District of Minnesota

MINNEAPOLIS—A federal indictment unsealed late yesterday charges two Minnesota men with conspiring to defraud equipment-leasing companies and insurance companies. The indictment, which was filed under seal on June 18, 2013, charges Joseph Michael Hanson, age 54, of Mendota Heights, and Timothy John Lambrecht, age 41, of Medina, with one count of conspiracy to commit mail and wire fraud. The indictment was unsealed following Lambrecht’s initial appearance in federal court on June 20.

During the time relevant to this case, Lambrecht owned and controlled InCompass, Inc., a corporation engaged in the business of providing information technology services to third parties. Lambrecht also owned and controlled TRAC Enterprises, a shell corporation that he purportedly used to perpetrate parts of this fraud scheme. Together, Lambrecht and Hanson owned HLI, which, in turn, owned the building in New Brighton where InCompass operated (the “HLI Building”). The defendants allegedly paid a portion of the fraud proceeds to the lender that financed the defendants’ acquisition of the HLI Building.

As to the fraud, the indictment alleges that between December 2008 and May 2012, the defendants conspired with others to lease or to cause third parties to lease computer equipment at greatly inflated prices to create a pool of funds from which the defendants then paid their personal and business expenses. They also allegedly submitted false claims to insurance companies, claiming their equipment had been stolen.

For example, in December 2008, Lambrecht purportedly caused TRAC to purchase a storage area network (“SAN”) device for $27,700. In February 2009, Lambrecht then allegedly caused Wells Fargo Equipment Finance (“WFEF”) to purchase the SAN from TRAC at the greatly inflated price of $112,300 and then lease it to InCompass. Lambrecht reportedly hid from WFEF that he owned both TRAC and InCompass. He also allegedly misled WFEF into paying for SAN training and consulting services, purportedly worth $28,750, that were never provided. In all, the indictment claims Lambrecht obtained more than $246,179 from WFEF, which he used to prop up InCompass and pay against the loan on the HLI Building.

The indictment also alleges that in July 2010, Lambrecht falsely reported to his insurance carrier that the SAN had been stolen from InCompass. The defendants reportedly submitted an invoice to the insurance company from a business owned by Hanson in support of Lambrecht’s claim for reimbursement of more than $170,000 in replacement equipment and data recovery services. Those replacements and services, however, were never purchased or provided. Instead, between July 2010 and January 2011, Lambrecht received more than $498,000 from the insurance company, purportedly depositing the funds into the bank accounts of InCompass and TRAC. And during that entire time, InCompass continued to use the SAN in the course of its business.

In addition, the indictment alleges that on March 25, 2009, the defendants and others caused an entity owned by an unnamed co-conspirator to purchase from InCompass a SAN for approximately $74,100, even though the original purchase price was $22,000. Moreover, on July 21, 2010, an unnamed co-conspirator allegedly made a false claim to another insurance company that the SAN had been stolen from InCompass, leading to an insurance payout of $160,000.

As a result of this alleged fraud conspiracy, WFEF lost at least $100,000 and the insurance companies lost approximately $658,000.

If convicted, the defendants face a potential maximum penalty of five years in prison. Any sentence would be determined by a federal district court judge. This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David J. MacLaughlin.

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 this week charges a 23-year-old St. Paul felon with possessing a .22-caliber handgun. The indictment specifically charges Phuvanath Ronald Mounthachack with one count of being a felon in possession of a firearm. The indictment was unsealed following Mounthachack’s initial appearance in federal court on June 19.

The indictment alleges that on January 15, 2013, Mounthachack possessed the .22-caliber, semi-automatic handgun. 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).

If convicted, Mounthachack faces a potential maximum penalty of ten years in prison. Any sentence would be determined by a federal district court judge. 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.

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 a dozen serious habitual criminals through Project Exile Minneapolis.

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 in St. Paul, a 47-year-old Minneapolis felon pleaded guilty to possessing a .357-caliber revolver. On June 20, 2013, Oscar Lee pleaded guilty to one count of being a felon in possession of a firearm. Lee, who was indicted on November 20, 2012, entered his plea before United States District Court Judge Paul A. Magnuson.

In his plea agreement, Lee admitted that on May 14, 2012, he possessed the revolver, which had been reportedly stolen. Minneapolis Police attempted to stop Lee’s vehicle in south Minneapolis after observing a missing headlight. Rather than stopping, Lee ran through a stop sign and led police on a car chase for approximately ten blocks. He threw the handgun from the vehicle as he turned down an alley. Police later found the firearm.

Because he is a felon, Lee is prohibited under federal law from possessing a firearm at any time. His prior Hennepin County convictions include burglary in the third degree (1987 and 1992) and assault in the second degree (1988). In 1997, Lee was convicted in Polk County, Iowa, for third-degree burglary, forgery, and being a felon in possession of a firearm.

Since those offenses constituted crimes of violence, Lee is subject to the federal Armed Career Criminal Act. That act mandates a minimum of 15 years in prison for anyone convicted in federal court of being a felon in possession of a firearm if that person also has at least three prior state or federal convictions for crimes of violence or serious drug crimes. Judge Magnuson will determine Lee’s sentence at a future hearing, yet to be scheduled.

This case resulted from an investigation conducted by the Minneapolis Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant U.S. Attorneys Julie E. Allyn and 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 more than a dozen serious habitual criminals through Project Exile Minneapolis.

 

 

MINNEAPOLIS—Earlier today in federal court, a 42-year-old Fridley man pleaded guilty to robbing two Twin Cities’ shoe stores in early January. Peter Christopher Nunn specifically pleaded guilty to two counts of interference with commerce by robbery, pursuant to the Hobbs Act. Nunn, who was indicted on February 5, 2013, entered his plea before United States District Court Judge Patrick J. Schiltz.

In his plea agreement, Nunn admitted that on January 5, 2013, he stole approximately $300 from the Payless ShoeSource store, located at 8510 Springbrook Drive in Coon Rapids, while threatening employees with a weapon that was later determined to be a BB gun. He also admitted ordering two people into a bathroom, barricading the bathroom door with a chair, and then leaving the store.

In addition, Nunn admitted that on January 7, 2013, he stole approximately $700 from the Famous Footwear store located at 1593 E. 17th Avenue in Shakopee in the same manner. Following that robbery, police arrested Nunn after a high-speed chase.

As stated, Nunn was charged in federal court under the Hobbs Act, which was passed by Congress in1946. The Act allows federal prosecutors to prosecute violent habitual criminals who commit armed robberies in places of business that involve interstate commerce.

For his crimes, Nunn faces a potential maximum penalty of 20 years in prison on each count. 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. Bureau of Alcohol, Tobacco, Firearms and Explosives and the police departments in Coon Rapids and Shakopee. It is being prosecuted by Assistant U.S. Attorney Thomas M. Hollenhorst.

 

 

MINNEAPOLIS—A federal indictment unsealed recently charges eight individuals in connection with a string of burglaries during which money was stolen from ATMs and prescription drugs were stolen from pharmacies. The indictment, which was filed under seal on June 10, 2013, was unsealed on June 18, 2013, following the defendants’ initial appearances in federal court. It charges Derek Edward Benedict, age 41, of Hugo; Lyle Robert Carpenter, age 40, of Hastings; Julia Jean Julien, age 35, of St. Cloud; Timothy Michael Kielb, age 45, of Fridley; Cherilyn Ann Mayotte, age 35, currently incarcerated in Superior, Wisconsin; Jason Michael Mussehl, age 42, currently incarcerated at the Stanley Correctional Institution in Stanley, Wisconsin; Jennifer Suzann Stanley, age 37, no known address; and Jonathan Roger Quast, age 28, of Lexington, Minnesota, with one count of conspiracy to commit bank burglary, bank larceny, and interstate transportation of stolen money.

In addition, Benedict, Carpenter, Julien, Kielb, Mayotte, Mussehl, and Quast were charged with one count of conspiracy to steal controlled substances. Carpenter, Kielb, Mussehl, and Stanley were also charged with one count of bank burglary and two counts of bank larceny. Benedict, Carpenter, Julien, Kielb, Mayotte, and Mussehl were also charged with one count of burglary involving controlled substances. Carpenter, Kielb, Mussehl, and Quast were also charged with one count of credit union burglary, one count of bank burglary, and one count of burglary involving controlled substances. And Benedict, Carpenter, Julien and Mussehl were also charged with one count of interstate transportation of stolen property.

More specifically, the indictment alleges that between October 2009 and February 2013, the defendants conspired with each other and others to enter and attempt to enter buildings that operated in whole or in part as banks or credit unions, because they housed ATM machines. In addition, it alleges that the defendants conspired to transport stolen merchandise and cash between the states of Minnesota and Wisconsin, and Iowa and Minnesota. The indictment also alleges that Benedict, Carpenter, Julien, Kielb, Mayotte, Mussehl, and Quast conspired with each other and others to steal controlled substances from pharmacies.

In addition to those conspiracy charges, the indictment alleges that Benedict, Carpenter, Mussehl, and Stanley stole money from a Bank of America ATM located inside a Robbinsdale Walgreens store on October 24, 2009, and from a Bank of America ATM located inside a Golden Valley Walgreens on November 29, 2009. The indictment further alleges that on July 15, 2012, Benedict, Carpenter, Julien, Kielb, Mayotte, and Mussehl stole various drugs from the Bloomington Drug Store. In addition, Carpenter, Kielb, Mussehl, and Quast allegedly stole money from a credit union ATM located inside the Dakota Convenience store in Prior Lake on August 19, 2012, and money from a U.S. Bank ATM located inside a Circle Pines Walgreens on August 23, 2012. Carpenter, Kielb, Mussehl, and Quast also stole drugs from the Circle Pines Walgreens pharmacy. And on September 9, 2012, Benedict, Carpenter, Julien, and Mussehl allegedly drove from Iowa to Minnesota carrying money stolen from a safe and ATM located inside a Walgreens store in Des Moines, Iowa.

If convicted, the potential maximum penalties are 20 years in prison for conspiracy to commit burglary involving controlled substances, bank burglary, credit union burglary, and burglary involving controlled substances; ten years for bank larceny and the interstate transportation of stolen property; and five years for conspiracy to commit bank burglary, bank larceny, and interstate transportation of stolen property. If convicted, the defendants’ sentences will be determined by a federal district court judge.

This case is the result of an multi-agency investigation conducted by the Internal Revenue Service-Criminal Investigation, the Federal Bureau of Investigation, the Hennepin County Sheriff’s Office, the U.S. Secret Service, the Centennial Lakes Police Department, and the Prior Lake Police Department, with cooperation from the Minnesota Bureau of Criminal Apprehension and the Minnesota Financial Crimes Task Force. It is being prosecuted by Assistant U.S. Attorney Surya Saxena.

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, a 38-year-old Coon Rapids man was sentenced for transporting firearms to his home country of Liberia. United States District Court Judge Ann D. Montgomery sentenced McHarding Degan Galimah to 30 months in prison on one count of smuggling firearms from the United States to Liberia. Galimah was indicted on August 22, 2012, and convicted on February 14, 2013.

The evidence presented at trial proved that Galimah purchased 12 firearms from a federally licensed firearms dealer, including seven Hi-Point, nine-millimeter handguns. In November 2010 and July 2011, he exported those weapons to Liberia and then made several trips to that country to take possession of the firearms for resale at a profit. At no time did he possess a license to transport the firearms, as required by federal law. Moreover, federal regulations prohibit the export of firearms to Liberia.

This case was the result of an investigation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant U.S. Attorney Andrew Dunne.

 

 

MINNEAPOLIS—Earlier today in federal court, a 49-year-old Scandia man was indicted for stealing more than $92,000 in survivor benefits from the United States Department of Veterans Affairs (“VA”). Dean Boraas was specifically charged with one count of theft of government funds.

The indictment alleges that from September 1, 2005, to May 30, 2010, Boraas stole and converted for his personal use $92,152 in survivor benefits to which he knew he was not entitled. The benefits were assigned to his mother, who passed away. However, the VA was not made known of that fact. As a result, the funds continued to be paid into a joint bank account held in the names of Boraas and his mother.

If convicted, Boraas faces a potential maximum penalty of ten years in federal prison. Any sentence would be determined by a federal district court judge. This case is the result of an investigation by the VA-Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.

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 – In the District of Minnesota, separate charges have been filed against two Mexican nationals who allegedly entered the United States illegally after being deported as criminals.

The first indictment alleges that on May 1, 2013, authorities found Juan Manuel Contreras-Lepe, age 61, in the U.S. illegally after he had been previously deported to Mexico. His deportation followed a 1995 Florida conviction for felony aggravated battery. On May 1, 2013, authorities identified Contreras-Lepe, also known as Ezekiel Hernandez-Sandoval, as an alien with a criminal record after a traffic stop near his Willmar residence.

If convicted of the federal charge now levied against him, Contreras-Lepe faces a potential maximum penalty of 20 years in federal prison, followed by deportation. Any sentence would be determined by a federal district court judge. This case is the result of an investigation by ICE’s Enforcement and Removal Operations (“ICE ERO”). It is being prosecuted by Assistant U.S. Attorney Deidre Y. Aanstad.

The second indictment alleges that on May 7, 2013, authorities found Alfredo Rios-Guzman, age 35, illegally in the U.S. 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. On May 7, 2013, after a traffic stop near his Bloomington residence, Rios-Guzman was identified as an alien with a criminal record.

If convicted of the federal charge now filed against him, Rios-Guzman faces a potential maximum penalty of 20 years in federal prison, followed by deportation. Any sentence would be determined by a federal district court judge. This case is the result of an investigation by the ICE ERO. It is being prosecuted by Assistant U.S. Attorney Sarah E. Hudleston.

In some instances, federal prosecution will occur only after the individual is prosecuted for the recent underlying offense. The men in these cases will remain in custody until their current federal cases are resolved.

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 this afternoon in federal court, a member of the Native Mob street gang was sentenced to 516 months in federal prison for shooting and killing fellow gang member Jeremee Kraskey. United States District Court Judge John R. Tunheim sentenced Shaun Michael Martinez, also known as Tinez, on one count of murder resulting from carrying and using a firearm during and in relation to a crime of violence. Since the federal justice system does not utilize parole, Martinez will serve virtually his entire sentence behind bars.

On July 19, 2012, Martinez was charged with the crime by way of a superseding indictment. He pleaded guilty on December 21, 2012. In his plea agreement, Martinez admitted that on February 26, 2011, he killed Kraskey to prevent him from offering law enforcement information about the Native Mob’s criminal activities, which were, at the time, the subject of a multi-jurisdictional investigation. Martinez specifically admitted driving Kraskey to a residence in the 3500 block of 14th Avenue South in Minneapolis, where he shot Kraskey three times, fatally wounding him.

The Native Mob is a regional criminal gang that originated in Minneapolis in the early 1990s. Members routinely engage in drug trafficking, assault, robbery, and murder. Membership is estimated at 200, with new members, including juveniles, regularly recruited from communities with large, young, male, Native American populations. Association with the gang is often signified by wearing red and black clothing or sporting gang-related tattoos.

Martinez was part of a federal case filed against 25 members of the Native Mob, many of whom were charged with violating the federal Racketeering Influenced and Corrupt Organizations Act (“RICO”). That law prohibits conspiring to conduct illegal activity through a criminal enterprise—in this instance, the Native Mob—in an effort to preserve, protect, promote, and enhance the enterprise’s power, territory, and financial gains.

To that end, members of the Native Mob distributed illegal drugs, from crack cocaine to ecstasy. They also provided monetary support to members, including those incarcerated; shared with one another police reports, victim statements, and other case discovery; hindered or obstructed officials from identifying or apprehending those wanted by the law; and intimidated witnesses to gang crime. Moreover, they maintained and circulated firearms for gang use and committed acts of violence, including murder, against individuals associated with rival gangs.

This case was the result of a long-term, cross-jurisdictional investigation conducted by numerous local, state, federal, and tribal law enforcement officers dedicated to making Minnesota’s streets and communities safer. These agencies included representatives from the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; the U.S. Drug Enforcement Administration; the U.S. Bureau of Indian Affairs; the FBI-funded Headwaters Safe Trails Task Force; the Paul Bunyan Drug Task Force; the Minnesota Department of Corrections; the Minnesota Bureau of Criminal Apprehension; the Carlton County Sheriff’s Office; the Mille Lacs Tribal Police Department; the Bemidji Police Department; and the Minneapolis Police Department. These investigators were assisted by those from—in alphabetical order—the Becker County Sheriff’s Office, the Beltrami County Sheriff’s Office, the Carlton County Attorney’s Office, the Cass County Attorney’s Office, the Cass County Sheriff’s Office, the Crow Wing County Sheriff’s Office, the Douglas County Sheriff’s Office of Wisconsin, the Duluth Police Department, the Fon du Lac Tribal Police Department, the Fridley Police Department, the Itasca County Sheriff’s Department, the Hennepin County Attorney’s Office, the Hennepin County Sheriff’s Office, the Hubbard County Sheriff’s Office, the Leech Lake Tribal Police Department, the LCO Reservation Police Department, the Lower Sioux Tribal Police Department, the Mahnomen County Sheriff’s Office, the Minnesota State Patrol, the Mille Lacs County Attorney’s Office, the Mille Lacs County Sheriff’s Office, the New Brighton Police Department, the North Central Drug Task Force, the Prior Lake Police Department, the Red Lake Tribal Police Department, the Redwood County Sheriff’s Office, Richfield Police Department, the Sherburne County Sheriff’s Office, the St. Paul Police Department, the U.S. Marshals Service, the Minneapolis Violent Offender Task Force, the Washington County Sheriff’s Office, and the White Earth Tribal Police Department.

This case was prosecuted by Assistant U.S. Attorneys Andrew R. Winter and Steven L. Schleicher.

 

 

MINNEAPOLIS—Earlier today in federal court, a 47-year-old Minneapolis felon was indicted for possessing four firearms. Carl Craig Larson was specifically charged with one count of being a felon in possession of a firearm.

The indictment alleges that on April 21, 2013, Larson possessed a .357-caliber revolver, a seven-millimeter 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 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. Any sentence will be determined by a federal district court judge.

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

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 32-year-old felon from St. Paul with possessing a nine-millimeter, semi-automatic pistol. The indictment, which was filed on May 7, 2013, charges Desmen Lee Parker with one count of being a felon in possession of a firearm. The indictment was unsealed following Parker’s appearance today in federal court.

The indictment alleges that from an unknown date through July 27, 2012, Parker possessed the pistol. Because he is a felon, Parker is prohibited under federal law from possessing a firearm or ammunition at any time. His prior Hennepin County convictions include receiving stolen property (2001) and being a felon in possession of a firearm (2001). In addition, Parker was convicted in Ramsey County for theft (2000) and receiving stolen property (2006). He was also convicted in Eau Claire County, Wisconsin, for armed robbery in 2007.

If convicted, Parker faces a potential maximum penalty of ten years in prison. Any sentences will be determined by a federal district court judge. This case is the result of an investigation by the Safe Streets Task Force. Safe Streets is a FBI-sponsored task force that focuses on combating violent street crime as well as gang and drug-trafficking offenses. This case is being prosecuted by Assistant United States Attorney Allen A. Slaughter.

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, an Edina mortgage broker was sentenced for his role in a $20 million mortgage fraud scheme that involved 57 properties. United States District Court Judge Joan N. Ericksen sentenced Derrick Ivan Lance, age 41, of Edina, to 46 months imprisonment followed by three years of supervised release on one count of conspiracy to commit wire fraud. Lance was charged on July 22, 2011, and pleaded guilty on August 10, 2011.

In his plea agreement, Lance admitted that between 2004 and 2007, he conspired with others to obtain mortgage loan proceeds based on fraudulent documentation. Lance’s unnamed co-conspirators identified residential properties available for purchase and recruited buyers for those properties. Two of the co-conspirators told buyers they would receive payments in the form of kickbacks after the property transactions had closed, and that they could put those payments toward the mortgages or use them to improve the properties.

For his part, Lance admitted using his licensed mortgage brokerage and his position within that brokerage to help prepare and submit false mortgage loan applications, which misrepresented the buyers’ true financial situation. Based on those fraudulent documents, loans were approved, and loan proceeds were disbursed by wire transfer into the accounts of various title companies. Due to paperwork that misrepresented the true nature of the real estate transactions, Lance and his co-conspirators then caused those title companies to disburse portions of the proceeds from the various transactions into bank accounts not associated with the property buyers, the purpose being to conceal the undisclosed kickbacks. Lance received more than $200,000 for assisting buyers in securing mortgage loans for at least 24 properties.

This case was the result of an investigation by the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Tracy L. Perzel.

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—A federal indictment unsealed yesterday charges a 32-year-old Moorhead man in connection with a series of mail thefts in several Minnesota counties in the fall of 2012. The indictment charges Justin Lee Feldt with one count of theft of mail, four counts of bank fraud, two counts of aggravated identity theft, and one count of access device fraud. The indictment was unsealed following Feldt’s initial appearance in federal court.

The indictment alleges that between October and November 2012, Feldt stole mail containing blank credit card cash advance checks. Allegedly, he subsequently altered the checks to make them payable to him and then deposited them, later withdrawing the funds. The indictment also alleges that between October 25 and 27, 2012, Feldt used a stolen debit card to purchase various items.

If convicted, Feldt faces a potential maximum penalty of 30 years in prison on each count of bank fraud, ten years for access device fraud, five years for mail theft, and a mandatory two years for aggravated identity theft. Any sentence would be determined by a federal district court judge.

This case is the result of an investigation by the United States Postal Inspection Service (“USPIS”) and the sheriff’s offices for Crow Wing, Otter Tail, Pine, and Scott counties. It is being prosecuted by Assistant U.S. Attorney John E. Kokkinen.

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.

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 in St. Paul, a 22-year-old felon from Fridley pleaded guilty to possessing nine-millimeter, hollow-point ammunition. On June 13, 2013, Raphael Eric Matthews pleaded guilty to one count of being a felon in possession of ammunition. Matthews, who was indicted on February 19, 2013, entered his plea before United States District Court Judge Paul A. Magnuson.

In his plea agreement, Matthews admitted that on January 31, 2013, he possessed the multiple nine-millimeter, hollow-point bullets. Matthews was a passenger in a vehicle stopped for a traffic violation, and the ammunition was found inside the jacket Matthews was wearing. Because he is a felon, Matthews is prohibited under federal law from possessing firearms or ammunition at any time. Matthews’s prior Hennepin County convictions include aggravated robbery (2007) and simple robbery (2012).

For his crimes, Matthews faces a potential maximum penalty of ten 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 Minneapolis Police Department, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Surya Saxena.

 

 

MINNEAPOLIS—Earlier today in federal court, a 50-year-old St. Paul woman pleaded guilty for her role in a conspiracy to defraud the Social Security Administration (“SSA”). Dianne Josephine Chess specifically pleaded guilty to one count of conspiracy to commit Social Security fraud. Chess, who was indicted along with three co-defendants on November 14, 2012, entered her plea before United States District Court Chief Judge Michael J. Davis.

From 2001 through June 2010, Chess was employed as a service representative at a SSA branch office in St. Paul. Her responsibilities included inputting into a computerized data system information provided by applicants seeking Social Security numbers. Based on that information, the Commissioner of Social Security would assign Social Security account numbers and issue Social Security cards to eligible applicants. Chess admitted entering false information into the SSA’s computer system and processing applications based on the false information so her co-conspirators would receive Social Security account numbers and cards.

On March 11, 2013, Victor Ray Holloway, age 52, of Richfield, pleaded guilty to one count of conspiracy and one count of theft of public funds in connection to this scheme. In his plea agreement, Holloway, also known as Victor Young, admitted that from 2001 through June 2010, he conspired with Chess and others to deceive the SSA. In addition, Holloway admitted that on June 13, 2008, he used the fraudulently obtained Social Security account number assigned to Victor Young while applying for a Minnesota identification card, and that from 2002 through October 2012, he embezzled approximately $77,318 in unentitled Supplemental Security Income (“SSI”) disability benefits.

On January 23, 2013, Larhea Lynn Nakao, age 34, of Brooklyn Park, pleaded guilty to one count of use of a false Social Security number and one count of theft of public funds. In her plea agreement, Nakao, also known as Larea Holloway, admitted that in July 2008, Victor Holloway provided her a fraudulently obtained Social Security card. Nakao also admitted that on October 24, 2010, she used that false Social Security number while applying for unemployment benefits. Moreover, from May 8, 2009, through October 2012, she failed to disclose on her Initial Information Sheet to the Metropolitan Council Housing & Redevelopment Authority that she was earning wages. As a result, she obtained $16,332 in Section 8 housing assistance payments from the U.S. Department of Housing and Urban Development (“HUD”) to which she was not entitled.

On January 18, 2013, Angela Grace Hinkle, age 47, of Lewisville, Texas, pleaded guilty to one count of use of a false Social Security number. In her plea agreement, Hinkle, also known as Angela Grace Holloway, admitted that in June 2008, Victor Holloway provided her with a fraudulent Social Security card. In addition, Hinkle admitted that on June 21, 2008, she used that Social Security number while applying for a Minnesota identification card.

For their crimes, the four defendants face a potential maximum penalty of five years on each count. Judge Davis will determine their sentences at future hearings, yet to be scheduled.

This case is the result of an investigation by the SSA-Office of Inspector General and the HUD-Office of Inspector General, with cooperation of U.S. Immigration and Customs Enforcement's Homeland Security Investigations. It is being prosecuted by Assistant U.S. Attorney Andrew Dunne.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, a 33-year-old man from the southeastern Minnesota community of Claremont pleaded guilty to conspiring to distribute more than 500 grams of methamphetamine. Michael Steven Schoenfelder specifically pleaded guilty to one count of conspiracy to distribute 50 or more grams of methamphetamine. Schoenfelder, who was indicted along with Clancy Shane Amy on May 6, 2013, entered his plea before United States District Court Judge Richard H. Kyle.

On June 12, 2013, Amy, age 38, also from Claremont, pleaded guilty to one count of conspiracy to distribute 50 or more grams of methamphetamine.

In their respective plea agreements, the defendants admitted that from at least August 2012 through March 2013, they conspired to distribute methamphetamine and other controlled substances from Mexico and Texas to areas within southeastern Minnesota. Both also admitted obtaining and selling approximately one pound of methamphetamine. In addition, Amy admitted that between January and March 2013, he sold methamphetamine to law enforcement in several arranged controlled purchases. On April 16, 2013, during the execution of a search warrant at Amy’s residence, authorities seized approximately 112 grams of methamphetamine, numerous plastic baggies, nine-millimeter and .38-caliber ammunition, two digital scales, a nine-millimeter handgun, a .22-caliber, semi-automatic handgun, a 12-gauge shotgun, and a safe that contained $615, marijuana, and methamphetamine.

For their crimes, the defendants face a potential maximum penalty of 40 years in prison. Judge Kyle will determine their sentences at future hearings, yet to be scheduled.

This case is the result of an investigation by the U.S. Drug Enforcement Administration, the Minnesota Bureau of Criminal Apprehension, the Minnesota South Central Drug Investigation Unit, and the Southeastern Minnesota Gang and Narcotics Task Force. It is being prosecuted by Assistant U.S. Attorney Allen A. Slaughter.

 

 

MINNEAPOLIS—Yesterday in federal court in St. Paul, a 24-year-old felon from St. Paul pleaded guilty to possessing a nine-millimeter, semi-automatic pistol. On June 12, 2013, Virgil Lee Kirkwood specifically pleaded guilty to one count of being a felon in possession of a firearm. Kirkwood, who was indicted on March 19, 2013, entered his plea before United States District Court Judge Paul A. Magnuson.

In his plea agreement, Kirkwood admitted that on December 6, 2012, he possessed the pistol. According to a law enforcement affidavit filed in the case, officers learned that Kirkwood was in possession of a gun and investigated in the area of 700 Central Avenue in St. Paul, Minnesota. When officers approached, they found Kirkwood, who was subsequently detained on an outstanding Anoka County warrant for an unrelated burglary. The pistol was found inside a black sock hidden near where Kirkwood was standing. Authorities later learned that the pistol was stolen from a Fridley-based licensed firearms dealer.

Because he is a felon, Kirkwood, also known as Virgil Lee Crenshaw, is prohibited under federal law from possessing firearms or ammunition at any time. His prior Hennepin County convictions include second-degree burglary (2010), third-degree attempted burglary (2012), and other offenses. Because certain of these convictions constitute crimes of violence, Kirkwood may be subject to sentencing under the federal Armed Career Criminal Act. That act mandates a minimum of 15 years in prison for anyone subsequently convicted in federal court for being a felon in possession of a firearm or ammunition. The potential maximum penalty is life in 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. Paul Police Department, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Allen A. Slaughter.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, a 35-year-old Red Lake man was sentenced for committing domestic assault involving a woman on the Red Lake Indian Reservation. United States District Court Judge Donovan W. Frank sentenced Brian Gordon Graves to 21 months in federal prison on one count of assault with a dangerous weapon and one count of domestic assault by a habitual offender. Graves was indicted on November 5, 2012, and convicted on January 31, 2013.

According to the indictment and evidence presented at trial, on October 6, 2012, Graves assaulted the victim with a 12-gauge shotgun. This assault was committed after Graves was convicted for assault on at least two prior occasions in Red Lake Indian Tribal Court (criminal domestic violence in 1997 and first-degree assault in 1998).

This is the second time the United States Attorney’s Office for the District of Minnesota has prosecuted someone under the federal “domestic assault by a habitual offender” law. That law was enacted in 2006 by Congress as support to the Violence Against Women Act of 2000. The 2006 statute is a valuable tool for federal prosecutors because research shows that many domestic violence offenders are repeat offenders and because domestic violence rates are extremely high in Indian Country.

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 during their lives than Caucasian women.

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.

This case was the result of an investigation by the Federal Bureau of Investigation and the Red Lake Tribal Police Department. 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—Earlier today in federal court, a 46-year-old man from Hanover, Minnesota, pleaded guilty to making false statements in matters within the jurisdiction of the United States Environmental Protection Agency (“EPA”) regarding the levels of toxic pollutants in the industrial wastewater discharged by Anodize, Inc., the Buffalo-based machine shop where he worked. Brent Roland Feickert specifically pleaded guilty to one count of making false statements. Feickert, who was charged on May 13, 2013, entered his plea before U.S. District Court Judge David S. Doty.

Anodize’s operations include metal plating, a process which yields industrial wastewater containing heavy metals and toxic pollutants. Anodize discharges the industrial wastewater into the sanitary sewer system pursuant to limits set forth in its discharge permit. Under the conditions of its permit, the concentration of toxic pollutants, including nickel and zinc, must be below specified limits set by the EPA. The Minnesota Pollution Control Agency (“MPCA”) monitors the permit and requires companies to submit quarterly reports.

At Anodize, Feickert was responsible for receiving and reviewing the results of tests performed on the company’s industrial wastewater and then entering those results on the quarterly discharge reports submitted to the MPCA. In his plea agreement, Feickert admitted that on five occasions between 2009 and 2011, he submitted false quarterly discharge reports to the MPCA. In each report, Feickert falsely represented that the levels of nickel or zinc in Anodize’s industrial wastewater discharge were within permit limits. In each instance, testing had revealed and Feickert knew that the levels of nickel or zinc were in excess of permit limits.

Following today’s plea, Michelle Beeman, Deputy Commissioner of the MPCA, said, “Self-reporting is a cornerstone of the environmental regulatory process. Water protection depends on truthful self-reporting and the MPCA considers any action that jeopardizes the integrity of the regulatory process to be a serious violation and a potential threat to the environment.”

“Without accurate and honest information, governments cannot fully protect the public’s health and welfare,” said Randall Ashe, Special Agent in Charge of the EPA’s criminal enforcement program in Minnesota. “If toxins contained in wastewater are not clearly identified, they cannot be properly treated. When that happens, America’s waterways end up as dumping grounds for waste materials. Today’s guilty plea should serve as a warning to anyone who puts public health at risk by not carrying out his or her responsibilities honestly.”

For his crime, Feickert faces a potential maximum penalty of five years in federal prison. Judge Doty will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Minneapolis Field Office of the EPA’s Criminal Investigative Division and the MPCA. It is being prosecuted by Assistant U.S. Attorney David M. Genrich.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, an inmate who escaped from the Federal Prison Camp in Duluth in March 2013 and was on the run for six days pleaded guilty to that crime. Michael Joseph Krzyzaniak, age 64, of Minneapolis, specifically pleaded guilty to one count of escape from custody. Krzyzaniak, who was indicted on April 22, 2013, entered his plea before United States District Court Judge Susan Richard Nelson.

In his plea agreement, Krzyzaniak admitted that on March 30, 2013, he left the custody of the federal prison camp without authorization. He was arrested on April 5, 2013, at a Burnsville motel. He was serving a 151-month sentence for a 2012 conviction in the District of Minnesota for wire fraud and tax evasion. According to a law enforcement affidavit filed in the current case, Krzyzaniak 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.

For his crime, Krzyzaniak faces a potential maximum penalty of five years in federal prison, which may be tacked onto the sentence he is already serving. Judge Nelson 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—Earlier today in federal court in St. Paul, a 47-year-old Shakopee man pleaded guilty to using other people’s food stamps. Chin Son Kim specifically pleaded guilty to one count of food stamp fraud. Kim, who was charged on April 18, 2013, entered his plea before United States District Court Judge Paul A. Magnuson.

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 the transaction total. The loss to the SNAP program because of Kim’s action was approximately $29,816.

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.

For his crime, Kim faces a potential maximum penalty of five 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 USDA-Office of Inspector General, the Ramsey County Sheriff’s Office, and the St. Paul Police Department. It is being prosecuted by Assistant U.S. Attorney David P. Steinkamp.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, the former owner of a toy company in Edina was sentenced for failing to pay over federal employment taxes. United States District Court Judge Paul A. Magnuson sentenced Kim Robert Calkins, former co-owner of Princess Soft Toys, Inc., to 12 months and one day in federal prison on one count of failure to pay federal employment taxes. Calkins was charged on September 11, 2012, and pleaded guilty on September 26, 2012.

In his plea agreement, Calkins admitted that from the third quarter of 2008 to the final quarter of 2010, he failed to pay to the Internal Revenue Services (“IRS”) the employment taxes withheld from employees of Princess Soft Toys. Despite receiving regular notices that the employment taxes were still due, Calkins neglected to pay the amount owed. The total tax loss in this case is $852,361.54.

This case was the result of an investigation by the IRS-Criminal Investigation and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Nicole A. Engisch.

In a related case, on February 8, 2012, Judge Magnuson sentenced Calkins’ wife and former co-owner of Princess Soft Toys, Sandra Lee Calkins, to 66 months in federal prison for defrauding Central Bank and 42 investors out of approximately $9 million. She was charged on April 29, 2011, and pleaded guilty on May 26, 2011.

In her plea agreement, Calkins admitted that between January of 2008 and March 5 of 2010, she falsified financial statements regarding the company in order to renew a $3.25 million line of credit at Central Bank. She specifically admitted including false information relative to revenue and net assets. As a consequence of the fraud, the credit line was renewed, and she made multiple draws against it, totaling $3,575,000. Central Bank suffered a loss of approximately $1.6 million because of her criminal behavior.
Calkins also admitted that between January of 2008 and 2010, she defrauded individuals into investing or loaning money to Princess Soft Toys through false financial statements or other misrepresentations. The total losses to individual investors exceeded $7 million.

This case was also the result of an investigation by the Federal Bureau of Investigation and the IRS-Criminal Investigation. It was prosecuted by Assistant U.S. Attorney Tim Rank.

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—Recently in federal court, the former postmaster of the Marble Post Office in Itasca County was indicted for stealing funds from the office. On June 10, 2013, Jill Marie Rousse, age 39, of Calumet, was charged with one count of misappropriation of postal funds and one count of unlawful issuance of postal money orders.

The indictment alleges that between August 2011 and October 2012, Rousse stole money from the post office by either directly taking cash from the cash drawer or issued money orders in her name. In addition, Rousse falsified reporting documents regarding the sale of money orders and postage in order to conceal her theft.

If convicted, Rousse faces a potential maximum penalty of ten years in prison on the misappropriation count and five years on the unlawful issuance count. Any sentence will be determined by a federal district court judge. This case is the result of an investigation by the United States Postal Service-Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Lola Velazquez-Aguilu.

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 jury found a hedge fund manager from Mound guilty of fraudulently raising money from individuals and through mutual funds for investment in Petters Company, Inc. (“PCI”). After a four-week trial, the jury convicted James Nathan Fry, age 59, on five counts of securities fraud, four counts of wire fraud, and three counts of making false statements to the United States Securities and Exchange Commission (“SEC”).

According to the evidence presented at trial, Fry raised hundreds of millions of dollars from investors using two hedge funds known as the Arrowhead Funds, which he then provided to PCI in exchange for substantial interest payments. Fry collected more than $30 million in fees from the money he raised from investors and provided to PCI.

Fry formed the Arrowhead Funds in collaboration with Frank Elroy Vennes, Jr. Vennes began raising money to invest with Petters in 1995, only a few years after he was released from federal prison, where he had been serving a sentence for money laundering, firearms, and narcotics charges. Fry used the Arrowhead Funds to solicit money from investors to invest exclusively in financing for PCI. All of the Arrowhead Funds’ transactions with PCI were done through Vennes, and any communication between Fry and Petters or his company had to go through Vennes.

Despite Vennes’s intimate involvement in all of the Arrowhead Funds’ dealings with Petters and PCI, Fry concealed Vennes’s involvement in the PCI transactions because he knew that investors would learn about Vennes’s criminal background and be deterred from investing. Over approximately eight years, Fry obtained hundreds of millions of dollars from investors, which he then provided to PCI, purportedly to finance the purchase of consumer electronics that Petters would later resell at a profit. All of the transactions between Arrowhead and PCI went through Vennes. And, although Vennes was in the middle of every single transaction between Arrowhead and PCI, Fry concealed Vennes’s role and criminal background from investors.

Fry also lied to investors by telling them that the Arrowhead Funds were getting paid directly by the big box retailers, which gave investors the false impression that there were real transactions underlying the PCI investments. In fact, the Arrowhead Funds never received a single payment from a retailer, and all payments on the PCI promissory notes came from PCI, which allowed the Petters Ponzi scheme to expand for years until it finally collapsed.

Finally, Fry lied to investors about significant problems with the PCI investments in 2007 and 2008. Fry told investors that the notes were “90-day notes,” meaning that they were paid off in 90 days. Beginning in the fall of 2007, payments on all the PCI notes held by Arrowhead became substantially later than 90 days, and almost half of the notes were not paid after 180 days and had to be extended to avoid going into default. Fry concealed this information from his investors. The concealment of this information was significant to new investors, who were deciding whether to place money with Arrowhead, and existing investors, who were assessing whether to withdraw from Arrowhead.

Fry also lied to federal authorities after the collapse of the Petters Ponzi scheme. In 2010, Fry gave sworn testimony before the SEC, and during that testimony, he claimed that he was unaware that the Arrowhead Funds were not paid directly from the retailers and that marketing materials containing false information were distributed.

Vennes pleaded guilty to aiding and abetting Fry in connection with these misrepresentations to the Arrowhead Funds’ investors.

For his crimes, Fry faces a potential maximum penalty of 20 years on each count of wire fraud and five years on each count of securities fraud and making false statements. United States District Court Judge Richard H. Kyle will determine Fry’s sentence at a future hearing, yet to be scheduled.

This case was the result of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service–Criminal Investigation, and the U.S. Postal Inspection Service. It was being 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 effort to investigate and prosecute 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 is working 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.

 

 

MINNEAPOLIS—Earlier today in federal court, an Apple Valley woman was sentenced for defrauding both her employer and Medica. United States District Court Judge David S. Doty sentenced Lori Jo Mueller, age 48, to 51 months on one count of wire fraud and one count of health care fraud in connection to the crime. Mueller was charged on January 9, 2013, and pleaded guilty on February 4, 2013. In her plea agreement, Mueller admitted that from June of 2006 through June of 2012, she embezzled approximately $840,000 from Edelweiss Home Health Care, using the funds for her personal use.

Mueller began working for Edelweiss, which is located in Maple Grove, in 2002, and she was ultimately promoted to the position of vice president of operations. In that capacity, she was responsible for the review and payment of corporate invoices, bookkeeping, and other financial matters. Mueller admitted using her access to the corporate checking account to issue payments to herself. She also concealed her actions from the company owners and made misrepresentations concerning the company’s financial state.

In addition, from March of 2010 through June of 2012, Mueller defrauded Medica, a non-profit corporation that provides health insurance products to individuals and families. She administered claims submitted to various insurers seeking reimbursement for services provided by Edelweiss nursing staff. In some instances, Mueller double-billed by allowing claims for the same services to multiple insurance providers. For example, Mueller allowed both Minnesota Medicaid and Medica to be billed for identical services provided to one client. The particular double-billing resulted in a double-payment to Edelweiss with Medicaid being the proper payer and Medica being the overpayer. As a result of this criminal behavior, Mueller defrauded Medica of over $600,000.

This case was the result of an investigation by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services-Office of Inspector General (“DHHS-OIG”), and Minnesota Attorney General’s Medicaid Fraud Control Unit. It was prosecuted by Assistant U.S. Attorney David M. Genrich.

The U.S. Attorney’s Office participates in a task force with the Medicaid Fraud Control Unit at the Minnesota Attorney General’s Office that focuses on home health care fraud trends. The task force includes the DHHS-OIG, the FBI, the Internal Revenue Service, and other federal, state, and local law enforcement partners.

As a result of federal convictions for health care fraud, defendants are excluded from participating in federal health benefit programs, including Medicare and Medicaid. Exclusion determinations are made by the U.S. Department of Health and Human Services. Nationwide, more than 3,000 individuals were excluded from program participation in Fiscal Year 2010 based upon criminal convictions or patient abuse or neglect, license revocations, or other factors.

For more information, visit http://www.stopmedicarefraud.gov/or http://www.stopfraud.gov/protect-health.html.

 

 

MINNEAPOLIS—Earlier today in federal court, a 36-year-old St. Cloud man was indicted for robbing the TCF Bank located at 1001 Fourth Street in St. Cloud. Fehd El Mehdi Kourima was specifically charged with one count of bank robbery.

The indictment alleges that on May 5, 2013, Kourima stole an undisclosed amount of cash from the bank. According to a law enforcement affidavit filed in the case, a man, later identified as Kourima, entered the bank at approximately 12:30 p.m. He gave a teller a note that stated, “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 bank and ran to a vehicle parked outside. Kourima was arrested later that day.

If convicted, Kourima faces a potential maximum penalty of 20 years in federal prison. Any sentence would be determined by a federal district court judge. 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 United States Attorneys Katharine T. Buzicky and Nathan P. Petterson.

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, a 24-year-old Red Lake man was indicted for sexually assaulting a woman while on the Red Lake Indian Reservation. Avery Wade Schoenborn was specifically charged with one count of sexual abuse. The indictment alleges that on May 7, 2013, Schoenborn engaged in a sexual act with the victim, who was incapable of declining participation in the act.

If convicted, Schoenborn faces a potential penalty of life in prison. Any sentence would 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 Clifford B. Wardlaw.

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, a 42-year-old Mexican national was indicted for entering the United States illegally after previously being deported as a criminal. Leopoldo Rivera-Leal was specifically charged with one count of illegal re-entry after deportation.

The indictment alleges that on May 7, 2013, Rivera-Leal was found in the U.S. after being deported to Mexico in 2005, following a 1991 Texas conviction for first-degree burglary. On May 7, 2013, Rivera-Leal was turned over to U.S. Immigration and Customs Enforcement (“ICE”) by Steele County officials after he had finished serving a state sentence for drug possession.

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

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 yesterday charges a 34-year-old Delano man in connection with the April 24, 2013, robbery of a McDonald’s in Buffalo. Matthew Dillon Sisneros was charged with one count of interference with commerce by robbery, pursuant to the Hobbs Act, one count of possession of a firearm in furtherance of a crime of violence, one count of being a felon in possession of a firearm and one count of possession of an unregistered firearm. On June 5, 2013, the indictment was unsealed following the defendant’s initial appearance in federal court.

The indictment alleges that on April 24, 2013, Sisneros took an undisclosed amount of money from the restaurant and threatened violence against the employees with a firearm. It also alleges that on April 24, Sisneros possessed a 12-gauge, semi-automatic, sawed-off shotgun with an obliterated serial number. The shotgun, which had a barrel length of less than 18 inches and an overall length of less than 26 inches, was not registered to him in the National Firearms Registration and Transfer Record, as required by law.

Because he is a felon, Sisneros, also known as Matthew Dylan Sisneros, is prohibited under federal law from possessing a firearm or ammunition at any time. He was previously convicted in Hennepin County for aggravated robbery (2000) and offering a forged check (2001).

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

If convicted, Sisneros faces a potential maximum penalty of 20 years in prison on the robbery count, a mandatory minimum penalty of ten years for possession of a firearm in furtherance of a crime of violence, and a potential maximum penalty of ten years on each of the other two counts. Any sentence would be determined by a federal district court judge.

This case is the result of an investigation by the Buffalo Police Department, the Wright County Sheriff’s Office, and the United States 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.

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 recently charges a 54-year-old Coon Rapids man with receiving, possessing and attempting to distribute child pornography. The indictment, which was filed on May 20, 2013, charges Guy Edward Wheelock with seven counts of attempted distribution of child pornography, one count of receipt of child pornography, and one count of possession of child pornography. On June 4, 2013, the indictment was unsealed following Wheelock’s initial appearance in federal court.

The indictment alleges that on seven occasions between September 13 and 20, 2011, Wheelock attempted to distribute, via a computer, videos involving minors engaged in sexually explicit conduct. It also alleges that on February 2, 2012, Wheelock received videos of similar conduct, and that he possessed several videos of similar conduct.

If convicted, Wheelock faces a potential maximum penalty of 40 years for each attempted distribution and receipt count and 20 years on the possession count. Any sentence would be determined by a federal district court judge.

This case is the result of an investigation by the Minnesota Internet Crimes Against Children Task Force, the Minneapolis Police Department, and the Anoka County Sheriff’s Office. It is being prosecuted by Assistant United States Attorneys Manda M. Sertich and Laura M. Provinzino.

Distribution, receipt 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.”

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, the owner of Dahl Trucking in Elmore, Minnesota, was indicted for avoiding payment of Federal Insurance Contribution Act (“FICA”) taxes on the wages of his employees from 2007 through 2010. Marlin Dahl was specifically charged with 13 counts of failure to collect and pay over FICA taxes.

The indictment alleges that from January 1, 2007, through March 31, 2010, Dahl executed a scheme to avoid paying FICA taxes to the Internal Revenue Service (“IRS”). As the owner of Dahl Trucking, Dahl had a duty to collect, account for, and pay over certain federal employment taxes, including both the employees’ and employer’s share of FICA taxes. Instead, he allegedly issued payroll checks that did not have any FICA withholdings deducted. Dahl also reportedly caused wages to be recorded in the company books at Dahl Trucking, also known as Elmore Truck and Trailer, as “road expense” reimbursements. In total, Dahl failed to pay to the IRS an estimated $168,219 in employees’ share of FICA tax.

If convicted, Dahl faces a potential maximum penalty of five years in prison on each count. Any sentence would be determined by a federal district court judge. This case is the result of an investigation by IRS-Criminal Investigation, the Minnesota Department of Employment and Economic Development, and the Minnesota Financial Crimes Task Force. It is being prosecuted by Assistant United States Attorney Jeffrey S. Paulsen.

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.

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. 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 in St. Paul, a 30-year-old man was indicted for possessing a .45-caliber pistol. Chandan Prentiss Hurd, of St. Paul, was specifically charged with one count of being a felon in possession of a firearm.

The indictment alleges that on March 23, 2013, Hurd possessed the pistol. Because he is a felon, Hurd is prohibited under federal law from possessing a firearm or ammunition at any time. His prior convictions include fleeing a peace officer in a motor vehicle in Ramsey County (2007), forgery in Dakota County (2006), and in Hennepin County, he was convicted of first-degree assault and attempted second-degree murder (2006) and first-degree damage to property (2004).

A law enforcement affidavit filed in the current case states that on March 23, police noticed a car stopped in the middle of Buchanan Street in northeast Minneapolis. Hurd was allegedly standing next to the vehicle. As the squad car pulled closer, Hurd allegedly approached it with his hands in his pockets. Officers reportedly ordered him to take his hands out of his pockets, but he failed to do so. Suspecting that Hurd may have a weapon, officers attempted to remove his hands from his pockets. During the struggle that ensued, officers reportedly discovered a pistol and magazine in Hurd’s right pocket. He was immediately arrested.

If convicted of the current offense, Hurd faces a potential maximum penalty of ten years in federal prison. Any sentence would be determined by a federal district court judge. This case is the result of an investigation by the Minneapolis Police Department and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). It is being prosecuted by Assistant U.S. Attorney Manda M. Sertich.

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 almost two dozen serious habitual criminals through Project Exile Minneapolis.

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 in St. Paul, a 23-year-old Minneapolis man pleaded guilty to being a felon in possession of a .22-caliber pistol. On June 3, 2013, Marcus Rashad Davis specifically pleaded guilty to one count of being a felon in possession of a firearm. Davis, who was indicted on January 22, 2013, entered his plea before United States District Court Judge Susan Richard Nelson.

In his plea agreement, Davis admitted that on June 15, 2012, he possessed the semi-automatic weapon. He was arrested after running from police, who were responding to a report of a man with a gun. Because he is a felon, Davis is prohibited under federal law from possessing a firearm at any time. His prior convictions include manufacture/delivery of a controlled substance (2008), possession with intent to deliver cannabis (2008), and burglary of a vehicle (2011), all in Illinois.

For this current offense, Davis faces a potential maximum penalty of ten years in 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 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 a dozen serious habitual criminals through Project Exile Minneapolis.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, a 34-year-old Hopkins man pleaded guilty to making false statements to Federally Licensed Firearms Dealers (“FFL”) for the purpose of illegally purchasing firearms for individuals in Honduras. Jony Sevilla Cerna pleaded guilty to one count of making false statements to a FFL in connection with the acquisition of a firearm. Cerna, who was charged on March 15, 2013, entered his plea before United States District Court Judge Susan Richard Nelson.

In his plea agreement, Cerna admitted that on March 29, 2012, he made a false written statement to a licensed Minnetonka firearms dealer when he was purchasing a nine-millimeter pistol. In that written statement, Cerna asserted that he was buying the gun for himself, when, in fact, he was not.

In addition, Cerna admitted to the court that he had made similar false statements to various licensed firearms dealers while purchasing 26 other firearms. In truth, he had purchased each of those firearms on behalf of individuals in Honduras.

After acquiring the firearms under the false pretense that he was buying the firearms for himself, Cerna admittedly shipped or attempted to ship the firearms to Honduras by concealing them in electronic equipment. Cerna traveled to Honduras on several occasions to distribute the firearms he had shipped there to third parties and to take payment for the firearms he exported. Seven of the firearms Cerna shipped were discovered and seized at a freight-forwarding company in Miami, Florida.

For his crime, Cerna faces a potential maximum penalty of ten 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 U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It is being prosecuted by Assistant U.S. Attorney Surya Saxena.

 

 

MINNEAPOLIS—Earlier today in federal court, a tax preparer pleaded guilty to devising and executing a scheme to defraud the Internal Revenue Service (“IRS”). Ieisha Smith pleaded guilty to one count of false claims. Smith, who was indicted on December 3, 2012, entered her plea before United States District Court Judge Ann D. Montgomery.

In her plea agreement, Smith admitted that she began the scheme in February 2009, when individuals came to her home for assistance in filing their income taxes. Specifically, she filed false tax returns on their behalf by claiming that taxes had been previously withheld when that was not the case and that refunds were therefore due, when she knew that to be false. The IRS calculated the total amount Smith claimed through the fraudulent tax returns to be approximately $765,000.

For her crime, Smith faces a potential maximum penalty of five years in federal 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 IRS-Criminal Investigation. It is being prosecuted by Assistant U.S. Attorney Thomas Calhoun-Lopez.

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.

 

 

MINNEAPOLIS—Earlier today in federal court, a 47-year-old St. Paul man pleaded guilty in connection with the December 13, 2012, armed robbery of the US Bank branch located at 711 Cleveland Avenue South in St. Paul. David Judin Greer pleaded guilty to one count of armed bank robbery and one count of brandishing a firearm during a crime of violence. Greer, who was indicted on February 5, 2013, entered his plea before United States District Court Judge Patrick J. Schiltz.

In his plea agreement, Greer admitted that on December 13, he stole $3,952 from the bank after showing the victim teller the revolver grip. According to a law enforcement affidavit filed in the case, a man, later identified as Greer, walked into the bank at approximately 2:00 p.m. He approached the teller counter, showed the gun, and demanded twenties, fifties, and one-hundred-dollar bills. The teller took money from the cash drawer and stuffed it into the white plastic bag that Greer provided. After demanding and receiving even more money, he fled the premises.

Immediately following the robbery, the Federal Bureau of Investigation released to the public digital images of the robber. Later that same day, the FBI received a telephone call from an anonymous individual who identified the robber as Greer. Authorities then began surveillance on Greer’s residence.

On December 29, 2012, the FBI received a call from the St. Paul Police Department, indicating officers there had just conducted a welfare check on Greer at the request of a family member. Officials subsequently transported Greer to Regions Hospital, where Greer gave law enforcement consent to search his residence. There, officers located the revolver used in the bank robbery. It was hidden above the duct work in the basement.

For his crime, Greer faces a potential maximum penalty of 25 years in prison on the armed bank robbery count, and a potential maximum penalty of life in prison on the brandishing count, which carries a mandatory minimum penalty of seven years. Judge Schiltz will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the FBI and the St. Paul Police Department. It is being prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.

 

 

MINNEAPOLIS—Earlier today in federal court, a 19-year-old Red Lake man pleaded guilty to assaulting a man inside a home located on the Red Lake Indian Reservation. Micah James Waybenais pleaded guilty to one count of assault resulting in serious bodily injury. Waybenais, who was indicted on October 10, 2012, entered his plea before United States District Court Judge John R. Tunheim.

In his plea agreement, Waybenais admitted that on September 11, 2012, he struck the victim with his hands and feet, dragged the victim back into a bedroom after tying speaker wire around his neck. The victim’s injuries included a potentially life-threatening laceration that ran from ear to ear on his neck, requiring hospitalization.

For his crime, Waybenais faces a potential maximum penalty of ten years in prison. Judge Tunheim 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 Red Lake Tribal Police Department. It is being prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.

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 52-year-old White Bear Lake man was sentenced for his role in a mortgage fraud scheme that defrauded mortgage lenders out of at least $7 million. United States District Court Judge Susan Richard Nelson sentenced Robert Leo Rick to three years in prison on one count of conspiracy to commit mail and wire fraud. Rick was charged on December 23, 2011, and pleaded guilty on January 27, 2012.

In his plea agreement, Rick admitted that from 2005 through 2007, while employed as a real estate agent for Rick’s Realty, he worked with developers, builders, and investors seeking to “invest” in residential real estate. Rick admitted soliciting and conspiring with others to secure investors to purchase multiple residential properties, in transactions where those investors, or buyers, would receive undisclosed kickbacks from mortgage loan proceeds.

To generate the funds for the kickbacks, builders sold the homes at reduced prices, appraisers appraised the homes at inflated prices, and the mortgage loan lenders were informed only of the inflated prices, and thus awarded buyers mortgage loans based on the inflated prices rather than the true, reduced sales prices. The excess mortgage loan proceeds were then used to provide the buyers with the promised kickbacks, which were not disclosed to the mortgage loan lenders. All of this was known to Rick.

Through this scheme, Rick assisted builders and developers, including TJ Waconia, to sell approximately 102 residential properties with mortgage loans totaling approximately $26 million. He also served as property purchaser, directly or through the use of his then-wife’s name, for at least eight properties, and received a total of approximately $397,000 in purchaser kickbacks. To further his scheme, Rick admitted using the U.S. mail and commercial carriers, as well as interstate wire communication, to pass along information to investors.

This case was the result of an investigation by the U.S. Postal Inspection Service and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Tracy L. Perzel.

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 64-year-old woman from the southeastern Minnesota community of Wykoff pleaded guilty to embezzling approximately $35,520 from the Security State Bank where she was employed as the head teller. Cheryl Lynn Holzer pleaded guilty to one count of bank embezzlement. Holzer, who was charged on May 3, 2013, entered her plea before United States District Court Judge David S. Doty.

In her plea agreement, Holzer admitted that between December 2010 and February 2012, she took bundles of cash from the bank’s vault for her personal use, primarily to pay her mortgage and other bills. She worked at the bank, located in Wykoff.

For her crime, Holzer faces a potential maximum penalty of 30 years in prison. Judge Doty will determine her sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Thomas Calhoun-Lopez.

 

 

MINNEAPOLIS—Earlier today in federal court in St. Paul, a 35-year-old felon from Maplewood was sentenced for possessing a loaded .32-caliber revolver. United States District Court Judge Donovan W. Frank sentenced Derek Lee Preston to 180 months imprisonment on one count of being a felon in possession of a firearm. Preston was indicted on April 12, 2011, and pleaded guilty on February 4, 2013.

In his plea agreement, Preston admitted that on January 25, 2011, he possessed the weapon while a passenger in a vehicle that was stopped by Minneapolis Police. Officers found the weapon inside the jacket Preston was wearing when Preston was searched in connection with the traffic stop. In addition, officers found recovered 7.5 grams of marijuana and nearly four grams of crack cocaine.

Because he is a felon, Preston is prohibited under federal law from possessing firearms or ammunition at any time. Preston’s prior Hennepin County convictions include unlawful possession of a pistol (1997), attempted first-degree aggravated robbery (1997), fifth-degree controlled substance crimes (1999 and 2009), a second-degree controlled substance crime (2001), terroristic threats (2005), violation of a no-contact order (2009), attempted violation of a no-contact order (2009), and domestic assault (2010).

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. Attorneys Surya Saxena and Andrew Dunne.

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 two dozen serious habitual criminals through Project Exile Minneapolis.

 

 

MINNEAPOLIS—Recently in federal court, four men were indicted for using stolen identification information to file tax returns that claimed false refunds. On May 21, 2013, Frantz Pierre, Ronnie Bussell, Christopher Torh, and Junior Tervil were charged with one count of conspiracy to defraud the United States. Pierre was also charged with one count of money laundering.

The indictment alleges that from July 2010 to May 2011, the defendants conspired with each other and others to defraud the Internal Revenue Service (“IRS”) by seeking tax refunds for which they were not entitled. Allegedly, the co-conspirators obtained the personal identifiers of other people and used that information, without those people’s knowledge, to create false 2009 and 2010 federal income tax returns that claimed refunds. In addition, the co-conspirators reportedly created false W-2 forms showing fabricated amounts of earnings and tax withholdings. The co-conspirators allegedly filed approximately 1,066 false tax returns, claiming approximately $6.9 million in fraudulent refunds.

The indictment also alleges that in order to receive the tax refunds, Pierre, Bussell, Torh, Tervil, and others created and established fictitious businesses in Minnesota that purportedly were involved in the preparation of income tax returns. The co-conspirators reportedly recruited others in Minnesota and elsewhere to do the same. Then, bank accounts were allegedly opened for each of the fake businesses, and the tax refunds were electronically deposited into those accounts. Finally, the Indictment alleges Pierre used some of the funds derived from this fraud scheme to purchase a residence in Parkland, Florida.

If convicted, the defendants face a potential maximum penalty of ten years in prison on the conspiracy count, and Pierre faces an additional potential maximum penalty of ten years on the money laundering count. Any sentence would be determined by a federal district court judge.

This case is the result of an investigation by the IRS-Criminal Investigation. It is being prosecuted by Assistant U.S. Attorney Karen B. Schommer.

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. 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, a 27-year-old Mexican national living in White Bear Lake was indicted for using someone else’s name, date of birth, and Social Security number for the past several years. Jesus Emmanuel Castro was charged with one count of false claim of citizenship and one count of aggravated identity theft.

The indictment alleges that on July 19, 2012, Castro, also known as Jesus Immanuel Castro-Hernandez, provided the identification information of someone else on an I-9 Employment Eligibility Verification form and attested that he was a citizen of the United States. It also alleges that on July 19, 2012, Castro used the name, date of birth, and Social Security number of another person without lawful authority in relation to the crime of false claim of citizenship.

According to a law enforcement affidavit filed in the case, in April 2013, authorities were investigating an identity theft case involving Castro. On July 19, 2012, Castro applied for employment at an Eagan-based business and completed the employment forms using the victim’s identity.

If convicted, Castro faces a potential maximum penalty of five years in prison on the false claim of citizenship count, and a mandatory minimum penalty of two years on the aggravated identity theft count. Any sentence will be determined by a federal district court judge.

This case is the result of an investigation by the South St. Paul Police Department, the Ramsey Police Department, and the United States Immigration and Customs Enforcement’s Homeland Security Investigations. It is being prosecuted by Assistant U.S. Attorney Andrew Dunne.

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 – In the District of Minnesota, separate charges have been filed against three foreign nationals who allegedly entered the United States illegally after being deported as criminals.

The first indictment alleges that on April 21, 2013, authorities found Lorenzo Armendariz-Sanchez, age 45, in the U.S. illegally after he had been previously deported to Mexico. His deportation followed a 1998 Faribault County conviction for burglary in the first degree. On April 21, 2013, authorities identified Armendariz-Sanchez, also known as Lorenzo Sanchez Armendariz, as an illegal alien with a criminal record while he was in the Blue Earth County jail, where he was being held after an arrest for burglary and domestic assault.

Identification was made through the U.S. Immigration and Customs Enforcement’s (“ICE”) Criminal Alien Program (“CAP”). One of the goals of that program is to locate criminal aliens incarcerated in federal and state prisons, as well as in local jails, and prevent them from being released into society by having them federally prosecuted.

If convicted of the federal charge now levied against him, Armendariz-Sanchez faces a potential maximum penalty of 20 years in federal prison, followed by deportation. Any sentence will be determined by a federal district court judge. This case is the result of an investigation by ICE’s Enforcement and Removal Operations (“ICE ERO”). It is being prosecuted by Assistant U.S. Attorney Katharine T. Buzicky.

The second indictment alleges that on April 30, 2013, authorities found Victor Ernesto Hernandez-Navaez, age 31, illegally in the U.S. after he had been previously deported to Mexico. His deportation followed a 2001 Ramsey County conviction for possession of a controlled substance with intent to distribute. On April 30, 2013, he was identified as an illegal alien via the CAP while in custody in the Pine County Jail on drug possession charges.

If convicted of the federal charge now filed against him, Hernandez-Navaez faces a potential maximum penalty of 20 years in federal prison, followed by deportation. Any sentence will be determined by a federal district court judge. This case is the result of an investigation by the ICE ERO. It is being prosecuted by Assistant U.S. Attorney Kevin S. Ueland.

The third indictment alleges that on March 23, 2012, authorities found Carlos Alberto Umansor-Mejia, age 31, illegally in the U.S. after he had been previously deported to Honduras. His deportation followed a 2007 Benton County conviction for criminal sexual conduct in the third degree. On March 23, 2012, he was identified as an illegal alien via the CAP while in custody in the Sherburne County Jail on a state fugitive warrant.

If convicted of the federal charge now filed against him, Umansor-Mejia faces a potential maximum penalty of 20 years in federal prison, followed by deportation. Any sentence will be determined by a federal district court judge. This case is the result of an investigation by the ICE ERO. It is being prosecuted by Assistant U.S. Attorney Nathan P. Petterson.

In some instances, federal prosecution will occur only after the individual is prosecuted for the recent underlying offense. The men in these three cases will remain in custody until their current federal cases are resolved. To learn more about the CAP, visit www.ice.gov/criminal-alien-program/

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, a 35-year-old Burnsville man was indicted for possessing with intent to distribute more than five kilograms of methamphetamine. Albert Morris Johnson was charged with one count of possession with intent to distribute 500 or more grams of methamphetamine, one count of distribution of 50 or more grams of methamphetamine, one count of being a felon in possession of a firearm, and one count of possession of a firearm with a removed, obliterated, or altered serial number.

The indictment alleges that on May 1, 2013, Johnson possessed the methamphetamine, along with two handguns -- a nine-millimeter, semi-automatic and a .40-caliber, semi-automatic firearm with an obliterated serial number. Because he is a felon, Johnson is prohibited under federal law from possessing a firearm or ammunition at any time. He was previously convicted in Sherburne County in 2009 for second-degree assault with a dangerous weapon.

A state law enforcement affidavit filed relative to the present case states that during the execution of a search warrant at Johnson’s residence on May 1, 2013, authorities seized approximately 12 pounds of methamphetamine in the laundry room, the two firearms noted above, more than $16,000 in cash, a digital scale, a money counter, and packaging material.

Authorities also executed a search warrant at Johnson’s Burnsville-based barbershop on that same day.
If convicted, Johnson faces a potential maximum penalty of life in prison on the possession with intent count, 40 years on the distribution count, ten years on the felon in possession count, and five years on the obliterated serial number count. Any sentence would be determined by a federal district court judge.

This case is the result of an investigation by the Dakota County Drug Task Force, and the United States Drug Enforcement Administration. It is being prosecuted by Assistant U.S. Attorneys Benjamin Bejar and Thomas M. Hollenhorst.

To learn more about the harmful effects of methamphetamine, visit http://www.justice.gov/dea/pr/multimedia-library/publications/drug_of_abuse.pdf#page=48.

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 late today charges a 32-year-old Duluth man with the sex trafficking of a child for approximately seven months last year. The indictment, which was filed on May 7, 2013, charges Markeace Arque Canty with one count of conspiracy to commit sex trafficking of a child, one count of sex trafficking of a child, and one count of receipt of child pornography. The indictment was unsealed following Canty’s initial appearance in federal court this afternoon.

The indictment alleges that from at least July 2012 through January 2013, Canty recruited, transported, and coerced 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 purportedly purchased “escort” advertisements on the website known as backpage.com and transported the female victim to locations in Duluth, Minneapolis, and elsewhere to meet advertisement responders at motels, where the victim engaged in sexual acts in exchange for money. Specifically, on September 12, 2012, law enforcement in Indiana responded to one of the advertisements and arrested the female victim after she reportedly agreed to perform sex acts in exchange for money. The advertisement in that instance purportedly included a phone number registered to Canty. The indictment also alleges that Canty attempted to arrange for the female victim’s release from jail after she was arrested on state prostitution charges.

As to the charge of receipt of child pornography, the indictment states that on January 15, 2013, Canty received visual depictions via a computer of a minor engaged in sexually explicit conduct.

If convicted, Canty faces a potential maximum penalty of life in prison on each of the sex trafficking counts and ten years on the charge of receipt of child pornography. Any sentences would be determined by a federal district court judge.

This case is the result of an investigation by the Federal Bureau of Investigation and the Duluth Police Department, with cooperation from U.S. Customs and Border Protection, 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 United States Attorney Thomas Calhoun-Lopez.

In 2012, Yuri Fedotov, the head of the United Nations’ Office on Drugs and Crime reported to those attending a U.N. General Assembly meeting that an estimated 2.4 million people worldwide are victims of human trafficking at any one time, with 80 percent of them being exploited as sex slaves. He also stated that approximately $32 billion is earned collectively every year by the criminals who operate human trafficking networks. The U.S. Department of Justice estimates that 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—Earlier today in federal court in St. Paul, a 20-year-old Bemidji man pleaded guilty to the December 10, 2012, armed robbery of the First State Bank of Bigfork, which is located in Kelliher, Minnesota. Travis Michael Burns specifically pleaded guilty to one count of aiding and abetting armed bank robbery. Burns, who was indicted on January 16, 2013, along with a co-defendant, entered his plea before United States District Court Judge Donovan W. Frank.

In his plea agreement, Burns admitted that on December 10, 2012, he drove Cody Lowell Troy, age 20, of Mizpah, to the bank for the purpose of robbing it. Burns also admitted waiting in the vehicle while Troy went inside the bank and then driving away again after Troy ran from the bank and got back in the vehicle.

According to a law enforcement affidavit filed in the case, Troy reportedly wore a white protective containment suit, a “Halloween” movie-style mask, Nike Air Jordan shoes, and black gloves during the robbery. Approaching a bank teller, he placed a black backpack on the counter, pointed the shotgun in the teller’s direction, and then pumped the gun. The teller immediately placed money in the backpack, which Troy grabbed before fleeing the premises.

On December 12, 2012, police arrested Troy in Bemidji on an outstanding Itasca County warrant for failure to appear in connection with a prior felony. At that time, officers located a red pickup that matched the description of the vehicle two witnesses spotted in the vicinity of the Kelliher bank and driving away from the bank immediately following the December 10, 2012, robbery.

During the subsequent execution of a search warrant at the Bemidji apartment where Burns lived and Troy was staying, authorities seized shotgun shells, a hacksaw, and a loaded sawed-off shotgun, as well as the sawed-off gun stock and barrel. They also recovered a white protective containment suit, black gloves, Nike Air Jordan shoes, and a “Halloween” movie-style mask. The backpack used in the robbery and some money from the bank were recovered in Burns’ bedroom.

On May 14, 2013, Troy pleaded guilty to one count of brandishing a firearm during a crime of violence. In his plea agreement, he admitted robbing the bank while brandishing a 12-gauge, sawed-off shotgun that had a partially obliterated serial number. He stole approximately $3,738.

For his crime, Troy faces a mandatory minimum sentence of ten years in federal prison. Burns faces a potential maximum penalty of twenty- five years in federal prison. Judge Frank will determine their sentences at future hearings, yet to be scheduled.

This case was investigated by the Federal Bureau of Investigation, the Beltrami County Sheriff’s Office, the Headwaters Safe Trails Task Force, and the Minnesota Bureau of Criminal Apprehension. It is being prosecuted by Assistant U.S. Attorneys Manda M. Sertich and Kevin S. Ueland.

 

 

MINNEAPOLIS—Earlier today in federal court, a 25-year-old St. Paul felon pleaded guilty to possessing a .22-caliber revolver and methamphetamine. Christopher Lee Rousseau specifically pleaded guilty to one count of being an armed career criminal in possession of a firearm. Rousseau, who was indicted on January 15, 2013, entered his plea before United States District Court Judge Patrick J. Schiltz.

In his plea agreement, Rousseau admitted that on December 3, 2012, he possessed the revolver, which was hidden along with several wrapped baggies of methamphetamine in the center console of the GMC Jimmy he was driving. Rousseau also admitted that he intended to distribute the methamphetamine, and that he carried the revolver in furtherance of his drug trafficking.

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).

Because those convictions constituted crimes of violence, Rousseau is now subject to the federal Armed Career Criminal Act. That act mandates a minimum of 15 years in prison for anyone subsequently convicted in federal court for being a felon in possession of a firearm or ammunition. Judge Schiltz will determine Rousseau’s sentence at a future hearing, yet to be scheduled.

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 then arrested for driving after cancellation of his license. During a search of Rousseau’s person, police found some ammunition and $385. A search of the vehicle led to the recovery of the gun and the methamphetamine.

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. It is being prosecuted by Assistant U.S. Attorney Lola Velazquez-Aguilu.

 

 

MINNEAPOLIS—Earlier today in federal court, two Rochester, Minnesota, women were sentenced for providing material support to al-Shabaab, a U.S.-designated foreign terrorist organization. United States District Court Chief Judge Michael J. Davis sentenced Amina Farah Ali, age 36, to 240 months in federal prison, followed by supervised release for life, on one count of conspiracy to provide material support to a Foreign Terrorist Organization al-Shabaab and twelve counts of providing material support to al-Shabaab. Chief Judge Davis also sentenced Hawo Mohamed Hassan, age 66, to 120 months in federal prison, followed by supervised release for life, on one count of conspiracy to provide material support to a terroristic organization and two counts of making false statements to authorities. Both women, who are naturalized U.S. citizens from Somalia, were indicted on July 6, 2010, and were convicted on October 20, 2011. They were remanded into custody following sentencing.

After court, John Carlin, Acting Assistant Attorney General for National Security, said, “Today’s sentences and those handed down earlier this week in Minneapolis underscore our commitment to dismantle networks that route funding and fighters from the United States to the al-Shabaab terror organization. These cases are the result of an extraordinary, long-term effort by many agents, analysts, and prosecutors, who worked tirelessly to ensure that the defendants were brought to justice.”

U.S. Attorney B. Todd Jones added, “Today’s sentencings illustrate yet again the high priority this office has placed on national security cases. Terrorist groups, such as al-Shabaab, threaten the safety of Americans, both abroad and here at home. These two defendants provided financial support to this U.S.-designated terrorist organization and then impeded the federal investigation into that matter by lying to authorities. This misguided conduct is unacceptable. With the assistance of our investigative partners, it will continue to be prosecuted vigorously, as was done in this case.”

Evidence presented at their trial proved that the defendants provided support to al-Shabaab from September 17, 2008, through July 19, 2009. Specifically, Ali communicated by telephone with Somalia-based members of al-Shabaab who requested financial assistance on behalf of the group. Ali, Hassan, and others raised money for the terrorist organization by soliciting funds door-to-door in Somali neighborhoods in Minneapolis, Rochester, and other cities in the U.S. as well as in Canada. Ali often sought the money under false pretenses, contending that it was to help the poor. The defendants also obtained funds by participating in teleconferences that featured speakers who encouraged listeners to make donations in support of al-Shabaab.

For example, on October 26, 2008, Ali hosted a teleconference during which an unindicted co-conspirator told listeners that rather than helping the poor and needy in Somalia, they should give to the mujahidin. Ali and Hassan recorded $2,100 in pledges at the conclusion of that teleconference. Then, on February 10, 2009, Ali conducted a fundraising teleconference during which she told listeners to “forget about the other charities” and focus on “the jihad.”

J. Chris Warrener, Special Agent in Charge of the Federal Bureau of Investigation’s Minneapolis Field Office, which leads the Minnesota Joint Terrorism Task Force, the primary investigative entity in this case, said, “The sentencings today are a culmination of the efforts of the FBI’s Joint Terrorism Task Force and its commitment to stop terrorist-related activities in Minnesota. The FBI is pleased with the sentences that were handed down and will work with the community to deter others from engaging in this type of activity.”

Upon garnering funds, Ali and others transferred them to al-Shabaab through various money remittance companies. Ali and others used false names to identify the money’s recipients in an effort to conceal that the money was being provided to al-Shabaab. Ali directed no fewer than twelve money transfers to al-Shabaab.

On July 14, 2009, the day after the FBI executed a search warrant at Ali’s home, she telephoned her primary al-Shabaab contact, saying, “I was questioned by the enemy here . . . they took all my stuff and are investigating it . . . do not accept calls from anyone.”

As for Hassan, she made at least two false statements when questioned by federal agents about international terrorism.

This case was the result of an investigation by the FBI’s Joint Terrorism Task Force. It was prosecuted by Assistant U.S. Attorney Jeffrey S. Paulsen and Steven Ward of the Counterterrorism Section of the Justice Department’s National Security Division.

***

Earlier today, Chief Judge Davis sentenced Adarus Abdulle Ali, age 29, of Columbia Heights, to 24 months in federal prison, followed by 36 months of supervised release, for making false statements while testifying before a federal grand jury in regards to a federal investigation known as “Operation Rhino.” That investigation focused on the disappearance of approximately 20 young, ethnic Somali men from the Twin Cities area during the past six years. The young men were recruited to fight against Ethiopian troops and Somalia’s internationally recognized Transitional Federal Government and later joined al-Shabaab. Ali was sentenced today on one count of perjury after being charged with that crime on October 27, 2009, and pleading guilty on November 2, 2009.

In his plea agreement, Ali admitted that on December 17, 2008, he testified to a federal grand jury that he did not know anyone who had traveled to Somalia with Kamal Said Hassan, who was sentenced earlier this week, when, in truth, Ali attended a meeting during which Hassan and others discussed going to Somalia to fight for al-Shabaab. In fact, Ali later admitted that he had driven Hassan and another individual to the Minneapolis-St. Paul International Airport for their flights to Somalia.

On Monday of this week, Chief Judge Davis sentenced Hassan, age 28, of Minneapolis, to 120 months in federal prison, followed by 20 years of supervised release, after he pleaded guilty to providing material support to the Foreign Terrorist Organization al-Shabaab and to a conspiracy to kill Ethiopian soldiers. He was charged with those crimes on February 18, 2009. Specifically, Hassan had traveled to Somalia, graduated from an al-Shabaab training camp, and participated in an al-Shabaab ambush of Ethiopian soldiers. On August 12, 2009, he was also charged with and later pleaded guilty to making false statements to the FBI. Those charges were based on the fact that Hassan lied to FBI agents about his continued involvement with al-Shabaab after completing his training in the al-Shabaab camp. (See Monday’s press release for more details.)

Through its investigation, federal authorities learned that groups of men first departed the United States to fight with al-Shabaab in Somalia in October and December of 2007, with others leaving in February 2008, August 2008, September 2008, November 2008, and October 2009. Upon arriving in Somalia, the men resided in al-Shabaab safe houses in Southern Somalia until constructing an al-Shabaab training camp, where they were trained from that point on. Senior members of al-Shabaab and a senior member of al-Qaeda in East Africa conducted those trainings.

In July 2008, men from Minneapolis as well as other Americans participated in an al-Shabaab ambush of Ethiopian troops. On October 29, 2008, one of those men, Shirwa Ahmed, who left Minneapolis in December 2007, detonated a vehicle-borne improvised explosive device as one of five coordinated suicide bombings in Bosaso and Hargeisa, Somalia. Ahmed is believed to have become the first American suicide bomber in Somalia. On May 30, 2011, Farah Mohamed Beledi, an indicted individual who departed Minnesota in October 2009, was killed at a checkpoint in Somalia as he attempted to detonate his suicide vest. To date, approximately 18 individuals have been charged through Operation Rhino, and eight have been convicted. The remaining ten are believed to be fugitives or have been killed in Somalia.

On Monday, Chief Judge Davis also sentenced Mahamud Said Omar, also known as Sharif Omar, age 46, of Minneapolis, to 240 months in federal prison, followed by life-long supervised release for conspiring to provide material support to a Foreign Terrorist Organization and conspiring to kill, kidnap, maim, and injure overseas. He was arrested in Netherlands in November of 2009 and extradited to the U.S. in August of 2011. In October of 2012, he was tried and convicted of these crimes. (See Monday’s press release for more details.)

On Tuesday of this week, Chief Judge Davis sentenced Omer Abdi Mohamed, age 28, of Minneapolis, to 144 months in federal prison, followed by 20 years of supervised release, after earlier pleading guilty to one count of conspiracy to provide material support to co-conspirators who intended to kill, kidnap, and main Ethiopian and Somali government troops. Abdifatah Yusuf Isse, Salah Osman Ahmed, and Ahmed Hussein Mahamud were each sentenced to 36 months in federal prison, followed by 20 years of supervised release, after earlier pleading guilty to related charges. Isse, Ahmed, and Mahamud cooperated with the United States and testified at the trial of Mahamud Said Omar. (For more details, see Tuesday’s press release.)

This case resulted from a long-term investigation conducted by the FBI’s Minneapolis Joint Terrorism Task Force. The case was prosecuted by Assistant U.S. Attorneys Charles J. Kovats, John Docherty, and LeeAnn K. Bell, and William M. Narus of the Counterterrorism Section of the U.S. Department of Justice’s National Security Division.

 

 

MINNEAPOLIS—Yesterday in federal court, a 32-year-old felon from the northern Minnesota community of Crosby pleaded guilty to possessing a .40-caliber, semi-automatic pistol along with approximately 30 grams of methamphetamine. Zachari Allen Kozar pleaded guilty to one count of being a felon in possession of a firearm and one count of possession with intent to distribute methamphetamine. Kozar, who was charged on May 14, 2013, entered his plea before United States District Court Judge Ann D. Montgomery.

In his plea agreement, Kozar admitted that on December 26, 2012, officers stopped Kozar for a traffic violation while he was near Brainerd, Minnesota, and later found the loaded handgun and drugs under the vehicle’s front passenger seat.

According to a law enforcement affidavit filed in the case, authorities began observing Kozar in the fall of 2012 as part of a drug trafficking investigation. During the December 26 stop, Kozar became agitated when a drug-sniffing canine was brought to the scene. The dog alerted police to a controlled substance. Police subsequently executed a search warrant on the vehicle, finding the loaded .40-caliber Steyr Mannlicher firearm in a nylon gun holster. They also recovered a second .40 caliber magazine, a plastic baggy containing approximately 2.8 grams of crack cocaine, as well as ten baggies of various amounts of methamphetamine and crack cocaine totaling approximately 32.1 grams. Kozar was arrested shortly afterward. Approximately $896 in U.S. currency was also found on his person.

Because he is a felon, Kozar is prohibited under federal law from possessing a firearm or ammunition at any time. His prior convictions in St. Louis County include two counts of theft of a motor vehicle (1999), fleeing police in a motor vehicle (1999 and 2004), third-degree burglary (1999), damage to property (1999), escape from custody (2001), fifth-degree drug possession (2004 and two counts in 2008), and third-degree drug possession (2009) . Because some of those convictions constitute crimes of violence, Kozar is subject to the federal Armed Career Criminal Act. That act mandates a minimum of 15 years in prison for anyone subsequently convicted in federal court for being a felon in possession of a firearm or ammunition.

For his crimes, Kozar faces a potential maximum penalty of life in prison on the gun charge and 40 years for drug possession. Judge Montgomery will determine his sentence at a future hearing, yet to be scheduled.

This case is the result of an investigation by the Lakes Area Drug Investigative Division, the Minnesota Bureau of Criminal Apprehension, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Allen A. Slaughter.

 

 

MINNEAPOLIS—Earlier today in federal court, a 25-year-old Cass Lake felon pleaded guilty to possessing a .357-caliber revolver. Anthony Duane Howard pleaded guilty to one count of being a felon in possession of a firearm. Howard, who was indicted on March 12, 2013, entered his plea before United States District Court Judge Joan N. Ericksen.

In his plea agreement, Howard admitted that on December 1, 2012, he possessed the revolver near a residential complex on Cedar Avenue in south Minneapolis. When police arrived, Howard discarded the firearm, which was later recovered. Because he is a felon, Howard is prohibited under federal law from possessing a firearm at any time. His prior Hennepin County convictions include first-degree assault (2003) and fourth-degree assault (2011).

For his crime, Howard faces a potential maximum penalty of ten years in prison. Judge Ericksen 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 LeeAnn K. Bell.

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 two dozen serious habitual criminals through Project Exile Minneapolis.