District of Minnesota

MINNEAPOLIS—Last week, a federal jury found a former executive of a Minnesota-based multi-level marketing company guilty of conspiracy to defraud the United States, tax evasion and failing to file federal tax returns. On March 14, 2014, following a seven-day trial, the jury convicted Michael Andrew Schlegel on one count of conspiracy to defraud the U.S., three counts of tax evasion and three counts of failure to file tax returns. Schlegel was indicted on April 9, 2013.

According to the indictment and evidence presented at trial, from 2002 through 2010, Schlegel, and his co-defendant Bradley Mark Collin, conspired with each other and others to defraud the U.S. by obstructing the Internal Revenue Service (“IRS”) in its lawful collection and assessment of individual income taxes. To that end, Schlegel failed to make any payments toward the back taxes, interest and penalties levied against him in 2000, which totaled more than $600,000. Both defendants also failed to file federal individual tax returns for tax years 2002-2009, pursuing “tax protestor” ideologies. On December 23, 2013, Collin pleaded guilty to one count of conspiracy to defraud the U.S.

From 2002 to 2009, Schlegel controlled NatureRich, Inc., a multi-level marketing company that sold natural and health-related products. Like similar companies, NatureRich paid commissions to salespeople based on direct sales and on the sales of downstream salespeople. At various times between 2002 and 2009, Schlegel and Collin received wages and commission payments from NatureRich that totaled more than $400,000. Schlegel also caused NatureRich to pay his commissions to a nominee trust called the “Andrew James Living Trust,” from which he then paid his family’s expenses. During that time, Schlegel also operated a painting business, receiving more than $400,000 in income from painting contracts.

In 2004, the defendants, through the use of nominee entities, began engaging the “warehouse” banking services of Olympic Business Systems and Century Business Concepts. “Warehouse” banking refers to the use of one or more bank accounts in which the funds of multiple clients are deposited, thereby concealing the true source of the funds.

The defendants also filed misleading federal corporate tax returns in the name of NatureRich in an effort to conceal the true extent of their personal interest in and the income derived from NatureRich. In all, the defendants attempted to conceal at least $3 million in gross income from the IRS, thereby avoiding income taxes on that income and also avoiding having those funds seized for payment of their previous tax debts.

For his crimes, Schlegel faces a potential maximum penalty of five years in prison on the conspiracy count, five years on each tax evasion count, and one year on each count of failure to file a tax return. Collin faces a potential maximum penalty of five years. U.S. District Judge Patrick J. Schiltz will determine their sentences at a future hearing, yet to be scheduled.

This case is the result of an investigation by the IRS-Criminal Investigations. It is being prosecuted by Assistant U.S. Attorneys Tracy L. Perzel and John E. Kokkinen.

Per U.S. Department of Justice policy, the U.S. Attorney’s Office is not allowed to provide the age and city of residence for defendants charged in criminal tax cases.

 

 

MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.

Minneapolis felon charged with possessing shotgun

James Reedus Berry, age 53, of Minneapolis, is charged with one count of being a felon in possession of a firearm and one count of possession of an unregistered firearm. Because he is a felon and three or more of his prior convictions were for violent or drug crimes, Berry is subject to the federal armed career criminal statute, which mandates a minimum sentence of 15 years in federal prison upon conviction.

If convicted, Berry faces a potential maximum penalty of ten years in prison on the unregistered firearm count. This case is the result of an investigation by the Minneapolis Police Department, and United States Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). It is being prosecuted by Assistant U.S. Attorney Julie E. Allyn.

Former postal employee charged with theft of mail

Debra Sue Morrow, age 60, of Faribault, was charged with one count of theft of mail by postal employee.

If convicted, Morrow faces a potential maximum penalty of five years in prison. This case is the result of an investigation by the U.S. Postal Service-Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Sarah E. Hudleston.

Minneapolis felon charged with possessing five firearms

James Herman Pegues, age 48, of Minneapolis, was charged via a superseding indictment with one count of being a felon in possession of a firearm. Because he is a felon and three or more of his prior convictions were for violent or drug crimes, Pegues is subject to the federal armed career criminal statute, which mandates a minimum sentence of 15 years in federal prison upon conviction.

If convicted, Pegues faces a potential maximum penalty of life in prison. This case is the result of an investigation by the Fridley Police Department, and ATF. It is being prosecuted by Assistant U.S. Attorney LeeAnn K. Bell.

Minneapolis man charged with receiving, distributing and possessing child pornography

Michael Thomas Schnapp, age 30, of Minneapolis, was charged with one count of receipt of child pornography, one count of distribution of child pornography, one count of attempted distribution of child pornography, and one count of possession of child pornography.

If convicted, Schnapp faces a potential maximum penalty of 40 years in prison on the receipt, distribution and attempted distribution counts, and 20 years on the possession count. This case is the result of an investigation by the Minneapolis Police Department and the Minnesota Internet Crimes Against Children Task Force. It is being prosecuted by Assistant U.S. Attorney Manda M. Sertich.

Distribution, receipt and possession of child pornography is against the law. In addition to prosecuting these cases, the Justice Department is presently funding a study focused on the correlation between involvement in child pornography and hands-on sexual abuse of children. A 2008 study (The Butner Study) published in the Journal of Family Violence found that up to 80 percent of federal inmates incarcerated for possession, receipt, or distribution of child pornography also admitted to hands-on sexual abuse of children, ranging from touching to rape.

This case was brought as part of Project Safe Childhood (PSC), 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 U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children and identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/ For more information about internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab “resources.”

 

 

MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.

Felon charged with possessing a .45-caliber pistol

Trevor James Beckman, age 30, unknown address, is charged with one count of being a felon in possession of a firearm. Because he is a felon and three or more of his prior convictions were for violent crimes, Beckman is subject to the federal armed career criminal statute, which mandates a minimum sentence of 15 years in federal prison upon conviction.

If convicted, Beckman faces a potential maximum penalty of life in prison. This case is the result of an investigation by the Rochester Police Department, and United States Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). It is being prosecuted by Assistant U.S. Attorney Carol M. Kayser.

Minneapolis felon charged with possessing a nine-millimeter pistol

Andre Maurice Cox, age 41, of Minneapolis, was charged with one count of being a felon in possession of a firearm.

If convicted, Cox, also known as Anthony White, faces a potential maximum penalty of ten years in prison. This case is the result of an investigation by the Minneapolis Police Department, and the ATF. It is being prosecuted by Assistant U.S. Attorney Surya Saxena.

St. Paul felon charged with possessing a nine-millimeter pistol

Michael Anthony Vargas, age 31, of St. Paul, was charged with one count of being a felon in possession of a firearm. Because he is a felon and three or more of his prior convictions were for violent crimes and/or drug trafficking, Vargas is subject to the federal armed career criminal statute, which mandates a minimum sentence of 15 years in federal prison upon conviction.

If convicted, Vargas faces a potential maximum penalty of life in prison. This case is the result of an investigation by the St. Paul Police Department, and ATF. It is being prosecuted by Assistant U.S. Attorney LeeAnn K. Bell.

 

 

MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.

Mexican citizen charged with illegal re-entry into U.S.

Jose De Jesus Sanchez, age 44, a citizen of Mexico, is charged with one count of illegally re-entering the United States after previously being deported subsequent to a conviction for a felony.

If convicted, Sanchez faces a potential maximum penalty of 20 years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations and is being prosecuted by Assistant U.S. Attorney Manda M. Sertich.

Red Lake man charged with assault

Donald Scott Whitefeather, age 65, of Red Lake, was charged with one count of assault resulting in serious bodily injury and one count of assault with a dangerous weapon.

If convicted, the defendant faces a potential maximum penalty of ten years in prison on each count. This case is the result of an investigation by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Katharine T. Buzicky.

 

 

MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.

Little Falls man charged with conspiring to distribute methamphetamine

James Kelly Benson, age 30, of Little Falls, was charged with one count of conspiracy to distribute methamphetamine and one count of possession with intent to distribute methamphetamine.

If convicted, Benson faces a potential maximum penalty of life in prison on the conspiracy count and 20 years on the possession count. This case is the result of an investigation by the Federal Bureau of Investigation and the Central Minnesota Violent Offender Task Force. It is being prosecuted by Assistant United States Attorney Thomas Calhoun-Lopez.

Arkansas man charged with bank robbery

Kenja Omar Deangelo Carmichael, age 35, of West Memphis, Arkansas, was charged with one count of bank robbery.

If convicted, Carmichael faces a potential maximum penalty of 20 years in prison. This case is the result of an investigation by the FBI and the Duluth Police Department. It is being prosecuted by Assistant U.S. Attorney Andrew Dunne.

Man charged with identity theft

Keith Michael Novak, age 25, unknown address, was charged by Information with one count of identity theft.

If convicted, Novak faces a potential maximum penalty of five years in prison. This case is the result of an investigation by the FBI. It is being prosecuted by Assistant U.S. Attorneys Charles Kovats and Andrew R. Winter.

 

 

MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in St. Paul, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.

Mexican citizen charged with illegal re-entry into U.S.

Delfino Guadarrama-Miranda, age 57, a citizen of Mexico, is charged with one count of illegally re-entering the United States after previously being deported subsequent to a conviction for a felony.

If convicted, Gutierrez-Garcia faces a potential maximum penalty of ten years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations and is being prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.

Three people charged with conspiracy to distribute marijuana

Alexander Edward Heying, age 31, and Peter Gregory Heying, age 27, both of Minnetonka; and Acacia Lauren Ruiz, age 33, of Ukiah, California, are each charged with one count of conspiracy to distribute marijuana and one count of conspiracy to commit money laundering.

If convicted, the defendants face a potential maximum penalty of life in prison on the marijuana count and 20 years on the money laundering count. This case is the result of an investigation by the U.S. Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigations, the West Metro Drug Task Force, the Hennepin County Sheriff’s Office, the West Hennepin Public Safety Department, and the police departments of Medina and Orono. It is being prosecuted by Assistant U.S. Attorney LeeAnn K. Bell.

Hastings felon charged with possessing firearms and ammunition

Samuel David Shoen, age 35, of Hastings, was charged with three counts of being a felon in possession of a firearm, two counts of being a felon in possession of ammunition, one count of possession with intent to distribute methamphetamine, and one count of possession of a firearm during and in relation to a drug-trafficking crime.

If convicted, Shoen faces a potential maximum penalty of 20 years in prison on the methamphetamine count, a consecutive five years on the possession of a firearm during and in relation of a drug-trafficking crime count, and ten years on each of the remaining counts. This case is the result of an investigation by the St. Paul Police Department, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). It is being prosecuted by Assistant U.S. Attorneys Julie E. Allyn and Bradley M. Endicott.

 

 

MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.

Mexican citizen charged with illegal re-entry into U.S.

Jose Israel Gutierrez-Garcia, age 28, a citizen of Mexico, is charged with one count of illegally re-entering the United States after previously being deported subsequent to a conviction for a felony.

If convicted, Gutierrez-Garcia faces a potential maximum penalty of ten years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations and is being prosecuted by Assistant U.S. Attorney Nathan P. Petterson.

St. Paul felon charged with possessing shotgun, ammunition

Michael John Walker, age 45, of St. Paul, was charged with one count of being a felon in possession of a firearm and one count of being a felon in possession of ammunition. Because he is a felon and three or more of his prior convictions were for violent crimes, Walker is subject to the federal armed career criminal statute, which mandates a minimum sentence of 15 years in federal prison upon conviction on either or both of the charges.

This case is the result of an investigation by the Minneapolis Police Department, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Amber M. Brennan.

 

 

MINNEAPOLIS—Acting United States Attorney John R. Marti announced today that the U.S. Attorney’s Office for the District of Minnesota collected $16,782,266.24 in criminal and civil actions in Fiscal Year 2013. Of this amount, $8,237,258.34 was collected in criminal actions and $8,545,007.90 was collected in civil actions.

Additionally, the U.S. Attorney’s Office for the District of Minnesota, working with partner agencies and divisions, collected $22,127,398 in asset forfeiture actions in Fiscal Year 2013. Forfeited assets are deposited into the Department of Justice and Treasury Assets Forfeiture Funds, and are used to restore funds to crime victims and for a variety of law enforcement purposes.

Additionally, Minnesota’s U.S. Attorney’s Office worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $458,000 in civil cases pursued jointly with these offices. Nationwide, the U.S. Attorney’s Offices collected $8.1 billion in criminal and civil actions during Fiscal Year 2013. A portion of this amount, $5.9 billion, was collected in shared cases in which one or more U.S. Attorney’s Offices or department litigating divisions were also involved. The $8.1 billion represents nearly three times the approximately $2.76 billion of the department’s direct appropriations that pay for the 94 U.S. Attorneys’ offices and its main litigating divisions., and it is the second-largest collection year in the department’s history, trailing only Fiscal Year 2012 when $13.1 billion was collected.

“The department’s enforcement actions help to not only ensure justice is served, but also deliver a valuable return to the taxpayer,” said Attorney General Eric Holder. “It is critical that Congress provide the resources necessary to match the department’s mounting caseload. As these figures show, supporting our federal prosecutors is a sound investment.”

In making today’s announcement, Marti said, “The public dialogue is often focused on the cost of government. But one fact often ignored is that attorneys and staff of this office and the Department of Justice regularly recoup funds owed to the government and crime victims in amounts that far exceed our annual budgets. These recoveries come from many sources and are essential and valuable in these challenging economic times.”

One of the largest civil recoveries obtained by Minnesota’s U.S. Attorney’s Office during Fiscal Year 2013 came from MTS Systems Corporation. In 2008, MTS pled guilty to two misdemeanor counts of knowingly submitting false or misleading export control filings to the U.S. Department of Commerce. Notwithstanding its plea agreement, MTS certified several times during the next three years that it had not been convicted of various criminal violations, including “falsification of records” and “making false statements,” within the preceding three years. MTS allegedly used those false certifications to win millions of dollars in government contracts. The Minnesota U.S. Attorney’s Office commenced suit against MTS under the False Claims Act, and to resolve the civil case, MTS paid $7.75 million.

A second civil recovery in Minnesota stemmed from a case against Bioscrip, a national specialty pharmacy services provider with a large mail-order component. The lawsuit commenced by the U.S. Attorney’s Office contended that Bioscrip failed to refund credit balances, failed to maintain prescriptions on file, and billed for products not provided. Bioscrip paid $5.06 million to settle the civil case.

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

The largest civil collections were from affirmative civil enforcement cases, in which the U.S. recovered government money lost to fraud or other misconduct, or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, the Department of Health and Human Services, the Internal Revenue Service, the Small Business Administration and the Department of Education.

 

 

MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.

Brooklyn Park man charged with bank robbery

Tearise Breon Baugh, age 23, of Brooklyn Park, was charged with one count of armed bank robbery and one count of brandishing a firearm during and in relation to a crime of violence.

If convicted, Baugh faces a potential maximum penalty of 25 years in prison on the bank robbery count, and a mandatory consecutive penalty of seven years on the brandishing count. This case is the result of an investigation by the Blaine Police Department, and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorneys Andrew Dunne and Manda M. Sertich.

Three men charged with conspiring to possess with intent to distribute over 5 kilograms of methamphetamine

Jorge Urbina Murguia, age 51, Heriberto Plancarte-Barrigan, age 19, and Gilberto Hernandez-Betancourt, age 22, were each charged with one count of conspiracy to possess with intent to distribute methamphetamine. In addition, Plancarte-Barrigan and Hernandez-Betancourt were each charged with one count of attempted possession with intent to distribute methamphetamine.

If convicted, the defendants each face a potential maximum penalty of life in prison. This case is the result of an investigation by the United States Drug Enforcement Administration.

St. Paul man charged with possessing a Molotov cocktail

Michael John Walker, age 45, of St. Paul, was charged with one count of possession of an unregistered firearm or destructive device.

If convicted, Walker faces a potential maximum penalty of ten years in prison. This case is the result of an investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Minneapolis Police Department. It is being prosecuted by Assistant U.S. Attorney Amber M. Brennan.

 

 

MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in St. Paul, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.

Minneapolis felon charged with possessing a nine-millimeter handgun

Randolph Seth Anderson, age 42, of Minneapolis, is charged with one count of being a felon in possession of a firearm. Because he is a felon and three or more of his prior convictions were for violent crimes, Anderson is subject to the federal armed career criminal statute, which mandates a minimum sentence of 15 years in federal prison upon conviction.

This case is the result of an investigation by the Minneapolis Police Department, and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Amber M. Brennan.

El Salvador citizen charged with illegal re-entry into U.S.

Ana Maria Ortiz, age 43, a citizen of El Salvador found in the Minnesota Correctional Facility in Shakopee, is charged with one count of illegally re-entering the United States after previously being deported subsequent to a conviction for an aggravated felony.

If convicted, Ortiz faces a potential maximum penalty of 20 years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations. It is being prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.

Honduras citizen charged with illegal re-entry into U.S.

Jorge Alberto Ortiz-Martinez, age 48, a citizen of Honduras, is charged with one count of illegally re-entering the United States after previously being deported subsequent to a conviction for an aggravated felony.

If convicted, Ortiz-Martinez faces a potential maximum penalty of 20 years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations and is being prosecuted by Assistant U.S. Attorney Sarah E. Hudleston.

Man charged with escaping from custody

Leland Wayne Thompson, age 35, of South Dakota, was charged with one count of escape from custody.

If convicted, Thompson faces a potential maximum penalty of five years in prison. This case is the result of an investigation by the U.S. Marshals Service. It is being prosecuted by Assistant U.S. Attorney David P. Steinkamp.

 

 

MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.

Mexican citizen charged with illegal re-entry into U.S.

Severo De Santiago De La Cruz, age 33, a citizen of Mexico found in Lyon County, Minnesota, is charged with one count of illegally re-entering the United States after previously being deported subsequent to a conviction for an aggravated felony.

If convicted, De La Cruz faces a potential maximum penalty of 20 years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations. It is being prosecuted by Assistant U.S. Attorney Sarah E. Hudleston.

Minneapolis man charged with possessing with intent to distribute methamphetamine

Isreal Landa-Leon, age 28, of Minneapolis, is charged with one count of possession with intent to distribute methamphetamine.

If convicted, Landa-Leon faces a potential maximum penalty of 40 years in prison. This case is the result of an investigation by the U.S. Drug Enforcement Administration. It is being prosecuted by Assistant U.S. Attorney Amber M. Brennan.

Man charged with robbing several banks

Maurice Dixon, age 46, no known address, was charged with three counts of bank robbery and one count of interference with commerce by robbery, pursuant to the Hobbs Act.

If convicted, Dixon faces a potential maximum penalty of 20 years in prison on each count. This case is the result of an investigation by the Federal Bureau of Investigation, and the police departments of Minneapolis, Roseville and St. Paul. It is being prosecuted by Assistant U.S. Attorney Kevin S. Ueland.

Mexican citizen charged with illegal re-entry into U.S.

Adain Salcido-Perez, a citizen of Mexico found in Richfield, Minnesota, is charged with one count of illegally re-entering the United States after previously being deported.

If convicted, Salcido-Perez faces a potential maximum penalty of 20 years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations. It is being prosecuted by Assistant U.S. Attorney Andrew Dunne.

 

 

MINNEAPOLIS—Identity theft is one of the fastest growing crimes in America, and in 2013, 32 members of a large, multi-state, identity theft ring were prosecuted and sentenced. Earlier today, the United States Attorney’s Office for the District of Minnesota recognized the hard work and dedication of the federal investigators who headed the lengthy investigation and prosecution of these individuals.

Special Agent Kelly Petricka, of the Internal Revenue Service’s Criminal Investigations (“IRS-CI”) was presented with the 14th annual U.S. Attorney’s Office Law Enforcement Recognition Award. Agent Petricka, as well as Inspector Barry Bouchie, of the U.S. Postal Inspection Service (“USPIS”) and Russ Wicklund, Assistant Chief of the Baxter Police Department, also received the Office’s Justice Award.

During the ceremony, Acting U.S. Attorney John R. Marti praised the award recipients, saying, “These agents do not seek out awards or medals, but perform their duties because they care deeply about public safety for their neighbors and communities. What they accomplished in this investigation matters and is remarkable.”

Marti recognized Agent Petricka’s outstanding career of contributions to public safety in the District of Minnesota, saying “Kelly Petricka is an exemplary public servant, and we should all be grateful for her service.” Criminal Chief Nicole Engisch also praised Special Agent Petricka, saying “Kelly Petricka makes prosecutors and other agents better. She successfully handles the most difficult investigations in a manner that is amazing.”

The U.S. Attorney’s Office Law Enforcement Award is presented annually to a local, state, or federal law enforcement agent or officer who has performed outstanding work on significant federal cases over an extended period. In addition, the recipient of the award must exemplify the cooperative spirit Minnesotans have come to expect from local, state, and federal law enforcement.

The Justice Award recognizes outstanding achievement by investigative teams in individual civil and criminal cases. The investigative team must have performed above and beyond the normal high standards set for these cases and their efforts must be of a distinctive character.

The prosecution of the identity theft ring, dubbed Operation Masquerade, started in 2011 and involved more than 100 individuals participating in a conspiracy to defraud banks, bank customers and businesses during a five-year period. The co-conspirators used victim information to create counterfeit checks and false identification documents to conduct fraudulent transactions at retail establishments, where expensive merchandise was purchased and returned for cash. At banks, the conspirators posed as customers and withdrew money from victims’ bank accounts. The members of the conspiracy conducted these fraudulent transactions in Minnesota and at least 13 other states. Victim information was obtained by members of the conspiracy through multiple sources, including from individuals who stole information from their places of employment, from people employed at area banks, from those who stole information from mail, during vehicle break-ins, and through business burglaries, among other sources. Operation Masquerade was prosecuted by Assistant U.S. Attorneys Karen Schommer and Michelle Jones.

Following today’s ceremony, Kelly R. Jackson, Special Agent in Charge of the IRS-CI’s St. Paul Field Office, said, “Special Agent Kelly Petricka embodies all that the public should expect in law enforcement officers and public servants. She is a shining example of what an IRS criminal investigator brings to the table on financial fraud investigations. Her dedication and keen investigative skills exemplify the best in federal law enforcement, and she is truly worthy of being the 2013 federal law enforcement officer of the year.”

Petricka has been with IRS-CI for 18 years, and has worked complex tax fraud, money laundering and identity theft cases.

Following today’s ceremony, Keith Hayden, Mail Fraud Team Leader for the USPIS’s Minnesota office, said, “Inspector Bouchie works tirelessly to protect the U.S. Mail and its customers.”

Bouchie has been with the USPIS for 18 years, and has investigated numerous cases involving mail fraud, mail theft, identity theft, revenue fraud and internal crimes.

The award ceremony, which took place at the U.S. Attorney’s Office in Minneapolis, was attended by the award recipients, their families and friends, as well as many law enforcement colleagues.

 

 

MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in St. Paul, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.

Mexican citizen charged with illegal re-entry into U.S.

Alonzo Cid-Escatel, age 36, a citizen of Mexico found in Pipestone, Minnesota, is charged with one count of illegally re-entering the United States after previously being deported.

If convicted, Cid-Escatel faces a potential maximum penalty of 20 years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations. It is being prosecuted by Assistant U.S. Attorney David P. Steinkamp.

Minneapolis man charged with possessing with intent to distribute methamphetamine

Isreal Landa-Leon, age 28, of Minneapolis, is charged with one count of possession with intent to distribute methamphetamine.

If convicted, Landa-Leon faces a potential maximum penalty of 40 years in prison. This case is the result of an investigation by the U.S. Drug Enforcement Administration. It is being prosecuted by Assistant U.S. Attorney Amber M. Brennan.

Arizona man charged with filing a false tax return

Brian Christopher Neary was charged with one count of filing a false tax return. If convicted, Neary faces a potential maximum penalty of three years in prison. This case is the result of an investigation by the Internal Revenue Service-Criminal Investigations. It is being prosecuted by Assistant U.S. Attorney David J. MacLaughlin.

Per U.S. Department of Justice policy, the U.S. Attorney’s Office is not allowed to provide the age and city of residence for defendants charged in criminal tax cases.

 

 

MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, returned the following indictments yesterday. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.

Crystal man charged with robbing Roseville bank

Jake Charles Cogswell, age 30, of Crystal, was charged with one count of armed bank robbery and one count of brandishing a firearm in furtherance of a crime of violence. If convicted, Cogswell faces a potential maximum 25 years in prison on the bank robbery count. In addition, he faces a mandatory consecutive seven years on the brandishing a firearm count. This case is the result of an investigation by the Federal Bureau of Investigation and the Roseville Police Department. It is being prosecuted by Assistant United States Attorney Nathan P. Petterson.

 

 

MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, returned the following indictments yesterday. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.

Mexican citizen charged with illegal re-entry into U.S.

Arnoldo Aguirre-Vasquez, age 44, a citizen of Mexico found in Renville, Minnesota, is charged with illegally re-entering the United States after previously being deported. If convicted, Aguirre-Vasquez faces a potential maximum penalty of 20 years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations. It is being prosecuted by Assistant U.S. Attorney Manda M. Sertich.

Kentucky man charged with robbing Eagle Lake bank

George Richard Gaunt, age 25, of Louisville, Kentucky, was charged with one count of bank robbery.
If convicted, Gaunt faces a potential maximum penalty of 25 years in prison. This case is the result of an investigation by the Federal Bureau of Investigation, the Eagle Lake Police Department and the Blue Earth County Sheriff’s Office. It is being prosecuted by Assistant U.S. Attorney Katharine T. Buzicky.

Rochester felon charged with gun crime

James Kent Johnson, age 34, of Rochester, was charged with one count of being a felon in possession of a firearm. Since Johnson’s prior felony convictions were for violent crimes, he is subject to the federal armed career criminal statute in the current federal case. That statute mandates a minimum sentence of 15 years in federal prison upon conviction. This case is the result of an investigation by the Olmsted County Sheriff’s Office and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Thomas M. Hollenhorst.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, Frank Elroy Vennes, Jr. was sentenced to 180 months in prison in connection with fraudulently raising money from individuals and through hedge funds for investment in Petters Company, Inc. (“PCI”). Vennes was a long-time associate of Thomas J. Petters, the Minnseota businessman who was convicted in 2009 of orchestrating a $3.65 billion Ponzi scheme. United States District Court Judge Richard H. Kyle sentenced Vennes, age 56, of Stuart, Florida, on one count of securities fraud and one count of money laundering. On July 11, 2011, Vennes was charged in a second superseding indictment, and on February 1, 2013, he pleaded guilty to those charges.

From 1995 through September of 2008, Vennes, individually and through his company, Metro Gem, obtained money from others for investment in PCI notes. He also assisted in the formation of hedge funds, known as the Arrowhead Funds, to help raise additional funds for that same purpose. Beginning in 2001 and proceeding through September 24, 2008, he aided and abetted individuals associated with the Arrowhead Funds in making fraudulent misrepresentations to investors regarding investments in PCI.

PCI was owned and operated by Tom Petters, who operated the Ponzi scheme by representing that money invested in PCI promissory notes would finance the purchase of electronics and other consumer merchandise. Purportedly, PCI would resell that merchandise for a profit to certain “big box” retailers, including Sam’s Club and Costco. In truth, however, no merchandise was bought or resold. Instead, Petters diverted hundreds of millions of dollars for his own benefit and the benefit of his co-conspirators. Petters’ Ponzi scheme unraveled in 2008, when federal agents executed search warrants at his business office and other locations.

Beginning in 2000, Vennes worked to form hedge funds to solicit investors in PCI, including Arrowhead Capital Partners II, L.P. and Arrowhead Capital Finance, Ltd., collectively known as the Arrowhead Funds, and Palm Beach Finance Partners, L.P. and Palm Beach Finance II, Ltd., collectively known as the Palm Beach Funds. Because he had a federal criminal record, having been previously convicted on federal narcotics, firearms, and money laundering charges, he had difficulty obtaining funding on his own. As a result, he worked through the Arrowhead Funds and the Palm Beach Funds when trying to solicit money from banks and institutional investors.

From 1999 through September 2008, all paperwork and communication between PCI and the Arrowhead Funds and Palm Beach Funds went through Vennes or one of his employees. At the same time, Vennes received “commissions” from Petters for brokering deals involving both Funds. His commissions were based on the amount of money he raised for Petters and PCI. Between 2001 and 2008, Vennes received more than $100 million in commissions.

During that same time period, Vennes knew that those acting on his behalf were making material misrepresentations and omissions to investors in the Arrowhead and Palm Beach Funds and did nothing to correct the situation. Investors were told, for example, that whenever a retailer purchased consumer electronics or other goods from PCI, those products were paid for by the retailer with funds directly deposited into a bank account under the control of a management company. Thus, investors were falsely assured that all PCI transactions were, in fact, taking place, and all money was secure. However, Vennes, among others, was well aware that no payments were ever received from retailers and, instead, came from PCI alone. Furthermore, investors were never informed of Vennes’ criminal record or his involvement in the Arrowhead and Palm Beach Funds’ transactions. And, finally, they were kept unaware that in late 2007 and early 2008, the PCI notes held by the Arrowhead and Palm Beach Funds were delinquent and were approaching default.

On October 11, 2013, Vennes’s co-defendant in this case, James Nathan Fry, age 60, of Orono, Minnesota, was sentenced to 210 months in prison on five counts of securities fraud, four counts of wire fraud, and three counts of making a false statement to the U.S. Securities and Exchange Commission during its investigation of investments in PCI by hedge funds under the management of Fry’s company, Arrowhead Capital Management. Fry was convicted on June 12, 2013.

On October 25, 2013, sentencing is scheduled for the investment managers of the Palm Beach Funds, who have pleaded guilty to committing fraud in connection to this scheme by making material misrepresentations to investors in their hedge funds concerning investments in PCI. David William Harrold, age 54, of Del Ray Beach, Florida, and Bruce Francis Prevost, age 53, of Palm Beach Gardens, Florida, await sentencing, each on four counts of securities fraud.

This case was the result of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service–Criminal Investigations, and the U.S. Postal Inspection Service. It was prosecuted by Assistant U.S. Attorneys Timothy C. Rank, Kimberly A. Svendsen, and Robert M. Lewis.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive attack on financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement, who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force hopes to improve efforts across the federal executive branch, and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The task force and the Minnesota U.S. Attorney’s Office want to remind people to protect themselves from securities fraud. For more information, visit http://www.stopfraud.gov/protect-securities.html.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, three individuals were sentenced for their roles in the murder of a couple on the Red Lake Indian Reservation on New Year’s Day 2011. United States District Judge Donovan W. Frank sentenced David John Martin, age 46, of Columbia Heights, to 160 months in prison on one count of robbery; and Kevin John Needham, age 21, of Red Lake, to 90 months in prison on one count of robbery. Yesterday, Terin Rene Stately, age 25, also of Red Lake, was sentenced to 40 months in prison on one count of aiding and abetting robbery.

On January 15, 2013, Martin and Needham were charged in a superseding indictment. Martin was convicted on March 12, 2013, and Needham pleaded guilty on February 26, 2013. Stately was indicted on August 16, 2012, and pleaded guilty on November 15, 2012.

On June 21, 2013, their co-defendant Geshik-O-Binese Martin, age 30, of Red Lake, was sentenced to life in prison on two counts of murder in the first degree, two counts of murder in the second degree, and one count of robbery. He was also convicted on March 12, 2013.

The trial evidence proved that on January 1, 2011, Craig David Roy and Darla Ann Beaulieu were killed while money and illegal drugs were stolen from Roy’s reservation residence. The bodies of Beaulieu and Roy were found in the remains of the house, which was destroyed by fire on that same day. Autopsies determined that the victims were killed as a result of multiple stab wounds and not the fire itself.

In his plea agreement, Needham admitted that he agreed to travel with Stately, the Martins, and another co-defendant to Roy’s residence, the intention being to take money and cocaine by force. Among other things, Needham admittedly stood in the driveway of the Roy residence during the robbery.

In her plea agreement, Stately admitted driving the group to and from the Roy residence and waiting in the vehicle during the robbery. She also admittedly knew of the plan to rob Roy.

This case was the result of an investigation by the Federal Bureau of Investigation and the Red Lake Tribal Police Department, with assistance from the Minnesota Bureau of Criminal Apprehension and the State Fire Marshal. It was prosecuted by Assistant U.S. Attorneys Deidre Y. Aanstad and Nathan P. Petterson.

Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, a 36-year-old Minnetonka man pleaded guilty to distributing child pornography. Jonathan Charles Otto pleaded guilty to one count of distribution of child pornography. Otto, who was indicted on July 23, 2013, entered his plea before United States District Judge Richard H. Kyle.

In his plea agreement, Otto admitted that on December 27, 2010, he distributed images and videos containing visual depictions of minors engaging in sexually explicit conduct. In addition, Otto admitted that he possessed more than 45,000 images and more than 3,800 videos of similar material. Some of the images and videos portrayed sadistic or masochistic conduct or other depictions of violence.

For his crime, Otto faces a potential maximum penalty of 20 years in prison, with a mandatory minimum penalty of five years. Judge Kyle will determine his sentence at a future hearing, yet to be scheduled.

This case is the result of an investigation by the Minnesota Child Exploitation Task Force, sponsored by the Federal Bureau of Investigation, with cooperation from the Minnetonka Police Department and the London Metropolitan Police Service. It is being prosecuted by Assistant U.S. Attorney Manda M. Sertich.

Distribution and possession of child pornography is against the law. In addition to prosecuting these cases, the Justice Department is funding a study focused on the correlation between involvement in child pornography and hands-on sexual abuse of children. A 2008 study (The Butner Study) published in the Journal of Family Violence found that up to 80 percent of federal inmates incarcerated for possession, receipt, or distribution of child pornography also admitted to hands-on sexual abuse of children, ranging from touching to rape.

This case was brought as part of Project Safe Childhood (“PSC”), 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 U.S. Attorney offices and the Justice Department’s Criminal Division, Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children and identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab “resources.”

 

 

MINNEAPOLIS—Earlier today in federal court, a 28-year-old felon from Minneapolis was sentenced for possessing a .44-caliber revolver. United States District Judge Ann D. Montgomery sentenced Eugene Denzel Johnson to 80 months in prison on one count of being a felon in possession of a firearm. Johnson was indicted on November 20, 2012, and pleaded guilty on May 13, 2013.

In his plea agreement, Johnson admitted that on September 5, 2012, he was riding in a vehicle that police attempted to stop following a traffic violation. Johnson jumped from the passenger side of the vehicle and ran, a gun tucked in his waistband. Spotting the gun as Johnson exited the vehicle, police gave chase, ultimately apprehending him a short time later. Officers recovered the gun after using a trained canine to trace the path that Johnson had taken.

Because he is a felon, Johnson is prohibited under federal law from possessing firearms at any time. He was previously convicted in Hennepin County on charges of first-degree aggravated robbery (2005 and 2010), in Ramsey County on charges of theft of a motor vehicle (2003), and in Dakota County on charges of criminal damage to property (2003).

This case was the result of an investigation by the Minneapolis Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant U.S. Attorney Amber M. Brennan.

The case was charged under Project Exile Minneapolis. That law enforcement initiative was launched on July 22, 2010, as part of a city-wide effort to reduce gun violence. Through Project Exile, the Minneapolis Police Department and the ATF work together to apprehend serial criminals for violations of gun laws. The Hennepin County Attorney’s Office then teams up with the U.S. Attorney’s Office to determine where those offenders will most effectively be prosecuted – state or federal court. Those determinations are based on the offenders’ criminal histories and current charges, among other factors. To date, the U.S. Attorney’s Office has brought charges against more than two dozen serious habitual criminals through Project Exile Minneapolis.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, a 47-year-old Lakeville man pleaded guilty for his role in a scheme to defraud mortgage lenders in connection with the sale of condominiums at the Chateau Ridge development in Burnsville. John Michael Stevens, the developer of the Chateau Ridge project, pleaded guilty to one count of conspiracy to commit wire fraud. Stevens, who was indicted on November 20, 2012, entered his plea before United States District Judge Susan Richard Nelson.

In his plea agreement and in Court today, Stevens admitted that in 2007, he conspired with others to defraud lenders who were financing his sale of certain units at Chateau Ridge.

In one of the sales, Stevens admitted to misrepresenting the true purpose of a payment that was to be made from mortgage loans proceeds. In that sale, he directed the loan closer to state in closing documents that a payment from loan proceeds was to satisfy a pre-existing mortgage on the property, even though he knew that was not the case. The loan was ultimately approved. The lender in that sale lost an estimated $227,712 when the unit went to foreclosure.

Stevens also admitted that he arranged for the buyers of four other units to be repaid their earnest money down-payments and closing costs. In effect, the buyers purchased the units for an actual price lower than what was disclosed to the lenders. The total amount refunded to the buyers of these four units was approximately $240,500.

For his crime, Stevens faces a potential maximum penalty of five years in federal prison. Judge Nelson will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Federal Bureau of Investigation and the U.S. Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorneys Robert M. Lewis and Karen B. Schommer.

The U.S. Attorney’s Office wants to remind people to protect themselves from mortgage fraud. For more information, visit http://www.stopfraud.gov/protect-mortgage.html.

 

 

MINNEAPOLIS—Earlier today in federal court, a 62-year-old man from the western Minnesota community of Graceville pleaded guilty to possessing more than 600 images of child pornography. John Rolland Parent pleaded guilty to one count of possession of child pornography. Parent, who was indicted on May 7, 2013, entered his plea before United States District Judge John R. Tunheim.

In his plea agreement, Parent admitted that on June 12, 2013, he possessed images that contained visual depictions of minors engaged in sexually explicit conduct. Parent admitted the images had been obtained via a computer. Authorities found the items on computers, hard drives, and other digital media that they seized during the execution of a state search warrant at Parent’s residence. Numerous images portrayed sadistic or masochistic conduct or other depictions of violence.

For his crime, Parent faces a potential maximum penalty of 20 years in prison, with a mandatory minimum penalty of ten years. Judge Tunheim will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Minnesota Internet Crimes Against Children Task Force, the Big Stone County Sheriff’s Office, the Federal Bureau of Investigation, and the Minnesota Bureau of Criminal Apprehension. It is being prosecuted by Assistant U.S. Attorney Andrew Dunne.

Possession of child pornography is against the law. In addition to prosecuting these cases, the Justice Department is funding a study focused on the correlation between involvement in child pornography and hands-on sexual abuse of children. A 2008 study (The Butner Study) published in the Journal of Family Violence found that up to 80 percent of federal inmates incarcerated for possession, receipt, or distribution of child pornography also admitted to hands-on sexual abuse of children, ranging from touching to rape.

This case was brought as part of Project Safe Childhood (“PSC”), 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 U.S. Attorney offices and the Justice Department’s Criminal Division, Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children and identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab “resources.”

 

 

MINNEAPOLIS—Earlier today in federal court, a 26-year-old Mexican national was indicted for entering the United States illegally after previously being deported as an aggravated felon. Joel Aguayo-Gomez was specifically charged with one count of illegal re-entry after deportation.

The indictment alleges that on November 5, 2011, Aguayo-Gomez was found in the U.S. after being deported to Mexico in 2011, following a 2008 Ramsey County conviction for aggravated robbery. On November 5, 2011, Aguayo-Gomez was taken into state custody on charges of terroristic threats and strangulation. In August 2013, Aguayo-Gomez was acquitted of all charges, and was placed into the custody of U.S. Immigration and Customs Enforcement (“ICE”).

If convicted of the federal charges now levied against him, Aguayo-Gomez will face a potential maximum penalty of 20 years in federal prison, followed by deportation. Any sentence would be determined by a federal district judge.

This case is the result of an investigation by ICE’s Enforcement and Removal Operations. It is being prosecuted by Assistant U.S. Attorney David P. Steinkamp.

An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.

 

 

MINNEAPOLIS—Late yesterday in federal court, a jury found a 33-year-old Duluth man guilty of the sex trafficking a child for approximately seven months last year. Following a four-day trial, the jury convicted Markeace Arque Canty on one count of conspiracy to commit sex trafficking of a child and one count of sex trafficking of a child. The jury acquitted Canty of one count of receipt of child pornography. Canty, also known as Quake, was indicted on May 7, 2013.

According to the indictment and the evidence presented at trial, from at least July 2012 through January 2013, Canty recruited and transported the female victim, who was under the age of 18 at the time, to engage in commercial sex acts, from which Canty benefitted financially. Canty purchased “escort” advertisements on the website known as backpage.com and transported the female victim to locations in Duluth, Minneapolis, Chicago, and elsewhere to meet advertisement responders at motels, where the victim engaged in sexual acts in exchange for money.

The jury heard evdience that on September 12, 2012, law enforcement in Indiana responded to an advertisement listing a phone number registered to Canty, and arrested the female victim after she agreed to perform sex acts in exchange for money. The advertisement in that instance included a phone number registered to Canty.

Evidence was also presented about results of a search of Canty’s iphone, which included texts that the prosecution argued coordinated times and amounts with respondents to the advertisements, as well as texts that the prosecution argued were between Canty and the victim in which she updated him on her illicit activities.

For his crimes, Canty faces a potential maximum penalty of life in prison on each of the sex trafficking counts, with a mandatory minimum penalty of ten years on the sex trafficking of a child count. United States District Judge Joan N. Ericksen will determine his sentence at a future hearing, yet to be scheduled.

This case is the result of an investigation by the Federal Bureau of Investigation and the Duluth Police Department, with cooperation from the St. Louis County Attorney’s Office, the Fargo and Grand Forks, North Dakota, police departments, the Grand Forks County Sheriff’s Office in North Dakota, the Eau Claire, Wisconsin, police department, and the Porter County Sheriff’s Office in Indiana. It is being prosecuted by Assistant U.S. Attorneys Thomas Calhoun-Lopez and LeeAnn K. Bell.

Anyone who may have information about any human trafficking matter is encouraged to report that information to the FBI at 763-569-8000. For information about human trafficking, the National Human Trafficking Resource Center’s toll-free hotline (1-888-373-7888) is available to answer calls from anywhere in the country. The U.S. Department of Justice reports that an estimated 14,500 to 17,500 people are trafficked within the U.S. alone each year.

For more information, visit http://www.fbi.gov/about-us/investigate/civilrights/human_trafficking.

 

 

MINNEAPOLIS—Yesterday in federal court in St. Paul, a 25-year-old White Bear Lake felon pleaded guilty to possessing a nine-millimeter, semi-automatic pistol. On September 11, 2013, Marquis Leval Cotton pleaded guilty to one count of being a felon in possession of a firearm. Cotton, who was indicted on December 3, 2013, entered his plea before United States District Judge Donovan W. Frank.

In his plea agreement, Cotton admitted that on April 30, 2012, he possessed the pistol, which was recovered by the Minneapolis Police Department.

Because he is a felon, Cotton is prohibited under federal law from possessing a firearm or ammunition at any time. His prior Chisago County convictions include fourth-degree assault (twice in 2010) and criminal damage to property (2010). In 2005, Cotton was convicted in Anoka County for aggravated robbery. Because those convictions constituted crimes of violence, Cotton will now be subject to the federal Armed Career Criminal Act. That act mandates a minimum of 15 years in federal prison for anyone with such a record who is subsequently convicted in federal court for being a felon in possession of a firearm or ammunition.

Judge Frank will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Minneapolis Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Richard Newberry.

The case was charged federally through Project Exile Minneapolis. That law enforcement initiative was launched on July 22, 2010, as part of a city-wide effort to reduce gun violence. Through Project Exile, the Minneapolis Police Department and the ATF work together to apprehend serial criminals for violations of gun laws. Then, the Hennepin County Attorney’s Office teams up with the U.S. Attorney’s Office to determine where those offenders will most effectively be prosecuted – state or federal court. Those determinations are based on the offenders’ criminal histories and current charges, among other factors. To date, the U.S. Attorney’s Office has brought charges against more than two dozen serious habitual criminals through Project Exile Minneapolis.

 

 

MINNEAPOLIS—Earlier today in federal court, a 26-year-old St. Paul felon was sentenced for possessing a .22-caliber revolver. United States District Judge Patrick J. Schiltz sentenced Christopher Lee Rousseau to 180 months in prison on one count of being an armed career criminal in possession of a firearm. Rousseau was indicted on January 15, 2013, and pleaded guilty on May 16, 2013.

In his plea agreement, Rousseau admitted that on December 3, 2012, he possessed the revolver. It was hidden in the center console of the GMC Jimmy he was driving at the time he was stopped by authorities. A law enforcement affidavit filed in the current case states that at approximately 12:30 a.m. on December 3, 2012, officers stopped Rousseau for a traffic violation near the intersection of U.S. Highway 61 and Warner Road. He was subsequently arrested for driving after cancellation of his license. During a search of Rousseau’s person, police found two rounds of ammunition and $385. A search of the vehicle led to the recovery of the gun.

Because he is a felon, Rousseau is prohibited under federal law from possessing a firearm or ammunition at any time. His prior convictions in Ramsey County include aiding and abetting second-degree burglary (2010) and fleeing police in a motor vehicle (2011). In addition, Rousseau was convicted in Pine County for fleeing police in a motor vehicle (2007) and, in Dakota County, for third-degree burglary (2010).

Since those felony convictions were for violent crimes, Rousseau was subject to the federal armed career criminal statute in the current federal case. That statute mandates a minimum sentence of 15 years in federal prison upon conviction. Given that the federal criminal justice system does not have parole, offenders serve virtually their entire sentence behind bars.

This case was the result of an investigation by the St. Paul Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant U.S. Attorney Lola Velazquez-Aguilu.

 

 

MINNEAPOLIS—Yesterday in federal court in St. Paul, a 47-year-old Shakopee man was sentenced for using other people’s food stamps. On September 5, 2013, United States District Judge Paul A. Magnuson sentenced Chin Son Kim to three years of probation on one count of food stamp fraud. Kim was charged on April 18, 2013, and pleaded guilty on June 12, 2013. Kim was ordered to pay restitution of $29,816.

In his plea agreement, Kim admitted that between November 2010 and July 2012, he obtained Supplemental Nutrition and Assistance Program (“SNAP”) cards, commonly known as food stamps, from the true recipients of those benefits. To acquire the cards, he waited near a charity facility in St. Paul, as well as at other locations, and then approached people he thought might be in possession of them.

After obtaining a card, Kim would go to cooperating local markets, where he would use the card in an unauthorized manner. Typically, he would present the card to the grocer, who would swipe it through a food-stamp scanner, routinely noting a transaction of approximately $200. Kim would then receive cash, groceries, or store credit in that amount. Afterwards, he would return the card to its rightful owner, providing that person with cash in the amount of approximately half of the transaction total. The loss to the SNAP program because of Kim’s action was approximately $29,816.

Following the sentencing, Assistant Special Agent-in-Charge Robert Wagner of the U.S. Department of Agriculture’s Office of Inspector General, said, “SNAP is the largest program in the domestic hunger safety net, and those who prey on the poor by illegally purchasing SNAP benefits erode the public trust in the program.”

Wagner expressed appreciation to the Ramsey County Sheriff’s Office, the St. Paul Police Department, and U.S. Attorney’s Office for effectively working together to prosecute those whose criminal conduct diverts vital federal nutrition assistance away from needy individuals and families.

Each individual who receives SNAP benefits is issued an electronic benefit transfer (“EBT”) card, which contains a monthly allocated benefit amount that can be used at authorized retailers. The U.S. Department of Agriculture (“USDA”) reimburses those retailers for the benefit amounts redeemed. Only eligible food items may be acquired with food stamps, and some items, such as alcoholic beverages, tobacco products, and cell phone minutes are not eligible. Moreover, food stamps may not be redeemed for cash.

This case was the result of an investigation by the USDA-Office of Inspector General, the Ramsey County Sheriff’s Office, and the St. Paul Police Department. It was prosecuted by Assistant U.S. Attorney David P. Steinkamp.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, a 33-year-old Red Lake man was sentenced for endangering the health of a baby. United States District Judge Donovan W. Frank sentenced Chad Joseph Sumner to 40 months in prison on one count of child endangerment. Sumner was indicted on January 8, 2013, and pleaded guilty on April 12, 2013.

In his plea agreement, Sumner admitted that on August 17, 2011, while acting as the caretaker for the baby when the mother was temporarily away, the child was injured. As a result of Sumner’s failure to properly care for the child, the infant suffered substantial physical harm, including head trauma and skull fractures.

This case was the result of an investigation by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Deidre Y. Aanstad.

Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney's Office.

 

 

MINNEAPOLIS -- In the District of Minnesota, court action continued this week in three separate cases that involve foreign nationals who entered the United States illegally after being deported subsequent to criminal convictions. In each case, the individual was charged with one count of illegal re-entry after removal.

In the first case, Hector Rios-Guzman, age 27, pleaded guilty yesterday in federal court. He was indicted on July 16, 2013, and entered his plea before U.S. District Judge John R. Tunheim. In his plea agreement, Rios-Guzman, also known as Hector Rios, admitted that on May 15, 2013, authorities found him in the U.S. illegally after he had been previously deported to Mexico. His deportation followed a 2004 Hennepin County conviction for terroristic threats. On May 15, 2013, Rios-Guzman was arrested following a traffic stop in Bloomington. According to a law enforcement affidavit filed in the case, Rios-Guzman fled the scene on foot before he was arrested. Rios-Guzman also has a previous federal court conviction in the District of Minnesota for illegal re-entry.

For his crime, Rios-Guzman faces a potential maximum penalty of 20 years in federal prison, followed by deportation. Judge Tunheim will determine his sentence at a future hearing, yet to be scheduled.

This case is the result of an investigation by U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations (“ICE ERO”). It is being prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.

In the second case, Alfredo Rios-Guzman, age 35, also pleaded guilty yesterday in federal court. He was indicted on June 18, 2013, and entered his plea before U.S. District Judge Donovan W. Frank in St. Paul. In his plea agreement, Rios-Guzman admitted that on May 7, 2013, authorities found him in the U.S. illegally after he had been previously deported to Mexico. His deportation followed a 2007 Hennepin County conviction for assault in the second degree involving a dangerous weapon. Rios-Guzman was identified as an alien with a criminal record and was arrested on May 17, 2013, after a traffic stop near his Bloomington residence.

For his crime, Rios-Guzman faces a potential maximum penalty of 20 years in federal prison, followed by deportation. Judge Frank will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by ICE ERO. It is being prosecuted by Assistant U.S. Attorney Sarah E. Hudleston.

In the third case, U.S. District Court Chief Judge Michael J. Davis, on September 3, 2013, sentenced Noe Castro-Coj, age 41, to 30 months in federal prison, followed by deportation. Castro-Coj was indicted on March 11, 2013, and pleaded guilty on May 7, 2013. In his plea agreement, Castro-Coj admitted that on February 5, 2013, he was found in the U.S. after having been deported to Guatemala in 2003, after a 2000 Kansas conviction for kidnapping. On February 5, 2013, Castro-Coj was arrested in Steele County for violating an order for protection. On February 7, 2013, ICE was notified that he was in jail.

This case was the result of an investigation by the Steele County Sheriff’s Office and ICE ERO. It was prosecuted by Assistant U.S. Attorney Andrew Dunne.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, a 36-year-old St. Cloud man pleaded guilty to robbing the TCF Bank located at 1001 Fourth Street in St. Cloud. Fehd El Mehdi Kourima specifically pleaded guilty to one count of bank robbery. Kourima, who was indicted on June 10, 2013, entered his plea before United States District Judge Paul A. Magnuson.

In his plea agreement, Kourima admitted that on May 5, 2013, he stole approximately $1,000. At approximately 12:30 p.m. that day, he entered the bank, which is located inside a grocery store, approached a teller, and presented a note that read, “Put as many $100 bills as you can into this envelope in fifteen seconds and no one gets hurt.” After receiving the money, Kourima left the premises and ran to a vehicle parked outside. Kourima was arrested later that day.

For his crime, Kourima faces a potential maximum penalty of 20 years in federal prison. Judge Magnuson will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the St. Cloud Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorneys Katharine T. Buzicky and Nathan P. Petterson.

 

 

MINNEAPOLIS—Yesterday in federal court in St. Paul, four individuals were sentenced for their roles in a large, multi-state, identity theft ring. United States District Judge Paul A. Magnuson sentenced Jerome Davis, Jr., Jemall Ronta Williams, Tierra Samantha Catrina House, and Shanell Collette Brewer each on one count of conspiracy to commit bank fraud and one count of aggravated identity theft.

Davis, age 44, no known address, was sentenced to 50 months of imprisonment, Williams, age 38, no known address, was sentenced to 36 months of imprisonment, House, age 23, of St. Paul, was sentenced to 32 months of imprisonment, and Brewer, age 34, of Minneapolis, was sentenced to 27 months of imprisonment.

These individuals, along with more than 100 others, were involved in a conspiracy, from 2006 through December of 2011, to defraud banks, bank customers, and businesses. The co-conspirators used victim information to create counterfeit checks and false identification documents to conduct fraudulent transactions at retail establishments, where expensive merchandise was purchased and returned for cash. At banks, the conspirators posed as customers and withdrew money from victims’ bank accounts. The members of the conspiracy conducted these fraudulent transactions in Minnesota and at least 13 other states. Victim information was obtained by members of the conspiracy through multiple sources, including from individuals who stole information from their places of employment, from people employed at area banks, from those who stole information from mail, during vehicle break-ins, and through business burglaries, among other sources.

In his plea agreement, Davis admitted that from 2010 through 2011, he, too, was part of the conspiracy. For his part, Davis recruited individuals to conduct fraudulent transactions at financial institutions and retail establishments. He provided those individuals with false identification documents and counterfeit checks that he had received from other members of the conspiracy. Davis also drove individuals to retail stores, where the co-conspirators conducted fraudulent transactions in excess of $140,000.

In his plea agreement, Williams admitted that he joined the conspiracy in 2009, and from that time forward, he obtained victim information from a co-conspirator who worked at Wells Fargo. Williams also admitted providing that information to others, who then used it to create false and fictitious identification documents and counterfeit checks. In addition, Williams admitted recruiting individuals to pass those counterfeit checks at banks and retail establishments. Williams was responsible for approximately $40,000 in fraudulent transactions.

In her plea agreement, House admitted that between July and November 2008, while employed as a bank teller at the St. Paul Postal Employees Credit Union (“PCU”), she provided co-conspirators with customer information, including names, dates of birth, Social Security numbers, account numbers, and account information. The co-conspirators used that information to create false identification documents, which were then used by other co-conspirators to conduct fraudulent transactions using counterfeit checks. House admitted responsibility for approximately $22,000 in fraudulent transactions involving money stolen from the accounts of others.

In her plea agreement, Brewer admitted that in 2009, while employed at Sonus, a Plymouth-based business, she provided co-conspirators with customer information, including names, addresses, and bank account numbers. The co-conspirators used that information to create counterfeit checks and false identification documents, which were then used by other co-conspirators to conduct fraudulent transactions at various businesses. Brewer admitted responsibility for at least $18,000 in attempted fraudulent transactions and purchases through the use of counterfeit checks.

To date, 28 other members of the conspiracy have been sentenced. The remaining co-conspirator, Gordon Lamarr Moore, awaits sentencing, which has not yet been scheduled. Moore was convicted in April 2013, following a jury trial. During the trial, Moore fled from the jurisdiction. On July 8, 2013, he was arrested in at a hotel in Milwaukee, Wisconsin. Moore then attempted to flee again but was apprehended without incident.

These prosecutions resulted from an investigation conducted by the Minnesota Financial Crimes Task Force, the U.S. Postal Inspection Service, and the IRS-Criminal Investigations. The defendants were prosecuted by Assistant U.S. Attorney Karen B. Schommer and Assistant U.S. Attorney Michelle E. Jones.

The Financial Crimes Task Force was established pursuant to state law and is comprised of local, state, and federal law enforcement investigators dedicated to combating the growing problem of cross-jurisdictional financial crimes. The task force, overseen by an advisory board also created under state law, serves the entire District of Minnesota, presenting its cases to county or federal prosecutors, as appropriate.

The task force and the Minnesota U.S. Attorney’s Office want to remind people to protect themselves from identity theft. For more information, visit http://www.stopfraud.gov/protect-identity.html.

For more information on how to avoid becoming a victim of identity theft, visit https://postalinspectors.uspis.gov/investigations/MailFraud/fraudschemes/mailtheft/IdentityTheft.aspx . The IRS-Criminal Investigations also urges citizens to review the Taxpayer Guide to Identity Theft, which can be found at http://www.irs.gov.

For tips on how to prevent mail theft, visit https://postalinspectors.uspis.gov/investigations/MailFraud/fraudschemes/mailtheft/MailTheft.aspx.

 

 

MINNEAPOLIS—Earlier today in federal court, a 66-year-old man from Cheboygan, Michigan, pleaded guilty to robbing the U.S. Bank in Stillwater. David Michael Tyler specifically pleaded guilty to one count of armed bank robbery. Tyler, who was indicted on July 8, 2013, entered his plea before United States District Chief Judge Michael J. Davis.

In his plea agreement, Tyler admitted that on June 8, 2013, at approximately 9:30 a.m., he entered the US Bank in Stillwater, wearing a fake beard and glasses and carrying a briefcase and backpack. Tyler placed the briefcase on a banker’s desk and showed him what appeared to be a homemade bomb inside. He then gave the banker a note, which demanded $200,000. It also threatened that if the demands were not met, Tyler would detonate the bomb.

While the banker placed the money into Tyler’s backpack, Tyler admittedly pushed a button on his cell phone, warning the banker that he had ten minutes before the bomb went off. Tyler then grabbed the bag and fled the premises, leaving the briefcase and purported bomb on the banker’s desk. Tyler was apprehended a short distance from the bank, after officers witnessed him throwing the backpack into a pickup truck. All of the money was recovered.

For his crime, Tyler faces a potential maximum penalty of 25 years in prison. Judge Davis will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Stillwater Police Department, the St. Paul Police Department, and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Kevin S. Ueland.

 

 

MINNEAPOLIS—Earlier today in federal court, a felon was sentenced for possessing a nine-millimeter, semi-automatic pistol. United States District Chief Judge Michael J. Davis sentenced Demetrius Demarco Spencer, age unknown, to 80 months in prison. He was indicted on November 14, 2012, and was convicted on January 16, 2013.

According to the indictment and the evidence presented at trial, Spencer possessed the gun on August 23, 2012. On that day, officers on routine patrol outside a Minneapolis nightclub saw Spencer standing in the parking lot. He reached into his pants and removed an “L-shaped” item covered with a white sock. He carried the item to a nearby car and placed it under the front seat. Officers later recovered the item—the nine-millimeter, semi-automatic pistol—from in the sock.

Because he is a felon, Spencer is prohibited under federal law from possessing a firearm at any time. His prior Hennepin County convictions include possession of a pistol by a prohibited person (2003), assault in the third degree (2007), and aggravated robbery (2007). Spencer was also convicted in Ramsey County for possession of a pistol by a prohibited person (2000).

This case was the result of an investigation by the Minneapolis Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). It was prosecuted by Assistant U.S. Attorney Richard Newberry.

The case was charged federally through Project Exile Minneapolis. That law enforcement initiative was launched on July 22, 2010, as part of a city-wide effort to reduce gun violence. Through Project Exile, the Minneapolis Police Department and the ATF work together to apprehend serial criminals for violations of gun laws. Then, the Hennepin County Attorney’s Office teams up with the U.S. Attorney’s Office to determine where those offenders will most effectively be prosecuted – state or federal court. Those determinations are based on the offenders’ criminal histories and current charges, among other factors. To date, the U.S. Attorney’s Office has brought charges against more than two dozen serious habitual criminals through Project Exile Minneapolis.

 

 

MINNEAPOLIS—Earlier today in federal court, a Minnesota man was sentenced for being part of a conspiracy to file false tax returns to generate inflated refunds. United States District Judge Joan N. Ericksen sentenced Solomon Frank-Sawari to 27 months in federal prison on one count of conspiracy to defraud the United States. Frank-Sawari was indicted on January 15, 2013, and pleaded guilty on March 26, 2013.

In his plea agreement, Frank-Sawari admitted to obstructing the Internal Revenue Service (“IRS”) and the State of Minnesota in their lawful collection of income taxes by falsifying hundreds of tax returns. The tax loss due to the conspiracy was estimated at between $80,000 and $200,000.

From 2007 through 2009, Frank-Sawari conspired with his two co-conspirators and others to prepare fraudulent tax returns for customers of his tax preparation services, Merit Tax Service of Robbinsdale and Capitol Income Tax of Minneapolis. Frank-Sawari admitted that the returns included false income and fraudulent dependent information, among other things. The returns generated inflated refunds for his customers and fraudulent fees and other payments for himself and others. He also admitted instructing customers to sign false income declarations and other paperwork to substantiate the false tax refund claims.

According to the IRS, approximately 60 percent of taxpayers use tax professionals to prepare and file their tax returns, with these paid preparers now collectively responsible for more than 80 million individual tax returns annually. “Tax return preparer fraud” is one of the IRS’s “Dirty Dozen Tax Scams.” For more information about the fight against tax fraud or how to choose a reliable tax return preparer, visit http://www.irs.gov/uac/Tips-for-Choosing-a-Tax-Return-Preparer.

This case was investigated by the IRS-Criminal Investigations with assistance from the Minnesota Department of Revenue. It was prosecuted by Assistant U.S. Attorney William J. Otteson.

Per U.S. Department of Justice policy, the U.S. Attorney’s Office is not allowed to provide the age and city of residence for defendants charged in criminal tax cases.

 

 

MINNEAPOLIS—Earlier today in federal court, an inmate who escaped from the Federal Prison Camp in Duluth in March 2013 pleaded guilty to that crime. Gerald James Greenfield, age 67, of Bloomington, specifically pleaded guilty to one count of escape from custody. Greenfield, who was charged on April 29, 2013, entered his plea before United States District Judge Patrick J. Schiltz.

In his plea agreement, Greenfield admitted that on March 30, 2013, he left the custody of the federal prison camp without authorization. According to a law enforcement affidavit filed in the case, Greenfield was present for a prisoner count at 4:00 p.m. on March 30. However, he was not present for the prisoner count at 10:00 p.m. He was arrested six days later, on April 5, 2013, at a Burnsville motel. At the time of his escape, he was serving a 50-month sentence following a 2012 conviction in the District of Minnesota for conspiracy to commit money laundering.

For his crime, Greenfield faces a potential maximum penalty of five years in prison, which could be added to his current sentence. Judge Schiltz will determine his sentence at a future hearing, yet to be scheduled.

This case is the result of an investigation by the U.S. Marshals Service. It is being prosecuted by Assistant U.S. Attorney Manda M. Sertich.

 

 

MINNEAPOLIS—Yesterday in federal court in Duluth, a 44-year-old Red Lake man was sentenced for causing serious bodily injury to a woman after assaulting her while on the Red Lake Indian Reservation. On August 28, 2013, United States District Judge Richard H. Kyle sentenced Roderick Arlyn Sayers to 43 months in prison on one count of assault resulting in serious bodily injury. Sayers was indicted on November 5, 2012, and convicted on April 16, 2013.

The evidence presented at trial proved that on November 25, 2011, Sayers assaulted the woman, which resulted in serious bodily injury.

This case was the result of an investigation by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorneys Deidre Y. Aanstad and Thomas Calhoun-Lopez.

Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.

The U.S. Justice Department is taking steps to increase engagement, coordination and action relative to public safety in tribal communities, including the creation of the Violence Against Women Federal and Tribal Prosecution Task Force. This task force will explore current issues raised by professionals in the field and recommend “best practices” in prosecution strategies involving domestic violence, sexual assault and stalking.

Violence against American Indian women occurs at epidemic rates. In 2005, Congress found that one in three American Indian women is raped during her lifetime, and American Indian women are nearly three times more likely to be battered in during their lives than Caucasian women.

 

 

MINNEAPOLIS—Late yesterday in federal court, a 47-year-old Le Center man was sentenced for receiving several videos containing child pornography. On August 28, 2013, United States District Judge David S. Doty sentenced Harold Duane Davenport to 60 months in prison on one count of receipt of child pornography. Davenport was indicted on November 5, 2012, and pleaded guilty on March 20, 2013.

In his plea agreement, Davenport admitted that from September 16, 2009, through February 6, 2010, he knowingly received visual depictions via the Internet that involved minors engaged in sexually explicit conduct. In addition, Davenport admitted that he possessed more than 600 images of child pornography, including images and videos portraying sadistic or masochistic conduct or other depictions of violence.

This case was the result of an investigation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the LeSueur County Sheriff’s Office, and the Minneapolis Police Department. It was prosecuted by Assistant U.S. Attorney Nathan P. Petterson.

Receipt of child pornography is against the law. In addition to prosecuting these cases, the Justice Department is presently funding a study focused on the correlation between involvement in child pornography and hands-on sexual abuse of children. A 2008 study (The Butner Study) published in the Journal of Family Violence found that up to 80 percent of federal inmates incarcerated for possession, receipt, or distribution of child pornography also admitted to hands-on sexual abuse of children, ranging from touching to rape.

This case was brought as part of Project Safe Childhood (PSC), 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 U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children and identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/ For more information about internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab “resources.”

 

 

MINNEAPOLIS—Earlier today in federal court, a former armored truck driver pleaded guilty to stealing money from automated teller machines (“ATM”) in numerous locations in Minnesota and North Dakota. Christopher James Diestler, age 31, of Fergus Falls, pleaded guilty to one count of bank larceny. Diestler, who was indicted on July 16, 2013, entered his plea before United States District Chief Judge Michael J. Davis.

In his plea agreement, Diestler admitted that from March 2005 through March 15, 2012, while working as an armored truck driver for a company out of Sauk Rapids, Minnesota, he stole approximately $182,350 from Bremer Bank ATMs in Alexandria, Breckenridge, Detroit Lakes, Fergus Falls, and Morris, Minnesota, and Wahpeton, North Dakota, as well as a Wells Fargo ATM in Alexandria and a U.S. Bank ATM in Fergus Falls.

ATM currency is dispersed from cassettes that are installed into ATM machines. Diestler admittedly took cash from a number of those cassettes. Then, upon returning to an ATM to retrieve a cassette from which he had stolen money, he replaced the missing funds with currency taken from another ATM. By doing this, any audit performed on the cassettes would fail to reveal the prior thefts.

For his crime, Diestler faces a potential maximum penalty of ten years in prison. Judge Davis will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Minnesota Bureau of Criminal Apprehension, the Otter Tail County Sheriff’s Office, the Fergus Falls Police Department, and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Lola Velazquez-Aguilu.

 

 

MINNEAPOLIS—Earlier today in federal court, a 53-year-old Excelsior coin dealer was sentenced for devising and executing a scheme to defraud customers and investors out of more than $3.3 million. United States District Judge Patrick J. Schiltz sentenced David Laurence Marion to 60 months in prison on one count of conspiracy to commit mail and wire fraud and one count of money laundering. Marion was indicted on November 14, 2012, and pleaded guilty on February 21, 2013.

Marion owned International Rarities Corporation (“IRC”), a business that bought, sold, and traded gold coins and precious metals, among other things. Marion directed his sales staff to “cold call” people from “lead” sheets in an attempt to get them to buy, sell, or trade coins and precious metals.

In his plea agreement, Marion admitted that between December 2010 and August 2011, IRC received over $2 million in coins, precious metals, and money from customers who intended to make purchases or trades. In August 2011, IRC purportedly had over $2 million in unfulfilled customer orders. When customers inquired about the status of their orders, they were ignored by Marion and the IRC sales staff, or they were falsely advised that their orders were being processed or their money, coins, and precious metals could not be returned at that time. In the meantime, Marion used the customers’ money, coins, and precious metals to support his gambling and lavish lifestyle as well as to pay commissions and salaries, fulfill other customer orders, and support his family. Customers lost approximately $1.7 million in money, coins, and precious metals as a result of this scheme.

As president of International Rarities Holdings (“IRH”), Marion also directed his sales staff to sell securities in the form of ownership shares in the company. However, Marion was not registered with the Securities and Exchange Commission (“SEC”) as a broker or dealer at that time, nor was he associated with a registered SEC broker or dealer. In fact, in April 2009, the SEC rejected Marion’s attempt to register the IRH offering as a security, yet, from at least November 2008 through July 2009, Marion and his sales staff raised approximately $1 million from at least 26 investors who believed they were purchasing ownership shares in the company. Marion used approximately $200,000 of those investor funds for his own personal use.

This case was the result of an investigation by the Federal Bureau of Investigation, the U.S. Postal Inspection Service, and the Internal Revenue Service-Criminal Investigations. It was prosecuted by Assistant U.S. Attorney Karen B. Schommer.

The U.S. Attorney’s Office wants to remind people to protect themselves from securities fraud. For more information, visit http://www.stopfraud.gov/protect-securities.html.

 

 

MINNEAPOLIS—Earlier today in federal court, a 33-year-old Eveleth woman made her initial appearance after being indicted for stealing more than $27,000 in Social Security benefits. On August 13, 2013, Kimberly Joann Wauzynski was charged with one count of theft of public money and one count of supplemental security income (“SSI”) benefits fraud.

The indictment alleges that from September 2008 through May 2012, Wauzynski, also known as Kimberly Joann Denne, stole approximately $27,851.08 from the Social Security Administration (“SSA”). According to the indictment, Wauzynski concealed from the SSA the true nature of her living arrangements in order to continue receiving SSI benefits on behalf of her child. Specifically, the indictment alleges that Wauzynski concealed the fact that the father of her child was living with her and her child and supporting the household. Per law, beneficiaries of SSI payments must report any change in living arrangements or sources of income.

If convicted, Wauzynski faces a potential maximum penalty of ten years in prison on each charge. Any sentence would be determined by a federal district judge. This case is the result of an investigation by the SSA-Office of Inspector General. It is being prosecuted by Assistant United States Attorney John E. Kokkinen.

An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.

 

 

MINNEAPOLIS—Yesterday in federal court, a 34-year-old Delano man pleaded guilty to committing the April 24, 2013, robbery of a McDonald’s in Buffalo. On August 27, 2013, Matthew Dillon Sisneros pleaded guilty to one count of interference with commerce by robbery, pursuant to the Hobbs Act, and one count of possession of a firearm in furtherance of a crime of violence. Sisneros, who was indicted on June 3, 2013, entered his plea before United States District Judge Ann D. Montgomery.

In his plea agreement, Sisneros admitted that on April 24, 2013, he took $3,266 from the restaurant and, with a firearm, threatened violence against the employees. Upon entering the restaurant, Sisneros admittedly pointed a sawed-off 12-gauge shotgun at employees and demanded money. After receiving the money, he ran to a waiting vehicle and left the area.

The Hobbs Act, passed by Congress in 1946, allows federal prosecutors to prosecute individuals who commit armed robberies of businesses engaged in interstate commerce.

For his crimes, Sisneros faces a potential maximum penalty of 20 years in prison for robbery and a mandatory minimum penalty of ten years for possession of a firearm in furtherance of a crime of violence. Judge Montgomery will determine his sentence at a future hearing, yet to be scheduled.

This case is the result of an investigation by the Buffalo Police Department, the Wright County Sheriff’s Office, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, with cooperation from the Minnesota Bureau of Criminal Apprehension. It is being prosecuted by Assistant U.S. Attorneys Julie E. Allyn and Laura M. Provinzino.

 

 

MINNEAPOLIS—A federal indictment unsealed late yesterday charges a 37-year-old Two Harbors man with producing images of child pornography. The indictment, which was filed on August 13, 2013, charges Joel Ray Allard with one count of production of child pornography. The indictment was unsealed following Allard’s initial appearance in federal court.

The indictment alleges that in August and September 2011, Allard enticed a minor to engage in sexually explicit conduct for the purpose of producing visual depictions of that conduct.

If convicted, Allard faces a potential maximum penalty of life in prison, with a mandatory minimum penalty of 15 years. Any sentence would be determined by a federal district judge.

This case is the result of the Cook County Sheriff’s Office and the Minnesota Child Exploitation Task Force, sponsored by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David P. Steinkamp.

Production of child pornography is against the law. In addition to prosecuting these cases, the Justice Department is funding a study focused on the correlation between involvement in child pornography and hands-on sexual abuse of children. A 2008 study (The Butner Study) published in the Journal of Family Violence found that up to 80 percent of federal inmates incarcerated for possession, receipt, or distribution of child pornography also admitted to hands-on sexual abuse of children, ranging from touching to rape.

This case was brought as part of Project Safe Childhood (“PSC”), 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 U.S. Attorney offices and the Justice Department’s Criminal Division, Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children and identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab “resources.”

An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.

 

 

MINNEAPOLIS—Earlier today in federal court, three individuals were indicted for arranging interstate transportation for the purpose of prostitution. Brandon Lynn Gilmore, age 23, and Angelica Marie Carter, age 20, both of Milwaukee, Wisconsin, and Dominique Alexandra McKee, age 19, no known address, were specifically charged with one count of conspiracy to facilitate travel in interstate commerce to engage in prostitution.

The indictment alleges that on July 12, 2013, the defendants entered into the conspiracy. A law enforcement affidavit filed in the case indicates that on July 20, 2013, Bloomington police were called to a local hotel to address a problem involving a 14-year-old girl. Upon their arrival, the police learned from the girl that she allegedly had been working as a prostitute out of the hotel for the past week. She reportedly said that Gilmore and McKee had brought her to the hotel from Milwaukee, where she wished to return. Officers located Gilmore and McKee in a hotel room. Carter was also found at the hotel. All three were immediately arrested.

According to police records, the minor female said she met McKee on a social website and chatted with him about escorting and making money. Then, on July 11, 2013, she allegedly met Gilmore and McKee at a Milwaukee hotel, where she was invited to travel with them to Minnesota to work as a prostitute. Allegedly, Gilmore took photographs of McKee and the young girl for the purpose of website-based advertising. For his part, Carter drove them all to Minnesota.

If convicted, the defendants face a potential maximum penalty of 30 years in prison. Any sentence would be determined by a federal district judge. This case is the result of an investigation by the Bloomington Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David P. Steinkamp.

Anyone who may have information about any human trafficking matter is encouraged to report that information to the FBI at 763-569-8000. For information about human trafficking, the National Human Trafficking Resource Center’s toll-free hotline (1-888-373-7888) is available to answer calls from anywhere in the country. The U.S. Department of Justice reports that an estimated 14,500 to 17,500 people are trafficked within the U.S. alone each year.

For more information, visit http://www.fbi.gov/about-us/investigate/civilrights/human_trafficking.

An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.

 

 

MINNEAPOLIS—A federal indictment unsealed earlier today charges a 43-year-old Red Lake man with sexually abusing a woman on the Red Lake Indian Reservation. The indictment, which was filed on July 23, 2013, charges Alan James Lussier with one count of sexual abuse. The indictment was unsealed following Lussier’s initial appearance in federal court.

The indictment alleges that on March 13, 2011, Lussier caused the victim to engage in a sexual act by placing her in fear.

If convicted, Lussier faces a potential maximum penalty of life in prison. Any sentence will be determined by a federal district court judge. This case is the result of an investigation by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Deidre Y. Aanstad.

Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.

The U.S. Justice Department is taking steps to increase engagement, coordination, and action relative to public safety in tribal communities, including the creation of the Violence Against Women Federal and Tribal Prosecution Task Force. This task force explores current issues raised by professionals in the field and recommends “best practices” in prosecution strategies involving domestic violence, sexual assault, and stalking.

Violence against American Indian women occurs at epidemic rates. In 2005, Congress reported that one in three American Indian women is raped during her lifetime, and American Indian women are nearly three times more likely to be battered during their lives as Caucasian women.

An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, a 47-year-old Minneapolis felon pleaded guilty to one count of being a felon in possession of a firearm for possessing a .357-caliber revolver, a rifle and two shotguns. Carl Craig Larson, who was indicted on June 18, 2013, entered his plea before United States District Judge Susan Richard Nelson.

In his plea agreement, Larson admitted that on April 21, 2013, law enforcement officers responded to a burglary call at a home in Waseca County, where they found Larson inside the residence. Police went on to discover several pieces of jewelry in Larson’s pockets. They also found a loaded .357 revolver in the house, which Larson had admittedly possessed and had used to shoot at doors in attempting to enter the house.

During the execution of a search warrant on the car Larson drove to the burglary, officers uncovered three other guns. The guns matched the description of firearms that had been reported stolen during a burglary in LeSueur County on April 20, 2013. The guns included a seven-millimeter caliber rifle and two 12-gauge shotguns.

Because he is a felon, Larson is prohibited under federal law from possessing a firearm at any time. Larson was previously convicted in Hennepin County for second-degree murder (1986), financial transaction card fraud (1997), and burglary (1999 and 2010). Because at least three of those convictions constituted crimes of violence, Larson will now be subject to the federal Armed Career Criminal Act. That act mandates a minimum of 15 years in federal prison for anyone with such a record who is subsequently convicted in federal court for being a felon in possession of a firearm or ammunition. Judge Nelson will determine Larson’s sentence at a future hearing, yet to be scheduled.

This case is the result of an investigation by the LeSueur and Waseca county sheriff’s offices, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorneys Julie E. Allyn and Sarah E. Hudleston.

 

 

MINNEAPOLIS—Earlier today in federal court, a 25-year-old Hastings man was sentenced for producing child pornography. United States District Judge Ann D. Montgomery sentenced Mark Matthew Cortes to 360 months in prison, along with a lifetime of supervised release, on one count of production of child pornography. Cortes was indicted on December 3, 2012, and pleaded guilty on April 9, 2013.

In his plea agreement, Cortes admitted that in November 2011, he knowingly persuaded a minor under the age of 12 to engage in sexually explicit conduct for the purpose of producing images of such conduct on his cellular telephone. Cortes also admitted that he transferred the images from his phone to his computer and then distributed them to another person. In addition, Cortes admitted that he committed a sexual act with the victim during production.

This case was the result of an investigation by the Minnesota Child Exploitation Task Force, which is sponsored by the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney David P. Steinkamp.

Production of child pornography is against the law. In addition to prosecuting these cases, the Justice Department is funding a study focused on the correlation between involvement in child pornography and hands-on sexual abuse of children. A 2008 study (The Butner Study) published in the Journal of Family Violence found that up to 80 percent of federal inmates incarcerated for possession, receipt, or distribution of child pornography also admitted to hands-on sexual abuse of children, ranging from touching to rape.

This case was brought as part of Project Safe Childhood (“PSC”), 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 U.S. Attorney offices and the Justice Department’s Criminal Division, Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children and identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab “resources.”

 

 

MINNEAPOLIS—Earlier today in federal court, a 25-year-old Anoka man was indicted for possessing a nine-millimeter, semi-automatic pistol. Arlan Kaleb Schultz was charged with one count of being a felon in possession of a firearm.

The indictment alleges that on January 19, 2013, Schultz possessed the pistol. According to a law enforcement affidavit filed in the case, at approximately 9:00 p.m. on January 19, Coon Rapids police attempted to stop a vehicle for a traffic violation. The driver refused to yield and, instead, speeded away, ultimately colliding with another vehicle at the intersection of Seventh Avenue and Main Street in Anoka. The driver, later identified as Schultz, immediately exited the vehicle and fled on foot. Police shortly apprehended him. And during the subsequent execution of a search warrant on the vehicle, the officers found the loaded pistol under the front passenger seat. Schultz’s DNA was found on the grip of the pistol. Ammunition was located elsewhere in the vehicle.

Because he is a felon, Schultz is prohibited under federal law from possessing firearms at any time. His previous Anoka County convictions include simple robbery (2008), third-degree burglary (2009), fleeing a peace officer in a motor vehicle (2010), and fifth-degree controlled substance crime (2012). In addition, Schultz was also convicted in Sherburne County for prohibited possession of a stun gun (2011).

Since at least three of Schultz’s prior convictions constitute crimes of violence or major drug crimes, he is subject to the federal Armed Career Criminal Act if convicted in the current federal case. That act mandates a minimum of 15 years in federal prison. The potential maximum penalty is life in prison. Any sentence would be determined by a federal district judge.

This case is the result of an investigation by the Coon Rapids Police Department and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorneys Benjamin Bejar and Andrew R. Winter.

An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.

 

 

MINNEAPOLIS—Yesterday in federal court, a 23-year-old St. Paul felon pleaded guilty to possessing a .22-caliber handgun. On August 20, 2013, Phuvanath Ronald Mounthachack pleaded guilty to one count of being a felon in possession of a firearm. Mounthachack, who was indicted on June 3, 2013, entered his plea before United States District Judge Patrick J. Schiltz.

In his plea agreement, Mounthachack admitted that on January 15, 2013, he made arrangements to sell a firearm to two individuals, one of whom was an undercover police officer. Mounthachack admitted instructing the individuals to meet him near the intersection of Interstate 94 and Lexington Avenue in St. Paul. At approximately 8:10 p.m., Mounthachack arrived at that location, carrying a .22-caliber, semi-automatic handgun along with some ammunition. In return for $500 in cash, he handed over the gun and ammunition to the two individuals.

Because he is a felon, Mounthachack is prohibited under federal law from possessing a firearm or ammunition at any time. His prior Wright County convictions include aggravated robbery (2007) and fifth-degree sale of a controlled substance while employing a dangerous weapon (2009).

For his crime, Mounthachack faces a potential maximum penalty of ten years in prison. Judge Schiltz will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Minneapolis Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Amber M. Brennan.

The case was charged federally through Project Exile Minneapolis. That law enforcement initiative was launched on July 22, 2010, as part of a city-wide effort to reduce gun violence. Through Project Exile, the Minneapolis Police Department and the ATF work together to apprehend serial criminals for violations of gun laws. Then, the Hennepin County Attorney’s Office teams up with the U.S. Attorney’s Office to determine where those offenders will most effectively be prosecuted – state or federal court. Those determinations are based on the offenders’ criminal histories and current charges, among other factors. To date, the U.S. Attorney’s Office has brought charges against approximately two dozen serious habitual criminals through Project Exile Minneapolis.

 

 

MINNEAPOLIS—Yesterday in federal court, the former postmaster of the Marble Post Office in Itasca County pleaded guilty to stealing funds from the office. On August 20, 2013, Jill Marie Rousse, age 39, of Calumet, pleaded guilty to one count of misappropriation of postal funds. Rousse, who was indicted on June 10, 2013, entered her plea before United States District Judge Ann D. Montgomery.

In her plea agreement, Rousse admitted that between August 2011 and October 2012, she stole money from the post office by either taking cash from the cash drawer or issuing money orders in her own name. Rousse also admittedly falsified reports regarding the sale of money orders and postage in order to conceal her theft. An audit of the post office identified shortages totaling $9,031.43 in cash and stamps.

For her crime, Rousse faces a potential maximum penalty of ten years in prison. Judge Montgomery will determine her sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the U.S. Postal Service-Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Lola Velazquez-Aguilu.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, two individuals were sentenced for their roles in a large, multi-state, identity theft ring. United States District Judge Paul A. Magnuson sentenced Russell Raymond Royals, age 61, of Cottage Grove, to 120 months in prison; and Desmon Desmond Burks, age 38, of St. Paul, to 252 months in prison. Royals previously pled guilty to one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Burks was convicted on September 6, 2012, following a jury trial, of one count of conspiracy to commit bank fraud, two counts of aiding and abetting bank fraud, and two counts of aggravated identity theft.

Two related defendants were sentenced last month for their roles in this conspiracy. On July 23, 2013, Norman Scott Allen, age 44, of Minneapolis, was sentenced to 80 months in prison on one count of conspiracy to commit bank fraud and one count of bank fraud. On July 22, 2013, Frederick Adrianne Hamilton, age 57, also of Minneapolis, was sentenced to 57 months in prison on one count of conspiracy to commit bank fraud and two counts of bank fraud. Both men were convicted on September 6, 2012 following a jury trial. Twenty-three other defendants have been sentenced in this case thus far, while five more await sentencing.

These individuals, along with over 100 others, were involved in a conspiracy from 2006 through December of 2011 to defraud banks, bank customers, and businesses. The co-conspirators used victim information to create counterfeit checks and false identification documents to conduct fraudulent transactions at retail establishments where expensive merchandise was purchased and returned for cash. At banks, the conspirators posed as customers and withdrew money from victims’ bank accounts. The members of the conspiracy conducted these fraudulent transactions throughout Minnesota and in at least 13 other states. Victim information was obtained by members of the conspiracy through multiple sources, including from individuals who stole victim information from their places of employment, from individuals employed at area banks, from those who stole the information from the mail, during vehicle break-ins, and business burglaries, among other sources.

Following sentencing, Patrick Henry, the head of the Minnesota Financial Crimes Task Force, said, “The Minnesota Financial Crimes Task Force led this investigation, but the effort was a success because of the extraordinary collaboration by all of the agencies involved.”

Kelly R. Jackson, Special Agent in Charge of Internal Revenue Service-Criminal Investigations, St. Paul Field Office, which also participated in the investigation, said, “Investigating identity theft is a priority for IRS-Criminal Investigations. Today’s sentencings of Desmon Burks and Russell Royals should serve as a strong deterrent to those who are considering similar conduct. Law enforcement and the U.S. Attorney’s Office are serious about investigating identity theft crimes and holding those accountable who commit these types of crimes.”

In a related case, five individuals were charged with conspiracy to commit bank fraud, bank fraud and aggravated identity theft. Jemall Ronta Williams, Jerome Davis, Jr., Tierra Samantha Catrina House, and Shanell Collette Brewer each pleaded guilty to one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Gordon Lamarr Moore was convicted in April 2013 following a jury trial. During the trial, Moore fled and became a fugitive. On July 8, 2013, he was arrested in at a hotel in Milwaukee, Wisconsin. Moore attempted to again flee, but was ultimately apprehended without incident.

These cases resulted from an investigation conducted by the Minnesota Financial Crimes Task Force, the U.S. Postal Inspection Service, and the IRS-Criminal Investigations. They were prosecuted by Assistant U.S. Attorney Karen B. Schommer and Assistant U.S. Attorney Michelle E. Jones.

The Financial Crimes Task Force was established pursuant to state law and is comprised of local, state, and federal law enforcement investigators dedicated to combating the growing problem of cross-jurisdictional financial crimes. The task force, overseen by an advisory board also created under state law, serves the entire District of Minnesota, presenting its cases to county or federal prosecutors, as appropriate.

The task force and the Minnesota U.S. Attorney’s Office want to remind people to protect themselves from identity theft. For more information, visit http://www.stopfraud.gov/protect-identity.html.

For more information on how to avoid becoming a victim of identity theft, visit https://postalinspectors.uspis.gov/investigations/MailFraud/fraudschemes/mailtheft/IdentityTheft.aspx . The IRS-Criminal Investigations also urges citizens to review the Taxpayer Guide to Identity Theft, which can be found at http://www.irs.gov.

For tips on how to prevent mail theft, visit https://postalinspectors.uspis.gov/investigations/MailFraud/fraudschemes/mailtheft/MailTheft.aspx.

 

 

FOR IMMEDIATE RELEASE
August 13, 2o13

MINNEAPOLIS—Earlier today in federal court in St. Paul, a man pleaded guilty to conspiring to file false tax returns after admitting he had used the identity information of several children to generate false dependents. Rotimi Williams specifically pleaded guilty to one count of conspiracy to obstruct the lawful functioning of the Internal Revenue Service (“IRS”) and four counts of identity theft. Williams, who was indicted along with Ayo Aseph on April 15, 2013, entered his plea before United States District Judge Paul A. Magnuson.

In his plea agreement, Williams admitted that from about April 15, 2008, through about April 15, 2011, he conspired with others to obstruct the IRS in its legal obligation to collect income taxes. During that time, Williams was in the business of preparing and filing federal and state income tax returns for clients, his main office located in Brooklyn, New York. Williams had several clients in Minnesota, including Aseph.

Williams, who had clients in Minnesota and New York, admitted to generating false tax returns for certain New York clients by adding the names, social security numbers, and birthdates of children who were not their dependents. Williams did this in order to lower the amount of federal taxes owed, and, thereby, qualify for refunds, by claiming additional dependents on their tax returns. The dependent information involved minors from Minnesota, and were added to certain New York clients’ tax returns.

On June 12, 2013, Williams’ co-defendant, Ayo Aseph, pleaded guilty to one count of conspiracy. In his plea agreement, Aseph admitted that Williams prepared his tax returns starting in 2007, and that Williams was his employer until 2011. In 2008, Aseph, at Williams’ direction, obtained the identities of children not his own to claim on his income tax return for that year. Aseph admittedly gave his brother money in exchange for the identification information of two children that his brother knew. The identification information of a third child was also provided by one of Aseph’s co-workers. Those three children were claimed as dependents on Aseph’s 2009 tax return as well. And, for his 2010 tax return, one of the children as well as two other children were claimed as dependents.

For their crimes, both defendants face a potential maximum penalty of five years in prison for conspiracy. In addition, Williams faces a potential maximum penalty of 15 years on each count of identity theft. Judge Magnuson will determine their sentences at a future hearing, yet to be scheduled.

This case is the result of an investigation by the IRS-Criminal Investigations. It is being prosecuted by Assistant U.S. Attorney John Docherty.

According to the IRS, approximately 60 percent of taxpayers use tax professionals to prepare and file their tax returns, with these paid preparers now collectively responsible for more than 80 million individual tax returns annually. “Tax return preparer fraud” is one of the IRS’s “Dirty Dozen Tax Scams.” For more information about the fight against tax fraud or how to choose a reliable tax return preparer, visit http://www.irs.gov/uac/Tips-for-Choosing-a-Tax-Return-Preparer.

Per U.S. Department of Justice policy, the U.S. Attorney’s Office is not allowed to provide the age and city of residence for defendants charged in criminal tax cases.