to which he was not entitled.

Lattisaw and the government have agreed that if the Court accepts the plea agreement Lattisaw will be sentenced to three years in prison followed by three years of supervised release.  U.S. District Judge Ellen L. Hollander has scheduled sentencing for August 24, 2016 at 2:30 p.m. 

United States Attorney Rod J. Rosenstein commended the Social Security Administration - Office of Inspector General and U.S. Department of the Treasury - Office of Inspector General for their work in the investigation and thanked Special Assistant U.S. Attorney Lauren E. Perry and Assistant U.S. Attorney Tamera L. Fine, who are prosecuting the case.

Bribes Paid to Former GSA Employees Totaling $15,000 in Exchange for Contract Work

A former government contractor pleaded guilty today to paying bribes to public officials related to work his company performed for the General Services Administration (GSA), announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Rod J. Rosenstein of the District of Maryland. 

Moustafa Ahmed Ibrahim, 37, of Harrisonburg, Virginia, pleaded guilty today before U.S. District Judge George L. Russell III of the District of Maryland to one count of bribery.  A sentencing hearing is scheduled for Sept. 9, 2016. 

In his plea agreement, Ibrahim admitted that between October 2007 and November 2009, he paid cash bribes totaling at least $15,000 to two GSA building managers in the Washington, D.C., metro area.  In exchange for the bribes, the two managers, both of whom have already pleaded guilty to bribery, awarded more than $200,000 in construction and maintenance work at the facilities they managed to Ibrahim’s general contracting company.  Each job was for less than $3,000 and so could be billed to a government credit card without an open bidding process, and Ibrahim admitted that in exchange for the work, that he would kick back approximately 10 percent of each job to the relevant GSA employee.  As part of the plea agreement, Ibrahim also agreed to forfeiture totaling $15,000. 

The GSA Office of Inspector General is investigating the case.  Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Kelly O. Hayes of the District of Maryland are prosecuting the case. 

Baltimore, Maryland – Moustafa Ahmed Ibrahim, 37, of Harrisonburg, Virginia pleaded guilty today to paying bribes to public officials in order to obtain government contracts for his company.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; and General Services Administration Inspector General Carol F. Ochoa.

According to his plea agreement, Ibrahim was the owner of a general contracting company that performed construction and maintenance work for government agencies, including GSA, in Silver Spring, Maryland, and the Washington, D.C. area.  Ibraham admitted that between October 2007 and November 2009, he paid cash bribes to two GSA Building Managers, both of whom have already pleaded guilty to bribery, in exchange for more than $200,000 in construction and maintenance work at the facilities they managed.  Each job was for less than $3,000 and so could be billed to a government credit card without an open bidding process, and Ibraham admitted that in exchange for the work, he would kick back approximately 10% of each job to the relevant GSA employee. The bribes paid to the GSA officials totaled $15,000 and as part of his plea agreement, Ibrahim agreed to forfeiture in that amount. 

Ibrahim faces a maximum sentence of 15 years in prison.  U.S. District Judge George L. Russell III has scheduled sentencing for September 9, 2016.

United States Attorney Rod J. Rosenstein commended the GSA Office of Inspector General for its work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Kelly O. Hayes and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, who are prosecuting the case.

Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Greg Milden, age 41, of Cliffside Park, New Jersey, today to 10 years in prison followed by five years of supervised release for conspiring to distribute and possession with intent to distribute controlled substances. Judge Chasanow also ordered Milden to forfeit $325,743, proceeds of his drug trafficking activities.

Judge Chasanow also sentenced Frederick Davis, age 32, of Gaithersburg, Maryland today to five years in prison followed by four years of supervised release for conspiring to distribute and possession with intent to distribute cocaine base (crack).  Judge Chasanow also ordered Davis to forfeit $1,500, proceeds of his drug trafficking activities.

The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Chief J. Thomas Manger of the Montgomery County Police Department (MCPD); Special Agent in Charge Darrell Gilliard of the Naval Criminal Investigative Service (NCIS), Washington Field Office; Chief Hank Stawinski of the Prince George’s County Police Department; Chief T. N. Treschuk of the Rockville City Police Department; Captain Timothy Lloyd of the Hackensack (New Jersey) Police Department; and Montgomery County State’s Attorney John McCarthy. 

According to Milden’s plea agreement, from February to June 8, 2015, Milden supplied a co-conspirator with cocaine in Brooklyn, New York, who brought the cocaine to Montgomery County, Maryland for redistribution.  Back in Maryland, some of the cocaine was “cooked” into crack before being sold to local distributors. 

On May 14, 2015 near Milden’s residence, law enforcement saw Milden place a backpack in the trunk of a car occupied by two individuals.  After the car left, the officers stopped the car and recovered $15,703 from the two occupants.  One of the occupants consented to a search of her residence in Hackensack, New Jersey where Milden had visited earlier that day.  There, law enforcement seized $154,985, most of which was found in shoe boxes, neatly organized by denominations and banded by different colored rubber bands.  An industrial-sized roll of plastic wrap commonly used to package kilogram quantities of cocaine was found in the bedroom. Milden used this residence as a stash house to store and package drugs and drug proceeds.

Law enforcement monitored several calls and texts during which Milden set up drug transactions. On June 8, 2015, law enforcement executed a search warrant at Milden’s residence and seized $25,850 in drug trafficking proceeds.  Officers also recovered drug ledgers describing Milden’s supply of cocaine and marijuana to other distributors.  During the course of the conspiracy, Milden was responsible for the distribution of between five and 15 kilograms of cocaine.

According to Davis’ plea agreement, from February to June 8, 2015, Davis obtained crack cocaine and heroin from a co-conspirator who Milden had supplied, and re-distributed the drugs in Gaithersburg to customers and distributors.  After monitoring drug transactions conducted by Davis, law enforcement executed a search warrant at his home on June 8 and seized drug paraphernalia including digital scales and gel capsules, as well as ammunition.  During the course of the conspiracy, Davis was responsible for distributing between 28 and 112 grams of crack cocaine.

United States Attorney Rod J. Rosenstein praised the FBI, the Montgomery County Police Department, NCIS, Prince George’s County Police Department and the Rockville and Hackensack (New Jersey) Police Departments for their work in the investigation.  Mr. Rosenstein commended the Bergen County State’s Attorney’s Office and Montgomery County State’s Attorney’s Office for their assistance, and thanked Assistant United States Attorneys Daniel C. Gardner and Joseph R. Baldwin, who prosecuted this Organized Crime Drug Enforcement Task Force case.

Greenbelt, Maryland – A federal criminal complaint has been filed charging Raleigh McClam, age 36, and Savion Sharpe, age 22, both of District Heights, Maryland, with conspiracy to commit sex trafficking of a minor. The complaint was filed on May 5, 2016, and was unsealed on May 13, 2016, upon the arrest of McClam.  At a detention hearing today U.S. Magistrate Judge Timothy J. Sullivan ordered that McClam be detained pending trial.  Sharpe is detained on related state charges.  No federal court appearance has been scheduled for Sharpe.

The charges were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; and Chief J. Thomas Manger of the Montgomery County Police Department.

According to the affidavit filed in support of the criminal complaint, on December 29, 2015, officers with the Montgomery County Police Department received a 911 call from a female stating that she was a prostitute and was in fear of a man who was outside her Rockville motel room.  The caller described the man and stated she was staying in room 257.  When officers arrived at the motel they saw McClam and Sharpe sitting in a vehicle in the motel parking lot.  Sharpe matched the description supplied by the 911 caller.  Sharpe and McClam told the officers that they were guests at the motel.  The officers knocked repeatedly on the door of room 257, which was eventually answered by a female (Victim 1).  The female denied that she was engaged in prostitution and claimed that Sharpe was her boyfriend, but was unable to provide officers with his name.

Subsequent investigation revealed that Victim 1 was 16 year old.  During interviews with Victim 1, she told officers that she met Sharpe in December 2015, when he approached her about working for him as a prostitute.  Victim 1 stated that McClam was Sharpe’s manager.  According to the affidavit, Victim 1 told officers that McClam drove Sharpe, Victim 1 and another woman to the Rockville motel on the evening of December 28, 2015, and had sex with Victim 1 before she saw any customers, as a kind of “test.”  Victim 1 also stated that Sharpe had provided Victim 1 with a cell phone to communicate with him and investigators recovered the phone.  A forensic analysis revealed text messages between Sharpe and Victim 1, including messages on December 29, 2015, when police were at the motel in Rockville.

Law enforcement also located multiple online advertisements for prostitution services in the Rockville, Montgomery County, Maryland area, associated with an email account allegedly used by McClam.  According to the affidavit, McClam also had a social media account.  An undercover officer contacted McClam through that account. During their conversations, McClam indicated he ran an escort service in Rockville and elsewhere and had four girls “working for him.”  After providing the undercover with his phone number, which was also found in Victim 1’s phone, the undercover investigator and McClam exchanged text messages and arranged to meet at a restaurant.  At the time of the meeting, McClam was arrested a short distance from the restaurant in his vehicle.  The vehicle matched the description provided by Victim 1 of the vehicle McClam used to drive her on December 28, 2015, as well as the vehicle occupied by McClam and Sharpe outside the motel on December 29, 2015. 

If convicted, McClam and Sharpe each face a maximum of life in prison for conspiracy to commit sex trafficking of a minor.  

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

The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from10 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 Rod J. Rosenstein commended FBI and Montgomery County Police Department for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Kelly O. Hayes and Special Assistant U.S. Attorney Francesca Liquori, of the U.S. Justice Department‘s Organized Crime and Gang Section, who are prosecuting the case.

Baltimore, Maryland - U.S. Attorney Rod J. Rosenstein sent the following message to police officers serving in Maryland:

“Working with exceptional Maryland law enforcement officers is one of the highlights of my job. It is a tremendous privilege to work with so many officers who serve with honor and integrity. Thank you for your courage and your devotion to justice.”

~ ~ ~

In 2016, National Peace Officers Memorial Day falls on Sunday, May 15. The official dates for National Police Week are May 15 through May 21, although many events are taking place before May 15.

During National Police Week, we pay tribute to police officers who have died in the line of duty and give thanks to officers who faithfully protect and serve.

This year, according to the National Law Enforcement Memorial Fund, the names of 123 officers killed in the line of duty are being added to the National Law Enforcement Officers Memorial in Washington, DC. They include officers who died in the line of duty during 2015, and officers who died in previous years but had not been added to the Memorial. Four Maryland officers were added this year:

Craig Anthony Chandler, Baltimore City Police Department (2015)
Brennan Roger Rabain, Prince George’s County Police Department (2015)
Noah Aaron Leotta, Montgomery County Police Department (2015) and
George Oliver Noonan, Bel Air Police Department (1920)

At a ceremony in Maryland on May 6, the state honored three officers who died in shooting incidents in 2016:

Patrick Dailey, Harford County Sheriff’s Office
Mark Logsdon, Harford County Sheriff’s Office
Jacai D. Colson, Prince George’s County Police Department

 

Baltimore, Maryland – Diameter Akala, age 43, of Silver Spring, Maryland, Washington, D.C. and New York, pleaded guilty today to a scheme to fraudulently obtain over $1.4 million in unemployment benefits.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Robin Blake, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and Postal Inspector in Charge Maria L. Kelokates of the U.S. Postal Inspection Service - Washington Division.

According to his plea agreement, from 2012 to 2015, Akala and his co-conspirators caused the Maryland Department of Labor, Licensing and Regulation (DLLR) and the Pennsylvania Department of Labor and Industry (DLI), which administered the unemployment insurance benefit programs in their respective states, to issue fraudulent unemployment benefits in the names of individuals by submitting false applications for monetary benefits. Akala enlisted his friends and family members to join him in the scheme.

Members of the conspiracy obtained the personally identifying information (PII) of individuals, including Maryland residents.  Akala filed false documentation with DLLR and DLI in the names of fictitious companies, falsely stating that the fictitious companies employed and paid wages to actual individuals. In fact, no unemployment insurance taxes were ever paid to DLLR or DLI in the names of the fictitious companies.  Akala, electronically and by phone, filed claims in Maryland and Pennsylvania for unemployment benefits in his own name and the names of other individuals, falsely claiming that they previously worked for those fictitious companies. Akala used the PII of individuals who had given permission to have their information used, as well as many who did not.  Akala offered money to co-conspirators in exchange for PII.

Akala and other members of the conspiracy used residential mailing addresses of co-conspirators in Maryland, New York, the District of Columbia, Pennsylvania and Virginia to register and receive correspondence for the fictitious companies, and apply for and receive unemployment benefits in the form of prepaid debit cards.  In exchange for the use of their addresses, the co-conspirators received funds obtained through the fraud, typically in the form of a fraudulently obtained prepaid debit card.  Members of the conspiracy regularly contacted DLLR and DLI, falsely representing themselves either to be a representative of one of the fictitious companies or an individual entitled to unemployment benefits.  Akala moved between different states in order to retrieve correspondence addressed to fictitious companies and individuals, including prepaid debit cards issued by DLLR and DLI.

Co-conspirators Wilfred Mendez, Tawana McClain, Ferny Alexander Moreno Puente, Wilfredo Torres and his half-brother, Eric Gonzalez, admitted that they agreed to have Akala file fraudulent unemployment claims in their names.  Mendez, Moreno Puente and Torres also provided the personal identification information and/or addresses of other individuals to file additional false claims in the names of those individuals, and others. The co-conspirators used the fraudulently obtained unemployment benefits prepaid debit cards that were either mailed to them, or provided to them by Akala, at ATMs or stores in order to withdraw and use the funds.  Some of the cards were in their names, but some of the cards were in the names of other individuals. Generally, the conspirators kept a portion of the fraudulently obtained funds for themselves and provided the remainder to Akala.  Torres also allowed his business address to be used to file fraudulent unemployment benefit claims and when the unemployment benefits debit cards arrived, he either used them or distributed them to co-conspirators. 

During the course of the conspiracy the actual loss was approximately $1,468,463.80 in fraudulently obtained unemployment benefits.  As part of his plea agreement, Akala will be required to pay restitution and forfeiture in that amount.

Akala faces a maximum sentence of 20 years in prison for conspiracy to commit wire fraud and  a mandatory minimum of two years in prison, consecutive to any other sentence, for aggravated identity theft.  U.S. District Judge Ellen L. Hollander has scheduled sentencing for Akala on August 4, 2016, at 10:00 a.m.

Wilfred Mendez, age 21, of Bronx, New York; Eric Gonzalez, age 34, of Alexandria, Virginia; Tawana McClain, age 51, of Washington, D.C.; Ferny Alexander Moreno Puente, age 26, of Gaithersburg, Maryland; and Wilfredo Torres, age 36, of Alexandria, Virginia, previously pleaded guilty to their roles in the scheme.  Mendez has agreed to the entry of an order to pay restitution and forfeiture of $195,422; Torres and Gonzalez have each agreed to the entry of an order to pay restitution and forfeiture of $173,185.32; Moreno Puente has agreed to the entry of an order to pay restitution and forfeiture of $268,911; and McClain has agreed to the entry of an order to pay restitution and forfeiture of $205,613. U.S. District Judge Ellen L. Hollander has scheduled sentencing for Mendez on July 18, 2016, for McClain and Gonzalez on July 15, 2016, and for Moreno Puente and Torres on July 14, 2016.

Co-conspirators Dulce Oleo, age 38, of the Bronx, New York; Yaw Bempa-Boateng, age 35, of Silver Spring, Maryland; and Carmen Benitez, age 29, of Scranton, Pennsylvania, previously pleaded guilty to their roles in the scheme and await sentencing.

The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended the Department of Labor – OIG and U.S. Postal Inspection Service for their work in the investigation, and praised the Maryland Department of Labor, Licensing and Regulation and the Pennsylvania Department of Labor and Industry for their assistance in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Sean R. Delaney, who is prosecuting the case.

Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Aleksey Sosonko, age 35, of Owings Mills, Maryland, today to 14 years in prison, followed by five years of supervised release, for conspiracy, kidnapping, and brandishing a firearm in relation to a crime of violence, in connection with the robbery of a jewelry store, including a home invasion robbery, carjacking and kidnapping. 

On May 12, 2016, Judge Motz sentenced co-conspirator Marat Yelizarov, age 27, of Pikesville, Maryland, to 18 years in prison, followed by five years of supervised release, for the same charges.  Judge Motz also entered an order requiring Sosonko and Yelizarov to pay restitution of $500,000.

The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.         

According to their plea agreements, Sosonko and Yelizarov were part of a conspiracy, led by Marat Yelizarov’s brother, Stanislav “Steven” Yelizarov, to rob an Owings Mills jewelry store.  In the course of the conspiracy, Sosonko and M. Yelizarove participated in an armed home invasion robbery designed to obtain firearms for use in the later robbery of the jewelry store.

Specifically, on July 22, 2012, S. Yelizarov, Sosonko, M.Yelizarov, and Grigory Zilberman robbed a home in Reisterstown, Maryland. Zilberman had been a guest in the home on a number of occasions and knew that the residents of the home owned firearms. After conducting surveillance of the home for several days prior to the robbery, at 2:30 a.m. on July 22, 2012, the conspirators, dressed all in black and wearing ski masks and latex gloves, entered the home through the garage door. S. Yelizarov was armed with a handgun when they entered the residence. The other three men grabbed long guns as they entered the home and carried them with them. A resident of the home was asleep when the four robbers entered his bedroom and woke him up, pointing guns at him and shining flashlights in his eyes. S. Yelizarov beat the resident when he tried to resist while M. Yelizarov tied up the resident with a belt and a cord. The robbers ransacked the home for about an hour, looking for firearms and other valuables. After the robbers left, the resident was able to free himself and call police.  The resident was taken to the hospital for treatment of his injuries. Among the items stolen from the house were 10 long guns (rifles and shotguns), a crossbow, a laptop computer, and jewelry. Numerous electronic devices including computers and televisions were destroyed during the robbery. The value of the items stolen was approximately $10,000.

S. Yelizarov also devised a plan to commit the jewelry store robbery and recruited Sosonko, M. Yelizarov, Zilberman, Igor Yasinov, Peter Magnis, Sorhib Omonov and others to participate in the robbery. Prior to the robbery, the conspirators gathered intelligence, including conducting surveillance and attaching a GPS device to the car of an employee of the jewelry store in order to learn the employee’s travel routine and habits.  Zilberman also exploited his friendship with the employee to obtain information about the operation of the jewelry store and the habits of the employee.

According to their plea agreements, on January 15, 2013, Zilberman enticed the employee to visit his home, in order to alert the other co-conspirators of the employee’s whereabouts.  While the employee was at Zilberman’s home, the other conspirators met at Yelizarov’s residence to prepare for the kidnapping and robbery, including preparing the firearms and donning masks and gloves. Early in the morning on January 16, 2013, M. Yelizarov and Omonov followed the employee from Zilberman’s home and notified the other conspirators of the employee’s location so they could follow the employee. S. Yelizarov, Sosonko, Yasinov, and Magnis used a law enforcement-type light bar and a loudspeaker to impersonate a police officer and pull over the employee. Brandishing firearms which were supplied by S. Yelizarov, the conspirators removed the employee from his car, bound and blindfolded the employee, put him into the trunk of his own car, and drove him to a predetermined location. Once at the location, Sosonko, Yasinov, Magnis, and S. Yelizarov continued to brandish firearms and threatened to kill the employee’s family if he did not comply with their demands or if he reported the incident to police. The employee complied and at approximately 3:52 a.m., Sosonko and S. Yelizarov drove the employee’s vehicle from the remote location to the jewelry store. Yasinov and Magnis stayed with the employee. M. Yelizarov and Omonov were stationed near the jewelry store to act as look-outs. S. Yelizarov and Sosonko entered the jewelry store and stole jewelry, stones, and watches, valued at about $500,000, then drove back to the remote location. The employee was then placed back into the trunk of his car and driven to another location, where he was left. The employee was able to kick his way out of the trunk through the back seat of his car.

On January 18, 2013, S. Yelizarov sold a portion of the stolen jewelry for approximately $29,000 to an FBI informant. On January 19, 2013, S. Yelizarov traveled to Brooklyn, New York to sell some of the jewelry and stones taken during the robbery, receiving over $100,000. On January 21, 2013, he returned to Maryland and divided the cash proceeds among the members of the conspiracy and others. S. Yelizarov determined how much each participant received based on his perception of the risk and the conduct of each participant.

On January 25, 2013, S. Yelizarov was arrested in Buffalo, New York, on charges of federal misuse of a passport. From January 25 through February 2, 2013, S. Yelizarov placed calls directing M. Yelizarov, Sosonko, and others, to remove from his residence and dispose of evidence related to the jewelry store robbery, including cash from the sale of the jewelry, firearms used during the conspiracy, the law enforcement light bar, the GPS device, a laptop computer, and other evidence of the crimes. 

Stanislav “Steven” Yelizarov, age 26, of Pikesville, Maryland, was sentenced to 30 years in prison, after he pleaded guilty to a robbery conspiracy, kidnapping, and brandishing a firearm in relation to a crime of violence. Peter Aleksandrov Magnis, age 28, of Hydes, Maryland, and Sorhib Omonov, age 27, of Baltimore, also pleaded guilty and were sentenced to seven years in prison and four years in prison, respectively. Judge Motz also entered an order requiring all of the sentenced defendants to pay restitution of $500,000. Grigoriy (Greg) Zilberman, age 25, of Owings Mills, Maryland; and Igor Yasinov, age 26, of Baltimore, previously pleaded guilty and are scheduled to be sentenced on May 20, 2016 at 10:30 and 11:00 a.m., respectively.

United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, and Baltimore County State’s Attorney’s Office for their work in the investigation.  Mr. Rosenstein thanked Assistant United States Attorneys Paul E. Budlow and Aaron S. J. Zelinsky, who are prosecuting the case.

Baltimore, Maryland – Michael Gerard Camphor, age 60, of Baltimore, pleaded guilty today to charges arising from the fraudulent purchase of four properties in Baltimore, using fraudulent loan documentation and straw purchasers, resulting in losses of over $736,000.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Cary A. Rubenstein of the U.S. Department of Housing and Urban Development Office of Inspector General; and Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office.

According to Camphor’s plea agreement and other court documents, since 2002, co-conspirator Andreas Tamaris purchased, renovated, and then resold distressed row houses in Baltimore City, primarily in the Highlandtown neighborhood.  Camphor had worked as a real estate agent for a company and also operated a real estate consulting business called Ron Gerard LLC, a/k/a Ron Gerard & Associates.

From approximately February 2008 to July 2009, Camphor and his co-conspirators, including Cecil Chester, found buyers for Tamaris’ properties and for other property owners. They sought potential buyers who were inexperienced with residential real estate transactions. Camphor and his co-conspirators advised these “straw purchasers,” who lacked the funds needed to pay the down payment and closing costs that they didn’t need to contribute these funds to buy the properties. Because the straw purchasers also lacked the earnings to keep up the mortgage payments, the conspirators typically advised that they would place tenants in the properties whose rent payments would cover the monthly mortgage payments after the transactions closed.  The conspirators promised to collect the rent and make the mortgage payments.

Camphor and his co-conspirators set the purchase price for the properties to exceed their actual fair market value, thereby generating excess proceeds from the transactions from which they could profit. The conspirators provided false information about the straw purchasers’ employment, income and financial assets to the mortgage loan brokers to enable the straw purchasers to qualify for home mortgage loans. The conspirators falsely indicated to the mortgage loan brokers that the straw purchasers each intended to use the property as their primary residence following the purchase. Tamaris and other individuals supplied the funds needed for the down payment and closing costs on each of the transactions, and were in turn reimbursed from the loan proceeds at settlement.

One of the conspirators brought the straw purchaser to the closing and then caused the straw purchaser to falsely sign certifications in the closing documents affirming that the property was to be used as the primary residence, and that no portion of the down payment and closing costs were borrowed.  Following the settlement on each transaction in which they participated, Camphor and his co-conspirators received substantial payments drawn from the proceeds of the loan.

Few, if any, payments were made towards the mortgages. 

Camphor was integrally involved in the fraud scheme by which four of the properties handled by the conspirators were sold and financed:  126 S. Curley Street; 1720 W. Pratt Street; 322 S. Robinson Street; and 8020 Gough Street, all located in Baltimore. All four properties went into foreclosure, resulting in a loss of at least $736,748.46.

Camphor has agreed to forfeit property retained or obtained as a result of the fraudulent conspiracy, including 1619 W. Baltimore Street; 2040 Linden Avenue, Unit A, and 1610 N. Smallwood Street, all located in Baltimore.

Camphor faces a maximum sentence of 30 years in prison and a $250,000 fine for conspiring to commit wire and mail fraud, and for wire fraud.  U.S. District Judge James K. Bredar has scheduled sentencing for August 26, 2016 at 11:30 a.m.

Cecil Sylvester Chester, age 69, of Mitchellville, Maryland previously pleaded guilty to the same charges and is scheduled to be sentenced on October 4, 2016 at 10:00 a.m.  

In a related proceeding, co-conspirator Andreas E. Tamaris, age 45, of Bel Air, Maryland, previously pleaded guilty to one count of conspiracy to commit mail and wire fraud.  Alexander Sivels, II, age 32, of Baltimore, previously pleaded guilty to wire fraud involving the fraudulent purchase of at least nine properties in Baltimore.  Both Tamaris and Sivels are scheduled to be sentenced on September 27, 2016.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available at http://www.justice.gov/usao-md/financial-fraud-and-identity-theft.

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended the FBI, HUD OIG - Office of Investigations and the U.S. Secret Service for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.

Baltimore, Maryland – A federal grand jury indicted Kendra Westmoreland, age 54, of Windsor Mill, Maryland, on charges of receiving and delivering an adulterated or misbranded device, in connection with her alleged receipt and use of Polydimethylsiloxane which she misrepresented as medical grade silicone. The indictment was returned on May 11, 2016.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Mark McCormack of the U.S. Food & Drug Administration, Office of Criminal Investigations’ Metro Washington Field Office; and Chief James W. Johnson of the Baltimore County Police Department.

According to the indictment, from October 2000 through October 4, 2015, Westmoreland received polydimethylsiloxane, a silicon-based organic polymer, from China that she injected directly into the bodies of victim customers for money or some other payment.  When used in this fashion, liquid silicone is a medical device subject to the regulation of the Food and Drug Administration (FDA). Polydimethylsiloxane is not approved, exclusively or as a component, for body-contouring.  Polydimethylsiloxane is used in the manufacture of shampoos (to make hair shiny and slippery), food (as an antifoaming agent), caulking, lubricants, kinetic sand, and heat-resistant tiles. 

The indictment alleges that Westmoreland intentionally defrauded and misled individuals by representing polydimethylsiloxane as “medical grade” silicone and approved for injecting directly into the human body.  As a result of her representations, victim customers came to her residence in Windsor Mill to have polydimethylsiloxane injected directly into their buttocks and other places on their bodies, for larger and fuller buttocks or to shape other areas of their bodies.  Westmoreland also traveled to Miami, Florida, and other locations, for the same purpose.    According to the indictment, Westmoreland stored the polydimethylsiloxone in a plastic container that was not properly labeled for medical use, nor was Westmoreland a licensed medical practitioner or under the supervision of a licensed medical practitioner.

If convicted, Westmoreland faces a maximum sentence of three years in prison.  An initial appearance is expected to be scheduled soon in U.S. District Court in Baltimore. 

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 Rod J. Rosenstein commended FDA Office of Criminal Investigations and Baltimore County Police Department for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Judson T. Mihok, who is prosecuting the case

Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Kaushik Kanti Modi, age 43, of Glen Burnie, Maryland, a native of India living illegally in the United States, today to time served, which has been approximately 13 and half months, for a money laundering conspiracy arising from a scheme to launder millions of dollars of fraud proceeds obtained from individual victims through a variety of scams. Judge Motz also ordered Modi to forfeit and/or pay restitution of $857,597.02, the amount involved in the money laundering offense that the government has seized or restrained.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Special Agent in Charge Rodney A. Davis of the Treasury Inspector General for Tax Administration; and Chief James W. Johnson of the Baltimore County Police Department.

“Modi’s involvement in this scheme is just another unfortunate example of criminals willing to enrich themselves at the expense of their victims,”said Thomas Jankowski, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office.  “Today’s sentence should serve as a reminder that these criminals will bear the consequences of their actions and be sent to prison for their crimes.”

“Crimes such as these prey on honest American taxpayers and today’s sentence serves notice to those committing these crimes that we in the law enforcement community will continue to identify, investigate and prosecute them,” said Special Agent in Charge Rodney A. Davis of the Treasury Inspector General for Tax Administration.

According to his plea agreement, Modi received text messages from conspirators instructing him to buy large numbers of stored value cards, principally GreenDot cards, and to forward the PIN numbers of the cards to other unidentified co-conspirators.

Modi’s co-conspirators loaded money onto the stored value cards using a variety of scams.  Some of the money came from calls made by persons impersonating IRS employees who convinced innocent taxpayers that they owed taxes to the IRS, and needed to send money to the co-conspirators to avoid arrest and incarceration.  On at least two occasions, victims of the IRS impersonation fraud deposited money directly into accounts held in Modi’s name.  Other money was derived by offering merchandise for sale on the internet and then failing to provide the merchandise once money was received from the victim-purchaser.

After money was loaded on the stored value cards, Modi was instructed to use the cards to buy money orders, principally MoneyGram money orders at Walmart stores, and then to deposit those money orders into bank accounts either in Modi’s name or the names of others.  From January 1, 2014 to March 24, 2015, Modi deposited 241 money orders totaling $2,077,308.20 into his bank accounts.  Moreover, Modi frequently bought the money orders using stored value cards that were activated using the identification of identity theft victims.

At the time of his arrest, Modi admitted that he knew that something was not right about the source of the money involved in the transactions, and accordingly, knew that the purpose of those transactions was to conceal the proceeds of unlawful activity.

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended the IRS – Criminal Investigation, Treasury Inspector General for Tax Administration, and Baltimore County Police Department for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Evan T. Shea, who prosecuted the case.

Baltimore, Maryland – U.S. District Judge George L. Russell sentenced Pedro Antonio Del Granado, age 49, of Fort Meade, Maryland, today to 10 years in prison, followed by 10 years of supervised release, for enticing a minor to engage in sexual activity. A federal jury convicted Del Granado on February 11, 2016 and he has been detained since that date, after Judge Russell ordered that he be immediately taken into custody and held pending sentencing.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Chief James W. Johnson of the Baltimore County Police Department.

According to the evidence presented at his four day trial, from October 23 through October 30, 2014, Del Granado used email messages to attempt to entice a person whom he believed to be a 13 year old girl to engage in sexual activity.  In fact, Del Granado was communicating with an undercover Baltimore County Police detective posing as a 13 year old girl.  Witnesses testified that Del Granado responded to an advertisement the undercover detective placed on an internet website.  The undercover detective and Del Granado continued communicating over the next several days.  During their conversations, the undercover detective posing as a 13 year old girl mentioned several times that she was 13 years old.  Despite that, Del Granado asked about meeting the 13 year old girl and discussed what they would do at that time, including having oral sex.

On October 30, 2014, Del Granado and the undercover detective agreed to meet and the undercover detective provided a location.  Del Granado advised the undercover detective that he would be driving a black SUV.  Members of the Baltimore County Police Department set up surveillance at the address.  When Del Granado arrived at the location he was arrested. A cellular phone containing most of the emails between the Del Granado and the undercover detective was found in his vehicle.  Del Granado told law enforcement officers that he was there to meet a 20-year old woman even though the emails from the undercover detective said the girl was 13 years old.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.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 Rod J. Rosenstein commended the FBI, HSI Baltimore, and Baltimore County Police Department for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Ayn B. Ducao and Special Assistant U.S. Attorney Angela Tang, who prosecuted the case.

Greenbelt, Maryland – A federal grand jury indicted Sidney J. Charles, Jr., age 49, of Raceland, Louisiana, formerly of Bowie, Maryland, on mail and wire fraud charges arising from an investment fraud scheme. The indictment was returned on April 27, 2016 and unsealed on May 10, 2016, after Charles was arrested late on May 9, 2016, in Levelland, Texas.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.

According to the three-count indictment, in August 2009 Charles founded The Borrowing Station, a Nevada limited liability company with its principal place of business in Bowie. From October 2009 through July 2011 Charles served as the president and chief executive officer of the business.  Charles marketed The Borrowing Station as an established investment firm that offered significant returns on investments.

The indictment alleges that from at least October 2009 through July 2011, The Borrowing Station, acting through Charles and others, orchestrated and operated a scheme to solicit investors with false promises of high rates of guaranteed return on their investments.  Specifically, The Borrowing Station, through Charles and others, solicited investors directly and through its website to participate in a pooled investment plan that traded off-exchange leveraged or margined foreign currency contracts (“forex” or “foreign currency”).  The solicitation included false promises, including: that investors could earn substantial investment returns such as 25% per year or 10% per month; that The Borrowing Station was an established, successful, and safe investment firm; and that pool participant funds were guaranteed against trading losses. For example, The Borrowing Station website stated:  “If for any reason we do not reach a return of 25%, we will subsidize your account with our money.”  The indictment alleges that as a result, The Borrowing Station obtained at least $368,628.37 from at least 17 individuals.

The indictment alleges that The Borrowing Station, through Charles: paid pool participants with other pool participants’ funds rather than from any funds generated by trading forex, and deposited only a portion of pool participant funds into actual trading accounts; hid trading losses from pool participants, including substantial losses resulting from unsuccessful forex trades; and used pool participant funds to pay for Charles’s personal expenses, and to fund The Borrowing Station’s operations. 

According to the indictment, to conceal the scheme Charles communicated false information to pool participants in response to their requests for the return of their funds.  In addition, Charles and others allegedly issued lulling payments to pool participants that typically approximated the return of 10% per month that Charles, directly and through others, had promised pool participants. 

If convicted, Charles faces a sentence of 20 years in prison for each of two counts of wire fraud and for mail fraud.  An initial appearance was held on May 10, 2016, in U.S. District Court for the Northern District of Texas.  Charles is scheduled to have an initial appearance U.S. District Court in Greenbelt on June 8, 2016, at 1:30 p.m. before U.S. Magistrate Judge Timothy J. Sullivan. 

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. 

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and recognized the U.S. Commodity Futures Trading Commission for its assistance.  Mr. Rosenstein thanked Assistant U.S. Attorney Sujit Raman, and Special Assistant U.S. Attorney Mara Senn, of the U.S. Justice Department’s Asset Forfeiture and Money Laundering Section, who are prosecuting the case.

Baltimore, Maryland – A criminal complaint was filed charging Brian Keith Wallen, age 52, of Lutherville, Maryland with mail fraud arising from a nationwide fraudulent telemarketing scheme designed to ship unwanted and vastly over-priced light bulbs and cleaning supplies to thousands of businesses and non-profit organizations, including churches, schools and homeless shelters.  The complaint was filed on May 4, 2016 and unsealed today.

The criminal complaint was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; and Postal Inspector in Charge Maria L. Kelokates of the U.S. Postal Inspection Service - Washington Division.

“We are asking for the public’s help in finding Brian Wallen,” said U.S. Attorney Rod J. Rosenstein. “Mr. Wallen reportedly left a note referencing his death, but law enforcement is still searching for him.” 

According to the affidavit supporting the complaint, Wallen and others operated principally operated out of Maryland and Florida, and used a variety of company names to disguise the existence of the scheme and confuse victims.  The conspirators used a company dubbed Midway Industries, as well as other related companies (collectively, the shell entities) to distribute products and collect the money from victims through fraud.  Wallen owned and/or managed in part all of the shell entities, and oversaw the Reisterstown-based operations.  Wallen, along with others, personally handled the accounts of large, repeat victims.

The affidavit alleges that from about 2010 to 2014, Wallen and others in the shell entities (collectively, the conspirators) telephoned authorized representatives of businesses and non-profit organizations, purportedly on behalf of individual shell entities. The authorized representatives were often maintenance employees. During these phone calls, the conspirators falsely stated that: the victim businesses had an existing business relationship with the shell entities; the purpose of the call was to provide an updated phone number or to send catalogues; and that the shell entities would send a “half box” of light bulbs, when in fact there were never any half boxes.  The “half box” was a deceptive technique used to understate the volume and price of shipments, and disguise unwanted future shipments. 

According to the affidavit, during the initial calls, conspirators regularly promised national store gift cards to the authorized representatives to induce them to place initial orders, or to provide to the shell entities additional company information or personal information, like the authorized representatives’ home address and personal phone number.  The conspirators used the cell phone numbers and/or birthdays of the authorized representatives as “purchase order” numbers in order to lend legitimacy to later collections efforts.  If the maintenance employee inquired about price, the caller falsely stated that he or she did not have the price in front of them, but that it would be at the corporate discount.  In fact, the shell entities did not offer a corporate discount. 

As long as the victims continued paying the shell entities’ invoices, the conspirators misrepresented in subsequent calls that the balance of the victim’s order or “regular seasonal order” had recently been shipped, despite no order having been made by the victim business, and no actual shipment having yet been sent. The conspirators called authorized representatives under the guise of different shell entities in order to repeat the process using a product other than light bulbs, often cleaning supplies. The conspirators often denied the relationship between the shell entities when questioned by victims.

The affidavit further alleges that on multiple occasions, when the authorized representative could not be reached by phone, the conspirators would simply send the product to the victim, without the victim placing an order.  The conspirators referred to this practice as “just shipping.”  Wallen was such a prolific user of the “just ship” method, his nickname within the shell entities was “Ship.” If the authorized representative had quit, been fired, or even passed away, they sent a product to the victim knowing that the victim would be unable to dispute the validity of the order.

According to the affidavit, Wallen and his co-conspirators ordered light bulbs and cleaning supplies from a company located in New Jersey (supplier).  They instructed the supplier to ship the products to the victim without an invoice, and to send the invoices directly to the shell entities.  The conspirators sent inflated invoices to the billing departments of the victims, which were often different departments from those of the authorized representatives.

The price billed to victims allegedly had no correlation to the product being sent.  Rather, the price was determined and/or approved by a supervisor based on what they suspected the victim would pay without detecting the scheme. The invoices were regularly 900% above the prices the shell entities paid the supplier. After a victim had paid one invoice, the conspirators sent invoices to the victim that were sometimes greater than 8,000% above the supplier’s prices. 

When victims did not remit payment, the shell entities repeatedly called the victims’ collection departments in order to force them to pay the inflated invoices.  If the victim company continued to protest, they were told that the authorized representative was recorded ordering the product. The shell entities insisted that the fact that the authorized representative had provided his home address to receive a gift card indicated that the authorized representative had actually placed an order with Midway. Conspirators recorded the serial numbers of gift cards before they were sent to victims in order to track the balance and use the expenditures by the maintenance employee against the victim companies. 

If the victim threatened to contact law enforcement or the Better Business Bureau, the conspirators offered to take back a product at either a discounted rate or for a re-stocking fee that was still substantially greater than the cost of the products purchased from the supplier.

From January 1, 2011 through June 2, 2014, a Federal Trade Commission (FTC) consumer protection database documented more than 500 complaints regarding the shell entities.  On July 21, 2014, the FTC filed a civil complaint in federal court in Baltimore, Maryland alleging telemarketing and consumer fraud.  The court temporarily enjoined the shell entities, and Wallen individually, from operating the businesses, and froze assets.  Business operations were halted on July 23, 2014.

As a result of the fraud scheme, Midway and the shell entities allegedly sent fraudulent invoices to victim companies for more than $100 million and received more than $50 million in payments on those invoices.

Wallen faces a sentence of 20 years in prison. 

On April 28, 2016, Wallen was reported missing.  The Baltimore County Police Department is currently conducting a missing person investigation. Anyone with information concerning Wallen’s whereabouts is urged to call police at 410-307-2020. http://www.baltimorecountymd.gov/News/PoliceNews/iWatch/PoliceNeedHelpFindingMissingLuthervilleMan

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

United States Attorney Rod J. Rosenstein commended the FBI and U.S. Postal Inspection Service for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Sean R. Delaney and Harry M. Gruber, who are prosecuting the case.

Greenbelt, Maryland – U.S. District Judge George J. Hazel sentenced Gavin Burns Smith, age 45, of New Port Richey, Florida, today to six months of home confinement followed by three years of probation for selling peptides to bodybuilders which were not approved by the FDA for human use. Judge Hazel also entered an order requiring Smith to forfeit $2,102,684.06, the value of the misbranded drugs subject to seizure.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Mark McCormack of the U.S. Food & Drug Administration, Office of Criminal Investigations’ Metro Washington Field Office.

“Non-FDA approved drugs may be dangerous and contain unknown and harmful ingredients.” said Mark S. McCormack, Special Agent in Charge, FDA Office of Criminal Investigations’ Metro Washington Office. “As we did in this case, we will continue to protect the public by bringing these peddlers of dangerous unapproved drugs to justice.”

According to his plea agreement, from 2010 to April 2012, Smith owned and operated Precision Peptides, located in Lutz, Florida; and from April 2012 to May 2015, he owned and operated DNA Peptides, located in New Port Richey, Florida.  Smith placed advertisements on the companies’ websites and sold body-enhancing injectable drugs to individuals seeking to enhance their physiques.  These drugs were not approved by the FDA for human use.

On August 22, 2012, law enforcement executed federal search warrants at Precision Peptides and DNA Peptides.  At some time thereafter, Smith began operating DNA Peptides out of his residence and continuing to sell drugs using a different website to avoid detection by law enforcement.

Smith caused DNA Peptides and Precision websites to display numerous disclaimers stating that all products sold were for “research/laboratory use only.”  Additionally, prior to purchasing the products from the website, each customer was asked to certify that he or she read the disclaimer that the “chemicals/materials for sale here are . . . not intended for human ingestion.”  Smith used these disclaimers as a ruse to avoid FDA scrutiny.

He advertised his products and website extensively in bodybuilding magazines and conventions.  Smith hired professional bodybuilders to promote his products and to claim that they personally experienced results from taking certain products he sold.  He also provided information to customers, via the company websites and Facebook pages, on how to self-administer drugs, including recommended dosages and placement of the injections, in order to best produce the desired bodily enhancements.

The drugs Smith sold included Growth Hormone Releasing Peptide-2, Growth Hormone Releasing Peptide-6, Melanotan II, Growth Hormone Releasing Hormone, Ipamorelin, Human Growth Hormone Fragment, Mechano Growth Factor, and Dehydroepiandrosterone, none of which the FDA has approved for use in humans.

On seven occasions from November 21, 2011 to March 12, 2015, Smith sold misbranded drugs to an undercover officer and shipped those drugs from Florida to locations in Laurel, Columbia and Beltsville, Maryland. None of the drug shipments included any directions for use of the products.  Additionally, although the labels stated that the products were for research only, Smith intended that the products be consumed by humans.

United States Attorney Rod J. Rosenstein commended the FDA Office of Criminal Investigations for its work in the investigation and thanked Assistant U.S. Attorneys James A. Crowell IV and Kelly O'Connell Hayes, who prosecuted the case.

Greenbelt, Maryland - U.S. District Judge Roger W. Titus sentenced Matthew Nicka, age 43, of Baltimore today to 188 months in prison, followed by five years of supervised release, for conspiracy to distribute at least 1,000 kilograms of marijuana and conspiracy to commit money laundering.  Judge Titus also entered a forfeiture order requiring Nicka to pay a money judgment of $15 million, which represents the proceeds of the offense. 

Nicka, his wife, Gretchen Peterson, and co-conspirator David D’Amico, had been fugitives since the indictment was returned in December 2010.  Nicka and Peterson were arrested in Canada in early August 2013, and D’Amico was extradited from Colombia, South America.   

The sentence was  announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Chief J. Thomas Manger of the Montgomery County Police Department; Chief Hank Stawinski of the Prince George’s County Police Department; Chief James W. Johnson of the Baltimore County Police Department; and Commissioner Kevin Davis of the Baltimore Police Department.

According to Nicka’s plea agreement and other court documents, Nicka, Peterson and D’Amico were part of an extensive drug trafficking operation which was discovered by the DEA when they executed a search warrant at a residence in the 3500 block of Hickory Avenue in Baltimore on March 18, 2009.  The residence was a center of operation for the group. Agents seized more than 80 pounds of marijuana, $20,000 in cash, 31 cell phones, documents regarding a plane purchased for $450,000, tally sheets showing over $14.5 million in marijuana sales, four money counters and false identifications. 

As part of the conspiracy, Nicka, D’Amico and their co-conspirators obtained large quantities of marijuana grown in Canada and northern California, which they transported by plane and tractor trailer, to warehouses in Maryland.  The marijuana was then divided for distribution in Maryland, Pennsylvania, Louisiana, Kansas, Florida, Ohio, North Carolina, Georgia and elsewhere. The defendants used multiple cellular telephones to avoid detection by law enforcement, as well as aliases and false identifications to conceal their activities.  Nicka supervised and directed the conspirators’ activities, recruited conspirators and obtained marijuana in exchange for bulk cash payments, while D’Amico oversaw the day-to-day operations, received orders for marijuana, collected money, arranged for the purchase, operation and rental of planes used to transport marijuana and cash, arranged for the transportation and storage of marijuana, and transported bulk cash payments to marijuana suppliers. Gretchen Peterson received orders for marijuana, transported currency, delivered marijuana, and arranged for deliveries of marijuana to mid-level dealers.  Nicka, D’Amico and Peterson also counted drug proceeds with other conspirators at a stash house in Baltimore. 

From 2007 through June 2009, Nicka, D’Amico, and Peterson used aliases and false identifications, and created and used shell corporations to hold and hide assets, conduct financial transactions, title vehicles, convert assets, and to conceal the source, ownership and control of the proceeds from the marijuana distribution. The defendants structured financial transactions to avoid IRS filing requirements for transactions involving more than $10,000 in cash payments in a single transaction, and further conceal from the government large cash transactions using drug proceeds.

A total of 15 defendants, including D’Amico, Nicka and Peterson, have been convicted in this case.  The other 12 defendants have already been sentenced to up to 121 months in prison. 

David D’Amico, age 49, of Baltimore, and Gretchen Peterson, age 34, of Kennett Square, Pennsylvania, previously pleaded guilty to their roles in the conspiracy.  D’Amico was sentenced to 10 years in prison, and ordered to pay a money judgment of $1 million.  Peterson and the government have agreed that if the Court accepts her plea agreement, she will be sentenced to between 84 months and 144 months in prison.  Judge Titus has scheduled sentencing for Peterson on September 8, 2016.

United States Attorney Rod J. Rosenstein praised the DEA, IRS-CI, and the Montgomery County, Prince George’s County, Baltimore County and Baltimore City Police Departments for their work in the investigation.  Mr. Rosenstein thanked Assistant United States Attorneys Deborah A. Johnston and Mara Zusman Greenberg, who prosecuted this Organized Crime Drug Enforcement Task Force case.

Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Anthony Niles, age 37, of Bowie, Maryland today to 10 years in prison followed by eight years of supervised release for conspiring to distribute and possession with intent to distribute heroin. 

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Chief J. Thomas Manger of the Montgomery County Police Department; Special Agent in Charge Darrell Gilliard of the Naval Criminal Investigative Service, Washington Field Office; Chief Hank Stawinski of the Prince George’s County Police Department; Chief T. N. Treschuk of the Rockville City Police Department; Captain Timothy Lloyd of the Hackensack (New Jersey) Police Department; and Montgomery County State’s Attorney John McCarthy.  

According to his plea agreement, from February to June 8, 2015, Niles supplied co-defendants Vincent Collins, Sierra Lynch, Abdul Sauda and others with large quantities of heroin for re-distribution.  Niles used a music studio known as “Crooked House Entertainment,” located at 7922 and 7924 Cryden Way, District Heights, Maryland as a “stash” house to store and distribute drugs.

After monitoring numerous cell phone calls pursuant to a court order in which Niles and his co-defendants discussed drug transactions, on June 8, 2015, law enforcement officers executed a search warrant at Nile’s residence.  Before law enforcement entered the residence, Niles attempted to flush several ounces of heroin down the toilet.  Officers subsequently recovered approximately 107 grams of heroin from the toilet. Officers also discovered a trail of heroin on the floor leading from Niles’ bedroom to the bathroom.  Niles was storing the heroin in a vent beside his bed.  Officers also seized approximately $6,156, and items used for the packing and distribution of drugs, such as digital scales and a heavy-duty industrial press.

Niles admitted that during the conspiracy he distributed between 700 and 1,000 grams of heroin.

On May 17, 1999, Niles pled guilty to distributing cocaine in the Circuit Court of Maryland for Prince George’s County, Maryland.  He was sentenced to two years imprisonment, with all but six months suspended.

Vincent Collins, age 37, of Oxon Hill, Maryland; Sierra Lynch, age 38, of Beltsville, Maryland; and Abdul Hakim Sauda, age 30, of Laurel, Maryland all pleaded guilty to their participation in the drug conspiracy.  Sauda was sentenced on May 2, 2016 to one year and one day in prison.  Collins and Lynch await sentencing.

United States Attorney Rod J. Rosenstein praised the FBI, the Montgomery County Police Department, NCIS, Prince George’s County Police Department and the Rockville and Hackensack (New Jersey) Police Departments for their work in the investigation.  Mr. Rosenstein commended the Bergen County State’s Attorney’s Office and Montgomery County State’s Attorney’s Office for their assistance, and thanked Assistant United States Attorneys Daniel C. Gardner and Joseph R. Baldwin, who prosecuted the case.

Baltimore, Maryland – Tariq Hicks, age 48, of Owings Mills, Maryland, pleaded guilty on May 2, 2016; and Eddie Carey, age 32; and Ishia Biff Cason, age 36, both of Baltimore, pleaded guilty on May 5, 2016, to bank fraud conspiracy and aggravated identity theft arising from a scheme to use stolen credit information of more than 200 victims to defraud financial institutions.

The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office.

According to their plea agreements, from at least June 2013, through December 18, 2013, Hicks, Carey, Cason, and others, conspired to defraud financial institutions by accessing stolen credit card and debit card accounts belonging to real people and using counterfeit cards encoded with the stolen account information to make unauthorized purchases. 

Hicks purchased the stolen account information over the internet and used a computer and an electronic device called a “reader-writer” to encode the stolen credit and debit card information onto existing credit cards, gift cards, or other similar cards.  These cards were sold or distributed to co-conspirators, such as Carey and Cason, who used them and provided the bulk of the proceeds to Hicks. 

Hicks also purchased or obtained over the internet “credit profiles” containing the identity information of victims.  He then obtained full credit reports for these victims.  Using the information from the credit reports, Hicks sent co-conspirators into stores where the victims had existing credit accounts, with the victim’s personal identity information so that they could “authenticate” themselves as the victim.  The co-conspirators, including Carey and Cason, would then make purchases on the existing accounts (called “account takeover”).  In addition, Hicks used the credit reports to identify stores at which a victim did not have an account, and sent Carey, Cason and other co-conspirators into those stores with the same personal identity information.  The co-conspirators would apply for new credit accounts in the victim’s identity, and then use that “instant credit” to make purchases before the victim learned of the account.

For all of these schemes, Hicks obtained fraudulent drivers’ licenses which bore the information of the victim, but the photograph of a co-conspirator.  Hicks or a co-defendant would often provide a cheat sheet with the necessary personal identity and account information so that the co-conspirator would have ready and covert access to the information as needed. The co-conspirators could then use the counterfeit license to establish their identity as the victim. 

Carey assisted Hicks by conducting wire transfers of money in payment for the stolen credit card numbers and personal profiles.  Carey always used a victim identity, provided by Hicks, to wire the money, usually between $2,000 and $3,000, to an individual in the Ukraine.  As one of the few men participating in the conspiracy, Carey was often involved in the exploitation of any male victim’s identity and account information.  He used the counterfeit cards both to purchase merchandise and to rent cars for use by members of the conspiracy.

Hicks instructed Carey and others to travel to other states to engage in the fraud.  Carey frequently traveled north to Pennsylvania and south as far as Georgia to engage in fraud, including North and South Carolina, West Virginia, and Virginia.  As they traveled, Carey used counterfeit cards in victims’ names to rent hotel rooms and automobiles. Cason, who was on probation at the time and not allowed to travel outside of Maryland, conducted her fraudulent activities in Maryland.

On December 18, 2013, a search warrant was executed at Hicks’ residence, where he lived with Carey and another co-defendant.  Located on the dining table in the kitchen area was a complete set up for the fraud scheme, including a computer with the credit profiles and credit reports on it, a reader/writer device, credit cards in various states of manufacture, money gram receipts for payments for the stolen credit card numbers and profiles, lists of personal identity information and “cheat sheets.”  Also recovered were dozens of credit cards bearing victims’ names and accounts, as well as dozens of fraudulent identification to match the credit cards, all bearing the information of the victims but the photographs of co-conspirators.  In Hicks’ bedroom was a receipt for a storage unit which was rented in a false identity used by a co-defendant.  A search warrant was executed on the storage unit and a duplicate “mill” was located, including an embosser to manufacture embossed credit cards, and boxes containing hundreds of blank plastic cards ready for counterfeiting, including white, gold, silver and black cards.  There were also over 150 cards in various states of manufacture.

Over 450 compromised accounts were compiled from the evidence seized from the residence and storage locker, although most had not yet been used in the scheme.  There were over 200 victims, including businesses and financial institutions which sustained an actual loss and victims who had their identities compromised in the conspiracy. Based on the individual victims and credit accounts which were recovered from the search warrant, actual losses associated with the scheme are $61,030.78.  As part of their plea agreements, the defendants will be required to pay restitution in the full amount of the victims’ losses.

The defendants each face a maximum sentence of 30 years in for the bank fraud conspiracy, and a mandatory two years in prison, consecutive to any other sentence imposed, for aggravated identity theft.  U.S. District Judge James K. Bredar scheduled sentencing for Hicks on June 10, 2016 at 9:30 a.m.; for Carey on August 18, 2016 and for Cason on August 5, 2016, both at 2:00 p.m.

The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended HSI Baltimore and the U.S. Secret Service for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Tamera L. Fine, who is prosecuting the case.

Greenbelt, Maryland – A federal jury convicted Evans Appiah, a/k/a Sean Carter, age 27, of Silver Spring, Maryland today for conspiracy, mail and wire fraud, and aggravated identity theft arising from an internet romance scheme in which the victims were defrauded of more than $600,000.  Following the verdict, U.S. District Judge George J. Hazel ordered that Appiah be immediately taken into custody and detained pending sentencing, which is scheduled for August 29, 2016, at 2:00 p.m.

The conviction was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge James Murray of the United States Secret Service - Washington Field Office; and Chief J. Thomas Manger of the Montgomery County Police Department.

According to testimony at his six day trial, Appiah and his co-conspirators searched online dating websites and initiated romantic relationships with male and female victims in order to obtain money from them.  The relationships began with emails and instant messaging and escalated to telephone calls and primarily text messages.  After gaining the victims trust, Appiah and his co-conspirators began asking for money for a variety of reasons, often invoking false stories and promises to convince the victims to send them money. 

According to evidence presented at trial, from December 2013 through June 2015, Appiah opened and maintained accounts in order to receive money from the victims.  Once the victims had deposited the funds requested by Appiah and the co-conspirators into the accounts controlled by Appiah, he disbursed the money by transferring it to other accounts, withdrawing cash, and by purchasing goods for shipment to co-conspirators outside of the United States.  At least seven confirmed victims were defrauded of more than $600,000.

Appiah also used the name and identifying information of one victim in particular, while depositing one of the victim cashier’s checks into his own bank account.

Appiah faces a maximum sentence of 20 years in prison for the conspiracy, and for each of two counts of wire fraud and for mail fraud.  In addition, he faces a mandatory minimum of two years in prison consecutive to any other sentence imposed for aggravated identity theft. 

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended HSI Baltimore, the U.S. Secret Service and Montgomery County Police Department for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Thomas P. Windom and Special Assistant U.S. Attorney Jennifer L. Wine, who are prosecuting the case.

Baltimore, Maryland – William Kyndall Francis, age 39, of Elkridge, Maryland pleaded guilty today to wire fraud.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.

Francis owned and operated Legacy Investment and Management, Inc. (Legacy Inc.) and Legacy Investment and Management, LLC (Legacy LLC), which were both located at 10015 Old Columbia Rd. in Columbia, Maryland.  Legacy Inc. and Legacy LLC (collectively Legacy) were both management firms that provided financial and property services primarily to homeowner and condominium associations (HOAs) in Maryland, Washington D.C. and Virginia in exchange for a monthly fee. One of the services that Legacy provided was management of the HOAs’ reserve funds, which were typically held in savings or money market accounts and were to be used to cover long term and unexpected capital expenses.

According to his plea agreement, from October 2011 to August 2012, Francis defrauded at least 51 of Legacy’s HOA clients by taking reserve funds that belonged to the HOAs.  For many of the HOAs, Francis created false bank statements that he gave to the HOA representatives that falsely reflected that their reserve funds were intact and earning returns.  In fact, Francis had spent the funds for his own personal and business benefit, including: $7,165.70 to Dogtopia, a dog grooming service; $2,339 to Delicate Touch Nails, a nail salon; $8,244.42 to the Washington Wizards; $1,000.01 to Bare Exposure and $3,848.67 to Pure Gold, adult entertainment clubs; $2,088.50 to A Platinum Plus Limousines; $3,700 to Shadow Room, a Washington D.C. night club; thousands of dollars for the purchase of clothing, liquor, restaurant meals, groceries and other living expenses; $40,025.07 for payroll for Legacy Inc. employees; and payment to AT&T.

The total loss caused by the fraudulent scheme was at least $2,573,753.92. Francis has agreed to the entry of a money judgment forfeiting $2.5 million.

Francis faces a maximum sentence of 20 years in prison and a fine of $250,000 for wire fraud.  U.S. District Judge Ellen L. Hollander scheduled his sentencing for September 13, 2016, at 10:00 a.m.

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked Assistant U.S. Attorney Kathleen O. Gavin, who is prosecuting the case.

Baltimore, Maryland – Tyesha Towanda Roberts, age 37, of Baltimore, Maryland pleaded guilty today to attempting to obstruct a federal investigation.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Frank Riehl of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Commissioner Kevin Davis of the Baltimore Police Department; Maryland State Fire Marshal Brian Geraci; and Anne Arundel County Fire Department Chief Allan C. Graves.

According to Roberts’ plea agreement, in September 2015, a co-conspirator told an individual that Roberts would be willing to offer false testimony concerning the whereabouts of that individual in a federal investigation involving insurance fraud and a series of arsons. On October 27, 2015, a confidential source met with the co-conspirator and Roberts to confirm that Roberts was willing to offer false testimony.  After discussing the proposed false testimony, Roberts agreed that she was willing to lie and took a $1,000 down payment from the confidential source.    

At a meeting on November 6, 2015, Roberts and her co-conspirator solicited $10,000 from the confidential source and an undercover officer, in order to commit the murder of a witness in the case.  Roberts said that she had a person who would carry out the murder.  The undercover officer offered a $2,000 down payment with the remaining $8,000 to be paid upon the completion of the murder.  Roberts and the co-conspirator agreed to accept that payment.  Roberts and the co-conspirator did not receive money at that time, but agreed to wait for the undercover officer to contact them to set up a meeting with them and the shooter. A few days later the co-conspirator told the undercover officer that he didn’t trust the person Roberts had found to commit the murder and that they (the co-conspirator and the undercover officer) should commit the murder themselves.

Roberts faces a maximum sentence of 20 years in prison. U.S. District Judge George L. Russell has scheduled sentencing for August 26, 2016 at 2:15 p.m.

United States Attorney Rod J. Rosenstein praised the ATF, Baltimore Police Department, Maryland State Fire Marshal’s Office and Anne Arundel County Fire Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Judson T. Mihok and Zachary A. Myers, who are prosecuting the case.

Baltimore, Maryland – A federal jury convicted Richard Shusterman, age 53, of Highland Beach, Florida late on May 2, 2016, of conspiring to commit wire fraud and nine counts of wire fraud in connection with a complex scheme to defraud investors and lenders of $278 million by selling fraudulent investment portfolios of debts purportedly owed by hospital patients. U.S. District Judge James K. Bredar detained Shusterman pending a detention hearing scheduled for today at 11:00 a.m.  Shusterman is the fourth and final conspirator to be convicted in the scheme.

The conviction was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

“Richard Shusterman and his co-conspirators perpetrated a brazen and complex Ponzi scheme that defrauded investors of more than $278 million,” said U.S. Attorney Rod J. Rosenstein. “The conspirators pretended that they were repaying investors with revenue earned by collecting debts, but they were really using the money of new victims to repay previous investors.”

According to trial evidence, Shusterman was a shareholder and president of International Portfolio, Inc. (IPI), located in Pennsylvania.  Co-conspirator Robert Feldman was part owner of IPI, and president of United Consulting, Inc.  Shusterman and Feldman represented that IPI had experience in the purchase, valuation, collection and resale of medical accounts receivable, comprising of past due patient accounts which the hospitals and other entities selling the accounts had been unsuccessful in collecting. Beginning on June 21, 2006, Shusterman and Feldman, through United Consulting and IPI, bought and sold consumer debt, including medical debt portfolios.  From December 2006 through June 2008, IPI paid more than $25 million to purchase over $4.1 billion in medical accounts receivable, comprising more than 3,872,514 past due patient accounts.  

Jonathan Rosenberg and Douglas Kuber operated Account Receivable Services, LLC (ARS) in New York, New York.  They agreed to promote the sale of IPI debt portfolio.  Pursuant to their agreement, Shusterman, through IPI, bundled the past due patient accounts from IPI’s inventory into investment portfolios, and then sold the portfolios to ARS at a discounted rate.  ARS’s purchases of the medical debt portfolios from IPI came from investors who agreed to lend money to ARS on a fixed-term basis in return for a high, fixed interest rate.  Shusterman and IPI agreed to manage the collection activity for each debt portfolio that IPI sold.  Any funds collected by IPI were to be forwarded to escrow accounts opened and maintained by ARS, which, in turn, would use the funds to cover the periodic interest payments and outstanding balances owed to the investors.

Fraudulent Inflation of Purchase Prices for IPI Debt Portfolios to Obtain Larger Investor Loans

Rosenberg and Kuber misrepresented to investors that a loan secured by IPI debt portfolios would not be used to pay up-front fees and commissions associated with the investment offering.  In fact, however, ARS and IPI devised an elaborate process involving the use of multiple escrow accounts and independent accountants to feign a transparent tracking of the deposit of the loan proceeds, the revenue from collection activity, the repayment of interest, and the sale of portfolios.  Funds to pay a 5% to 10% fee would come from the investor’s loan proceeds.  Pursuant to this undisclosed fee arrangement, ARS and IPI would agree to a concealed purchase price for a debt portfolio.  Then they would tell the investor that the portfolio price was 5% to 10% higher than the concealed price.

Shusterman agreed to kickback the loan proceeds in excess of the true purchase prices to Rosenberg and Kuber. The kickbacks were characterized as a refund or a rebate. In so doing, ARS and IPI avoided the intricate escrow arrangement they had created to convince investors to finance the joint venture. From June 2007 to March 2009, Shusterman paid Kuber and Rosenberg kickbacks totaling in excess of $8 million.  

In reliance on those misrepresentations, investors provided loans to ARS of approximately $145 million to purchase IPI debt portfolios, which IPI managed.  Other investors purchased approximately $122,500,000 worth of IPI debt portfolios, which IPI also managed.

Fraudulent Inflation of Collection Results

In order to induce existing investors to maintain and increase their participation in the investment scheme and to persuade new investors to join, ARS and IPI falsely represented the amount of income being generated from the collection activity for the medical debt portfolios.   It became apparent almost from the start that collections were significantly inadequate, not only in their failure to cover periodic interest payments that ARS owed its investors, but also to repay the investors’ principal.

Shusterman and Rosenberg agreed that IPI would advance ARS the money needed to make ARS’s periodic interest payments to the investors.  From July 2008 to December 2009, and without the investors’ knowledge, Shusterman and his conspirators wired approximately 209 advances from IPI into the bank accounts of the ARS debt portfolios, which were subsequently used to pay periodic interest payments due to an investor and/or inflate the collection history of the respective investor debt portfolios.  Misleading collection reports were created to deceive the investors.

After their plan to subsidize ARS with monthly advances was implemented, an investor was induced to fund the purchase of 12 more portfolios between July and November 2008, totaling approximately $65 million in new investments.  Another investor representative living in West River, Maryland was induced to fund the purchase of a portfolio on November 8, 2008 for $10 million, and another portfolio on May 26, 2009 for $5 million.

To conceal poor collection results and artificial resale prices for IPI debt portfolios, and to assure a continuing flow of new funding into the investment scheme, Shusterman and his conspirators continued to solicit existing and prospective investors to purchase or finance IPI debt portfolios.  In so doing, they fraudulently used new investor funds to make interest and resale payments in order to meet the investment benchmarks of prior investors.

As a result of the scheme, the loss to investors was $278 million.

Shusterman faces a maximum sentence of 20 years in prison. Judge Bredar scheduled his sentencing for October 11, 2016, at 11:00 a.m.

New Jersey residents Robert Feldman, age 68, of Beach Haven; Jonathan E. Rosenberg, age 47, of West Orange; and Douglas A. Kuber, age 55, of Livingston, previously pleaded guilty to their participation in the conspiracy and face a maximum sentence of 20 years in prison.  Feldman, Rosenberg and Kuber are scheduled to be sentenced on June 2, 14 and 30, 2016, respectively.

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein thanked the FBI and HSI Baltimore for their work in the investigation.  Mr. Rosenstein praised Assistant U.S. Attorneys Martin J. Clarke and Leo J. Wise, who are prosecuting the case.