District of Maryland

Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Chad Bennet Brown, age 34, of Glen Burnie, Maryland, on May 8, 2014, to 10 years in prison, followed by three years of supervised release, after pleading guilty to conspiracy to distribute and possess with the intent to distribute heroin and cocaine.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Anne Arundel County Police Chief Kevin Davis; Chief James W. Johnson of the Baltimore County Police Department; and Colonel Michael Kundrat, Chief of the Maryland Transportation Authority Police.

According to Brown’s plea agreement, from May 2013, through February 10, 2014, Chad Bennett Brown, conspired with others to acquire quantities of cocaine and heroin from sources of supply in Texas for distribution in Maryland. Arrangements for the acquisition of the drugs were made by Brown, while a co-conspirator drove from Maryland to Texas to secure the drugs, often carrying cash to pay for the drugs. On one occasion, the co-conspirator was en route from Maryland to Texas when he was stopped by police in Dickson County, Tennessee and approximately $132,000 was seized. This money was intended for delivery to a source of supply in Texas as payment for several kilograms of cocaine.

This pattern of activity, which involved Brown making arrangements with the sources of supply and the co-conspirator taking money to Texas or picking up drugs in Texas, was repeated on at least ten occasions. On February 10, 2014, the co-conspirator was arrested with 2.5 kilograms of heroin in Jefferson County, Texas, while en route back to Maryland.

Over the course of the conspiracy, Brown was responsible for the distribution of over one kilogram of heroin and five kilograms of cocaine. At the time of his arrest, Brown was on supervised release for a previous federal drug conviction.

United States Attorney Rod J. Rosenstein praised the DEA, Anne Arundel County and Baltimore County Police Departments and the Maryland Transportation Authority Police for their work in the investigation. U.S. Attorney Rosenstein also recognized the Dickson County, Tennessee Sheriff’s Office, Jefferson County, Texas Sheriff’s Office and the U.S. Attorney’s Office for the Eastern District of Texas for their assistance in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorneys James G. Warwick and Kenneth S. Clark, who prosecuted the case.

Baltimore, Maryland – U.S. District Catherine C. Blake sentenced Trevor Cox, age 21, of Baltimore, today to 10 years in prison followed by five years of supervised release for possession of a firearm in furtherance of a drug-trafficking crime.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Baltimore City State’s Attorney Gregg L. Bernstein; and Baltimore Police Commissioner Anthony W. Batts.

According to his plea agreement, on January 5, 2013, Baltimore Police officers responded to the 4000 Block of Park Heights Avenue, Baltimore, Maryland after receiving a tip that a man was carrying a handgun and displaying it to individuals in that area. Officers entered a grocery store located in the area and saw an individual matching the man’s description. The man, who was later identified as Cox, acted in a manner which led the officers to believe that Cox was armed.

The officers then quickly approached Cox to secure any possible weapons and recovered a loaded .38 caliber revolver. Further examination of the revolver showed several attempts to obliterate the serial number.

After his arrest, law enforcement overheard Cox indicate in jailhouse phone calls that he possessed the gun for his own protection while engaged in a conspiracy with others to distribute drugs.

United States Attorney Rod J. Rosenstein commended the ATF, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Special Assistant United States Attorney H. Brandis Marsh, Jr., a cross-designated Baltimore City Assistant State’s Attorney assigned to Exile cases, who prosecuted the case.

Greenbelt, Maryland – Chief U.S. District Judge Deborah K. Chasanow sentenced Keith McBride, age 25, of Washington, D.C., today to 42 months in prison followed by three years of supervised release for conspiring to commit bank robbery.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief Mark A. Magaw of the Prince George’s County Police Department.

According to his plea agreement, McBride, Devontae West and Stephanie Fletcher stole vehicles to use during bank robberies, designated a co-conspirator to act as a getaway driver, wrote demand notes to present to bank tellers, used juveniles to enter the banks to demand money, used cell phones to maintain constant contact during the bank robberies and divided the proceeds of the bank robberies amongst themselves.

More specifically, on four occasions from March 13 to May 22, 2013, McBride and others, including juveniles, drove to the following bank branches where he stole a total of $9,093: TD Bank, PNC Bank and Citibank in Washington, D.C.; and SunTrust Bank in Forestville, Maryland. Also, on May 13, 2013 McBride and his conspirators drove to Capitol One Bank in Suitland, Maryland to rob the bank, but left without having obtained any money.

Devontae West, age 26, of Washington, D.C., previously pleaded guilty to his participation in the conspiracy and to possession of child pornography. West and the government have agreed that if the Court accepts the plea agreement, West will be sentenced to 12 years in prison. Chief Judge Chasanow scheduled West’s sentencing for June 16, 2014.

Stephanie Fletcher, age 36, of Washington, D.C., has also pleaded guilty to her participation in the conspiracy and is scheduled to be sentenced on June 2, 2014.

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 and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney LisaMarie Freitas and Assistant U.S. Attorney Thomas Sullivan, who prosecuted the case.

New Employee Also Recognized at Courthouse Ceremony

Baltimore, Maryland - Thirteen employees of the United States Attorney’s Office and thirteen law enforcement officers were honored today with the Office’s most prestigious awards. At a ceremony held to announce the awards this morning at the U.S. Courthouse in Baltimore, the United States Attorney also welcomed a new Assistant U.S. Attorney and other employees who have joined the Office since last year.

Former United States Attorney, Maryland U.S. District Judge Catherine C. Blake served as the keynote speaker for the event. Judge Blake was an Assistant U.S. Attorney for ten years and served as U.S. Attorney from 1985 to 1986.

“These award recipients sought justice with exceptional skill and dedication,” commented U.S. Attorney Rod J. Rosenstein. “As the U.S. Attorney’s Office works with our partners in local, state and federal law enforcement to promote the rule of law, punish criminals, deter crime and protect government property, it is essential to maintain our commitment to excellence, integrity and achievement.”

Annual Awards

The following awards were announced for accomplishments over the past year:

Gary Jordan Award
Recipient: Roann Nichols

Gary P. Jordan served with distinction for many years as an Assistant U.S. Attorney, as First Assistant from March 29, 1987 until his death on October 25, 1996, and as interim U.S. Attorney in 1993. This is an honorary award presented annually to an Assistant U.S. Attorney for exemplary performance that demonstrates the highest traditions of the office: integrity, ingenuity, dedication to public service and fairness.

Barnet D. Skolnik Award
Recipients: Martin J. Clarke
Sandra Wilkinson

Barnet D. (Barney) Skolnik was an Assistant U.S. Attorney who led teams that prosecuted numerous white collar criminals and corrupt public officials in the 1970s, including Vice President Spiro T. Agnew. This is an honorary award presented annually to one or more Assistant U.S. Attorneys who demonstrate outstanding professionalism, determination and creativity in a case of unusual public significance.

Employee of the Year Award
Recipient: Elizabeth Gardner

The Employee of the Year Award recognizes sustained superior performance and outstanding achievements by a non-attorney employee. The award also recognizes the recipient's professionalism, dedication and comprehensive knowledge in their area of expertise.

Pete Twardowicz Award
Recipients: Michael Baier
Michael Corcoran
Karen Franks
Lynn Grant
Erika Jenson
David Lee
Sarah Lewis

The Pete Twardowicz Award was established in honor of Eugene P. (Pete) Twardowicz, who rendered many years of outstanding service to the U.S. Attorney’s Office as an IRS criminal investigator and a Special Investigator for this Office. This award recognizes law enforcement agents or officers for outstanding cooperation and achievement while working with the U.S. Attorney’s Office on a significant case.

Excellence in Civil Advocacy
Recipient: Thomas H. Barnard

The U.S. Attorney’s Award for Excellence in Civil Advocacy, established in 2007, is presented annually to an Assistant U.S. Attorney for outstanding advocacy in civil litigation.

Excellence in Prosecution of Fraud
Recipients: Kevin V. DiGregory
Kristi N. O’Malley

The U.S. Attorney’s Award for Excellence in Prosecution of Fraud, established in 2007, is presented annually to an Assistant U.S. Attorney for outstanding work in prosecuting fraud.

Excellence in Prosecution of Violent Crime
Recipient: Paul E. Budlow
Mark W. Crooks

The U.S. Attorney’s Award for Excellence in Prosecution of Violent Crime, established in 2007, is presented annually an Assistant U.S. Attorney for outstanding work in prosecuting violent crime.

Excellence in Prosecution of Organized Crime
Recipient: Ayn B. Ducao
Robert R. Harding

The U.S. Attorney’s Award for Excellence in Prosecution of Organized Crime, established in 2007, is presented annually to an Assistant U.S. Attorney for outstanding work in prosecuting organized criminal activity.

Excellence in Legal Support
Recipient: Gerry Zinser

The U.S. Attorney’s Award for Excellence in Legal Support, established in 2007, is presented annually to one or more non-attorney employees for outstanding work in support of the mission of the U.S. Attorney’s Office.

Outstanding Contributions to a Law Enforcement Initiative
Recipient: John Allen
Patrick Dugan
Bonnie S. Greenberg
Earl Jenkins
John Sheridan

The U.S. Attorney’s Award for Outstanding Contributions to a Law Enforcement Initiative, established in 2007, is presented annually to one or more employees for outstanding work in support of an initiative of the U.S. Attorney’s Office.

Carl S. Lackl Award
Recipient: Michael Baier
Michael Groth
Patrick Michaels

The Carl S. Lackl Award for Exemplary Perseverance and Fortitude in Pursuit of Justice was established in 2008 in honor of Carl Stanley Lackl, Jr. Mr. Lackl witnessed a murder in Baltimore in 2006 and agreed to testify against the suspect he identified. After the suspect was arrested by police and charged in state court with the murder, he used a contraband cellular telephone to contact co-conspirators and arranged to murder Mr. Lackl, who was shot to death outside his house in front of his daughter. All of the conspirators were convicted on federal charges.

New Employees

In addition, the U.S. Attorney welcomed new employees who joined the office last year. Assistant U.S. Attorney Zachary Myers and Special Assistant U.S. Attorneys: Frank Balsamello; Nathaniel Cohen; Anthony Enright; Piper McKeithen; James Pearce; and Jennifer Sykes. Non-Attorney Staff: Joanna Neubauer.

Helped Entice the Victim to Submit to Sexual Degradation and Abuse

Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced David Andrew Pizer, age 46, of Silver Spring, Maryland today to 249 months in prison followed by supervised release for life, for conspiring to produce child pornography. Judge Grimm ordered that upon his release from prison, Pizer 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 was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief J. Thomas Manger of the Montgomery County Police Department.

According to his plea agreement, co-conspirator A used pictures of a nine year old girl to create profiles on online forums to advertise to others who expressed a sexual interest in children. Thereafter, and from March 16 to May 11, 2012, Pizer emailed and chatted online with conspirator A and the victim to encourage the victim to submit to sexual degradation and abuse that Pizer either watched through web-cam or that co-conspirator A would photograph and provide to Pizer and others. Pizer also introduced co-conspirator B to the victim and co-conspirator A, to help persuade the victim to continue to engage in sexual acts. Pizer and co-conspirator B repeatedly emailed images of minors dressed in sexually provocative outfits or engaged in sexual acts to co-conspirator A to help groom the victim to engage in sexual acts.

Further investigation revealed that Pizer’s laptop computer had 4,486 images and six videos that depicted children engaged in sexual acts with adults, children in sexually provocative poses or nude image of children. Approximately 605 of the images depicted the victim in lingerie, nude or engaged in sexual acts.

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 and the Montgomery County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi O’Malley, who prosecuted the case.

Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Isiah Robinson, age 27, of Baltimore, to 10 years in prison followed by five 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; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.

According to his plea agreement and court documents, from January to July 23, 2013, Robinson conspired with his father, Darryl Robinson Sr., and others to distribute heroin from an open-air drug “shop” in the Poplar Grove neighborhood of Baltimore. On a daily basis, the co-conspirators bought heroin, stored the drugs at stash houses throughout Baltimore City and packaged the drugs to sell on the streets. Isiah Robinson personally sold heroin to customers in Baltimore City while also supervising and directing other street-level dealers.

During the conspiracy, Isiah Robinson and others conspired to distribute and possess with the intent to distribute at least a kilogram of heroin.

Darryl Robinson, age 49, of Baltimore, a leader of the drug trafficking organization, previously pleaded guilty to his participation in the conspiracy and was sentenced to 15 years in prison.

United States Attorney Rod J. Rosenstein praised the ATF, Baltimore Police Department, and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Clinton J. Fuchs and Scott Lemmon, who prosecuted the case.

Admitted to Possessing Two Guns, Including One With an Obliterated Serial Number

Baltimore, Maryland – U.S. District Judge George L. Russell, III sentenced Gerod Boyd, age 30, of Middle River, Maryland, today to 10 years in prison followed by three years of supervised release for possession with intent to distribute cocaine.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.

According to Boyd's plea agreement, on June 25, 2013, Baltimore City police officers were executing a search warrant at a home in the 5700 block of Eastbury Avenue in Baltimore. Boyd was arrested prior to the execution of the search warrant and had the key to the residence in his hand when he was taken into custody. Located inside the residence was a loaded .38 Special revolver, which Boyd admitted belonged to him. Boyd advised that a .357 revolver with an obliterated serial number, recovered during another search that day from his residence in Middle River was also his firearm.

Investigation revealed that Boyd ran a cocaine distribution network in the 600 block of North Kenwood Avenue in Baltimore, Maryland. Specifically, Boyd used the residence in the 5700 block of Eastbury Avenue and other locations, including a home in the 600 block of North Kenwood Avenue, to store items related to the drug distribution operation. On June 25, 2013, law enforcement officers also executed a search warrant at the home on North Kenwood Avenue and recovered four ounces of cocaine from inside that residence. Recovered near the cocaine was a black bag containing packaging material for street level distribution of drugs, a digital scale, and a razor blade.

United States Attorney Rod J. Rosenstein commended the ATF, Baltimore Police Department and Baltimore City State’s Attorney's Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Bonnie S. Greenberg, who prosecuted the case.

Robbed Eight 7-Eleven Stores in 18 Days

Baltimore, Maryland – John Robinson, age 34, of Baltimore, pleaded guilty today to robbery and using a gun in furtherance of the robbery.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Baltimore City State’s Attorney Gregg L. Bernstein; Baltimore Police Commissioner Anthony W. Batts; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.

According to his plea agreement, from December 1 to 18, 2013, Robinson and a co-conspirator robbed eight 7-Eleven Stores, using a loaded revolver. The stores were located in Baltimore on Boston Street, Holabird Street, West 33rd Street, Belair Road, Reisterstown Road, Harford Road, Frederick Road and Pulaski Highway. In each of the robberies, Robinson wore a mask and pointed the gun at the store employee, demanding money. Robinson or his co-conspirator, who was also masked, would take other items as well, such as cigarettes and lottery scratch-off tickets. On some occasions, Robinson would order the store employee to lie on the floor.

Robinson and the government have agreed that if the Court accepts the plea agreement, Robinson will be sentenced to 20 years in prison. U.S. District Judge Catherine C. Blake scheduled his sentencing for August 1, 2014 at 9:30 a.m.

United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department; Baltimore City State’s Attorney=s Office, Baltimore County Police Department and Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Bonnie S. Greenberg, who is prosecuting the case.

Baltimore, Maryland – A federal grand jury has indicted Laiton Blake Witkowski, age 41, of Stockton, Maryland, on charges of production, distribution and possession of child pornography. The indictment was returned on May 1, 2014. Witkowski is scheduled to have his initial appearance today at 1:00 p.m. in U.S. District Court in Baltimore.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Worcester County Sheriff Reggie T. Mason, Sr.; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; and Worcester County State’s Attorney Beau Oglesby.

The seven count indictment alleges that Witkowski produced images of two minor females engaged in sexually explicit conduct. These images appear to have been taken without the knowledge of the victims, including images of one victim who appears to be sleeping and images of the second victim as she is using the restroom. The indictment further alleges that Witkowski distributed and possessed other images of child pornography, including images of prepubescent children being sexually abused.

Witkowski faces a mandatory minimum of 15 years and a maximum of 30 years in prison for each of the two counts of production of child pornography; a minimum of five years and a maximum of 20 years in prison for distribution of child pornography; and a maximum of 20 years in prison for each of the four counts of possession of child pornography.

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

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States 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 HSI Ocean City, Worcester County Sheriff’s Office, Maryland State Police Internet Crimes Against Children Task Force (ICAC) and the Worcester County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Judson T. Mihok and Special Assistant U.S. Attorney Julie Podlesni, who are prosecuting the case.

Used Inside Information Provided By His Accomplice

Baltimore, Maryland –Darrius Roszario D. Washington, age 20, of Baltimore, Maryland, pleaded guilty today to an armed bank robbery in which Washington forced a teller at gunpoint to accompany him and open the bank vault.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief James W. Johnson of the Baltimore County Police Department.

According to Washington=s plea agreement, on October 1, 2013, Washington and an accomplice parked his car in a parking lot near the M&T Bank in Dundalk. Washington’s accomplice had previously been a teller-trainee at the bank and was familiar with the bank layout, bank procedures and the tellers who worked at the bank. Shortly before 7:30 a.m. Washington and his accomplice approached a teller in the parking lot when she got out of her car. Washington pointed a .32 caliber gun at the teller’s head and ordered her to unlock the door of the bank. The teller initially told Washington that she could not open the door but Washington told her he knew she was lying and threatened to “blow her head off,” if she didn’t unlock the door. The teller opened the door and after Washington and his accomplice entered the bank, the teller fled and called police.

Once inside the bank, Washington, using information provided by his accomplice, approached a second teller, calling her by name. Washington knew that the teller had access to the bank’s vault. Using the gun, Washington forced the teller to accompany him to the vault and ordered her to open the door, threatening that if she did not, she would never see her child, whom Washington called by name, again. The teller opened the vault door and Washington forced her to the floor at gunpoint. Washington removed the money from the vault, while his accomplice emptied the cash from the teller drawers. Washington and his accomplice then left the bank, carrying a canvas bag filled with $133,600, stolen from the bank, got into their car and attempted to flee. They were arrested a short time later and officers recovered the cash stolen from the bank, the gun used during the robbery, and the hats and blue latex gloves worn by Washington and his accomplice during the robbery.

Washington faces a maximum penalty of 25 years in prison for armed bank robbery. U.S. District Judge Richard D. Bennett has scheduled sentencing for August 1, 2014, at 3:00 p.m.

United States Attorney Rod J. Rosenstein commended the FBI and Baltimore County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Gregory R. Bockin and Judson T. Mihok, who are prosecuting the case.

Baltimore, Maryland - A federal grand jury has indicted Yogesh K. Patel, age 47, of Gaithersburg, Maryland, and Wesley Burnett, age 54, of Hermosa Beach, California, for conspiracy to commit wire fraud in connection with a scheme to fraudulently obtain more than $1.8 million in federal government contracts through the use of the Small Business Administration’s 8(a) program, designed to assist disadvantaged businesses.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Small Business Administration (SBA) Inspector General Peggy E. Gustafson; Brigadier General Kevin J. Jacobsen, Commander Air Force Office of Special Investigations; and Mary L. Kendall, Deputy Inspector General, Department of the Interior.

Yogesh K. Patel was the owner of United Native Technologies, Inc. (“UNTI”), which, according to its articles of incorporation, was formed to “perform information technology services to federal, state and local government, as well as commercial.” In 2005, Patel applied for and was granted certification as a minority or socially disadvantaged owned business under the SBA’s 8(a) program. In addition to a broad scope of assistance from SBA, participants in the 8(a) program can receive sole source government contracts that are reserved for minority or socially disadvantaged owned companies.

Wesley Burnett owned Total Barrier Works (TBW), a professional services company specializing in the maintenance and installation of anti-terrorist systems and vehicle control equipment such as security barriers, bollards, gates, uninterrupted power systems (UPS) and all other perimeter security anti-terrorist equipment.

The indictment alleges that Patel and Burnett agreed to use UNTI to bid on 8(a) set aside contracts at federal government installations, including military bases and federal buildings, with Burnett, TBW and individuals at Burnett’s direction actually performing the work necessary to fulfill these contracts. Burnett also agreed to pay Patel approximately 4.5% of the total value of any contract awarded to UNTI. As a result, the indictment alleges that between January 2010 and November 2013, UNTI was fraudulently awarded more than $1.8 million in 8(a) set-aside U.S. Government contracts, while the work on the contracts was actually performed by Burnett’s company and employees.

Patel and Burnett each face a maximum sentence of 30 years in prison and a $250,000 fine for conspiracy to commit wire fraud. No court 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.

The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrates the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.

United States Attorney Rod J. Rosenstein praised the SBA Office of Inspector General, U.S. Air Force Office of Special Investigations and the Department of the Interior, Office of Inspector General for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Leo J. Wise, who is prosecuting the case.

Station Managers Allegedly Submitted Fraudulent and Inflated Invoices for Landscaping and Cleaning Services in Exchange for Bribe Payments

Baltimore, Maryland - A federal grand jury has indicted Richard Louis Wright III, age 46; Kimberly A. Parnell, age 43; Shane Anderson, age 37, all of Baltimore; and Ladena D. Sketers-Anderson, age 47, of Randallstown, Maryland, on charges related to a bribery conspiracy to obtain contracts with the U.S. Postal Service. The indictment was returned on April 30, 2014.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Paul Bowman of the U.S. Postal Service Office of Inspector General; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.

“The indictment alleges that two post office station managers accepted bribes in return for contracts for landscaping, snow removal, and cleaning services,” said U.S. Attorney Rod J. Rosenstein. “Officials who exercise governmental authority are obligated to use it for the public good and not to advance their own financial interests.”

Beginning in January 2007, Wright was the United States Postal Service (USPS) Station Manager of the Waverly Station in Baltimore, and beginning in July 2010, Parnell was the USPS Station Manager of the Pikesville Station in Pikesville, Maryland. As part of their official duties as USPS Station Managers, Wright and Parnell had the authority to contract for landscaping, snow removal, and certain cleaning services at the Post Offices they managed, and to submit invoices for those services to USPS for payment. According to the indictment, Wright and Parnell knew one another professionally and personally and consulted with one another on the operations of their respective stations, including referring contractors to one another.

The 29-count indictment alleges that beginning in October 2007 and continuing until approximately October 2013, Wright and Parnell engaged in a scheme to commit bribery, wire fraud and mail fraud by creating, approving and submitting false and inflated invoices for maintenance work allegedly performed at their respective Post Offices by Anderson, Sketers and others, and then splitting the proceeds with the alleged providers of the services.

According to the indictment, in the Spring of 2013, when one of their co-conspirators failed to make timely bribe payments to Wright and Parnell, Parnell proposed that they replace the co-conspirator with Shane Anderson, who operated a landscaping company in Baltimore called Youthful Minds Lawn Care, and whom they believed would make bribe payments to them in exchange for USPS contracts. Thereafter, Parnell, Wright and Anderson agreed that Parnell and Wright would submit false and inflated invoices from Youthful Minds Lawn Care for landscaping services in exchange for a percentage of the proceeds paid to Youthful Minds by the USPS.

Ladena Delore Sketers-Anderson (aka Ladena Sketers) operated a cleaning company called Keep U Clean Janitorial Services, LLC in Randallstown, Maryland. Wright and Sketers had been business partners in a janitorial services company before Sketers went into business as Keep U Clean. Wright used Sketers’ company for cleaning services at the Waverly Station and recommended Keep U Clean to Parnell at the Pikesville Station. The indictment alleges that Wright submitted false and inflated invoices from Keep U Clean in exchange for Sketers paying him a percentage of the funds she received from the USPS. Later, Wright began submitting Keep U Clean invoices to the USPS for cleaning work done by employees at his direction at the Waverly Station, even though he had been directly instructed not to perform contract work at the station he managed. According to the indictment, Wright also proposed to Parnell that Keep U Clean employees under his direction perform cleaning services at the Pikesville Station in exchange for a bribe payment to Parnell and Parnell agreed to that arrangement.

Finally, the indictment seeks forfeiture of any proceeds obtained directly or indirectly, as the result of the scheme, including: $591,791 for Wright; $50,470 for Parnell; $30,455 for Anderson; and $109,976 for Sketers-Anderson.

The defendants face a maximum sentence of five years in prison for the conspiracy and 15 years in prison for each count of bribery. No court appearances have 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.

The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrates the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.

United States Attorney Rod J. Rosenstein praised the USPS – Office of Inspector General and FBI for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Leo J. Wise, who is prosecuting the case.

Indictment Seeks Forfeiture of Over $14 Million

Baltimore, Maryland - A federal grand jury has indicted Jeong Joon Moon, a/k/a Patrick Moon, age 46, of Germantown, Maryland, on charges arising from a scheme to defraud financial institutions who loaned money to small businesses. The indictment was returned on April 24, 2014, and unsealed today. Moon was arrested yesterday and his initial appearance is scheduled for 3:00 p.m. today in federal court in Baltimore.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Small Business Administration (SBA) Inspector General Peggy E. Gustafson; Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division; Assistant Director in Charge Valerie Parlave of the Federal Bureau of Investigation’s Washington Field Office; and Acting Inspector General Fred W. Gibson, Jr. of the Federal Deposit Insurance Corporation.

Moon owned and operated JM Capital Solutions, Inc. and RNB Consulting, Inc., which were loan brokerage firms with offices located in Annandale and Springfield, Virginia. These firms specialized in securing loans for individuals interested in purchasing or refinancing small businesses in Maryland, Virginia, the District of Columbia and elsewhere.

Moon encouraged prospective borrowers to apply for business loans through the SBA’s Section 7(a) program, which authorizes SBA to help small businesses obtain financing by guaranteeing 75 to 90 percent of qualified loans made by commercial lenders. Small business owners are required to invest a certain amount of their own money into the business before they can qualify for the loan. Moon compiled and submitted to lenders the documentation necessary to substantiate the borrowers’ equity injection and ability to repay loans guaranteed by SBA, as well as documentation needed for other commercial loans.

According to the 25 count indictment, from 2006 to April 2014, Moon and others defrauded financial institutions by submitting false copies of the borrowers’ monthly bank statements to reflect more money than was actually in the borrowers’ bank accounts. Moon and others also allegedly prepared and submitted false tax returns for the borrowers which inflated the borrowers’ income. The financial institutions relied on the false information to lend funds to the borrowers, which resulted in loan broker commissions being paid to JM Capital and RNB Consulting.

The indictment also alleges that on July 12 and 15, 2013, Moon altered, destroyed or concealed documents relating to six loans guaranteed by SBA for six small businesses, intending to impede the federal investigation of such loans.

The indictment seeks the forfeiture of $14,708,000, the amount of fraudulently obtained loans.

Moon faces a maximum sentence of 30 years in prison for conspiracy to commit bank fraud, and for each of the 18 counts of bank fraud; and 20 years in prison on each of six counts for destruction of records in a federal investigation

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 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 the SBA - OIG, U.S. Postal Inspection Service, FBI and FDIC for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Leo J. Wise and Marty Clarke, who are prosecuting the case.

Five Co-Conspirators Previously Pleaded Guilty

Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Bonnie Kathleen Kreamer, a/k/a Bonnie Meehan, age 49, of Riva, Maryland, on April 25, 2014, to 51 months in prison, followed by three years of supervised release, for conspiring to commit wire fraud in connection with a mortgage fraud scheme which resulted in losses of over $4.8 million. Judge Bredar also ordered Kreamer to pay restitution of $2,499,048 to the victims and to forfeit $4.8 million.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge Brian Murphy of the United States Secret Service Baltimore Field Office; Special Agent in Charge Michael P. Tompkins, Washington Field Office, U.S. Department of Justice Office of the Inspector General; Howard County Police Chief William McMahon; and Howard County State’s Attorney Dario Broccolino.

According to her plea agreement, in 2002, Kreamer’s Maryland license to issue title insurance policies was revoked after she was convicted of theft for fraudulently endorsing checks at a title attorney’s office where she worked. Despite her conviction, from 2007 until January 2010, Kreamer worked at Sanford Title Services LLC located in Columbia, Maryland, and had significant day-to-day responsibility for the operation of Sanford Title. From June 2008 to January 2010, Kreamer and co-conspirators Niesha Williams, Rhonda Scott, Emeka Udeze and Demetrius Peete arranged various aspects of real estate transactions so they could siphon profits out of the transaction for themselves. They used many fraudulent techniques to further the conspiracy, including: short sales in which the property was sold for a higher price than was represented to the lien holder and the seller; sales of properties not owned by the seller at the time of settlement; real estate transactions in which there were multiple sales of the same property at the same time; real estate transactions in which the buyer’s financial status was misrepresented to lenders; transactions in which the seller and/or buyer were shown different settlement statements and the conspirators used the difference between the figures in the two statements to enrich themselves.

In addition, Kreamer admitted that she personally facilitated deals between her co-conspirators, prepared false settlement statements, improperly disbursed funds contrary to the settlement and lender approved disbursements sheets, failed to pay off mortgage loans in accordance with the settlement documents, directed funds to entities created by herself and her co-conspirators, received proceeds of fraudulent transactions, and improperly issued title insurance policies.

Kreamer admitted that the scheme involved at least 30 victims, including lenders, sellers and buyers of real estate, a title insurance company and lien holders. She further agreed that her offense involved sophisticated means and her abuse of a position of trust at Sanford Title. The reasonably foreseeable loss associated with Kreamer’s conduct is at least $4.8 million.

Niesha Williams, age 34, of Fort Washington, Maryland; Rhonda Scott, age 52, of Oxon Hill, Maryland; Demetrius Peete, age 46, of Manassas, Virginia each previously pleaded guilty to their roles in the fraud and are scheduled to be sentenced on May 1, May 2, and May 7, respectively. Gregory Green, age 49, of Waldorf, Maryland, also pleaded guilty and was sentenced to three months in prison and ordered to pay restitution of $404,596. A fifth conspirator, Emeka Udeze, age 38, of Bowie, Maryland, also pleaded guilty and is awaiting sentencing.

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 www.justice.gov/usao/md/Mortgage Fraud/index.html.

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 the FBI, Department of Justice - OIG, Howard County Police Department, Secret Service and Howard County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Harry M. Gruber and Judson T. Mihok, who are prosecuting the case.

Greenbelt, Maryland –U.S. District Judge Paul W. Grimm sentenced Gregory Warrick, age 53, of Landover, Maryland, today to 14 years in prison followed by five years of supervised release for conspiring to distribute and possessing with intent to distribute five or more kilograms of cocaine powder. Judge Grimm enhanced Warrick’s sentence upon finding that he is a career offender based on two previous drug convictions.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division and Chief Mark A. Magaw of the Prince George’s County Police Department.

According to his plea agreement, from May 2012 to March 2013, Warrick bought cocaine powder from a co-conspirator about two to three times a week. Warrick distributed the drugs to others. Beginning in November or December 2012, Warrick used an apartment located on Addison Road in Capital Heights to store and sell cocaine powder.

On March 22, 2013, Warrick bought cocaine powder. Later that afternoon, law enforcement executed a search warrant on Warrick’s vehicle while he was a gas station in Landover. They seized 6.22 grams of cocaine powder packaged in 22 baggies from Warrick. Shortly thereafter, law enforcement also executed a search warrant at the apartment Warrick used to sell drugs and seized 133 grams of cocaine powder packaged in 26 baggies, a scale and other drug paraphernalia.

Between five and 15 kilograms of cocaine powder was reasonably foreseeable within Warrick’s agreement to sell, and possess with intent to sell, cocaine powder.

United States Attorney Rod J. Rosenstein praised the ATF and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Leah Jo Bressack, who prosecuted the case.

Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced David Jesse Hotton, age 35, of Delmar, Maryland today to five years in prison followed by five years of supervised release for conspiring to distribute and possess with intent to distribute cocaine base and cocaine.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; and members of the Wicomico County Narcotics Task Force: Colonel Marcus L. Brown, Superintendent of the Maryland State Police, Wicomico County Sheriff Michael A. Lewis, Salisbury Police Chief Barbara, Chief Michael Phillips of the Fruitland Police Department Department and Wicomico County State’s Attorney Matthew Maciarello..

According to his plea agreement, Hotton conspired with Ranson Chandler, Tyson Hobson and Floyd Sykes to distribute and possess with intent to distribute large quantities of crack and powder cocaine. During their investigation, DEA and the Wicomico County Narcotics Task Force overheard Hotton on many occasions transacting drug deals on his cell phone. For example, in September 2012, Hotton was overheard saying that he just got a kilogram of cocaine and was going to cook up half or so of the powder into crack. Also that month, Hotton was overheard agreeing to sell two ounces of cocaine for $3,000.

Hotton admitted that it was foreseeable that he and his co-conspirators distributed more than 280 grams of crack cocaine and more than 500 grams of powder cocaine from June 2012 to November 28, 2012.

Maryland residents Ranson Chandler, Jr., age 37, of Salisbury; Tyson Gabriel Hobson, Sr., age 37, of Princess Anne; and Floyd Lee Sykes, age 35, of Quantico, previously pleaded guilty to their participation in the conspiracy. Judge Hollander sentenced Chandler to 123 months in prison and Sykes to 46 months in prison. Hobson awaits sentencing.

United States Attorney Rod J. Rosenstein praised the DEA and Wicomico County Narcotics Task Force comprised of the Maryland State Police, Wicomico County Sheriff’s Office, Salisbury Police Department, Fruitland Police Department and the Wicomico County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Peter J. Martinez, who prosecuted this Organized Crime Drug Enforcement Task Force case.

Baltimore, Maryland – Rodney Hubert, a/k/a “Noah,” age 39, of Parkville, Maryland pleaded guilty today to sex trafficking of a minor.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt 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, in January 2013, Hubert, a registered sex offender in Maryland, recruited girls, some of whom were underage, to engage in prostitution. He offered a finder’s fee to young prostitutes if they found additional girls to prostitute for them.

Hubert took explicit photos of girls which he posted on internet websites that hosted ads for prostitution. He provided a residence in Parkville to host “in-call” local prostitution. He also instructed the girls on how to use a phone application to communicate with prospective customers and avoid detection by law enforcement.

Hubert sought a 19-year-old associate to work for him as a prostitute beginning in December 2012. Hubert offered her a commission to recruit a 16-year-old Baltimore resident to perform prostitution for him. Hubert invited the 16 year old to reside with him. The 16 year old girl had sex with customers on at least five occasions in the Parkville house, and on at least seven occasions at other locations, as directed by Hubert.

Hubert offered to pay the 16 year old girl $400 dollars to take provocative photos of her wearing lingerie. She posed for the photos taken by Hubert, although Hubert never paid her the promised fee. He did, however, use these photos to post online prostitution ads. Hubert also offered to pay her $1,000 to make a pornographic film with him in which they would engage in sex.

As part of his plea agreement, Hubert 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).

Hubert and the government have agreed that if the Court accepts the plea agreement, Hubert will be sentenced to between 168 and 262 months in prison followed by a lifetime of supervised release. U.S. District Judge George L. Russell III has scheduled sentencing for August 1, 2014 at 2:00 p.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 and Baltimore County State’s Attorney’s Officefor their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Mark W. Crooks, who prosecuted the case.

Shootings and Murders Attributed to Rival Drug Gangs

Baltimore, Maryland – Davon Martin, age 25, of Baltimore, Maryland pleaded guilty yesterday to conspiracy to participate in a racketeering enterprise, related to his drug dealing and violence in the Cherry Hill section of Baltimore.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.

“Many of the shootings and murders in Baltimore City result from disputes between rival drug gangs,” said U.S. Attorney Rod J. Rosenstein. “Thanks to a lengthy and intensive investigation, we will hold accountable the criminals who turned Cherry Hill into a war zone.”

According to his plea agreement, from at least 2003 to 2013, Davon MARTIN was a member of a group known as “Little Spelman” in the “down the hill” area of Cherry Hill. This group committed acts of robbery, homicides, non-fatal shootings and drug distribution, to include crack cocaine, heroin, cocaine and marijuana. From 2009 to 2011, Martin, along with another member of Little Spelman, operated a crack cocaine distribution “shop” out of an apartment located on Round Road. Martin and others sold at least two kilograms of crack cocaine from the apartment on Round Road. On at least one occasion, while in possession of a firearm, Martin robbed an individual who had sold him some bad cocaine. Martin admitted he has also committed other robberies related to his drug distribution.

Martin admitted that on January 20, 2011, he shot and killed Rhidell Price, a member of a rival group operating in Cherry Hill known as “Up Da Hill,” in the rear of 2900 Denham Circle. After receiving a call that Price was in the area, Martin and an associate drove down to Denham Circle where Rhidell Price was getting out of a vehicle parked on the street. Martin got out of his vehicle and began shooting at Price, chasing after Price and ultimately killing him. Martin killed Price in retaliation for Martin and another Little Spelman member being shot at by Up Da Hill members a few days earlier.

Two days after Martin killed Price, on January 22, 2011, Little Spelman associate Harry Hicks was shot and killed by Up Da Hill members in retaliation for Price’s murder. On April 9, 2011, Martin shot and killed Up Da Hill member Dwight Taylor at a barbershop on W. Saratoga Street in Baltimore, in retaliation for Hicks’ murder. During the murder, Martin was wearing a black jacket and a black mask which he discarded in a nearby dumpster on Clay Street. Both the mask and jacket were recovered by police from the dumpster. The DNA recovered from both the face mask and the jacket matched Martin’s DNA. A ballistics comparison of the .45 caliber firearm that Martin used to kill Taylor revealed that it was the same gun used on January 28, 2011 by Dominic Hope, another Little Spelman associate, and the former leader of Little Spelman, to shoot Up Da Hill member Antione White, who was leaving the funeral of Rhidell Price. Dominic Hope was subsequently shot and killed on January 20, 2012.

Martin and the government have agreed that if the Court accepts the plea agreement he will be sentenced to between 30 and 35 years in prison. U.S. District Judge George L. Russell, III has scheduled sentencing for July 18, 2014 at 9:30 a.m.

United States Attorney Rod J. Rosenstein praised the ATF, Baltimore Police Department, and Baltimore City State’s Attorney’s Office for their work in the investigation and thanked the FBI, Baltimore County Police Department, Anne Arundel County Police Department, and Baltimore City Sheriff’s Office for their assistance. Mr. Rosenstein thanked Assistant United States Attorneys Andrea L. Smith and Brooke Carey, who are prosecuting the case.

More Than $20 Million Returned to Bona Fide Account Holders

Baltimore, Maryland - U.S. District Judge Ellen L. Hollander ordered yesterday the forfeiture of $45,816,817.84, the remaining value of over $86.3 million in e-gold, Ltd. (EGL ) accounts seized by the government in 2011. In 2012, Judge Hollander ordered the forfeiture of over $10.8 million in the EGL accounts, bringing the total amount forfeited to over $56.6 million. Judge Hollander also ordered the return of $295,642 to bona fide account holders who were able to verify their ownership of the accounts. Judge Hollander had previously ordered the return of over $19,947,313.91 to identified account holders.

The forfeiture was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kathy Michalko of the United States Secret Service - Washington Field Office.

U.S. Attorney Rosenstein said, “Civil forfeiture allows the government to recover the proceeds of criminal activity, while assuring that the due process rights of any lawful owners are fully protected.”

EGL was in the business of exchanging traditional forms of currency for precious metals held in electronic form, known as e-metals or e-gold, and settling payer-initiated transfers of e-metals from one customer account to another. In 2008, EGL pled guilty in the District of Columbia to money laundering and operating an unlicensed money transmitting business. EGL sold precious metals in electronic form to provide customers with a means of transferring value from one customer account to another while maintaining anonymity, knowing that at least some of the funds were involved in criminal activities. Non-traditional money transmitting businesses such as EGL are frequently used by criminals to transfer money because they are not as closely regulated as banks and other traditional financial institutions. For that reason, they must be licensed by the state in which they operate and register with the Department of the Treasury.

In 2011, the government filed a civil forfeiture action in the District of Maryland against the value of the e-gold accounts, totaling more than $86.3 million, and sent notice of the right to contest the forfeiture to the registered account holders. Some of the account holders who received the notice responded that they were the victims of identity theft and had no connection to EGL.

As part of its plea agreement, EGL identified 12,869 customer e-metal accounts that contained funds derived from a variety of criminal offenses including child pornography, credit card fraud, identity theft, investment fraud and the sale of stolen or non-existent goods on the internet. In 2012, Judge Hollander ordered the forfeiture of more than $10.8 million, the value of those accounts. Judge Hollander also ordered that that $12,287 be returned to 22 claimants from those identified accounts, whose claims the government did not contest.

The government then sought the forfeiture of the remainder of the $86.3 million as property involved in EGL’s criminal offenses, but it agreed to exempt from forfeiture any money claimed by bona fide account holders. The money forfeited yesterday represents the balance of the funds involved in the criminal offenses that was not claimed by account holders, bringing the total forfeited to the government to over $56.6 million.

Digital currencies are generally marketed as offering global acceptance without the need for conversion between national currencies, and are valued at fluctuating rates tied to the price of a particular precious metal, especially gold. Digital currency is used for on-line commerce or for funds transfers between individuals for private purposes. In general, an EGL customer opened an e-gold account, and then could use the internet to transfer the value in the account to any other EGL customer anonymously and instantaneously anywhere in the world. The recipient could then redeem the e-gold for any national currency. Because of the ease with which customers could purchase and transfer e-gold anonymously, outside of the regulated traditional banking system, trading in e-gold became popular among persons looking for a way of laundering criminal proceeds. In particular, e-gold was widely accepted as a means of transacting credit card and identification fraud, high yield investment programs and other investment scams, and child exploitation, but was not widely accepted by large or mainstream vendors.

United States Attorney Rod J. Rosenstein praised the U.S. Secret Service Washington and Orlando Field Offices and the SCIRS-SS Task Force for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Stefan Cassella, who handled the civil forfeiture for the government.

Operated Puff & Stuff Stores at Three Locations in Cumberland and LaVale

Baltimore, Maryland – Charles and Traci Casey, the owners of Puff & Stuff stores in Cumberland and LaVale, Maryland, have agreed to forfeit $173,988.61, to settle claims that they sold synthetic drugs at their stores.

The settlement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; and the members of the Allegany County Combined Criminal Investigations Task Force (C3I),Colonel Marcus L. Brown, Superintendent of the Maryland State Police, Cumberland Police Chief Charles H. Hinnant, Allegany County Sheriff Craig Robertson; Frostburg Police Chief Royce C. Douty, Frostburg University Chief of Police Cindy R. Smith, and Allegany County State’s Attorney Michael O. Twigg.

According to the settlement agreement and complaint for forfeiture, in April 2012, the Maryland State Police received complaints about a business called “Puff & Stuff,” that operated in Cumberland. The complaints stated that the business is a “head shop,” (a business that sells drug-related paraphernalia including smoking devices and other related items) and sold synthetic drugs. The synthetic drugs are often labeled as different brands, but they are commonly referred to as “spice.” As set forth in the complaint, what the Caseys were selling as “spice” was leafy vegetable matter sprayed with chemicals that have a pharmacological effect on the human body that is similar to that of marijuana. Puff & Stuff currently operates at two locations in Cumberland and another in LaVale, Maryland. A Maryland State Police Task Force initiated an investigation and conducted five controlled purchases of spice from Puff & Stuff stores beginning on April 23, 2012 through February 27, 2013. As a result of the investigation, on March 7, 2013, officers executed five search and seizure warrants at the Casey’s residence; the three Puff & Stuff store locations; and for two of the Casey’s bank accounts, seizing a total of $259,988.61 in cash and numerous packets of spice.

Under the terms of the settlement agreement, the Government has agreed to release $86,000 of the seized funds and the Caseys have agreed to withdraw their claims to the remaining $173,988.61. In addition, the Caseys have agreed to stop selling any substances marked or distributed as “potpourri,” “spice,” or “bath salts.”

The claims settled by this agreement are allegations, and there has been no determination of liability.

United States Attorney Rod J. Rosenstein praised the DEA and Allegany County Combined Criminal Investigations Task Force (C3I), comprised of the Maryland State Police, Cumberland Police Department, Allegany County Sheriff’s Office, Frostburg Police Department, Frostburg University Police Department and Allegany County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Stefan D. Cassella, who handled the forfeiture.

Provided False Information About the Buyer and Property Renovations

Greenbelt, Maryland – Real estate agent Nsane Phanuel Ligate, age 42, of Ashburn, Virginia, pleaded guilty today to conspiring to commit wire fraud in connection with a mortgage scheme involving the purchase of two properties located on North Patterson Park Avenue in Baltimore. Co-defendant Cane Mwihava, age 43, of Bowie, Maryland pleaded guilty to the same offense yesterday.

The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG); Special Agent in Charge Cary A. Rubenstein of the Housing and Urban Development Office of Inspector General (HUD); Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; and Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

According to their pleas, in 2008, Ligate and his co-conspirators identified two properties for sale located at 424 and 444 North Patterson Park Avenue in Baltimore. Also at that time, Mwihava established a shell company called Xavier Engineering and Construction Company (XECC) to receive settlement disbursements for purported home renovations. With assistance from Ligate, co-conspirator Gladyness Silaa acted as the real estate agent; and co-conspirator Larry Johnson acted as the buyer. Ligate, Silaa and Johnson included false statements in the loan applications for both properties regarding Johnson’s employment, income, credit and assets. Mwihava and Ligate falsely inflated the purchase price of the properties by representing to lenders that repairs and renovations had been completed on each property by XECC, including installation of premium kitchen cabinets, granite countertops, stainless steel appliances and marble flooring. None of the purported renovations or repairs were in fact performed.

After the settlement of the properties, the settlement agent disbursed a total of $108,860 to XECC, the amount shown on false invoices submitted for the purported renovations. Mwihava then divided these funds between himself, Ligate, Silaa and Johnson.

On June 5 and 9, 2008, Ligate and Mwihava caused banks to wire transfer $181,159.65, and $179,866.93, respectively, to the title agent to complete the settlement transactions. These amounts were needed to fund the original loan amounts plus additional costs and fees associated with the closings.

As a result of the conspiracy, HUD, which insured the loan for 424 North Patterson Park Avenue suffered a loss of $164,090, and a bank which was the lender for the other property suffered a loss of $188,001.58.

The defendants face a maximum sentence of 30 years in prison and a $1 million fine. Chief U.S. District Judge Deborah K. Chasanow scheduled sentencing for Mwihava on October 14, 2014, at 1:00 p.m. and for Ligate on October 16, 2014 at 10:00 a.m.

Gladyness Silaa, age 35, of Bowie, previously pleaded guilty to conspiracy to commit wire fraud and her sentencing is scheduled for June 16, 2014 at 10:00 a.m. Larry Johnson, age 57, previously pleaded guilty to making false statements in a loan application and was sentenced on February 24, 2014 to eight months in prison consecutive to the current sentence he is serving on an unrelated case.

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 www.justice.gov/usao/md/Mortgage Fraud/index.html.


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 commended the FHFA- OIG, HUD-OIG, Secret Service and HSI Baltimore for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi N. O’Malley and Special Assistant U.S. Attorney Kevin DiGregory, from the Federal Housing Finance Agency, Office of Inspector General, who are prosecuting the case.

One Defendant Sentenced to 30 Months for Smuggling Drugs; Thirteenth Officer Pleads Guilty and Admits to Having Sex With BGF Inmates

Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced correctional officer Katrina Laprade, a/k/a Katrina Lyons, age 32, today to 30 months in prison followed by one year of supervised release for participating in a racketeering conspiracy arising from the smuggling of drugs and contraband inside the Baltimore City Detention Center (BCDC). Another correctional officer, Tanierdra Finch, age 26, of Baltimore, and Frederick Morrison, a/k/a Fry, an inmate, age 29, pleaded guilty yesterday to the conspiracy.

The sentence and guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Secretary Gregg Hershberger of the Maryland Department of Public Safety and Correctional Services; Baltimore Police Commissioner Anthony W. Batts; and Baltimore City State’s Attorney Gregg L. Bernstein.

This case was developed as a result of the efforts of the Maryland Prison Task Force, formed in 2011 with the Maryland Department of Public Safety and Correctional Services, local, state and federal law enforcement agencies, and prosecutors. The Task Force has met regularly for over three years, generating recommendations to reform prison procedures and producing leads that have been pursued by state, local and federal criminal investigators. The investigation is continuing.

According to court documents, the Black Guerilla Family (BGF) has been the dominant gang at the BCDC, and in several connected facilities, including the Baltimore Central Booking Intake Center BCBIC, the Women’s Detention Center, which houses many men, and in the Jail Industries Building.

Laprade and Finch, correctional officers at BCDC, admitted that in 2012 and 2013, they helped smuggle contraband into the jail. Laprade smuggled in marijuana and tobacco on behalf of Stephen Loney, a leader of the BGF. Finch admitted that she smuggled drugs such as Percocet into BCDC for distribution by BGF inmates such as Tavon White and Jamar Anderson. Finch also had sexual relations with some BGF members, including Anderson.

Morrison was a BGF member and in pretrial custody at BCDC from 2012 to 2013. He was involved with and often directed the smuggling of cell phones, tobacco, marijuana and drugs into BCDC through other correctional officers who received payments, gifts or a share of the profits. Morrison had sexual relations with at least one of the correctional officers involved with contraband trafficking. He also helped conceal from prison officials contraband smuggled into the jail.

As part of his plea agreement, Morrison and the government have agreed that if the Court accepts the plea agreement, Morrison will be sentenced to five years in prison consecutive to any state prison sentence he is serving. Finch faces a maximum sentence of 20 years in prison for the racketeering conspiracy. Judge Hollander scheduled sentencing for Morrison on August 27, 2014 and for Finch on August 8, 2014.

Thirteen correctional officers have pleaded guilty to their roles in the conspiracy. Two of these correctional officers, Taryn Kirkland, age 23, and Adrena Rice, age 26, both of Baltimore, were sentenced in January 2014, each to 42 months in prison and officer Jasmine Thornton, a/k/a J.T., age 27, of Glen Burnie, Maryland, was sentenced to 32 months in prison on February 5, 2014.

BGF leader Tavon White, age 37; BGF commander Steven Loney, age 25; BGF members Jamar Anderson a/k/a “Hammer” and “Hamma Head,” and Kenneth Parham, both age 24; and Jermaine McFadden, age 25, an associate of BGF; also pleaded guilty to the racketeering enterprise. Parham was sentenced on February 24, 2014 to151 months in prison, McFadden was sentenced on March 12, 2014 to 140 months and Loney was sentenced on January 14, 2014 to nine years in prison. Tavon White and Jamar Anderson are awaiting sentencing.

U.S. Attorney Rosenstein recognized the efforts of the other members of the Maryland Prison Task Force, including: Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Chief Mark A. Magaw of the Prince George’s County Police Department; United States Marshal Johnny Hughes; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Tom Carr, Director of the Washington-Baltimore High Intensity Drug Trafficking Area; and Dave Engel, Executive Director of the Maryland Coordination and Analysis Center.

United States Attorney Rod J. Rosenstein praised the FBI, Maryland Department of Public Safety and Correctional Services, Baltimore Police Department, and Maryland Prison Task Force, for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Robert R. Harding and Ayn B. Ducao, who are prosecuting this Organized Crime Drug Enforcement Task Force case.

Baltimore, Maryland - Patrick J. Belzner, a/k/a “Patrick McCloskey,” age 45, of Glen Arm, Maryland, pleaded guilty late yesterday to a wire fraud conspiracy, wire fraud and tax evasion.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.

“For over a decade, through a combination of lies and deceit, Patrick Belzner and his coconspirators caused serious financial harm to their victims. These individuals were focused on their own personal gratification with no regard for the consequences of their actions,” said Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation, Washington, D.C. Field Office. “Holding cheats such as Belzner accountable for their misdeeds, is critically important to maintaining the integrity of our economy.”

According to Belzner’s plea agreement, from 2009 through August 2011, Belzner, a home builder, worked for a real estate development business known as the McCloskey Group, LLC, owned by Brian McCloskey, who was also a home builder. During that time, Belzner conspired with McCloskey, Maryland attorney Kevin Sniffen and others to defraud investors through a fraudulent investment scheme.

Specifically, Belzner and the conspirators advised wealthy individuals and investment advisers that in order for the McCloskey Group to obtain loans for commercial real estate projects, the loan broker required that large sums of money be deposited in an escrow bank account to show “liquidity.” They further falsely represented that the funds would be maintained under the control of Sniffen, a licensed attorney and escrow agent; would not be used for any other purpose; and that the money would be returned to the investor, either upon the funding of the loan or after a specified period of time. In return for this temporary use of the investor's funds, Belzner and McCloskey promised to pay substantial fees or interest.

Instead, Belzner admitted that he directed McCloskey to remove the investors’ funds soon after they had been deposited into the escrow account. Belzner and McCloskey then used the stolen funds to pay for their personal and business expenses, as well as to make partial repayments to earlier lenders, to pay fees to some of the victim investors to keep them from demanding the return of their money, and to pay the loan broker for its supposed work and expenses in attempting to locate financing sources.

Belzner and his co-conspirators attempted to conceal the fraud by: issuing false bank statements regarding the amount of escrowed funds; falsely representing in emails and by phone the balance of escrow funds and the date when the investors’ money would be returned; and returning part of the victim’s investment using funds fraudulently obtained from other investors. Belzner also wrote scripts for the conspirators to use in telephone conversations or in written communications to lull the victims and their representatives into believing that their escrow monies were safe and would be returned to them as promised in the escrow agreements, as well as to persuade victims not to pursue demands or legal action for the immediate return of their funds.

The government contends that Belzner and his conspirators' fraudulent scheme caused losses in excess of $22 million to more than 10 victim investors.

Belzner also pleaded guilty to evasion of assessed tax payments. In 1995, 1996 and 1998, Belzner stole $1,111,304.78 from his employer at the time, and in 1998, he stole $186,146.71 from another employer, none of which he reported as income on his tax returns for those years. A subsequent IRS audit of those tax years resulted in the assessment of additional taxes, interest and penalties against Belzner of $1,150,935.25 for the 1995 and 1996 tax years and $246,424.50 for the 1998 and 1999 tax years.

To avoid paying those taxes, Belzner admitted that between January 2006 and June 2011, he intentionally concealed income and assets from the IRS and made no payments on his tax debt. For example, Belzner placed his residences, other real estate and automobiles, in the names of corporations that he formed. Belzner paid his personal expenses from bank accounts he opened in the names of the corporations, including his mortgage, ground rent for a vacation home, construction costs on a house that he built, car payments, Ravens season tickets, and private school tuition. Belzner used individuals to act as “straw purchasers” for property that he acquired and to conduct financial and other transactions on his behalf. At Belzner’s direction, McCloskey Group employees and others also cashed more than $175,870 in company checks made payable to them, returning the cash to Belzner or using the cash to pay Belzner's creditors. Belzner also arranged for the McCloskey Group to pay many of his personal living expenses, rather than issuing him salary checks. For example, between January 2009 and June 2011, the McCloskey Group paid more than $1.5 million of Belzner’s personal expenses, including health and life insurance premiums, car, personal loan and mortgage payments, and utility and cable bills. In February 2006 and again in January 2009, Belzner submitted forms to the IRS falsely claiming that he did not have sufficient income to make any payments on the assessed back taxes, penalties and interest. The total amount of assessed tax, interest and penalties owed by Belzner as of August 2013 was $2,619,870.

Belzner faces a maximum sentence of 20 years in prison each for wire fraud and for conspiracy; and a maximum of five years in prison for evasion of assessed tax payments. U.S. District Judge James K. Bredar has scheduled sentencing for September 3, 2014 at 10:00 a.m.

Brian McCloskey, age 42, of Baltimore and Kevin Sniffen, age 52, of Phoenix, Maryland have each pleaded guilty to their roles in the conspiracy and are awaiting sentencing.

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 the FBI and IRS – Criminal Investigation for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Jefferson M. Gray and Kathleen O. Gavin, who are prosecuting the case.

Driver was Drunk When Passenger was Ejected from the Vehicle During a Crash

Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Josue Balbino Ruiz Reyes, age 20, of Hyattsville, Maryland today to 37 months in prison, followed by three years of supervised release, for involuntary manslaughter in connection with the death of a passenger in Reyes’ vehicle resulting from a car collision.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Acting Chief of Police Robert D. Maclean of the U.S. Park Police.

According to his plea agreement, on August 22, 2013 at about 5:30 a.m., Ruiz Reyes drove with a female passenger in his SUV from the Glen Burnie area southbound on the Baltimore-Washington Parkway. He had been drinking alcohol earlier that morning and the previous night. Near the route 197 exit, he lost control of his SUV and drove onto the shoulder of the highway. His SUV rolled over completely and landed upright, breaking all the windows and ejecting the passenger. Ruiz Reyes drove away.

Numerous motorists called 911 to report the accident. The U.S. Park Police found Ruiz Reyes driving his badly damaged vehicle on the ramp from the Parkway to Powder Mill Road, about four miles south of the location of the crash. Four police cruisers forced the vehicle to a stop. The right side of the SUV was completely smashed. The passenger side door would not open. Ruiz Reyes told the police he had two beers earlier. He was shirtless, and had minor bruises and cuts on his body. Ruiz Reyes was taken to the hospital where a blood test was given. His blood-alcohol level was .10 grams of alcohol per 100 mL of blood.

Meanwhile, U.S. Park Police officers at the scene of the roll-over found the passenger’s body lying in the grass, where she had been ejected from the SUV. She was pronounced dead. Ruiz Reyes told police that the passenger had gotten out of the car on the side of the road voluntarily. His Maryland driving privileges were suspended.

United States Attorney Rod J. Rosenstein praised the U.S. Park Police for its work in the investigation and thanked Assistant U.S. Attorney Hollis R. Weisman, who prosecuted the case.

Also Encouraged His Ex-Wife to Distribute Child Pornography

Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced David Ralph Fisher, age 43, of Baltimore, today to 293 months in prison, followed by lifetime supervised release, for producing child pornography and attempting to coerce and entice a minor to engage in sexually explicit activity. Judge Bredar ordered that upon his release from prison, Fisher 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 was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.

According to his plea agreement and court documents, David Fisher repeatedly requested that his ex-wife, Lori Fisher, produce sexually explicit photos of two minor girls, which she did on at least two occasions between August and December of 2008. Lori Fisher took the photos on her cell phone, then texted the images to David Fisher, who saved the images on his cell phone and computers.

On November 4, 2012, the Baltimore Police Department received information that images and videos of child pornography were observed on David Fisher’s external hard drive at his residence. The external hard drive was provided to police. Many files depicting minors engaged in sexually explicit conduct were found.

A search warrant was subsequently executed at David Fisher’s residence on November 20, 2012, and computers, cell phones and other items were seized. Sexually explicit email messages with attachments were recovered in which Fisher solicited child pornography from other individuals, and shared child pornography from his collection. Also, in February 2013, law enforcement confirmed that some of the sexually explicit images found on David’s computer and cell phone were images of the two minor girls that Lori Fisher had photographed and sent to David. In all, over 2,200 images and 100 videos of minors engaged in sexually explicit conduct, including prepubescent minors, were recovered.

On March 14, 2013, a Baltimore Police detective working undercover contacted David Fisher on Facebook, posing as a 14 year old female. Between March 14 and April 11, 2013, David Fisher communicated with the undercover detective through Facebook and email, often using a computer at a public library because of law enforcement’s seizure of his home computer. David Fisher asked the undercover detective to send him sexually explicit photos, and sent the undercover detective sexually explicit photographs of himself. Fisher also gave the undercover detective his cell phone number and proposed meeting to engage in sexual activity. A meeting was arranged for April 11, 2013. Fisher was arrested when he arrived at the meeting.

Lori Fisher, age 46, of St. Cloud, Florida, and formerly of Bel Air, Maryland, previously pleaded guilty to distribution of child pornography and faces a minimum of five years and a maximum of 20 years in prison at her sentencing scheduled for June 11, 2014 at 9:30 a.m. As part of her plea agreement, Lori Fisher will be required to register as a sex offender in the place where she resides, where she is an employee, and where she is a student, under the Sex Offender Registration and Notification Act (SORNA).

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, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Judson T. Mihok, who prosecuted the case.

Greenbelt, Maryland –William S. Gazafi, age 44, of Lusby, Maryland, pleaded guilty today to six counts of sexually exploiting a minor to produce child pornography.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Brigadier General Kevin J. Jacobsen, Commander Air Force Office of Special Investigations.

According to the indictment, court documents and statements made at his plea hearing, on August 15, 2013, Gazafi engaged in a chat on a website dedicated to incest discussions with an undercover officer. During the chat, Gazafi discussed his sexual interest in children and advised that he had been drugging and molesting several children, including an infant. During the chat, Gazafi sent seven images to the undercover officer, three of which were child pornography he stated he produced after drugging the child. Gazafi was subsequently identified and arrested. At the time of his arrest, Gazafi was carrying multiple digital media items. A forensic examination of those items and others seized from his residence revealed videos and images that Gazafi produced of children engaged in sexually explicit conduct, including one child as young as five months old. The images also depict children bound and handcuffed while sleeping. Gazafi is a non-commissioned officer in the U.S. Air Force working at Andrews Air Force Base.

Gazafi faces a minimum mandatory sentence of 15 years in prison and a maximum of 30 years in prison on each of the six counts, followed by up to lifetime of supervised release. U.S. District Judge Roger W. Titus has scheduled sentencing for June 23, 2014, at 1:00 p.m. Gazafi remains detained.

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, Air Force Office of Special Investigations and the Calvert County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney LisaMarie Freitas of the U.S. Justice Department, Criminal Division, Child Exploitation and Obscenity Section and Assistant U.S. Attorney Thomas Sullivan, who are prosecuting the case.

Imported Counterfeit Merchandise from China

Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Hao Yang, age 25, of Bloomsburg, Pennsylvania, today to 21 months in prison for conspiring to traffic in counterfeit goods and counterfeit military goods. Judge Motz also entered an order that Yang forfeit five bank accounts worth over $59,000, a 2010 Acura purchased with proceeds of the crime, and counterfeit computer software, DVDs, sports jerseys and other items valued at approximately $280,720.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

“The defendant imported counterfeit goods from China and fraudulently sold them as legitimate merchandise,” said U.S. Attorney Rod J. Rosenstein. “Counterfeit integrated circuits from China were falsely represented to be legitimate American-made parts.”

“This investigation, conducted by HSI special agents in Baltimore, Tampa and Harrisburg, Pa., identified Chinese national Hao Yang as a co-conspirator in an overall scheme to traffic in counterfeit goods to include military grade integrated circuits and defense goods into the United States from China,” said HSI Baltimore Special Agent in Charge William Winter. “These counterfeit military goods pose a threat to our national security as they could end up in the wrong hands and legitimate manufacturing and high technology businesses may believe they are receiving authentic goods. HSI and our partners at U.S. Customs and Border Protection will continue to protect the American public and America's warfighters from the introduction of counterfeit, non-conforming, and substandard materials and goods from entering the United States.”

According to his plea agreement, from 2010 until his arrest on June 19, 2013, Yang and his co-conspirators created and operated several companies in Maryland, Pennsylvania, and elsewhere, including MS Technologies and Aone Electronics in Baltimore; Abest Technologies in China; and Arrcord Group, SMC Group and Smooth LLC. The latter three companies were operated by Yang at his residence in Bloomsburg. Yang used his residence to warehouse the counterfeit goods, including counterfeit military goods, sent to him by his co-conspirators in China. He then shipped items to buyers in the United States based on the order information provided by his co-conspirators. Yang maintained numerous bank accounts to deposit his illegal commissions and make payments associated with his counterfeit activities. He also used the commissions he received from his co-conspirators to pay for living expenses and other purchases, including a 2010 Acura TSX sedan.

Yang received counterfeit circuits, a number of which were military-grade, from a co-conspirator in China. This co-conspirator sold, or attempted to sell, the circuits to individuals, companies and government agencies in the United States. Yang then distributed the counterfeit circuits, using his domestic businesses, to the buyers in the United States, sometimes in repackaged form. The co-conspirator paid Yang a commission of $500 per month for his distribution services. Yang and his co-conspirator formed Aarcord Group to conceal the fact that the counterfeit circuits were being imported from China. The counterfeit circuits that Yang redistributed could likely have caused serious bodily injury or impaired military operations, personnel or national security.

Yang also obtained other counterfeit goods, including computer software, DVDs, and sports jerseys, from other co-conspirators in China and Hong Kong, which he then distributed in the United States. Yang received commissions from these co-conspirators of $1,000 to $2,000 per month for his distribution services. Between March 2011 and April 2013, Yang used several false identities to receive hundreds of shipments from China and Hong Kong, including shipments involving integrated circuits.

United States Attorney Rod J. Rosenstein praised HSI Baltimore for its work in the investigation and thanked Assistant U.S. Attorney Christine Manuelian, who prosecuted the case.

Baltimore, Maryland – Computer Sciences Corporation, Inc., a defense contractor headquartered in Falls Church, Virginia, has agreed to pay the United States $1.1 million to resolve allegations under the civil False Claims Act that the company falsified qualifications of its employees in order to bill for labor charges at rates higher than allowed under a government contract.

The settlement was announced today 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; and Major General David Quantock, Provost Marshal General of the Army and Commanding General of the U.S. Army Criminal Investigation Command.

Computer Sciences Corporation designs and operates satellite and wireless network solutions and security systems for government and private sector customers. Prior to January 1, 2008, the U.S. Army Communication Electronics Command (CECOM), which is headquartered at Aberdeen Proving Ground, Maryland, awarded Computer Sciences a contract to provide information technology support to government assets and locations worldwide.

The settlement resolves allegations that Computer Sciences Corporation submitted false resumes for employees to qualify them for higher paying positions, thereby falsely increasing the amount of money for labor charged by Computer Sciences. These claims relate to services rendered between January 16, 2008 and January 15, 2012 under a specific task order of an information technology services contract administered by the Army CECOM.

“When defense contractors can enrich themselves at taxpayers’ expense by falsely representing that they provided expensive services, the government must be vigilant in pursuing fraudulent claims,” said U.S. Attorney Rod J. Rosenstein.

The claims settled by this agreement are allegations, and there has been no determination of liability.

U.S. Attorney Rod J. Rosenstein thanked the Defense Contract Audit Agency for their assistance in the investigation. This case was handled by Assistant U.S. Attorney Thomas Barnard.

Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced Ernst Harmon, age 37, of Annapolis, Maryland, today to 198 months in prison, and his brother Dontaye Harmon, age 40, of Baltimore, Maryland to 125 months in prison, both followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute cocaine base.  Judge Hollander also ordered Harmon to forfeit a 2004 Land Rover truck, a 1999 Dodge Caravan and $4,050 in cash.

The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Annapolis Police Chief Michael A. Pristoop; Anne Arundel County Police Chief Kevin Davis; Commissioner Anthony W. Batts of the Baltimore Police Department; U.S. Marshal Johnny Hughes; and Anne Arundel County State’s Attorney Anne Colt Leitess.

"We are proud of the excellent work and partnerships that resulted in removing two violent offenders from our streets," said Annapolis Police Chief Michael Pristoop. "This is significant for public safety in Annapolis."

According to their plea agreements, from at least July 2012 until June 2013, Ernst and Dontaye Harmon conspired with their brother, Donwand Harmon, Damian Brown and others to distribute cocaine base to a number of individuals in the Baltimore and Anne Arundel County, Maryland areas.

On July 31, 2012, Baltimore City Police officers stopped Ernst Harmon for a traffic violation. The police seized a hollowed-out cigar filled with raw marijuana and $4,050 from Ernst, and 140 grams of cocaine base and additional raw marijuana from a hidden compartment in his vehicle.

Dontaye Harmon worked with Ernst Harmon to run a drug shop operating out of the projects located at 920 President Street in Annapolis. Law enforcement saw Ernst and Dontaye outside the drug shop regularly making hand-to-hand transactions with customers. Pursuant to a court authorized wiretap on Ernst’s cell phone, law enforcement overheard Ernst arranging sales of cocaine base directly with customers, or instructing customers to deal with Dontaye. Ernst was also overheard calling Dontaye on multiple occasions to warn him that the police were coming, or were outside the drug shop. On two occasions in November 2012 and February 2013, investigators used an individual to purchase a total of 36.9 grams of cocaine base directly from Ernst and Dontaye at the drug shop. On a third occasion in January 2013, the individual made a controlled purchase of 27.2 grams of cocaine base from Ernst at the drug shop.

It was reasonably foreseeable to Ernst and Dontaye that the conspiracy distributed at least 280 grams of cocaine base.

Ernest Harmon also faces attempted murder charges in Anne Arundel County Circuit Court for the September 9, 2012 shooting of two individuals in Annapolis.

Donwand Cuppatino Harmon, age 37, of Annapolis, Maryland, previously admitted that he was responsible for distributing at least a kilogram of heroin during the conspiracy. Judge Hollander sentenced Donwand Harmon on February 7, 2014 to 210 months in prison, and ordered him to forfeit $27,895 in cash, a 2010 Porsche Panamera, a 2008 Mercedes Benz CL550, and jewelry, including a Breitling wrist watch with a diamond face and band.

Damian Brown also pleaded guilty to the drug conspiracy on February 3, 2014, and is scheduled to be sentenced on June 17, 2014 at 11:00 a.m.

United States Attorney Rod J. Rosenstein praised the ATF, Annapolis Police Department, Anne Arundel County Police Department, Baltimore Police Department, U.S. Marshals Service and Anne Arundel County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Kenneth S. Clark and Scott Lemmon who prosecuted this Organized Crime Drug Enforcement Task Force case.

Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced Ranson Chandler, Jr., age 37, of Salisbury, Maryland, today to 123 months in prison, followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute cocaine, and for possession of a firearm in furtherance of a drug trafficking crime.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Wicomico County Sheriff Michael A. Lewis; Salisbury Police Chief Barbara Duncan; Chief Michael Phillips of the Fruitland Police Department; and Wicomico County State’s Attorney Matthew Maciarello.

According to Chandler’s plea agreement, an investigation by the Drug Enforcement Administration and the Wicomico County Narcotics Task Force established that during the months of October and November 2012, Ranson Chandler, Jr., conspired with Terron Lamont Crump and others to distribute cocaine on the Eastern Shore of Maryland.

Information obtained through wiretaps demonstrated that on multiple occasions Chandler conducted or attempted to conduct narcotics transactions with Crump and others.

For example, in an intercepted call on November 27, 2012, Chandler and Crump discussed the price of “the hard knock,” which Chandler was attempting to procure for a third party. Crump told Chandler that the price was “one even,” or $1,000 per ounce, but that he (Crump) would not be able “to get to it” until the following day. At approximately 10 a.m. the next morning, officers observed a drug transaction between Chandler and Crump near the Route 50 Diner in Salisbury. After the transaction took place, the officers attempted to arrest Chandler who, while attempting to flee, crashed his vehicle into a vehicle occupied by three law enforcement officers.

Chandler was arrested. During a search officers recovered approximately 68 grams of cocaine from Chandler’s pants pocket and an additional 197 grams of cocaine from his vehicle, as well as a loaded (and stolen) 9 mm handgun recovered from the center console of Chandler’s vehicle.

The evidence showed that that it was foreseeable to Chandler that he and his co-conspirators distributed, more than 500 grams of cocaine during the conspiracy, which operated from June 2012 through and November 28, 2012.

Terron Lamont Crump, age 35, of Fruitland, Maryland, pleaded guilty to his role in the conspiracy and was scheduled to a year and a day in prison.

United States Attorney Rod J. Rosenstein praised the DEA and Wicomico County Narcotics Task Force comprised of the Maryland State Police, Wicomico County Sheriff’s Office, Salisbury Police Department, Fruitland Police Department and the Wicomico County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Peter J. Martinez, who prosecuted this Organized Crime Drug Enforcement Task Force case.

Caused a 15 Year Old Runaway to Engage in Prostitution

Baltimore, Maryland – Thomas Sean Tinsley, age 29, of Glen Burnie, Maryland pleaded guilty today to sex trafficking of a minor. Tinsley is a registered sex offender, having previously been convicted of having sex with a minor female.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.

According to Tinsley’s plea agreement, in May 2013, Tinsley met a 15 year old runaway near the Galleria Mall in downtown Baltimore, and invited her to live with him at his residence - a motel on Caton Avenue in Baltimore. Soon thereafter, Tinsley began having sex with the victim.

Tinsley encouraged the victim to engage in prostitution to pay for the motel room and to provide him with additional money. The victim routinely met with prostitution clients and communicated with Tinsley regarding her client interactions, including the location of the commercial sex and the identity of her patrons. Tinsley monitored the victim’s commercial sex activities and gave her instructions regarding her client interactions, including telling her to collect cash before the commercial sex. Sometimes, Tinsley negotiated directly with prospective clients for commercial sex on behalf of the victim.

When they searched the motel room, federal agents found Tinsley’s sex offender registry paperwork from a prior conviction, which listed the motel address as his ‘place of residence.”

Tinsley and the government have agreed that if the Court accepts the plea agreement Tinsley will be sentenced to between 121 and 210 months in prison followed by a lifetime of supervised release. U.S. District Judge Ellen L. Hollander has scheduled sentencing for July 2, 2014 at 11:00 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 Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorney Mark W. Crooks, who is prosecuting the case.

Was a Member of a Drug Trafficking Conspiracy Based out of the Paschall Auto Body Shop; Loaned His Truck to Others to Use in Commercial Robberies

Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Richard Ashbrook, age 51, of Baltimore, today to five years in prison followed by three years of supervised release for conspiring to distribute oxycodone.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Howard County Police Chief William McMahon; Chief James W. Johnson of the Baltimore County Police Department; Anne Arundel County Police Chief Kevin Davis; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Otis E. Harris, Jr., Special Agent in Charge, Coast Guard Investigative Service, Chesapeake Region; and Commissioner Anthony W. Batts of the Baltimore Police Department.

"The big picture about today's sentencing of Mr. Ashbrook is that prescription drug trafficking in Maryland is a growing problem," stated Gary Tuggle, DEA Assistant Special Agent in Charge. “As a result of the illegal abuse of opiate based drugs like oxycodone, a wider epidemic of opiate addiction has developed in Maryland. We now have a new sub culture of opiate addicted individuals; individuals who now turn to heroin to feed their habits all because of prescription drug abuse."

According to his plea agreement, from the spring of 2012 to July 2013, Ashbrook illegally sold prescription pills, often OxyContin and Percocet, to David Paschall and others. David Paschall operated Paschall’s Auto Body Shop, formerly located at 801 Desoto Road in Baltimore. Ashbrook knew that the business was operating as a hub for the sale of illegal narcotics - mostly oxycodone, but also heroin, cocaine and other illegal drugs. Ashbrook sold oxycodone to David Paschall that was either prescribed to him, or which he had illegally obtained from others. Ashbrook sold more than 14,930 milligrams of oxycodone, which is roughly 1,000 15mg pills. He further admitted that members of the conspiracy distributed between 14.93 and 59.70 grams of oxycodone.

Ashbrook also knew of other illegal conduct being committed by his coconspirators and others. David Paschall and others borrowed Ashbrook’s truck to use in commercial burglaries. On April 8, 2013, law enforcement overheard Ashbrook warning David Paschall about the light coming on when the truck doors are open, and suggesting that Paschall use a screwdriver to pop out the light, to avoid detection by law enforcement.

David Paschall, age 54, of Catonsville, Maryland, and his son, Chad Paschall, age 28, of Baltimore, pleaded guilty in February 2014 to conspiring to distribute oxycodone and two counts of conspiring to commit bank burglary. The Paschalls admitted to committing commercial burglaries in Maryland, Virginia, West Virginia and Pennsylvania. According to their plea agreements, the Paschalls conspired to steal cash, money orders, stamps, silver bars, jewelry, cigarettes, lottery tickets, prescription drugs, food, beverages, safes, laptop computers, cell phones, electronics, vehicles and other valuable items from gas stations, convenience stores, banks, credit unions and other commercial establishments.

At their sentencing, David and Chad Paschall face a maximum sentence of 20 years in prison and a $1 million fine for the drug conspiracy, and five years in prison for the bank larceny conspiracy. David Paschall has agreed to forfeit $500,000, his ownership interest in Paschall’s Auto Body Shop and his residence, three firearms and his vehicle. Chad Paschall has agreed to forfeit $250,000, his interest in his residence, four firearms and ammunition.

To date, a total of 12 defendants charged in the drug and burglary conspiracies have pleaded guilty to their participation in the criminal activities. Charges remain pending against four other defendants.

United States Attorney Rod J. Rosenstein commended the DEA, Howard County Police Department, Baltimore County Police Department; Anne Arundel County Department, ATF, Department of Health and Human Services - Office of Inspector General; Coast Guard Investigative Service and Baltimore Police Department for their work in the investigation. Mr. Rosenstein also praised the many local and state agencies in Virginia, West Virginia and Pennsylvania for their assistance in the investigation.

Mr. Rosenstein thanked Assistant United States Attorneys David I. Sharfstein and Andrea L. Smith, who prosecuted this Organized Crime Drug Enforcement Task Force case.

Scheme Resulted in Tax Loss of More Than $839,000

Greenbelt, Maryland - Georgia Smith, age 52, of Edgewater, Maryland, pleaded guilty today to conspiring to defraud the United States in connection with a scheme to file false tax returns by concealing income and inflating expenses.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Small Business Administration Inspector General Peggy E. Gustafson; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and General Services Administration Inspector General Brian D. Miller.

Georgia Smith’s husband, Vernon Smith, was the president and sole owner of Capitol Contractors since 2002. Capitol Contractors was a Maryland corporation with its headquarters in Capitol Heights, Maryland and later Edgewater, Maryland. Capitol Contractors had provided roofing and construction services but was largely dormant after 2002.

In 1999, Vernon Smith caused a new roofing and construction company, Platinum One Contracting, Inc. (“Platinum”) to be incorporated in Maryland. Although Vernon Smith installed two individuals to be the nominee owners and officers of Platinum, Vernon Smith exercised complete and undisclosed control over Platinum’s business operations. Georgia Smith was in charge of Platinum’s accounting, and acted as the de facto Controller for the company.

Georgia Smith and Vernon Smith transferred millions of dollars from Platinum to bank accounts in their own names, to casinos on their own behalf, to Capitol Contracting and another company owned by Vernon Smith, and to credit card companies to pay for personal expenses that Georgia Smith and Vernon Smith charged to Platinum’s corporate credit cards, including extensive dental work, veterinary visits for personal pets, lavish vacations, a Royal Caribbean cruise, limousine transportation to casinos in Atlantic City, N.J., funeral expenses for a family relative, fencing for their personal residence, among others. Georgia Smith also mischaracterized numerous payments to casinos as subcontractor expenses.

Georgia Smith admits that she and Vernon Smith signed false corporate and personal tax returns for 2005 and 2006. The Smiths knew that the cost of goods sold and payments to contractors reported on the corporate returns were false because almost all of that money was paid to, and for the benefit of, Georgia and Vernon Smith at casinos. They also knew that the income reported on their personal income taxes omitted hundreds of thousands of dollars that Capitol Contractors had paid to, and for their benefit. As a result, the Smith’s owed additional personal income tax to the IRS totaling $264,105, and Capitol Contractors owed an additional $574,911 to the IRS for tax years 2005 and 2006. The total tax loss resulting from Georgia and Vernon Smith’s conspiracy to defraud the IRS is $839,016.

Vernon J. Smith III, age 61, also of Edgewater, pleaded guilty last week to his participation in the tax scheme, as well as to fraudulently obtaining more than $52 million in federal contracts to which it was not entitled under the Small Business Administration Section 8(a) program. The total loss to the government resulting from Vernon Smith’s illegal conduct, regarding the illicit profit he received by defrauding the SBA, and depriving a legitimate Section 8(a) contractor of such profit, is $6,194,828.

Georgia Smith faces a maximum sentence of five years in prison for the conspiracy. U.S. District Judge Paul W. Grimm has scheduled her sentencing for July 2, 2014, at10:30 a.m. Vernon Smith’s sentencing is scheduled for July 2, 2014, at 9:30 a.m.

United States Attorney Rod J. Rosenstein praised the SBA Office of Inspector General; Defense Criminal Investigative Service; IRS Criminal Investigation; and the GSA Office of Inspector General for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Gregory R. Bockin and Trial Attorney Kenneth C. Vert of the U.S. Department of Justice Tax Division, who are prosecuting the case.

Used Stolen Identity Information to Purchase Motorcycles and Other Goods
With Losses to the Victims of at Least $120,000

Baltimore, Maryland – Tavares Davon Miller, a/k/a “Tavon Jackson,” “Tavon Miller,” and “Ooh,” age 30, of Baltimore, Maryland pleaded guilty today to conspiracy to commit wire fraud and aggravated identity theft, in connection with a scheme to use the personal identifying information of others to purchase motorcycles, electronic equipment, jewelry and other goods.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Anne Arundel County Police Chief Kevin Davis; Charles County Sheriff Rex Coffey; Howard County Police Chief William McMahon; Chief J. Thomas Manger of the Montgomery County Police Department; and Chief Michael Phillips of the Fruitland Police Department.

According to his plea agreement, from September 25 through November 1, 2012, Miller acquired the identifying information of more than 10 victims, and used that information to fabricate driver’s licenses and credit cards in the names of those victims, but using the photograph of a co-conspirator (where applicable). Miller and the co-conspirator traveled to motorcycle dealerships and retail stores in Maryland, Delaware, Virginia and Pennsylvania, and used the fraudulent identification documents to purchase merchandise, including electronic equipment, jewelry and clothing, or apply for lines of credit at those stores. Miller and the co-conspirator then loaded the motorcycles and merchandise into their vehicle and returned to Maryland. Miller advertised the motorcycles and merchandise for sale over the internet, retaining the proceeds of the sales and paid the co-conspirator a fee for her services.

As part of his plea agreement, Miller will be required to pay restitution in the full amount of the victims’ losses, which is at least $120,000.

Miller faces a maximum sentence of 20 years in prison for the wire fraud conspiracy and two years in prison, consecutive to any other sentence, for aggravated identity theft. U.S. District Judge Ellen L. Hollander scheduled sentencing for June 27, 2014 at 12:00 p.m.

United States Attorney Rod J. Rosenstein praised the U.S. Secret Service, Maryland State Police, the Anne Arundel, Howard and Montgomery County Police Departments, Charles County Sheriff’s Office and Fruitland Police Department for their work in the investigation. Mr. Rosenstein also recognized the following agencies for their assistance in the investigation: the Delaware State Police; Leesburg (Virginia) Police Department and Stafford County (Virginia) Sheriff’s Department; and the Lancaster (Pennsylvania) Police Department and Springettsbury Township (Pennsylvania) Police Department. Mr. Rosenstein thanked Assistant U.S. Attorney Judson T. Mihok, who is prosecuting the case.

Robbed Seven Businesses and Employees; Attempted to Rob a Take-Out Restaurant

Greenbelt, Maryland – Duane James, age 53, of Germantown, Maryland pleaded guilty today to five counts of robbery.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; and Chief J. Thomas Manger of the Montgomery County Police Department.

According to his plea agreement, on seven occasions from January 21 to February 17, 2013, James robbed Maryland businesses and their employees, each time wearing a ski mask and pointing what appeared to be a gun at the store clerks. In Silver Spring, James stole $50 and $10,000 worth of jewelry at The Gold Spot store; $110 from the store register and $100 from the clerk’s wallet at the AT&T store; and $3,000 from the cash drawer and lottery proceeds at the Bel Pre Beer & Wine store. In Rockville, James stole $1,500 from the register at the Shell Gas Station. In Gaithersburg, James stole $400 from the store register and $5 from the clerk at the Walnut Hill Liberty Gas Station; $300 from the cash register and $200 from the clerk at Twinbrook Shell Gas Station; and $1,043 from the register and cigarettes at the Exxon Gas Station.

Also, on February 17, 2013 and prior to robbing the Exxon gas station that same day, James pointed what appeared to be a gun at a clerk at a take-out restaurant in Gaithersburg, demanding cash from the register. The clerk did not move or open the drawer. James left the store.

James faces a maximum sentence of 20 years in prison and a fine of $250,000 for each of the five counts robbery. Chief U.S. District Judge Deborah K. Chasanow scheduled sentencing for July 14, 2014 at 10:00 a.m.

United States Attorney Rod J. Rosenstein praised the ATF and Montgomery County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Mara Zusman Greenberg and Special Assistant U.S. Attorney Jennifer R. Sykes, who are prosecuting the case.

Baltimore, Maryland – Joshua Ferguson, age 34, of Pasadena, Maryland pleaded guilty today to unlawfully providing notice of electronic surveillance.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; and Anne Arundel County Police Chief Kevin Davis.

According to his plea agreement, in June of 2013, pursuant to a court authorized wiretap, the DEA and Anne Arundel County Police Department were monitoring the cell phone of a suspected drug trafficker, Paul Cain. On June 27, 2013, law enforcement overheard a call from Ferguson who warned Cain of three phone taps in Pasadena for drugs. Ferguson also told Cain to warn another suspected drug dealer, Daryell Rexrode, about the phone taps. Shortly thereafter, Cain and Rexrode stopped using their cell phones.

Further investigation revealed that Ferguson learned of the phone taps through Sarah Harris who worked at the Clerk’s Office in the Circuit Court for Anne Arundel County. Ferguson had met with Harris at a bar on June 26, 2013. Harris told Ferguson that there were phone taps in Pasadena for drugs, which were not local. Ferguson understood this to mean that federal law enforcement officers were conducting the phone taps.

Ferguson faces a maximum sentence of five years in prison followed by three years of supervised release and a fine of $250,000. U.S. District Judge George L. Russell III scheduled sentencing for June 27, 2014.

Sarah Elizabeth Harris, age 23, of Pasadena, Maryland, pleaded guilty in February 2014 to obstruction of an official proceeding and faces a maximum sentence of 20 years in prison at her sentencing scheduled on May 9, 2014 at 2:00 p.m. Paul Rodney Cain, age 48, and Daryell Mitchell Rexrode, age 56, both of Pasadena, Maryland, previously pleaded guilty to their participation in drug trafficking activities. Rexrode was sentenced on March 8, 2014 to 160 months in prison. Cain awaits sentencing.

United States Attorney Rod J. Rosenstein praised the DEA and Anne Arundel County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Peter J. Martinez, who is prosecuting the case.

Owes Over $750,000 in Additional Taxes to the IRS

Greenbelt, Maryland –Krishan M. Mathur, M.D., age 64, of LaPlata, Maryland, pleaded guilty today to filing false tax returns.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.

According to Dr. Mathur’s plea agreement, he is an oncologist and has been the owner and operator of the Cambridge Cancer and Infusion Center in Maryland since 1984. Dr. Mathur also served as the Medical Director for Hospice of Charles County and was paid for his services.

Dr. Mathur admitted that he filed false tax returns for tax years 2006, 2007 and 2008, falsely overstating his expenses and underreporting his income. For example, Dr. Mathur received rebate payments from certain companies from which he had purchased pharmaceuticals. Those rebates were deposited directly to his personal bank account. Dr. Mathur failed to disclose the payments or provide his bank records to his accountant. As a result, the accountant claimed the pharmaceutical purchases as expenses, but the failed to properly report the income received from the rebate payments. In addition, Dr. Mathur wrote checks and withdrew funds for personal use from his medical practice’s bank account, which he then falsely indicated on business records were payments made to medical suppliers. Finally, Dr. Mathur failed to report income he received from the Hospice of Charles County for serving as its Medical Director. The income was deposited into his personal bank account and not disclosed to his accountant.

As a result of the scheme, Dr. Mathur owed additional taxes for those years totaling $750,249. As part of his plea agreement, Dr. Mathur will be required to pay restitution to the IRS in that amount.

Krishan Mathur faces a maximum penalty of three years in prison. U.S. District Judge Paul W. Grimm has scheduled his sentencing for July 17, 2014.

United States Attorney Rod J. Rosenstein praised the IRS – Criminal Investigation for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Nicolas Mitchell and Bryan E. Foreman, who prosecuted the case.

Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Tyrone Collington, Jr., age 27, of Seat Pleasant, Maryland, today to 15 years in prison, followed by three years of supervised release, after Collington pleaded guilty to carjacking. Judge Motz ordered that the sentence be served concurrent with the seven year sentence imposed by U.S. District Court for the Eastern District of Virginia in U.S. v. Collington, Case No. AJT-11-CR-00027, for a carjacking that took place in Fairfax, Virginia

The sentence and guilty plea were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief J. Thomas Manger of the Montgomery County Police Department; and Montgomery County State’s Attorney John McCarthy.

According to his plea agreement, on June 22, 2010, Collington approached a driver of a Honda Civic parked in the garage of the Westfield Wheaton Plaza Mall in Wheaton, Maryland. The driver was buckling the driver’s two children into their car seats when Collington pointed a semiautomatic gun at the driver and stated: “If you don’t want to be shot in front of your kids, give me your keys.” The driver complied and Collington drove off, after giving the driver sufficient time to remove the children from the car. Montgomery County Police responded to the scene, but did not locate Collington.

A couple days later on June 24, Collington approached a driver of a BMW convertible in the parking lot at the University Mall in Fairfax, Virginia. Collington pointed the same gun at the driver, racked the slide and demanded the car keys. The driver complied. After a couple minutes of trying to start the BMW and failing, Collington left and drove away with another passenger in the Honda Civic he had previously stolen.

The driver of the BMW pursued Collington. Shortly thereafter, the driver caught the attention of a Virginia State Trooper who joined the chase. Collington and his passenger eventually abandoned the Honda Civic and escaped on foot. A subsequent search of the Honda Civic revealed a cell phone, GPS devices, clothing and a Maryland driver’s license, all belonging to Collington. Montgomery County Police detectives also found latent fingerprints inside the car belonging to Collington.

Collington was arrested on July 1, 2010, at his residence. Officers seized the gun he used in both carjackings from his bedroom closet.

United States Attorney Rod J. Rosenstein commended the FBI, Montgomery County Police Department and Montgomery County State’s Attorney’s Office for their work in the investigation and thanked the U.S. Attorney’s Office for the Eastern District of Virginia for their assistance in the prosecution of the case. Mr. Rosenstein also thanked Assistant United States Attorney Kelly O’Connell Hayes and Special Assistant United States Attorney Paul Nitze, who prosecuted the case.

Allegedly Used Stolen Identity to Gain Employment at a Doctor’s Office; Treated 200 Patients, Including Infants, and Wrote Prescriptions

Baltimore, Maryland - A federal grand jury has indicted Shawna Michelle Gunter, age 36, of Severna Park, Maryland, on charges of wire fraud, aggravated identity theft and health care fraud. The indictment was returned on March 18, 2014, and unsealed today upon Gunter’s arrest.

The indictment was announced 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; and Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Colonel George F. Johnson IV, Superintendent of the Maryland Natural Resources Police.

“This case involves very troubling allegations that Shawna Michelle Gunter fraudulently posed as a licensed physician’s assistant, treating patients and writing prescriptions, although she has no medical training,” said U.S. Attorney Rod J. Rosenstein. “I commend the Maryland State Police for their quick response, which brought the charade to an end.”

According to the four count indictment and search warrant affidavit, from July 5 to August 29, 2013, Gunter acted as a physician’s assistant, even though she did not have the medical education, training or qualifications to do so. Gunter sought employment as a physician’s assistant with a pediatrician who had offices in Centreville and Chestertown, Maryland. To gain employment, Gunter allegedly provided a forged Howard University physician’s assistant diploma. She also allegedly provided a forged physician’s assistant certificate bearing the license number of another physician assistant practicing in Salisbury, without the victim’s knowledge or approval, as well as a forged DEA controlled substance registration certificate bearing a registration number that was almost identical to the victim’s.

Gunter started her employment as a physician assistant on July 5, 2013. She began seeing patients alone on August 18, 2013. According to the affidavit, between August 18 to 29, 2013, Gunter saw and treated around 200 Medicaid patients for sick visits, ADHD follow-ups, newborn visits and routine physicals. Each medical visit resulted in a claim submitted to Medicaid and in turn, money paid to the pediatrician’s practice for medical services allegedly provided by an unlicensed and unqualified individual. Gunter also wrote numerous prescriptions that were filled by the patients and paid by Medicaid.

The affidavit alleges that on August 29, 2013, the physician owner of the pediatric practice contacted the Maryland State Police upon receiving an anonymous communication informing him that Gunter was not qualified to be a physician’s assistant. That same day, Maryland State Police arrested Gunter at the pediatrician’s office in Centreville. At the time of her arrest, Gunter had three of the pediatric doctor’s prescription pads in the pocket of a white doctor’s coat that she was wearing. Officers also seized from her purse numerous items including another prescription pad belonging to a surgeon who Gunter previously worked for; a folder containing a schedule of patients and their illnesses for each day in August; and originals of all of the fraudulent documents Gunter provided to the pediatrician.

The affidavit alleges that further investigation indicates that between April and October 2013 Gunter filled multiple prescriptions for Gabapentin, Divalproex and Cymbalta, purportedly written by a doctor for whom Gunter formerly worked, for her own child. The doctor advises that she never saw Gunter’s child as a patient. The child has since seen another doctor who directed that the child be slowly weaned off the medications.

Gunter faces a maximum sentence of 20 years in prison for wire fraud and health care fraud; and two years in prison, consecutive to any other sentence, for each of two counts of aggravated identity theft. Gunter had her initial appearance this afternoon in U.S. District Court in Baltimore and is detained pending a detention hearing scheduled for April 7, 2014 at 2:30 p.m.

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

United States Attorney Rod J. Rosenstein praised the Department of Health and Human Services Office of Inspector General, Maryland State Police, HSI and Maryland Natural Resources Police for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Tamera L. Fine, who is prosecuting the case.

Used her Position in the Bank to Apply for Mortgages in the Names of Family Members and Used the Loan Proceeds for Her Personal Benefit

Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Jill Dail, age 59, of Cambridge, Maryland, today to 16 months in prison, followed by five years of supervised release, for bank fraud in connection with a scheme in which she and her brother, Jeffrey Scott Dail, fraudulently obtained mortgage loans in the names of family members, using the proceeds for their own benefit. Judge Motz sentenced Jeffrey Dail, age 49, also of Cambridge, today to a year and a day in prison, followed by three years of supervised release, for his role in the scheme. Judge Motz ordered ordered Jeffrey Dail to pay restitution of $248,000. The amount of restitution for Jill Dail will be determined at a later date.

The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.

According to her plea agreement, Jill Dail was a loan settlement processor in the mortgage department at a Salisbury, Maryland, bank until she was terminated in June 2007, as part of a reduction in the bank’s workforce. Shortly thereafter, Dail was privately hired by the manager of the bank’s mortgage department to continue to do the same loan processing work she had performed as an employee of the bank. The bank manager paid Dail out of his own funds and gave her full access to the bank premises, computer system and loan files. Dail continued to represent herself as a bank employee in her dealings with title companies and other businesses.

Jill Dail admits that beginning before January 2006 through at least August 2009, she and her brother, Jeffrey Dail, applied for mortgage loans in the names of family members and used the proceeds of the loans for their personal benefit. The Dails forged the signature of family members and bank officials on the loan applications, causing the bank to approve the applications and authorize the distribution of the loan proceeds at settlement. In each instance, the family members whose identities were used on the loan applications, and whose properties were used as collateral for the loans, had no knowledge of the applications or the loans.

Based on the assurances of Jill Dail, with whom the title company had a well-established business relationship, title company employees notarized the signatures of the family members on the settlement documents and disbursed the loan funds at settlement, as directed by Jill Dail, to herself, to Jeffrey Dail, or to their creditors. The balance of loan funds still unpaid is approximately $687,923.67.

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 www.justice.gov/usao/md/Mortgage Fraud/index.html.

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 the FBI for its work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Kathleen O. Gavin, who prosecuted the case.

Partnership Between the Social Security Administration and Department of Justice Increases Criminal Prosecution of Fraud in SSA’s Title II and Title XVI Benefit Programs

Baltimore, Maryland – Since October 2012, the U.S. Attorney’s Office for the District of Maryland has participated in the Social Security Administration (SSA) Fraud Prosecution Project, which places attorneys in federal districts around the country to serve as Special Assistant United States Attorneys (SAUSAs). The District of Maryland is one of a dozen such districts to participate in the program, which will expand to at least ten additional districts in 2014. Assigned SAUSAs work within their assigned district to bring criminal indictments charging individuals who have actively defrauded SSA. These schemes can last many years and result in large financial losses to the agency. Collateral benefits of the program include providing a deterrent effect and punishment to those who steal from SSA benefit programs and who undermine the public’s trust in SSA’s stewardship of the trust funds.

FEDERAL CRIMINAL PROSECUTIONS

Since October 2012, 15 defendants have pleaded guilty to their participation in fraud schemes affecting SSA’s benefit programs. Five of those defendants have been sentenced to between one month and 33 months imprisonment. Twelve defendants have also been ordered to pay a total of $761,109 in restitution to SSA, Maryland Medicare and Maryland Medicaid, with individual defendants paying between $6,480.15 and $190,900.

“We increased federal prosecutions of criminals who defraud the Social Security Administration as a result of unprecedented support from the agency,” said U.S. Attorney Rod J. Rosenstein. “These cases are important in order to punish and deter people who lie, cheat and steal to gain government benefits they do not deserve.”

“I’m gratified at the results of this joint effort, and I want to thank United States Attorney Rod J. Rosenstein and Chief Counsel David Black for their unwavering support,” said Special Agent in Charge Michael McGill of the Social Security Administration - Office of Inspector General, Philadelphia Field Division. “The SSA-OIG is steadfast in its commitment to combating Social Security fraud, and relies heavily on the cooperation of both the Department of Justice and the Social Security Administration. These results illustrate with remarkable clarity what can be accomplished to preserve Social Security funds for those entitled to them when each of those parties not only commits to combating fraud waste and abuse, but acts on that commitment.”

The following are examples of cases involving social security fraud schemes prosecuted in Maryland.

Deceased Beneficiary

U.S. District Judge George L. Russell III sentenced Robert Errol Jackson, age 45, of Baltimore, today to 33 months in prison followed by three years of supervised release for theft of government property, in connection with an 18 year fraud scheme to obtain his grandfather’s social security benefits. Judge Russell also entered an order that Jackson pay restitution of $190,900 for social security benefits unlawfully received.

According to his plea agreement, Jackson’s grandfather received monthly cash benefits from the Social Security Administration (SSA) at the time of his death on June 9, 1992. The benefits were paid by direct deposit into a checking account. After his grandfather’s death, Jackson took possession of the debit card in his grandfather’s name and used the card to regularly withdraw money from the account until December 3, 2010, when the benefits were terminated. From June 1992 to December 2010, SSA deposited a total of $190,900 into the account on the grandfather’s behalf. Jackson had no legal entitlement to these benefits.

Jackson was incarcerated between 1990 and 1994, and again between 2004 and 2010. During his imprisonment, Jackson told others to withdraw money from the account and spend it at his direction, including by sending money to Jackson in prison. He spent substantially all of the social security benefits that SSA had deposited in the account on his grandfather’s behalf. When the grandfather’s benefits were suspended in 2010, Jackson called SSA and unsuccessfully attempted to impersonate his grandfather in order to resume the payment of benefits.

Work Concealment

Charles David Jones, Sr., age 58, of Frederick, Maryland, pleaded guilty on February 27, 2014, to theft of government property, after he received at least $110,000 in disability benefits while working at a Frederick restaurant.

According to his guilty plea, Jones applied for disability benefits in March 2002, claiming that he could no longer work and was disabled. Starting in July 2002, Jones began to work as a cook at a Frederick restaurant and was promoted to manager and head chef. Jones never reported this work to SSA. On October 13, 2003, Jones purchased the restaurant and continued to manage and operate the restaurant through at least August 2011. In February 2004, Jones was awarded disability benefits by SSA, retroactive to August 2002 and continued to receive benefits until they were suspended in 2011. In March 2010, Jones signed and submitted to SSA a Continuing Disability Review Report, in which he claimed that he was not working and was not able to work.

Jones faces a maximum penalty of 10 years in prison at his sentencing, which is scheduled for June 24, 2014 at 9:30 a.m. Under the terms of his plea agreement, Jones will also be required to pay restitution of at least $110,000.

On February 21, 2014, Ronald William Burke, age 53, of Crisfield, Maryland, was indicted by a federal grand jury on charges arising from his concealment of work activity while receiving Title II disability benefits.

The three count indictment alleges that Burke, who qualified for disability benefits in April 2010, returned to work as a commercial waterman without notifying SSA. The indictment alleges that Burke maintained an active commercial fishing license between 2010 and 2013, and owned and operated commercial fishing boats during the same period, including the “Laura” and the “Belinda Jean.” On January 26, 2012, the indictment alleges that Burke signed an SSA work activity report, on which he was obligated to report all work activity since his disability in January 2010. Burke is alleged to have falsely certified that he had not worked during the entirety of that period, when in fact he had been self-employed as a commercial waterman during some of that time.
Burke allegedly received $36,691 in unlawful disability benefits and $35,610 in unlawful Medicare services between 2010 and 2013. He faces a maximum sentence of 10 years in prison for theft of government property; and five years in prison for making a false statement to SSA and for improper receipt of Title II benefits.

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.

Debit Card Program Fraud

Scerena Simpson Genus, age 35, and her mother, Doreen Spence, age 50, both of Baltimore, pleaded guilty to a scheme to steal social security benefits. Genus was sentenced to two years in prison and Spence to 11 months in prison. Both were ordered to pay restitution of $6,480.15.

According to their plea agreements, beginning no later than September 2011, co-conspirators in Jamaica, including cousins and other family members of Genus and Spence, applied by telephone for Direct Express debit cards in the names of social security beneficiaries, impersonating the victims and using the victims’ personal identifying information. The co-conspirators obtained the personal information of the victims by, among other means, telling the victims that they had won the Jamaican National Lottery and that they would send them “winnings” from the lottery if the victims provided their personal information. The Direct Express debit card program can be used by beneficiaries of federal programs which disburse cash benefits. The co-conspirators signed up for Direct Express in the name of the victims and requested that the victims= monthly social security benefits be loaded onto the debit cards and sent to the home of Genus and Spence.

Spence and Genus received at least five of the more than 23 debit cards that the co-conspirators applied for and used the cards to make purchases and cash withdrawals at locations around Baltimore. Soon after withdrawing the benefits Spence and Genus wired a portion of the funds to the Jamaican co-conspirators, keeping a portion of the stolen benefits for themselves. The total amount of benefits fraudulently withdrawn from the five cards by Genus and Spence was $6,480.15.

United States Attorney Rod J. Rosenstein thanked the Social Security Administration, Office of Inspector General for its work in these investigations. Mr. Rosenstein praised Special Assistant U.S. Attorney Paul Nitze, on detail from the Social Security Administration, who handles SSA-related fraud cases in Baltimore and Greenbelt, as well as Assistant U.S. Attorney Justin S. Herring, who is handling the Jones case.

Members of the Conspiracy Paid an Undercover Agent $1,770,230 for More Than 17 Million Contraband Cigarettes

Greenbelt, Maryland – U.S. District Judge Peter J. Messitte sentenced former Prince George’s County police officer Sinisa Simic, age 30, of Woodbridge, Virginia, today to 10 years in prison, followed by four years of supervised release, for: an extortion conspiracy under color of official right arising from a scheme involving the transport and distribution of untaxed cigarettes; conspiracy to distribute cocaine; and, possession and transfer of a firearm in furtherance of a drug trafficking crime and a crime of violence. Judge Messitte also ordered Simic to forfeit $1,137,898.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.

According to Simic’s plea agreement, between July 2009 to January 2010, Simic participated in a conspiracy to transport and distribute untaxed cigarettes in Maryland, Virginia and elsewhere. As part of the conspiracy, Simic used his official authority as a Prince George’s County police officer to ensure the safe transport and distribution of the untaxed cigarettes in exchange for cash payments from a source and an undercover agent working with the FBI . During November 2009, law enforcement intercepted conversations on Simic’s cellular phone which indicated that Simic and his co-conspirator, Mirza Kunjundzic, both wanted Kunjundzic to be armed while they were protecting the contraband cigarettes during transportation and distribution. Simic subsequently obtained a 50 caliber handgun requested by Kunjundzic, which was recovered at Simic’s residence at the time of his arrest, along with a 9mm handgun. On December 2, 2009, Simic and Kunjundzic transported 80 cases of contraband cigarettes to New Jersey in exchange for $3,400 paid by the undercover agent.

From July 2009 through January 2010, Simic and Kunjundzic also distributed cocaine to the undercover agent and source. For example, on October 7, 2009, Simic and Kunjundzic delivered 114.5 grams of cocaine to the undercover agent, who paid them $6,520 for the cocaine and to transport and protect a delivery of contraband cigarettes. A portion of the cocaine was secreted in the shipment of contraband cigarettes. Similarly, on October 22, 2009, Simic and Kunjundzic delivered 244.3 grams of cocaine to the undercover agent and on and November 12, 2009, they delivered 268.2 grams of cocaine, for which they were paid $13,800 and $4,000, respectively, for the cocaine and to transport contraband cigarettes. Simic was armed during each of the transactions.

From September 9, 2009 through at least January 26, 2010, Simic and Kunjundzic provided protection for eight shipments of contraband containing 575.5 master cases of cigarettes and were paid a total of $52,120, including the payments for the cocaine. The tax loss attributable to Simic relating to the illegal cigarette trafficking is $1,356,358, based on losses of $819,600 to Maryland, $122,940 to Virginia and $413,818 to the federal government.

On February 26, 2014, Mirza Kunjundzic, age 33, of Woodbridge, Virginia, was sentenced to 15 years in prison after pleading guilty to conspiracy to distribute and possess with intent to distribute controlled substances, and possession of a firearm in furtherance of a drug trafficking crime.

United States Attorney Rod J. Rosenstein praised the FBI and IRS for their work in these investigations and expressed his appreciation to Prince George’s County Police Chief Mark A. Magaw for the assistance that he and his department provided. Mr. Rosenstein thanked Assistant United States Attorneys James A. Crowell IV, A. David Copperthite and Sujit Raman, who prosecuted the case.

Fraudulently Obtained $200,000 and Attempted to Obtain Another $500,000 through a National Science Foundation Small Business Program

Baltimore, Maryland - A federal jury convicted Manoj Kumar Jha, age 46, of Severn, Maryland, today of wire fraud, mail fraud, falsification of records, and theft of government property in connection with a scheme to fraudulently obtain research grants from the National Science Foundation (NSF) and kickbacks from students’ stipends.

The conviction was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Allison Lerner, Inspector General at the National Science Foundation.

“The Small Business Technology Transfer Program supports research performed cooperatively between small businesses and research institutions,” said Allison Lerner, National Science Foundation Inspector General. “This conviction of guilt on seven counts, including obstruction of justice and theft of government property, sends a strong signal to anyone who would seek to defraud this program and divert taxpayer dollars intended for scientific research to personal use. I commend the U.S. Attorney’s office for its strong support in this case.”

According to trial testimony, from January 2008 through July 2009, Jha fraudulently obtained $200,000 in grant funds from the National Science Foundation=s (NSF) Small Business Technology Transfer (STTR) program to fund a highway project, and attempted to obtain another $500,000 through the same program. Jha converted the funds to his personal use. For example, Jha made payments on his mortgage and personal credit card and authorized approximately $11,000 in salary payments to his wife, who performed no NSF-related work.

Jha, a full time professor at Morgan State University, incorporated Amar Transportation Research and Consulting, Inc. (ATRC), and was its president and only director. Trial evidence showed that Jha submitted funding proposals on behalf of ATRC to the STTR. The stated purpose of Jha=s proposed project was to enhance current models used by highway planners to optimize horizontal and vertical highway routes, and ultimately, to commercialize the result. In his application for STTR funding, Jha listed himself as the principal investigator and the University of Maryland as the CRI. Under the STTR, the primary employment of the principal investigator must be with the small business at the time of the award; and at least 40% of the research must be performed by the small business and 30% by a collaborating research institution (CRI), as measured by the budget.

Trial evidence was presented that in his applications, Jha falsely represented that: he would secure “release time” or negotiate other leave options with Morgan State University in order to spend time at ATRC working on the highway project; that ATRC had eight employees; and that another Morgan State professor would be working for ATRC as a Senior Scientific Advisor. In fact, Jha remained employed full time as a professor at Morgan State and that none of the statements were true. Jha also misrepresented the involvement of the University of Maryland in conducting research on the project and further misrepresented that he had obtained a $100,000 investment from a third party in order to qualify for matching funds from NSF.

On February 15, 2011, an investigator with the Office of Inspector General (OIG) for the NSF sent Jha a letter requesting copies of documents, including a list of all individuals who worked on the highway project and their time sheets, and the company=s expenditure ledger detailing all budget categories, as part of a proactive OIG review of ATRC’s compliance with laws, regulations, and conditions in connection with the NSF grant. On March 11, 2011, Jha provided, through his attorney, biweekly, signed time sheets purportedly maintained by Jha for a research scientist who worked on the highway project from October 1, 2008 until September 8, 2009. The time sheets were created by Jha only after receiving the OIG letter, and in such a way as to give the false appearance that the time sheets had been maintained and signed contemporaneously with the research scientist’s work. Jha also provided a copy of ATRC’s expenditure ledger as of September 10, 2009, in which he entered fictitious research expenses in order to conceal the fact that NSF funds had been converted to Jha’s personal use.

Finally, between March 4, 2008 and June 30, 2012, Morgan State University received federal funds under two subcontracts funded by the U.S. Department of Defense. Jha served as Morgan State’s Principal Investigator for those contracts and authorized stipend payments totaling approximately $100,000 to Morgan State University students working on those contracts. Trial evidence showed that between July 25, 2009 and July 24, 2010, Jha told some students who received stipend payments that they had to return a portion of the stipend funds to him, offering various false and misleading reasons. Some students returned a portion of their stipend to Jha, which Jha then used to pay personal expenses. The evidence showed that approximately $36,000 in stipend funds returned to Jha by Morgan State University students were deposited into Jha’s personal bank account

Jha faces a maximum sentence of 20 years in prison for each of four counts of wire fraud, and for one count each of mail fraud and falsification of records; and a maximum sentence of 10 years in prison for theft of government property. U.S. District Judge Ellen L. Hollander scheduled sentencing for July 11, 2014, at 10:00 a.m.

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 thanked the National Science Foundation, Office of Inspector General for its work in the investigation and thanked the Department of Transportation Office of Inspector General for its assistance. Mr. Rosenstein praised Assistant U.S. Attorney Martin J. Clarke and Special Assistant U.S. Attorney Fara Damelin, Investigative Attorney with the Office of Inspector General for the National Science Foundation, who are prosecuting the case.

Co-Conspirators Admitted to Committing up to 22 Armed Robberies of Stores and Businesses

Baltimore, Maryland - U.S. District Judge Marvin J. Garbis sentenced Dion Mitchell Doram, age 23, of Baltimore, Maryland today to 10 years in prison followed by five years of supervised release for commercial robbery and possession of a firearm in furtherance of a crime of violence.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Commissioner Anthony W. Batts of the Baltimore Police Department; Chief James W. Johnson of the Baltimore County Police Department; and Anne Arundel County Police Chief Kevin Davis.

According to his plea agreement and court documents, Doram, Quindell Gardner, Tavon McPhaul and others robbed stores in the Baltimore area. After deciding which place to rob, the conspirators would steal a car to use during the robbery. They also used a gun during the robberies to steal cash and cigarettes.

Doram admitted that he participated in at least four armed robberies of convenience stores. On June 21 and June 30, 2012, Doram entered stores on West 41st Street, and on Washington Boulevard, respectively, in Baltimore, brandishing a sawed-off shotgun. Money and cigarettes were taken from employees in each robbery.

On July 4, 2012, Doram entered a store on North Dundalk Avenue in Dundalk, Maryland, carrying a sawed-off shotgun. Gardner entered the store with Doram and stole money and cigarettes from an employee. Doram and Gardner left the store and escaped in a stolen vehicle driven by McPhaul. Witnesses saw the getaway car and provided a description to police.

Shortly thereafter, while Doram waited in the get-away car, Gardner entered a convenience store on Eastern Avenue in Baltimore brandishing the same sawed-off shotgun Doram had used earlier that day. After stealing cash from an employee, Gardner and Doram escaped in the car driven by McPhaul. Police responding to the scene spotted the car and a chase ensued. Doram and Gardner jumped out the car during the chase and were arrested by Baltimore Police officers. McPhaul abandoned the car and escaped on foot, carrying the sawed-off shotgun, but was subsequently arrested.

Quindell Ryeshawn Gardner, and Tavon McPhaul, both age 22, and both of Baltimore, previously pleaded guilty to their roles in committing robberies. Gardner admitted to participating in 22 armed robberies and McPhaul admitted to participating in 12 armed robberies, with Gardner going into the store to commit the robbery and McPhaul driving the getaway vehicle. Judge Garbis sentenced McPhaul to 145 months in prison. Gardner is scheduled to be sentenced on June 5, 2014. Gardner and the government have agreed that if the Court accepts his plea agreement, he will be sentenced to between 15 and 25 years in prison.

United States Attorney Rod J. Rosenstein praised the FBI, the Baltimore City and Baltimore County Police Departments and Anne Arundel County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Benjamin M. Block, who prosecuted the case.

Allegedly Engaged in Deceptive Practices To Offer Debt Management Services

Greenbelt, Maryland - A federal grand jury today returned a superseding indictment against Richard A. Brennan, age 42, of Clarksburg, Maryland, which added charges of conspiracy, mail, wire and telemarketing fraud, and filing false tax returns, to the several gun charges contained in the original indictment. The original indictment was returned under seal on March 5, 2012, and was unsealed on March 12, 2014, upon Brennan’s arrest.

The superseding indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Maryland Attorney General Douglas F. Gansler.

According to the superseding indictment, Brennan was an attorney who operated law offices and other businesses in Frederick, Maryland and elsewhere, that offered debt management and settlement services. Brennan’s firms recruited customers from around the United States through telemarketers.

In 2007, the Maryland Attorney General’s Office began an investigation into allegations that Brennan’s firms engaged in unfair and deceptive trade practices, including: that they sold debt management services to customers and administered debt management plans from their offices in Frederick, although they could not lawfully do so in Maryland; that they held themselves out as non-profit credit counseling agencies, when they were for-profit entities; and that the employees of Brennan’s firms almost always recommended that the debt clients enter into debt settlement plans that were profitable for Brennan’s firms, but not necessarily an appropriate resolution of the clients’ financial problems. In addition, Brennan’s firms represented to clients that the funds collected from debt clients would be placed in a trust account and used to administer the clients’ debt management plans, with payments made timely to the clients’ creditors. Instead, the funds were used to pay Brennan’s business operation and personal expenses and the firms did not make timely payments to clients’ creditors because of lack of funding in the trust account.

On October 18, 2007, Brennan signed an agreement with the Maryland Attorney General’s Office acknowledging that he was responsible for creating and implementing the alleged unfair or deceptive practices of his companies and agreed to “cease and desist” such practices and abide by the requirements set out in the agreement.

The eight count superseding indictment alleges that between October 19, 2007 and April 2010, Brennan conspired with others to continue to make false representations to new and existing debt clients to convince them to engage or retain Brennan’s firms to negotiate settlement of their debts with creditor companies. Brennan and his co-conspirators used telemarketing to execute the scheme and, in doing so, victimized at least 10 people over the age of 55. Brennan and his coconspirators would mail or email contracts and power of attorney forms to clients, which authorized Brennan’s companies to make periodic debits from their accounts, but which failed to make disclosures required under the agreement with the Attorney General’s office, and which omitted any mention of his restrictions from providing such services. Brennan allegedly deposited all funds debited from debt clients’ accounts into one account which he then used to pay the operating expenses of his firms, as well as to fund lavish personal expenses, including several luxury vehicles, international travel, exotic firearms and furnishings for his residence.

The superseding indictment alleges that to evade the restrictions in the agreement, Brennan renamed his firm multiple times and moved its physical operating location on several occasions. In addition, Brennan and co-conspirators allegedly formed new entities in order to open bank accounts using entity names besides those of Brennan’s firms in order to disguise ownership and avoid scrutiny from regulatory authorities.

According to the superseding indictment, Brennan used the deceptive practices to defraud debt clients over more than $6.265 million during the course of the conspiracy.

The superseding indictment also charges that Brennan filed false tax returns in 2006 and 2007. For example, the indictment alleges that in 2007, Brennan reported an adjusted gross income of negative $576,273.10 when he had unreported business receipts that year of at least $9,229,802.

Finally, Brennan faces four gun charges, including: that he illegally possessed 11 machineguns; transported a handgun from Maryland to a person in Virginia who was not a licensed importer; manufactured firearms without having registered as required by law; and possessed an unregistered sawed off shotgun.

Brennan faces a maximum sentence of 20 years in prison for the conspiracy and mail fraud counts; a maximum of 10 years in prison, consecutive to any other sentence, for using telemarketing to victimize ten or more people over the age of 55 in the course of committing the fraud conspiracy; a maximum of three years in prison for each of the two tax charges; and a maximum of 10 years in prison for each of the four firearms charges. An initial appearance and arraignment on the superseding indictment is scheduled for April 7, 2014, at 1:30 p.m. in U.S. District Court in Greenbelt. Brennan is released under the supervision of U.S. Pretrial Services.

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

United States Attorney Rod J. Rosenstein praised ATF, U.S. Postal Inspection Service, IRS-Criminal Investigation, and the Maryland Attorney General’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Adam K. Ake, who is prosecuting the case.

Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Steven Ray Williams, age 43, of Frederick, Maryland, today to 15 years in prison, followed by five years of supervised release, for three armed robberies and for brandishing a gun during a crime of violence.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief J. Thomas Manger of the Montgomery County Police Department; and Chief Alan Goldberg of the Takoma Park Police Department.

According to Williams’ plea agreement, on December 10, 2011 Williams and a co-conspirator robbed a store in the 15000 block of Frederick Road in Gaithersburg, Maryland. Williams and the co-conspirator accosted a store employee as he was opening the store, pointing a handgun at the employee and ordering the employee to open the safe. After the employee opened the safe, Williams and the co-conspirator wrapped the employee’s arms and ankles with duct tape and fled the store, stealing $6,000 in store proceeds, as well as the employee’s cell phone and wallet. On March 7, 2012, Williams and another co-conspirator robbed the same store, accosting two store employees as they were opening the store. Williams and the co-conspirator duct taped one of the employee’s legs and wrists and forced the other store employee at gunpoint to open the safe. They then duct taped that employee’s wrists, and fled the store, stealing $2,700 in store proceeds, as well as the cell phone of one of the employees.

On September 16, 2012, Williams and the two co-conspirators robbed a store located in the 6300 block of New Hampshire Avenue in Takoma Park, Maryland. One of the co-conspirators waited outside the store while Williams and the other co-conspirator entered the store. After the last customer had left the store, the co-conspirator locked the front door and Williams took out a gun, pointed it at a store employee and ordered the employee to take him to the store office, where the manager was counting money. After entering the office, Williams threw the employee to the floor and the co-conspirator tied his hands and feet using flex cuffs. They were unable to tie up the manager, so Williams held the gun to the manager’s neck, while Williams and the co-conspirator collected the money the manager had been counting. While the robbery was taking place, an 81 year old customer managed to open the front door and entered the store. Williams and the co-conspirator tied the customer’s hands with flex cuffs and dragged the customer to the back of the store. Williams and the co-conspirator ran out the back door with a bag filled with approximately $800 in store proceeds, but as they attempted to flee, they left the money outside the store.

United States Attorney Rod J. Rosenstein praised the ATF, Montgomery County Police Department and Takoma Park Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Leah J. Bressack, Mara Zusman Greenberg and Kelly O. Hayes, who prosecuted the case.

Tied up the Pharmacist and Store Clerk, and Took the Pharmacist’s Car

Baltimore, Maryland – U.S. District Ellen L. Hollander sentenced Anthony Sering and Anthony Alascio, both age 28, of Anne Arundel County, today each to 135 months in prison followed by three years of supervised release for conspiring to commit robbery. Judge Hollander also entered an order that the defendants pay $4,095 in restitution.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Howard County Police Chief William McMahon; and Howard County State’s Attorney Dario Broccolino.

According to their plea agreements, on December 28, 2012 the defendants took a car from a relative of Alascio without permission and drove to a neighborhood near a pharmacy in Woodbine, Maryland. They parked the car in front of the garage of a residence. The owner of the residence became suspicious and called police.

The defendants left the car and walked to the pharmacy, wearing disguises. One of the defendants pointed a gun at the pharmacist and demanded prescription drugs and cash. The other defendant restrained the store clerk with plastic zip ties around her hands and ankles, and ordered her to lie face down on the bathroom floor. After the defendants took a total of $7,287.52 in drugs and cash, they used duct tape to restrain the pharmacist’s wrists and ankles and placed her face down on the floor next to the clerk. The defendants left, taking the pharmacist’s car. They drove back to the car they had parked in front of the residence. The resident, who was standing at a window inside his home, saw Alascio. Alascio spoke to the resident. The defendants loaded the drugs and cash into the parked car and sped off.

A police officer arrived at the residence and saw the defendants drive away at a high rate of speed. The officer pursued them. The defendants led police on an eight mile chase that sometimes exceeded 100 miles per hour, until Sering crashed the car into another vehicle at the intersection of Route 70 and Route 32 in Howard County. The defendants were arrested, and the stolen drugs and cash were seized. The resident who had called the police was driven to the scene and identified Alascio as the person who had parked in front of his house and who spoke to him.

The defendants were initially detained in the Howard County Detention Center. They were overheard during phone calls admitting to the robbery.

United States Attorney Rod J. Rosenstein commended the FBI, Howard County Police Department and Howard County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney A. David Copperthite, who prosecuted the case.

Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Thomas Warren Stickney, age 22, of Timonium, Maryland, today to five years in prison, followed by 25 years of supervised release, for distribution of child pornography. Judge Motz ordered that upon his release from prison, Stickney 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 was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Stephen E. Vogt 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 Stickney’s plea agreement, on December 13, 2012, Stickney sent an image and video, each depicting minors engaged in sexually explicit conduct, to an individual with whom he was communicating on-line. The individual reported the incident to Baltimore County Police detectives, who assumed the online identity of the individual. In an undercover capacity, a Baltimore County Police detective communicated with Stickney and requested another video, which Stickney supplied. Stickney then asked the detective to meet him for sexual purposes. The detective, still in an undercover capacity, informed Stickney that he would have to drop off his young nephew before he could meet with Stickney. Stickney suggested that the detective bring his nephew along so that they could engage in sexually explicit conduct with the nephew. Stickney was arrested when he arrived at a local motel for the meeting. A search recovered two condoms from Stickney’s front pants pocket, as well as a cellular phone from the front console of the car, and a laptop computer and external hard drive from a back pack on the front passenger seat.

A search warrant was obtained for Stickney’s car and residence. A subsequent forensic examination of the laptop, external hard drive and other digital media seized from Stickney’s home showed that there were approximately 14,350 images and 203 video files of minors, including prepubescent minors, engaged in sexually explicit conduct. These included depictions of sadistic and masochistic conduct or other depictions of violence.

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 HSI Baltimore, FBI, Baltimore County Police Department, Crimes Against Children Unit, and the Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Judson T. Mihok, who prosecuted the case.

Fraudulently Obtained Over $52 Million in Government Contracts, Concealed Income by Transferring Millions from Corporate Accounts to Casinos and to Pay Other Personal Expenses, and Filed False Tax Returns

Greenbelt, Maryland - Vernon J. Smith III, age 61, of Edgewater, Maryland, pleaded guilty today to conspiring to defraud the United States in connection with schemes to fraudulently seek federal contracts under a Small Business Administration program to assist socially and economically disadvantaged small businesses; and to defraud the IRS.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Small Business Administration Inspector General Peggy E. Gustafson; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and General Services Administration Inspector General Brian D. Miller.

“Today’s guilty plea sends a strong message to those who lie to obtain preferences for federal contract awards,” said Inspector General Peggy E. Gustafson of the Small Business Administration. “With our interagency partners, SBA OIG will continue to pursue those who defraud the government by lying to gain access to federal set-aside contracts. We would like to thank the U.S. Attorney's Office for its leadership and professionalism throughout this investigation.”

“Corruption of the nature uncovered throughout the course of this investigation destroys confidence in the Government's ability to act as a fair and effective steward of taxpayer dollars. This plea today, demonstrates the commitment of the Defense Criminal Investigative Service and its law enforcement partners to prosecute fraud to the fullest extent of the law,” said Robert E. Craig, Special Agent in Charge, Mid Atlantic Field Office, Defense Criminal Investigative Service.

“Conspiring to defraud the government in a decade long scheme and filing false tax returns is unlawful,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office. “Bringing individuals to justice, such as Vernon Smith, who intentionally engage in this type of activity in order to defraud the IRS, ranks high on the list of IRS- CI's enforcement priorities.”

“This complicated scheme boils down to lying and cheating to obtain government contracts,” said GSA Inspector General Brian D. Miller. “I appreciate the hard work of our special agents, law enforcement partners, and U.S. Attorney's Office.”

According to his plea agreement, Vernon Smith was an owner and officer of Capitol Contractors, which provided roofing and construction services, primarily to U.S. government agencies. On March 3, 1993, Capitol Contractors was certified to participate in the SBA’s Section 8(a) program, which provides assistance to socially and economically disadvantaged small businesses. The majority owner of Capitol Contractors was a Native American. A small business can only participate in the Section 8(a) program for nine years before it “graduates” from the program and is no longer eligible to obtain government contracts reserved for Section 8(a) program participants. Shortly before Capitol Contractors graduated from the program in March 2002, the majority owner sold his interest in the company to Vernon Smith, who became the company’s sole owner and managed the day-to-day operations of the company. Vernon Smith did not qualify as a socially and economically disadvantaged individual under the Section 8(a) Program.

In August 1999, Vernon Smith arranged for Anthony Wright, an African-American who was a former roofer and project manager at Capitol Contractors, to form a new company to participate in the Section 8(a) program upon Capitol Contractors’ graduation from the program. On August 11, 1999, Wright incorporated Platinum One Contracting in Maryland. Wright was the president and 60% owner, and Smith’s son was vice president and owned the remaining 40% of the corporation. In reality, Vernon Smith exercised complete and undisclosed control over Platinum’s operations, including the day-to-day management and long term decision making for the company.

Vernon Smith admits that from August 1999 to June 2013, he conspired to defraud the SBA in several ways. For example, Smith directed Wright to submit an application to the SBA for certification in the Section 8(a) program which did not reveal that Vernon Smith: exercised control over the company; had previously supervised Wright; owned more than 10% of Capitol Contractors; and was related to an owner of Platinum. From May 2004 through April 2010, Vernon Smith also caused Platinum to submit annual updates to the SBA Section 8(a) program that contained false information, including that the company was controlled by a socially and economically disadvantaged individual, and that no non-disadvantaged member of Platinum’s management received compensation that exceeded that received by Wright. In fact, Vernon Smith controlled the company and Platinum’s payments to Vernon Smith and other corporate officers far exceeded payments received by Wright for 2004 through 2009. Based on the fraudulent application and annual updates, Platinum One received more than $52 million in contracts from the federal government under the Section 8(a) program, to which it was not entitled. The total loss to the government resulting from Vernon Smith’s illegal conduct, regarding the illicit profit he received by defrauding the SBA, and depriving a legitimate Section 8(a) contractor of such profit, is $6,194,828

In addition, Vernon Smith and a co-conspirator transferred millions of dollars from Platinum to bank accounts in their own names, to Capitol Contractors, to casinos on their own behalf; and to pay for personal expenses charged to Platinum One’s credit cards. These expenses included: extensive dental work, veterinary visits for pets, lavish vacations, and limousine transportation to casinos in Atlantic City, New Jersey, among others.

Vernon Smith admits that he signed false corporate and personal tax returns for 2005 and 2006. Smith knew that the cost of goods sold and payments to contractors reported on the corporate returns were false because almost all of that money was paid to, and for the benefit of, Smith at casinos. He also knew that the income reported on his personal income taxes omitted hundreds of thousands of dollars that Capitol Contractors had paid to, and for his benefit. As a result, Smith owed additional personal income tax to the IRS totaling $264,105, and Capitol Contractors owed an additional $574,911 to the IRS for tax years 2005 and 2006. The total tax loss resulting from the conspiracy to defraud the IRS is $839,016.

Vernon Smith faces a maximum sentence of five years in prison for the conspiracy. U.S. District Judge Paul W. Grimm has scheduled his sentencing for July 2, 2014, at 9:30 a.m.

Anthony Wright, age 42, of Bowie, Maryland, pleaded guilty on June 18, 2013, to his role in the scheme and is scheduled to be sentenced on June 23, 2014.

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 the SBA Office of Inspector General; Defense Criminal Investigative Service; IRS Criminal Investigation; and the GSA Office of Inspector General for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Gregory R. Bockin and Trial Attorney Kenneth C. Vert of the U.S. Department of Justice Tax Division, who are prosecuting the case.

Used Stolen Identities to Purchase Expensive Cars

Greenbelt, Maryland - U.S. District Judge Peter J. Messitte sentenced Flinton Newton, age 34, of Bartlett, Tennessee today to 42 months in prison followed by two years of supervised release for conspiring to commit wire fraud and aggravated identity theft in connection with a scheme to use the stolen identity of others to purchase expensive cars.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kathy A. Michalko of the United States Secret Service - Washington Field Office; Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division; and Chief J. Thomas Manger of the Montgomery County Police Department.

According to his plea agreement, Newton and his co-conspirators obtained the identity information of credit-worthy individuals, created false identity documents in the names of those individuals, then posed as those individuals at automotive dealerships in order to apply for vehicle financing. Newton and his coconspirators filled out credit applications with dealers in Maryland and Virginia, and then used the extended credit to purchase, or attempt to purchase, expensive cars. They did not intend to make any payments on the loans.

On July 19, 2013, Newton and a co-conspirator went to Capitol Cadillac in Greenbelt. Newton posed as another person whose identity he had fraudulently obtained, to apply for $80,663 in financing to purchase a 2013 Cadillac Escalade in the victim’s name.

Later that evening, Newton and the co-conspirator drove to Mercedes-Benz of Silver Spring where Newton again posed as the victim. The men attempted to purchase a 2012 Mercedes-Benz CL550 and a 2009 Mercedez-Benz S550 for a total of $120,056. They filled out credit applications to finance the entire purchase price, again using the victim’s identity and credit. The dealership manager saw that the victim’s credit had just been used to purchase the Cadillac Escalade, so he notified Montgomery County Police, who responded and arrested Newton and his co-conspirator.

The total attempted loss as a result of the fraudulent scheme was between $200,000 and $400,000.

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 the Secret Service, U.S. Postal Inspection Service and Montgomery County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Adam K. Ake, who prosecuted the case.