Eastern District of North Carolina

NEW BERN - United States Attorney Thomas G. Walker announced that in federal court today, United States District Judge Louise W. Flanagan sentenced FABIO HIROCHI INOUE, 40,of Anaheim, California, to 51 months in prison and 5 years of supervised release for conspiracy to distribute and possess 5 kilograms or more of cocaine and conspiracy to launder monetary instruments.  INOUE previously pled guilty to these charges on May 13, 2014.    

The investigation revealed that between April 2013 and September 22, 2013, INOUE flew to North Carolina and Florida to deliver cocaine and collect drug proceeds for a drug trafficking organization operating out of Mexico and California.  INOUE made several trips during this time period to meet with traffickers in the Johnston County, N.C., area.  During these trips he delivered multiple kilograms of cocaine and collected approximately $185,745 in drug proceeds.  INOUE laundered some of the drug proceeds by depositing portions into a bank account in the name of a real estate business located in California.  Based on the investigation, the United States Drug Enforcement Administration discovered that INOUE would be flying to the Raleigh Durham International Airport with several kilograms of cocaine on September 22, 2013.  Agents found INOUE at the airport and seized his luggage which contained 3,891 grams of cocaine.  In total, INOUE was found to be responsible for trafficking 12.7 kilograms of cocaine. 

The investigation of this case was conducted by the United States Drug Enforcement Administration, the Johnston County Sheriff’s Office and the Internal Revenue Service-Criminal Investigation Division.  The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry.  Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office.  Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters.  Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission

NEW BERN - United States Attorney Thomas G. Walker announced that in federal court today, United States District Judge Louise W. Flanagan sentenced JOHNNY TYRONE HOPKINS, 44,of Farmville, North Carolina, to 60 months in prison and 5 years of supervised released for conspiracy to distribute and possession with the intent to distribute 500 grams or more of cocaine, 28 grams or more of cocaine base (crack), and a quantity of marijuana, and to 60 months in prison and 5 years of supervised release for possession of a firearm in furtherance of a drug trafficking crime.  The 60 month sentence for the firearm charge will run consecutively to the 60 month sentence for the drug conspiracy producing a total term of 120 months.  HOPKINS previously pled guilty to these charges on October 21, 2014.      

The investigation revealed that between March 2010 and April 2014, HOPKINS conspired with others to distribute approximately 1 kilogram of cocaine, 135 grams of cocaine base (crack), 5 kilograms of marijuana and 52 grams of oxycodone.  The investigation also revealed that HOPKINS sold firearms and possessed numerous firearms in connection with his drug trafficking. 

The investigation of this case was conducted by the Farmville Police Department, the Pitt County Sheriff’s Office, the Greenville Police Department and the Drug Enforcement Administration.  The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry.  Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office.  Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters.  Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.

NEW BERN – United States Attorney Thomas G. Walker announced that yesterday in federal court, United States District Judge Louise W. Flanagan sentenced BRANDON PAUL GARNER , 32, of Beaufort, North Carolina, to 28 months of imprisonment and 3 years supervised release and was ordered to pay $18,994.00 in restitution.  On March 10, 2015 GARNER entered a guilty plea to making false distress calls to the United States Coast Guard.

"The Coast Guard has a long and proud history of Search and Rescue, often at great personal risk to those who chose to devote their life to the service of others.  False distress calls incur significant cost to the public by obligating search resources and vast amounts of tax payer dollars.  More importantly, they risk the very lives of responders for cases where no actual distress exists.  Additionally, these false distress calls take search and rescue resources away from those who may be in real distress," said Captain Sean Murtagh, commander of Sector North Carolina.  “Through the vigilance of the public, our strong partnerships with the Department of Justice, the U.S. Attorney's Office, and our Coast Guard Investigative Service, this case affirms our collective commitment to holding accountable those individuals who make hoax calls."

According to information in the public record, on October 20, 2013, the United States Coast Guard received a “MayDay” call in which the caller claimed a vessel with five adults and two children was taking on water and sinking near the Core Creek Bridge in Beaufort, North Carolina.  The calls indicated that one child was stuck on the vessel and could not be seen.  Upon receipt of the distress call, small boats from Coast Guard Station Fort Macon, North Carolina; a helicopter from the Marine Corps Air Station at Cherry Point, North Carolina; a towboat from a local salvage company; and emergency responders from the sheriff’s office and two fire departments were deployed to assist in the search and rescue of the vessel.  However, response crews found no vessel or persons in distress.  Ultimately, the Coast Guard determined that the call was a hoax, but not until after $18,994.00 worth of resources were expended.

The search and rescue efforts were led by United States Coast Guard – 5th District and Coast Guard Sector North Carolina.  The criminal investigation of this case was conducted by the United States Coast Guard Investigative Service.  Assistant United States Attorney Susan B. Menzer prosecuted the case.

NEW BERN - United States Attorney Thomas G. Walker announced that in federal court today, United States District Judge Louise W. Flanagan sentenced FELIPE DE JESUS JARAMILLO-ROSAS, 29,of Gwinnett County, Georgia, to 56 months in prison and 5 years of supervised release for conspiracy to distribute and possess with the intent to distribute 500 grams or more of methamphetamine.  JARAMILLO-ROSAS previously pled guilty to this charge on February 10, 2015.  On May 13, 2015, a co-defendant, LESLIE FAVIOLA-ALVARADO, pled guilty to the same charge and her sentencing hearing is pending.   

The investigation revealed that on June 25, 2013, JARAMILLO-ROSAS and FAVIOLA-ALVARADO took possession of 907 grams of methamphetamine from a source of supply in the Atlanta, Georgia, area and began driving to Johnston County, N.C., to deliver the methamphetamine to traffickers.  JARAMILLO-ROSAS and FAVIOLA-ALVARADO arrived in Johnston County on June 26, 2013.  However, the traffickers decided not to accept the methamphetamine.  As JARAMILLO-ROSAS and FAVIOLA-ALVARADO and FAVIOLA-ALVARADO were attempting to deliver the methamphetamine back to the suppliers, the North Carolina Highway Patrol stopped their car in Graham, N.C.  The trooper discovered that the driver, JARAMILLO-ROSAS, did not have a valid driver’s license and smelled a strong odor of marijuana from the car.  The trooper asked for and received consent to search the car.  Troopers located the methamphetamine in two plastic containers in the back seat of the car during the consent search. 

The investigation of this case was conducted by the United States Drug Enforcement Administration, the Johnston County Sheriff’s Office and the North Carolina Highway Patrol.  The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry.  Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office.  Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters.  Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.

RALEIGH - United States Attorney Thomas G. Walker announces that a federal grand jury in Raleigh returned a 39 count indictment (attached) and the defendants were arrested for conspiring to manufacture and distribute cocaine and cocaine base (crack) in large quantities over a four plus years’ time frame.

The following people were indicted and arrested.

• Lemont Jerrone Webb, aka “L Dawg” and “Mont”, 41, of Godwin, NC
• Antoine Dewayne Myles aka “Twan”, 39, of Dunn, NC
• Farrah Michelle Harrell, 37, of Durham, NC
• Douglas Earl Register, 49, of Dunn, NC
• John Bernard Taylor, Jr., 45, of Fayetteville, NC
• Ronald Devon Pegues, 36, of Fuquay Varina, NC
• Major Lewis Clark, Jr., 31, of Dunn, NC
• Cleveland Myles, 49, of Dunn, NC
• Larry Donnell Pearsall, 40, of Godwin, NC
• Nathune Jamerson Myles, 39, of Godwin, NC
• Adriann Roshanda Currie, 38, of Burlington, NC
• Carlos Edward Carmelo, 36, of Fayetteville, NC
• Tiwana Jennelle Smith, 36, of Dunn, NC
• Christopher Lee Johnson, 45, of Fayetteville, NC
• Maurice Shaunt Blanks, 30, of Roseboro, NC
• Chapman Carroll, 31, of Godwin, NC
• Janice Marie Smith, 51 of Fayetteville, NC
• Harry Myles, Sr., 59, of Godwin, NC
• Sophia Latrice Eaddy Myles, 33, of Fayetteville, NC

Harry Myles, Sr. and Sophia Latrice Eaddy Myles were charged with Money Laundering. The others listed above were charged with a Drug Distribution Conspiracy to distribute cocaine and cocaine base (crack).  Lemont Jerrone Webb and Antoine Dewayne Myles were also charged with both Drug Distribution and Money Laundering.

If convicted, the maximum penalties for the charged drug counts are life imprisonment, a $10 million fine, and a term of supervised release of not less than 5 years, following any term of imprisonment.  The maximum penalties for the money laundering charges are not less than 20 years imprisonment, a $500,000 fine or twice the value of the property involved, whichever is greater, and up to 3 years supervised release following any term of imprisonment. 

The charges and allegations contained in the indictment are merely accusations.  The defendants are considered innocent unless and until proven guilty in a court of law. 

The case is being investigated by the Drug Enforcement Administration (DEA), the Cumberland County Sheriff’s Office (CCSO), the Internal Revenue Service - Criminal Investigation (IRS-CI) and the United States Marshal’s Service (USMS).

RALEIGH - United States Attorney Thomas G. Walker announced that yesterday in federal court Chief United States District Judge James C. Dever, III sentenced SAIKU GANDO BARRIE, 28, of Raleigh, to serve a total of 7 years in prison, followed by 3 years of supervised release, on charges of Aggravated Identity Theft and Conspiracy to Commit Access Device Fraud.  BARRIE was also ordered to make restitution to numerous victims.

According to the Indictment, BARRIE was a participant in a five year credit card and cigarette trafficking scheme.  The purpose of the scheme was to use stolen credit card account information to purchase large quantities of cigarettes in North Carolina which were resold in New York.  To carry out the scheme, participants acquired stolen credit card data from other conspirators and encoded the stolen data onto the magnetic strip of what appeared to be legitimate gift cards.  Managers in the scheme, including BARRIE, then distributed the cards to “runners” who traveled to various gas stations, convenience stores, and grocery stores located around the state to purchase dozens of cartons of cigarettes at a time using the counterfeit gift cards.  The runners returned the cigarettes to the managers in the scheme, who paid the runners a kickback.  Managers, including BARRIE, periodically made trips to New York to sell the cigarettes on the black market for cash.

At the sentencing hearing, the Government argued for a 7 year prison sentence based upon a variety of factors, including the fact that the defendant had been involved in five separate arrest events with state authorities over time, but had been undeterred from the activity.  The Government also argued that the case involved untold losses and large numbers of victims whose identities had been compromised.  The defendant argued, through counsel, the he carried out the offenses in order to eat.  The court specifically rejected this argument when it announced the lengthy prison sentence.

Investigation of BARRIE’s case was conducted by the United States Secret Service, with the assistance of the Raleigh Police Department.  Assistant United States Attorney William M. Gilmore represented the United States.

WASHINGTON – Three subsidiaries of North Carolina-based Duke Energy Corporation, the largest utility in the United States, pleaded guilty today to nine criminal violations of the Clean Water Act at several of its North Carolina facilities and agreed to pay a $68 million criminal fine and spend $34 million on environmental projects and land conservation to benefit rivers and wetlands in North Carolina and Virginia.  Four of the charges are the direct result of the massive coal ash spill from the Dan River steam station into the Dan River near Eden, North Carolina, in February 2014. The remaining violations were discovered as the scope of the investigation broadened based on allegations of historical violations at the companies’ other facilities.

Under the plea agreement, both Duke Energy Carolinas and Duke Energy Progress, must certify that they have reserved sufficient assets to meet legal obligations with respect to its coal ash impoundments within North Carolina, obligations estimated to be approximately $3.4 billion.

Officials from the Justice Department’s Environment and Natural Resources Division and the three U.S. Attorney’s Offices in North Carolina, the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance, EPA’s Office of Inspector General, the Internal Revenue Service (IRS) Criminal Investigations and the North Carolina State Bureau of Investigation (SBI) made the announcement following a plea hearing at the federal courthouse in Greenville, North Carolina today.

“The massive coal ash spill into North Carolina’s Dan River last year was a crime and it was the result of repeated failures by Duke Energy’s subsidiaries to exercise controls over coal ash facilities,” said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division.  “The terms of these three plea agreements will help prevent this kind of environmental disaster from reoccurring in North Carolina and throughout the United States by requiring Duke subsidiaries to follow a rigorous and independently verifiable program to ensure they comply with the law.”

“Duke Energy's crimes reflect a breach of the public trust and a lack of stewardship for the natural resources belonging to all of the citizens of North Carolina,” said U.S. Attorney Thomas G. Walker for the Eastern District of North Carolina.  “The massive release at the Dan River coal ash basin revealed criminal misconduct throughout the state – conduct that will no longer be tolerated under the judgment imposed by the court today.”

“Duke’s subsidiaries discharged potentially toxic pollutants that put at risk North Carolina’s water quality and wildlife and today’s outcome ensures they will be held responsible for violating federal environmental requirements,” said Acting U.S. Attorney Jill W. Rose for the Western District of North Carolina.  “The defendants will now have to comply with the terms imposed by the court, including paying hefty financial penalties and making significant financial contributions toward improving the quality of impacted waterways, wetlands and our water supply system.”

“Duke’s actions adversely impacted the Dan River ecosystem and caused residents who live near and rely on the water supply much apprehension about the safety of the river,” said Criminal Chief Cliff Barrett for the U.S. Attorney’s Office in the Middle District of North Carolina.  “Today’s plea holds Duke accountable for this result and charts a course to remediate the impact of these spills.”

“Over two hundred sixteen million Americans rely on surface water as their source of drinking water,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance.  “Duke Energy put that precious resource at risk in North Carolina as the result of their negligence.  Companies that cut corners and contaminate waters on which communities depend, as Duke did here, will be held accountable.”

On Feb. 20, 2015, the three U.S. Attorney’s Offices in North Carolina filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities: the Dan River steam station (Rockingham County), the Cape Fear steam electric plant (Chatham County), the Asheville steam electric generating plant (Buncombe County), the H.F. Lee steam electric plant (Wayne County) and the Riverbend steam station (Gaston County).  The alleged violations included unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee and Riverbend facilities.

As part of their plea agreements, Duke Energy Business Services LLC, Duke Energy Carolinas LLC and Duke Energy Progress Inc. will pay a $68 million criminal fine and a total $24 million community service payment to the National Fish and Wildlife Foundation for the benefit of the riparian environment and ecosystems of North Carolina and Virginia.  The companies will also provide $10 million to an authorized wetlands mitigation bank for the purchase of wetlands or riparian lands to offset the long-term environmental impacts of its coal ash basins.  In addition, they will pay restitution to the federal, state and local governments that responded to the Dan River spill and be placed on a period of supervised probation for five years.

Duke’s subsidiaries operating 18 facilities in five states, including 14 in North Carolina, will also be required to develop and implement nationwide and statewide environmental compliance programs to be monitored by an independent court appointed monitor and be regularly and independently audited.  Results of these audits will be made available to the public to ensure compliance with environmental laws and programs.  The companies’ compliance will be overseen by a court-appointed monitor who will report findings to the court and the U.S. Probation Office as well as ensuring public access to the information.

Approximately 108 million tons of coal ash are currently held in coal ash basins owned and operated by the defendants in North Carolina.  Duke Energy Corporation subsidiaries also operate facilities with coal ash basins in South Carolina, approximately 5.99 million tons of coal ash, Kentucky, approximately 1.5 million tons of coal ash, Indiana, approximately 35.6 million tons of coal ash and Ohio, approximately 5.9 million tons of coal ash.

The companies must also meet the obligations imposed under federal and state law to excavate and close coal ash impoundments at the Asheville, Dan River, Riverbend and Sutton facilities.   

Additionally, at the insistence of the United States, the holding company Duke Energy Corporation has guaranteed the payment of the monetary penalties and the performance of the nationwide and statewide environmental compliance plans.

“Duke’s environmental crimes required a special financial review of their actions to which we were proud to join our partners in investigating,” said Special Agent in Charge Thomas J. Holloman, III of the IRS Criminal Investigation.  “The considerable fines, formal apologies and massive cleanup initiatives will impact the Duke image and brand, assuring the public that corporations will be held accountable for their gross actions involving the environment, wildlife and the communities of this great state.”

“The SBI worked closely with the Environmental Protection Agency Criminal Investigation Division and the Internal Revenue Service in this matter,” said Acting Director B.W. Collier of the North Carolina SBI.  “This type of collaboration is critical to ensuring a thorough and intensive review on cases such as this.  The SBI remains committed to the public interest and is prepared to continue assisting the U.S. Attorney’s office.”

The criminal investigation was conducted by the Criminal Investigation Division, Region Four and the Office of Inspector General of EPA, Criminal Investigations of the IRS and North Carolina State Bureau of Investigation with assistance from the Federal Bureau of Investigation and the Department of Defense Criminal Investigative Service.

Link to Duke Joint Factual Statement

RALEIGH - United States Attorney Thomas G. Walker announced the indictment of ALPHA OUMAR DIALLO, 24, of Raleigh, MAMADOU LAMARANA BAH, also known as “Lanzo”, 34, of Bronx, NY, and MAMADOU JALLOW, also known as “Mike”, 32, of Raleigh.  DIALLO, BAH, and JALLOW were each charged in indictments alleging Conspiracy to Commit Access Device Fraud, Access Device Fraud,  and Aggravated Identity Theft.  DIALLO also faces the charge of Felon in Possession of a Firearm.

The indictments generally allege that DIALLO, BAH, and JALLOW, were engaged in a schemes to acquire, among other things, large quantities of cigarettes in North Carolina and elsewhere using counterfeit gift and debit cards.  The cards utilized by the conspirators were counterfeit because the data encoded in the magnetic strip of the cards had been altered to contain credit and debit card numbers that were not encoded upon them at the time they were manufactured.  The indictments further alleged that conspirators acquired stolen credit and debit card data from sources on the internet, and received the stolen data in the form of internet email accounts to which they had access.  It is alleged that the conspirators used the stolen credit and debit card data to fraudulently re-encode cards for later use to purchase cigarettes and other items.

After acquiring several counterfeit cards, the indictments allege that the conspirators used the cards, and caused the cards to be used, to purchase numerous cartons of cigarettes.  The conspirators would generally travel from one store to another in a vehicle during a single trip to acquire a large volume of cigarettes.  Other conspirators would then transport the cigarettes to other states to be resold at a profit.

If convicted, the maximum punishment for Conspiracy to Commit Access Device Fraud and Access Device Fraud is up to 20 years in prison.  The punishment for Aggravated Identity Theft is a mandatory two years in prison consecutive to any other penalty imposed.  The maximum punishment on the charge of Felon in Possession of a Firearm is up to 10 years in prison.

Anyone with information on the whereabouts of ALPHA OUMAR DIALLO is asked to please contact the United States Secret Service at (919) 855-1052.

An indictment is an allegation of a crime.  All defendants are presumed under the law to be innocent until proven guilty.

The investigation of this case is being conducted by the United States Secret Service.  Assistant United States Attorney William M. Gilmore is the assigned prosecutor on the case from the Economic Crimes Division of the United States Attorney's Office.

GREENVILLE - United States Attorney Thomas G. Walker announced that CEDRIC SHARROD WILLIAMS, 32, of Scotland Neck, ALONZO KEITH CARTER, 36, of Rocky Mount, DERRICK LAMONT HANNON, 24, of Scotland Neck, HERMAN LEE COLEY, III, 40, of Rocky Mount, JERRY KEITH PITTMAN, JR., 26, of Sharpsburg, and JOSEPH LAMAR NORRIS, 31 of Rocky Mount, were each sentenced resulting from their earlier guilty pleas to distributing large quantities of heroin, cocaine and cocaine base (crack).  The charges involved a large scale narcotics ring responsible for selling 2,493 grams of heroin, 255.15 grams of cocaine, and 49 grams of crack from sometime in 2011 until February 2014 centered in the Rocky Mount area.

“We are making a difference when it comes to getting major drug dealing organizations out of communities.  We are working toward diminishing the quantity of illegal drugs that enter our city,” said Rocky Count Police Chief James Moore. “However it’s not just a Rocky Mount problem.  It’s a North Carolina and an America problem – and until we address the issue of the unquenchable thirst for drugs in this country, it will be a perpetual cycle of apprehension and distribution, no matter how much enforcement we do.”

All 6 defendants were sentenced by Senior Judge Malcolm J. Howard.  WILLIAMS was sentenced to 480 months.  CARTER was sentenced to 120 months; HANNON was sentenced to 66 months imprisonment; COLEY was sentenced to 60 months imprisonment; PITTMAN was sentenced to 41 months; and NORRIS was sentenced to 18 months imprisonment.

According to the investigation, the co-conspirators were members of a heroin trafficking organization, organized by WILLIAMS, and centered in the Rocky Mount, North Carolina, area. The conspirators were involved in the distribution of heroin from sometime in 2011 until February 2014. Further investigation revealed that WILLIAMS maintained a source of supply for heroin in New Jersey and he traveled to New Jersey on multiple occasions with HANNON, COLEY, and others to obtain heroin for sale in the Rocky Mount area.

On June 15, 2012, agents received information from a confidential informant (CI) that WILLIAMS returned the previous day from New Jersey with a large quantity of heroin.  Agents conducted surveillance of WILLIAMS and they observed him conduct multiple drug transactions from a vehicle on Sunset Avenue in Rocky Mount. Officer’s conducted traffic stops on three individuals who had purchased narcotics from WILLIAMS.  All three individuals, who were arrested on state charges, admitted that they purchased heroin from WILLIAMS. Officers recovered 72 bindles (1.44 grams) of heroin from the occupants of the vehicle.  Upon his arrest, WILLIAMS confessed to agents that he traveled to New Jersey with HANNON and COLEY on June 13, 2012, to purchase heroin.  WILLIAMS advised agents that there was heroin, money, and a shotgun at his residence in Rocky Mount.  During a search of the residence officers recovered 22 bricks (22 grams) of heroin, a 12 gauge shotgun, one box of .45 caliber ammunition, two boxes of 12 gauge shotgun shells, and $4,358.  WILLIAMS also admitted to having thrown drugs out of his vehicle prior to being arrested. As a result, agents were able to recover an additional 60 bindles (1.2 grams) of heroin. During the conspiracy, WILLIAMS confessed to purchasing approximately 20 grams per week from his source in New Jersey.  Over the course of the investigation, WILLIAMS was caught possessing numerous illegal firearms in furtherance of his drug trafficking activities.

Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), Drug Enforcement Administration-Raleigh, Rocky Mount Police Department, and the Nash County Sheriff’s Office.  Assistant United States Attorney James Kurosad is handling the prosecution for the government.

WASHINGTON – A Raleigh, North Carolina, man pleaded guilty today to conspiracy to file false claims and identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina.

According to court documents and court statements, Christian Rhodes and other co-conspirators recruited individuals to provide their personal information, which Rhodes and his co-conspirators used to prepare false federal individual income tax returns.  The tax returns that Rhodes prepared and filed contained false wages, income tax withholdings and deductions, resulting in the false claims for tax refunds.  Rhodes also used stolen identities to file false claims for tax refunds, and directed the Internal Revenue Service (IRS) to deposit these refunds electronically into bank accounts that he controlled, as well as accounts in the names of and controlled by third-party taxpayers.  The tax loss as a result of these false claims is more than $3 million.

Rhodes faces a statutory maximum sentence of 10 years in prison for the conspiracy charge and a mandatory minimum sentence of two years in prison for aggravated identity theft.  He also faces financial penalties, including fines and restitution.  Senior U.S. District Judge James C. Fox scheduled sentencing for the Aug. 5th term in Wilmington, North Carolina.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Walker commended the special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Susan Menzer of the Eastern District of North Carolina, and Trial Attorneys Lauren Castaldi and Rebecca Perlmutter of the Tax Division, who are prosecuting the case.

RALEIGH – United States Attorney Thomas G. Walker announced that today in federal court, United States District Judge Terrence W. Boyle sentenced, KELVIN BROADWATER, 44, of Wilmington, to 180 months of imprisonment followed by 3 years of supervised release. 

BROADWATERwas named in an Indictment filed on August 27, 2014. On February 12, 2015, the Defendant pled guilty to Distribution of a Quantity of Heroin and Felon in Possession of a Firearm and Ammunition.  According to the investigation and information presented in open court during the arraignment and sentencing, on March 21, 2014, officers with the Wilmington Police Department executed a search warrant at BROADWATER’S residence.  When BROADWATER and a female pulled up to the apartment, vice detectives approached him and asked him to get out of his car.  Rather than complying, BROADWATER locked himself in his car and attempted to ingest heroin.  Detectives broke out the rear window and gained entry into the car.  BROADWATER was taken into custody and 3 bindles of heroin fell off his person.  Also during the execution of the search warrant, officers found a .32 caliber revolver in a dresser of BROADWATER’s bedroom.  In a separate dresser drawer officers found a box of .32 caliber ammunition.  The execution of the search warrant came after the Wilmington Police Department conducted two controlled purchases of heroin from BROADWATER.

BROADWATER admitted that he had been selling drugs and admitted buying the gun for $100.00 from a neighbor.  Due to BROADWATERS’S extensive criminal history, he was designated as an Armed Career Criminal.

Investigation of this case was conducted by the Wilmington Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.  Special Assistant United States Attorney Charity Wilson prosecuted the case.  Ms. Wilson is a prosecutor with the District 5 District Attorney’s Office encompassing New Hanover and Pender Counties.  District Attorney Ben David has assigned her to the United States Attorney’s Office to prosecute violent crime, firearm related cases, and narcotic crimes.

NEW BERN – United States Attorney Thomas G. Walker announced that in federal court today, BAILEY JOE MILLS, 34and his wife, ELIZABETH MILLS, 35, both of Lillington, North Carolina, were sentenced before United States District Judge Louise W. Flanagan.  BAILEY JOE MILLS received 45 years imprisonment followed by a lifetime term of supervised release. ELIZABETH MILLS received 16 years imprisonment followed by 10 year supervised release. Both are required to register as sex offenders.

On June 12, 2014, a Criminal Information was filed charging BAILEY JOE MILLS with manufacturing child pornography, in violation of Title 18, United States Code, Sections 2251(a) and (d).  ELIZABETH MILLS was charged by Criminal Complaint on October 20, 2014, with aiding and abetting the manufacturing of child pornography.  Both pled guilty to their charges on August 12, 2014, and November 12, 2014, respectively.

According to the investigation, in January, 2014, an investigation was initiated relating to the sexual abuse of a 12-year-old.  Law enforcement learned that BAILEY JOE MILLS had also sexually abused at least 10 other minors and that he had paid several of the minors to have sex with himself and other men. 

As the investigation continued, a search warrant was executed on the MILLS’ residence in Harnett County, where multiple computers, cellular phones and media storage devices were seized.  Forensic examination of the cellular phones and computers revealed a multiple of still images and videos depicting the minors engaged in prohibited sexual conduct produced by BAILEY JOE MILLS with the assistance of his wife, ELIZABETH MILLS.      

Investigation of this case was conducted by the Harnett County Sheriff’s Office and the Department of Homeland Security/Homeland Security Investigations.  Assistant United States Attorney Ethan Ontjes prosecuted the case for the United States.

This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level.  For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.

RALEIGH – United States Attorney Thomas G. Walker announced that the U.S. Attorney’s Office reached agreements with White Sands Technology, LLC, Sierra Software, LLC, TNT Software, LLC, Digital Reveal, LLC, and the principal of Figure 8 Technologies, Inc.  These agreements provide that the United States Attorney’s Office for the Eastern District of North Carolina will not prosecute the software companies or their principals, for the use of alleged illegal internet sweepstakes software in internet cafes across the state of North Carolina.  These agreements are conditioned upon their agreement that by July 1, 2015, they will no longer have any involvement with sweepstakes in North Carolina involving an entertaining display.  The companies supplied hundreds of Internet Cafes in North Carolina:

• White Sands Technology, LLC – Approximately 180 locations
• Sierra Software, LLC – Approximately 175 locations
• TNT Software, LLC, Digital Reveal, LLC – Approximately 40 locations
• Digital Reveal, LLC – Approximately 25 locations
• Figure 8 Technologies, Inc. –Over 200 locations before selling its software in January 2014

Sierra Software, LLC and the principal of Figure 8 Technologies, Inc. agreed that they will not take part in North Carolina in any activities relating to electronic sweepstakes at all.  White Sands Technology, LLC, TNT Software, LLC, and Digital Reveal, LLC agreed that they will take no part in any actions relating to sweepstakes relating in any way to the use of an entertaining display in North Carolina.  They also agree that to provide notice to the U.S. Attorney’s Office for the Eastern District of North Carolina before taking part in any activities relating to sweepstakes or gambling in North Carolina not covered under the ban.  Sweepstakes is defined to include all games where chance predominates. 

United States Attorney Thomas G. Walker stated: “We hope this action will be a big step forward in ensuring compliance with North Carolina’s gambling laws.  Our office is prepared to assist the state in enforcing large scale violations of the law.”

Mark J. Senter, Branch Head of North Carolina Alcohol Law Enforcement, stated: “Alcohol Law Enforcement is proud to have worked with the U.S. Attorney’s Office for the Eastern District of North Carolina in this case.  Sweepstakes machines have been a source of problems for local law enforcement and the community for years.  It is our hope this action eliminates this illegal activity.”

Thomas J. Holloman III, Special Agent in Charge, IRS-Criminal Investigation, Charlotte Field Office, stated: “CI stands in support of the USAO’s decision to enter into this non-prosecution agreement.  Today’s agreement is consistent with our two-faceted, proactive approach to industry compliance that focuses on investigations and liaison activities essential to the enforcement of tax, money laundering, and related financial crimes to combat illegal activity within the gaming industry, as well as to uncover and shutdown illegal gaming operations.   This agreement is a positive step forward in reducing the number of software companies that supply gaming type software crucial to operating internet sweepstakes operations in North Carolina.”

Cumberland County Sheriff Earl R. “Moose” Butler stated: “This announcement marks a major milestone in the long and ongoing fight against illegal gambling.  In this case, for several years, video poker machines have been masquerading as sweepstakes. We hope these agreements will stop and deter evasion of North Carolina’s gambling laws.  We have long been involved in this fight, and we will not stop until the laws passed by the legislature and the North Carolinians they represent are fully enforced.” 

Investigation of this matter was conducted by North Carolina Alcohol Law Enforcement, the Internal Revenue Service, and the Cumberland County Sheriff’s Department in coordination with Assistant United States Attorneys David Bragdon and Joshua Royster.

RALEIGH - United States Attorney Thomas G. Walker announced that Physician Pharmacy Alliance, Inc., (“PPA”), agreed to pay $5 Million to settle claims that, under prior ownership, PPA gave improper gift cards in order to induce referrals or enrollments of Medicare and Medicaid patients, and routinely waived copayments of Medicare and Medicaid patients, in violation of the Anti-kickback statute. 

“This settlement demonstrates our commitment to protect taxpayer money and the integrity of Medicare and Medicaid health care programs.  This case underscores for health care providers that if you commit fraud by giving gift cards or routinely waiving copayments in order to induce referrals, you will be liable for substantial damages and penalties under the Anti-kickback statute,” stated U.S. Attorney Walker.

Health Care Providers are prohibited from giving illegal remunerations under the Anti-kickback statute, which includes giving cash equivalents, such as gift cards, and routinely waiving copayments.  PPA provides pharmacy services through home delivery to Medicare and Medicaid patients in North Carolina.  PPA’s current owners agreed to this settlement for damages and penalties based upon allegations of PPA practices that occurred prior to their purchase of the business in 2011.  The claims resolved by civil settlement are allegations only; there has been no determination of liability. 

The settlement was the result of coordinated effort by the U.S. Attorney’s Office for the Eastern District of North Carolina, the United States Department of Health and Human Services Office of the Inspector General, and the North Carolina Department of Justice's Medicaid Investigations Division.  Assistant United States Attorneys Neal Fowler and William Gilmore, along with North Carolina Department of Justice Attorneys Stacy Race and Michael Heavner, directed the investigation and negotiated the settlement. 

RALEIGH – United States Attorney Thomas G. Walker announced that today, the U.S. Attorney’s Office reached a non-prosecution agreement with HSV Entertainment LLC.  The agreement provides that the United States Attorney’s Office for the Eastern District of North Carolina will close its criminal investigation of HSV, conditioned upon HSV’s agreement that it will no longer have any involvement with sweepstakes in North Carolina involving an entertaining display.  HSV has had a lease with the City of Roanoke Rapids to operate the Roanoke Rapids Theater.  The primary purpose of the lease was to operate an entertainment venue, including concerts and other shows.  In addition, HSV also operated pre-reveal internet sweepstakes games.  It will terminate its operation of the theater effective May 18, 2015.  The City Attorney for Roanoke Rapids has informed the U.S. Attorney’s Office that it will no longer allow sweepstakes devices back in the theater after HSV leaves.  Investigation of this matter was conducted by North Carolina Alcohol Law Enforcement and the Internal Revenue Service in coordination with Assistant United States Attorneys David Bragdon and Joshua Royster.

RALEIGH – United States Attorney Thomas G. Walker announced that in federal court today, PAUL FANTZ, 32, was sentenced by Senior United States District Judge W. Earl Britt to 100 months imprisonment followed by 15 years supervised release for  receipt of child pornography, in violation of Title 18, United States Code, Section 2252(a)(2), during his arraignment.

On March 5, 2014, a Criminal Information was filed charging FANTZ with the violation.  On May 12, 2014, FANTZ pled guilty to receipt of child pornography, in violation of Title 18, United States Code, Section 2252(a)(2).

According to the investigation, FANTZ was seen attempting to videotape a child in the men’s restroom at the North Carolina State Fair in October, 2013.  He was stopped and questioned by Wake County Sheriff deputies.  After admitting to the violation, FANTZ was placed under arrest and a search warrant was obtained for his Ipone and laptop.  Forensic examination revealed at least 100 videos of boys urinating.  Another 100 images were discovered of child pornography on the laptop.

Investigation of this case was conducted by the Wake County Sheriff’s Department Department and the Federal Bureau of Investigation.  Assistant United States Attorney Ethan Ontjes prosecuted the case for the United States.

This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level.  For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.

WASHINGTON – Thirteen current and former law enforcement officers and two other individuals have been indicted and arrested for allegedly protecting narcotics shipments and cash proceeds during transit along the east coast for what they believed was a large-scale drug trafficking organization that was actually an undercover operation by the FBI.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina and Special Agent in Charge John A. Strong of the FBI’s Charlotte, North Carolina, Division made the announcement.

“Corruption in local government – especially involving law enforcement – threatens the social compact that binds our communities together,” said Assistant Attorney General Caldwell.  “When the officer with a gun and a badge is no different from the trafficker peddling drugs in the street, we all suffer.  That is why the Criminal Division of the Department of Justice and our law enforcement partners in North Carolina and throughout the country are determined to root out corruption, wherever and in whatever form it may be found.”

“The actions by these individuals are particularly troubling due to their current and past affiliation with law enforcement,” said U.S. Attorney Walker.  “Their alleged conduct was reprehensible and my office will not tolerate this kind of corruption in our district.  I am grateful for the outstanding work of the FBI Special Agents who investigated this case.”

“They vowed to protect and serve, but instead these deputies and correctional officers sold their badges and used their law enforcement positions to line their own pockets,” said Special Agent in Charge Strong.  “Public corruption at any level is the number one criminal priority of the FBI and we will work aggressively to protect the public trust.”

The following individuals were indicted in the Eastern District of North Carolina and arrested today in a coordinated operation by the FBI:

• Lann Tjuan Clanton, 36, a correctional officer with the Virginia Department of Corrections;
• Ikeisha Jacobs, 32, a deputy with the Northampton County Sheriff’s Office;
• Jason Boone, 29, a deputy with the Northampton County Sheriff’s Office;
• Wardie Vincent Jr., 35, formerly of the Northampton County Sheriff’s Office;
• Adrienne Moody, 39, a correctional officer with the North Carolina Department of Public Safety;
• Cory Jackson, 43, formerly of the Northampton County Sheriff’s Office;
• Jimmy Pair Jr., 48, a deputy with the Northampton County Sheriff’s Office;
• Curtis Boone, 31, a deputy with the Northampton County Sheriff’s Office;
• Antonio Tillmon, 31, a police officer with the Windsor City Police Department;
• Alaina Sue Kamling, 27, a correctional officer with the North Carolina Department of Public Safety;
• Kavon Phillips, 25, a correctional officer with the North Carolina Department of Public Safety;
• Crystal Pierce, 31, of Raleigh, North Carolina;
• Alphonso Ponton, 42, a correctional officer with the Virginia Department of Corrections;
• Thomas Jefferson Allen II, 37, a deputy with the Northampton County Sheriff’s Office; and
• Tosha Dailey, 31, a 911 dispatch operator for Northampton County. 

All 15 defendants are charged with conspiring to distribute controlled substances and conspiring to use and carry firearms during and in relation to drug trafficking offenses.  Other charges against certain defendants include attempted extortion, attempted possession with intent to distribute controlled substances, money laundering, federal programs bribery and use and carry of firearms during and in relation to crimes of violence and drug trafficking offenses.

The charges contained in the indictment are merely accusations.  The defendants are presumed innocent unless and until proven guilty.

The case is being investigated by the FBI’s Charlotte Division, Raleigh Resident Agency and the North Carolina Department of Public Safety, with assistance from the Halifax County Sheriff’s Office.  The case is being prosecuted by Trial Attorneys Lauren Bell and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Brian S. Meyers of the Eastern District of North Carolina.

MEDIA ADVISORY

WHEN:    Thursday, April 30, 2015 at 1:00 pm

WHERE:   

Terry Sanford Federal Building
U.S. Attorney’s Office
310 New Bern Avenue, 3rd Floor Main Conference Room
Raleigh, NC 27601-1461

Re:       Operation Rockfish Press Conference

RALEIGH – The United States Attorney’s Office announces a press conference to discuss the Public Corruption Operation Rockfish arrests today.  The case involves a major undercover investigation of current and former law enforcement and corrections officers.  The following dignitaries are scheduled to join U.S. Attorney Thomas G. Walker.  Acting Chief of the Department of Justice Public Integrity Section Raymond Hulser, and the Special Agent in Charge of the Charlotte Division of the FBI John A. Strong, and Frank Perry, Secretary, North Carolina Department of Public Safety . 

Raleigh – United States Attorney Thomas G. Walker announced that in federal court today United States District Judge Terrence W. Boyle sentenced ROY CHRISTOPHER PERRY, 49, of Raleigh to 151 months imprisonment followed by 5 years of supervised release.

On January 28, 2015, PERRY pled guilty to receipt of child pornography, in violation of Title 18, United States Code, Section 2252(a)(2). 

According to public information, in January, 2014, an investigation was initiated relating to the distribution and receipt of child pornography through Gnutella, a peer-to-peer file sharing network.  Earlier that month, an Internet Protocol (IP) address was identified.  As the investigation continued the subscriber assigned to the IP address was captured and identified as PERRY. 

On June 18, 2014, a search warrant was executed at PERRY’s residence.  When the officers arrived, PERRY’s computer was running and attempting to download files.  Forensic examination of the defendant’s computer and media storage devices revealed over 5,000 images of child pornography.

The criminal investigation of this case was conducted by the Raleigh Police Department and the Federal Bureau of Investigation.  Assistant United States Attorney Ethan A. Ontjes is handling the prosecution on behalf of the Eastern District of North Carolina.

This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level.  For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.

RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today, Chief United States District Judge James C. Dever III sentenced JAMES DINO WILLS, 45,of Wilson, North Carolina, to 102 months in prison and 3 years of supervised release.  Additionally, WILLS was ordered to forfeit $733,882.34.  WILLS also agreed to file amended federal income tax returns for the tax years 2008 through 2013 and to pay any taxes owed. 

WILLS pled guilty on May 7, 2014 to Structuring Financial Transactions to Evade the Filing of Currency Transaction Reports (CTRs). Structuring is the breaking up of a single cash transaction of more than $10,000.00 into two or more separate transactions for the purpose of evading the federal reporting requirement, i.e. CTR.  Federal law requires banks and other financial institutions to file CTRs with the U.S. Treasury Department for all cash transactions exceeding $10,000.

Thomas J. Holloman, III, Special Agent in Charge of the IRS Criminal Investigation stated, “Structuring is an illegal activity!  Regardless of whether the funds come from legal or illegal sources, structuring financial transactions to evade Bank Secrecy Act reporting requirements or to conceal legal cash generating activities as a way to evade paying taxes is a felony that IRS-CI will continue to investigate in adherence with the law.  The structuring crime in Mr. Wills’ situation is amplified because he has now been prosecuted for the same type of illegal activity twice!”

The investigation revealed that WILLS operated a home repair and roofing business in the Rocky Mount and Wilson, North Carolina areas from 2008 to 2013.  WILLS received payments for services and repairs primarily in the form of checks.  These checks were deposited into his business accounts at two financial institutions.  WILLS then structured cash withdrawals from these accounts in order to avoid the filing of CTRs. He most often accomplished this by withdrawing cash in amounts just under $10,000.00 and withholding cash from deposits in amounts just under $10,000.00.  From 2008 to 2013, WILLS structured $755,764.34 in cash transactions.  WILLS was prosecuted for the same offense in 1998.

The investigation of this case was conducted by the Internal Revenue Service Criminal Investigations. The prosecution of the case was handled by Assistant United States Attorney Thomas Murphy.

RALEIGH – United States Attorney Thomas G. Walker announced that today in federal court before United States District Judge Terrence W. Boyle, JOEL DE LA TORRE, 33, of Chicago, Illinois, pleaded guilty to Making False Statements Concerning Highway Projects, in violation of Title 18, United States Code, Section 1020, and Aggravated Identity Theft, in violation of Title 18, United States Code, Section 1028A.

Investigation revealed in October of 2011 a federal highway contractor discovered a defect in a grouping of elastomeric bridge bearings that had been shipped for use on bridges in North Carolina.  An elastomeric bridge bearing is a slab of rubber that is reinforced with multiple layers of steel and placed underneath bridges to absorb shock.  The bearings were defective because the steel plates were exposed, subjecting them to the elements and creating the potential for deterioration.  

The North Carolina Department of Transportation began an investigation and found systematic problems with the bearings that had been shipped, and in some instances installed, on bridge projects throughout the state.  In total, 1,270 of the shipped bearings were found to be nonconforming and defective.  The bearings were shipped in connection with 25 different highway projects in North Carolina between May of 2009 and October of 2011.  Upon further investigation, the Department of Transportation found that many of the bridge bearings had come from a company named Delgado Elastomeric Bearings Corporation, located in the Chicago area. 

The United States Department of Transportation conducted a criminal investigation into the creation and shipment of the defective bridge bearings.  It was discovered that the North Carolina application to supply the bridge bearings to local contractors had been forged.  The name of a teenager with no knowledge of how to manufacture bridge bearings was fraudulently used on the application.  This teenager was also held out by Delgado Elastomeric Bearings Corporation as the vice president of the company, when in fact, the teenager had no idea of this title.  This same name and title had also been used on all certificates sent to North Carolina highway contractors certifying the conformity of the bearings with applicable state and federal regulations.

Ultimately, the investigation revealed that the defendant, JOEL DE LA TORRE, had forged the name of the teenager on the documents described above.  Inspection of the Chicago facility used to manufacture the bridge bearings revealed that the facility did not contain the required testing devices and machinery which would have revealed the defects in the bridge bearings.

Costs associated with the replacement of the bearings are expected to exceed $5 Million due to the difficulty in removing the bearings from beneath existing structures, engineering costs, and traffic control.

Sentencing is currently scheduled for July 2015.  A violation of Making False Statements Concerning Highway Projects carries a maximum penalty of 5 years imprisonment, $250,000.00 fine, and 3 years of supervised release.  A violation Aggravated Identity Theft carries a maximum penalty of 2 years imprisonment consecutive to any other sentence imposed,  $250,000.00 fine and 1 year of supervised release.

The investigation of this case was conducted by the United States Department of Transportation, Office of the Inspector General, with the assistance of the Federal Bureau of Investigation.  Assistant United States Attorney William M. Gilmore represents the United States.

RALEIGH – The Plea and Sentencing Hearing has been rescheduled for Duke Energy Business Services, LLC, Duke Energy Progress, Inc., and Duke Energy Carolinas, LLC to May 14, 2015 at 10:00 a.m. in the federal courthouse in Greenville, North Carolina.  The companies were charged with multiple criminal violations of the Clean Water Act. 

Persons directly and proximately harmed as a result of the conduct charged in this matter may have rights under the Crime Victims’ Rights Act.  See 18 U.S.C. § 3771.  If you believe that you are a crime victim in this matter, please contact the United States Attorney’s Office for the Eastern District of North Carolina at USANCE.CrimeVictimsRightsAct@usdoj.gov no later than April 30, 2015.

The U.S. Attorney’s Offices will have no further comment on this matter until after court proceedings.

RALEIGH - United States Attorney Thomas G. Walker announced that in federal court on April 6, 2015 CLAY TAYLOR STRICKLAND, 74, of Spring Hope, North Carolina, was sentenced by Chief United State District Judge James C. Dever III, to 6 months imprisonment to be followed by 3 years of supervised release.  STRICKLAND was ordered to make restitution in the amount of $233,559 to the United States Department of Agriculture Risk Management Agency and $64,856 to the United States Department of Agriculture Farm Service Agency.  STRICKLAND was also fined $10,000.  STRICKLAND previously pled guilty to conspiring to make false statements, to make material false statements, to commit mail fraud and wire fraud, and to structuring transactions all in violation of Title 18, United States Code, Section 371 and aiding and abetting the making of false statement in connection with the Federal Crop Insurance Program, in violation of Title 18, United States Code, Section 1014.

Mr. Walker stated, “As a farmer, STRICKLAND understood the importance of the federal crop insurance program as a safety net to the community in times of disaster and yet, he stole from that same program.  The sentence imposed today reflects the seriousness of his offense and should serve as a deterrent for others.”

The Criminal Information, filed on October 2, 2014, alleges that STRICKLAND was engaged in the business of farming, doing business as Clay T Strickland Farms, Inc.  The Information goes on to allege that STRICKLAND filed a false crop insurance claim in that he hid tobacco production from USDA by selling tobacco for cash to a tobacco warehouseman who then sold the tobacco in nominee names.  STRICKLAND profited under the scheme because he was paid twice for each pound of tobacco; once through the false crop insurance claim and also from the sale of the “hidden” tobacco for cash.  To conceal the conspiracy, STRICKLAND made false statements to law enforcement officers during the investigation. 

Investigation of this case was conducted by the United States Department of Agriculture - Office of Inspector General, Investigations; the United States Department of Agriculture - Risk Management Agency, Special Investigations Branch, and the Internal Revenue Service – Criminal Investigations.  Assistant United States Attorney Banumathi Rangarajan served as prosecutor for the government.

WASHINGTON – The Department of Justice filed a complaint in the U.S. District Court for the Eastern District of North Carolina today seeking the arrest and extradition of a former colonel in the Salvadoran army to face charges in Spain related to the murder of five Spanish Jesuit priests in El Salvador in 1989.    

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina made the announcement.

Inocente Orlando Montano Morales, 72, formerly of Everett, Massachusetts, and 19 other former Salvadoran military officials have been indicted in Spain for the 1989 murders of five Spanish Jesuit priests during the 10-year Salvadoran civil conflict.  An arrest warrant for Montano was issued by a Spanish magistrate.    

According to allegations in the complaint filed in U.S. District Court today, between 1980 and 1991, El Salvador was engulfed in a civil conflict between the military-led government and the Farabundo Martí National Liberation Front (FMLN).  During this conflict, in the early morning hours of November 16, 1989, members of the Salvadoran military allegedly murdered six Jesuit priests, their housekeeper and the housekeeper’s 16-year old daughter at the Universidad Centroamericana.  Five of the Jesuit priests were Spanish nationals, and the remaining victims were from El Salvador.  The Jesuit priests were allegedly advocates for discussions between the FMLN and the military-led government to end the strife. 

At the time, Montano Morales was a colonel in the Salvadoran army, and he also served as Vice Minister of Defense and Public Safety.  The complaint alleges that he shared oversight responsibility over a government radio station that, days before the massacre, issued threats urging the murder of the Jesuit priests.  The day before the murders, Montano Morales also allegedly participated in a series of meetings during which one of his fellow officers gave the order to kill the leader of the Jesuits and leave no witnesses.  The following day, members of the Salvadoran army allegedly executed the six priests, their housekeeper and the housekeeper’s daughter.

Montano Morales is currently serving a 21-month federal prison sentence in the United States for his 2013 conviction in the District of Massachusetts for immigration fraud and perjury in connection with false statements he made to immigration authorities to remain in the United States.  He will be released from that prison sentence on April 16, 2015.   

The allegations contained in the complaint are merely accusations, and any finding of guilt or innocence will be made by Spanish courts upon Montano Morales’s extradition.

The case is being handled by Assistant U.S. Attorney Eric Goulian and Special Assistant U.S. Attorney John Capin of the Eastern District of North Carolina and Trial Attorney Roberto Iraola of the Criminal Division’s Office of International Affairs.

WILMINGTON - United States Attorney Thomas G. Walker announced that in federal court on March 30, 2015, Senior United States District Judge James C. Fox sentenced CHRISTIAN PATRICK LUSARDI, 43,of Fayetteville, North Carolina, to 60 months in prison and 3 years of supervised release for Copyright Infringement and Trafficking in Counterfeit Labels. LUSARDI was ordered to pay $1,137,864.01 restitution.  LUSARDI previously pled guilty to these charges on September 2, 2014.

Investigation revealed that several boxes of counterfeit DVDs mailed from China were intercepted by the National Intellectual Property Rights Coordination Center and Customs and Border Protection (CBP).  The boxes of counterfeit DVDs were controlled delivered to the identified address.  Shortly after the controlled delivery was complete, agents made contact with LUSARDI which resulted in the subsequent search of LUSARDI’s residence.  The search resulted in the discovery of over 35,500 counterfeit DVDs.  Investigation revealed that between June 2010 and July 2012, LUSARDI was in the business of receiving, manufacturing, and selling counterfeit DVDs in both the United States and Canada.  It was determined that LUSARDI received over $1.3 million in his PayPal account during this time period.

The investigation of this case was conducted by the Department of Homeland Security and the United States Postal Inspection Service.  The prosecution of the case was handled by Assistant United States Attorney Susan B. Menzer.

RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today Senior United States District Judge W.Earl Britt sentenced JOHN TOBIAS SWEENEY, 38, to 78 months imprisonment followed by 15 years supervised release.  A $10,000 fine was imposed.  SWEENEY is also required to register as a sex offender.

A Federal Grand Jury returned a Criminal Indictment on May 21, 2014.On November 3, 2014, SWEENEY pled guilty to receipt of child pornography.

According to the investigation, in March 2013, an investigation was initiated when law enforcement learned of a 12-year-old engaging in explicit communications with SWEENEY, online applications such as TextNow, a test messagin application, and Oovoo, an instant messaging client application. During the communications SWEENEY repeatedly requested sexually explicit images from the 12-year-old victim.  That same month, an agent working undercover assumed the identity of the victim and continued the communication through September, 2013.  SWEENEY was a high school teacher and the girls/boys soccer coach at South Onslow County High School at the time.  

In December, 2013, a search warrant was executed at SWEENEY’s residence and the high school.  During that time it was learned that SWEENEY used approximately 50 email accounts and fake profiles on chat sites and had nude images of minors on his phone.  Forensic examination of SWEENEY’s computer revealed nude images of the victim, which were also duplicated on his thumb drive.    

This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level.  For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.

Investigation of this case was conducted by the Federal Bureau of Investigation - Wilmington.  Assistant United States Attorney Ethan A. Ontjes prosecuted the case.

WASHINGTON – A federal grand jury in the Eastern District of North Carolina has returned an indictment against a Raleigh, North Carolina, resident for one count of conspiracy to defraud the United States, 17 counts of presenting false claims to the Internal Revenue Service (IRS), three counts of wire fraud and two counts of aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina.

Christian Rhodes, of Raleigh, was arrested earlier today on the indictment, which alleges that Rhodes and others solicited individuals in order to prepare their federal tax returns that used false information to claim tax refunds that the individuals were not entitled to receive.  The tax returns that Rhodes prepared and filed contained false wages, tax withholdings and deductions.  Rhodes directed the IRS to deposit refunds electronically into bank accounts in his own name and in the names of third-party taxpayers.  Rhodes also used stolen identities in order to file false claims for tax refunds.

If convicted, Rhodes faces a statutory maximum sentence of 10 years in prison for the conspiracy count, five years in prison for each false claims count, 20 years in prison for each wire fraud count, and a maximum fine of $250,000 for each count.  Rhodes also faces a statutory mandatory minimum sentence of two years in prison for the aggravated identity theft count.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Walker commended the special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Susan Menzer of the U.S. Attorney’s Office for the Eastern District of North Carolina, and Trial Attorneys Lauren Castaldi and Rebecca Perlmutter of the Tax Division, who are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.  Additional information about tax fraud schemes to watch out for may be found on the IRS-Criminal Investigation website.

An indictment is merely a formal charge by the grand jury.  The defendant is presumed innocent unless and until proven guilty in a U.S. District Court.

RALEIGH -  United States Attorney Thomas Walker announced that yesterday in federal court, DAVID THOMAS STEPHENSON, III , 68, of Lumberton, NC, waived indictment and pled guilty to a Criminal Information charging him with structuring transactions to evade reporting requirements and aiding and abetting the same.  Structuring is the breaking up of a single cash transaction of more than $10,000 into two or more separate transactions for the purpose of evading the federal reporting requirement.  Federal law requires banks and other financial institutions to file Currency Transaction Reports with the U.S. Treasury Department for all cash transactions that exceed $10,000.

According to the Criminal Information filed on January 26, 2015, and information presented in open court, STEPHENSON was a tobacco warehouseman in Lumberton, NC and former board member for the Golden Leaf Foundation.  He operated a tobacco warehouse/tobacco receiving station under the name of S & P Tobacco Marketing.  STEPHENSON also operated as an independent tobacco broker, buying and selling tobacco on his own.  On his tax returns, STEPHENSON failed to report all of his tobacco purchases and sales.

Between 2009 and 2012, STEPHENSON converted tobacco checks made payable to him and others (third party checks) to cash by withholding cash from deposits, exchanging tobacco checks for cashier’s checks, mainly in amounts less than $10,000, that were subsequently cashed or converted to additional cashier’s checks that were cashed, and by making cash withdrawals after tobacco checks and cashier’s checks were deposited.

During that same time frame, STEPHENSON structured $382,562.37 in financial transactions to evade the $10,000 trigger for the filing of currency transaction reports.  He did so at three domestic financial institutions. STEPHENSON structured the transactions as part of a pattern of illegal activity involving more than $100,000 in a 12-month period.   Between September 2011 and January 2012, he structured just over $150,000, with transactions in varying amounts such as $9,500; $9,600; and $9,700.

At sentencing, set for the June 15, 2015, term of court, STEPHENSON faces up to 10 years imprisonment followed by up to 3 years of supervised release and a fine of $500,000.  This case is part of the ongoing investigation of crop insurance fraud in the Eastern District of North Carolina.

The criminal investigation of this case was conducted by United States Department of Agriculture – Office of the Inspector General – Investigations, the United States Department of Agriculture - Risk Management Agency – Special Investigations Branch, and the Internal Revenue Service - Criminal Investigations.  Assistant United States Attorney Banumathi Rangarajan is handling the prosecution on behalf of the Eastern District of North Carolina.

RALEIGH – A Plea and Sentencing Hearing has been set for Duke Energy Business Services, LLC, Duke Energy Progress, Inc., and Duke Energy Carolinas, LLC for April 16, 2015 at 10:00 a.m. in the federal courthouse in Greenville, North Carolina.  The companies were charged with multiple violations of the Clean Water Act. 

Persons directly and proximately harmed as a result of the conduct charged in this matter may have rights under the Crime Victims’ Rights Act.  See 18 U.S.C. § 3771.  If you believe that you are a crime victim in this matter, please contact the United States Attorney’s Office for the Eastern District of North Carolina at USANCE.CrimeVictimsRightsAct@usdoj.gov no later than March 26, 2015.

The U.S. Attorney’s Offices will have no further comment on this matter until after court proceedings.  

RALEIGH – United States Attorney Thomas G. Walker announced that today in federal court, Senior United States District Judge James C. Fox sentenced, ERNEST DAILEY, 48, of Wilmington, to  262 months of imprisonment followed by 5 years of supervised release. 

DAILEY was named in an Indictment filed on August 27, 2014. On December 1, 2014, the Defendant pled guilty to Possession with the Intent to Distribute more than 28 grams of Cocaine Base and Possession of a Firearm During and In Relation to a Drug Trafficking Crime.  According to the investigation and information presented in open court during the sentencing, on March 26, 2014, officers with the Wilmington Police Department executed a search warrant at DAILEY’S residence.  During the search officers found over 44 grams of cocaine base, which is crack, approximately 6 grams of cocaine hydrochloride, $8,800 in US Currency, various drug paraphernalia and a 9 mm semi-automatic firearm.  DAILEY admitted that he had been selling drugs and admitted taking the firearm in a form of payment for drugs.  Due to DAILEY’S extensive criminal history, having approximately 12 prior drug convictions, he was designated as a Career Offender.

Investigation of this case was conducted by the Wilmington Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.  Special Assistant United States Attorney Charity Wilson prosecuted the case.  Ms. Wilson is a prosecutor with the District 5 District Attorney’s Office encompassing New Hanover and Pender Counties.  District Attorney Ben David has assigned her to the United States Attorney’s Office to prosecute violent crime, firearm related cases, and narcotic crimes.

RALEIGH – United States Attorney Thomas G. Walker announced that today in federal court, United States District Judge Louise W. Flanagan sentenced, ANTONIO BRADLEY, 33, of Wilmington, to 262 months of imprisonment followed by 5 years of supervised release. 

BRADLEY was named in an Indictment filed on March 18, 2014. On August 12, 2014, the Defendant pled guilty to Possession with the Intent to Distribute a Quantity of Heroin and Using, Carrying and Brandishing a Firearm During and In Relation to a Drug Trafficking Crime.  According to the investigation and information presented in open court during the arraignment and sentencing, on February 1 and 4, 2014 detectives with the New Hanover County Sheriff’s Office set up two controlled purchases of heroin from BRADLEY.  Later on Feburary 4, 2014, detectives executed a search warrant at BRADLEY’S home wherein detectives found over 100 bags of heroin, $1500 and a firearm.  Due to BRADLEY’S extensive criminal history, he was designated as a Career Offender.

Investigation of this case was conducted by the New Hanover County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Special Assistant United States Attorney Charity Wilson.  Ms. Wilson is a prosecutor with the District 5 District Attorney’s Office encompassing New Hanover and Pender Counties.  District Attorney Ben David has assigned her to the United States Attorney’s Office to prosecute violent crime, firearm related cases, and narcotic crimes.

GREENVILLE – United States Attorney Thomas G. Walker announced that today in federal court, Senior United States District Judge Malcolm J. Howard sentenced TERESA LYN FLETCHER , age 55, of Raleigh, North Carolina, to 60 months imprisonment, followed by 5 years of supervised release.

FLETCHER pleaded guilty to a Criminal Information filed on September 3, 2014, charging her with two counts of bank fraud and one count of mail fraud.  According to the investigation, charging documents and statements made in court, FLETCHER engaged in separate schemes to defraud Bank of North Carolina, TD Bank, and Liberty Mutual Insurance over a 10-month span in 2013. 

In January 2013, FLETCHER provided false information about her income and assets to Bank of North Carolina in order to obtain a personal loan.  Among other things, FLETCHER falsified her credit application and submitted bogus wage records.  After Bank of North Carolina approved the loan based on FLETCHER’s fraudulent representations, FLETCHER proceeded to rapidly dissipate the loan proceeds.  When FLETCHER defaulted on the loan for non-payment, she filed a false identity theft report with Equifax claiming that someone else had opened the loan account.

In February 2013, FLETCHER closed on the purchase of a $1.85 million residence in Raleigh.  To finance the purchase, FLETCHER applied to TD Bank for over $1.65 million in loans. During the loan approval process, FLETCHER gave false information to TD Bank about her financial condition and the nature of the sales transaction.  Among other things, FLETCHER completed a loan application in which she falsified her assets, provided TD Bank with counterfeit bank records and fake IRS Forms W-2 reflecting grossly inflated wages, and fraudulently represented in the HUD-1 settlement statement that she had received a “gift of equity” to be applied to the purchase price, when, in fact, it was a concealed side loan.  After defaulting on her loan obligations to TD Bank, FLETCHER submitted a false identity theft report to Experian in an effort to prevent the negative item from appearing on her credit report.  

FLETCHER’s Raleigh residence was thereafter insured by Liberty Mutual Insurance.  From approximately May 2013 to October 2013, FLETCHER made repeated false claims against the Liberty Mutual homeowner’s policy for reimbursement of expenses she purportedly incurred to repair the residence after a spring storm hit the Raleigh area.  In furtherance of the scheme, FLETCHER generated counterfeit records from contractors and vendors and provided them to Liberty Mutual to support her claims.

Investigation of this case was conducted by the United States Secret Service.  The prosecution was handled by Assistant United States Attorney Adam F. Hulbig.

RALEIGH – The United States Attorney’s Offices for the Eastern, Middle, and Western Districts of North Carolina, along with the Department of Justice – Environmental Crimes Section, filed criminal charges today against three subsidiaries of Duke Energy Corporation: Duke Energy Business Services LLC, Duke Energy Carolinas LLC, and Duke Energy Progress, Inc. for multiple violations of the Clean Water Act. 

The three U.S. Attorney’s Offices filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities:  Dan River Steam Station (Rockingham County); Cape Fear Steam Electric Plant (Chatham County); Asheville Steam Electric Generating Plant (Buncombe County); H.F. Lee Steam Electric Plant (Wayne County); and Riverbend Steam Station (Gaston County).  The alleged violations include unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee, and Riverbend facilities.

The U.S. Attorney’s Offices for Middle and Western Districts also filed papers asking their courts to transfer the cases to be heard in the Eastern District of North Carolina.

The defendants face a maximum penalty on each charged count of five years probation; a fine in an amount of the greater of not less than $2,500 nor more than $25,000 per day of violation; $200,000.00; or twice the gross gain or loss; restitution; and a special assessment of $125.00. 

Persons directly and proximately harmed as a result of the conduct charged in this matter may have rights under the Crime Victims’ Rights Act.  See 18 U.S.C. § 3771.  If you believe that you are a crime victim in this matter, please contact the United States Attorney’s Office for the Eastern District of North Carolina at USANCE.CrimeVictimsRightsAct@usdoj.gov no later than March 6, 2015.

A criminal information is not a finding of guilt.  A corporation charged by criminal information is presumed innocent unless and until proven guilty in a court of law.

The U.S. Attorney’s Offices will have no further comment on this matter until after court proceedings.

RALEIGH - United States Attorney Thomas G. Walker announced that today in federal court Chief United States District Judge James C. Dever, III sentenced IBRAHIM BARRIE, 32, of Raleigh, to serve a total of 42 months in prison, followed by 3 years of supervised release, on charges of Aggravated Identity Theft, in violation of Title 18, United States Code, Section 1028A(a)(1), and Conspiracy to Commit Access Device Fraud, in violation of Title 18, United States Code, Section 1029(b)(2).  BARRIE was also ordered to make restitution to victims.

According to the Criminal Information and other details discussed in open court, BARRIE was a participant in a credit card and cigarette trafficking scheme.  The purpose of the scheme was to use stolen credit card account information to purchase large quantities of cigarettes in North Carolina which were resold in New York.  To carry out the scheme, participants acquired stolen credit card data from other conspirators and encoded the stolen data onto the magnetic strip of what appeared to be legitimate gift cards.  Managers in the scheme, including BARRIE, then distributed the cards to “runners” who traveled to various gas stations, convenience stores, and grocery stores located around the state to purchase dozens of cartons of cigarettes at a time using the counterfeit gift cards.  The runners returned the cigarettes to the managers in the scheme, who paid the runners a kickback.  Managers, including BARRIE, periodically make trips to New York to sell the cigarettes on the black market for cash.

On July 22, 2012, BARRIE was arrested on state charges after a concerned citizen indicated that BARRIE and others attempted to have the citizen purchase gasoline on BARRIE’s credit card in exchange for payment.  A subsequent search of BARRIE and his vehicle revealed 20 cartons of cigarettes and 11 counterfeit gift cards.  Additionally, on October 24, 2012, BARRIE was stopped by Virginia State Police.  During a search of the defendant’s car police located 600 cartons of cigarettes.

Investigation of BARRIE’s case was conducted by the United States Secret Service, with the assistance of the Raleigh Police Department.  Assistant United States Attorney William M. Gilmore represented the United States.

WILMINGTON – United States Attorney Thomas G. Walker announced today that a jury convicted BRADLEY CAMPBELL, 23of Harnett County, North Carolina, of kidnapping, use and carrying of a firearm during a crime of violence, and of being a felon in possession of a firearm.  The jury returned its verdict following a trial in federal court before United States District Judge James C. Fox.

Following a domestic dispute which had occurred previously in the day, CAMPBELL, in the early morning hours of January 17, 2014, entered the home in Spring Lake, NC he shared with a woman.  At the time, the home was occupied by 17-year old and 18 year old males, the woman, her oldest child, and two younger children of both CAMPBELL and the woman.  The 18 year old victim was shot by CAMPBELL and held captive; the 17 year old male escaped; and the mother with an infant escaped approximately one hour later.  CAMPBELL, after repeated demands to law enforcement that they bring him marijuana, released the shooting victim approximately 5 hours after the violence began. The two additional children were released approximately 2 hours following that.  At sentencing, CAMPBELL faces a minimum of ten years and up to life imprisonment.

The events and scene were handled by the Harnett County Sheriff’s Office, and further investigation completed by the Harnett County Sheriff’s Office and the United States Bureau of Alcohol, Tobacco, Firearms, and Explosives.  The Cumberland County Sheriff’s Office provided forensic assistance.

NEW BERN - United States Attorney Thomas G. Walker announced that in federal court today, United States District Judge Louise W. Flannagan sentenced JOSEPH GRECCO, 52,of DuBois, Pennsylvania, to 30 months in prison and 3 years of supervised release for Conspiracy to Commit Bank Fraud.  GRECCO previously pled guilty to this charge on March 12, 2014.  On August 8, 2014, Judge Flannagan sentenced GRECCO’S co-defendant, EDWARD A. YATES, 50, of Wilmington, North Carolina, to 12 months and 1 day in prison and 3 years of supervised release for Conspiracy to Commit Bank Fraud.  On January 8, 2015, another co-defendant RONALD DOERRER, 67 of Kure Beach, North Carolina was sentenced to 18 months imprisonment followed by 3 years of supervised release for the same charge, Conspiracy to Commit Bank Fraud.  A fourth co-defendant, and the leader of this conspiracy to commit bank fraud, RONALD HAYDEN KOTLER, remains at large.

“Fraud in any form harms every consumer, and identity theft in particular is a devastating crime for the victim”, said Thomas J. Holloman, III, Special Agent in Charge IRS Criminal Investigation.  “With these sentencings, these defendants are now forced to bear the consequences of their criminal activity. I would encourage the public to take the appropriate measures to safeguard their personal information, so as not to fall victim to identity theft.”

These criminal charges grew out of the activities of KOTLER, DOERRER, GRECCO, and YATES in connection with a company in Wilmington known as Commercial Loan Solutions (CLS), which operated from 2006 until 2009.  CLS, which was run by KOTLER and DOERRER, offered its services as a broker who could provide bank financing for individuals and companies, in exchange for hefty fees, ranging from 15% to 25% of the loan amount. 

The way in which KOTLER and DOERRER were able to procure financing for individuals and businesses was by helping their clients, including GRECCO, YATES, and other unindicted conspirators, to falsify loan application by submitting false tax returns, and vastly inflating these individuals’ business income and assets.  

GRECCO received in excess of $360,000.00 in financing based upon falsified loan applications that CLS helped him prepare and submit, while YATES received approximately $350,000.00 in financing based upon falsified loan applications that CLS helped him prepare and submit.

The co-conspirators defrauded various financial institutions, including, but not limited to, Bank of America, Chase, CitiBank, National City Bank, PNC Bank, and Tri Counties Bank.  The scheme involved obtaining money, funds, credits, and other things of value from these financial institutions by providing them with materially false information and making fraudulent representations and promises.  These financial institutions suffered losses in excess of $4,500,000.00 as a result of KOTLER’S scheme to defraud. 

Any person having knowledge of KOTLER’S whereabouts is encouraged to contact the Internal Revenue Service Criminal Investigations office in Wilmington, or United States Secret Service office in Wilmington, North Carolina.

The investigation of this case was conducted by the Internal Revenue Service Criminal Investigation and the United States Secret Service.  The prosecution of the case was handled by Assistant United States Attorney Evan Rikhye.

Raleigh – United States Attorney Thomas G. Walker announced that in federal court yesterday, United States District Judge Terrence W. Boyle sentenced TINA LURETHA TYREE JOHNSON, 46, of Rocky Mount, North Carolina to 30 months imprisonment and 3 years of supervised release.  On July 18, 2013, JOHNSON pled guilty to Tax Fraud and Aiding and Abetting in violation of Title 18, United States Code, Section 287 and 2.

U.S. Attorney Walker stated, “Our tax system relies on the honesty of tax payers with a heightened duty of honesty expected from professional tax preparers.  Whenever someone like JOHNSON deliberately files false returns, the U.S. Attorney’s Office in support of the IRS will pursue the matter through the Courts as provided by our laws.”

According to the Criminal Information filed on January 31, 2013, JOHNSON, beginning in or about January 2008 and continuing until on or about June 2008, did knowingly make and present, and caused to be made and presented, to the Internal Revenue Service claims against the United States for payment that were false by preparing federal income tax returns for individuals totaling approximately $40,867.00.  Johnson’s sentence was based on all relevant tax fraud conduct, not just the $40,867 list in the Criminal Information, which totaled over $400,000 in actual loss and $1 million in intended loss to the IRS. 

“Filing a truthful, accurate federal tax return is a responsibility that hardworking taxpayers take very seriously, and so should their tax preparers, said Thomas J. Holloman, III, Special Agent in Charge, IRS Criminal Investigation. This sentence is a clear message to unscrupulous tax return preparers, such as Tina Johnson, that with criminal activity and greed comes severe consequence. I would encourage citizens to avoid being taken advantage of by seeking out credentialed, reputable tax preparers during the current filing season.”

The criminal investigation of this case was conducted by Internal Revenue Service Criminal Investigation.  Assistant United States Attorney David Bragdon is handling the sentencing on behalf of the government.

WILMINGTON – United States Attorney Thomas G. Walker announced that yesterday in federal court, Senior United States District Judge James C. Fox sentenced PHILLIP HARDY , 30, of Goldsboro, North Carolina to a total of 180 months imprisonment, followed by 10 years of supervised release.

HARDY was named in a seven count Indictment filed on February 18, 2014.  On July 14, 2014, HARDY pled guilty to Conspiracy to Distribute and Possess with Intent to Distribute 1 Kilogram or More of Heroin; and Possession of a Firearm in Furtherance of a Drug Trafficking Offense. 

According to the investigation, the Wayne County Sheriff’s Office began utilizing a confidential informant in May 2013 to investigate the heroin trafficking activities of HARDY.  On June 5, 2013, agents simultaneously executed a search warrant at HARDY’s apartment in Goldsboro and the residence he shared intermittently with his grandparents in Goldsboro.  With regard to the search of the defendant’s apartment, agents encountered HARDY upon entry and immediately detained him. A search of HARDY’S bedroom resulted in the recovery of a pistol and a 50-round drum pistol magazine, ammunition, 68.43 bundles (27.372 grams) of heroin, bags used to package heroin and a total of $13,686 in U.S. Currency.  From HARDY’S vehicle agents recovered 1 bundle (0.4 grams) of heroin.

During the search of the defendant’s grandparents’ residence, agents recovered five firearms (two of which were determined to be stolen), assorted ammunition, several firearms magazines, a digital scale and plastic bags used to package narcotics

It was determined that between 2007 and February 25, 2014, HARDY possessed/distributed more than 33 kilograms of heroin. He also possessed firearms in furtherance of his drug trafficking activities.  On July 25, 2014, the defendant provided a written statement to the probation office wherein he acknowledged his involvement in the instant offense and expressed remorse for the harm his actions have caused him, his family, and society.

Investigation of this case was conducted by the Wayne County Sheriff’s Office and the Drug Enforcement Administration. Assistant United States Attorney Jennifer E. Wells represented the government.

RALEIGH - United States Attorney Thomas G. Walker announced that TAVARIS DELINO BATTLE, 30, of Elm City, TONY MARICHAL SHARP, 31, of Sharpsburg, BYRON DALE WHITAKER, 23, of Sharpsburg, GREGORY DEVONTE ROBERTSON, 20, of Rocky Mount, NATALIE BAKER LYNCH, 33, of Roanoke Rapids, TREMAYNE A. LYNCH, 35, of Rocky Mount, TANGI SONYETTE WILLIAMS, 37, of Rocky Mount, ROBERT MACK RICHARDSON, 33 of Enfield, MATHEW LEE LEAK, 32, of Sharpsburg, ANDREW LEONARD LEAK, 30, of Rocky Mount, JEROLD JERALD MASON, 30, of Sharpsburg, SHAMEKA JOHNESE WINN, 28of Wilson and ROY LATRON RICHARDSON, 23, of Nashville were each sentenced resulting from their earlier guilty pleas to distributing large quantities of cocaine and cocaine base (crack).  The charges involved a large scale narcotics ring responsible for selling kilos of crack from around May 2011 to on or about July 16, 2013 in the Sharpsburg area.

Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, & Explosives, Wayne L. Dixie, Jr. stated, “This case is another example of ATF’s commitment to ensure the public’s safety by removing drug traffickers and violent individuals from our communities.  These results could not have occurred without the outstanding partnerships that we have with our law enforcement partners (USAO; Drug Enforcement Administration, Rocky Mount Police Department, Nash County Sheriff’s Office, Wilson County Sheriff’s Office and Edgecombe County Sheriff’s Office).” 

All 13 defendants were sentenced by Chief United States District Judge James C. Dever, III.  BATTLE was sentenced to life imprisonment.  SHARP was sentenced to 480 months imprisonment; WHITAKER was sentenced to 480 months imprisonment; ROBERTSON was sentenced to 262 months imprisonment; NATALIE LYNCH was sentenced to 132 months imprisonment; TREMAYNE LYNCH was sentenced to 450 months; WILLIAMS was sentenced to 90 months; ROBERT RICHARDSON was sentenced to 75 months imprisonment; MATTHEW LEAK was sentenced to 156 months imprisonment; ANDREW LEAK was sentenced to 132 months imprisonment; MASON was sentenced to 36 months imprisonment; WINN was sentenced to 70 months imprisonment; and ROY RICHARDSON was sentenced to 102 months imprisonment.

According to the investigation, BATTLE was the leader of this narcotics distribution organization. SHARP helped plan a brutal home invasion and was instrumental in the group selling kilos of crack cocaine. 

During the violent home invasion WHITAKER and TREYMAYNE LYNCH were searching for drugs and money that resulted in a brutal rape of young mother while her small child watched.  LYNCH also shot the mother’s boyfriend, the father of the child, during the home invasion twice.  ROBERTSON participated in the home invasion by beating the already shot and bound boyfriend. 

In addition to the home invasion, TREYMAYNE LYNCH was involved with three other exceedingly violent incidents.  In 2 of them he walked up and started shooting at competitors and in the third he kidnapped someone who owed the group money and held him hostage for a couple of days repeatedly strangling the victim into unconsciousness, tying him to a tree and shooting a gun in front of him, beating him, and threatening to have WHITAKER burn his groin with heated keys. 

WILLIAMS drove the home invasion crew to the victims house knowing they were going in armed and with masks to commit robbery.  After the robbery, she drove the group to a hotel room and located someone to sell TREMAYNE LYNCH a gun.  She also drove LYNCH to Washington, D.C. to avoid arrest.

Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration, Rocky Mount Police Department, Nash County Sheriff’s Office, Wilson County Sheriff’s Office, and Edgecombe County Sheriff’s Office.  Assistant United States Attorney John Bowler is handling the prosecution for the government.

GREENVILLE - United States Attorney Thomas G. Walker announced today that, STEPHEN A. LAROQUE, of Kinston, North Carolina, pleaded guilty to the theft of $150,000 from a federally-funded nonprofit organization in violation of Title 18, United States Code, Section 666.  LAROQUE also agreed to pay $300,000.00 in full restitution to East Carolina Development Company (“ECDC”), which is a nonprofit organization based in Kinston, North Carolina. ECDC was originally created to provide loans to small rural businesses using federal funds provided to ECDC by the United States Department of Agriculture under the Rural Development Division’s Intermediary Relending Program.

On April 17, 2013, a 12-Count Second Superseding Indictment was returned charging LAROQUE, among other things, with the theft of $300,000 from ECDC.  According to the Indictment, LAROQUE accomplished the $300,000 theft through four disbursements made by ECDC under the guise of loans to LAROQUE’s wholly-owned company.  A review of bank records established that such funds were funneled through LAROQUE’s wholly owned company and then used for his personal benefit, including his investment in an ice skating rink in Greenville and to help fund his purchase of rental property in Kinston.

On June 7, 2013, after a three-week trail, a jury found LAROQUE guilty on each of the twelve counts.  Later, the court granted a new trial based on an issue regarding a juror’s internet research during deliberations.

At sentencing scheduled for the court’s May 12, 2015 term in Greenville, LAROQUE faces a maximum of 10 years imprisonment followed by up to 3 years of supervised release.

Investigation of this case was conducted by the Internal Revenue Service - Criminal Investigation, the United States Department of Agriculture, Office of Inspector General-Investigations, Raleigh Office, and the Federal Bureau of Investigation.  Assistant United States Attorneys, Dennis M. Duffy and Adam F. Hulbig prosecuted the case.

RALEIGH – United States Attorney Thomas G. Walker announced that on January 20, 2015 in federal court, United States District Judge Terrence W. Boyle sentenced JONATHAN BAYSDEN , 25, of Jacksonville, North Carolina to a total of 120 months imprisonment, followed by 3 years of supervised release.

BAYSDEN was named in a seven count Indictment filed on May 7, 2014.  On July 14, 2014, BAYSDEN pled guilty to Conspiracy to Distribute and Possess With Intent to Distribute a Quantity of Oxycodone; Possession of a Firearm in Furtherance of a Drug Trafficking Offense; and Conspiracy to Launder Monetary Instruments from July 2010, to May 7, 2014. 

According to the investigation, the Jacksonville Police Department, the Onslow County Sheriff’s Office, the United States Postal Inspection Service and Homeland Security Investigations opened an investigation into BAYSDEN’s drug trafficking activities in 2010.  Based on that investigation, BAYSDEN was arrested on state charges in August of 2010 after a package containing just under a kilogram of marijuana was intercepted while it was in transit to BAYSDEN. A search of BAYSDEN’s residence revealed a loaded .45 caliber handgun and other items associated with drug trafficking.

BAYSDEN was released on bond.  While his case was pending, BAYSDEN was arrested again in December of 2010 after the United States Postal Inspection Service intercepted a package containing Oxycodone that was intended for BAYSDEN.  BAYSDEN was again arrested on state charges and drug paraphernalia was seized again.

BAYSDEN was again arrested in February of 2014 after the United States Postal Inspection Service intercepted two packages containing Oxycodone that were intended for BAYSDEN.  A search warrant was again executed at BAYSDEN’s residence where investigators seized Fentanyl, Oxycontin, hydrocodone, marijuana and a loaded .40 caliber handgun.  Further investigation by law enforcement determined that BAYSDEN was receiving shipments of Oxycontin from an international source, and then selling the Oxycontin in the Jacksonville and Greenville areas.  During the course of the conspiracy, BAYSDEN sent $598,796.82 overseas to pay for illegally imported Oxycontin.

Investigation of this case was conducted by the United States Postal Inspection Service, Homeland Security Investigations, the Internal Revenue Service Criminal Investigation, the Jacksonville Police Department, and the Onslow County Sheriff’s Office.  Assistant United States Attorney Jennifer E. Wells represented the government.

WASHINGTON—Thirteen commercial fishermen in North Carolina and Georgia have been charged in federal court in Raleigh, North Carolina, for their role in the illegal harvest and sale, and false reporting of approximately 90,000 pounds of Atlantic striped bass from federal waters off the coast of North Carolina during 2009 and 2010, the Justice Department announced today.  The average retail value of the illegally harvested Striped Bass is approximately $1.1 million dollars.

This investigation began as a result of the U.S. Coast Guard boarding of the fishing vessel Lady Samaira in February 2010, based on a complaint that multiple vessels were fishing Striped Bass illegally.  The individuals have been charged with violating the Lacey Act, which is a federal law that prohibits individuals from transporting, selling, or buying fish and wildlife harvested illegally.  Additionally, eleven of these fishermen also have been charged with filing false reports in connection with the illegally harvested fish.  One of the fisherman is also charged with obstruction of a proceeding before a federal agency.  Specifically, the indictments allege that the commercial fishermen transported and sold Atlantic striped bass, knowing that they were unlawfully harvested from federal waters off the coast of North Carolina.  In an effort to hide their illegal fishing activities, these fishermen falsely reported harvesting these fish from state waters, where it would have been legal.

“The illegal poaching of striped bass by commercial fishermen can have a huge collective impact on the fish resource and has the potential to devastate the future livelihoods of law abiding commercial fishermen,” said John C. Cruden, the Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The vast majority of fisherman do respect the law and carefully monitor their harvest to ensure they stay within the well-researched limits. Those who deliberately break the law will be prosecuted.”

“The Atlantic Striped Bass fishery is extremely important to the economy of the State of North Carolina as well as our sister States along the Atlantic seaboard, and it represents a success in species recovery thanks to conservation, management, and law-abiding fishermen,” said U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker.  “Illegal harvesting of this protected species and submitting false reports to federal agencies undermine those efforts and adversely impact our entire coastal communities.”

All of the defendants are licensed by the state of North Carolina and the National Oceanic and Atmospheric Administration (NOAA) to fish in state waters only for striped bass.  The individuals charged are:

Gaston Saunders Jr., of Wanchese, North Carolina
Bryan Daniels of Belhaven, North Carolina
Ellis Leon Gibbs, Jr. of Engelhard, North Carolina
David Saunders of Poplar Branch, North Carolina
Michael Potter of Bayboro, North Carolina
Steven Daniels of Wanchese, North Carolina
James R. Craddock of Manns Harbor, North Carolina
James K. Lewis of Gloucester, North Carolina
Joseph H. Williams of Brunswick, Georgia
Dewey W. Lewis, Jr. of Newport, North Carolina
Dwayne J. Hopkins of Belhaven, North Carolina
Ronald W. Berry of Kill Devil Hills, North Carolina
John F. Roberts of Engelhard, North Carolina

In early spring each year, wild coastal striped bass (Morone saxatilis), known regionally as “rockfish,” “striper,” or “rock,” enter the estuary or river where they were born to spawn, and then return to ocean waters to live, migrating along the coastline.  They may live up to 30 years and reach 50 pounds or more.  The population of coastal Atlantic Striped Bass depends heavily upon the capability of older, larger, female striped bass to successfully reproduce.   

Under federal law, Atlantic striped bass may not be harvested from or possessed in federal waters.  This ban on fishing for Atlantic striped bass in federal waters has been in place since 1990 due to drastic declines of the stock that occurred in the 1970’s.  North Carolina allows fishermen to harvest fish from state waters, but often limits fishermen to no more than 100 fish per fishing trip.  Commercial fishermen are required to report on a fishing vessel trip report the fish harvested from state waters; that report is then submitted to NOAA’s  National Marine Fisheries Service (NMFS).    .  NOAA uses the information on this report to assess the fishery and its sustainability throughout the eastern seaboard.

According to the Atlantic Marine Fisheries Commission, “Striped bass have formed the basis of one of the most important fisheries on the Atlantic coast for centuries. Early records recount their abundance as being so great at one time they were used to fertilize fields. However, overfishing and poor environmental conditions led to the collapse of the fishery in the 1980s.”  The North Carolina Division of Marine Fisheries, along with other states, has reduced, twenty-five percent, the catch limits for the 2015 striped bass commercial fishing season in the Atlantic Ocean and Albemarle Sound/Roanoke River areas, citing a decline in stocks.  The division cited 2013 surveys revealing that the female spawning stock has been steadily declining.  The reduction applies to all commercial and recreational striped bass fishing for all the eastern coastal states.

A criminal indictment is not a finding of guilt.  An individual charged by criminal indictment is presumed innocent unless and until proven guilty in a court of law. 

The Lacey Act makes it unlawful for a person to transport or sell fish that were taken in violation of any law or regulation of the United States and carries a maximum penalty of five years in prison and a fine of up to $250,000, plus the potential forfeiture of the vessels and vehicles used in committing the offense.

The charges are a result of the investigation by NOAA’s Office of Law Enforcement, with assistance from the U.S. Coast Guard and its Investigative Service, the North Carolina Marine Patrol, and the Virginia Marine Police.  These cases are being prosecuted primarily by Trial Attorneys Shennie Patel, Shane Waller, Lauren Steele, and Joel LaBissonniere, from the Justice Department’s Environmental Crimes Section, Environmental and Natural Resources Division, and Assistant U.S. Attorney Banumathi Rangarajan.

GREENVILLE - United States Attorney Thomas G. Walker announced that TYRONE MAURICE WILLIAMS, 29, of New Bern, was sentenced resulting from his earlier guilty plea to robbery and firearms charges.  The charges stem from the July 24, 2012 armed robbery of the Dollar General store at 3699 Neuse Boulevard in New Bern and the February 11, 2014 robbery of First Flight Federal Credit Union at 3127 Dr. Martin Luther King, Jr. Boulevard in New Bern.  The defendant also pled to an unrelated firearm offense which occurred in Winterville on August 16, 2012.

On January 21, 2015, U.S. District Judge Terrence W. Boyle sentenced WILLIAMS to a total sentence of 40 years in prison without parole.  WILLIAMS received 20 years in prison for his plea to one count of robbery affecting interstate commerce, in violation of Title 18, United States Code, Section 1951; and one count of bank robbery, in violation of Title 18, United States Code, Section 2113(a).  WILLIAMS was sentenced to 10 years in prison consecutive to the robbery sentence for being a felon in possession of a firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924.  Finally, WILLIAMS was sentenced to an additional 10 year consecutive sentence for using or carrying a firearm during and in relation to a crime of violence, or possessing a firearm in furtherance of a crime, in violation of Title 18, United States Code, Section 924(c)(1)(A).  This 10 year portion of the sentence resulted from the defendant’s shooting of two Dollar General employees during that robbery, for which WILLIAMS only obtained $600.00.  The employees were seriously wounded as a result.  WILLIAMS was ordered to be supervised for 5 years following release.  WILLIAMS was also ordered to pay restitution in the amount of $422,377.16, which includes medical and counselling expenses for both victims.  The $4,373 taken from First Flight Credit Union was recovered at the time of WILLIAMS’s arrest, which was minutes after the robbery.

Investigation of this case was conducted by the New Bern Police Department and the Federal Bureau of Investigation.  Assistant United States Attorney John Bennett is prosecuting the case.

RALEIGH – United States Attorney Thomas G. Walker announced that today in federal court, United States District Judge Terrence W. Boyle sentenced, DESMOND SIMPSON, 29, of Wilmington, to 189 months of imprisonment followed by 5 years of supervised release. 

SIMPSON was named in an Indictment filed on December 17, 2013. On September 30, 2014, the Defendant was found guilty by a jury of Robbery of a Business Engaged in Interstate Commerce and Using, Carrying and Brandishing a Firearm During and In Relation to a Crime of Violence.  According to the investigation and information presented in open court during the trial and sentencing, on April 25, 2012, SIMPSON, robbed a Papa John’s delivery person after calling in the order and waiting for the delivery driver to attempt the delivery.  When the delivery driver arrived at the given address for the delivery, SIMPSON brandished a firearm and demanded the victim’s money.  When the victim refused and tried to run away, SIMPSON grabbed him by the collar and began to fight with him, repeatedly hitting the victim in the head with the firearm, an injury which required numerous staples.  SIMPSON fled the area but left behind a pair of sunglasses that he wore during the robbery.  Later testing confirmed SIMPSON’S DNA on this item.  In addition, a shirt was found nearby the scene of the robbery that had SIMPSON’S DNA on it along with the DNA of the delivery driver.

Investigation of this case was conducted by the Wilmington Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.  Special Assistant United States Attorney Charity Wilson prosecuted the case.  Ms. Wilson is a prosecutor with the District 5 District Attorney’s Office encompassing New Hanover and Pender Counties.  District Attorney Ben David has assigned her to the United States Attorney’s Office to prosecute violent crime, firearm related cases, and narcotic crimes.

GREENVILLE – United States Attorney Thomas G. Walker announced that today in federal court Senior United States District Judge Malcolm J. Howard sentenced MATTHEW MARKS WESTBROOKS, 34, of Lexington, South Carolina, to serve ten months in federal prison, followed by a three-year term of supervised release.   Judge Howard also ordered WESTBROOKS to pay restitution in the amount of $286,816, which was comprised of $70,493 in losses owed to Credit Suisse Securities, $80,543 in losses owed to Novastar Mortgage, and $135,780 in losses owed to M&T Bank.

The Criminal Information to which WESTBROOKS pled guilty charged that during times material to the case, WESTBROOKS was employed as a mortgage originator in the Eastern District of North Carolina.  WESTBROOKS was separately, but simultaneously, engaged with others in the business of buying and selling properties for profit.  In his work as a mortgage originator, WESTBROOKS received a commission whenever he successfully assisted a borrower to obtain a mortgage loan.  WESTBROOKS did not receive a commission if the mortgage loan was not approved by the lender, and if the associated real estate transaction did not close.

The Criminal Information further charged that as a mortgage originator, WESTBROOKS was responsible for, among other things, typing borrower loan qualifications and other information into software used by his employer to electronically transmit loan application information from North Carolina to banks and lenders located in various other states.  The Loan Application Software was also used to generate a physical or electronic copy of a Uniform Residential Loan Application, or Form 1003, containing borrower loan application information.  Form 1003 required the borrower to identify, among other things, the source of any down-payment funds.  Form 1003 contained a warning that “misrepresentation(s) of the information contained in this application may result in . . . criminal penalties, including, but not limited to, fines or imprisonment. . .”

The Criminal Information further alleged that as a mortgage originator, WESTBROOKS was required by his employer on each transaction to communicate with the borrower regarding the borrower’s obligations at closing, including the requirement to bring to the closing cash due from the borrower under the terms of the loan.  Specifically, WESTBROOKS was required to obtain a copy of the HUD-1 Settlement Statement (“HUD-1”) from the closing attorney.  The HUD-1 showed, among other things, the remaining balance of the “Borrower’s Obligation,” or cash due from the borrower at closing.  WESTBROOKS was obligated to review the HUD-1s and confer with the borrower regarding the Borrower’s Obligation, as set forth in the HUD-1. 

The banks and lenders did not permit the seller, the mortgage originator, or a third party to the transaction to “front” or pay the Borrower’s Obligation on behalf of the borrower.  The borrower was obligated to bring to closing the amounts identified on the HUD-1 in satisfaction of the Borrower’s Obligation.  Moreover, the HUD-1 contained a warning that providing false statements on the HUD-1 could result in a prosecution under Title 18, United States Code, Section 1001.

The Criminal Information specifically alleged that on or about February 14, 2007, WESTBROOKS falsified a loan application and HUD-1 Settlement statement which reflected that the borrower supplied down-payment funds when, in fact, the defendant had supplied the funds on behalf of the borrower.

At the sentencing hearing held today, WESTBROOKS’s attorneys argued, among other things, that WESTBROOKS should not receive a sentence of imprisonment because he has already been rehabilitated since the time of the offense.  The Government noted that in his capacity as a mortgage originator, WESTBROOKS had made false statements on 13 loans across 9 different lenders, resulting in fraudulent mortgage proceeds exceeding $1.9 Million.  The Government argued that prison, rather than probation, was appropriate to punish the defendant and deter others from engaging in similar conduct.  Ultimately, the Court ordered the defendant to serve 10 months in prison.

Investigation of this case was conducted by the Internal Revenue Service - Criminal Investigation and the Federal Bureau of Investigation.  Assistant United States Attorney William M. Gilmore represented the United States.

GREENVILLE - United States Attorney Thomas G. Walker announced that DAVID McARTHUR KING, 24, of New Bern, THOMAS LEE CUTHBERTSON, JR., 24, of Vanceboro, and KHIRY TERREL JONES, 24, of Oriental, were each sentenced resulting from their earlier guilty pleas to bank robbery and firearms charges.  The charges stem from the December 2, 2013 robbery of First Citizens Bank in Oriental, and the November 22, 2013 robbery of TD Bank in Easley, South Carolina.

On December 10, 2014, Senior U.S. District Judge Malcolm J. Howard sentenced KING TO 20 years in prison for his plea to two counts of armed bank robbery, in violation of Title 18, United States Code, Sections 2113(a) and 2113(d), and a single count of using or carrying a firearm during and in relation to a crime of violence, or possessing a firearm in furtherance of a crime, in violation of Title 18, United States Code, Section 924(c)(1)(A), all for his role in both robberies.  On January 13, 2015, Judge Howard sentenced JONES to 8 years in prison for armed bank robbery, for his role as the getaway driver in the First Citizens robbery.  On January 14, 2015, Judge Howard sentenced CUTHBERTSON to 17 years in prison for armed bank robbery, in violation of Title 18, United States Code, Sections 2113(a) and 2113(d), and a single count of using or carrying a firearm during and in relation to a crime of violence, or possessing a firearm in furtherance of a crime, in violation of Title 18, United States Code, Section 924(c)(1)(A), all for his role in both robberies.  KING, JONES AND CUTHBERTSON were each ordered to be supervised for 5 years following release.  KING was ordered to pay restitution in the amount of $61,539.50, which includes $3,000.00 from an additional robbery.  JONES was ordered to pay $33,797.00 in restitution.  CUTHBERTSON was ordered to pay $58,521.50 in restitution.

Investigation of this case was conducted by the Federal Bureau of Investigation, the New Bern Police Department, the Pamlico County Sheriff’s Office, the Oriental Police Department, and the North Carolina State Bureau of Investigation.  Assistant United States Attorney John Bennett is prosecuting the case.

WILMINGTON – United States Attorney Thomas G. Walker announced today that a jury convicted RANDOLPH JOHNSON SPAIN, 25of Wilmington, North Carolina, of two counts of interstate transportation of a person(s) with the intent that person(s) engage in prostitution.  The jury returned its verdict following a trial in federal court before United States District Judge James C. Fox.

The defendant was the target of an investigation which was a collaborative effort among several law enforcement agencies, to include the Wilmington Police Department, the New Hanover County Sheriff’s Office, and the United States Department of Homeland Security.  Among other evidence received during the trial, in August 2010, law enforcement in Norfolk, Virginia, were called to a hotel for a reported domestic assault.  Upon investigation, two women encountered there told the Virginia authorities that they had been working as prostitutes for SPAIN, that he had brought them by automobile to Virginia from North Carolina, that he would not pay them, and that he would not let them leave.  Spain faces a maximum of ten years imprisonment on each of the two counts.

NEW BERN - United States Attorney Thomas G. Walker announced that in federal court today, United States District Judge Louise W. Flannagan sentenced ANTONIO O’DARIAN REED, 20,of Oxford, North Carolina, to 196 months in prison and 5 years of supervised release for attempt to kill with intent to retaliate against an informant and discharging a firearm during and in relation to a crime of violence and aiding and abetting.  REED previously pled guilty to these charges on January 14, 2014.  On November 7, 2014, Judge Flannagan sentenced REED’S co-defendant, ANTHONY RODRIGUEZ CROWELL, 23, of Oxford, North Carolina, to 128 months in prison and 5 years of supervised release for obstruction of justice by retaliating against an informant, and using and carrying a firearm during and in relation to a crime of violence.   

The investigation revealed that on July 10, 2013, the Bureau of Alcohol, Tobacco, Firearms, and Explosives utilized a cooperating witness to attempt a controlled purchase of heroin and cocaine base (crack) from CROWELL and REED.  On August 29, 2013, the cooperating witness was standing in the parking lot of a Granville County gasoline station when a vehicle approached occupied by CROWELL in the driver’s seat, REED in the front-passenger seat, and an unindicted individual in the back seat.  As the cooperating witness pumped gas into his vehicle, REED brandished a firearm and discharged two rounds in the direction of cooperating witness.  The cooperating witness was struck and sustained serious, but non-life-threatening injuries.

The investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Henderson Police Department, and the Oxford Police Department.  The prosecution of the case was handled by Assistant United States Attorney Toby Lathan.

RALEIGH - United States Attorney Thomas G. Walker announced that today in federal court, United States District Judge Terrence W. Boyle sentenced Lomachael Antonio Grice , 32, of New Bern to 108 months imprisonment, followed by 4 years of supervised release.

District Attorney Scott Thomas said, “This is another case in our ongoing effort to fight illegal drug activity in our district. CNET has been very proactive in identifying and investigating drug dealers operating in our area.  We have had a good working relationship with the U.S. Attorney’s Office as we work together to prosecute drug dealers in state and federal courts.”

Grice was named in a Criminal Information filed on March 18, 2014, charging him with conspiracy to distribute and possess with the intent to distribute 28 grams or more of cocaine base (crack) and a quantity of cocaine from 2006 until August 30, 2013.  On July 17, 2014, Grice pled guilty to that charge.

According to the investigation, law enforcement agencies in the Eastern and Middle Districts of North Carolina worked together to identify GRICE’s source of supply who was traveling from the Chatham County area to deliver large amounts of cocaine to GRICE and other drug dealers in the Craven County area.  After GRICE’s supplier was arrested, further investigation lead to GRICE’s arrest following a controlled delivery operation where GRICE handed money to a confidential informant in exchange for cocaine.  Further investigation revealed that GRICE was responsible for the distribution of multiple kilograms of powder and crack cocaine in the Craven County over a time period spanning from 2006.

Investigation of this case was conducted by the Coastal Narcotics Enforcement Team, a multi-agency task force comprised of agents from the Bridgeton Police Department, Craven County Sheriff’s Office, Havelock Police Department, Jones County Sheriff’s Office, New Bern Police Department, Pamlico County Sheriff’s Office, River Bend Police Department, and Trent Woods Police Department.  These agencies were assisted by the Chatham County Sheriff’s Office, the Drug Enforcement Agency, and Internal Revenue Service Criminal Investigation.  Special Assistant United States Attorney Augustus Willis represented the government.  Mr. Willis is a prosecutor with the District 3-B District Attorney’s Office encompassing Carteret, Craven and Pamlico Counties.  District Attorney Scott Thomas has assigned him to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters.  Mr. Wills’ position is funded through a grant provided by the Governor’s Crime Commission.

RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today, United States District Judge Terrence W. Boyle sentenced DERRICK HOWARD, 46,of Greenville, North Carolina, to 108 months in prison and 4 years of supervised release for conspiracy to distribute and possess with the intent to distribute 100 grams or more of heroin.  HOWARD  previously pled guilty to this charge on August 4, 2014.  On December 17, 2014, Judge Boyle sentenced another member of the conspiracy, CHAUNCEY GREEN, 46, of Greenville, North Carolina, to 131 months in prison and 4 years of supervised release for the same charge.    HOWARD and GREEN are from New Jersey and moved to Greenville, N.C., in 2010 and 2011, respectively.   

The investigation revealed that between July 2011 and February 20, 2013, GREEN arranged for over 40 shipments of heroin to be brought from New Jersey to Greenville, N.C., for resale to street-level heroin dealers.  HOWARD delivered many of the shipments of heroin from New Jersey and was involved in many of the sales to the street-level dealers.  On January 23, 2013, the Greenville Regional Drug Task force used an informant to buy 150 bags of heroin (1.97 grams) from HOWARD.  Surveillance officers saw GREEN drive HOWARD to meet the informant and GREEN pick up HOWARD after the sale.  During a traffic stop on February 20, 2013, HOWARD was found to be in possession of 21 grams of heroin that he was transporting from New Jersey to Greenville.

HOWARD and GREEN received enhanced sentences as career offenders based on their multiple New Jersey convictions for distributing controlled substances. 

The investigation of this case was conducted by the Greenville Regional Drug Task Force.  The Greenville Regional Drug task force is comprised of officers from the Pitt County Sheriff’s Office, Greenville Police Department, North Carolina State Bureau of Investigations, Farmville Police Department, East Carolina University Police Department and the Winterville Police Department.  The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry.  Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office.  Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters.  Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.